The restructuring and future of the British Rail system

The paper focuses mainly on reviewing and analysing the restructuring of Britain’s railways, including the re-cently published proposals for its future. The objective is to investigate the current market structure, the market behaviour and the overall performance of the British rail system over time. In order to learn what other people think about the problems of the industry and their solutions, interviews with key people associated with the in-dustry and several submissions of some key interest parties to the 2004 railway structure review are used in this paper. The results are that all major characteristics of the rail reform in Britain are seen as workable and empiri-cal data reveal that they have worked comparatively successfully, before Hatfield. Because of bad implementa-tion some of the features, and in particular the private infrastructure manager, have not worked well. Most of the problems have arisen because of indecision over refranchising and the disruption following Hatfield. Further-more the policy of the Government after Hatfield created an extremely risk averse culture within the industry, at a time when Railtrack had not enough insights about the state of the rail network. Although empirically unjustified, safety improvement became the main issue, costs escalated and reliability and productivity experienced a huge fall. The current White Paper “The Future of Rail” is seen as partially misleading and not at all detailed. At present it is only clear that the proposals will result in further increase of political interference. Much will depend on the precise implementation of the proposed measures and therefore the future of British rail remains unclear.