Privatisation of British Rail - Changes To The Structure Since The Railways Act 1993

Changes To The Structure Since The Railways Act 1993

Since 1997, considerable changes have taken place to the original structure of privatisation, of which very little is left unaltered. The principal changes are as follows:

Infrastructure owner

Railtrack was placed into administration on 7 October 2001 and, the following year, its functions as the track owner were taken over by Network Rail, which is a company limited by guarantee, nominally in the private sector but with members instead of shareholders and its borrowing guaranteed by the government.

Regulation

ORR has been renamed the Office of Rail Regulation and the Rail Regulator replaced by a board in line with changes to the regulation of other privatised industries. ORR has also been given the responsibility for safety regulation which was previously the remit of the Health and Safety Executive. The last Rail Regulator was Tom Winsor whose powers to decide how much money the Government should spend on Railways were resented by many in Whitehall. As a result the ORR, presently chaired by Chris Bolt has substantially less powers than Winsor enjoyed.

Franchising

OPRAF was replaced by the Strategic Rail Authority, whose remit also included the promotion of freight services. The SRA has since been wound up and its franchising functions passed to the Department for Transport. The most recent rounds of franchising have considered the planned improvements and previous good service delivery of bidders as well as the cost element. As part of the devolution process since 1997, the Scottish Executive has been given a greater role in determining the franchising of ScotRail, the Welsh Assembly Government is a co-signatory of the Wales and Borders franchise, Merseytravel (the Merseyside Passenger Transport Authority) is responsible for Merseyrail, and the Mayor of London has some input in decisions on rail services in the Greater London area.

Passenger train operators

The number of passenger franchises has been reduced and further amalgamations are planned. Many of the franchises have changed hands between private sector operators and one, Southeastern (train operating company), has been operated in the public sector after Connex was removed from control by the SRA and before a new private sector operator could be appointed. However, two new open access operators have appeared to run new services; Heathrow Express and Hull Trains. A third, Grand Central Railway was due to start operating in December 2006, but suffered delays, including franchised operator GNER taking the Rail Regulator to Court over his decision to grant access rights. In September 2007, the Office of Rail Regulation granted track access rights under Section 17 of the Railways Act 1993 to Wrexham, Shropshire and Marylebone Railway Company Limited (known as Wrexham & Shropshire) to run 5 trains a day between London Marylebone and Wrexham, although there were conditions attached to the right to call at Wolverhampton. Other applications by potential open access operators have been turned down by ORR, but a number of new open access operations are waiting in the wings and may materialise in the near future.

Freight train operators

Despite going to the expense of setting up separate management structures for the three parts of the trainload freight sector, on 24 February 1996 all three units were sold to "North & South Railways", a subsidiary of the American Wisconsin Central Railroad, which soon renamed the operation English, Welsh and Scottish Railway. EWS also acquired Rail Express Systems, Railfreight Distribution (the last part of the nationalised railway to be sold, after Labour had been elected) and National Power's railfreight operation. EWS was bought by Deutsche Bahn in 2007 and is thus effectively now state owned - but by the German rather than United Kingdom state. Current freight train operators other than EWS include Freightliner (UK) (purchased by a management buyout) and two open access freight operators: Direct Rail Services and FirstGBRf.

Train owners

The three ROSCOs continue to exist as originally established, the only part of the privatised railway to remain unchanged, although some now lease freight locomotives and wagons to the FOCs. They have been joined by a variety of small-scale train owners ready to let old railway stock on short-term leases, including FM Rail, Harry Needle Railroad Company and West Coast Railway Company. Also, Railtrack and Network Rail have purchased some rolling stock themselves.

Infrastructure maintenance and renewal

In 2004 infrastructure maintenance, (Track, Signal, and Overhead lines), was taken back 'in-house' by Network Rail, but track renewal remains contracted out to the private sector.

Specialist companies

After Union Railways ran into trouble with the construction of the Channel Tunnel Rail Link, it was rescued by Railtrack.