Rail network price critical

Rail network price critical

Any decision to re-nationalise the rail network must be treated with great care, warns the Employers & Manufacturers (Northern).

"Government or private investors have to make their investment decisions based on supply and demand, and economic pricing, or ignore market reality," said Alasdair Thompson, EMA's chief executive.

"The result will be a cost to the taxpayer one way or another.

"If rail cannot survive without taxpayer support, the question has to be asked: 'Is rail the right solution?' For some purposes it may well be, for example, to get logs and other bulk goods to port.

"However, roads though largely publicly owned*, have a wide variety of private users with road transport companies operating in competition on them. Many more roads could be built under public/private partnerships as toll roads.

"In theory the same principle could apply on publicly owned rail networks.

"The question is, whether there are competitors who would pay an economic price to access the rail network irrespective of the network being publicly or privately owned.

"If the unsubsidised price of access is low enough, and the network can be used for a range of transport modes, the answer may well be affirmative.

"Everyone agrees if private investors make a mistake they have to bear the cost themselves. But when government makes investment mistakes, taxpayers meet the bill.

"Unfortunately experience shows government spending other people's money means it generally has a higher propensity to make mistakes. Hence the degree of care needed in considering whether the rail network might be re-nationalised."

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