British Railways

8/3/2019 British Railways

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A Presentation on

BRITISH RAILWAYS

MCM:614- INFRASTRUCTURE DEVELOPMENT PROJECTS

UNDER GUIDANCE OF :

PROF. D. ROY

SUBMITTED BY-

JACKSON CHRISTIAN (G04108)DEEPAK KUMAR (G04110)

SAPTARSHI GHOSH (G04113)

ROHAN KAPLE (G04117)

HIREN PATEL (G04130)

KEYUR PATIDAR (GO4134)

KUNDAN RATHOD (G04138)



Overview

In Britain, practically all the capital for

railway construction came from private

sources, overwhelmingly from

individuals. This was unlike everyplace

else in the world (including the U.S.),where governments were heavily

involved in financing the construction of

this infrastructure.

By the end of 1850, British investors had

put about £250 million into their

country¶s railways, almost half of their

GDP, equivalent to about $7 trillion for

the United States today.



A few years after the Railway

Mania had wound down, Britain gotinvolved in the Crimean War of

1853±1856. Its cost to Britain is

estimated at about £70 million,

about what British investors had lost

on railways.

The size of the British Army during

this war reached about 250

thousand, twice its more normal

strength in the 1840s. That was justabout the size of the labor force

constructing railways in 1847 (when

there were also another 50 thousand

workers on railways in service)







Status

15,795 kilometres of track that connect most towns of any sizein mainland Britain.

London is the hub of the rail network where there are 14

µterminals, from which the principal lines that link London

with other parts of Great Britain run.

There are also a lot of µmetro¶ systems such as the Newcastle

Metro, Glasgow Underground and Docklands Light Railway

(DLR) in London, and modern tram systems such as those in

Sheffield, Manchester, Birmingham, Croydon and

Nottingham.



Northern Ireland has its own rail

system ± Northern Ireland

Railways (NIR) has four mainroutes, radiating from Belfast

which serve a number of major

cities and towns and some coastal

regions.

Finally, there is the Eurostar

(passenger only) and Eurotunnel

(vehicle with passenger) services

through the Channel Tunnel.Eurostar services operate from

London St Pancras International

and Ashford International stations

to Paris, Lille, Brussels and other

destinations.



UK Rail ± Facts & Figures

An Extensive and Accessible

Railway Network

y 15,795 route kilometers

y 2,500 stations

y 44% of population live within 25 minutes walk of a station

P assenger Demand at

P ost-War Record Levels

y 1.27

billion passengers in 2008/09

y 3.5 million passengers per day in 2008/09

y 20,000 trains per day

y 50+% growth in journeys since 1997/98

y 104 million long-distance rail journeys made in 2007/08 vs 25 million domestic air journeys

M assive Investment &

Improvement P rogrammes

y £5 billion invested in new rolling stock since 1996

y Average age of fleet less than 15 years

y More than £30 billion invested in infrastructure since 1995/96

Low Environmental Impact

y Passenger rail contributes 0.5% of total UK CO2 emissions(vs 13.4% for road passenger transport)

y Average CO2 emissions per passenger mile significantlylower than those for short-haul air , car and bus transport

The UK rail network is t he fastest growing railway in Europe, wit h passenger growt h in excess of 50% since t he franc hise network was completed in 1997



Timeline

Until 1992

± A public system with British Rail, the public, monopolistic rail operator since

1948

In 1993, promulgation of the Railways Act

± Privatisation of British Rail set in motion by John Major's Conservativegovernment

± Re-organisation of the rail network :

the establishment of a single infrastructure management company

(Railtrack, subsequently Network Rail) in 1994; and

the letting of 24 regional train operating franchises of varying durations

from 1996 onwards to service the passenger market.

The franchise network was completed in 1997 :

± The franchise network was completed in 1997. Franchises are subject to review

and re-award after a defined number of years, which differs across franchises.



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K ey Events

From 1948 to 1997, British Rail was solely responsible for the state railways of

Britain, transforming a collection of exhausted, post-war steam operators into the

modern network we know today.

The history of British Rail is the story of post-war rail travel in the UK. British

Railways, known from the 1960s simply as British Rail, operated most of Britain¶s

trains from 1948 to 1997. Formed from the nationalisation of the "Big Four" UK railway companies ± LNER, LMS, GWR and SR ± BR became an independent

statutory corporation in 1962 (the British Railways Board) and oversaw the

transformation of the UK rail network until its privatisation in the 1990s.



K ey Events

Nationalisation to Rationalisation

The decades after nationalisation in 1948 brought wholesale change to the

national railway network, as governments committed to the elimination of

steam traction in favour of diesel and electric power. Over time, with the

growth of the road haulage sector, passengers replaced freight (especially

coal transport) as the railways¶ main source of income, and, asrationalisation took hold in the 1960s, one third of the pre-1948 network

was closed.

High Speed

In the 1970s, British Rail began investing in High Speed Trains and by1990 both main coastal express routes, the East and West Coast Main Lines

had been electrified between London and central Scotland.



K ey Events

1955 Modernisation Plan

The report latterly known as the "Modernisation Plan" was published in

December 1954. In 1955 the programme (costing £1.2 billion) was authorised

by the government. It was intended to bring the railway system into the 20th

century. The aim was to increase speed, reliability, safety, and line capacitythrough a series of measures that would make services more attractive to

passengers and freight operators, thus recovering traffic lost to the roads.

Important areas included:

Electrification of principal main lines, in the Eastern Region, Kent,

Birmingham and Central Scotland

Large-scale dieselisation to replace steam locomotives

New passenger and freight rolling stock

Resignalling and track renewal

Closure of a small number of lines unnecessary in a nationalised network, as

they duplicated other lines



K ey Events

The Beeching Report

Following a 1950s modernisation plan designed to take Britain¶s railways from the

19th to the 20th century, Doctor Richard Beeching¶s 1963 report, µThe Reshaping

of British Railways¶, recommended the closure of a third of passenger services and

more than 4000 of the 7000 stations.

Privatisation

In 1982, British Rail passenger services were split into three core sectors: InterCity,

NetworkSouthEast and Regional Railways. Then, between 1994 and 1997, British

Rail was privatised, as track and infrastructure passed to Railtrack in 1994 and,

later, passenger services were franchised in 25 blocks to private-sector operators.

Freight services were sold outright. Overall, ownership and operation of thenetwork became highly fragmented, as operations were split between more than

100 companies.

Legacy: The BR Logo

The famous British Rail µdouble arrow¶ logo, formed of two white arrows on a red

background, lives on to this day on street signs and railway tickets.



Train Operating Companies

24 train companies that serve the length and breadth of the UK

The TOCs operate under a license

There are divided in 3 categories :

± 9 TOC operate long distance traffic

± 6 TOC operate regional traffic

± 9 TOC operate London & Southeast traffic



Long Distance Traffic



Regional Traffic



London & Southeast Traffic



Services Train Companies run many different types of

trains across the rail network, offering a range of

facilities.

All trains are totally non-smoking and offer

standard seating.

Some trains offer additional facilities such as:

± First Class seating

± Catering

± Seat reservations

1st class Anytime tickets provide access to

Lounges.

WiFi and power points for laptops and mobile

phone chargers are available on some trains.

Modern trains are equipped with visual

information displays and automatic

announcements are made to keep you informed

throughout your journey.





UK Rail Organisation

Network

Rail

Office of

Rail

Regulation

ATOC

TOCs

Department for Transport

Also: Passenger Transport Executives,Welsh Assembly, Transport Scotland,

Transport for London

Franchise

Agreements

Track Access

Agreement

High Level

Output

Statement

Passenger

Focus

funding

The Railway Act establish a new regulatory framework to oversee t he

activities of and relationships between t he various stakeholders



UK Railway Organization Office of Rail Regulation (ORR) :

± Regulates Network Rail¶s stewardship of the network ± Licenses the operators of railway assets and approves agreements and

charges for access to the network

± Following the enactment of the Railways Act 2005, ORR has also

taken over the safety regulation role of the industry

Network Rail : ± Owns, maintains and develops the railway infrastructure, including its

track, signaling, electrification equipment and structures

(bridges/tunnels/level crossings)

± Successor organisation to original infrastructure manager, Railtrack

Train Operating Companies (TOCs) : ± Manage the provision of day-to-day train services and champion

passengers¶ interests

± They provide and run train services and the majority of railway stations



ATOC

ATOC

± It stands for ³Association of Train Operating Companies´

± It¶s an unincorporated association owned by its members, set up in

1994 by the Train Operating Companies (TOC) formed during

privatization of the railways under the Railways Act 1993.

± It¶s a body which represents around 24 train operating companies that provide passenger railway services on the privatized British railway

system

As the ³official voice of the passenger rail industry´, ATOC

± Coordinates of joint activities for its members (TOCs)

± Manages & promotes of the National Rail brand

± Provides support services to travel agents

± In particular, on the international markets ATOC is in charge of the

distribution, promotion and marketing of the TOC Sales.



International Markets Specificities

Until 2009 the only British product line to be sold on the international

market was the BritRail one, distributed by ACP : ± Britrail Passes

± BritRail OT (zoned priced)

As of now, the domestic fare range can be sold on international markets

and Rail Europe is one of the 3 accredited distributors of this range in itsmarkets.

The domestic fare range is the same as the range offered in UK (with a few

exceptions : season tickets and discounted cards) and offers much more

competitive prices.



OBJECTIVES FOR PRIVATISATION

Official objectives were:

± Provide greater incentives ± Allow choices through competition

± Give railway managers the freedom to manage

± Set clear and enforceable quality standards

± Reflect regional or local identities

± Improve efficiency and reduce costs

Real objective was desire to use private sector funding and to reduce

subsidies

Labour¶s threats to re-nationalise increased risks of investing and led the

Government to moderate competition

Political necessity made privatisation itself the objective rather than the

means



K RAIL INDUSTRY STR UCTURE,

1997

Six freightoperators(TOCs)

freight trains

Three rolling stockcompanies

(ROSCOS)

Own rolling stock

Heavymaintenance

suppliersMaintain rolling

stock

ProvideServices

Leaserolling

stock

ProvideServices

Providesaccess

tonetwork

Providesaccess

tonetwork

Rail Regulators(OPRAF AND ORR)

RAILTRACKManages the

railway

infrastructure

ProvideServices

ProvidesServices

ProvideServices

Infrastructuremaintenance

companiesMaintain

infrastructure

Track renewalcompanies

Renew track

Other services

providers

Twenty-fivepassenger

train

operatingcompanies

(TOCs)

run passenger trains

Regulators

Players

Activities



SOME WEAK NESSES OF THE

PRIVATISATION PR OGRAMME

There was no framework for strategic planning of the industryas a whole

Most franchises were for only seven years, inhibiting long-term planning and investment by operators

Performance standards generally were based on low historicstandards and failed to look forward to the rising expectationsof passengers

The industry structure did not anticipate the need for significantinvestment to cope with sharply increased passenger and freighttraffic

There were no proper incentives for private companies to investin expansion



UNANTICIPATED DEMAND

Railtrack sold with the expectation that rail traffic would remain

constant

All 25 franchises forecast improving financial performance over time in

their bids

As fares were controlled could only come through increase in traffic

Lack of co-ordination in bid process

Nobody did any work to see whether the aggregate of that growth could be fitted onto the network

In the event 21% growth in three years



STR UCTURE OF

RAILTRACK Monopoly

± ³Lacks Competition´

± ³Unable to benchmark performance´

Overly-regulated

± ³Government intervention through the regulators´

± ³Access charges distort competition, which resulted in over 90% of Railtrack¶sincome coming from fixed charges, and a lack of customer focus´

Poorly incentivised

± ³Not incentivised the right way, eg Railtrack is monitored on punctuality, but asthey estimate 1% increase in the amount of trains would lead to 2.5% increase in

congestion-related delays, there is little incentive on Railtrack to ease thecongestion by adding more trains´



FLAWED REGULATION

Privatisation involved:

± Single regulator

± Investment funded by privatised companies

Privatisation of rail far more complex involving

± Two ³Regulators´ ± ORR and OPRAF and separate bodies

for safety

± Privatised infrastructure monopoly

± Privatised TOCs

± Investment funded by both private and public sector



FLAWED REGULATION

ORR

± created to regulate a privatised monopoly ± Railtrack

± controls what Railtrack can charge TOCs

± controls what rate of return Railtrack can earn

± both determinants of what Railtrack can invest on its own account

OPRAF

± created to manage the franchise process

Treasury/DETR

± determines what can be invested from public purse



FLAWED REGULATION

Government wanted more investment in rail but one of chief investment vehicles

(ie Railtrack) was outside its direct control.

Railtrack¶s financial position damaged by ORR¶s fines and threats

If 20 year franchises agreed, TOCs effectively become long-term monopolieswhich themselves require regulation

Support for combining OPRAF and ORR

Hatfield exposed enormous fault lines in the process of regulation

Railtrack¶s ability to raise money severely weakened ± an ability which theGovernment was relying on to help finance the forward investment programme



Impact of Rail Disasters

Southall, Ladbroke Grove, Hatfield and PottersBar train crashes in 2000 to 2002

Chaos affected the rail industry at that time

Significant numbers of people began to travel by plane within the UK



Conclusion

Hence we can safely conclude that the market

in the 1840s was inefficient, grossly so,

comparably to the market at the time of the

telecom bubbles a decade ago. Investors in the

British Mania, and even the vast majority of

opponents of this bubble, did not see very clear

signs that expected revenues and profits werenot going to materialize.



Serious planning required to achieve the right

structure for the desired future shape of the

business.

Achieve alignment between the different parts

of the business if they are to be privatised

separately.

To PPP or not to PPP?



ANY QUESTION ?????

Documents

British Railways