As if confirmation was required that a nationalised rails service would be better for the country, The Guardian reported fifteen months ago; “How infuriating it must be, then, for free-market ideologues that east coast (nationalised) depended on less public subsidies than any of the 15 privately run rail franchises. Indeed, the franchise has proved a lucrative cash cow for the state, bringing in around £1bn to the exchequer since 2009. East coast is an embarrassing success story for public ownership. Instead, it must be run by a tax exile and a Scottish businessman perhaps best known for campaigning against gay equality.”
And so it was sold off. No doubt increased subsidies will follow. But now there’s something new for George Osborne to flog off.
Network Rail is a ‘not for dividend’ company with no shareholders which reinvests its income in the railways and was moved onto the books of the government just 18 months ago, it is now apparent why. Network Rail is about to sell its largest railway stations to shopping centre landlords and developers in yet another privatisation drive. And this, it appears, is just the start.
When the stations are sold-off, the profits, like in all privatised operations will go to shareholders and not reinvested back into public safety and upgrades. Network Rail has its problems and one of those is debt. One has to consider what a private company can do to halt losses and generate profits when considering public safety as the main cause of losses. Clearly, the private for-profit operations have failed in the past.
Not all stations will be sold off but the shops within them are rented out. For instance, the concession model has been used at St Pancras station. This is run by HS1, which in turn is managed by Canadian pension funds on a 30-year concession, having paid £2.1bn for the privilege in 2010. The profits from that operation goes to funding Canadian state pension liabilities!
A recent review also included recommending selling off the entire Network Rail operation which manages 20,000 miles of track and 40,000 bridges and tunnels and demonstrates that selling off assets and public safety is one giant scam operation to siphon off billions of public money.