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May 30, 2008

‘Half-baked’ Tube booze ban could endanger staff, says RMT

RMT: May 30 2008

THE BAN on alcohol on Tube trains which comes into force on June 1 is half-baked and could put staff in greater danger of assault, the network’s biggest union says today.

RMT has also expressed its concern at London Underground's complacent response to the organisation of a 'booze-ban party' on the eve of the ban.

"It is pretty irresponsible to organise a booze party on the Tube when alcohol already plays a part in so many incidents," RMT general secretary Bob Crow said today.

"We are concerned that LUL does not intend to put on any extra staff on Saturday night as it will be our members who will be in the front line and at risk from aggressive drunken behaviour

"RMT will support any measure that will make our members' working lives safer and more pleasant, but the ban has been poorly thought through, is being implemented in haste and could put our members in greater danger

"Violence against Tube staff is already a major problem, particularly from people who have been drinking, but now our members will be expected to approach people drinking and stop them or even remove them from the train or station.

"It was bad enough that the ban was announced without any consultation with staff, but it took three weeks after the announcement for them to meet with our safety reps.

"When they did finally come up with some guidelines they were issued late last Friday before the bank holiday weekend and are still being amended two days before the ban is supposed to come into force.

"The ban does not apply to national rail, so what happens on those interchanges like Farringdon, where Tube platforms are immediately next to national rail platforms?

"We need a sensible cross-industry approach to violence and anti-social behaviour, with everyone involved in finding the solutions, including the unions who represent the workers who are on the receiving end of it.

"A good first step would be to recognise that we need more staff on stations and guards back on all trains," Bob Crow said.

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Tube booze party 'irresponsible'

BBC News: 30 May 2008

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The ban will be implemented across London's entire transport network

London Underground workers have attacked plans for a public drinks party on Circle Line trains on the eve of an alcohol ban.

The Rail Maritime and Transport (RMT) union said it was irresponsible of those behind the event, when alcohol played a part in trouble on the system.

Saturday's "Last Round on the Underground" party has been advertised on the internet.

The alcohol ban also applies to buses, the Docklands Light Railway and trams.

From 1 June, open containers of alcohol will be banned with the aim of making travelling on London's public transport network a safer and more pleasant experience for passengers.


"It is pretty irresponsible to organise a booze party on the Tube when alcohol already plays a part in so many incidents" - RMT's Bob Crow

The new policy was announced earlier this month by London Mayor Boris Johnson.

People have been invited to bring their own cocktails to the party, but to behave themselves and be civil to other passengers.

Bob Crow, general secretary of the RMT, said: "It is pretty irresponsible to organise a booze party on the Tube when alcohol already plays a part in so many incidents.

"We are concerned that London Underground does not intend to put on any extra staff on Saturday night, as it will be our members who will be in the front line and at risk from aggressive drunken behaviour.

Police help

"RMT will support any measure that will make our members' working lives safer and more pleasant, but the ban has been poorly thought through, is being implemented in haste and could put our members in greater danger."

A spokeswoman for Transport for London said it would be monitoring the party, but was confident it would pass off without incident.

Addressing the RMT's concerns, she said: "We will not be asking staff to put themselves in a position where they feel they are in danger.

"If they feel they are in danger they can call for extra help from the approximately 2,500 police and community support officers dedicated to the transport network."

British Transport Police said it would have an increased number of officers deployed on the Underground for a number of events in London on 31 May.

German Parliament Clears Way for Rail Privatization

Deutsche Welle: 30.05.2008

The German Parliament gave the green light on Friday for the partial privatization of Deutsche Bahn AG by agreeing to a controversial plan to sell off shares in Europe's biggest rail group.

Chancellor Angela Merkel's ruling coalition on Friday, May 30, approved a proposal in parliament to allow private investors to buy up to 24.9 percent of Deutsche Bahn's passenger and logistics operations with Deutsche Bahn expected to make its stock market debut later this year.

The Bundestag vote saw 355 deputies approve the measure with 153 against and three abstaining. Nearly 100 MPs did not cast a ballot.

The move by the Bundestag to sign off on the privatization plan came despite the three opposition parties voting against the sell-off and stiff resistance from the influential leftwing faction of the Social Democrats, the junior member of Merkel's conservative-led coalition.

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Mehdorn promises the sell-off will benefit passengers

"It is a good day for (rail) travelers, taxpayers and employees," Deutsche Bahn chief Hartmut Mehdorn said.

"Today's decision secures the future of the company and its 237,000 employees," he said in a statement. "Now we must make the partial privatization a success together in the coming months and strengthen Germany's position as a place to do business."

Compromise between parties

The privatization of Deutsche Bahn has been on the cards since 1994, when the rail operators of the former West and East Germany merged.

But the plans were delayed by the company's disastrous financial situation following the unification of the country.

The left-right government was sharply divided between Christian Democrats backing the privatization and Social Democrats raising concerns about potential job cuts at Deutsche Bahn.

They struck a compromise to avoid handing a foreign investor a blocking minority, which German law has set as a 25-percent stake in a company.

Deutsche Bahn and trade unions have also agreed on a plan that would prevent any layoffs at the company until 2023.

Analysts say the planned partial privatization should generate about six billion euros ($9.3 billion) with proponents of the sell-off saying it would help to mobilize capital for the railway.

Experts criticize plan

But the 24.9 percent share sell off, which was proposed by Social Democratic chief Kurt Beck as a compromise, falls short of the 49.9 percent that Merkel's supporters have argued for.

Indeed, senior members of Merkel's Christian Democratic Union have indicated that they see the 24.9 percent as representing possibly the sale of the first tranche of shares in the railway company.

Deutsche Bahn's partial privatization follows years of wrangling between Germany's politicians

Moreover, analysts have criticized the privatization model as resulting in only a small parcel of shares being sold off. This could result in the stock ending up principally in the hands of big institutional investors, some analysts say.

Under the plan, the state would have a 75.1-percent stake of Deutsche Bahn's passenger and freight operations.

The partial privatization, however, means that Berlin would retain a 100-percent control of the rail company's railway stations as well as its 34,000 kilometers of track network and energy supplier operations.

- DPA News Agency (sp)


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German Lower House Supports Deutsche Bahn Privatization

The Wall Street Journal: May 30, 2008
By ANDREA THOMAS

BERLIN -- Germany's lower house of Parliament Friday supported the controversial planned partial privatization of railway operator Deutsche Bahn AG.

"I am convinced we are opening the door for a good future of Deutsche Bahn," German Transport Minister Wolfgang Tiefensee told the lower house in a debate. He rejected suggestions the company's service would suffer from the decision. "The opposite is true, we will get better."

The government plans to sell 24.9% of Deutsche Bahn in a public offering late this year, privatizing the last big state-owned company.

Mr. Tiefensee has said the partial privatization of Deutsche Bahn's passenger and freight services and the logistic unit in form of a holding company would take place in November. It is expected to generate proceeds of €5 billion to €8 billion.

All stations and track will remain in full state ownership.

The proposal faced heated debate in the lower house because the government decided it only required cabinet approval, not that of Parliament. The opposition party The Left has filed a legal complaint against the decision. In Friday's lower house vote, lawmakers were only asked to vote on a motion but not on a bill. It was supported by votes from a large majority in the lower house.

The plan has also been controversial because some lawmakers fear the privatization might hurt the local railway transportation system, which isn't as profitable as the long-distance transportation.

Two-thirds of the privatization proceeds will go to Deutsche Bahn to boost its capital base and to invest in projects such as track network. The rest will go to the federal budget.

US freight rail congestion a concern

Associated Press: May 30, 2008
By MICHAEL TARM

AP IMPACT SURVEY: US freight rail congestion could mean billions in losses for economy

(CHICAGO) Railway executive Matthew Rose stood before fellow industry leaders, pointing to a map meant to tell the future of the U.S. rail freight network. It was drenched in red — east to west, north to south.

The blotches illustrated areas where, by 2035, traffic jams could be so severe trains would grind to a halt for days with nowhere to go.

"For those of you who've ever seen a good rail meltdown, this is what it looks like," Rose, CEO of Burlington Northern Santa Fe Corp., said as the crowded hall shifted uncomfortably in their chairs. "It's literally chaos in the supply chain."

While the nation's attention is focused on air travel congestion and the high cost of fuel for highway driving, a crisis is developing under the radar for another form of transportation — the freight trains used to deliver many of the goods that keep the U.S. economy humming.

The nation's 140,000-mile network of rails devoted to carrying everything from cars to grain by freight is already groaning under the strain of congestion, with trains forced to stand aside for hours because of one-track rail lines.

And it's probably going to get worse over the next two decades, according to an analysis of government and industry projections by The Associated Press and interviews with experts on rail freight.

The damage to the U.S. economy could climb into the billions of dollars. Higher shipping costs would raise prices for everything from lumber to grain. One analyst said the rail crunch could add thousands of dollars to the price of a car.

"It's not rocket science to see we have a calamity coming down the road," said Paul Bingham, a transportation analyst at research firm Global Insight.

Congestion around the country has remained chronic, even as the ailing economy has led to a 3 percent dip in freight train traffic in the first few months of this year compared with last year. And a new U.S. Chamber of Commerce report warns demand for freight trains is expected to double over the next 25 years.

The problem is that there's no room.

"Even if the estimates are half wrong, we can't put even 25 percent more freight in the system right now without serious implications," said Randy Mullett, an analyst for the nonprofit Transportation Research Board.

Already, delays hamper the existing rail freight network. A lone train stopped in Chicago can force other trains to stop or slow as far away as Los Angeles or Baltimore.

"It's a ripple effect," said Scott Haas, a vice president for United Parcel Service, which uses 3,000 freight cars every day, more than any other U.S. business. "Everything in my system backs up."

Atlanta-based UPS hasn't determined the total cost of freight route congestion, but says that just five minutes of daily delays for each of its drivers amounts to $100 million in company losses a year.

Other modes of transport can't take up the slack: Trucking faces its own congestion problems, a shortage of drivers and high fuel prices. Ships and barges can't reach large parts of the country. Airplanes couldn't begin to carry the millions of tons of coal, waste, chemicals, grain and cars hauled by trains. And hauling freight by rail remains far more fuel-efficient than trucking.

Many politicians are joining rail executives in sounding the alarm.

"The amount of money we're investing nationally is pathetic," Rep. Peter DeFazio, D-Ore., said during a recent congressional hearing on congested freight routes. "We're heading toward fourth-world infrastructure."

Others suggest the railroads are being alarmist.

Kenneth Kremar, another Global Insight analyst, said talk of a looming crisis serves industry interests as rail companies jockey for more money from Congress. He said investment in larger, high-tech train cars and computer systems that better pace trains should help avert logjams.

"It's illogical to assume nothing will be done," he said. "Railroads have an inherent interest in doing something. The market will respond. There's no reason think they're headed for the abyss."

Amtrak, which shares the rails with freight trains, is also feeling the pinch. Its long-distance trains were on time just 42 percent of the time last year, according to a report by the U.S. Department of Transportation's inspector general.

The problem on the shared tracks has worsened in recent years as freight traffic has soared. Passenger trains move much faster than most freight trains, and in many areas there is only a single track, forcing trains to pull over onto side tracks and wait while trains coming in the other direction pass.

A solution won't come cheap.

The Chamber says expanding capacity on the more than 150-year-old U.S. rail system would cost $148 billion over 30 years. Private rail companies would have to pay most of it, with federal and state tax dollars covering much of the rest.

Any solution will have to include Chicago, which handles about 40 percent of all U.S. rail freight on 180,000 trains a year.

Expanding capacity here will cost $1.5 billion over six years, a coalition of officials and rail executives estimates. David Burns, an independent railroad engineering consultant based in the Chicago area, put the cost closer to $4 billion.

Bottlenecks crop up in other parts of the country, too.

Long stretches of busy Union Pacific Corp. lines in Southern California and the Southwest, vital routes for agricultural goods and Asian trading, have just a single track.

And Baltimore's long but low Howard Street rail tunnel, connecting mid-Atlantic states to the Midwest, has just one track and can't accommodate freight-train cars used elsewhere that carry twice the load, with one container stacked on top of another.

But the big choke point is Chicago, where it can take up to two days for trains to wind through the city.

Nearly all the major routes of the weblike rail freight system comes through one or more of the nearly 80 rail yards here. It's why a single delayed train here can force those thousands of miles away to stop or slow down.

The problem is that the Chicago hub was designed in the mid-1800s, when the area was a comparative backwater of 30,000 people. Now, 10 million residents sprawl into formerly rural areas where trains once rolled along unencumbered.

The 500 freight trains moving through Chicago each day also have to share tracks with — and yield to, according to protocol — 700 daily commuter trains. In contrast, commuter trains in New York City don't share lines with freight.

Proposed solutions include building new overpasses to keep trains moving at track intersections. Elsewhere, single-line tracks could be expanded to double or triple. And some advocates want to restore tracks that fell out of use in the 20th century.

Jacksonville, Fla.-based CSX announced plans this month to spend $300 million on upgrades to allow trains with double-stacked freight cars to run from the East Coast to the Midwest.

That would mean raising clearance on bridges and tunnels on lines through the Appalachian Mountains. CSX would like the federal and state governments to kick in $400 million more.

While the move would help congestion, it's not a cure-all. Double-stacked cars can't carry heavy, densely packed commodities, like coal, wheat and liquid chemicals, because of weight limits on tracks and because the heavy loads would make the trains dangerously unstable.

Expanding capacity to route trains around clogged cities may not sit well with suburban and exurban towns.

And then there's Amtrak. It already operates on tracks owned by the big railroads, which will be increasingly reluctant to make concessions to passenger trains.

But Amtrak spokesman Marc Magliari said it was only right that Amtrak also benefit from capacity upgrades. The service was formed in 1970 when Congress agreed to let railroads unload passenger service they said was dragging them down. In exchange, the railroads were required to give Amtrak priority on their tracks.

It may be impossible to keep both sides happy.

"There are areas, especially where there's just a single track, where Amtrak takes as much as 30 percent out of the capacity of freight rail. That's huge when you're in a capacity crunch," said Mullett, the analyst. "There will be hard public policy decisions, and that would include Amtrak."

— — —

On the Net:

Federal Railroad Administration: http://www.fra.dot.gov

Surface Transportation Board: http://www.stb.dot.gov

Transportation Research Board: http://www.trb.org

Association of American Railroads: http://www.aar.org

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Facts about US rail freight system

Associated Press: 29 May 2008

Some facts about the U.S. rail freight system:

_ The first North American railroad was chartered by Baltimore merchants in 1827. The golden age of railroads began around 1865, when there was about 35,000 miles of track. It peaked in 1916 at 250,000 miles.

_ As the trucking industry boomed in the 1950s, there was a rash of bankruptcies in the railway industry, lasting into the 1970s. Deregulation in the 1980s forced scores of mergers and helped bring the industry back.

_ Today, trains move more than 2 billion tons of freight a year on 140,000 miles of track, nearly all of it privately owned and maintained.

_ Coal accounts for more than 40 percent of all freight transported by train.

_ In 1929, the average freight train had around 50 cars, with about 800 tons of freight. Trains now are far more efficient. An average train has about 70 cars and carries more than 3,000 tons of freight.

_ Railway companies employ nearly 200,000 people; the average salary is around $70,000.

_ Texas has the largest number of rail freight workers, about 17,000, followed by Illinois, which employs about 13,000; Nebraska is third, with around 11,000 (according to 2005 figures).

_ Nine companies account for more than 90 percent of all North American railway revenue, or more than $50 billion. The five largest are Union Pacific Railroad, BNSF Railway, Norfolk Southern, CSX Transportation and Canadian National Railway.

Sources: Federal agencies, Association of American Railroads.

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Railroads Roll With a Greener Approach

Wall Street Journal: May 29, 2008
By ALEX ROTH

Industry Makes Case That Switch to Trains Is More Eco-Friendly

A new CSX Corp. radio ad declares that even the most fuel-efficient hybrid car can't compete with a train, which "can move a ton of freight 423 miles on a single gallon of fuel."
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Norfolk Southern is among the railroad companies running environmentally themed ads.

"Too bad we can't all drive a train," the announcer says before urging listeners to visit CSX's Web site to learn about the Jacksonville, Fla., company's "commitment to protecting the environment."

Railroad companies, long a target of environmentalists who blame them for everything from deforestation to toxic spills, are marketing themselves as the ultimate eco-friendly, low-fuel-consuming industry.

With fuel prices at record highs and worries about global warming reaching critical mass, U.S. companies of all stripes are touting their green credentials. That list includes plenty of businesses that wouldn't normally be associated with the environmental movement, like oil companies or mining outfits. But the juxtaposition for trains is among the starkest.

Early in the 20th century, steam-powered trains, fueled by coal, cast off trails of embers that often ignited and denuded the surrounding landscape. Train accidents and cargo spills still taint perceptions of railroad companies. Earlier this month, a Burlington Northern Santa Fe train partially derailed in Lafayette, La., and began leaking hydrochloric acid. Several thousand people were forced to evacuate. (Accidents involving trains carrying hazardous material have been declining slightly over the past decade, according to the U.S. Department of Transportation.)

Freight trains now use much cleaner and more fuel-efficient diesel engines, and railroad companies are testing new engines that the industry is touting as "ultralow-emission." Many environmentalists acknowledge that the railroads have a powerful argument, given that freight trains burn far less fuel than trucks and can help reduce highway congestion.

"In general, train transportation is much more fuel efficient than trucking, and we should be doing more of it," says Colin F. Peppard, transportation policy coordinator for Friends of the Earth, an environmental advocacy group.

Several rail companies are rolling out their own statistics to make the case that the switch to trains is good for the environment. Norfolk Southern Corp. is running a series of environmentally themed television spots and has a "carbon footprint analyzer" feature on its Web site that allows customers to measure the environmental advantages of shipping by freight rather than truck.

Union Pacific Corp.'s Web site touts the company's "cleaner and greener" fleet of locomotives and argues that if 25% of truck freight was diverted to rail, there would be "nearly 800,000 fewer tons of air pollution" by 2025.

Much rides on this approach. For the first time in decades, railroad stock prices have been rising, and business is booming. By one estimate, the railroad industry will need to expand its capacity by 88% in the next quarter-century, as highways get even more congested, fuel prices rise and more shippers decide to use trains to move their products. What's more, railroads -- which used to carry mainly raw materials such as coal and timber -- are now increasingly transporting consumer goods from ports to cities.

As the industry begins billions of dollars worth of system improvements, it is increasingly seeking public money to help pay for some of the expansion projects. Norfolk Southern, for example, is seeking public funding to help pay to upgrade the Crescent Corridor, a network of routes between the New York City area and New Orleans. The industry is also asking Congress to pass a proposed bill that would give railroads tax credits for money spent on track expansion.

The railroad industry is also trying to fend off calls for tougher federal regulations that would make it easier for shippers to challenge prices in areas where a railroad has a monopoly.

Some environmentalists say the industry hasn't done enough. In the Los Angeles/Long Beach area, environmental groups are battling Union Pacific and Burlington Northern Santa Fe Corp., which are seeking to expand and modernize their rail-yard operations in the neighborhoods surrounding the nation's busiest port system.

Last year, the South Coast Air Quality Management District, which monitors air quality in the Los Angeles region, released a statement accusing the railroads of "spew(ing) toxic diesel soot into neighborhoods, backyards and school yards, posing health risk to residents."

"From our viewpoint, it just seems that they've been extremely recalcitrant and stubborn in terms of being willing to adopt cost-effective measures that will reduce air pollution," said Sam G. Atwood, the district's spokesman.

Union Pacific Chief Executive James Young says that a certain amount of community resistance is inevitable whenever a business tries to expand. "You have the not-in-my-backyard mentality," he said.

Norfolk Southern executives say they first began to hone their eco-friendly message about three years ago with a television ad showing a tree lifting a freight container off a busy highway and placing it on a train.

Norfolk Southern's latest ads -- a campaign dubbed "The Lonely Gallon," showing a family of gas cans looking on forlornly as a train whizzes by -- will air roughly 400 times during the fall election season, the company said.

May 29, 2008

Collective agreement finally reached for German engine drivers

EIRO: 29 May, 2008
Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

In mid April 2007, after about a year of negotiations, the rank and file members of the German Engine Drivers’ Union (GDL) finally approved the results of the collective bargaining round with the German rail company Deutsche Bahn (DB).

In July 2007, the rail workers’ trade unions had already negotiated a collective agreement with DB, covering 134,000 employees, However, GDL secured an independent collective agreement for about 20,000 engine drivers at DB in the spring of 2008.

The reason for the protracted collective bargaining negotiations in the railways sector is the rivalry between the German Engine Drivers’ Union’ (Gewerkschaft Deutscher Lokomotivführer, GDL) and the other two trade unions in the sector – Transport, Service and Networks (Transport, Service und Netze, Transnet), affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB), and the Transport Trade Union GDBA (Verkehrsgewerkschaft GDBA), affiliated to the German Federation of Career Public Servants (Deutscher Beamtenbund, dbb). Transnet and GDBA are united in a formal collective bargaining association (Tarifgemeinschaft) based on a mutual agreement between the two trade unions.

Previously, the three trade unions and the Employers’ Association of Mobility and Transport Service Providers (Arbeitgeberverband der Mobilitäts- und Verkehrsdienstleister, Agv MoVe), representing the German rail company Deutsche Bahn (DB), had signed a package of collective agreements on pay and job security covering all DB employees. With the collective wage agreement that was part of this package due to expire on 30 June 2007, a new collective bargaining round in the railways sector began earlier that year.

Trade unions demands in 2007 collective bargaining round

In contrast to the then valid collective wage agreement that had been negotiated and signed by all three trade unions, in a press release (in German), GDL decided to call for negotiating a separate collective agreement for around 30,000 engine drivers, ticket collectors and train catering staff. In a further press statement in March 2007, the Chair of GDL, Manfred Schell, also called for higher entry-level salaries and shorter weekly working time. GDL demanded an initial monthly salary for engine drivers of €2,500, compared with the basic monthly starting salary of €1,970 being paid at the time.

However, GDL’s call for an independent collective agreement was severely criticised for abandoning the legal principle, derived from decisions of the Federal Labour Court (Bundesarbeitsgericht, BAG), stipulating that different wage agreements should not coexist at one and the same company (Tarifeinheit).

The Transnet/GDBA association, on the other hand, had in a press statement (in German) in March 2007 called for a pay rise of 7% with a minimum monthly wage increase of €150 for lower income groups. While GDL was fighting for an independent collective agreement for certain occupational groups at DB, Transnet/GDBA, which organises around 134,000 employees at DB, continued to negotiate a collective wage agreement for all DB employees.

Negotiations between Transnet/GDBA and DB

Results of collective bargaining

Negotiations between Transnet/GDBA and DB began on 19 June 2007. In the first round of negotiations, according to a press article (in German), DB did not make any pay offer. In the second round, the company offered a pay increase of 2% but demanded in return an increase in the weekly working time to 40 hours.

On 9 July 2007, Transnet/GDBA and DB presented the outcome of the collective bargaining round (in German). In terms of pay provisions, the two parties had agreed on the following:

* a pay rise for employees of 4.5%, effective from 1 January 2008;
* a lump-sum payment of €600 for all employees.

By the time the agreement expires on 31 January 2009, all employees will be receiving a monthly salary of at least €1,600.

Separate negotiations sought for new pay structure

However, only two days after the newly concluded agreement had been finalised, Transnet/GDBA announced in a statement to the press that they were seeking further negotiations concerning the introduction of an entirely new pay structure for DB employees. In their statement, the trade unions emphasised that they wanted to negotiate this structure separately from their demands in the pay round; therefore, they had not pursued the issue of an overall renewal of the existing pay structure with DB during the collective bargaining round just concluded.

In the autumn of 2007, DB announced to the press the cornerstones of the newly negotiated pay structure. On 30 November 2007, the company agreed to a total pay rise of 10% to be implemented between 1 January and 31 December 2008. This included the initial pay rise of 4.5% already agreed in July 2007. Trade unions and employers also reached consensus on the introduction of a pay scale involving a new grouping of employees. The agreement on the new pay structure also provides for an increase in employees’ profit sharing by 50% for 2007. Up until the autumn of 2007, the employee profit share (in German) had been set at €100 or €200, depending on the profits earned by the company.

New collective bargaining structure agreed

Moreover, DB and Transnet/GDBA agreed on the introduction of a new collective bargaining structure within the company, which will come into operation in 2008. According to this new bargaining structure, a basic collective agreement (Basis-Tarifvertrag) will regulate holidays, employee profit sharing and retirement provisions, while special collective agreements (Zusatztarifverträge) will cover the new pay scale, bonuses and working time issues. Nonetheless, the details of each of these collective agreements still need to be negotiated.

DB’s Director of Human Resources (HR), Margret Suckale, also stated that a special collective agreement for engine drivers could be part of this bargaining structure, thereby avoiding the coexistence of different collective agreements at the same company.

Negotiations between GDL and DB

Demand for independent agreement for engine drivers

During the summer of 2007, DB, Transnet/GDBA and GDL referred their dispute to a joint dispute resolution procedure (Schlichtung). On 28 August 2007, the two sides presented the results (in German) of this process. GDL gave up its initial claim to represent all train crews and accepted that it only represented engine drivers. While still calling for an independent collective agreement for engine drivers, GDL declared that it sought to work together closely with Transnet/GDBA. The latter association highlighted in a press announcement (in German) that attempts by any trade union to ‘go it alone’ shall be avoided.

However, GDL underlined its demand for an independent agreement for engine drivers by organising strike action. In November 2007, according to GDL figures, about 20,320 engine drivers and train staff stopped work for 62 hours. Even freight transport was affected by the strike. December 2007 and January 2008 saw further strike action by GDL and intermittent negotiations between GDL and DB.

First draft of engine drivers’ agreement

In January 2008, the two sides finally announced the first outline of a future agreement for engine drivers. In a press statement (in German), DB explained that a lump-sum payment of €800 – backdated to 1 July 2007 – was to be made, while from March 2008, engine drivers were to receive a pay increase of 8%. Furthermore, their wages are to be raised by another 3% by September 2008. This wage agreement is set to expire on 31 January 2009. The two sides also agreed on a reduction of weekly working hours for engine drivers – effective from 1 February 2008 – from 41 to 40 hours a week without any loss in wages.

Nonetheless, DB emphasised that the adoption of a final collective agreement for GDL would depend on the consent of Transnet/GDBA to the conclusion of such an agreement. In a press announcement (in German), the latter association stated that it expected the company to keep its promise that different collective agreements at the company would not conflict with each other.

Details concerning the scope of the agreement were still to be clarified by the three trade unions and DB. Issues to be resolved included whether drivers of small railroad locomotives called shunters, newly employed engine drivers – hired on or after 1 January 2008 – or engine drivers at DB’s subsidiary DB Temporary Employment Agency were also to be covered by the GDL agreement for engine drivers. However, consultations between the three trade unions at the beginning of March 2008 on their possible cooperation had failed.

Collective agreement for engine drivers signed

On 9 March 2008, GDL finally announced in a statement to the press (in German) that DB had signed the collective agreement for engine drivers. Apart from the cornerstones outlined above, the two sides agreed on the following:

* GDL and Agv MoVe, representing DB, would sign a basic collective agreement that recognises the independence of the collective agreement for engine drivers;
* GDL has the right to negotiate collective agreements for engine drivers not only at DB but also at its subsidiaries.

The collective agreement (in German, 3.21Mb PDF) will take retroactive effect from 1 March 2008.

On 11 March 2008, DB’s HR Director, Ms Suckale, highlighted in an article in the daily newspaper Frankfurter Allgemeine Zeitung (FAZ), in connection with the new settlement, that the trade unions had agreed on a clear demarcation of employees to be represented by them. In this context, Ms Suckale further mentioned that GDL had chosen to concede to the representation of shunter drivers, who are now covered by the collective agreement of Transnet/GDBA.

On 14 March 2008, Transnet/GDBA finally approved the collective agreement for engine drivers concluded by GDL and DB, as highlighted in a press statement (in German). It was furthermore agreed that the GDL agreement would also cover engine drivers represented by Transnet/GDBA. On 14 April 2008, the rank and file members of GDL also announced in a press statement (in German) their approval of the collective agreement for engine drivers. Interestingly, during the collective bargaining round in the railways sector in 2007, about 40,000 working days were lost due to strike action initiated by GDL (DE0802019I).

Commentary

GDL is another trade union that has succeeded in establishing a collective agreement for one particular occupational group in a single company. Earlier examples of similar agreements include the ground-breaking collective agreement between the German airline Lufthansa and the German Airline Pilots’ Association (Vereinigung Cockpit, VC) for Lufthansa pilots in 2001, as well as the collective agreement negotiated by the trade union representing medical doctors, Marburger Bund (MB), for doctors at university hospitals in 2006.

However, as the lengthy campaign by GDL highlights, these arrangements cannot entirely prevent trade unions from competing for members and for the right to represent certain groups of employees at the establishment level.

Drivers to vote on proposals to end Irish rail strike

Belfast Telegraph: May 29, 2008

An end to the bitter, week-long rail dispute could be in sight, with 50 Cork-based drivers set to vote this morning on a deal agreed late last night by unions and Iarnrod Eireann.

The breakthrough followed 20 hours of talks with the Labour Relations Commission.

Disruption to train services to and from Cork and Kerry will continue this morning until the drivers have voted on the agreement.

They have been refusing to work for almost a week as part of a row over their co-operation with the training of new drivers.

SIPTU says it is confident the drivers will accept the LRC proposals.

Tolpuddle Martyrs' Festival 2008 - Sunday, 20th July

TUC:

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On February 24th, 1834, six farm labourers from the Dorset village of Tolpuddle were arrested on a charge of taking part in an 'illegal oath' ceremony. In the eyes of their masters, however, the real offence was that they had dared to form a trade union to defend their livelihood. For this they were sentenced to seven years' transportation to the penal colonies of Australia. The sentences provoked an immense outcry, leading to the first great mass trade union protest.

The campaign won free pardons and the Martyrs' return to England. A historic episode in the struggle for trade unionists' rights in Great Britain. Each year trade unionists from all over Britain and the world come to the tiny Dorset village of Tolpuddle to celebrate

We shall never forget what we owe them.

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RMT Dorset Rail branch proudly unveiled their new banner at this year's Tolpuddle Martyr's Festival and led the RMT contingent on the parade of banners through Tolpuddle village. Dorset Rail RMT branch secretary, Pete Brown (left) supported by another comrade leads our contingent above.

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Another new RMT branch banner this year is Portsmouth No. 1 RMT General Grades branch, which unites railworkers and seafarers in the Portsmouth area. The branch have paired the RMT union motto 'Unity is Strength' in a scroll with a central roundel adapting the old badge of the National Union of Railwaymen (NUR) 'Workers of the world, Unite!' The banner depicts a train, a ship and a lighthouse - the old symbol of the National Union of Seamen (motto 'Pull Together'). Branch secretary, Richard Howard (left) and branch chair, Mick Tosh (right) are carrying the banner here, while RMT Regional Organiser, Phil Bialyk watches them sweat.

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The Bristol Rail RMT branch banner makes another return to Tolpuddle carried by branch member Nigel and assisted by RMT Regional Organiser, Brendan Kelly (Phil, please take note).

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RMT Gloucester branch flag carried by Carolyn Parry and Gloucester RMT branch secretary, Tim Wilkinson.

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The banner of RMT's South Wales & West of England Regional Council - motto 'Unity is Strength' - Mewn Undeb Mae Nerth' carried by John Kear (left) and Chris Davidson (right).

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The people who started it.

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Each year commemorative wreaths are laid on James Hammett's grave in Tolpuddle churchyard. Here 'Red Notes', Bristol's Socialist choir follow the laying of the wreaths with the song of the Tolpuddle Man:

Farewell to my family, it's now I must leave you
That far-fabled shore in chains we shall see.
Although we are taken,
Do not be mistaken
As brothers in union, we shall be free.

They can bring down our wages and starve all our children.
In chains they can bind us and steal all our land.
They can mock our religion,
From our families divide us;
But they can't break the oath of a Tolpuddle man.

To those who rule us we are the dissenters;
"Do your duty, be grateful, don't complain!" we are taught.
For God, in His wisdom,
Has divided this kingdom
For few to have much, while so many have naught.

As brothers and sisters with an oath we will bind us;
The labouring poor in all England shall rise.
Thought Frampton has framed us,
They never will tame us.
Arise men and women; we'll yet win the prize.

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In a day of great music the RMT-sponsored Nottingley Colliery brass band from Easington in Wearside were the undoubted highlight. Here they are warming up before the march in front of RMT's Brighton and Hove City branch banner.

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And again!

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The band in formation.

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(left to right): Bob Crow, Dave Prentis, Tony Benn and Brendan Barber.

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As the sun rose on February 24 1834, Dorset farm labourer, George Loveless set off to work, saying goodbye to his wife Betsy and their three children. They were not to meet alone again for three years, for as he left his cottage in the rural village of Tolpuddle, the 37-year-old was served with a warrant for his arrest.

Loveless and five fellow workers – his brother James, James Hammett, James Brine, Thomas Standfield and Thomas's son John – were charged with having taken an illegal oath. But their real crime in the eyes of the establishment was to have formed a trade union to protest about their meagre pay of six shillings a week – the equivalent of 30p in today's money and the third wage cut in as many years.

With the bloody French Revolution and the wrecking of the Swing Rebellion just a few years before still in the minds of the British establishment, landowners were determined to stamp out any form of organisation. So when the local Squire and landowner, James Frampton, caught wind of a group of his workers forming a union, he sought to stamp it out.

Workers would meet under the sycamore tree in the village or in the upper room of Thomas Standfield's cottage. Members swore of an oath of secrecy – and it was this act that led to the men's arrest and subsequent sentence of seven years' transportation. By handing out such a harsh sentence, the government hoped to stem the growth of the fledgling Labour movement.

As the men were being led back to prison, George Loveless scribbled some words: “We raise the watchword, liberty. We will, we will, we will be free!" The rallying call underlined the Martyrs’ determination and has inspired generations of people to fight against injustice and oppression.

Transportation to Australia was brutal. Few ever returned for such a sentence as the harsh voyage and slavery took their toll.

The working class rose up in support of the Martyrs. A massive demonstration marched through London and a 800,000-strong petition delivered to Parliament protesting about their sentence. After three years, during which the trade union movement sustained the Martyrs' families by collecting voluntary donations, the government relented and the men returned home with free pardons and as heroes.

It was still to be many years before farm workers secured a lasting trade union and even longer for voting reform but as in the words of Goerge Loveless, the Tolpuddle Martyrs helped “raise the watchword liberty”.

Every year the story is remembered at the Tolpuddle Festival, held in the village where it all began. The event attracts thousands of people who enjoy the mixture of politics, theatre and music. There is also a procession of colourful trade union banners through the village.

The struggle and sacrifices made by the Tolpuddle farm workers are being repeated today around the world as people fight against injustice and inequality. In Britain trade unions continue to organise and defend the interest of working people in the face of powerful employers, privatisation and job cuts.

The story of the Tolpuddle Martyrs and the campaign that freed them inspires us to fight on. The annual festival reflects the spirit of those prepared to stand up and be counted and for those just learning about the history it is a joyful celebration of our solidarity.

Tolpuddle 2008 Festival Tickets Weekend camping tickets are available for purchase. Entrance to the festival is free.

Join the Tolpuddle Martyrs Festival group on Facebook!


Sunday 20 July - Main Stage Provisional Programme

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11.00 Graham Moore
Tolpuddle Man singer songwriter plays host for the day.

Seize the Day
It all started back during the road protest days of the late nineties. They’ve been protesting, campaigning and playing to audiences big and small ever since. Their songs will make you laugh, cry, or stand up and get active in changing the world for the better www.seizetheday.org

11:45 Grupo Lokito
Fusing Salsa and Congolese Rumba in an exuberant explosion of sound.

12.30 Speakers
Chair of the South West TUC welcomes
Dave Prentis TUC President and UNISON General Secretary
Elaine Bernard Harvard Trade Union Centre, USA
Dot Gibson National Pensioners Convention marks the centenary of the first state pension
President of the National Union of Students

1.00 Devon Sproule
Born on a commune in Canada this young singer songwriter is winning rave reviews. “Perhaps the sweetest and most honest folk-pop this year.” Rolling Stone. www.devonsproule.com

1.05
While the music continues on the main stage, the guest speakers will walk over to St John’s church to lay wreaths on the grave of Martyr James Hammett.


2.00 Procession of the trade union banners
led by Musicians’ Union Great Western Jazz Band

3.00 Speakers

Hashemiya Muhsin Hussein President, Electricity & Energy Union, General Federation of Iraqi Workers
Brendan Barber TUC General Secretary
Kate Allen Amnesty International
Tony Benn

3.30 Alabama 3
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- acoustic and unplugged
Acoustic stripped down versions of Alabama 3’s songs with Larry Love, Devlin Love, Rock Freebase and Harpo Strangelove. - “truly the perfect choice for a night of bourbon, barbeque, and fun.”

4.15 - to be confirmed

5.30 Robb Johnson & The Irregulars
- Finish on a high note with the end of festival party and Robb Johnson in the Martyrs’ Marquee.
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This year’s festival closes with one of the finest songwriters in the UK and his band. Their recent album, All That Way For This has been winning rave reviews. www.robbjohnson.co.uk

May 28, 2008

Jamaican Transport Minister outlines rail plans

Radio Jamaica: 28 May 2008

Jamaican Transport Minister Mike Henry on Wednesday outlined far-reaching plans which should see the kick-starting of plans towards the revival of the defunct Jamaican rail system.
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Transport Minister Mike Henry

Making his contribution to the Sectoral Debate on Wednesday afternoon Mr. Henry said the agreement with the Chinese Government will involve the construction of 18 new railway stations and the provision of five new engines.

The agreement includes the acquisition of 68 freight coaches, training for personnel and the reopening of the Kingston to Montego Bay service.

Rail Service is also to be established between Spanish and Ewarton in St. Catherine.

Mr. Henry said the Government is hoping to ease the pressure on the island's road network as emphasis will be placed on moving goods by freight.

Mr. Henry said the refurbishing exercise is to be carried out over a three year period and is due to start before year end.

He adds that the revival of the rail service will result in the creation of thousands of jobs.

See also:

Jamaica's rail service to be revived

Caribbean News: May 31, 2008

KINGSTON, Jamaica: Jamaica's Minister of Transport and Works, Mike Henry has said that the Chinese government is prepared to provide 85 percent of the required funding to revive the railway industry, through a loan to the Jamaica Railway Corporation, which would be guaranteed by the government of Jamaica.

"The project has to have the capacity to repay the US$354 million it is estimated to cost; the Government of Jamaica will retain ownership of its assets in respect of the JRC, while all the operating costs are to be met by the operators, who will be expected to provide the remaining 15 per cent of the overall funding as equity," Henry said.

The minister was making his contribution to the 2008/09 Sectoral Debate in the House of Representatives on May 28.

Henry pointed out that the Chinese proposal is the route being taken and it is now a "done deal," with the ministry and the government looking forward to bringing back the buzz which once dotted the geographical network, which was covered by the passenger rail service.

Rural agriculture, cottage industries, heritage tourism and excursions, including school tours are projected to be among the main beneficiary activities from the reintroduction of the passenger rail service.

"This is akin to what's happening in many other parts of the world, where various countries are investing heavily in railways, because of the recognised potential of rail services to contribute to national economic development," Henry said.

Colombia, China, India, the Philippines, Mozambique, Ghana, Brazil, and Trinidad and Tobago are among the countries which are investing in rail transportation.

See also:


Railway plans back on track - State to fund $7b renovation

Jamiaca Gleaner: May 30, 2008

Athaliah Reynolds, Staff Reporter

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The deserted railway station in downtown Kingston against the backdrop of high-rise buildings. The Jamaican Government has enlisted the help of the Chinese to renovate the rail system

Transport Minister Mike Henry has said the Government would be seeking to revitalise the country's railway system, with work expected to begin before year end.

Speaking during his contribution to the 2008-2009 Sectoral Debate at Gordon House on Wednesday, Henry said the move involves plans to reopen the Kingston to Montego Bay and Spanish Town to Ewarton services.

He said Government would be spending close to US$300 million (J$7 billion) on the initiative, which will be done within a three-year refurbishing schedule.

Arrangements made

According to Henry, arrangements have already been made with the Chinese government to facilitate the construction of 18 new railway stations across the country. These will accommodate new tracks of 105-pound standard to enable greater speed and load-carrying capacity.

He said the reintroduction of the passenger and freight railway service is intended to significantly impact on rising fuel costs. The Government is focused on getting much of the island's freight transportation done by rail and increasing mass transit to ease traffic gridlocks in urban centres.

The transport minister said the present wooden sleepers would be replaced with concrete over time, as concrete sleepers require less maintenance. The system will also accommodate five new engines, 45 coaches for passengers and 68 freight coaches.

To create jobs

Henry further said the initiative is expected to create thousands of jobs for Jamaicans during and after the construction of the railway lines and supporting networks.

Meanwhile, Henry reiterated that unlike other categories of service providers in the public transport sector, the state-owned Jamaica Urban Transit Company would not be granted a fare hike.

He, however, said he would be announcing a rate increase in July for the Portmore toll road.

Henry also said there has been a change in the toll policy under the concession agreement, which will now see an annual review of tariffs by the developer, instead of the twice-yearly review. Commuters, therefore, can expect a possible further increase in July 2009.

See also:

Trains will roll again in three years, minister promises

Jamaica Observer: May 30, 2008
BALFORD HENRY

Says no fare increase for JUTC at this time

TRANSPORT Minister Mike Henry says Jamaica's rail service should be back on track within three years, following a deal with the Chinese Government.

Henry, who was addressing Parliament Wednesday during his contribution in the sectoral debate, also told the House that no fare increase was being contemplated for Corporate Area commuters at this time.

On the prospects for the resumption of the local railway service, Henry said that the government was now signing off on arrangements for a resumption, within three years, after eight months of discussions with Chinese officials.

He said that the deal would include the building of 18 new railway stations and new tracks for greater speed and load-carrying capacity; special areas to be realigned to enable trains to maintain speed levels; replacement of wooden sleepers with concrete ones; provision of five new engines plus 45 passenger coaches and 68 freight coaches.

He said the railway resumption would see a reopening of the Kingston/Montego Bay service, as well as service between Spanish Town and Ewarton, St Catherine.

"The passenger and freight rail service is intended to significantly impact on the rising fuel cost, with the Government focused on getting much of the island's freight transportation done by rail," he said.

In the meantime, the minister said that despite the Jamaica Urban Transit Company's (JUTC) significant losses, unlike other categories of service providers in the public transportation sector, the state-owned bus company would not be granted any fare increase at this time.

"This is because the ministry and, by extension, the Government, is not about to grant increases to offset inefficiencies among any service provider," Henry said. "The JUTC team knows that the company has a number of issues to overcome in order to realise the level of efficiency that the entity is capable of, hence the team took the conscious decision not to seek any fare increase, until those matters are adequately addressed," he told Parliament.

"When you have millions of dollars in lost revenue daily, you have to effectively deal with that - plug those loopholes and see where you really are before you can reasonably come asking for a fare increase," he added.

Despite his stance against a bus fare increase, however, Henry painted a dismal picture of poor management and inefficiency at the JUTC over the past five years.

As an example he cited the loss of some $140 million from the purchase of unnecessary spare parts.

Henry said that when he took over the JUTC last October, there were a significant number of spare parts, costing $150 million, but the reason for their purchase was difficult to explain.

"They had apparently been bought for the wrong buses and those parts were not needed. But, interestingly, some of the parts were assigned a value of $1 each on the company's books, making over $150 million in spare parts carry a book value of only $10 million," the minister said.

He said that 212 buses had been "cannibalised" over the period and another 100 buses were out of operation, for various reasons, and are now being refurbished.

He said that he also discovered that the training school for bus drivers was owned by a former chairman of the JUTC, and the company ended up with over 2,500 outstanding accident claims valued at $450 million in terms of potential liability.

UK rail passenger fare takings up over 11% to £7.37 billion in 2007

Research and Markets: May 28, 2008

DUBLIN, Ireland - Research and Markets has announced its "Rail Travel Market Report 2008".

In the year ending March 2007, the passenger receipts of the UK market for rail travel amounted to £7.37bn, an increase of 11.4% compared with turnover of £6.61bn in the previous year. This was largely due to a 12.1% rise in the turnover of the national rail sector, although urban rail services also reported healthy growth (of 9%) over the same period, while Northern Ireland Railways' turnover increased by 21.5%.

The UK passenger rail sector is defined to include the services provided on the national rail system by the infrastructure provider, Network Rail, and the train operating companies (TOCs) under franchise, concession and open-access arrangements, as well as the services provided by Northern Ireland Railways. It also includes services offered by urban rail systems, including London Underground and other metro and light rail operators, and the international services provided by Eurostar and the Eurotunnel Passenger Shuttle. The activities of preserved railways — which are regarded more as tourist attractions than transport operations — are not covered in this Market Report. The UK rail travel market is also analysed in terms of journey purposes, including journeys to work and trips made for business, shopping, leisure or other reasons.

Since 2003, there has been a significant recovery in demand for rail travel. Economic growth and increasing road congestion have facilitated this development; however, the increase in passenger receipts is largely attributable to fare rises, which were considerably higher than the rate of increase in the retail price index (RPI). The urban rail sector is dominated by the largest UK urban railway operator, the London Underground, which, although it has a far higher annual turnover than any single TOC, has not been growing as rapidly as other operators. Across the sector as a whole, revenues have been growing at a faster rate than travel demand — measured by the number of journeys and passenger kilometres (pkms) travelled.

In terms of legislation and the activities of the regulatory authorities, the public sector has exerted a major influence on the financial performance of the rail travel industry and in the perception of the travelling public. In 2007, significant changes were made to the allocation of franchises to the TOCs, in line with the Government's aim to reduce the number of franchises and to create a closer match between these franchises and Network Rail's route structure. New franchises were created, including East Midlands Trains, London Midland, London Overground, National Express East Coast and CrossCountry, following the earlier steps towards the implementation of this policy that were taken in April 2006, with the creation of the Capital Connect and Greater Western franchises.

Despite some signs of a slowdown in the UK economy growth rate, the macro-economic environment is generally favourable to the continued growth of the UK rail passenger market. Travel on urban railways and international services is predicted to grow more slowly than travel on the national network, with capacity constraints limiting growth on the London Underground, and international services continuing to be affected by competition from short-haul sea ferry operators and low-cost airlines.

For more information visit http://www.researchandmarkets.com/reports/c93081.

Arcapita nears Freightliner deal

Financial Times: May 25 2008
By Robert Wright and Simeon Kerr

Britain’s second-biggest rail freight operator is set to move into foreign ownership after Bahrain’s Arcapita emerged as front-runner to take over Freightliner.

Arcapita is conducting due diligence investigations of Freightliner ahead of reaching a conclusion on the deal, probably within about two weeks, according to people familiar with the situation.

Including debt it will assume, Arcapita is expected to pay about £350m for the operator, which was founded in 1965 by British Rail for the new market in hauling shipping containers by rail.

The potential sale follows years of speculation about the ownership of Freightliner, 76 per cent of whose shares are held by a consortium of 3i and Electra Capital Partners, both private equity investors. Management and employees hold the rest of the shares.

The two private equity investors have regularly sought potential buyers for Freightliner since backing a management buy-out of the company during rail privatisation in 1996.

Arcapita seems to have outbid SNCF, France’s state-owned train operator, which had looked at Freightliner as part of a Europe-wide acquisition spree but backed out several weeks ago. None of the parties involved would comment publicly.

Conclusion of a deal would be further proof of the attractiveness of Britain’s fast-growing rail freight sector after Germany’s Deutsche Bahn last year bought EWS, the largest company in the sector.

Freightliner was the only part of British Rail’s freight operations not to end up as part of EWS, which was assembled by Ed Burkhardt, a US rail entrepreneur. Freightliner initially stuck to its traditional role as a transporter of shipping containers – known as intermodal transport – but then started its heavy haul division to compete with EWS in the lucrative market hauling coal to power stations.

EWS was fined £4.1m for anti-competitive behaviour over its aggressive reaction to Freightliner’s market entry. Freightliner also has a business in Poland.

Arcapita is a privately-owned investment bank run on Islamic principles.

The UK has one of Europe’s fastest-growing rail freight markets, encouraged by government subsidy of some investments and relatively low fees for using track – freight trains pay only for the extra costs they impose on Network Rail, owner of the rail infrastructure. Most costs are paid by passenger train operators.

Intermodal traffic, where Freightliner is the largest operator, has grown particularly rapidly in recent years with soaring imports of containerised goods from Asia. Demand for coal has boosted the heavy haul division.

Freightliner is widely seen as having been a shrewder player of the market than EWS, which inherited more restrictive working practices from British Rail and over-invested in new locomotives under Mr Burkhardt.


See also:

Arcapita on track to buy Freightliner

Thomson Financial: 05.26.08

LONDON (Thomson Financial) - Bahrain-based investment bank Arcapita is expected to take over Freightliner, Britain's second-biggest rail freight operator, in a deal worth around 350 million pounds, including the debt it will assume, the Financial Times reports.

Arcapita is currently conducting due diligence and the deal is expected to close within about two weeks, the paper said, citing people familiar with the situation.

Freightliner is currently 76-percent owned by a consortium of private equity investors 3i and Electra Capital Partners.


See also:

Sharia-compliant fund on track for Freightliner

Telegraph: 26/05/2008
By Ben Harrington

The Bahrain-based investment fund Arcapita is in talks to acquire Freightliner, British Rail's former rail haulage division, for around £350m including debt.

The fund is on the verge of entering exclusive discussions to buy the business after Freightliner's private equity owners, 3i and Electra Partners, appointed the investment bank NM Rothschild earlier this year to sell the company.

French rail operator SNCF and Go-Ahead are also understood to have made it into the final stages of the auction and have been in negotiations to buy the business for several weeks, said sources.

If Arcapita fails to strike a deal within the next few days, it is thought SNCF and Go-Ahead could still buy the business.

Freightliner, whose wagons carry inland freight containers to inland terminals, was sold to 3i and Electra for just under £10m as part of a privatisation.

Sources said a sale to Arcapita could complete within a couple of weeks.

The possible deal comes as a growing number of gulf-based investors buy up huge amounts of British companies and infrastructure.

The new wave of private investment from the Middle Eastern sovereign wealth funds started in 2005 when Dubai Ports World bought container ports and ferry group P&O for about £3.3bn. Since then, budget hotel chain Travelodge and engineering group Doncasters have both been sold to Dubai International Capital, another division of Sheikh Mohammed bin Rashid Al Maktoum's Dubai Holding group.

Arcapita, though, is not a sovereign wealth fund.

The group, formerly known as First Islamic Investment Bank, uses its balance sheet to make investments and then syndicates the equity to high-net-worth, Gulf investors. It also only makes investments that are compliant with Sharia law, which forbids interest payments or usury.

For Electra Partners, the sale of Freightliner follows a series of major disposals, including the $2.5bn (£1.26bn) sale of Dakota Minnesota & Eastern Railroad to Canadian Pacific Railroad.

Sources said the private equity investment group, which manages a quoted investment trust, now has €1bn (£796m) to invest in buy-outs, mezzanine debt and real estate after raising a new £100m private fund from investors.

The establishment of a new fund, which will be invested alongside capital of the quoted investment trust, comes after Electra Partners split from Electra Partners Europe in 2006. After the split, Electra Partners Europe changed its name to Cognetas.

Electra Partners and Arcapita declined to comment. 3i did not return calls.

See also:

Electra Private Equity confirms in talks to sell stake in Freightliner

Thomson Financial: 05.27.08

LONDON (Thomson Financial) - Electra Private Equity Plc. confirmed that it is in discussions which may lead to the sale of its stake in Freightliner Group Ltd.

However, the company said there is no certainty as to the outcome of these ongoing talks and a further announcement will be made in due course.

See also:


Arcapita in talks to buy UK haulage firm

Arabian Business: 25 May 2008
by Dylan Bowman
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ACQUISITION TARGET: Arcapita is close to sealing a deal to purchase Freightliner (pictured) for around $690 million. (Getty Images)

Bahrain Islamic investment bank Arcapita is looking to acquire UK rail freight operator Freightliner for around 350 million pounds ($692.9 million), sources close to the deal have said.

Arcapita is in talks with Freightliner's current private equity owners 3i and Electra Partners, and is close to entering "exclusive discussions" to buy the company, the haulage unit of British Rail, according to the UK's Sunday Telegraph newspaper.

The deal could be wrapped up within the next few weeks, the sources said.

Arcapita said in February it had completed a deal to buy US storage firm Portable On-Demand Storage (PODS) for $451.4 million.

In January the bank bought a Texas power plant for $695 million, its biggest US acquisition to date.


See also:




Arcapita acquires top logistics firm

Gulf Daily News: 7th May 2008

MANAMA: Bahrain-based Arcapita Bank has completed the acquisition of Pinnacle Real Estate, a leading developer and operator of logistics warehouses in Central and Eastern Europe.

The transaction includes an existing portfolio of leased warehouses of approximately 230,000 sq/m, as well as a land bank of nearly 1.5 million sq/m for future development.

The majority shareholder prior to the acquisition was Merrill Lynch through its Global Principal Investments group.

Pinnacle was founded seven years ago, and in that time, the company has successfully grown into one of the leading developers in logistics in its markets of Central and Eastern Europe.

It has offices in the Czech Republic, Poland and Slovakia, and is well-placed to benefit from the positive economic development and the build out of distribution networks in Central and Eastern Europe.

"With its growing footprint in Central and Eastern Europe, we are very pleased to have added Pinnacle to our European real estate portfolio," said Arcapita chief executive officer Atif A Abdulmalik.

"Pinnacle has quickly built up an attractive mix of yielding and developmental assets to become a dominant developer in what we believe are high growth markets with excellent further appetite for modern and well situated warehousing and distribution facilities.

"Pinnacle also fits well with our existing portfolio of West European logistics warehouses, and takes our total European investment into this sector to over $1.4 billion, representing a total of approximately 2m sq/m of developed and developable warehouse space."

Arcapita's acquisition of Pinnacle solidifies its position as a major investor in industrial real estate in Europe, and the transaction joins the recent joint venture agreement with Prologis to form Prologis Middle East, which will develop and manage up to $1bn of modern logistics warehouses in Saudi Arabia and the rest of GCC, estimated to total over 1m sq/m.

Arcapita has also previously partnered with Prologis in the US, where it invested in 79 fully-leased assets across the country.

May 23, 2008

RMT Driver wins FGW Drivers' Divisional Council election

Tim Earl, a member of RMT's Bristol Rail Branch has been successfully elected to represent Train Drivers on the Drivers' Divisional Council of First Great Western.

Tim who was standing for the seat to represent HSS (High Speed Services) Drivers at FGW's Paddington, Bristol and Swansea depots won his election by a margin of 88 votes to 38 votes for his opponent from the ASLEF. There was one spoilt ballot paper.

The full results from ERBS are:
Number of voting papers despatched 231
Number of voting papers returned 127
Number of voting papers to be found invalid/spoilt 1
Therefore, total number of voters who participated 126

Result - 1 to elect (in vote order)

EARL, Tim 88 ELECTED

CORBETT, Brian 38

Voting papers will be stored for a period of 6 months before being securely destroyed.

Tim is only the second RMT candidate to be elected to a Drivers' company-level negotiating council since BR privatisation led to the break-up of national negotiations where the NUR and RMT had always represented Train Drivers at all levels of the negotiating machinery.

Tim welcomed the result of the FGW Drivers' Divisional Council election as a confirmation of RMT's growing strength and credibility as a union representing and organising train drivers and thanked all those who had voted for him. An official circular confirming Tim's victory will be published by RMT Regional Organiser, Brendan Kelly shortly.

Strike vote over FGW buffet services

BBC News: 21 May 2008

Some 700 workers at First Great Western are being balloted to strike by unions after the train company threatened to remove buffet services.

First said without them it can lighten trains so they travel more quickly.

But the Rail Maritime and Transport (RMT) union warned the move could lead to a loss of jobs.

"Of all the things that hold up First Great Western trains buffet cars are the least of their concerns," said Alex Gordon of the RMT.

"We've heard about points failures, about leaves on the line, signal failures and broken trains but really blaming it on the sandwiches just takes the biscuit," he added.

First said it would bring in trolley services to replace buffet cars.

The move would also help it make a saving of some £40,000 a year in leasing costs.

In a statement the company said: "The RMT is scaremongering. There will be no job losses and trains on long distance services at busy times will not be affected."

Disruption for commuters as rail action spreads

Irish Times: 23/05/2008
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Thousands of rail commuters face disruption this morning as an unofficial industrial action by Iarnród Éireann drivers in Cork looks set to escalate.

There were cancellations this morning on the Cork-Heuston, Galway-Heuston, Athlone-Heuston, and Westport-Heuston routes. Services from Cork to Tralee and Mallow have also been affected.

Other services are running between Dublin and Cork, with bus transfers between Mallow and Cork.

Iarnród Éireann said further disruption is likely on Galway, Westport and Athlone services, and that disruption is expected in Cork throughout the day, with commuter services remaining suspended.

Many Cork/Dublin and Cork/Tralee services will be cancelled, with other services operating between Dublin and Mallow only.

As many as 15,000 passengers may be affected by this morning's action as the dispute escalates. The 10.30am and 11.30am Cork-Heuston trains are expected to operate from Mallow only, with bus transfers from Cork to Mallow, Iarnród Éireann said.

All Cork-Cobh and Cork-Mallow commuter services were expected to be cancelled, and customers have been advised to make alternative arrangements.

Services to and from Cork were hit yesterday morning after drivers operating out of Cork's Ceannt Station - members of the National Bus and Rail Union and Siptu - refused to operate trains in support of a colleague who was taken off the payroll.

According to Iarnród Éireann, the stoppage began after a refusal by a Cork-based driver to drive his train within his core roster on Thursday, to allow for training of new trainee drivers.

Union sources last night said senior management at Iarnród Éireann had orchestrated the dispute in Cork yesterday, and appealed to the company to take steps to resolve the row before it escalated.

Management has strongly denied this allegation.

See also:


Disruption as rail dispute escalates

RTE: 23 May 2008

There has been an escalation in the Iarnród Éireann dispute.

Unofficial action by drivers has disrupted services into and out of Cork's Kent Station this morning, stopping services between Cork and Dublin and Cork and Tralee.

The row has spread to early services out of Galway, Westport and Athlone.

Services to Cobh and Mallow are also affected.

An Iarnród Éireann spokesman has said the drivers' refusal to facilitate the training of other drivers was unjustified.

Iarnród Éireann said its website would be updated throughout the morning. Full updated service information is available on 1850-366222.

Five early morning services from Cork to Heuston were cancelled this morning.

All Cork/Cobh and Cork/Mallow services are cancelled as were a number of services between Cork and Tralee, Galway and Heuston, Athlone and Heuston and Westport and Heuston. The 11.10am service from Heuston to Galway is also cancelled.

Some services have been operating between Dublin and Mallow, with bus transfers between Mallow and Cork. They will include the
10.30am and 11.30am Cork to Heuston services.

For trains operating to and from Galway, the 7.10am Heuston to Galway and 10.50am Galway to Heuston were due to operate as normal.

Iarnród Éireann says further disruption is likely on Galway, Westport and Athlone services.

Disruption is expected to continue in Cork throughout the day, with commuter services remaining suspended; many Cork to Dublin and Cork to Tralee services cancelled, and other services operating between Dublin and Mallow only.

All other routes are operating normally.


See also:

MORNING RAIL SERVICES FROM GALWAY CANCELLED

Galway News: 23rd May 2008

There's further rail service cancellations to Galway this morning after an escalation of a strike by Iarnród Eireann train drivers.

The company has just been forced to cancel the 9.10 Heuston to Galway and the 11.10 Heuston to Galway trains.

However the 10.50 Galway to Heuston train will run as normal and the 7.10 Heuston to Galway is also running normally.

Other Galway early morning services cancelled, include the 5.20 Galway - Heuston service, the 7.15 Galway - Heuston and 7.20 Athlone to Galway services.

Further disruption is likely on Galway, Westport and Athlone services and Iarnród Eireann will be updating customers throughout the day.

The chaos was triggered after a driver was removed from the pay roll for refusing to co-operate with the training of new recruits.

See also:


Commuter misery to continue in row over rail roster

Irish Independent: May 23 2008
Michelle McDonagh

COMMUTERS face more misery today as a result of an unofficial rail dispute in Cork, where industrial action caused disruption to thousands of passengers yesterday.

All Cork-Dublin services were cancelled between 11am and 5.30pm. Services from Dublin to Kent Station in Cork were cancelled from 6pm, and the 6.30pm Dublin-Tralee train was also hit by the Cork-based drivers' action.

A number of Cork commuter services serving Cobh and Mallow were also affected by the dispute over driver rosters.

A spokesman for Iarnrod Eireann said it was likely that today's services from Cork to Dublin, up to and including the 9.30am Cork-Dublin service, would be cancelled.

"The 10.30am and 11.30am Cork to Heuston are expected to operate from Mallow only, with bus transfers from Cork to Mallow. The 7am and 8am Heuston to Cork services are likely to operate to Mallow only, with bus transfers from Mallow to Cork. The remaining morning services are likely to be cancelled," he warned

"All Cork to Cobh and Cork to Mallow commuter services are expected to be cancelled, and customers are advised to make alternative arrangements.''

The spokesman added that some Cork-Tralee services were expected to be cancelled, with others operating between Tralee and Mallow only.

He said the stoppage began with the refusal of a Cork-based driver to drive within core roster hours yesterday morning, to facilitate the training of new drivers. The spokesman said Iarnrod Eireann would try to provide bus transfers on some of the affected Dublin-Cork, and Cork-Mallow services.

At the time of going to press, there no comment from SIPTU on behalf of the rail workers. The Iarnrod Eireann spokesman said service information would be updated as soon as it became available.

Negotiations

He claimed the action by drivers followed months of non-cooperation with the training of new drivers, and numerous refusals to drive trains within normal rosters.

"Iarnrod Eireann has patiently endeavoured to resolve these issues by engaging in the agreed industrial relations machinery," he added.

The Labour Relations Commission and the drivers' unions, SIPTU and NBRU, had told drivers to cooperate with training and to drive normally within core rosters as the basis for continuing talks.

"The situation has now become unsustainable and intolerable. Iarnrod Eireann has already increased the number of drivers by over 50pc over the past eight years," he added.

French National Audit Office condemns 'dysfunctional' rail liberalisation policy

Railway Gazette Internatonal:
23 May 2008

FRANCE -- A review of the first 10 years since the split between infrastructure and operations finds serious failings in financial policy and maintenance management as a result of an 'incomplete' reform process.

SNCF may be proudly proclaiming its financial fitness, but any assessment of the economic health of the French national railway must take into account the position of infrastructure company Réseau Ferré de France. RFF's annual results published on April 10 were in marked contrast to those of SNCF, with an operating loss in 2007 of €771m and net debt which has reached the impressive sum of €27·4bn.

It so happens that the Cour des Comptes (the French national audit office) has been taking a hard look at railway policy, and its 167-page report published on April 16 does not exactly shower the parties involved with compliments. The Rail Network: an Unfinished Reform, an Uncertain Strategy assesses what has happened since RFF was set up in 1997. Both RFF and SNCF come in for some harsh criticism, but most of all the report berates successive governments which have conspicuously failed to tackle the problems arising from the reform.

The 1997 legislation suffered from 'intrinsic weaknesses' which have been 'the origin of numerous difficulties experienced by the railway sector', with 'confusion of responsibilities' creating 'serious dysfunctionalities'. Among the few benefits arising from the reform had been the development of expertise within RFF for designing and managing major projects such as new lines - which had ended SNCF's virtual monopoly in this field. Transfer to RFF of €20·5bn of debt had allowed SNCF to clean up its financial act, but the Cour points out that the reason the debt was moved to RFF rather than taken on by the state was to ensure that France met the monetary requirements for joining the euro zone.

In the meantime the total debt of the French railway business has reached more than €41bn, including €8·3bn squirrelled away in SAAD (Service Annexe d'Amortissment de la Dette), an organisation set up in 1991 specifically to redeem SNCF's debt over the long term.

Maintenance

The Cour is especially critical of the arrangements for maintaining the national network. This is the responsibility of RFF, but the company does not have the resources to carry out the work, which is contracted back to SNCF. In the process, RFF loses control over the job, and its attempt to incentivise SNCF to improve productivity by not increasing payments has led to a reduction in the amount of work carried out, in turn necessitating the imposition of speed restrictions for safety reasons.

To remedy this, the Cour recommends that 55 000 SNCF personnel are either transferred to RFF or to a new subsid­iary responsible for infrastructure maintenance. Predictably, this suggestion was not received favourably by the railway unions who threatened industrial action if staff were 'externalised'.

Maintenance methods and processes, which still rely on a daily window in the timetable of 1 h 50 min, are criticised as expensive and inefficient. The arrangements for lookouts are especially costly, representing as much as 10% of the total cost of a maintenance project - the report recommends the introduction of automated lookout systems such as those used in Switzerland.

The Cour has similar concerns over the 'complex and confusing procedures' for timetabling and path allocation, which again are nominally RFF's responsibility. The report notes that SNCF has refused to transfer to RFF the staff involved in this function, noting that the current arrangements may lead to unfair treatment as more operators seek to run trains on the network.

Government failings

The state has 'too often failed to settle differences' between the two organisations, says the report, in some cases 'aggravating tensions between the two protagonists'. For example, RFF is expected to balance its books, but the state has made it difficult for RFF to break even as it has left the organisation 'with a debt of €12bn which cannot be redeemed because it has been forced to finance unprofitable investments' - in direct contradiction of RFF's legal duties. Decisions on the level of access fees had been made on the basis 'of compromises with no economic rationale', while the fees 'bore no relation to infrastructure costs'.

The Cour recommends that the state should assume €12bn to €13bn of RFF's debt - but a statement from the transport ministry issued on April 16 'notes with interest the Audit Commission's observations'. Three days later the ministry indicated that Transport Secretary Dominique Bussereau would appoint Senator Hubert Haenel to head a parliamentary inquiry into the development of the railway industry and the 1997 reforms.

The report also addresses the physical condition of the network, referring to an assessment published in September 2005 (RG 11.05 p663) that had drawn attention to the increasing age of infrastructure assets. A combination of maintenance and speed restrictions imposed on 1 300 route-km has so far ensured safety, but 'the risks of an accident are increasing', says the Cour. The poor state of the network had led to a decline in punctuality, with the percentage of late passenger trains rising from 31% in 1993-97 to 37% in 2002-06. A plan to improve network condition launched in 2006 has not been adequately funded, especially in 2010-15 when major renewals will be needed.

Examination of operating costs led the Cour to conclude that there is considerable scope for improving productivity, notably when signalling equipment is modernised. It suggests that the number of signalling staff could be halved, but it finds that replacement of old equipment is proceeding too slowly.

Finally, the Cour notes that 46% of the network generates just 6% of traffic. Many regional and rural lines are maintained at considerable loss for little gain, and even if environmental benefits are included the economics of some lines are doubtful. The Cour recommends that a debate on the future of these lines is reopened, noting that some could be closed. There seems to be no suggestion that lines could be revitalised by the introduction of a more frequent train service which would attract more business and make the lines more viable.

May 22, 2008

RMT to ballot train staff at Arriva Cross Country over removal of on-board catering facilities

RMT: May 22 2008

MORE THAN 400 catering staff and guards at Arriva Cross Country are to be balloted for strike action over the removal of catering facilities from trains.

The ballot, scheduled to close on June 19, follows the company's failure to undertake to retain shops and buffets on trains as they are refurbished, to reverse cuts in catering on services to Cornwall and north of Edinburgh, and to ensure that catering on former Central services is provided by directly employed staff.

It has also been prompted by the company's failure to guarantee that full operational control of power-operated doors on Voyager trains will be returned to the guard.

"Refurbishment of trains should be an opportunity to improve on-board services and safety, but Arriva is using it to strip essential catering facilities from long-distance cross-country trains," RMT general secretary Bob Crow said today.

"The company has told us flatly that there will be no buffets on refurbished high-speed trains, and plans for removing shops from Voyagers are already under way.

"For our members it adds up to inferior, exposed and less safe working conditions, and for passengers it is a straightforward attack on their services.

"Without any consultation Arriva has already cut catering on services to Cornwall and north of Edinburgh and on all services after 8pm, and we want these cuts reversed.

"Refurbishment should also provide the opportunity to fulfil the promise made years ago to return full control of powered doors on Voyager trains to guards - but Arriva has failed to guarantee that either.

"We made it clear to the company that we would be in dispute unless we received the guarantees we were seeking by yesterday, and the RMT executive has therefore agreed to ballot catering staff and guards for strike action.

"I hope that passengers will understand that in fighting to defend our members' jobs and working conditions we are also battling to defend the on-board catering services that are essential on some of Britain's longest rail journeys," Bob Crow said.

RMT to ballot 700 FGW train staff over removal of catering facilities from high-speed trains

RMT: May 20, 2008

MORE than 700 train-catering staff, train managers and senior conductors at First Great Western are to be balloted for strike action over the removal of catering facilities from high-speed trains.

The ballot, scheduled to close in mid-June, follows the company’s failure to guarantee that it will stop removing buffet cars from its high-speed trains or to give assurances over job security and safe working conditions.

“The company has already removed the buffet cars from three trains and our fear is that it plans to do the same with nearly half of its high-speed fleet,” RMT general secretary Bob Crow said today.

“Removal of buffet cars has serious implications for our catering members and for safe systems of working on high-speed trains, as well as for levels of passenger service.

“The company is lamely claiming that cutting buffet cars will help their trains to run on time, but it is quite clear that they are putting profits ahead of safety and service.

“Our members have no problems with trialling new trolleys, but the right place for them to based is in a properly equipped buffet car, not in wheelchair bays or vestibule door areas.

“When the company asked passengers if they would like at-seat buffet service on long-haul journeys it forgot to mention that the trolleys would ultimately be instead of rather than in addition to the existing facilities.

“For months we have been trying to get the company to drop these plans, but last week FGW refused point-blank to give us the assurances we were seeking.

“I hope that passengers will understand that we have no option now but to ballot our members for industrial action, and that by defending our members’ jobs, working conditions and safety we are also defending their catering services,” Bob Crow said.

Glasgow bus fares rise by up to 25% as price cap is removed

The Herald Tuesday 20th May

Scotland's largest bus operator has increased its fares by up to 25%, only weeks after a cap on price rises was removed by the Competition Commission.

First Bus put up fares from Sunday, blaming an increase in costs, including fuel. Last month, it stated drivers' wages were also a factor in calling for permission to raise fares above the agreed rate.

The cost of an adult single will increase from between 80p and £2.80 to between 85p and £3.10. The child fare range will rise from between 45p and £1.20 to 55p-£1.35.
An all-day unaccompanied child ticket, which is popular with children travelling to school, will increase by 25% from £1.60 to £2, while a four-week two-zone FirstCard will rise 12%, from £23.10 to £26.

The Scottish Government will also face an increase in the amount of cash it pays under its free bus travel for pensioners scheme. Bus firms submit claims for the number of free passengers they carry.

First receives 73.6% of a standard adult fare for every free passenger, and the total will rise in line with the new fares. Uptake has been rising since it was introduced, with 113,000 pensioners and disabled people in the Glasgow area signing up.

Drivers, believed to be considering balloting for industrial action over a pay settlement, are angry that passengers are being asked to pay more, with increased wages given as one justification for the fares rise.

Passengers learned of the increases through leaflets and posters on buses on Sunday. A statement said: "From Sunday May 18, First in Glasgow will implement a revised fare structure across its greater Glasgow network. Our main single fares have increased by just 10p after many years, whereby bus fares in Glasgow have risen at a level below increases in bus industry costs including fuel.

"For regular travellers, some fares remain unchanged and our popular FirstWeek season ticket has risen from £12.50 to £13.50 after some 20 months when this price has not changed."

First yesterday declined the opportunity to add to the statement. However, the company's fares chart shows 13 adult single prices, all of which increase, and five child singles, all of which rise. Its adult FirstCard has 12 combinations of zones and timescales, all of which rise, as do the seven child versions. Only the accompanied child fare of £1 remains unchanged.

Last month, First was freed from long-standing undertakings that it would not increase fares by more than the retail price index. It argued that costs had increased disproportionately with the rest of Britain, with firms north of the border not receiving an increase in fuel duty allowance.

The Competition Commission agreed First Bus was not able to meet the rising costs as a result of the cap, as well as meeting the increased cost of wages, maintenance, insurance and fuel per year in line with the UK average.

Tube’s assets need improving, not stripping, says RMT

RMT: May 22 2008

TIM PARKER should leave his asset-stripping reputation at the door when he starts work as the Mayor of London’s chief executive, the Tube’s biggest union said today.

Responding to the news that Mr Parker has been appointed as Boris Johnson's first deputy and chief executive of the GLA Group, and is to be nominated as Transport for London chair, RMT said that his job should be to improve and expand services, not decimate them.

And the union warned that it would act to defend its members' jobs, working conditions and interests "as we always do".

"Tim Parker has a reputation as a private-equity asset-stripper and has been dubbed the Prince of Darkness by unions that have encountered his methods in the past," RMT general secretary Bob Crow said today.

"We are well aware of his track record, and Mr Parker has the opportunity to leave that reputation behind him when he starts work for the Mayor of London.

"The world's finest metro system does not need an asset-stripper or a Prince of Darkness, but it does need its modernisation programme put back on track if it is to be ready for the 2012 Olympics.

"Tube users and workers have already had more than a bellyful of privatisation with the huge waste and failure of the PPP and the collapse of Metronet.

"The Tube needs public investment to improve it for Londoners and the restoration of Metronet's contracts to public control will be a massive step along the right road.

"RMT exists to improve its members' living standards and to defend their jobs and conditions, and it will continue to do so," Bob Crow said.

Train firms accused of using new ticketing system to raise prices

The Independent: 19 May 2008
By Jerome Taylor

The cost of an early morning ticket on a Virgin train from Holyhead to London has tripled.

A new pricing system for Britain's rail network has been criticised by unions and passenger groups, who accused train operators of introducing fare increases "by the back door".

The new system, partially introduced yesterday, was supposed to make buying tickets easier by reducing the number of reservation types available to just three. But passenger groups warned that a number of train companies had already used the changes to scrap some of their cheapest fares by cutting the number of off-peak services and said more may follow suit when wider changes take effect later this year.

Critics fear the overhaul, which has seen the price of many journeys rise, may result in fewer people using trains despite the Government's pledge to encourage environmentally friendly methods of transport.

Gerry Doherty, leader of the TSSA rail union, said: "Whilst we welcome any simplification of the ticket system we didn't want rail companies to use these changes as an excuse to reduce off-peak travel or bring in more expensive tickets. What we've been given are a number of fare increases by stealth. It is old people, students and families that will be hit hardest by any reductions in off-peak travel, as well, which seems particularly unfair."

Restrictions to some off-peak journeys, introduced yesterday by Virgin Trains, National Express and Cross Country, mean that an early morning train from Holyhead to London on Virgin is now be three times more expensive than it was last week because passengers who were formerly able to buy saver tickets now have to purchase more expensive standard and open return tickets.

Passengers who use National Express trains to commute between Essex and London will have to buy a full-price return ticket if they want to leave London between 4.30pm and 6.30pm, instead of a one-day travelcard, an increase of 63 per cent.

Stephen Joseph, the executive director for Campaign for Better Transport, said the simpler ticket system would still not help those unable to book tickets in advance. "If you want to get a train from Manchester that arrives into London before 11am the price for that ticket has doubled in the past 10 years," he said. "What we're seeing is the disappearance of the walk-on railway and that is a real problem."

Virgin Trains said changes to the new Holyhead fare were necessary to stop customers further down the line buying tickets from north Wales. National Express said it was forced to restrict access to peak-time trains because they were becoming increasingly busy.

David Mapp, commercial director of the Association of Train Operating Companies (Atoc), said denied the changes were an attempt to sneak in price rises.

"Passengers have told us that they want a simpler fares system," he said. "We are listening and responding. These tickets will enable people to buy train tickets more easily and with greater confidence."

Price increases aside, the attempt to simplify train ticketing will be welcomed by many. Since the privatisation of the railways more than a decade ago each individual rail operator has offered passengers its own pricing system, leading to what many have described as a "fare jungle" that left many passengers confused as to what was the cheapest ticket to buy.

Last month operators agreed to synchronise the introduction of a new simpler ticketing system, spearheaded by Atoc, that would reduce the number of ticket types available to just three: advance, off-peak and anytime.

As of yesterday, any rail passengers pre-booking their trip will now only be issued a single advance ticket which replaces the myriad discounted tickets previously on offer, such as leisure advance, business advance and apex.

Refunds will no longer be given on advance sales but railcard users will now be able to obtain discounts on pre-booked tickets.

May 20, 2008

Pepy charts an expansionist future

Railway Gazette International: 20 May 2008

FRANCE: Ambitious is the adjective that best describes SNCF's plans for the next five years. Newly-appointed President Guillaume Pepy went public on March 19 with his proposals to expand and develop the French national railway, promising 'a change in pace and scope'.

Declaring that SNCF was 'now financially healthy' (Table I), Pepy indicated that the railway was able to finance its own investments, which in 2007 represented €2·99bn or 12·5% of turnover. Another indication of good performance was payment to government of a €130m dividend.

In his letter of nomination from French President Nicolas Sarkozy, Pepy is tasked with 'regaining a central role for SNCF in freight transport in France, in Europe and worldwide'. If SNCF grasped the opportunities available, said Pepy, it would be 'much larger' in five years' time - he is targeting a huge increase in annual turnover to around €36bn that would generate an operating profit of €2bn.

Pepy lost no time in moving towards this objective, with the announcement on April 6 of a 'voluntary and friendly cash offer' to acquire 100% of logistics group Geodis, in which SNCF already has a 42·4% stake. The bid is worth €135 a share, valuing Geodis at more than €1bn. If the offer succeeds, Geodis would be integrated into a restructured freight and logistics business able to offer customers 'a complete platform of intermodal solutions'. The combined business would employ about 50 000 staff and generate an annual turnover of around €8bn.

On April 7 SNCF announced plans to acquire 75% of Import Transport Logistik, a German business based in Dresden with subsidiaries in the Netherlands, the Czech Republic and Poland. With ambitions to expand into Ukraine and Russia, ITL would give SNCF access to much of eastern Europe. Together with Geodis, it would put SNCF in a position to compete effectively with the DB Schenker empire. Other acquisitions or partnerships are not ruled out, with ABX and SBB Cargo mentioned as possibilities - 'everyone is talking to everyone else', remarked Pepy.

Plans have already been laid to restructure management of the freight business, with Pierre Blayau, Chairman & CEO of Geodis heading the combined entity. Olivier Marembaud will continue as Senior Vice-President of Fret SNCF until May 28, when he will take over the functions of Vice-President in charge of exec­utive management policy for the SNCF group. Luc Nadal is expected to replace him as head of Fret SNCF.

Plans call for Fret SNCF to achieve 50 billion tonne-km by 2012. In the short term a programme of reviving and optimising the rail freight network would be implemented with financial contributions from RFF and possibly the government, with SNCF contributing €50m by 2010. A €20m fund would be set up to help attract new customers, and the Fret GV programme (RG 2.08 p76) would be launched in 2009. In the meantime bids have been called for 85 main line diesel locos able to operate in Belgium, the Netherlands and Germany.

Passenger businesses

Pepy reported that the long-distance passenger business Voyageurs France Europe had increased turnover by 5% in 2007 to reach €6·89bn. Thalys traffic was up by 6·6%, Eurostar by 15·5% and Lyria by 19·4%, with internet sales rising by 20%. Over the next three years commercial policy would be honed to achieve better load factors.

Confirming that a tender was being prepared to start renewal of the TGV fleet, Pepy proposed that 'TGV Duplex could be married with AGV technology' to create 'Europe's best-performing jumbo'. He also believed that maximum speeds of 350 to 360 km/h would be needed on selected routes.

The 'Proximité' business, which groups SNCF's TER regional passenger oper­ations, Transilien (Paris suburban), Corail Intercités, Keolis contract oper­ations and the Effia passenger services activities, reported a 4% rise in turnover to €5·9bn. Over the next few years management efforts would be devoted to achieving better punctuality, with RER Line D in Paris singled out for special treatment because of its poor reliability. Punctuality of TER services would improve from 91% to 94% by 2012, and marketing efforts would be stepped up to attract more season-ticket holders.

Table I. SNCF's financial performance in 2007

Turnover €m 23 691
EBIT €m 994
Recurring net profit €m 657
Free cash flow €m 302
Net debt €m 4 488

May 15, 2008

RMT wins equality for First Great Western train-maintenance and cleaning staff

RMT: May 15 2008

Planned strike action by than 400 train-maintenance, shunting and cleaning staff at eight First Great Western sites between Penzance, Swansea and London has been called off today after the company conceded to union demands.

24-hour strike action planned for Sunday, May 18 was called off after the company dropped plans to extend the use of contractors within engineering and agreed to pay all overtime within the engineering grades at a time and quarter with effect from Sunday June 8 2008.

The company also agreed to implement 35-hour week rosters and a 25 per cent increase in earnings for some of the lowest paid cleaning grade members.

RMT general secretary Bob Crow congratulated members on sticking together and standing up to a management that had not previously been prepared to treat staff equally.

“The vast majority of FGW engineering and cleaning staff were still being paid the flat hourly rate for their overtime, rather than the time-and-a-quarter enjoyed by other FGW staff, including train-crew and station staff.

Staff at Bristol, Reading, Oxford, Penzance, Exeter, Plymouth, Swansea, and Old Oak Common in London had voted by a three-to-one margin for strike action.

“Due to the steadfastness of members at FGW, these inequalities have been removed.

“This once more shows what can be achieved if all grades organise and work together in one industrial union.

This month RMT also launched a charter for train maintenance depot workers to address the issues of disparity between pay rates, overtime enhancements and employment conditions.

“This is the first step in making our members' wishes a reality,” Bob Crow said.

ends

May 14, 2008

RMT condemns “obscene” First Group profits

RMT: May 14 2008

SPECIALIST transport union RMT condemned First Group profits announced today as obscene, calling for the rail and bus operator’s services to be returned to the public sector.

RMT general secretary Bob Crow said: “Given that its subsidiary First Great Western has faced passenger fare strikes over its poor performance and overcrowding and has been forced by the government to implement a remedial plan, these figures are obscene.

“Millions upon millions of pounds continue to pour into shareholders’ pockets – money that should be invested into developing the company’s rail and bus services.

“The profits throw into sharp focus the folly of the Scottish executive’s recent three-year extension to the First ScotRail franchise. New revenue sharing arrangements are favourable to First and a profit-sharing scheme allows it to make £30 million a year before the extension even kicks in.

“Today’s announcement perfectly illustrates why Britain’s rail and bus services must be returned to public ownership in order that they are operated in the national interest rather than those of greedy shareholders.”

ends

Notes for editors:

First Group’s preliminary results for the year to March 31, 2008 showed:

• Adjusted Operating Profit of £360.1 million across the group, up almost 40% from last year.
• UK Rail Adjusted Operating profit of £120 million, an increase of 10.3% on last year.
• UK Bus Adjusted Operating Profit of £122 million, an increase of 18.4% on last year. Operating margins are 11%.
• Dividend payments of £69.5million.

May 13, 2008

From union boss to company executive—the case of Norbert Hansen

WSWS: 13 May 2008
By Stefan Steinberg

After a prolonged debate going back a number of years and involving various alternative proposals and working papers, the cabinet of the German grand coalition government—made up of the Social Democratic Party (SPD), the Christian Democratic Union (CDU) and the Christian Social Union (CSU)—agreed to the partial privatisation of the national railway system April 30. Just eight days later, Norbert Hansen resigned his post as head of the Transnet rail trade union to take over as Industrial Relations Director at the German national rail operator, Deutsche Bahn (DB).
welkom.jpg
Hartmut Mehdorn (L), chairman of the German railway company Deutsche Bahn AG shakes hands with Norbert Hansen (R), chairman of railway union Transnet as Klaus-Dieter Hommel (2nd-L), chairman of railway union GDBA and Margret Suckale (2nd-R), head of Human Resources of Deutsche Bahn AG look on during a news conference on July 9, 2007 in Berlin, Germany.

There is nothing coincidental about the timing of these two events. As head of Germany’s biggest rail union, with 270,000 members, the 55-year-old Hansen was for a number of years a leading protagonist of privatisation. Now he is being rewarded, openly and shamelessly, for his campaign in favour of privatisation with a seat on the board of the new company—with a corresponding boost to his salary.

Reports in the German press of Hansen’s move from union headquarters to company boardroom refer sympathetically to his days of doubt and misgivings before accepting his new post. Finally, the story goes, in consultation with close political colleagues, including fellow former “Young Socialists” (Jusos)—Hansen is a member of the SPD)—he agreed to the new job.

In fact, such media reports should be taken with a large grain of salt. It is far more likely that Hansen was promised a job (and corresponding stock options) with the privatised DB at a much earlier stage of the process.

Hansen and privatisation

At the annual conference of Transnet in 2000 Hansen actually opposed the privatisation plans put forward by DB Chairman Hartmut Mehdorn, but in the space of a few years the union official was to develop into one of the most ardent supporters of selling off the nominally state-owned concern to private investors.

At a special congress of his union in July 2007, Hansen pressured delegates to endorse the line of “constructive cooperation” with the government and DB management to bring about a parliamentary decision on a stock market launch (Initial Public Offering) as soon as possible.

Hansen argued that by selling up to 49 percent of DB shares it would be possible to retain the unity of DB and prevent a British-type fragmentation of the railways. His line of argument was supported by Transport Minister Wolfgang Tiefensee (SPD), who told delegates that everything would go well after the IPO and that DB needed “fresh capital” to become the “global player number one” in the logistics sector.

red-brown.jpg
SPD Board & Council Meeting: Kurt Beck (L), Chairman of the German Social Democrats (SPD), and Norbert Hansen, head of the German railway employees' union Transnet, arrive for a meeting of both the SPD Board and Council at SPD headquarters on April 21, 2008 in Berlin, Germany. The SPD leadership was to discuss Beck's proposal for a partial privatization of German state railways Deutsche Bahn. (Photo by Sean Gallup/Getty Images)

In October 2007 Transnet offered its services to the government. The union co-authored a paper that declared: “Transnet offers the federal government its advisory services with regard to the definition of the content of the privatisation law.”

Professing its adherence to the principle of profitability for the denationalised company, which the union declares is just as important as the security of employees’ rights, the paper continued: “The economic stability of the DB and its competitiveness in Germany, Europe and worldwide are just as relevant for job protection as the securing of existing contract rights.” This ignores every disastrous experience with privatisation on a global scale in recent years. While speculators and their hangers-on have made fortunes, workers have lost out on every occasion.

Hansen stands to the right of the DGB

On the issue of privatisation Norbert Hansen stands to the right of the Federation of German Trade Unions (DGB). At a meeting of the DGB executive in 2007, Hansen was the only bureaucrat who voted against a resolution opposing privatisation of the railways.

grand coalition.jpg
Grand Coalition 6 months ago: German Chancellor Angela Merkel (C) poses for a group picture with leaders of German trade unions before talks in Berlin, December 20, 2007. Pictured are first row L-R: Leader of the German construction workers union IG Bauen-Agrar-Umwelt Klaus Wiesenhuegel, German Trade Union DGB leader Michael Sommer, metal worker union IG Metall leader Berthold Huber and head of German services trade union Verdi Frank Bsirske. In the back row L-R: Chief of Germany's IG BCE union for miners and chemicals industry workers Hubertus Schmoldt, head of the union Nahrung-Genuss-Gaststaetten Franz-Josef Moellenberg, Police union leader Konrad Freiberg and chairman of the railway unions Transnet Norbert Hansen.

Finally, in April of this year the federal government agreed to proposals for the launch of Deutsche Bahn on the stock market. Following some opposition from within the SPD, Transport Minister Wolfgang Tiefensee was forced to compromise on his (and Hansen’s) original plan to sell off 49 percent of DB shares. Instead 24.9 percent of shares will be made available for the IPO, but it is widely acknowledged that this initial floatation is likely to be just the first step towards the comprehensive privatisation of the railways.

Not content with actively supporting privatisation, Hansen has also played a major role in backing Mehdorn’s “rationalisation” of the railways to present the best possible, (i.e., profitable) package to potential investors.

As union boss, Hansen was active in facilitating all the attacks carried out by the DB management on rail workers.

Originally a state-owned enterprise, German Railways was converted into a corporation in 1994 (provisionally still in the possession of the state). The consequences for railway employees were devastating. The company was split up into nearly 200 subsidiaries—a measure that led to a spiralling decline in wages and working conditions. Productivity has increased by 180 percent while personnel costs have decreased by 28 percent.

DB has shed nearly half its workforce since 1994—approximately 150,000 workers. At the same time, the remaining workers are required to work increasing levels of overtime—14 million hours in 2002 alone. All this took place with the cooperation of Transnet, and the other rail unions such as the white-collar GDBA and the GDL, the train drivers union.

In 2003, Transnet and the GDBA signed a contact pegging rail workers’ wages for over 24 months and in 2005 Transnet, the GDBA and the DB agreed to a so-called “Future Program for Economy and Employment.” The DB proudly announced that the new program meant a reduction in labour costs of 5.5 percent based on an unpaid extension of working times, increased flexibility and a new contract involving one-off payments with a two-year duration. Only at the end of this period were wages to be increased by 1.9 percent—less than the rate of inflation, i.e., a wage cut.

Again in July 2007 Hansen announced a “breakthrough” in contract negotiations with Mehdorn and agreed to a 4.5 percent wage deal for his members to begin from the start of 2008. The rapid conclusion of the deal with Transnet was aimed at freeing up the hands of the DB executive to concentrate on breaking the GDL train drivers’ union, which, under pressure from its members, had put forward a wage demand of 30 percent.

Hansen then used every opportunity to agitate against the train drivers’ strike. At a special meeting of the supervisory board of Deutsche Bahn, of which he is a member, Hansen supported a resolution, along with other “workers’ delegates,” calling on the company executive to remain unyielding “even if the GDL continues to strike.” Hansen’s main reproach against the GDL was that the union was violating “solidarity” with the other rail unions. For Hansen, “solidarity” has always meant direct collaboration with the DB executive.

In the event, after nearly a year of sporadic industrial action, the leadership of the GDL struck their own rotten deal with the DB board.

Hansen’s role as strike-breaker in the train drivers’ strike and his complete subservience to management have earned him the nickname of DB Chairman Mehdorn’s “poodle.” Allegations have appeared in the German media that the DB executive is secretly funding Transnet, which was widely regarded as a “house trade union.”

Now Hansen is to be rewarded handsomely for his services. He will now take over a number of the responsibilities carried out by the current personnel director of DB, Margret Suckale, who led the campaign against the recent train drivers’ industrial action. DB management will be relying on Hansen’s expertise and his extensive connections within the trade unions and German social democracy to nip any resistance to the privatisation of the railways in the bud—thereby creating the best possible conditions for propelling Deutsche Bahn towards becoming “global player number one” in the logistics sector.

Hansen’s salary in his new post has not been officially been made public, but if Suckale’s income is anything to go by, then Hansen can expect annual remuneration in the €2 million range per year.

Exclamations of protest at the rapid switch by Hansen from union boss to director of industrial relations were made by leading representatives of a number of other trade unions, such as the public service union Verdi and the train drivers’ GDL. However, no credence can be given to their complaints. The GDL has no principled opposition to the privatisation of the railways, but has merely warned against adverse consequences should rail track be privatised—as was the case some years ago in Britain.

As for Verdi, its chairman Frank Bsirske was also a virulent opponent of the train drivers’ strike and joined sides with Transnet in condemning the GDL. At the same time Verdi has played a major role in sabotaging a series of recent industrial actions by public services workers. In the course of all of these disputes intimate links have been revealed between the Verdi bureaucracy, management and local government.

The transition from union headquarters to boardroom is a common occurrence and flows from the logic of Germany’s particular form of “social partnership”—i.e., collaboration between unions and management. Hansen has raised eyebrows in trade union circles merely for the hasty, public and provocative manner in which he has jumped into bed with the DB executive.

Pay & Conditons Dispute, Engineering Grades, FGW

RMT Circular: 12th May 2008
To all RMT Engineering Grade Members

Dear Colleagues,

PAY AND CONDITIONS ISSUES DISPUTE, ENGINEERING GRADES - FIRST GREAT WESTERN
NOTICE OF STRIKE ACTION AND REVISED INDUSTRIAL ACTION SHORT OF A STRIKE - Sunday 18 May 2008

RMT has now taken the decision to take a ‘one day’ strike and not an indefinite overtime ballot from 18th May. This follows consultation with RMT Reps from all the depots affected.

Therefore please DO NOT book-on for any turns of duty between 00.01 and 23.59 on Sunday 18th May 2008. Please also note that a ban on working any form of overtime will be in operation that day, but only for the 24 hour period in question and not on a continuous basis as detailed before.

Our members have shown solid support for the RMT in the ballot by voting 3 to 1 in favour of strike action and 7 to 1 in favour of action short of a strike. This has sent a clear message to FGW that our engineering grade members including Skilled, Shunting, Manoeuvring and Carriage Cleaning members are not prepared to be treated less favourably than other grades employed by FGW.

As I said, strike action is called for ALL TURNS BOOKING ON Sunday 18 May between the hours of 00.01 and 23.59. This means Saturday 17th May night staff book on as normal and complete their turn of duty of duty as their turn starts before Sunday 0001.

IMPORTANT NOTE:
Any FGW Engineering Grade who wishes to support the RMT action on Sunday 18th May can simply fill out an application form and they are covered.


Harmonisation – Don’t be fooled !

➢ FGW have proposed the continued use of contractors in all grades and the gradual replacement of FO1s with ‘cheaper’ contractors. RMT will not accept your jobs going to the lowest bidder .RMT wants FGW workers on FGW work !

➢ FGW want more unsociable rostering (nightshift and weekends) particularly at SPM and Reading but are offering ‘pennies’ as compensation. RMT want decent rates of pay to recognise unsociability !

➢ FGW are continuing to refuse to recognise the importance and responsibilities of Shunters. RMT believe that Shunting skills must be properly rewarded !

➢ FGW are proposing no real improvements in pay to recognise the Harmonisation changes they want. RMT are determined to improve pay for Engineering grades and to close the gap on the differential with drivers!

➢ FGW want Engineering staff to wait until 2009 for the 35 hour week – 3 years into the franchise ! RMT have stated that none of our Engineering members should be on more than 35 hours particularly when FGW have given it to ALL other grades – before harmonisation !

➢ FGW want Engineering grades to wait for enhanced overtime rates but other grades have been granted these in 2007 – before harmonisation ! Remember - drivers never even had to ask for this ! RMT believes this is unacceptable. Depot workers should not be treated less favourably !

Best wishes.

Yours sincerely

Bob Crow
GENERAL SECRETARY

Railway strike in the offing

Sri Lankan Daily Mirror: May 13, 2008
By: Kassapa Ellepola

A railway strike is in the offing in Sri Lanka, The Organization for Protection of the Properties and the Rights of Railway Employees (OPPRRE) warned it would seek the support of engine drivers to curtail operations if its demands were not met.

OPPRRE said that it had already decided to go on strike from tomorrow claiming there was no other option to the problems faced by the employees of the sector. OPPRRE added that the strike will be extended if the problems were not resolved.

Among the demands of OPPRRE is a solution to the 2006 circular issued regarding payments, travel expenses, over-time payments, permanent jobs for gate keepers who had served for over 18 years and other incentives and other incentives.“There are over 5,000 employees who had not been given fixed working hours and the authorities had failed to conduct proper management systems the union charged. The Minister in charge had lost the opportunity to settle the problem because he himself had cancelled the two dates that were scheduled for meetings,” OPPRRE convener Sumathipala Manavadu said.

Botswana - Missing Out On An Opportunity?

Mmegi Online: 12 May 2008
SANDY GRANT

A couple of weeks ago, the world famous Rovos Rail steam safari train passed through Gaborone on its way to Bulawayo and the Victoria Falls. By report, this was the first time this particular train had diverted into this country since Rovos was established in 1989.

Steam trains have their own very special appeal and there was no surprise therefore that the visit should have generated so much public interest. Now was it any surprise that the Tourism Board should have sought to utilise the opportunity to spread its own wares. In reality, despite this sensible bit of opportunism, the visit could only have been something of an advertising coup for South African Tourism. But much, nevertheless, could have been learnt from that visit.

For instance, we too could start thinking about setting up our own tourism/education train. A luxury high cost steam train traversing South Africa and a bit beyond has proved to be a winning idea there but one which would not work here. They have dramatic scenery and places of major interest which can still be visited by rail. In contrast, the places of interest in this country which are being currently promoted by the Tourism Board are those which are inaccessible by rail - namely the Okavango, Chobe, the Kgalagadi and the Makgadikgadi Pans. There is nothing particularly surprising about this because railways have always been constructed to link one population centre with another.

It follows therefore that the opportunities presented by the essentially one line, north to south, railway line in this country are of a very different kind. In the 1950s, the Anglican Church recognised how the railway could be exploited when it established its own railway mission. And in the early 1970s I suggested that if a coach could be properly fitted out, a mobile dental service using the railway would have reached a very large number of people. The idea was never implemented. Now we are in another millenium and the railway remains a resource which is yet to be fully utilised.

How come that its role remains exactly the same as it was a hundred years or more ago - the long distance transporting of freight and passengers, nothing more. Short distance passenger rail services to Kgale, Pilane and Lobatse came and went in record time.

There has never been a railway coach equipped as a library, or museum or to provide election information even though, despite the obvious difficulties, problems and costs involved, all three have been created, at one time or another, to use the roads.

We missed out on the anniversary of the ending of the Anglo-Boer War in 1902 which would have been the perfect opportunity to have a coach running up and down the line explaining its role during that campaign and the events that had occurred along it, at Gaborone, Lobatse, Mahalapye and Molotwana, for instance.

But even now, it could still be done. Or maybe something different such as short there-and-back trips for the paying public, including schools, from say, Gaborone to Lobatse or Artesia with cold drinks and snacks on sale. Alternatively or in addition, there could be more ambitious 'know your country' trips with specific themes - the history of mining or settlement or education in this country, or changing patterns of just about everything from clothing to land utilisation.

This would be a different sort of national branding but one which could be much more meaningful than that rather curious logo.

May 12, 2008

17,000 Network Rail workers balloting for industrial action

RMT: May 12 2008

Two separate disputes involve maintenance and signalling staff

MORE THAN 17,000 RMT members at Network Rail are being balloted for industrial action in two separate disputes involving maintenance and signalling and other operational staff.

Ballot papers are being sent to more than 12,000 infrastructure workers after they rejected an "unacceptable" offer from the company on the harmonisation of terms and conditions by a landslide margin of more than 100 to one.

And some 5,000 signallers and other key operational staff are being balloted over pay and conditions after rejecting a "cynical" offer of an additional 0.1 per cent on the first year of a two-year deal. Both ballots conclude on May 22.

The harmonisation dispute follows months of fruitless talks aimed at achieving a single set of terms and conditions for maintenance staff, many of whom transferred into Network Rail from the private sector.

"The company has been using the talks to try to drive down our members' conditions, and they can hardly be surprised that their pathetic offer was thrown out by a margin of more than 100 to one," RMT general secretary Bob Crow said today.

"The company is now saying that our members can stay on their existing terms, but they are already moving to sneak inferior conditions in through the back door with a list of issues it now wants to 'discuss' separately.

"We know that means an attack on everyone's terms and conditions, not least because the company is looking to cut its maintenance budget by up to 12 per cent year on year."

The ballot of signalling and other operational staff follows the rejection of a pay-and-conditions offer that holds the prospect of a real-terms cut in living standards.

"We told the company quite clearly that the second-year element of their pay offer to operational staff, of RPI plus 0.5 per cent, would not protect our members against costs that are rising way ahead of the official inflation rate," Bob Crow said.

"Their cynical response was to offer another tenth of one per cent on the first year element on condition that we do not ballot, when they knew perfectly well that it would not address our concerns.

"We have also told the company that we want a return to a common anniversary date for all operational and maintenance and infrastructure workers," Bob Crow said.

ends


Notes to editors:

The 5,000 signallers and operational staff are in dispute over pay. Network Rail's original offer, of 4.8 per cent this year and RPI plus 0.5 per cent in 2009, was rejected by RMT members by a margin of two to one. The company had been informed that they year one element was acceptable but that the year 2 element was not.

The company's offer of an extra 0.1 per cent in year one, bringing it to 4.9 per cent but conditional on the union not balloting for industrial action, would leave the second-year element unchanged.

The maintenance dispute follows the failure of months of talks to produce a serious offer on the harmonisation of terms and conditions for 12,000 infrastructure workers, many of whom have transferred into NR from former contractors.

Some 6,641 RMT members voted to reject the proposals with just 56 voting to accept, and the union had already signalled that rejection would lead to a ballot for industrial action if acceptable proposals are not forthcoming at last-ditch talks which took place last month.

RMT's aspirations for Network Rail harmonisation include:

Working week

* 35 hour week without loss of pay
* Move towards a 34 hour week and where possible a maximum four-day rostered week over a 13 week cycle

Annual Leave

* 28 days on entry plus Bank Holidays
* 30 days after ten years' service plus bank holidays
* No compulsory working on Christmas Day, Boxing Day and New Year's Day
* Agreed enhancements for all the above working

Sick Pay

* 39 weeks' full pay

Pay

* One grading system
* One set of job descriptions
* Highest possible basic rates with allowances but recognising allowances can be reduced to increase the basic pay
* 100 per cent pensionable pay

Stunning full-year figures to belie FGW’s torrid story

Western Mail: May 12 2008

The firm behind the First Great Western rail service labelled “unacceptable” by ministers earlier this year is likely to stoke further criticism with bumper annual profits on Wednesday.

Transport operator FirstGroup is expected by analysts to unveil pre-tax profits of around £248m for the year to March 31 – 77% ahead of the previous 12 months.

The group’s bottom line will be boosted by six month trading from US group Laidlaw – the yellow school bus giant and owner of bus company Greyhound – which it bought last year.

But its latest trading update also boasted a 10%-plus rise in rail revenues during the year.

In January, passengers were hit with above-inflation fare rises across the network, although FGW’s poor performance prompted fare strikes by consumers.

A month later it received a formal rebuke for its handling of the rail franchise and was forced into a £29m programme of improvements at FGW.

Albania Rail Workers Strike Over Pay

Balkan Insight: 12 May 2008
albania.jpg
Tirana -- Workers at Albania Railways, HSH, blocked a train heading from Durres to Tirana on Monday, in a protest for higher pay.

The planned protest involved a half hour sit-out on rail tracks, before the train could resume its trip to the scheduled destination.

The strike was broken out after the intervention of police and the dispersal of workers.

The state owned company said in a statement the strike was illegal.

Albania is the only country in Europe where there are no international rail links. The state-owned company is heavily-subsidized by the state.

Before the fall of Albania’s communist regime, where the private ownership of cars was illegal, railways were often the only mode of transportation.

However, since the regime collapsed in 1991, passenger and cargo numbers have dwindled, while tracks and equipment have fallen into disrepair.

First Great Western train-maintenance and cleaning staff to strike

RMT: May 8 2008

MORE than 400 train-maintenance, shunting and cleaning staff at eight First Great Western sites in a triangle between Penzance, Swansea and London are to strike for 24 hours on Sunday, May 18 over working hours, overtime rates and other issues.

After voting by a three-to-one margin for strike action, staff at Bristol, Reading, Oxford, Penzance, Exeter, Plymouth, Swansea, and Old Oak Common in London will not book on for shifts that begin after 00:01 on May 18.

The breakdown in industrial relations centres on the company's consistent refusal to pay an enhanced rate of pay for overtime and or to concede a 35-hour week at the Reading and Exeter depots.

"The vast majority of FGW engineering and cleaning staff are still paid the flat hourly rate for their overtime, rather than the time-and-a-quarter enjoyed by other FGW staff, including train-crew and station staff," RMT general secretary Bob Crow said today.

"Most FGW staff already work a 35-hour week, but we have some engineering grades at Reading still on 42 hours - effectively working an extra day a week for nothing.

"For months we have tried to get the company to recognise that engineering grades have the right to the same treatment as other grades, but the company has dug in its heels and that is an absolute disgrace.

"The company has now tried to confuse matters by pretending that what is a straightforward case of equal treatment can only now be resolved in wider harmonisation talks, and that is simply not good enough.

"The company's refusal to budge leaves us with no alternative but to strike, and the RMT executive has today agreed that the members involved will strike for 24 hours on May 18," Bob Crow said.

ends


See also:


Rail workers to strike in overtime row

Media Wales: May 8 2008

Hundreds of rail maintenance workers and cleaners at a leading train company are to stage a one-day strike in a row over hours and overtime, it was announced today.

The Rail Maritime and Transport Union said 400 of its members at First Great Western will walk out on May 18.

The workers, based at Bristol, Reading, Oxford, Penzance, Exeter, Plymouth, Swansea and London, voted three to one in favour or taking industrial action.

The union said there had been a breakdown of talks and accused the company of refusing to pay an enhanced rate for overtime worked or to concede a 35-hour week for all the workers.

General secretary Bob Crow said: “The vast majority of First Great Western engineering and cleaning staff are still paid the flat hourly rate for overtime rather than the time-and-a-quarter enjoyed by other staff including train crews.”

Mr Crow said the union had no alternative but to order a strike.

SNCF eyes Italian rail freight operator Ferrovie Nord Cargo

Thomson Financial: 05.12.08

PARIS - French state railway SNCF is considering taking a stake of up to 49 percent in Italian rail freight operator Ferrovie Nord Cargo, the Financial Times reported.

The company is also looking at other potential purchases, including the privatisation of CFR Marfa, the freight arm of Romania's national railways, a person familiar with SNCF's thinking told the newspaper.

Any deal for FNC - expected to value the business at a few tens of millions of euros - would not be likely before June, the source added.

Botswana - Missing Out On An Opportunity?

Mmegi Online: 12 May 2008
SANDY GRANT

A couple of weeks ago, the world famous Rovos Rail steam safari train passed through Gaborone on its way to Bulawayo and the Victoria Falls. By report, this was the first time this particular train had diverted into this country since Rovos was established in 1989.

Steam trains have their own very special appeal and there was no surprise therefore that the visit should have generated so much public interest. Now was it any surprise that the Tourism Board should have sought to utilise the opportunity to spread its own wares. In reality, despite this sensible bit of opportunism, the visit could only have been something of an advertising coup for South African Tourism. But much, nevertheless, could have been learnt from that visit.

For instance, we too could start thinking about setting up our own tourism/education train. A luxury high cost steam train traversing South Africa and a bit beyond has proved to be a winning idea there but one which would not work here. They have dramatic scenery and places of major interest which can still be visited by rail. In contrast, the places of interest in this country which are being currently promoted by the Tourism Board are those which are inaccessible by rail - namely the Okavango, Chobe, the Kgalagadi and the Makgadikgadi Pans. There is nothing particularly surprising about this because railways have always been constructed to link one population centre with another.

It follows therefore that the opportunities presented by the essentially one line, north to south, railway line in this country are of a very different kind. In the 1950s, the Anglican Church recognised how the railway could be exploited when it established its own railway mission. And in the early 1970s I suggested that if a coach could be properly fitted out, a mobile dental service using the railway would have reached a very large number of people. The idea was never implemented. Now we are in another millenium and the railway remains a resource which is yet to be fully utilised.

How come that its role remains exactly the same as it was a hundred years or more ago - the long distance transporting of freight and passengers, nothing more. Short distance passenger rail services to Kgale, Pilane and Lobatse came and went in record time.

There has never been a railway coach equipped as a library, or museum or to provide election information even though, despite the obvious difficulties, problems and costs involved, all three have been created, at one time or another, to use the roads.

We missed out on the anniversary of the ending of the Anglo-Boer War in 1902 which would have been the perfect opportunity to have a coach running up and down the line explaining its role during that campaign and the events that had occurred along it, at Gaborone, Lobatse, Mahalapye and Molotwana, for instance.

But even now, it could still be done. Or maybe something different such as short there-and-back trips for the paying public, including schools, from say, Gaborone to Lobatse or Artesia with cold drinks and snacks on sale. Alternatively or in addition, there could be more ambitious 'know your country' trips with specific themes - the history of mining or settlement or education in this country, or changing patterns of just about everything from clothing to land utilisation.

This would be a different sort of national branding but one which could be much more meaningful than that rather curious logo.

May 11, 2008

NZ Rail buyback feelgood factor may pay dividends for Labour

New Zealand Herald: May 11, 2008

Conspicuous by its absence from the New Zealand Government's announcement this week that it was buying Toll Holdings' rail and ferry assets was a clear explanation of the reason.

On the face of it, the $665 million price, some $235 million above book value, seems high for an asset that the Bolger National Government sold in 1993 for less than half that. It may gladden the hearts of those who have always considered privatisation a dirty word to see the New Zealand rail network back in public hands, but running a rail company has always been a dodgy commercial proposition in this country, even before the railways lost their statutory monopoly over long-haul goods services in the 1980s.

New Zealand Prime Minister Helen Clark seemed to acknowledge as much this week, saying that the Government was "not going into this to make money". That's just as well. The Government paid $44 million five years ago to stop Tranz Rail going bankrupt. That was meant to be part of an agreement to buy back the entire network for $126 million with a further $100 million over five years to be invested in improvements to the network. Finance Minister Michael Cullen puts those improvement costs now at "hundreds of millions". The delay has cost him dearly and he will not be expecting a return on this week's investment any time soon.

And there is no reason he should. Toll, a successful Australian-based firm that is the region's largest transport company, has no stomach for more after five years of ownership. Tellingly, the ink was barely dry on the contract before the company's managing director, Paul Little, announced Toll's "complementary acquisition" of Northland trucking firm United Carriers. Clearly Toll believes in the future of road over rail.

The New Zealand Government may - and certainly should - have its eye on the more distant horizon. Cullen has described the purchase as a key part of a push for sustainability, though he begs the question by failing to explain why Government ownership is necessary to ensure rail's survival. He might be forgiven for being tired of using public money to prop up private enterprise; perhaps he is encouraged by the performance of Air New Zealand since he became its major shareholder, but he could have done a better job of explaining his reasoning to the electorate, who will be paying for his spending spree.

National's decision in 1993 was based on Treasury advice at that time questioning the need for having a rail service at all: distances were too short and New Zealand too long and thin for rail to compete with long-haul trucking that can provide a door-to-door service without double handling. In addition, the advice said, there were not enough bulky goods to make rail freight economic.

Certainly the landscape has changed in the 15 years since - most notably in soaring fuel prices. If we are to meet our (postponed) emission-reduction targets, more trucks will have to come off the road. As a way of moving goods (long-distance passenger services are unlikely to be revived) rail may have a bigger future than it did last week.

The return on investment is unlikely ever to be in hard cash or even black ink in Government accounts. Whatever benefit it confers will be spread across various parts of the economy: it will be disguised as savings in road-surface maintenance, lower road tolls and quicker progress towards environmental and other targets.

But the move is shrewd politics. The return of assets to public ownership makes for good election-year headlines and the move causes discomfort to National because it highlights the gap between its leader and deputy leader on asset sales.

It is also music to the ears of the Greens, who may yet save Labour's bacon in the scramble to form a Government.

See also:


New Zealand's experiment in rail privatisation comes to a halt

Financial Times: May 6 2008
By Peter Smith in Sydney

The New Zealand government has bought back the country's main rail and ferry operating business from Australia's Toll Holdings for NZ$665m (US$522m) after the two sides failed to settle a long-running funding dispute on upgrading the rail network.

The deal puts an end to an experiment in rail privatisation begun in 1993 with the sale of the network to US railway company Wisconsin Central and a consortium of New Zealand investors for NZ$320m.

Michael Cullen, the Labour finance minister, said the privatisation "and the running down of the asset has been a painful lesson for New Zealand".

Paul Little, Toll's managing director, said the group had not planned on selling its rail operating business back to the government. But he said proceeds from the sale would help it pursue acquisitions in Asia. Toll shares rose 35 cents to A$8.38.

Although the sale fits with Toll's "asset light" strategy and will result in a book profit, the renationalisation of the rail and ferry businesses comes ahead of a national election due by mid November. The decision to take back the rail operating business is expected to win public support.

It comes less than a month after an attempt by the Canada Pension Plan investment board to buy a large stake in Auckland's airport was blocked by the New Zealand government.

Last week, however, the government indicated it was unlikely to block the NZ$785m sale of the Wellington power grid network to Hong Kong's Cheung Kong Infrastructure Holdings.

The government's repurchase of the rail assets completes New Zealand's second large-scale renationalisation in recent years.

This signifies a sharp reversal of the mass privatisation policies for which it became internationally known in the 1980s and early 1990s.

In late 2001, it agreed to bail out Air New Zealand, the national carrier, to prevent it from going bankrupt, injecting NZ$885m in return for an 83 per cent stake.

Rail privatisation was never popular in New Zealand and Tranz Rail, the company set up to run the system, ran into financial and political difficulty after its owners stripped it of capital and under-invested in the railway system.

Toll bought a majority stake in Tranz Rail in 2003. It sold the track network back to the government in 2004 for a nominal sum of NZ$1, but continued to operate train services.

May 10, 2008

Unions launch international group to represent National Express workers

ITF: 9 May 2008

Trade unions today inaugurated a network for workers at National Express Group at a two day meeting at the ITF in London.

Representatives from The Netherlands, Spain, the UK and USA met for the first time to discuss the coordination of activities relating to the National Express Group (NEX). The delegates cover the Group’s rail, bus, coach, inter-city and school bus operations in these countries and exchanged their experiences of dealing with the company

For example, in the UK, the rail sector is highly unionised and inherits the collective bargaining agreements from British Rail days. However, NEX’s US subsidiary, Durham, is considered an anti-union employer with a track record of poor labour relations and practices. Meanwhile NEX has acquired ALSA’s Spanish operation and is expanding its franchise business in Europe through the brand-name, Euroline. The new group welcomed a progress report from the British TUC on the establishment of a European Works Council at NEX.

Delegates agreed to further coordinate their European and global activities through the ITF and pledged to support the US workers in their organising campaigns. The group identified that long distance coach and Eurolines drivers were largely employed by third party operators and agreed to seek to promote the option of union membership and organisation to them via the ITF.

Mac Urata, Secretary of the ITF’s Inland Transport Section, commented: “This is the launch of a common forum for unions representing the workers of National Express that will allow us to represent them better, promote best practice, and hold the company to the highest standards.”

Present at the meeting were representatives of the following unions: CC.OO, and UGT (Spain); FNV Bondgenoten (Netherlands): IBT and TWU (USA), ASLEF, RMT, TSSA and UNITE (UK).

ENDS

May 9, 2008

Belgian rail unions plan national strike on May 20

Reuters: May 9, 2008

BRUSSELS - Belgium's two largest rail unions have called for a nationwide strike on May 20 in a dispute over pay and conditions.

The ACOD and ACV-Transcom unions said their members had rejected a provisional deal agreed with management last month.

The strike, by some 90 percent of the employees of state rail firm SNCB/NMBS would bring trains to a standstill for 24 hours from 10 p.m. (11 p.m. British time) on May 19.

It would also hit high-speed international services such as the Eurostar to Britain, Thalys to France and the Netherlands and the ICE to Germany.

GE close to $263 mln Bosnia rail deal

Reuters: May 9, 2008

BANJA LUKA, Bosnia - Bosnia's Serb Republic government said on Friday it is close to clinching a 170 million euro ($263 mln) deal with U.S. conglomerate General Electric to help it rebuild its devastated rail network.

"The contract could be signed in a month's time", the Prime Minister of the autonomous region, Milorad Dodik, told a news conference after a meeting with the company's officials.

Dodik said the project could start in September.

In the first phase of modernisation, GE would provide the equipment for the construction of a high-speed railway section connecting the northern towns of Doboj and Banja Luka with the northwestern town of Prijedor.

Bosnia's road and rail network, as well as much of its utility infrastructure, were destroyed in the 1992-95 war among its three ethnic groups -- Serbs, Muslims and Croats.

The Serb Republic government has picked Austrian builder Strabag to build a 3 billion euro highway network, the Serb region's largest post-war investment.

Bosnia's other half, the Muslim-Croat federation, is also looking into major infrastructure projects and could clinch a similar deal with GE soon.

May 8, 2008

No new Metronet for Tyne and Wear, says RMT

RMT: May 6 2008

Biggest rail union pledges ‘tooth and nail’ fight to keep Metro 100% public

A TOOTH-and-nail fight against privatisation has been pledged by Britain's biggest rail union after plans emerged that could see Tyne and Wear Metro's infrastructure fragmented and handed over to privateers to milk of public money.

Warning against the creation of a Metronet Mark II, RMT says it will fight "all the way" if Nexus, Tyne and Wear's Passenger Transport Executive, tries to hand any part of Metro's maintenance to the private sector.

The government has earmarked £600 million for a welcome upgrade of the Metro network, but has stipulated that maintenance of new ticket machines, trains and infrastructure - all currently done in-house by Metro staff - is competitively tendered for.

"The corpse of Metronet is barely cold, yet the government is insisting that another highly successful Metro system is subjected to a process that could see its maintenance thrown to the privateers," RMT general secretary Bob Crow said today.

"They say that history's tragedies repeat themselves as farce, but this time there is not even any pretence that there will be any private-sector investment.

"That means that private shareholders stand to get a fat profit for doing nothing more than overseeing what Metro's own maintenance staff already do perfectly well.

"But we would also end up with a Metro fragmented along the same disastrous lines that have caused such massive safety problems for the national rail network and London Underground

"Rail privatisation, on the national network and on London Underground, has been a colossal, wasteful and dangerous failure, and it would be an act of criminal vandalism to put the country's last wholly publicly owned railway through the same mill.

"RMT and its members have a bellyful of experience of rail privatisation, and we give fair warning now that we will fight to ensure that Tyne and Wear Metro remains an integrated, publicly owned and accountable railway serving its community," Bob Crow said.

ends

Notes to editors: The Tyne & Wear Metro is currently a vertically integrated publicly owned railway but requires significant new levels of investment to upgrade the system. Nexus have proposed a "Metro Reinvigoration" program comprising of three phases.

Phase One, to be in place before 2010, covers primarily the installation of new ticket machines.

Phase Two, which is scheduled to begin in 2010, aims to refurbish the Metrocars, stations, track and overhead lines.

Phase Three starts in 2008, to build a new generation of Metrocars and signaling systems. Tyne and Wear Metro does not have the in-house capacity to undertake the major renewals and refurbishments described above but all maintenance work can be carried out in house.

The government has committed up to £600m funding to the Metro Reinvigoration program but have stipulated that this funding will only be forthcoming if Nexus tender for the work to be undertaken by the private sector and use a "public/private comparator" to determine whether better value would be obtained by the work being undertaken by the public or private sector.

It is proposed that the private sector will not make any investment in the Metro, but will simply be paid a fee.

Stage One is now at an advanced stage: invitations to tender for the ticketing system were due to be sent out on 21 April 2008 and contracts to be signed on 4th November 2008. This invitation to tender invites bids for: "Design, supply, installation and commissioning of the Metro Ticketing System for Nexus. Maintenance of the system will be an option within the Invitation to Tender."


See also:


Union warning on Metro safety work

The Journal: May 7 2008
by Adrian Pearson,

UNION bosses have warned that Metro safety standards could be jeopardised if the majority of work on the rail system is privatised.

Members of the Rail, Maritime and Transport Workers union have called on Metro owners Nexus to do all it can to avoid selling off responsibility for the rail service, or risk facing the same financial and safety problems which almost crippled the London Underground.

The union wants to make sure that if the Government hands over a £600m Re-invigoration package this summer, it does not lead to Nexus transferring control to the private sector and placing profits before passenger concerns.

Last night Nexus insiders rubbished the union’s fears, insisting that if it did decide to contract out services, they would still own the train system and would set strict standards.

The RMT has warned Nexus bosses to look south if they want to see the results of moving services from the public sector into the hands of private companies.

They are now comparing the potential problems of a Metro changeover to the controversial situation in London when maintenance company Metronet took over.

Yesterday RMT general secretary Bob Crow said Tyneside faces the ghost of Metronet and warned of a tooth-and-nail fight against privatisation.

He said: “The corpse of Metronet is barely cold, yet the Government is insisting that another highly-successful Metro system is subjected to a process that could see its maintenance thrown to the privateers.

“They say that history’s tragedies repeat themselves as farce, but this time there is not even any pretence that there will be any private-sector investment.

“That means that private shareholders stand to get a fat profit for doing nothing more than overseeing what Metro’s own maintenance staff already do perfectly well.”

Nexus has insisted it has no intention of seeing any Metro standards slip.

A spokesman said: “The comparison with Metronet is simplistic. Metronet was one of two similar concessions let by Transport for London to manage infrastructure only.

“Metronet’s performance failed to meet the levels set down by Transport for London while the other concession, Tubelines, continues to operate very successfully. There are lessons to be learned and we’ll incorporate these into our own distinct plans.

“There is no proposal to privatise Metro or break up the operation.”

Fears ignored

ENGINEERING firm Metronet was repeatedly criticised for its safety standards in London throughout its four years in charge.

Concerns increased following a train derailment and the company went into administration after overspending by more than £1bn.

It was awarded the maintenance contract in 2003 despite then-mayor Ken Livingstone’s objections and his concerns for safety standards.

By summer 2007, bosses were packing up as anger mounted over the huge sums of taxpayers’ money spent on the increasingly expensive private-sector option.

The company’s financial problems were blamed on Metronet’s policy of sub- contracting work among its partners, a selection of engineers who did not face the same punishments if they failed to do the job on time.

May 6, 2008

Tackling the barriers to progress

Railway Gazette International: 06 May 2008
Murray Hughes

Competitors are making their presence felt in the Italian market as the national railway prepares to step up the range and quality of its freight and passenger services. Chief Executive of FS Holding SpA Mauro Moretti talks to Nick Kingsley and Murray Hughes

Mauro Moretti, Chief Executive of FS Holding SpA, has some ambitious goals. Among the targets set for FS in the 2007-11 period is 'to position railways as the main mode of passenger and freight transport' in Italy. Numerous investment projects are in hand to drive the business towards this demanding objective, most prominent of which is the scheduled completion in 2009 of the Alta Velocità project for a north-south high speed line linking the country's principal cities.

Other projects in progress include the improvement of links to the rest of Europe thanks to investment under the TEN-T priority programme and an €8bn domestic scheme to segregate suburban and freight traffic flows from inter-city services in and around major cities.

At the same time the FS Group has launched several development initiatives designed to transform the national railway into a business stretching far beyond its traditional remit. Memoranda of understanding have been signed with the ports of Genova, Taranto and Venezia for upgrading of infrastructure and the development of rail logistics services. In a related move, at the end of February FS set up Italia Logistica, a joint venture with Gruppo Poste Italiane (RG 4.08 p206). This will see FS move into activities such as storage and warehousing, inventory management, packing and packaging, distribution and after sales service.

In a bid to exploit its valuable property portfolio, FS is working on plans to redevelop major stations - the most spectacular part of this programme covers the new or rebuilt stations for AV services at Torino Porta Susa, Bologna Centrale, Firenze Belfiore, Roma Tiburtina and Napoli Afragola. Elsewhere, abandoned areas of land are to be recovered and redeveloped, and many stations will be modernised to include car parks and better integration with local transport.

All this can be seen as preparation for the increasingly competitive market that will ultimately emerge as the European Union's policies take effect on rail businesses across the continent. In the meantime Moretti insists that Europe is 'not yet a free market. We have a sort of liberalisation, but in some ways it is the same as before,' as competitors are not necessarily from the private sector. Naming SBB Cargo and Deutsche Bahn as state-owned railways competing with FS for freight traffic, Moretti points out that Rail Traction Company too can be classed as 'part of the public sector' because Autostrada del Brennero, regional authorities and DB jointly own a majority share of the business.

Combating the cherry pickers

The advent of domestic freight competition presents FS with the problem of cherry-picking. In terms of legislation permitting on-rail competition, Italy is 'more advanced than the rest of Europe', but Moretti says that it is impossible for Trenitalia to run freight services between central and southern Italy without a state contribution - the market will simply not bear the cost. Competitors can pick and choose their business, but 'I have the rest of the network to fund', he says. 'If we ran the network on the same basis as our competitors, we would have to close about 50% of the railway.'

Contending that free market policies will only be effective if common rules apply across all of Europe, Moretti notes that there is 'much talk' of common policy and standards, although in practice different policies apply in different countries. The main issue, he feels, is regulation of public service contracts, and at the moment 'the rules of public service contracts are not well defined'.

With the impending deregulation of international passenger services in 2010, Moretti views open access with some scepticism, calling for a fair market with 'reciprocity'. 'If SNCF wants to run trains in Italy, then the French market has to be free for other operators too. A few years ago FS spent €50m to enter the French market, but so far it has brought us nothing.'

Asked to comment on how independent FS is from the Italian government, Moretti says that 'FS is completely free when the market can pay the costs directly', both for passenger and freight traffic.

Costs and productivity

It is on routes where grants or subsidies are needed that the issue of operating costs becomes critical - agreements with the trade unions still require Trenitalia freight trains to have two fully qualified drivers. Pressed on this issue, Moretti confirms that 6 000 jobs were cut from the FS payroll in 2007, taking the number of employees in the group down to 87 000. He insists that 'we will face up to the problem of the single driver' now that automatic train protection technology is 'in place on the network'. Acknowledging that 'there are obvious difficulties with the trade unions', he says that 'we are preparing to take the next step, although we will need a transition period to discuss this.' Of course, he adds, 'the problem does not exist for our competitors.'

Financial targets set for FS Holding SpA by 2011 include a commitment to put the railway in the black, and the 2008 Business Plan puts the operating result at close to zero rather than a loss.
AV network

In December this year the 182 km Milano - Bologna section of the AV network will be finished, paving the way for journey time cuts on Italy's north-south corridor that will start to make rail competitive with air. In December 2009 opening of the 78·5 km section from Bologna to Firenze will finally complete the corridor, and Moretti expects the market for inter-city rail travel to grow dramatically: 'it will take just 3 h to travel from Roma to Milano, and during peak hours we will run trains every 15 min.'

This contrasts with the rather limited AV service currently operated between Roma and Napoli, where Moretti says that the market does not yet justify more trains. 'When the whole route is open from Milano to Napoli, the market will increase', he says.

This potentially lucrative axis is already in the sights of competitors such as NTV, which has announced its intention to launch competing services using a fleet of Alstom-built AGV trainsets. Asked if he is concerned, Moretti says 'we have no problem if competitors want to enter this market - if they ever arrive.'

More capacity

Although the obvious benefit from the AV programme is faster journey times, a clear objective is to lift capacity on the core network. A combination of new line construction and upgrading will see capacity more than doubled on some routes.

One of the benefits is expected to be a real improvement in punctuality, the aim being for 92% of passenger trains to arrive on time and 80% of freight services to reach their destination within 30 min of the schedule.

A 35% improvement in seat availability thanks to better utilisation of the AV, Eurostar Italia and inter-city fleets is expected to yield significant benefits. Related to this is the introduction of a regular-interval timetable on many routes.

The Level 2 ETCS fitted on Italy's high speed lines is designed to permit 5 min headways with trains running at 300 km/h. Moretti is proud that FS was the first railway in the world to run trains at this speed with Level 2, and he laments the slow progress being made with the same technology in other countries - 'we are the first and only ones to use ETCS, and we feel quite lonely.' While Switzerland is arguably in the lead with the application of Level 2 at lower speeds - and LGV Est in France is being dual-fitted with Level 2 and TVM430 - Moretti believes that 'there needs to be a major effort to extend the technology to a reasonable network on Europe's main corridors. It needs more pressure from the European Union with concrete tools such as finance.'

Just over two-thirds of Rete Ferroviaria Italiana's 16 000 route-km network is electrified at 3 kV DC, but the high speed lines now nearing completion are wired at 25 kV 50 Hz. Moretti is disappointed that 'other railways' north of the Alps are not following suit and using what has effectively become a world standard for main line electrification.

The feeling of isolation extends into commercial areas such as ticketing. Trenitalia is not a member of Railteam 'as this is for northern Europe where different companies have the problem of working together. We are discussing whether to join Railteam, but it is not clear what the advantages are; it's different from an airline alliance.' In Moretti's view ticketing remains an important barrier in the rail market, and 'we need to break down the barriers.'

Alstom set to win UK order for 106 Pendolino tilting trains

Thomson Financial: 05.06.08

LONDON -- Alstom said it is poised to win a 1.5 billion pounds order from the UK's Department for Transport (DfT) for 106 Pendolino tilting train carriages to run on the West Coast Main Line.

The French train maker said the DfT had given it a 'notice to proceed' with production of the carriages, which will be used to lengthen 31 existing Pendolinos from nine to 11 cars and to expand the fleet by four 11-car trains.

'This notice to proceed is intended to be followed by a firm contract for trains and maintenance worth a total of 1.5 billion pounds, which is due to be finalised in August 2008,' Alstom said in a statement.

The new trains will be in full service on the London-Glasgow West Coast route, which is operated by Virgin Trains, by December 2012, the DfT said. Terms were not disclosed.

There is also an option exercisable by 2010 to procure a further 42 carriages by early 2013, a statement from the DfT said.

The department also said it had short-listed Govia Transportation Projects Ltd and Virgin Rail Group Holdings Ltd for a contract to manage the process of lengthening the existing trains, and would shortly issue the companies with an invitation to tender document.

The Go-Ahead Group PLC and Keolis SA, which is 45.5 pct owned by French state railway SNCF, own Govia.

Virgin Rail Group Holdings is 51 percent owned by Virgin Holdings Ltd and 49 percent by Stagecoach PLC.

The new trains and carriages will result in the creation of more than 7,420 extra seats on West Coast services, in addition to the 45 percent increase in long distance services on the line due to take place this December, the DfT said.


See also:


Alstom: May 06, 2008

UK Department for Transport Reaches Agreement with Alstom for Supply and Maintenance of Pendolino High-Speed Tilting Trains

The UK Department for Transport reached agreement with Alstom (Paris:ALO) for the supply and the maintenance of Pendolino high-speed tilting trains for use on the West Coast Main Line between London and Glasgow, one of the United Kingdom's main railway routes. This notice to proceed is intended to be followed by a firm contract for trains and maintenance worth a total of €1.8 billion (£1.5 billion) which is due to be finalised in August 2008.

The notice to proceed for rolling stock, worth €318 million (£255 million), will cover the delivery of four Pendolino trains. The West Coast Main Line fleet, currently composed of 52 trains built and maintained by Alstom since 2003 and operated by private operator Virgin, will therefore comprise 56 trains after this delivery.

The new trains with eleven cars each will be put into service in 2011 and 2012. To meet the needs of the growing number of passengers on the West Coast Main Line, 31 of the trains in the fleet currently in service will also be lengthened by two cars each, for a total of 11 cars per train. This will raise their capacity to 589 passengers each. These lengthened trains will be put into service between April and December 2012.

The agreement provides for an option – to be exercised by August 2010 – for the 21 remaining trains to be lengthened to 11 cars as well.

The four new Pendolino trains and the cars required to lengthen the existing trains will be manufactured at Alstom's centre of excellence for high-speed models in Savigliano, Italy. The train lengthening will take place at Alstom's maintenance centre in Liverpool.

Regarding the maintenance of the Pendolino fleet, the €1.5 billion (£1.25 billion) notice to proceed covers maintenance of the Pendolino fleet and would extend the current contract by ten years beginning on 1 April 2012, the date on which the contract with private operator Virgin Trains expires. Maintenance will be performed at the five Alstom Traincare Centres along the West Coast Main Line.

"This agreement confirms the success of the Pendolino," said Philippe Mellier, President of Alstom Transport. Since 2003, when the Pendolino was put into service on the West Coast Main Line by Virgin Trains, the number of passengers has risen 40%. With this agreement, Alstom will play a role in increasing the UK rail system's capacity. We are committed to providing UK railways with ongoing high-performance maintenance services – just as we've been doing since 2003 for our customer Virgin Trains."

Alstom Transport's Pendolino

The tilting trains in Alstom's Pendolino range operate at 200 km per hour. The Pendolino is equipped with Tiltronix technology, a tilting system guaranteeing passenger comfort and safety when the train takes curves at high speeds. Moreover, the energy saved in braking means that the Pendolino consumes 17% less electricity than trains with a conventional braking system. The fleet is also outfitted with the "e-train" maintenance system, which anticipates maintenance needs and relays them to maintenance teams via GPRS, thereby improving train availability.

Since its launch in 1998, Alstom's Pendolino has been a true success, covering over 200 million kilometres in commercial service worldwide. It is already in operation in ten countries: the United Kingdom, Italy, Germany, Austria, the Czech Republic, Switzerland, Slovenia, Portugal, Spain and Finland. Russia will join the list in 2010 with the inauguration of the high-speed St. Petersburg-Helsinki line.

May 5, 2008

Government repurchase of rail and ferry operations great news for rail workers and NZ

Rail and Maritime Transport Union - New Zealand: 5 May 2008
Press Release

“Railway workers will be celebrating today’s news of the government’s repurchase of the national rail and ferry operations. This purchase will see the national railway asset and the “iron bridge” across Cook Strait returned to the people of NZ, and the industry will finally have an owner who has the means to be able to back up the promises for much needed investment,” Rail and Maritime Transport Union (RMTU) General Secretary Wayne Butson said today.

“The RMTU campaigned long and hard to get the Labour led Government to buy back the rail tracks but we always knew that in order to have the rail industry deliver what this country needs that they couldn’t stop there. We have all been urging the Government to go the final step to renationalize the network.”

Mr Butson says that from the day that the National government sold off the SOE NZ Rail Limited to an American led consortium, the lot of rail workers and customers has been down hill in direction. The flavour of the day was to extract the cash, replace it with debt and do just enough to keep it going.

“Toll purchased the rail business and they have promised new locomotives since they arrived. Years later, not one order for a new locomotive has been placed. It has been ‘paint them up’ in Aussie colours and send it back out into service,"

“Recent years has seen an exodus of key skilled workers, who were leaving because they didn’t see this industry going anywhere. Today’s announcement will start to stem the drift.”

“The RMTU is keen to be a part of the rejuvenation of the NZ rail industry so that it can deliver the safe sustainable transport option demanded by global warming and escalating fuel prices, and we call upon the Government to make strong early statements of investment in new locomotives and wagons.”

“We know that there will be those who will condemn the Government buy back as a return to the “bad old days”. To them we say look at the record of the SOE from 1987 to 1993, which saw the entity turn into a profitable enterprise.”

ENDS

For further information, contact Wayne Butson, General Secretary, RMTU on 0274-962-461.

See also:


Shipping union praises rail move

New Zealand Herald: May 07, 2008

The Maritime Union says the buyback of rail and ferries is a good step towards rebuilding a top quality transport system in New Zealand.

Maritime Union General Secretary Trevor Hanson says the move is positive for New Zealand, and should have been done a long time ago.

"The only regret is that we have now had a generation where this vital part of our infrastructure has been first asset stripped then unsuccessfully operated by global corporations interested in shareholder profit, not for what is good for New Zealand."

Mr Hanson says the Government was moving in the right direction but should not be timid.

"We need some more speed in developing New Zealand-owned coastal shipping, establishing a national ports strategy, and ensuring our transport infrastructure is developed for the benefit of New Zealand, not private interest groups or overseas shareholders."

Mr Hanson says shipping and rail will be the two transport modes of the future as fuel prices, road congestion and environmental problems continue to grow.

"Hopefully this is the closing chapter of the rail saga that goes back to the right-wing political cabal who stripped New Zealand's assets and sold them to their mates during the 1980's and 1990's."

The Maritime Union represents maritime workers aboard the Cook Strait ferries and in all New Zealand ports.

See also:

Government Toll buy a sad indictment

New Zealand Herald: May 10, 2008
By Brian Gaynor

The nationalisation of the country's rail system, which is yet another Government pre-election flip-flop, is a sad indictment of our political decision-making process.

Not only are we throwing nearly $4 billion at a failed company but we have also transferred huge wealth to overseas investors while showing little concern for domestic investors and companies.

The story begins on October 28, 1990, when the core rail business of the old New Zealand Railways Corporation was transferred into the new limited liability company, New Zealand Rail Limited. As part of this process the Crown wrote off $1087 million of debt and injected $360 million of equity.

The new company was created with no debt because its directors and investment bank Fay, Richwhite, the company's main financial advisers, believed NZ Rail had a better future with minimal gearing.

A scoping report by the Treasury, dated September 25, 1992, concluded that "there were no apparent public policy reasons for continued Government ownership of NZ Rail".

It believed that between $217 million and $315 million could be realised from a negotiated trade sale compared with $165 million to $175 million from a sharemarket float.

Bankers Trust, adviser to the Treasury, was concerned a suitable buyer wouldn't be found. But Sir Michael Fay and David Richwhite spotted a chance to repeat their windfall Telecom profit and convinced the highly regarded Wisconsin Central to join their consortium.

The Treasury was apprehensive that Fay, Richwhite would have an unfair advantage because it had been NZ Rail's financial adviser, but the consortium's $328 million offer was accepted in 1993.

Tranz Rail, the purchasing vehicle, borrowed $223 million to fund the acquisition with the consortium contributing only $105 million of equity. This was a classic private-equity structure with the rail company borrowing to fund the consortium's purchase cost instead of using the new debt to invest in rolling stock and track.

In June 1995, Tranz Rail made a capital repayment of $100 million that reduced the equity contribution of the original investors to just $16 million after taking additional shares issued to management into account.

In mid-1996 Tranz Rail issued 31 million shares - 25 per cent of the company - to the public at $6.19 a share compared with the consortium's average cost of less than 20c a share.

The share price rose to $9 by mid-1997 and many consortium members took advantage of heady share prices to sell out at a handsome profit.

The four main original investors - Fay, Richwhite, Wisconsin Central, Berkshire Fund and Alex van Heeren - realised profits of $370 million, mainly tax free, from the sale of their Tranz Rail shares.

Some of these share sales were the subject of an insider trading inquiry by the Securities Commission and settlement was reached with a number of parties. These included parties associated with David Richwhite and Sir Michael Fay, which paid $20 million, while Berkshire Fund and one of its executives paid $7.4 million.

In 2003 Melbourne-based Toll Group made an offer for Tranz Rail at $0.75 a share, later raised to $1.10 a share that valued the company at $231 million.

Toll acquired nearly 84 per cent of Tranz Rail under this offer.

Shareholders who bought shares in the IPO at $6.19, took up their entitlement to the 2002 five-for-seven rights issue at 75c a share and accepted the directors' recommendation to sell at $1.10 a share received only $28 for every $100 invested.

Immediately after the bid the track infrastructure was sold back to the Crown for $1 with several other assets for $33.5 million. This followed the sale of the Auckland track to the Government for $81 million in December 2001.

Since acquiring the track the Government has committed more than $1.5 billion to improving the network, more than $1 billion of it in the Auckland region. In the past two years Ontrack, a division of the New Zealand Railways Corporation that owns and manages the rail network on behalf of the Crown, received $167 million in Government grants and now values the track at an unbelievable $10,648 million.

Ontrack's latest annual report reveals that Labour Party president Mike Williams and former Labour MP Clive Matthewson are directors.

Finally last year Toll made a successful offer for the Tranz Rail shares and Grant Samuel valued the company between $2.89 and $3.32 a share. The main beneficiary of this $3-a-share offer was the United States investor Third Avenue Management, which had bought 10.1 per cent in 2003 to stymie Toll's ability to move to compulsory acquisition under the $1.10 a share offer.

Although Toll had finally achieved its 100 per cent shareholding objective there were major disagreements with the Crown over track access charges.

Originally Toll was meant to pay Ontrack's cash operating costs for the first five years and Ontrack's cash operating cost plus capital costs after that. But Toll dug its toes in and refused to sign a long-term deal on the basis that the proposed agreement would lead to substantial losses or would encourage its customers to transfer to road.

Finance Minister Michael Cullen dropped a bombshell on Monday when he revealed the Government would buy Toll's rail and ferry business for $665 million. There are several reasons why the renationalisation was greeted with dismay by the business and investment community:

The purchase price of $665 million is extremely generous, particularly as Toll is keeping the highly successful freight forwarding and road transport operation, with nearly 200 trucks.

The Crown will give Toll a six-year, rent-free period on the property used by these operations. This could be an effective subsidy by New Zealand taxpayers to the Australian company of more than $70 million over the six-year period.

In addition, Toll's rail operations have charged below-market rates to its freight-forwarding business and this is expected to continue under the new regime. This makes it extremely attractive for Toll to buy new businesses as any new companies it acquires should also be able to obtain below-market rail freight rates.

Why do our politicians continue to offer fantastic deals to overseas investors while treating domestic companies and investors with near contempt?

Most of the privatised companies have delivered great returns for overseas investors while domestic investors have experienced more losses than gains.

Auckland International Airport shareholders were deprived of an attractive offer from the Canada Pension Plan Investment Board while Toll's ASX share price rose strongly this week as Mainfreight's share price fell.

There is a reasonable amount of public support for the renationalisation of rail, mainly based on the premise that a strong railway will take freight off the roads.

But the most important question is, does rail have a viable future in NZ?

Since 1990 the taxpayer has spent or committed nearly $4 billion on rail if the debt write-offs, equity injections, asset buy-backs, subsidies, grants and planned track expenditure are added.

This is before any future expenditure on rolling stock or any past spending by the company is taken into account.

Cullen's only strategy seems to be to throw more money at the mess, yet how can we spend $4 billion on rail when Air New Zealand generates 5 times more revenue, is far better managed and has a sharemarket value of only $1.2 billion?

Surely it would have been far more rational to have spent the $4 billion-plus on improving our road network.

* Disclosure of interest:
Brian Gaynor is an executive director of Milford Asset Management.
gaynor@milfordasset.com

See also:


Waitakere lauds purchase of rail, ferry business

Stuff.co.nz: 09 May 2008

The government’s $665 million buy-back of the Toll Holdings’ rail freight and ferry services has been welcomed by the Waitakere City Council.

The deal is expected to be finalised next month.

Auckland’s passenger rail services are owned by the Auckland Regional Transport Authority.

The council says it will back the sale if it means better rail services sooner.

"For us it’s a signal the government is taking the need for rail seriously," deputy mayor Penny Hulse says.

"Investing heavily in the national rail system to build it back up as quickly as possible is a strategic objective and the government is to be congratulated for taking decisive action.

"Efficient, well-equipped rail is a very important part of a sustainable transportation mix that will deliver efficiency and reduce carbon emissions.

"That is why Waitakere city has been an outspoken advocate for the restoration of commuter rail and public transport in general in Auckland."

May 4, 2008

New Zealand government buys back rail and ferries

New Zealand Herald: May 05, 2008
NZPA, NZHERALD STAFF
nz_train.jpg
The Government has bought back Toll's rail and ferry business for $665 million (£263 million).

The Crown has been in negotiations with Toll over a buyback for several months.

It comes against a backdrop of wrangling over Toll's access agreement to the rail tracks, which are already owned by the Crown, with the Government saying it has been failing to pay its fair share.

Prime Minister Helen Clark today said the deal would pave the way for the modernisation of the rail network, which formed a key part of the Government's sustainability agenda.

"Modernising our transport sector is central to transforming our economy and making it truly sustainable," the PM said.

"With rising fuel prices and growing awareness about the challenge of global climate change, many nations are looking to rail as a central part of 21st century economic infrastructure."

She said a modern rail system could reduce the emissions of the overall transport network, take pressure off our roads and allow trucking and shipping to operate more efficiently.

The Government will pay a purchase price of $665 million for the rail and ferry business with settlement on June 30.

Finance Minister Michael Cullen said buying the rail operating business was the best way to increase investment in the industry and make it more responsive to customers' needs.

Rail assets had been run down after the sale of the public rail system in the early 1990s and the Government would now look at upgrading rolling stock.

The New Zealand First party will welcome the announcement, as their transport spokesman Peter Brown called for rail to be nationalised last December.

"The failure (of negotiations between the Government and Toll) is yet another chapter in the sorry history of our rail services. Sold for a song in 1993 by the National Government to its rich mates Fay and Richwhite, rail has been run into the ground by a succession of owners. It is time to face facts - privatisation has failed.

"Government ownership could open the door to improved flexibility, innovation, efficiency and service, which are currently lacking," he said.

Dr Cullen said Toll had done a good job increasing freight volumes and streamlining the operation of terminals, but it had struggled to run a "commercially viable" business without government support.

"The Government will now avoid paying subsidies to third parties and we also avoid the on-going disputes over the implementation of the National Rail Access Agreement that had the potential to destroy value in the business and erode the morale of the people who work in it."

The negotiations reportedly took place against a backdrop of the Government manoeuvring to make Toll start paying the full price of access to the rail track network.

Toll has been paying about $48 million a year since an access deal was struck in 2004, with the Government picking up the shortfall of about $10 million needed to maintain and improve the tracks.


See also:


New Zealand buys back rail network from Toll

Reuters: May 5

WELLINGTON - The New Zealand government said on Monday it was buying back the rail network from Australia's Toll Holdings Ltd.

It said it would pay NZ$665 million ($520 million) for the operation, including inter-island passenger and freight ferries, and take control on June 30.

Finance Minister Michael Cullen said the privatisation of the rail network in the early 1990s had been painful and seen the asset run down.

"During the negotiations with Toll it transpired that buying the rail operating business including the ferries was the best way to increase investment in the industry and enable it to be more responsive to the needs of New Zealand customers," Cullen said in a statement.

Toll, Australia's biggest transport group, acquired control of the rail operation after a protracted takeover bid for TranzRail Holdings Ltd in 2003.

At that stage the New Zealand government bought the rail track network for NZ$200 million and gave Toll exclusive use for an annual fee based on performance along with promises to invest in new rolling stock.

The railways were sold in 1993 to a consortium that included U.S. rail operator Wisconsin Central.

See also:


Rail buy back marks new sustainable transport era

Press Release: New Zealand Government
Monday, 5 May 2008

Rt Hon Helen Clark
Prime Minister of New Zealand
Hon Dr Michael Cullen
Minister of Finance


5 May 2008 Media Statement

Embargoed until 10am

Rail buy back marks new sustainable era for transport

The Labour-led government has reached agreement with Toll Holdings Ltd for the purchase of Toll New Zealand’s rail and ferry business, Prime Minister Helen Clark and Finance Minister Michael Cullen announced today.

“Modernising our transport sector is central to transforming our economy and making it truly sustainable,” Helen Clark said.

“With rising fuel prices and growing awareness about the challenge of global climate change, many nations are looking to rail as a central part of 21st century economic infrastructure.

“A modern rail system can lessen the carbon footprint of our wider transportation network, taking pressure off our roads and allowing our trucking and shipping businesses to operate more efficiently. Combined with an increase of almost 1,100 per cent in public transport investment since 1999, today’s announcement marks a major step forward in building a truly sustainable transport network.”

The government will pay a purchase price of $665 million for the rail and ferry business with settlement on 30 June 2008.

“The selling off our public rail system in the early 1990s and the running down of the asset afterward has been a painful lesson for New Zealand,” Dr Cullen said.

“During the negotiations with Toll it transpired that buying the rail operating business including the ferries was the best way to increase investment in the industry and enable it to be more responsive to the needs of New Zealand customers.

“Running a commercially viable business that was able to contribute to the economic and environmental development of New Zealand was proving extremely difficult without government support.

“The government will now avoid paying subsidies to third parties and we also avoid the on-going disputes over the implementation of the National Rail Access Agreement that had the potential to destroy value in the business and erode the morale of the people who work in it.

“We acknowledge the important role that Toll has played in the industry by increasing the volumes carried by rail and improvements that they have made to the operation of the terminals. We look forward to continuing to work with them in their ongoing freight forwarding business.

“In the months ahead, I will explore options for significant investments in new, modern rolling stock. These will be presented to Cabinet and full details will be made available as soon as possible.”

Dr Cullen will hold a media briefing at 10am. Further details including background material will be provided later in the day.


ENDS

See also:


Govt could have bought the trains for less

Fairfax Media: 05 May 2008
By GARETH VAUGHAN

So the Government is coughing up $665 million of taxpayers' money to buy Toll New Zealand's trains and Cook Strait ferries.

Amid government crowing today about it apparently saving the transport system, environment and economy, it's worth remembering the Government missed the chance to buy these assets for a lot less five years ago.

Back in April 2003 the rail operator, then known as Tranz Rail, engaged in a foolish, and unsuccessful, attempt to obtain a High Court gagging order preventing Standard & Poor's from making public a five notch downgrade in the rail group's credit rating.

The court was told that Tranz Rail's cashflow forecasts showed it would have just $1.3 million available at the end of June 2003 with its bank debt facilities fully drawn.

That would have been nowhere near enough to meet a large and complex company like Tranz Rail's day to day running costs. Asset sales were one lifeline but potential buyers knew the financially crippled Tranz Rail would be a forced seller. So clearly the company was heading for bankruptcy.

The Government, which Tranz Rail had been lobbying for help for months, was well aware the rail group was in dire financial straits.

Rather than launch a quick bid, or allow Tranz Rail to fall into receivership from where it might have plucked the assets at fire sale prices, the Government concocted a complex $226 million rescue package. Meanwhile Tranz Rail's shares continued trading on the sharemarket.

This allowed aggressive Australian freight group Toll Holdings to buy shares, building up a 19.9 per cent stake and seizing the initiative.

This eventually led to an uncomfortable alliance with the Government buying the dilapidated rail network for $1 and Toll the trains, ferries and trucks.

Fast forward five years and rather than great improvements to the rail network, all we've really had is continuous bickering between Toll and the Government over who pays for what.

At least that should end now. But it's worth remembering it might have happened at a lot less cost to the taxpayer.

See also:


History of the railways in New Zealand

New Zealand Herald: May 05, 2008

nz rail wellington.jpg
The Government's re-nationalisation of the railways , buying the assets off Tranz Rail for $655 million, has rewound history.

A potted history of New Zealand railways:

1862 - first railway opens - a horse-drawn tramway from Dun Mountain copper mine to Port Nelson.

1863 - first steam railway opened on the Christchurch-Lyttleton line, via the Lyttleton tunnel.

1870 - with less than 100km of track operating, Prime Minister Julius Vogel calls for railways to aid economic development, and a narrow gauge is chosen to save money.

1873 - first train in North Island, Auckland-Onehunga.

1878 - first express trains Christchurch-Dunedin cover 370km in 11 hours.

1879 - possible to travel 600km from Christchurch to Invercargill by train.

1880 - Almost 1900km of railway open.

1886 - Wellington and Manawatu Railway Company opens line to Longburn, near Palmerston North, introducing gas lighting and dining cars. It was profitable for 22 years, until taken over by Government.

1908 - North Island main trunk line completed after 23 years work - the crowning achievement of the "railway age". First train carried MPs on a junket to Auckland, in August.

1923 - West Coast line opens - its Otira tunnel, at 8.55km the longest in the British Empire and containing the nation's first electric railway.

1930 - Rotorua Limited introduced for tourists from Auckland, with observation car.

1936 - First successful railcars, Wairarapa route.

1945 - South Island main trunk from Christchurch to Picton completed.

1953 - the length of railway line operating hits its all-time peak - 5656km. Christmas Eve crash at Tangiwai kills 151 rail passengers.

1955 - Rimutaka tunnel opens, eclipsing Otira as the longest at 8.8km.

1982
- Railways Corporation created as statutory corporation from Railways Department.

1983 - Start of deregulation of "distance limits" on trucking companies opens railways to road-based competition. Rail employs 21,000 workers.

1984 - Electrification of North Island main trunk starts. Completed in 1988 at a cost of $250 million.

1986 - Labour government makes railways a state-owned enterprise. In six years the workforce is cut from 21,000 to 5000, while productivity of the land-based workforce is lifted 300 per cent.

1990 - Finance Minister says Railways Corporation has accumulated debt of $1.1 billion, and the Government is considering restructuring it.

1990 - Limited liability company, New Zealand Rail (NZR) is formed.

1993 - Government announces sale of NZR to a consortium of Wisconsin Central Transportation Corp and Berkshire Partners (60 per cent stake) and Fay Richwhite (40 per cent) for $328.3m.

1995 - Company re-named Tranz Rail.

1996 - Wisconsin Central and Fay Richwhite strip cash out of the business before exiting. They took $322m of equity out before floating 31 million shares to the public at $6.19/share.

1997 - Tranz Rail share price peaks at $9.

1998 - Tranz Rail share price slumps to $2.71.

2002 - David Richwhite and Michael Fay quit their stake at $3.60/share, netting an $87m profit on their original $31m investment, plus collecting $10m in advisory fees. Wisconsin quits two weeks later at $3.70/share, netting a $100m profit on its $37m investment, plus getting $8m in advisory fees.

2002 - Tranz Rail's operating loss $70.7m (net loss $122.7m).

2002 - Finance Minister Michael Cullen's spokeswoman says speculation the Government may buy back the national track network is "premature".

2003 - Standard & Poor's suspends Tranz Rail's BB- plus credit rating, saying only that the suspension was extremely rare.

2003 - Stock plunges towards 30c/share, details emerge of how the company needs to sell assets to meet lease payments and repayments of debt required by bankers.

2003 - RailAmerica makes a $158m takeover bid, saying it would refinance $235m of Tranz Rail's existing lease obligations and debt.

2003 - Australian firm Toll Holdings Ltd discloses a strategic 6.1 per cent stake in Tranz Rail, bought at 76.37c. Tranz Rail shares jump nine cents to 95 cents - a 20 per cent gain in two days.

2003 - RailAmerica chairman axes bid after due diligence investigation. Tranz Rail shares plunge 23 cents to 70 cents immediately.

2003 - Toll Holdings puts in a lowball bid for the company at 75 cents/share, 13c below previous day's closing price of 88c. Share price falls 5c.

2003 - Tranz Rail receives formal notice of Toll Holdings' takeover offer, Toll will also assume debt and lease obligations - estimated by RailAmerica at $236 million - taking the total value of its bid to $394 million.

2003 - Government announces $75.8 million bailout of Tranz Rail, in which it will buy the rail network for just $1, take a 35 per cent stake in the rail operator through a rights issue, and give it an immediate $44 million cash injection.

Transport Minister Paul Swain said if the Government had not acted the trains would have stopped running within a week.

2006 - Toll Holdings and government agency Ontrack in face off over how much Toll should pay towards improving the tracks.

2006 - Toll NZ reported it had nearly doubled its June year net profit to $53.3 million. It made a $30m profit in the second half.

2006 - Toll NZ said to face rail track access fees as high as $100 million a year by 2013, more than double the amount it was paying at that time. The Track Access Charge (TAC) would rise once the $200m the government was investing in the network ran out.

2006 - Toll NZ threatens to slash services on much of the national rail network including the main trunk line unless it gets a long-term agreement from the Government on its track-access fee.

2007 - Toll Holdings buys another 10 per cent of railway shares, triggering a compulsory takeover for the remaining shares at the same price of $3 each. Toll could finally take full control of its New Zealand assets and "grow the business more quickly", it said.

2007 - October: Rail buffs speculate Toll Holdings is finding New Zealand too hard a place to make a dollar and may sell its rail business to the Government, Toll NZ spokeswoman Sue Foley said Toll NZ was absolutely committed to rail in New Zealand and freight was increasing on a number of its services.

2008, May 5 - The Government buys back Toll's rail and ferry business for $665m, after several months of negotiations.

Strike by Azerbaijani State Railway Workers Prevented

Trend Capital: 03.05.08
E. Ismayilov

Azerbaijan, Baku -- The strike action held by the workers of the locomotive depot of the State Railway of Azerbaijan in Balajari, demanding to increase salaries, was prevented by officials of law enforcement bodies and the Railway department.

The strike participants were proposed to make a written appeal to the department. A group of the strike participants was invited to discuss the issue with the head of the department on 7 May.

Workers of the locomotive depot launched strike on 2 May. The strike participants demanded to increase their salaries.

From the end 2007 to April 2008, the workers of the department have received AZN 30 compensations. However, the worker who was on vocation or sick leave was deprived of this compensation. “From 1 April, according to the department head, we would receive AZN 28,6 addition to salary. The size of addition on salary will be equal for all workers,” a protester said.

State Railway stated that the salaries for all workers will be increased by AZN 28.6 from 1 April. Currently, the salaries of Railway workers make up AZN 302 against AZN 274.

“The strike did not affect the Railway schedule and cargo and passenger transportations,” Railway station said.

In February, the workers have already staged the strike demanding to raise their salaries. The strike was stopped after the workers met with the head of the department.

The correspondent can be contacted at: capital@trend.az

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World Bank announces $795 million Azerbaijan railway project

ABC.az: 03.05.2008

Baku -- Within the framework of Rail Trade and Transport Facilitation Project approved on March 27 by World Bank Group (WBG) Board of Directors the selection of a technical consultant has been announced.

Project group information is that technical consultants are to replace the power supply along the Baku-Beyuk-Kesik railway, renew signalling systems and purchase locomotives.

Requirements are at least 10 years work experience , practical experience in replacement of permanent current of 3.3 kV with 27.5 kV, replacement of signalling systems from 3.3 kV with 27.5 kV, expertise in the area of locomotive purchase and management, road business and carrying out systems modernisation will be selected in the competition.

The work duration is 40 months. Interested persons may receive additional information at: Baku, 230, D.Aliyeva Street (ADDY). The bids are received itll June 2, 2008, 3 pm.
Contact phone: 499-63-95. Fax: 499-63-97.
E-mail: piu@addy.gov.az, nahmadova@addy.gov.az

The $450 million loan for Rail Trade and Transport Facilitation Project has become the World Bank's biggest for Azerbaijan since 1995 when WBG opened financing. The loan will be disbursed through the International Bank of Reconstruction & Development (IBRD) for a 17-year period with a 4-year grace term.

The project aims to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of Azerbaijan Railway- ADDY- in particular along the transport corridor toward Georgia (east-west corridor). 90% of the $795 million loan project will be directed for transport and 10% for industry and trade.

Art in the Age of Steam

The Sunday Times: May 4, 2008
Review: Waldemar Januszczak

It sometimes wanders off track, but this artist’s-eye view of the railway era provides plenty of nostalgic pleasures
CGT car.jpg
HANDOUT PICTURE ART IN THE AGE OF STEAM Hot Shot Eastbound, Iaeger, West Virginia by O Winston Link (1956).

Trains don’t seem to offer us much any more. The plane is our vessel of choice for the bigger getaway, and it holds the edge, too - despite the continuing efforts of Ryanair - when it comes to a sense of the miraculous. Up in the sky, looking out at earth’s horizon, it is as clear as it ever was that what we are doing ought to be impossible. The transport we are most in love with, though, is, of course, the car, because it cuts us off from the rest of the world and allows us to zoom about among our fellows in a mechanised bubble. Like the iPod, the internet and the anonymous letter, the car is essentially a solitary pleasure. It allows us to retire to our own kingdom and express ourselves from a position of glassed-in safety. That’s why quiet people become beasts of the road inside their cars, and why dull-looking newsagent types are the keenest kerb-crawlers.

So, the poor old train has lost most of its selling points. In journey times, it competes with the plane only on the grimmest commuter distances. Boats cling to a finer air of rarity. And trains no longer allow you to indulge successfully in any tempting intimacy with strangers, because of the modern preference for the open-plan compartment, so they’ve lost their magic. Which is why an exhibition in Liverpool, Art in the Age of Steam, is such a sad pleasure. In various ways, it reminds us of the lost potency of the train.

The thing about trains is that they were the first unmistakably modern contraptions to escape from the city. Early trains were devilish things - clanking, boiling, hissing, rattling, whistling - thundering across the landscape and frightening nature with their scary belches and horrible stinks. So, the show begins on a note of genuine trepidation. David Cox, a tremulous rural watercolourist at the best of times, watches a night train roaring across Yorkshire in 1849, showering sparks and spewing smoke, and he sees a mechanical Satan threatening the safety of his beloved England. Judging by the enormous gloom of the sky, and the crazy fear of the horses galloping across the foreground, the end of the world is nigh, rather than the 4.15.

There was much about the first trains that was diabolical. Not just the fire and brimstone of the engines, but those pitch-black tunnels into which they disappeared. What the hell was down there? Even the way trains wound their way through the landscape was snakey. Adolph Menzel watched one puffing out of Berlin in 1847 and noticed how its relentless smoking had stained the surrounding countryside the colour of excrement, and how the brutal thrust of its progress through nature had about it the air of a rape. Trains took a lot of getting used to. Only when artists began switching their attention from the outside of the train to the inside - looking at what went on among the passengers - did they get properly interested in puffers.

The exhibition looks at how artists responded to the impact that steam trains had on European landscape and society.

AitAoS Frith Station.jpg
William Powell Frith - The Railway Station
Oil on canvas, Royal Holloway College, University of London, Egham.
William Powell Frith's 1862 view of Paddington Station shows all social orders

Frith’s famous view of the crowd at Paddington station is a prime example of the genre, a multi-part soap opera unfolding across the largest platform in the world, as a frantic scrum of the train-travelling classes - including the thief whom the police have handcuffed on the right - prepares to board a 4-2-2 broad-gauge engine of the Iron Duke class. (If that kind of information presses your horn, then there is plenty here for you.) A much greater painting, though, than Frith’s railway station is Honoré Daumier’s Third-Class Carriage, a gloomy peep inside the cheapest wagon, where three generations of the poor - a grandmother, her daughter and a baby - sit on the hardest seats and wait. Train travel has become a metaphor for human suffering.

The show devotes most of its attention to the 19th century, when the train’s history was at its most pioneering.

We begin in Britain, but soon branch out to Europe, America and as far afield as Japan, where British engineers completed the first railway line in 1872, between Tokyo and Yokohama. Most people, however, will be drawn to this show to see what the impressionists made of the train. After all, trains began popping up all over the French landscape at roughly the same time as impressionists did.

The greatest painting in the show is unquestionably Manet’s view of a small girl and her nanny looking down through some railings onto the Gare St-Lazare. The woman in the picture is Victorine Meurent, the same model who posed for Manet’s scandalously naked Olympia, as well as the brazen nude in Déjeuner sur l’herbe, so we can be sure this is one of those important Manet paintings that seeks to encapsulate the plight of the modern woman. In this instance, the railings of the railway bridge have become the bars of a cage. The railway beyond them represents escape, freedom, choice - but the little girl and her nanny are trapped on the wrong side of the platform.

AitAoS_railway_manet.jpg
The Railway (The Gare Saint-Lazare) by Edouard Manet (1873 – French).
Oil on canvas. Board of Trustees, National Gallery of Art, Washington, gift of Horace Havemeyer in memory of his mother, Louisine W Havemeyer.

As the train’s symbolism keeps changing, so art’s interest in it adapts accordingly. What should be the highlight of the show, Monet’s momentous battle with the different shades of smoke inside St-Lazare station, turns out to be disappointing. He painted several versions of the subject, but only the least exciting one has arrived here. Van Gogh is represented by a drawing. And, back at the start of the journey, we are welcomed aboard by a video about Turner’s crucial Rain, Steam and Speed, rather than the painting itself. The sweet old Walker, I fear, lacks the clout to ensure the best loans.

Many artists had studios near the Gare Saint-Lazare in Paris, which appears in numerous Impressionist works.

AitAoS st_lazare_monet.jpg
Claude Monet - Gare Saint-Lazare
Oil on canvas, National Gallery, London.

Perversely, just as the train’s role in art increases in importance, the show itself decreases in stature. The section dealing with the train’s identity as a futuristic icon of progress and speed is particularly disappointing. The organisers were unable to borrow Boccioni’s futurist master-work from MoMA, the huge triptych set in a railway station called States of Mind. And even the mad love affair with the train of the postrevolutionary Russians is poorly evoked. For the surrealists, trains became handy locations for distressingly predictable sexual fantasies, usually involving a dramatic plunge into a tunnel. Yet De Chirico, the master of sexually charged railway innuendo, is another who is weakly represented. And the two huge Delvaux paintings of naked girls in ridiculous railway situations are no substitute for a good trainy Magritte.

AitAoS iron_age_delvaux.jpg
'The Iron Age', Paul Delvaux
Museum voor Schone Kunsten, Oostende

This potentially fascinating account is just about to peter out dismally when the Americans arrive to save the day. In the show’s final image, that great photographer of steam trains, O Winston Link, takes us to a drive-in movie in the 1950s as a speeding smoker thunders past the fence. The great express is so close, you can almost touch it. Everyone at the cinema must surely have heard it. But the couples in the cars are too busy watching a movie about a plane to notice it. In a show packed with railway metaphors, this surely, is the saddest.

Art in the Age of Steam, Walker Art Gallery, Liverpool, until Aug 10

See also:


All aboard for the modern age


The Observer: May 4, 2008
Laura Cumming

Art in the Age of Steam, 1830-1960
Walker Art Gallery, Liverpool; until 10 August

The coming of the railways transformed Victorian Britain and inspired powerful new art, as this fine show in Liverpool reveals

The modern world began in 1830, it is said, when the first passenger train screamed through the land, 'burrowing among the dwellings of men, flashing out into the meadows with a shriek and a roar!' recalled Dickens in Dombey and Son. The sight was so astonishing some people thought these machines were supernatural illusions. Others actually believed they grew bigger as they got closer. As for hazarding a trip, you could be crushed to death, tipped from a bridge or burned alive in the wooden carriages, victim of an oil lamp mishap. Just to watch the landscape flashing by at 50mph would damage your eyesight.

Artists were wary at first, depicting trains as black forces raping the landscape. Wordsworth was the loudest dissenter. But just as passengers fell in love with these alien creatures, so painters began to see the wild beauty of steam and speed, of rushing motion, of arrival and departure and of all the human stories that happened in between.

AitAoS lpool_manc_shaw.jpg
Travelling on the Liverpool and Manchester Railway - S G Hughes after Isaac Shaw
Aquatint, hand-coloured, The Ironbridge Gorge Museum Trust, Telford.

The world's first passenger train ran from Liverpool to Manchester, so it is apt that one of the highlights of Liverpool's Year of Culture should be Art in the Age of Steam. It is a terrific show, both in terms of art, with masterpieces by Monet, Manet, Daumier and (amazingly) van Gogh, among many others, but also in the tale it unfolds.

Opening a route to Manchester meant boring through vast hillsides. The light at the end of the tunnel has never been better represented than in Thomas Bury's watercolours of Olive Mount, last tunnel before Lime Street, where engineers fumble through a hellish gloom lit only by the distant exit.

And it meant scoring the ground with miles and miles of track receding in dizzying perspectives in English etchings to rival Piranesi; perspectives that would become sinister in Edward Hopper's Midwest and surreal in the cityscapes of de Chirico.

The train is a dark bolt, an explosion, a speeding leviathan. Steam flares and dissolves, the only evidence of a machine that is gone before you know it. In Munich, steam draws a grey pall over the station windows. In Paris, it swarms in dabs in Monet's Gare St Lazare. Steam is cloud brought conveniently to earth; no wonder the Impressionists loved it.

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Train in the Snow (The Locomotive) - Claude Monet
Oil on canvas, Musée Marmottan-Monet, Paris

The carriage is literally that at the start: a pony trap drawn on locomotive trestles. Then come first, second and third class and Victorian artists begin painting the social distance between compartments; the upholstered parlour of first in which the young lady, on a long journey to Perth, meets her future husband; the fetid prison on wheels of Daumier's Third Class.

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The Travelling Companions - Augustus Egg
Oil on canvas, Birmingham Museums & Art Gallery, presented by The Feeney Charitable Trust, 1956.

English art leads from the off with Turner's Rain, Steam and Speed, but the most influential railway painting of the 19th century was William Powell Frith's The Railway Station (1862). All human life is readying for departure on the 5.04pm from Paddington - the new bride, the old soldier, the father emigrating to find work in America, the rozzers catching up with the criminal.

Twenty thousand Londoners paid to see this picture in its first six months, before it became a mass-market engraving that nearly outsold Millais's Bubbles. Abroad, painters restaged it for local markets from Berlin to Sacramento, with cowboys instead of clerks. Trains, like art, crisscross the globe; some of the strongest works here show the railroads pushing out across the prairies of America. Morning of a New Day, as it's sarcastically titled, has a fiery-eyed monster ravaging the heartlands of the watching Indians. The scene is in all respects painted from their viewpoint.

American painters, proud of the progress their young country was making, were initially more willing than Europeans to include railways in their landscapes.

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The Lackawanna Valley - George Inness
Oil on canvas, Board of Trustees, National Gallery of Art, Washington, gift of Mrs Huttleston Rogers.

Trains take artists where they have never been before, from snowbound Siberia to the height of the Sierra Nevada. They give the Russian Constructivists an image - a blueprint - for fast-moving progress. They symbolise the caffeine rush of the 20th century for Futurists.

But the single clinching image of this new sense of time and motion is James Tissot's Gentleman in a Railway Carriage, in which a prosperous, fur-collared gent holds fast to a strap as the train rushes on, the view through the window a blur. On his knee is an open timetable, in his hand a fob watch and he flashes the viewer a knowing look as if we were also checking progress. Halfway between portrait and archetype, this is the very essence, as a contemporary critic put it, 'of Nineteenth-Century Man'.

Tissot is a strange case, French born but long resident in London and an exception that proves the rule with his narrative bias. For the other story of this show is about international painting and the different routes it takes in the late 19th century. English painters are increasingly anecdotal, literary, moralistic. American painters show the measureless landscapes through which trains move like tiny insects. French painters regard the railways as aspects of modernity, signs of the times. To prove the point, the Walker has flown in from America two crucial masterpieces of French art.

During the 20th century, the railway became an increasingly fascinating subject for artists from photographers to Futurist painters.

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Auguste Hippolyte Collard - Roundhouse for Thirty-Two Locomotives, at Nevers, on the Bourbonnais Railway
Albumen print, J Paul Getty Museum, Los Angeles.

One is Gustave Caillebotte's extraordinarily daring On the Pont de l'Europe, in which fully half of the painting is empty of anything but the bridge's steel struts and the other half shows the back of three men, one of whom is walking fast out of the picture. What they are looking at is the railway below, a scene we can't see but which turns this into a scene of modern life, abruptly skimmed from the streets and stained blue with smog.

The other is Manet's marvellously mysterious Gare Saint-Lazare, also known as The Railway - the child and the woman bound in their famous triangle, one looking into another world, the other looking our way with that inquiring eye, noticing that she's noticed. The future is all there in the parade of railings that spans the picture, coming between the figures and the pure white steam beyond. It is an abstract dimension, the very signal of modernity.

See also:


Steam and art

Rail Future:

box.jpg
No 1 Tunnel by John Cooke Bourne
from the Ironbridge Gorge Museum Trust

A rare opportunity exists for rail supporters to see a collection of 100 works of art inspired by the railway.

The Liverpool exhibition includes paintings, drawings, prints and photographs and “captures the excitement of the steam train in art from the earliest days”, to the 1960s.

Art in the Age of Steam “celebrates the power and impact of the railway on artists” and is a highlight of Liverpool’s European Capital of Culture year.

There are works by Frith, Manet, Monet, Van Gogh and Hopper, great names from both Europe and North America.

The four-month long free-entry exhibition at the Walker Art Gallery is the only European showing of the exhibition, which is organised in collaboration with The Nelson-Atkins Museum of Art, Kansas City.

It includes:

The Railway by Edouard Manet, from the National Gallery of Art, Washington.
La Crau from Montmajour, with train by Van Gogh from the British Museum, London.
Lordship Lane Station by Camille Pissarro from the Courtauld Institute of Art, London.
Four paintings by Claude Monet, including Gare Saint-Lazare from the National Gallery, London.
Railroad Train by Edward Hopper from the Phillips Academy, Andover, Massachusetts.
The Anxious Journey by Giorgio de Chirico from the Museum of Modern Art, New York.
Photographs by Bill Brandt, Alfred Stieglitz and O Winston Link.

Curator Julian Treuherz commented: “Aboard these great machines, passengers travelled at faster speeds than ever before and notions of time and space were forever changed.”

Mr Treuherz, co-curator and former keeper of galleries at the Walker Art Gallery added: “Nothing has been done on this scale before – visitors are transported on an exhilarating journey in the company of some of the world’s great artists.”

The exhibition opened in April and continues until Sunday 10 August 2008. It goes to The Nelson-Atkins Museum of Art from 13 September 2008 to 18 January 2009.

The Walker is open from 10am to 5pm every day and is a short walk from Liverpool Lime Street main line station.

It is also possible to use Liverpool Lime Street low level, Moorfields station or Liverpool Central.

More info: liverpoolmuseums.org.uk/walker/exhibitions/steam

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Art in the Age of Steam: ticket to a brave new world

Telegraph: 22/04/2008
By Richard Dorment

The coming of the railways transformed the way people lived - and provided glorious inspiration for artists, photographers and filmmakers.

The modern world came into being with a shriek and a rattle and a puff of dirty smoke on the day in 1830 when the first passenger train pulled out of Liverpool on its way to Manchester. The steam engine, which enabled travel by train, changed man's perception of the world and his place in it.

Images from America and the rest of the world demonstrate that the railway was a global phenomenon and show how the technology travelled.
AitAoS Fly.jpg
O Winston Link - Uncoupling on the Fly, Blue Ridge Grade, Virginia
Gelatin silver print, Chrysler Museum of Art, Norfolk, VA, Loan, with intent to give from David and Susan Goode.

A quarter of a century after that first journey by rail, Britain was served by a railway system that enabled men and women to move from North to South in hours, not days. This new conception of distance led in turn to a stronger sense of a national identity. And, with the introduction of timetables, people became conscious of a wholly modern anxiety - the need to be on time. No longer was it enough to start a journey more or less when you intended to set out. With railway time, six o'clock meant six o'clock, not two minutes past.

Art in the Age of Steam at the Walker Art Gallery (until Aug 10) looks at the way artists responded to these upheavals from the 1830s to the mid-1950s.

Initially, artists considered trains eyesores. The earliest images of the railways are, therefore, documentary prints and drawings showing not just the engine and carriages, but deep gorges cut through hills, vertiginous viaducts, vaulted tunnels and giant ventilating shafts.

It was a remarkable artist named John Cooke Bourne who lovingly recorded these awe-inspiring sights in lithographs, watercolours and pen-and-ink drawings that speak more eloquently than words of the Victorian romance with the marvels of engineering.

But the first important artist to see poetry and beauty in a speeding train was JMW Turner, whose Rain, Steam, and Speed - The Great Western Railway (1844) evokes in nearly impressionistic brushstrokes the blur of a steam engine seen from head-on as it thunders across a railway bridge spitting fire and steam.

Contained within this one image are all the themes with which this show is concerned - the power of the machine itself, the devastation it wreaks on landscape, the new architecture (the railway bridge) that comes with the new invention, and the way railways render old forms of transportation (a boat and road bridge) out-of-date.

Finally, with the addition of a tiny detail, Turner indicates that the new technology has already altered man's conception of time, for at the side of the train he shows one of nature's swiftest creatures, a hare, pathetically trying to outrace the a roaring monster of iron and steel. The picture is too fragile to be lent, but it is so crucial that the show starts with a film of it hanging in the National Gallery.

It wasn't just the countryside that was changed for ever with the coming of rail travel. In Dombey and Son, Dickens describes the huge excavations and building projects that transformed the area in North London behind Euston, St Pancras and King's Cross, and this is precisely the scene that so fascinated artist George Scharf in his drawing of the Birmingham Railroad in Progress in the Hampstead Road.

On the whole, artists who first described the railways saw them as embodiments of progress, power, beauty and hope - overlooking the pollution, urban desolation and human degradation they bought in their wake. Trains also ushered in the age of mass migration as the British artist Frank Holl shows in his touching study of a forlorn group of poor women whose husbands and sons have just boarded the train to Liverpool, where boats will take them to the New World.

By the 1850s, Victorian artists often used trains and railway stations as settings for narrative pictures, whether it's the two sisters enveloped in grey silk crinolines who share a stifling private carriage in Augustus Egg's ravishing Travelling Companions, or Abraham Solomon's paired scenes showing the meeting of young lovers in First Class, and the tearful parting of a poor mother from her sailor son in Second Class. Great art? Hardly, but gripping social commentary: we see how quick the railway companies were to minimise contact between rich and poor.

In his panoramic view of Paddington Station of 1862, William Powell Frith shows all social orders - middle class and working class, British and foreign, policeman and thieves - chaotically mixing together on the station platform. In a moment or two, they will all board the train and social hierarchies will be restored by the separation of the travellers according to class and wealth.

As a setting for all the best stories, trains fascinated artists and filmmakers right up to Alfred Hitchcock's Strangers on a Train, The Lady Vanishes and North by Northwest.

In France the representation of trains and railway stations has much more to do with the representation of modern life than it does with storytelling or searching social commentary. Manet's The Railway (1873) isn't really about transportation but about the strange sight of steam rising behind a well-dressed Parisienne sitting in front of iron railings above the station, while her little girl looks down on the trains below.

Here, and in Gustave Caillebotte's On the Pont de L'Europe, anonymous inhabitants of a modern city look as though they are crushed or imprisoned by impersonal iron structures. In his Gare Saint-Lazare, Monet wreathes utilitarian architecture in clouds of blue steam, while, at the turn of the century, Camille Pissarro is completely matter- of-fact in his representation of now familiar suburban trains puffing through Bedford Park and Dulwich.

But each country is different. In America, artists rarely showed trains close up. What interested George Innes in his views of the Delaware Water Gap and the Lackawanna Valley is the sight of distant trains snaking through pristine wilderness - evidence of man's presence in the New World and of his noble aspiration to bring civilisation to an empty land.

If Americans saw beauty in the railroads, that is in part because they actually were more beautiful than in Europe. With virtually limitless land and labour, Americans didn't have to blast through hillsides or build trestle bridges to cross the continent. Train tracks were curved, meandering up or around mountains without destroying the land, as we see in Albert Bierstadt's majestic view of a little train tootling through the Sierra Nevada.

In the 20th century, surrealists used trains as symbols of internal anxiety and Futurists saw in them hope for a brave new world.

AitAoS speeding_panaggi.jpg
Speeding Train - Ivo Pannaggi
Oil on canvas, Cassa di Risparmio, Macerata.

The show closes on perfect note, with a photo by O Winston Link, Hot Shot Eastbound, Iaeger, West Virginia. It shows a young couple at a drive-in cinema, cuddling in their convertible. At the very moment the image of a large jet fills the screen, a steam train thunders past. The date, 1956, is important because, with the coming of the diesel engine and the jet, the age of steam drew to a close.

Most thematic shows tend to be patchy because the images are chosen for the subject, not the quality of the art. This one, organised by Julian Treuherz and Ian Kennedy, is different because in addition to telling a terrific story, the paintings, prints and photographs are for the most part exceptional, whether they are by famous artists or unknowns.

# Art in the Age of Steam at the Walker Art Gallery (until Aug 10)

Stripped-down Jarvis seeks to get off the train with £100m sale

Independent: 4 May 2008
By Mark Leftly

Jarvis, the quoted rail contractor chaired by former London mayoral candidate Steven Norris, is preparing for a sale this year.

Once valued at over £1bn, Jarvis would fetch about £100m today. Potential bidders include fellow rail contractors Balfour Beatty and First Engineering

The news emerges just days ahead of the sixth anniversary of the Potters Bar derailment, which killed seven people. Jarvis maintained that stretch of track and although it was never found guilty of any wrongdoing, its fortunes dived for the next four years.

Jarvis is "cleaning up" the business, selling 21 private finance initiative contracts for up to £9m by the end of the summer. It has sold numerous divisions as part of a restructuring since 2005.

No information memorandum will be prepared, though Jarvis will be "proactive" in courting buyers, said a source. Mr Norris is happy to keep running the business if no offers transpire, but has assured investors he is looking at strategic options.

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Jarvis: the company that made a billion and nearly lost it all

Independent: 4 May 2008

As the rail-maintenance group gears up for a sale, Mark Leftly looks back on a dash for growth and the accident that changed everything

Paris Moayedi, the charismatic Iranian entrepreneur, has an unfortunate habit of being away when news breaks on Jarvis, the construction and infrastructure group he turned into a £1bn empire.

He was on a flight to the Cayman Islands when a train derailed at Potters Bar in Hertfordshire, a piece of track maintained by Jarvis, on 10 May 2002. He was on holiday the following year when Jarvis mistakenly took the rap for a derailment at King's Cross; and this bank holiday weekend, as The Independent on Sunday discloses that the company he once grew so spectacularly is cleaning itself up for a possible future sale, Moayedi is in mainland Europe.

Jarvis is no longer under the control of Moayedi – he was ousted in what was in effect a boardroom coup in November 2003. But he is integral to one of the UK's great corporate stories of recent times – a staggering, riches-to-rags yarn that has seen Jarvis's market capitalisation fall from around £1bn to less than £50m today.

As one former Jarvis executive says: "The nightmare was always the fear that people might die because of a train derailment. But when it happened [seven people were killed at Potters Bar], I don't think anyone knew how bad the repercussions would be from a business point of view. Paris also had to cancel a lot of holidays, I can assure you."

Jarvis has never been found guilty of causing the problems at Potters Bar, although, along with Network Rail, it did accept "liability on behalf of the rail industry" in 2004. Several sources who were employed by Jarvis at the time remain convinced that sabotage was the likely cause.

But local authorities were not convinced. The group's private finance initiative (PFI) division started losing work. Worse still, in the drive to win PFI deals in the years leading up to Potters Bar, it had underpriced contracts, particularly on school buildings.

The company was leaking money. "We were spending 12 to 16 hours a day, seven days a week, plugging gaps in underpriced construction contracts," says one member of an eight-strong troubleshooting team set up by the board to solve its financial crisis. "We were focused on simply selling assets and generating cash."

Another member of that team says there was a growing realisation Jarvis had been "driven too hard" in the second half of the 1990s. When Moayedi took over in 1994, it was worth only £3.6m. "If you go back to 1995-2000, Jarvis was all about growth, commitment and a driven work ethic," says the source.

Moayedi moved from chief executive to chairman in 2003 and his replacement, Kevin Hyde, had to focus on stemming growth and reviving a failing business. He announced a profit warning in January 2004.

Moayedi had already left, replaced by the non-executive director and then London mayoral candidate Steven Norris. A swathe of senior Jarvis figures followed Moayedi in 2004. One of them was Hyde, who was succeeded in the October by former Dunlop Slazenger chief executive Alan Lovell, a turnaround specialist desperately needed as the share price lost 80 per cent of its value in nine months.

The group's debt burden, at £304m, was crippling, and in December the market was shocked by the announcement of a £283.1m half-year loss. Lovell ordered spending on construction contracts to be stopped and sold the company's one-third stake in Tube Lines, the London Underground consortium, for £147m.

The key, though, was a £350m debt-for-equity swap with Jarvis's lenders, diluting the holdings of existing investors. By the end of 2005, with numerous divisions sold off, it was focused on lucrative track-renewal contracts with Network Rail. Well-regarded by that client, Jarvis survived last year's cull of two of the six firms on the renewals framework.

Today, Jarvis is basically a rail specialist. Having successfully restructured the business, Lovell left in 2006, though two sources close to him admit the debt-for-equity swap was an indication to the market that the company had no long-term future."Jarvis will get broken up and consolidated – that's been on the cards since the swap," says one of the sources. "You could never grow Jarvis back to a £1bn business."

There have been subsequent problems. In November, a shock profit warning wiped 75 per cent off the share value. At the start of this year, chaos on the West Coast Mainline in the Rugby area was blamed on delays to a £415m upgrade project run by Jarvis. That, says a source close to the group, has "set back Jarvis's full recovery by a couple of years".

But that the business survived at all is testament to Lovell and Norris. Privately, Lovell is known to beam that "it was a good battle" and is proud that 5,000 jobs ultimately remained in place. Norris and the latest chief executive, Richard Entwistle, are clearing up the remnants of Jarvis's past, with 21 "legacy" contracts from its PFI days likely to be sold for £7m to £9m by the end of the summer. Interested parties are thought to include Operon, a construction and PFI business, and Hochtief, the German builder.

Cleaned up, Jarvis will be in position for a sale and Norris would be open to offers. While no information memorandum will be prepared, a source suggests that Jarvis will be "proactive" in interesting buyers.

The most likely interested parties are those on the Network Rail renewals framework: Balfour Beatty, an Amey/Serco joint venture, and First Engineering.

A source close to Jarvis says that, including debt, the business could fetch £100m.

If and when Jarvis is sold the company will probably be consolidated into its new parent's operations. At that point, this saga will finally have an end.

May 2, 2008

SFO Questions 3 Railway Managers following strike

Happy Ghana: 5/2/2008

THE Serious Fraud Office (SFO), has invited three workers of the Ghana Railway Company (GRC) for questioning in connection with alleged financial impropriety and causing financial loss to the company.

They are, Christian Barnes, acting Financial Controller, Paul Afful Dadzie, Deputy Financial Controller in-charge of Revenue, and J. W. Myers, Chief Cashier.

Sources close to the GRC said that letters were sent to the three men on Monday evening inviting them to the offices of the SFO the following day. They all complied.

The sources said that two of them were released after they had written their statements but Mr. Myers was detained overnight and released on Wednesday at about 4 p.m. He was asked to report next Monday, May 5, with some documents for verification.

Recently, a group of railway workers calling itself the "Concerned workers of Railways" called for a forensic audit to check financial impropriety in the GRC.

They alleged that several thousands of Ghana cedis had been stolen by some workers of the company, some of whom, they said, were leading the agitation against the management in order to conceal their malfeasance.

The concerned workers alleged that some members of the present leadership of the workers union, the Interim Management Committee (IMC) who had stolen money from the company’s cash office feared being exposed hence the agitation.

The Times learnt that in January, a shortfall of GH ¢455,000 was detected at the cash office of the company, and when Mr. Myers was confronted, he told management that the amount was used for voucher payments.

Mr Myers was said to have been asked to hand over on January 25 to his counterpart and to account for all the money that he had received at the cash office, including the shortfall.

He was alleged to have pleaded with management to extend the handing over period to February ending and management obliged. Not long afterwards, the workers embarked on the recent strike.

When contacted, K. B. Amofah, Deputy Managing Director who is now acting as the Managing Director, confirmed that the three workers had been questioned by the SFO, adding that on Wednesday, some SFO officials came to the company to collect some registers and documents.

He said it was at this juncture that he asked about the whereabouts of Mr. Myers, and he was told that Mr. Myers could not be released unless he was bailed.

U.S. West Coast ports closed by worker protest

Reuters: May 1, 2008
By Jill Serjeant and Bernard Woodall
ilwu oakland 010508.jpg
LOS ANGELES - Ports along the U.S. West Coast, including the country's busiest port complex in Los Angeles, shut down on Thursday as some 10,000 dock workers went on a one-day strike to protest the war in Iraq, port and union officials said.

Twenty-nine ports from San Diego to Washington state that handle more than half of U.S waterborne trade ground to a halt, but shipping experts said the economic costs of the walk-out would be limited.

"We are hearing there is no activity taking place up and down the West Coast," said Steve Getzug, spokesman of the Pacific Maritime Association, which represents all 29 ports. "There is no unloading or loading."

At the Los Angeles-area port of Long Beach, a hub for trade with Asia, a Reuters reporter said the normally bustling area was unusually quiet and there were no signs of protesters.

Long Beach Port terminal operators expect union workers to return for the second shift beginning at 6:00 p.m. PDT (01:00 GMT on Friday).

Paul Bingham, an economist with Global Insight, which tracks container volume and congestion at U.S. ports, said labor officials had alerted shippers and carriers.

"If this had come as a surprise it would have been a lot more serious in its impact," said Bingham, also noting that it was not peak season for shipping.

"This isn't like the West Coast port lockout in 2002 when we shut down the ports for 10 days," he added.

The International Longshore and Warehouse Union said some 10,000 workers joined the anti-war protest, spurred in part by its belief that big shipping companies are profiting from the war.

"Longshore workers are standing down on the job and standing up for America," said ILWU International President Bob McEllrath. "We're supporting the troops and telling politicians in Washington that it's time to end the war in Iraq."

'LEVERAGE CONTRACT NEGOTIATIONS'

But port officials cast doubts over the war protest motive.

PMA's Getzug said the action came two months prior to the expiration of the current labor agreement.

"Today's actions raised the question of whether this was an attempt to leverage contract negotiations," he said in a statement.

He added that the work stoppage was illegal under the PMA's contract with the ILWU.

It was not clear how many ships or containers were affected by the longshore workers action. But the PMA said that on a typical weekday shift between 10 a.m. to 5 p.m. about 10,000 containers are moved on the West Coast.

Arly Baker, spokesman for the Port of Los Angeles, said 15 ships were to arrive at the port on Thursday and about half of them had arrived and berthed before the work stoppage began for the day.

"What this amounts to is probably the same effect of an official holiday where the terminals shut down," Baker said. "There won't be a backup in cargo or some kind of bottleneck resulting from it."

Together, the neighboring ports of Los Angeles and Long Beach handle 43 percent of the container cargo imports, including most of the household goods shipped from China.

The two ports bring in about $1 billion of cargo daily, Baker said.

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The International Longshore and Warehouse Union (ILWU) represents 60,000 working women and men in five states (California, Oregon, Washington, Alaska, Hawaii) and Canada. Through more than 60 locals ILWU unites longshore workers, warehouse workers, watchmen, clerks, ferry and tugboat workers, tourism industry workers and agricultural workers.

INTERNATIONAL LONGSHORE & WAREHOUSE UNION - AFL-CIO
1188 FRANKLIN STREET,
SAN FRANCISCO,
CALIFORNIA 94109
(415) 775-0533
(415) 775-1302 FAX
WWW.ILWU.ORG

President, ROBERT McELLRATH - Vice President, JOSEPH R. RADISICH - Vice President, WESLEY FURTADO - Secretary-Treasurer, WILLIAM E. ADAMS

For immediate release: May 1, 2008 Contact: Craig Merrilees 510-774-5325
Jennifer Sargent: 503-703-2933
John Showalter: 415-775-0533, ext 139

Longshore workers are standing down at West Coast ports:



“We’re standing up for America, we’re supporting the troops, and we’re telling politicians that it’s time to end the Iraq war now!”


(SAN FRANCISCO, CA) More than 25,000 longshore workers at 29 west coast ports are exercising their First Amendment rights today by taking a day off work and calling for an end to the war in Iraq.

“Longshore workers are standing-down on the job and standing up for America,” said ILWU International President Bob McEllrath. “We’re supporting the troops and telling politicians in Washington that it’s time to end the war in Iraq.”

McEllrath says rank-and-file members made their own democratic decision in early February when Longshore Caucus delegates voted to take action on May 1. Employers were notified of the plan, but refused to accommodate the union’s request despite plenty of advance notice. The employer group, represented by the Pacific Maritime Association (PMA) consists of large carriers and port operators, most of which are foreign-owned.

“Big foreign corporations that control global shipping aren’t loyal or accountable to any country,” said McEllrath. “For them it’s all about making money. But longshore workers are different. We’re loyal to America, and we won’t stand by while our country, our troops, and our economy are destroyed by a war that’s bankrupting us to the tune of 3 trillion dollars. It’s time to stand up, and we’re doing our part today.”


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Ready for a cargo surge

Financial Times: Mar 27, 2007
By Andrew Ward

Cargo has been flowing through US ports with surprising ease over the past two years. Despite continued growth in the number of ocean containers entering the US, there has been no repeat of the severe congestion that spread chaos through corporate supply chains in 2004.

But while US ports are learning to cope better with surging volumes of cargo from Asia, experts warn against complacency. Much of the US freight transport system continues to operate close to full capacity, with container traffic forecast to more than double over the next 15 years, on top of the 8 per cent annual growth since 2002.

US ports are responding through a combination of capacity expansion and increased productivity. But they face resistance from environmental groups and local residents opposed to bigger ports and from labour unions wary of efficiency measures that could cost jobs.

"The volume of traffic from Asia is going to grow and our ability to handle it will rely on heavy investment in infrastructure and technology," says Brook Benz, an expert on ports at Accenture, the consulting group. "There are so many different vested interests involved in a port - the local community, the port authority, the union and workforce, the shipping lines, the railroad companies, the trucking companies - and it is very difficult to bring all those groups together."

By far the most congested bottleneck is at Los Angeles and Long Beach, which receive almost half of containerised cargo arriving in the US. Southern California was at the epicentre of the congestion crisis that struck the US three years ago, when cargo ships from Asia were forced to anchor offshore for days while waiting for space to dock.

The backlog heaped pressure on port authorities to increase capacity and improve efficiency. Hemmed in by one of America's biggest and most densely populated urban areas, building extra dock space is almost impossible and the ports have had to lengthen opening hours.

Until two years ago, America's two largest ports were open to trucks for only nine hours each weekday. Trucks arriving after the gates closed at 5pm had to wait until 8am the next day to deliver or pick up containers. The introduction of regular night and weekend shifts has more than doubled the time the ports are open. Extended hours helped Los Angeles and Long Beach handle a record 15m containers last year - up 11 per cent from the year before - without serious delays.

Despite the changes in southern California, Mr Benz says US ports are still "four or five times" less productive than Hong Kong and other leading Asian ports.

One of the biggest obstacles to increased productivity at many US ports is powerful labour unions. In 2002, all 27 US west coast ports shut down for 11 days because of a strike by the 15,000-strong International Longshore & Warehouse Union (ILWU). The stoppage caused $15bn of losses to the US economy and it took 100 days to clear the cargo backlog.

The strike ended when the union agreed a contract that balanced union demands for improved pay and benefits with the port authorities' demand for greater productivity and wider use of technology. That contract expires in July next year and the two sides are already gearing up for months of tough negotiations.

Jim McKenna, president of the Pacific Maritime Association, which represents shipping lines, told a conference that ports and unions needed to send a message that they are ready for the next cargo surge from Asia. "The closer we come to the end of this contract without agreement, the more the phone lines from Washington to us will be burning up."

As west coast ports creak, shipping companies and their customers are looking for alternative gateways to the US. Three large ocean carriers - Maersk, APL and Hapag Lloyd - have introduced services to the Mexican port of Lazaro Cardenas, from where cargo is transported to the US by rail. A $200m expansion is under way at Lazaro Cardenas and Mexico is also considering plans to build a new port at Colonet Bay, 120 miles south of San Diego.

Another new container port is being built at Prince Rupert Island on the rugged coast of British Columbia, Canada. Despite its remote location, the island is 1,100 miles closer to Shanghai than southern California - the equivalent of two days' travel time - and is connected to the US by an uncongested rail line.

Ports along the Atlantic and Gulf coasts of the US are also expanding as Asian imports destined for the eastern half of the US are increasingly shipped through the Panama Canal to avoid southern California.

A long-awaited expansion of the canal, approved by Panama voters last year and scheduled for completion in 2014, will allow bigger ships to cross from the Pacific to the Atlantic, fuelling further growth in US east coast ports. New container terminals are either under construction or planned at Houston, Texas; Mobile, Alabama; Jacksonville, Florida; Charleston, South Carolina; Wilmington, North Carolina; and Norfolk, Virginia.

But Jon DeCesare, president of WCL Consulting, a logistics consultancy, says ports alone cannot solve the capacity crunch in the US freight transport system. Improvements in port productivity must be matched by action to tackle congestion on US roads and railways. "There needs to be an integrated, nationwide, multi-modal federal transportation policy," he says. "Having an efficient port is no good unless there is an efficient transportation network to carry cargo inland."

May 1, 2008

Brussels warns on railways' state aid

Financial Times: May 1 2008
By Andrew Bounds in Brussels and Robert Wright in London

The European Commission has told governments to end "hidden" state aid to railway companies by the end of next year or face a crackdown.

Benoit Le Bret, the chief of staff to transport commissioner Jacques Barrot, said on presenting new state aid guidelines: "We know there is state aid that is being hidden. There are government loan guarantees and aid hidden in national budgets. This is really the final whistle. These activities must cease by January 1 2010."

The Commission wants to boost competition at a time when several rail companies have been acquiring privately owned train operators. It had hoped the new entrants would provide competition for the state-owned operators that still dominate in every European country except the UK and Estonia.

Heiko Fischer, chief executive of VTG, Europe's largest rail wagon leasing company, said concern about such transactions might have motivated the move. "The big, state railways are now, with the help of their balance sheets and strong financial support from their owners, on a buying spree to buy up rail assets, especially the private competition."

The rules aim to stamp out these distortions. While freight services have been liberalised, passenger services will not follow suit until 2010. Then the big operators should no longer be able to use high freight charges to subsidise passenger fares, Mr Le Bret said. Freight operations would be eligible for aid only if they were set up as separate legal entities.

States had spent €7bn ($11bn, £5.5bn) on infrastructure since 2004 and paid companies €15bn a year to maintain unprofitable routes, the Commission said.

"Some operators will have to change their practices and may have a change in their ratings by financial agencies. I am confident they are going to do what is necessary without going through a fight with the Commission," Mr Le Bret said.

See also:


Commission adopts guidelines for State aid to rail undertakings

Infrasite Nieuws: 05-05-2008

Brussels, Belgium -- The European Commission adopted guidelines for State aid to railway undertakings. The guidelines clarify the rules governing public funding of these businesses. This is one way the Commission is boosting the liberalisation of the industry and ensuring that public funding contributes to sustainable mobility in Europe.

Jacques Barrot, Vice-President of the European Commission responsible for transport, said: "After the third railway package and the Regulation on public service obligations, the adoption of these guidelines is a new stage in the development of a coherent and transparent legal framework for a dynamic and competitive rail industry, as a pillar of sustainable mobility on the European scale."

These guidelines are intended to give guidance on the compatibility of State aid to railway undertakings with the EC Treaty. A safe and clean mode of transport, rail is also an industry that is undergoing liberalisation; facing tough competition from other transport modes, it is presenting some specific challenges as well in the context of EU State aid law. With this document, which pays due account to the specific features of rail while ensuring convergence of the sectoral rules with the general rules on State aid, the Commission wants to help promote the liberalisation of the sector, improving its competitiveness and capitalising on its strengths, especially from the environmental angle. The guidelines complement the 'PSO Regulation',[1] which deals in particular with aid in the form of compensation for discharging public service obligations.

The text adopted today will henceforward make it possible, under certain conditions, to grant regional aid for the purchase and renewal of passenger rolling stock. The Commission is thus lifting a prohibition contained in the regional aid guidelines. It will be possible to put such aid towards the modernisation of rail transport, which is urgently required, especially in the new Member States, both in the passengers' interest and in that of 'greener mobility'. Wishing to promote sustainable mobility, the Commission is also extending this approach to public transport by road and says it will look into the possibility of giving specific support to the least polluting technologies.

The guidelines also specify the conditions for applying Article 73 of the EC Treaty, which provides that aid which meets the needs of coordination of transport is compatible with the common market. It will be possible to apply that article directly for authorising certain State aid once the PSO Regulation has entered into force in 2009. In the interests of transparency and legal certainty, the Commission is thus presenting the methodology it will be using to assess the compatibility of aid intended to iron out differences in infrastructure costs or external costs compared with those of other transport modes, to promote interoperability, to improve safety, to reduce noise or to encourage research.

These guidelines at the same time indicate to Member States how to reconcile with the Treaty's State aid rules the requirement imposed on them by Community legislation to assume the debts of railway undertakings in order to allow them to rectify their financial situation.

The Commission is in addition adapting the rules on restructuring firms in difficulty to be able to respond to situations where the freight division of a railway undertaking has serious economic problems but cannot be restructured by the railway undertaking as a whole. The Commission says that for a transitional period up to 1 January 2010 it is willing to derogate from certain aspects of the horizontal rules to take into account the specific situation of rail freight. It is thus providing for more favourable arrangements to encourage the restructuring of freight operations, which are nevertheless obliged to ensure that their activities are kept legally separate from the rest of the railway undertaking.

Finally, the Commission draws attention once again to the general criteria applicable to the public funding of infrastructure, and stresses that apart from the explicit derogations provided for in the guidelines, the competition rules have to be applied to the rail sector as to all the other sectors. This is particularly the case as regards the unlimited State guarantees still given to certain railway undertakings. The Commission recalls that these guarantees constitute State aid which is incompatible with the EC Treaty and therefore has to be dismantled within two years at most.

[1] Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007, OJ L 315, 3.12.2007, p. 1

See also:


Commission adopts guidelines for State aid to rail undertakings

Euroalert!: May 05, 2008
Internal Market

The European Commission has adopted guidelines for State aid to railway undertakings. The guidelines clarify the rules governing public funding of these businesses. This is one way the Commission is boosting the liberalisation of the industry and ensuring that public funding contributes to sustainable mobility in Europe.

Guidelines

These guidelines are intended to give guidance on the compatibility of State aid to railway undertakings with the EC Treaty. A safe and clean mode of transport, rail is also an industry that is undergoing liberalisation; facing tough competition from other transport modes, it is presenting some specific challenges as well in the context of EU State aid law. With this document, which pays due account to the specific features of rail while ensuring convergence of the sectoral rules with the general rules on State aid, the Commission wants to help promote the liberalisation of the sector, improving its competitiveness and capitalising on its strengths, especially from the environmental angle. The guidelines complement the 'PSO Regulation', which deals in particular with aid in the form of compensation for discharging public service obligations.

The text that has been adopted will make it possible for the European Railway Agency to grant regional aid for the purchase and renewal of passenger rolling stock. It will be possible to put such aid towards the modernisation of rail transport, which is urgently required, especially in the new Member States, both in the passengers' interest and in that of 'greener mobility'. Wishing to promote sustainable mobility, the Commission is also extending this approach to public transport by road and says it will look into the possibility of giving specific support to the least polluting technologies.

The guidelines also specify the conditions for applying Article 73 of the EC Treaty, which provides that aid which meets the needs of coordination of transport is compatible with the common market. It will be possible to apply that article directly for authorising certain State aid once the PSO Regulation has entered into force in 2009. In the interests of transparency and legal certainty, the Commission is thus presenting the methodology it will be using to assess the compatibility of aid intended to iron out differences in infrastructure costs or external costs of:

* Other transport modes.
* To promote interoperability.
* To improve safety.
* To reduce noise.
* To encourage research.

What is European Railway Agency?

The construction of a safe, modern integrated railway network is one of the EU’s major priorities. Economic integration and rapid growth in trade have transformed the European Union’s transport needs. In order to service this integrated market, railways must become more competitive and offer high-quality, end-to-end services without being restricted by national borders.

The European Railway Agency was set up to help create this integrated railway area by reinforcing safety and interoperability. Its main task is to develop economically viable common technical standards and approaches to safety, working closely with railway sector stakeholders, national authorities and other concerned parties, as well as with the European institutions.

UK float for Russian rail group

Financial Times: May 1 2008
By Robert Wright, Transport Correspondent

Globaltrans, Russia's largest private train operator, said yesterday it would raise $449m (£226m) when it floats on the London Stock Exchange next week.

Global Depositary Receipts representing shares in Globaltrans will be priced at $13.25 - in the middle of the $11.50 to $15 price range announced on April 16 - after strong interest in the listing, the first of a Russian train operator in London.

The price implies a market capitalisation for the company - one of scores of private freight haulage companies to have sprung up under Russia's rail reform programme - of $1.55bn.

Half of the listing proceeds will go to the present shareholders - a mix of N-Trans, Russia's largest transport company, and management - and the other half to fund future investment.

Sergey Maltsev, Globaltrans' chief executive, said the offer's success showed investors recognised the potential of the Russian rail freight industry.

"This is a sector that is set to continue its rapid growth and we intend to retain and build on our leadership position within it," he said. "The offering has given us access to the capital we need and we will now move forward with the implementation of our investment plans."

Conditional dealing in the shares would start next Wednesday, the company said, while the official listing was likely to start on May 8.