Chairman Pip's Railway Thoughts

It’s “Make your Mind Up” time

Posted in Business, Great Britain by Chairman Pip on 23 April 2010

Deutsche Bahn have completed their takeover of Arriva, in a deal expected to cost somewhere in the region of £1.7bn, which will see DB take control of rail and bus operations in 12 seperate European countries. European competition rules mean that Arriva’s rail operations in Germany will need to be sold, but on the whole DB will likely do quite well out of the deal. Typically however, and of course led by Mr Potato Head, the unions are apoplectic about the deal. According to him, the purchase will:

sound a warning that we’re heading towards a dangerous monopoly of rail and bus services across Europe in which profit comes ahead of safety and service.

Correct me if I’m worng, Mr Potato Head, but aren’t you seeking a monopoly? Isn’t that what tends to come about from nationalisation? I mean, correct me if I’m wrong of course, but I don’t recall seeing any other operators on Britain’s railways during the days of British Rail. Does that not count as a monopoly? And is that not what you actually want? In any case, the German rail system has several different operators in addition to DB, so it can’t even be said that there is a monopoly in Germany. Let’s also be clear; Germany is Germany, and Britain is Britain, and in terms of the railways the rules on safety are different, which is a government decision, not a company one. DB is also a private company, not a state one, as many people seem to think – it has shares that can be traded, but which at the moment are owned by the German government. This is not like British Rail, which was a nationalised corporation that had no tradeable shares. So the argument of Gerry Doherty, head of the TSSA, does not hold up:

If Germany believes railways should be run by the state in favour of the passenger, why don’t we do the same here in Britain?

It remains to be seen if the sale will be a good thing for the passengers that use Arriva Trains Wales and CrossCountry. But, there have been no complaints from passengers of the other rail operators owned by DB. One final point. If the unions object so much to DB’s takeover of Arriva, why didn’t they also object strongly about the entry into the UK market of Nederlandse Spoorwegen? NS own a pair of UK TOCs, and are no doubt interested in obtaining others. What makes the Dutch different to the Germans? (Aside from a wonderful openness in their national character :P).

“Unions angry as Arriva is taken over by German company”
“D.Bahn says must sell Arriva German rail activities”

"Bob Potato Head, it's make your mind up time"


2 Responses

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  1. Claire said, on 24 April 2010 at 5:51 pm

    Yes, nationalisation v. much is a monopoly! Thing is, though, that it was when the monopoly/nationalisation ended in the UK that the safety standards seemed to drop. I heard somewhere that there had apparently been fewer rail accidents since privatisation, but that did not seem the case – not long after the privatisation, there was a series of rail crashes.

    I think the point about profit over safety is one worth raising but I believe anyone who has a monopoly is likely to consider safety more – not less! They’re more guaranteed money no matter what.

    • Chairman Pip said, on 25 April 2010 at 5:42 pm

      Mr Potato Head is always trying to use the emotive “profit before safety” argument. But look at the last time there was a fatal accident on the railway that was the result of safety standards – the 2007 Grayrigg crash. Prior to that, the last one was the Potter’s Bar crash in 2002. While it is true that there were some major incidents in the years following privatisation, standards have massively improved, especially since Ladbrooke Grove in 1999. Safety is now king in the UK.

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