Britain's privatized railway system Literature review

Britain's privatized railway system - Literature review Example This freed up the Secretary of State to give the relevant board directions concerning the disposal of its holdings. This Act was necessary because the government at all times had to act by the rules that were established by various Acts covering transport and railways, which would have stopped the board from disposing of the assets. Following the Secretary of state’s actions, he directed for the formation of Rail-track PLC, which, in turn, paved the way for 1993’s Railways Act. The British Railways Board’s operations were subsequently sold off. At the time, the process was riddled with controversy and some of the results have lent credence to the criticism that came its way. The manner of the privatization also led to widespread criticism from over twenty companies involved, especially for its complexity. Following the Swedish example that seemed apparently successful, the BEU issued directive 91/440, wishing to enable new rail operators to access the market (Jupe & Crompton, 2006: p1038). EU member states were required to separate infrastructure and railway management operations from transport services with account separation termed, as compulsory to all industries that were formally owned by the state with while separation with institutions being optional. The EU hoped that track operators would levy a transparent fee that would allow operators to run networked trains under open access. British Rail was privatized between 1994 and 1997 with Rail-track given ownership of infrastructure and track in April of 1994. Following this, there was franchising of passenger operations to operators in the private sector with outright sale of freight services. BRB Ltd. got the remaining British rail obligations. When John Major replaced Margaret Thatcher as the Conservative party leader in late 1 990 the privatization of the British Rail begun to pick up steam. The government under Thatcher had sold off almost all industries that were formally owned by the state with the exception of British Rail. Even though, Cecil Parkinson, the previous Secretary for Transport had led advocacy for a form of semi-private or private ownership of the British rail network, Thatcher had deemed it too much (Jupe & Crompton, 2006; p1039). In the 1992 elections, the Conservative manifesto included a privatization commitment for the British rail network, although the specifics were not set out clearly. Triumphing over opinion polls, the Conservatives won the 1992 elections and had to, consequently, come up with a plan to privatize British Rail prior to the publishing of the Railways Bill the following year (Haywood, 2007: p200). British Rail’s management led a strong advocacy campaign for the privatization of British Rail under a single entity with John Redwood, a Cabinet Minister, arguing for the regional companies that were in charge of trains and track, although the Prime Minister did not back this at the time. Consequently, following pressure from a think tank fronted by the Adam Smith Institute, the treasury advocated for seven franchises for passenger railways, which later expanded to 25, as a means of revenue maximization. The treasury prevailed in this instance. In addition, privatization of British Rail became a reality. In 1997, the Labor government took over after almost all privatization had been carried out and failed to act, on its earlier promise, to return to the public sector the railway system (Haywood, 2007: p200). It, instead, elected to leave the structure as it was and even oversaw the completion of