U.K. Orders Rethink of Privatized Railway After Summer Meltdown

(Bloomberg) -- Britain will rethink its rail strategy after a summer of travel chaos in what the Department for Transport said will be the most sweeping review since privatization in the 1990s.

The main aim of the plan will be “bringing track and train closer together to reduce disruption and improve accountability,” Transport Secretary Chris Grayling said in a statement Thursday after a study blamed a lack of leadership in government and industry for the scheduling meltdown.

While Grayling said the review will seek to build on the current franchising model, in which companies bid to run trains on specific lines or networks, he added that its chairman Keith Williams, who previously ran IAG SA’s British Airways arm, will have a wide-ranging remit to consider all options.

“Privatization has delivered huge benefits to passengers,” Grayling said. “But it is clear that the structure we inherited is no longer fit to meet today’s challenges and cope with increasing customer demand.” The review will consider all parts of the railway, including franchising, industry structures, accountability and value for money for passengers and taxpayers.

Japanese Option

Writing in the Daily Telegraph, Grayling separately said that the railway is too divided, with too many different companies and organisations. He added that he continues to favor a privatized system, blaming state-run system manager Network Rail Ltd. for many current issues, and mooted the Japanese model of large regional companies running both trains and track as one alternative.

Initial findings of an inquiry into the summer rail crunch suggest the Department for Transport, Network Rail and the operators of England’s Thameslink and Northern rail franchises “all made mistakes which contributed to the collapse of services,” according to the Office of Rail and Road, which wa also found to have been at fault.

Swathes of Britain’s railway were thrown into turmoil by the biggest timetable change in a generation in May. The industry “placed engineering and planning concerns ahead of serving its passengers” the study found, while Network Rail and the DfT didn’t fully understand the risk of major disruption.

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