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Monday, 22 October, 2001, 10:54 GMT 11:54 UK
Britain's railways: Who should own Railtrack?
This week Transport Secretary Stephen Byers made a statement on the future of Railtrack to the House of Commons.
He said he could not give Railtrack a "blank cheque", or act as a guarantor for the company's shareholders.
He told MPs that he wants Railtrack to become a not-for-profit company without shareholders, while also giving some control to train operators.
This means that companies, such as Stagecoach and National Express, may be given a bigger role in track maintenance.
Do you think that recent events mark a turning point in Britain's beleaguered rail service? Should Railtrack Group be allowed to run the Channel Tunnel rail link? Do you feel that there would be a more unified rail system under the train operating companies?
This Talking Point has now closed. Read a selection of your comments below.
Steve Munday, England
There cannot be any comparison with the experience of travelling on both UK railways and the SNCF (French) network. Our continental counterparts have created a modern, integrated network for the 21st Century making it safe by government investment. Why can't our government provide the same kinds of funds or adopt the same ideas?
Its a bit rich for many of the commentators to say Railtrack shareholders deserve what they got - theft of a legally held asset by a third party, namely the UK Government.
Yes Railtrack was and is a special case but when you look at some of the achievements after 50 years of zero state funding (for example the station refurbishment work) you have to accept that some good was done. People bleat on about dividends - just wait for the bureaucratic waste of money to come. With the meddling of politicians it's amazing we have any rail industry at all. Business (i.e. the wealth creators) and taxpayers beware!
As a former Railtrack employee a lot of the general public appear to be unaware that from day one the government were always interfering with the running of the company. Almost every month there would be new instructions, new people and new organisations we would have to report to. It became so bad we would ask who would say enough is enough. No other company in the country had so much government interference!!
Who should own the Railways? Maybe someone with experience of running trains and knowledge of train technology, such as train engineers. They have been replaced with accountants and business managers which obviously doesn't work. No wonder the whole world is laughing at us.
Tony Sheerstone, Netherlands
The government of the time sold the rail network into private ownership, financed to whatever degree by shareholders money. Those shareholders accept the risk that the value of those share fluctuate with the success, or lack of, that the company experiences. In the "normal" world when a company fails the assets are sold off to pay debts and, if funds allow, to reimburse shareholders to what ever degree the funds will stretch to. Why should Railtrack shareholders be treated any differently? The government is attempting to steal the assets of Railtrack from the company and its shareholders, plain and simple.
I would vote for any political party that can sort our transport problems out. We need new roads; an expanded, faster, rail system that works efficiently; more cycle lanes and more frequent buses. I would vote for a party that committed to massive long-term public investment that must be made across our transport networks, most importantly the rail network. If this requires tax increases, so be it. We must have an efficient transport system that can do SO MUCH to stimulate successful economic growth in our country.
It is quite evident that the Government needs to do something about the appalling transport situation in our country. We need massive new investment in new and better maintained roads, extra rail capacity and rail routes & services, more frequent buses, and safer exclusive routes for cyclists. In short, we need to get Britain moving again!
The Government was right to wind up Railtrack but it should ensure that the new system of ownership retains money for investment rather than paying out dividends to shareholders or wasting money on lawyers. The correct system should be the one that provides the maximum investment to help improve our rail network. It is overly apparent to me that the road network, although it can be improved, can only go so far in solving the country's transport problems. We need an expanded, strong, safe & efficient, value for money rail system to move more of our people about. This can only be underpinned with certain planned massive investment for Labour or Conservative governments.
Railtrack, as with all other service industries, should have remained in government hands. Public transport should be exactly that, public and not put into the hands of businesses that are only interested in making profits. If the Government was really serious about reducing pollution and the numbers of private vehicles then they should be responsible for providing a viable and efficient public transport system.
No, Railtrack should not pay their shareholders. For all the talk that there has been about safety, the monies should be ploughed back into safety, after all was that not Railtrack's first concern.
Sorry to bring reality into this when everyone wants to talk about "profits before safety," but I do think it's worth pointing out that safety has improved since privatisation. Fatalities and significant accidents dropped by almost a third, and accidents per mile travelled decreased by almost 40%. Incidents causing alarms also dropped, though not as dramatically. SPADS are down, and horrendous as Ladbroke Grove was, Clapham junction was not nice either. Privatisation was working.
If Railtrack was going to go bust then it should have been allowed to do it in the normal way, its assets should have been auctioned off, with no restrictions on who may buy them and thus the structure would have been reorganised by the market.
Thank God that those who believe some "public services" are too important to be left to the free market don't believe that the supply of food is that important!
I think the Government have been very deceitful in mugging Railtrack as they have. Byers knew that refusing to give Railtrack public money would leave the company insolvent. By doing this, he has effectively paralysed the railway's infrastructure. I do not believe in nationalisation, but the way our railways were privatised was far from ideal. Railtrack should be done away with (after compensating shareholders), and train operating companies should own the tracks they run on, as was the case pre-British Rail.
I read the calls for re-nationalization of the railways with some amusement. Why would anyone suppose that things would be any different the second time around.
In my opinion, the four companies that owned and ran the railways prior to a Labour government nationalising in 1947. Showed concern for the customer, ran trains that were comfortable to ride in. I come home twice a year, and find it difficult to walk up to buy a ticket easily for where I want to go, and know that I will get there and back. The motor car is, sadly, my best option.
I worked part time when I was a student to save some money. I invested most of my savings at the time in Railtrack with the intention that they would grow towards my retirement and I always took scrip dividends. Now I have no pension (can't afford one) and have seen my shares taken from me by the Government. The whole way the Government has done this stinks and is akin to theft. My total life savings have halved overnight thanks to Mr Byers. I feel sorry for the thousands of others who, like me, have lost their money.
Yes I am a shareholder and I think the future of Railtrack should be with the courts to decide if nationalisation without compensation carried out in a very grubby way is against the law or not.
Taxpayers' money should definitely not be used for compensation. Public transport should never have been privatised in the first place. Bus services are just as chaotic - too many in large towns and cities and not enough in rural areas.
For those who don't understand why shareholders should get compensation, and say they should have realised the risk, the explanation is simple. The shareholders realised they were taking a normal commercial risk, in which for commercial reasons the shares could go down, and the company could go insolvent, however in the former case they could then hang onto their shares hoping for a recovery, or at least sell them when they chose for at some return. In the latter case the administrators would either find a buyer or recovery deal for the whole company, or sell off the very considerable assets, which would result in something for the shareholders.
The difference is that the government has refused to allow these normal commercial processes, and has changed the rules on which the shares are held with no warning. They have confiscated the assets, which were part owned by the shareholders, which is nothing short of theft.
Shareholders should not be compensated - the risk that the company might go bankrupt is one, which you take when you buy a share, and if they were not aware of this then they should either complain to their advisers or admit they didn't read the literature. After all, they have benefited from the massive dividend which Railtrack paid last year, and I didn't hear them suggesting after Hatfield that perhaps they should give back some of the cash to compensate passengers for the delays and disruption caused - perhaps if they had Railtrack would not be in this position. As for the pension and investment funds, the profits of these companies should be able to absorb the loss, even if the fund manager is daft enough to buy 4% of the company.
Of course the shareholders should be compensated - they should be paid exactly what the company is worth, unless of course it's true value is negative, where limited liability means they get nothing, rather than ending up owing money.
The track infrastructure should be renationalised. Its a natural monopoly and shouldn't ever have been put in private ownership. Historically UK government has been bad at managing nationalised industries, but the simple fact is, Railtrack have been worse.
Could someone Please explain why the government is supposed to handover almost unlimited amounts of our cash without being able to meddle in Railtrack? It is a company that has consistently failed to deliver and the government is an investor on behalf of the taxpayer so we are just as entitled to see a return on our money as the shareholders.
The shareholders and management should either run the railway privately without our money or stop whingeing about the consequences of their failure to deliver what was promised.
Railtrack were entrusted with a national asset to run and maintain for the benefit of the nation. This they have singularly failed to do - so surely they should be paying compensation to us, not the other way round?
All the comments about the Government putting Railtrack into administration because they were not prepared to give the company a blank cheque are misleading. What will happen if the not-for-profit company makes a loss? The Government will have to pay up and so management will have little incentive to even try to make a profit.
The administration itself will be costly - maybe £10 million per year until a new structure is dreamt up.
The one certainty in this mess is that the DETR will be more concerned with spinning than sorting out the railways.
Steve Marshall should be running a bank or finance company, not a railway. He only cares about his shareholders who have been lining their pockets. Is his salary justified? What about the train operating companies - will they be turned into not for profit companies? We have the highest rail fares in Europe and therefore still have shareholders to think about. Go and work for a bank Steve Marshall and let the engineers and experienced staff run a railway
How dare the shareholders ask for our money to compensate them! Would they have shared their profits with the public? I think not. They deserved everything that was coming to them, as did Railtrack.
The whole privatisation was a farce and an expensive, painful joke for commuters. You just cannot run a modern transport system through privatisation. Commercial interests don't want to give people a decent service - only higher travel costs. The only solution is to renationalise the whole system and urgently.
People who use public transport in the UK include those without any choice - the young, the disabled, the poor and the elderly. Most in these categories cannot afford the luxury of an independent means of transport. How are they supposed to get to work etc, with the transport system the way it is.
Railways are still a key infrastructure and fundamental in promoting economic growth. Although a publicly managed rail system may be slightly less efficient than in the private sector, the positive economic spill-overs of a decent rail system far outweigh any missed benefits.
Mr Byers has in effect tried to re-nationalise Railtrack without paying the compensation due to investors.
Railtrack will be replaced with a legal fiction non-profit making company run by conflicting vested interests that will do nothing but fight amongst themselves. When the next rail crash happens the government will try to distance itself from its creation.
A good example of a government run railway is London Underground.
Rail traffic fell by 35 percent over 20 years until 1995 under British Rail. In contrast Railtrack has increased passenger numbers by 35 percent since 1995.
Now it's all up in the air again. Can we only look forward to more uncertainty and under-funding for the railways, just as when they were a nationalised industry?
It is good to see the Government finally terminate this particular gravy train.
Railtrack have shown their true colours, only being interested in lining shareholder pockets whilst claiming poverty with the government. I wonder how big the director's severance pay will be for such a sparkling performance?
Let the TOCs have the track, stations, rolling stock and everything. Then we will have a proper free market and only a few people to blame.
While not many people believe that Railtrack's management did a great job, it will be interesting to see how the government expects to attract a top class experienced management team to run a not for profit company, particularly went it has demonstrated that it cannot be trusted.
In the 21st Century our travel needs are different, mostly due to the motorcar. Nevertheless, we still find ourselves in a national transport crisis, and the best way to proceed is to nationalise the lot to allow central control, where everyone works to the same aims i.e. an efficient, safe national rail network. Or does that make me the old-fashioned one?
Bring back steam, it may not be any more or less efficient that what we have at the moment but at least it's fun and romantic.
What the rail network really needs is a coherent structure - with leadership and good management, public or private. British Rail managed to keep the network safe and running to a reasonable (although it left a lot to be desired) standard despite being starved of funds. The current fragmented network receives more total funding yet is a mess. If private companies are to be involved, fine. But keep it to a manageable level with some competence (not Connex) and deep pockets. Whatever happens, train fares must go DOWN! Trains can be a good alternative to cars, but not at the moment.
The government has spent decades restructuring the rail system, privatising it, and spending millions upon millions on consultants to tell them how to do it. During this time, practically nothing was invested in infrastructure. During the same period, the French, Germans, Italians, Belgians and Spanish spent millions on building high-speed lines and modernising the infrastructure. The difference shows!
Anthony Owen, Germany
Passenger numbers grew strongly after privatisation and, contrary to general perception performance (as measured by safety and timeliness) actually improved slightly. So there is no evidence that, even if the structure could have been improved on, private ownership has made things worse.
More generally, the economic evidence is clear: nothing is so damaging for investment and growth as the undermining of property rights. This decision, close to Mugabe-style theft, will make the attraction of private sector capital to help fund public investment much harder.
If the Government plans to run the railways like they maintain the road network, then rail passengers are in for a lot more trouble.
Before those new companies could do much more than scratch the surface of the problems they inherited, along came Labour to pull the rug out from under Railtrack. Watch out you Train Operating Companies! It's your turn next! Labour seems determined to recreate British Rail.
A number of comentators seem to think that private industry cannot be trusted with Britains' railways. This completely ignores the fact that private industry built the entire network (22,000 miles at its' peak) without any government help. And they ran in considerably better than today.
Would you invest in a Part Government project?
Here's a scary thing. I have recently spent time extensively travelling round the Netherlands. While it is not cheap, it is so much better value than travel in Britain. Prices are understandable, trains run on time, and you don't need a timetable. Once you know the time of one, you know them all. They are clean, efficient, and comfortable. Worst of all, the Dutch think their network is naff!
Let the Public sector run it. We already know the running costs and future investment requirements for the UK rail network for say the next ten years then simply divide the costs by mile of rail and charge each operator accordingly. No profit needs to be charged but the cost of infrastructure repairs and upgrade can be recovered in the charges to the user.
We have Red Ken back in power, Parkinson on a Saturday night. Why not give us British Rail back?
The whole privatisation was wrong. Follow the French example and let it be a public institution. The shareholders are owed nothing, it was a bad investment and that is the reality. Railtrack sucked public money, was mismanaged and was responsible for deaths on the rail network through incompetence and the need to pay dividends. Surely these people need no sympathy.
The shareholders who still owned shares in Railtrack after the accidents were pretty stupid or did they just expect the tax payer to keep bailing them out? Stop whinging and look at the companies you're investing in. As for the chairman complaining about the treatment by the Government - did he not hear the customers commenting on the way Railtrack was run? It sounds like the government did the right thing by pulling the plug on them. You might have guessed by now that I have no sympathy for Railtrack and its investors. Sorry I couldn't be more constructive.
The suggestion of a "not for profit" organisation is just plain useless. This organisation would just be a means for the government to run the railways, while distancing themselves from any problems. When things go well the government will take the credit, and when they don't they will blame the intermediary.
I think Railtrack winding up was the best thing that has happened to the rail industry. Now if the Government doesn't sell it off, we may have a railway that may actually work once again
Mike from Peterborough: the last time the railways worked efficiently and well was before the war. Wake up! The current problem is due to half a century of under-investment by the government, not the failure of private enterprise. Railtrack should be given to the companies running the train services. Better them than a quango full of Blair's fat cats!
The Government should get the Swiss to show them how to run a railway. The shareholders have been mugged by deceitful politicians.
please do renationalise Railtrack and pay the investors for their shares. You already know that you would legally have to pay far more than £3.90 per share. Is this why you have taken this deceitful action?
The Government on behalf of the taxpayers and private industry, has been pumping billions in to rebuild Britain's rusty railways. Along with the travelling public, they have so far seen very little return for their money. It is calculated that our national railways need approx £100bn over the next 10 years, half from Government, half from private sources. So what's wrong with the Government owning 50% of the shares of Railtrack and private shareholders the rest? The one drawback is that the Government is not willing to take 50% of the blame if things go wrong - the private sector must realise that they will always get 100% of the blame.
Ben Drake, York, UK
Surely if the old model for privately owned railway systems had been adopted, the track owned by the same people that run the trains, the train operators, would have an interest in the condition of the track and infrastructure. Right now the operators use Railtrack as a convenient scapegoat for poor punctuality and service.
The first mistake was to nationalise the railways in the 40s. The second mistake was to privatise it in the way it was privatised. There is no place for Railtrack, it should either be a non profit organisation or the train operating companies should own the tracks on which they run. The Government's role is not in running traditionally private services such as rail and electricity, the money is better spent on health, education and defence.
Zachary, England. It was LNER, LMS, GWR and SR who built the railways originally, not the government. They just nationalised it (when it was making a profit) and cut the service by half.
Yes shares can go down as well as up but it is slightly unusual for a government to steal the company the shares represent.
Yes, Railtrack did know their targets, its just they keep changing.
How about this as a solution. By now it must be known what
needs to be done to make the railway network work again.
This to-do list is independent of who does it. Re-launch Railtrack but make it a non-profit organisation until it has accomplished all that was put on the to-do list. At least it'll provide them with an incentive to do what they should have done in the first place.
The railway network should be under the control of the government, but employees should have the same terms and conditions as non-government organisations. If not, we'll soon have the same catastrophic mess that we had in the seventies, with railway staff on strike at the drop of a hat. Money should be transferred from defence to transport to buy some decent equipment, and the 18th-century work practices should be dragged kicking and screaming into the 21st century. All accounts information should be made public. I still fail to see where all the money goes when I pay £40 for a one-hour trip, and have to stand the whole way because of overcrowding.
And to those who say that Railtrack has not been given enough time to turn the situation around, the state of the railways has gotten worse every year since Railtrack took over. This was due to them paying shareholders far too much in dividends, and far too little on maintaining the track.
The rail network is to be renationalised. For "Hatfield" read "Clapham" and instead of "late trains on private tracks" expect "late trains on public tracks". The problems for the rail industry are still the same - the network needs rebuilding and the taxpayer will have to pay.
I find it amusing that there has been an outcry over this... What these people seem to have forgotten is that shares go down as well as up in value. The thought that shareholders are demanding the government to step in is ridiculous. The private sector is just that.
Lucy Brooke, USA
I was interested to read the news story from late last night (11th Oct) that the German state-owned bank WestLB was interested in taking over Railtrack.
If our government aren't interested in looking after a national treasure (which the network could be) then I don't see any problem letting the Germans with their reputed work ethic, attention to detail etc doing it. We might see the improvement and investment in the network, we all know it needs.
It couldn't be easier to
renationalise the railways
at this moment in time.
Railtrack is at a dirt-low
price and the
Government could quite easily
wait until the train
operator francises run
out to take control of the
rest of it then, quite
legally and with not too
I really can empathise with Railtrack's shareholders - I mean, it must be terrible to pay out all that money and get nothing in return. I feel the same every time I buy a train ticket.
So, now a German bank is looking to buy our railways, and the government says that, of course, they would have to consider a 'reasonable' offer.
When will they ever learn?
We don't want another Railtrack. We don't want foreign firms buying our utilities. We want a railway system that works for us, not for fat cats.
It's about time our MPs accepted that it's their responsibility now and that selling out again is not an option.
Beaumont Blodgett, United Kingdom
Gavin Pearson, Detroit, USA
Whilst the privatisation of the railways was far from ideal all of the railway organisations are fighting a worthwhile battle and do not deserve the appalling and incompetent treatment of this government.
Byers in particular merely continue to provide illustrations of his complete stupidity.
Serves them right. They had their chance. Being responsible for safety, not doing enough about it and paying shareholders millions leaves this as a fair result.
James Mott, UK
As a taxpayer and a commuter I have been swindled by the government, Railtrack and various other rail companies. Enough is enough.
Bad management, whether in the hands of public or private enterprise is still bad management. As a private company, when management is bad, the shares suffer, the shareholders suffer, the customers suffer. As a public company, when management is bad, the taxpayers suffer and the customers suffer. Looks like we get stiffed either way!
All the comments about theft do not seem to take into account the money taken from taxpayers and commuters, and then squandered by Railtrack.
Investment in ethical companies is not in itself foolproof, especially given the dreadful management on display. Shares can be sold as well as bought, and Railtrack should have been dumped some time ago. Not only did the price collapse, but it was obvious that the board did not have a clue how to proceed.
Being a former driver of some fifteen years and having seen the mishandling of the Railways in the UK I can only say that it is time that this happened. I can remember the start of this sorry mess. Instead of investment in the track they spent money on office furniture and "rent-a-plant" to go with their new "corporate image". While slashing the maintenance budget to help pay for it all, along with the fat subsidy to set it all up. The company was overvalued to start with, as the assets were not easy to liquidate anyway. Now let's move on to renationalise the whole sorry mess and invest in the railways to provide an integrated, safe transport network that serves the needs of business and the public alike. Running British Rail was far cheaper than running the defunct franchise system that they have now.
Don't shareholders know that the value of their investment can go up as well as down? The tragedy at Hatfield was essentially the result of Railtrack's mismanagement and this led to their downfall, not any SRA interference. A non-profit option is surely better than what the Tories set up. The government should learn from this lesson when thinking of future privatisation of state monopolies.
Vijay K Vijayaratnam, UK
Railtrack shareholders profited by Railtrack's decisions to cut down on safety and maintenance work on the line. Those decisions were directly responsible for the break in the line which caused the Hatfield crash.
Personally I hope none of the Railtrack shareholders see a penny for their shares.
The railways should be run as a public service, not as a way for fat-cats to put money in their pockets at the expense of the general public.
Railtrack and the other companies took over a defunct British Rail which had been run down by the management, unions and government since the day it was formed. It will need massive investment which the taxpayer will fund - what private investor will lend to a company that has already defaulted on its shareholders?
The government has further underlined how untrustworthy it is as a contracting partner. This is nothing more than theft. Where does this leave all other PFI/PPPs? As for the not-for-profit trust, what incentive will it have to run things for the better or more efficiently? Public services do not mean better standards or even more safety - just look at the NHS. What they usually mean is jobs for cronies and taxpayers footing an ever-increasing bill for deteriorating standards.
I have no pity for the shareholders. You don't invest risk-free. To expect better treatment than any other management group that is completely unable to run their company properly is a complete outrage. Fat-cats have no business in what should be a public service. It's high time to nationalise all public transport, including the corrupt city coach services.
T Reynolds, USA
The railway network should be re-nationalised it is appalling that the Conservatives privatised it in the first place to line their own pockets with money.
The railway network is falling to pieces, and there have been several major crashes.
If it hadn't been privatised these crashes might not have happened.
The cost of rail fares have jumped sky high, in four years the cost of travelling from London to Manchester has risen 80%.
I will be travelling home at Christmas on the trains and you can guarantee that there will be cancellations, poor service, shoddy customer care and no compensation for being treated like that.
Where is the money going from your tickets? Into the shareholders' pockets. We should have a non-profit organisation ploughing the money back into the railway network and making it affordable for everybody.
The problems started way back in the early 60s when Beeching started swinging his axe. Since then successive administrations have failed to invest in rail. BR did a wonderful job on £1bn a year to stand still. Privatisation costs £2bn a year plus all of the lawyers' fees. The cost of the West Coast Mainline upgrade is around £2.3bn for the equipment and workers, but Virgin and other operators want compensation whilst the work goes on. What we need now is investment and a return to the style of BR upgrading i.e. no compensation to operators, who will all benefit from the upgrades.
Our European partners such as France, Germany and Spain have pride in their rail networks. They are efficient, well maintained and government controlled. Railtrack have failed, period. If a non-profit organisation take over the running of the railways and the investment that is needed is provided, perhaps once again we can have a great, safe and reliable network. Hopefully now someone will decide to revoke the licences from the train operators and these too can be brought back under non-profit making control.
Marcus Donnelly, England
Years ago as a young fireman on the steam trains it was drummed into me constantly the need for safety. Rule 55 I still remember to this day refers to train protection during an unscheduled stoppage. In those days there were two men on the footplate and I believe that all the woes Railtrack face and the feelings of a poor deal the passengers have, are in some way due to this as well. Nowadays there appears to me to be only one person to look after the train and he sits in the front. Only when the industry once again puts safety above all other considerations will rail travel generally improve. In those days too every Sunday was used as a day to improve rail track maintenance. Of course then we got paid double time for this but at least the work was done. Now in the bid to make a fat profit all this seems to be out of the window.
The railways should be re-nationalised.
They are essential to the country's economic well-being.
What right does Steve Marshall have to be angry?
The management of Railtrack has been catastrophic.
Most people with jobs in the real world would have been
sacked long before they could have made such a monumental
mess, let alone being allowed to moan that it's because they
didn't get a helping hand when it all went wrong.
Robert Pattison, England
I must take issue with Robert Pattison's comments that the Government has 'stolen' Railtrack from the shareholders. What about all the public money that the shareholders in Railtrack have 'stolen' from the railway system in this country? Money that could have been used for rail improvement. After all, theft could be viewed as taking money for a service that you have no intention of providing.
Bring back steam trains, regional railways and local pride then we might get something resembling the service we invented in the first place. For a country that gave railways to the world this is a disgrace and yet another nail in the coffin of privatisation, I hope. Oh but of course the Underground hasn't has its go yet.
The railways are a public service and at long last the government has acted in the public interest. As a railway user and enthusiast I fully support them. This privatisation was doomed to failure from day one. Those who invested in Railtrack shares did so in the belief that the government (i.e. the taxpayer) would continue to hand over endless subsidies while they enjoyed dividend payments. There never would have been any dividends without the subsidies and yet now we're supposed to feel sorry for them.
Danny Colyer, UK
I am amazed at the comments by Steve Marshall that commitments are made to be kept - definitely a case of the pot calling the kettle.
I am even more amazed that the Government waited so long to put Railtrack out of our misery.
As for the angry shareholders, they should have seen this coming, ABN Amro analyst Philip Oakley for instance pointed out in June the extreme riskiness of Railtrack shares.
This was a privatisation too far and a total disaster - sometimes literally. Let's hope the sell-off of NATS (air traffic control) works better.
This is the biggest case of insider dealing to date. The Government has relentlessly bashed Railtrack until its share price compromised its ability to raise funds.
Now they walk in and steal £1.44 billion from shareholders - i.e. taxpayers and their pension funds.
Are we really expected to believe that the organisation responsible for the Dome and for the non-building of football and athletic stadiums is capable of running a rail infrastructure?
Much has been said about profit and dividends, ignoring the fact that the £120m of dividend is effectively interest paid on the £1.95 bn loaned by shareholders. The new company will be paying well over this 6% rate to borrow money as there will be no shareholder capital to employ in investment.
I'd be angry if the Government pulled the rug from under my £400,000+ per annum job!
I doubt very much that he's half as angry as the average rail traveller is - the UK's rail network is in a mess and Railtrack only have themselves to blame.
Something we all once owned is now back where it belongs - being owned by us all again. I hope Mr Byers approached this nationalisation with a song in his heart! It's good to see the messes made by the Tories finally starting to be cleaned up.
The normal situation when a company becomes insolvent is that it's assets are first used to pay off the creditors, and any remainder is used to pay the shareholders. If there is nothing left, then shareholders must get nothing.
So, the legal alternative is that the government buys the company by buying the shares. But taking something that belongs to someone else without paying for it is stealing.
Railtrack should not and must not be allowed to liquidate the remainder of its assets to pay to shareholders. These assets belong strategically to the public. They are vital infrastructure, like our roads - they should not be sold off in an opportunistic, money grabbing, loss cutting exercise.
Good riddance to them. Money came before people every time - including those seven-figure payoffs. What we have to do now is stop pretending profit can be made from essential services like railways without immediate reinvestment
Its hard to imagine anything being worse than Railtrack, but bear in mind that the only British raiBritish railways that are still nationalised - those in Northern Ireland - are second only to Albania for the title of worst railway network in Europe.
I think that Railtrack plc has been very badly treated by the Government. It has been under-funded and subject to constant Government meddling. The shareholders should be compensated for what is effectively a re-nationalisation. Those who complain about the performance of the managers at Railtrack plc need to contemplate the possibility that simple bad luck may have played a part.
Why on earth should Railtrack shareholders get any compensation? What about people like myself who invested in Equitable Life? We invested our savings for our old age, in good faith, and now see our investment worth so much less. People buying shares know the risks involved and have to live with the consequences.
While a majority of the public may say they wish to see the railways re-nationalised, what the country really needs is an improved railway network. Sadly, I fear that the actions of Mr Byers are highly unlikely to achieve this objective, in the short or long term.
While I do feel sorry for some shareholders, I can only woonder why they would invest in a company that is massively in debt and has to rely on cash injections from a increasingly reluctant goverment. The Railtrack story is a warning of what a goverment will do to avoid raising taxes.
Railtrack did not fail because of poor management, but because the government forced them to reduce costs while increasing passenger numbers.
Surely the answer is to ask the French railway operator, SNCF, to take over our railway industry and run it efficiently. I believe we no longer have the management expertise.
11 Oct 01 | Business
Railtrack's 'back door' nationalisation
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Railtrack creditors 'will not lose out'
08 Oct 01 | Business
Angry Railtrack chief quits
08 Oct 01 | Business
Rail users promised 'fresh start'
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