From Socialist Voice, January 2006

More privatisation coming down the track

In December 2005 the Transport Ministers of the EU member-states met and agreed rules requiring states to begin preparing for the “liberalising” of railways throughout the European Union by 2010.
    Over the next four years governments will have to comply with various directives dealing with railways, including Council directive 91/440/EEC. This directive, introduced on 29 July 1991, requires a root-and-branch application of the neo-liberalist model, which will institute what is called a “vertical split”: the separation of the railway infrastructure from the operation of railway services. It requires, or demands,
(1) operational autonomy for railway operators,
(2) under the guise of accountancy purposes, the separation of the infrastructure from service operation,
(3) open access for cross-border undertakings,
(4) track access charges, and a “sound financial basis” for railway operators.
    What they are attempting to bring about is the application of the model of running a railway network that John Major inflicted on the British railways, with disastrous consequences not alone for the travelling public but in the huge loss of life resulting from little or no investment and from fractured control and supervision. In Britain the Railways Regulation (1992), which began the whole privatisation thrust, was introduced under section 2 (2) of the European Communities Act (1972) in order to comply with directive 91/440/EEC.
    We have seen ten years’ experience of this model of running a railway network, the costs of which are clear for all to see (except for the ideologues of the neo-liberalist kind): the rapid deterioration of tracks and rolling stock, many passengers and railway workers killed or badly injured, state subsidies filling the bank accounts of private train operators, and pay and working conditions constantly under pressure and fares skyrocketing, making Britain’s railways the most expensive in Europe.
    If we analyse the four criteria outlined, we see they are so wide that they can be interpreted in many ways; but, given the current dominance of privatisation, the following interpretations are not unreasonable.

(1) “Operational autonomy for railway operators”

This will be argued for on the grounds that it will give the management of existing state-run railways more freedom and autonomy and will free them from political control and interference, thereby making them more responsive to market demands through freeing them from political control and interference.
    Yes, there is an argument to be made for the management to be made more accountable to the needs of the public, and also to its work force. That should properly be undertaken when there is a long-term investment programme and the management, workers and travelling public know that regular subventions are guaranteed. The management could then plan for infrastructural development, establish investment priorities, establish investment priorities, and advance towards providing an acceptable public service and an appropriate return.
    But neo-liberalists will argue that “operational autonomy” means that the state itself should cease to own, or have any say in, how rail transport should be run. Autonomy can really be achieved only when it is in private hands. The first step along this road will be “operational autonomy,” and the second step will be privatisation.

(2) “Separation of infrastructure from service operation”

What the directive demands is that the track network should be operated separately from the trains that run on the tracks. The track company would charge the train company so much for the use of the tracks—somewhat akin to a toll on a motorway. (And experience shows that these tolls continuously increase.) The ultimate aim of “transparent financial accounting” is the situation they have in Britain, where the trains are owned by one company and the tracks are owned by another one.
    To separate track and trains seems to imply that if the company that runs the trains can’t reach agreement with the company that runs the tracks, they can pick up the trains and go to another set of tracks. Faced with a toll road, you can choose to travel on that road or not; but it is obvious that a train and track have a fixed relationship. This approach would allow the public purse to be constantly raided by robber barons. Subsidies will increase; but the main beneficiaries will be the private operators, both train and track owners.
    The priority of private companies is to make profit. Experience has shown that railways require long-term and sustained investment from the public purse. This investment will not be secured from train operators, as they are under the same commercial pressures from their investors as the track companies. It is clear that the real losers will be the public.

(3) “Open access for cross-border undertakings”

This suggests that trains should be able to run throughout the countries of the European Union without hindrance. To bring about this kind of standardisation would require billions in investment. This can, and no doubt will, come from the various member-states; very few private companies or banks are going to take the long-term approach that this will require, or the risks involved.
    It is in this context that we need to understand and to be concerned about the massive investment from the public purse that is now under way—and is long overdue—in Iarnród Éireann. This is a vital public asset and needs to be kept in public ownership.
    Under this new Rail Directive it would mean that if you own a railway company, for instance in Poland or Latvia, you could run a railway service in France or in Ireland, with Latvian or Polish rates of pay and conditions. And there would be no grounds for anyone objecting or challenging this.
    This form of social dumping is already happening in the maritime and road freight industries. The European Union is proposing a “European train drivers’ licence,” which would lead to the driving down of wages and conditions. We know from the experience of Irish Ferries that wages and conditions are never restructured upwards.

(4) “Track access charges and a sound financial basis for railway operators”

It is possible under this section of the directive that a company could strategically own and control track in a number of adjoining countries. This would give them unprecedented bargaining power and control over the complete network by virtue of their geographical advantage. They would not have a monopoly, but with strategic buying they could turn a minority control into a virtual monopoly. This would allow a private company to determine economic and social development and priorities throughout a great portion of the European Union. Perhaps this is why the German government recently announced that there are no plans at present to privatise the Deutsches Bundesbahn.
    The disaster that is rail transport in Britain is a direct result of this “vertical split” model now about to be implemented by the EU Commission and national governments. Naturally it has the backing of the powerful lobby of the employers’ group CER (European Rail Community).
    Irish railway workers need to be aware of what is coming down the track and to alert their unions that they want them to vigorously oppose this directive.
    Only an integrated public transport system, incorporating a strategic planning model where the workers and the travelling public have a say in how it is managed and in the priorities it should serve, can create the best means of providing reliable public transport.

◼ For a more detailed analysis of the Rail Directive we recommend readers to visit the web site of the People’s Movement at www.people.ie.

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