Rail break-up to get under way next year: Critics say privatisation Bill lacks answers and ignores need for investment

THE BILL to privatise the railways over the next decade was published yesterday and met with almost universal hostility. It also failed to address many unresolved issues affecting fares, investment and cuts in services.

Launching the Bill, John MacGregor, Secretary of State for Transport, said it 'will make a big difference' to passenger services and all 'the problems will be overcome'. But he admitted implementation will be delayed several months beyond the April 1994 deadline.

Mr MacGregor faces strong opposition from passenger groups, opposition parties, some Tory backbenchers and the trade unions - and within British Rail. Sir Bob Reid, the BR chairman, who last month publicly expressed strong doubts about the proposals, appeared sceptical. Despite being asked repeatedly at a press conference to endorse the government plans, he refused to say that they would produce any improvement in services.

He would only say: 'The Bill is a legitimate approach to broadening the finance of the railway. Whether it works or not will depend on who comes forward to run the franchises.'

Other reaction was not so muted. There was concern at the complexity of the proposals, lack of investment, feared cuts in services and absence of any mention of the Passenger's Charter.

Robert Adley, Tory chairman of the Commons Transport Select Committee, said: 'The Bill is a masterpiece of academic theory. Fear, not hope, fills my heart at the prospect of experimenting with our railways.'

Brian Wilson, Labour transport spokesman, called it 'a bureaucratic nightmare'. Even the Royal Institute of Chartered Surveyors said the plans 'ignore the need for investment and exacerbate the growing imbalance between road and rail funding'.

There were few surprises in the complicated 132-clause Bill. Mr MacGregor promised reports soon on the key issue of access and track charges, freight and private sector investment in rolling stock.

BR is to be divided: one body will handle infrastructure, including track and signalling; train operations are to be offered for franchise to the private sector.

Mr MacGregor conceded this week in the face of pressure from potential operators that many franchises would be let on an exclusive basis, abandoning earlier claims that privatisation would boost competition.

Interestingly, the Bill makes no mention of the infrastructure body, expected to be called Railtrack. That is because Mr MacGregor has conceded that some franchisees could take control of the tracks they use.

Much of the criticism focuses on the complex bureaucratic structure. As well as Railtrack, there will be a Franchising Director responsible for allocating the franchises, a Regulator, to oversee access and competition - both with wide powers - and passenger watchdogs.

One BR source suggested the Bill is very much in line with previous legislation on education and health, giving greater control to central government: 'At the moment it is local managers who make up the timetable. In future, it will be the franchising director in London who will do so.'

The Bill does not make clear whether rival operators may co- operate on joint timetables and joint services. Bus operators, since deregulation in 1986, have often been prevented from doing so by the Office of Fair Trading.

New operators will face stringent safety requirements and, if they go bankrupt, the franchising director will be able to take over their assets. That may cause difficulties for operators wishing to use assets as collateral.

In the metropolitan areas, the powers of passenger transport executives that now determine the level of provision will be handed over to the franchise authority.

Mr MacGregor admitted the Bill covers all railways, including the underground systems in London, Newcastle and Glasgow, but said that there were no plans to privatise them.

However, a leading privatisation lawyer, William James of Theodore Goddard, said: 'It would only take a simple enabling Bill for a future government to privatise these railways.'

After privatisation, page 8

Leading article, page 14