BRITAIN'S BIGGEST rail union today renewed its call for an end to the "costly, damaging and dangerous" fragmentation of Britain's rail network, as MPs debated the chaos caused by overruns of engineering work after the New Year.

In a parliamentary briefing issued today (attached below) RMT warned that further fragmentation of infrastructure mooted by the Tory Party and some private train operators would result in a bad situation being made even worse.

"The more we hear about the recent overruns the clearer it is becoming that the contract culture, fragmentation and corporate greed are at the core of the problem," RMT general secretary Bob Crow said today.

"From the reports we have had coming in it seems that engineering contractors have been making hay out of everyone else's misery by chasing cash around the country.

"If Network Rail is to get to grips with its problems it needs to take proper control of its renewals programme, and that means doing away with the maze of contractors, subbies and agencies and bringing renewals contracts back in-house, as it already has with most maintenance work.

"The last thing we need is further fragmentation and train-operating companies sweating infrastructure assets, but that will be the nightmare result if the Tories get their way.

"It was the Tories who cursed us with rail privatisation in the first place, and now they want to take us back to the future by splitting up the national rail network and divvying it up among their boardroom pals in the train-operating companies.

"If the Office of Rail Regulation simply ends up slapping a fine on Network Rail it will only doubling the misery already heaped on passengers and taxpayers who are already subsidising the contractors' and train operators' profits.

"Of course we need an investigation, but what is the point if it doesn't look at the effects of fragmentation?

"If we are to get the modern high-capacity railway our economy and environment need, the government must ultimately accept that operations, infrastructure and rolling stock must be re-united in a single, coherent, accountable public structure," Bob Crow said.

ends

Opposition day debate: Performance of Network Rail

Summary

* The National Union of Rail Maritime and Transport Workers (RMT) is the UK's largest rail union. Of its 75,000 members over 60,000 are employed on the railways and London Underground.
* The disruption over the holiday period was a direct result of the continuing structural flaws in the railway industry caused by the Tory privatisation and fragmentation of the railways.
* The government has made progress in addressing these problems but needs to make further progress by creating a single unified, integrated public sector railway, as per 2004 Labour Party Conference policy and the 2004 Transport Select Committee Report which recommended the introduction of a new public sector railway agency "given all the powers required to manage the entire rail system."
* The current Tory proposals for the industry would be disastrous, leading to the further fragmentation of the industry and setting back the progress which the government has made.

Key Points - background to holiday period rail disruption.

* To understand the causes of the rail disruption over the holiday period it is necessary to understand the structure of the rail industry.
* Railtrack was a wholly private company created following the Tory privatisation of the railways. Railtrack was responsible for the renewals and maintenance of Britain's rail infrastructure, e.g. its track, signalling and stations.
* In railway language "renewals" is the term for major rail improvements such as the installation of new signalling or the laying of new track, and "maintenance" is the day-to-day inspection and repairs of wear and tear of rail infrastructure.
* The wholly private Railtrack in turn contracted out its maintenance and renewals work to a profusion of private contractors and sub-contractors. Although in the private sector and paying a dividend to shareholders Railtrack relied on government subsidy to remain viable.
* Whilst Railtrack was responsible for railway infrastructure, railway passenger services were the responsibility of individual private Train Operating Companies.
* Following Railtrack's collapse the government created Network Rail to take over Railtrack's responsibility for maintenance and renewals. Network Rail is a "not for dividend" private company subsidised by the government. It can make profits but its status means that all its profits must be reinvested to improve the railway infrastructure.
* In 2004 Network Rail took most maintenance contracts back in-house, meaning that for the first time since the privatisation of British Rail, railway maintenance was integrated into a unified management structure and undertaken to improve the railway rather than make a commercial profit.
* Network rail has not, however, taken renewals back in-house and they are still undertaken by commercial companies contracted to Network Rail.
* Rail services over the holiday period were severely disrupted on the West Coast Mainline and into London Liverpool Street.
* The disruption over the holiday period was caused by the overrun of "renewals" work in these areas undertaken by private companies, contracted to work for Network Rail.

Key Points - Creating a better railway

* When maintenance contracts were first brought back in-house by Network Rail there were big improvements, with delays caused by infrastructure failure falling dramatically.
* Network Rail reported delays caused by infrastructure falling by 17% and 8.7% in 2005 and 2006 respectively. In all, delays caused by Network Rail have fallen 28% since the company took control.
* The conclusion we would draw from this and which we believe is being considered as an option by some in Network Rail, is that following the success of rail maintenance being bought back in House, rail renewals should also be bought under the direct control of Network Rail.
* Whilst it is true to say that the improvements obtained by bringing maintenance back in-house has slowed this has been caused by the continued fragmentation of responsibility of railway infrastructure. With work still fragmented between maintenance and renewals and a very long contractor and sub-contractor chain Network Rail simply cannot deliver long-term improvements.
* The re-integration of maintenance and renewals is a prerequisite for those improvements because it provides a stable platform on which NR can build and effectively plan across the whole network. One single body will be responsible for all rail infrastructure where the needs of the railway are placed before commercial considerations.
* The experience of maintenance being brought in-house is that if a fully integrated infrastructure does not exist then it is difficult to sustain improvement in performance.
* In addition to unifying responsibility for rail infrastructure steps should then be taken to recreate wholly integrated railway by unifying operations and infrastructure.
* The benefits of this approach to the taxpayer and fare-payer can be found in the government's own National Transport Statistics published in December 2007. This showed that rail investment was three times higher in real terms ten years after privatisation, but that punctuality and reliability were still below British Rail levels. That is to say the failed privatised system means investment costs three times what it did in British Rail days, while punctuality and reliability remain below pre-privatisation levels
* The last independent report into the viability of railway public ownership was undertaken by the Catalyst (now part of Compass) think tank in 2005, which found that.

"Any private sector investment in the railway must ultimately be paid for by farepayers and taxpayers - with interest. Around £800m a year is taken out of the industry as returns to private lenders and investors - a total leakage of more than £6b since 1996.

The majority of passenger services could be taken into the public sector by 2013 at no cost. Reductions in regulatory bureaucracy and in the subsidies paid to private Train Operating Companies could save more than £200m a year

Restoring network infrastructure and rolling stock to public ownership would entail a one-off increase in public debt by, at most, 2.15 per cent of GDP. This would not breach the government's Golden Rule or Sustainable Investment Rule. This capital investment could produce immediate savings of £300m or more a year in current spending

Rolling stock companies should also qualify for a one-off windfall tax on excess profits. If this was calculated and applied in the same way as Labour's 1997 windfall tax on privatised utilities, additional revenue of £100m to £200m could be yielded

Overall, the most conservative estimates indicate that bringing the railway system back into public ownership could produce immediate cash savings of £500m a year or more through reduced bureaucracy and leakages to private providers of finance.

Over the medium and longer term, reintegration would produce further savings and improvements as the post privatisation trend to waste and cost-escalation is reversed."

Key Points - Tory Proposals a step backwards

* RMT is completely opposed to" horizontal fragmentation" of the railways which has been proposed by the Tories and some Train Operating Companies, which would see the franchise holders controlling the tracks and signals over which their services operate. RMT remains convinced that a single infrastructure controller, currently Network Rail, is the most appropriate way to set and monitor national operational and safety standards on the rail infrastructure.
* RMT would not want to see these continuing improvements made by Network Rail threatened by an unnecessary and potentially expensive fragmentation of the railway infrastructure.
* RMT believes that some train operators would simply 'sweat the assets' on the railway infrastructure, particularly in circumstances where their franchises were coming to end and the existing operators were either not bidding for or were not short-listed for the replacement franchise.
* RMT has serious concerns that horizontal fragmentation would repeat the Railtrack experience where the company systematically underinvested in order to maximise returns to shareholders. The result was a catastrophic degradation of the railway infrastructure.