Rail Partners: rail growth needs the private sector

OPERATORS are calling for long-term reforms that will help to stabilise industry finances by growing revenue.

And they are rejecting nationalisation as the way to achieve that goal.

Published a few days after the Labour Party’s annual conference backed full renationalisation (RAIL 967), a new report sets out an immediate step that government can take to accelerate growth, as well as priorities for longer-term reform, through a revived public-private partnership.

The report - Revitalising Rail: How private operators can accelerate recovery - is published by Rail Partners, the trade body representing independent passenger and freight operating companies.

It outlines how such a move can attract more people and businesses to rail, and increase revenue while reducing costs benefiting both taxpayers and customers.

“The private sector has previously restored the industry’s finances to good health, and it can once again help meet the significant challenges the railway faces,” said Rail Partners CEO Andy Bagnall.

“The right conditions are needed for the private sector to do what it does best and grow the rail market - increasing revenue by delivering for customers, and securing all the economic and environmental benefits a vibrant railway delivers for Britain.

“Our research shows at least an additional £200 million per annum could potentially flow back to the Treasury if operators are given more commercial freedom in their current contracts.”

Rail Partners argues that “changed realities” after the pandemic mean that reform remains “imperative”, and that the private sector wants to “use its expertise to support government in successfully co-creating rail’s future”.

It adds: “A change in ownership does nothing to attract customers and businesses to rail.”

Revitalising Rail highlights three crucial elements for longer-term reform that Rail Partners believes will support the Government’s growth agenda:

■ Getting the design of Great British Railways (GBR) right:

GBR should be given a specific duty in the new legislation to promote private sector innovation and investment. Clarity will be needed on its structure and how it will operate, leaning on the experience and knowledge of the operators.

■ Ensuring Passenger Services Contracts are fit for purpose:

The new contracts must give operators the right incentives to grow revenues back and control costs, and the right levers over timetabling, fare setting and marketing within the GBR framework, so that they can respond to customers’ needs quickly, using the in-depth knowledge of local needs and markets.

■ Encouraging modal shift to using freight: Trebling freight volumes could treble the benefits over the next decades. If that target is set and met, it is potentially worth more than £7 billion to UK plc and equates to 21 million fewer HGV movements annually, supporting the economy and the environment.

Rail Partners observes that its membership brings experience across multiple markets.

“Through their commercial acumen and innovation, prior to the pandemic they had delivered more than a doubling of passenger numbers, revenue growth at twice the rate of GDP, and overturned the £2bn annual industry operating loss,” it said.

The organisation’s members are: Abellio, Arriva, First, Govia, Mitsui, MTR, Serco, Trenitalia UK, Colas Rail, DB Cargo, Direct Rail Services, Freightliner and GB Railfreight.