Crossrail prepares for renationalisation (by other countries)

Over half of the bidders to run the new railway are foreign nationalised rail firms.

TfL has announced the four companies it has approved to bid for operational control of Crossrail. The company which wins the franchise will run the train services and stations, as well as providing staff, for the London metro rail service, which is due to open with a partial service in May 2015.

MayorWatch reports:

The companies shortlisted to bid are: Arriva Crossrail Limited, Keolis/Go Ahead, MTR Corporation (Crossrail) Limited and National Express Group PLC.

Just to break that down a bit: Arriva is a wholly owned subsidiary of Deutsche Bahn, which is the German national rail company and is majority-owned by the German government; MTR corporation is the Hong Kong national rail company and is majority-owned by the Hong Kong government; and Keolis is majority-owned by SNCF, the French national rail company which is wholly owned by the French government.

National Express and Go Ahead, the other half of the Keolis/Go Ahead consortium, are both UK-headquartered FTSE 250 companies.

In other words, fully half of the companies which are bidding to run Crossrail are the nationalised rail companies of other countries; and another quarter of the bidders is a joint venture involving the nationalised rail company of another country.

That follows the creation of London Overground Rail Operations Limited, the company which runs the London Overground concession. That franchise, which is consistently one of the best, or the best, on the whole National Rail network, is run by a consortium of Arriva and MTR under the control of TfL.

Nationalisation: apparently quite good in practice?

Original post, "Why Crossrail's new roundel matters more than it seems", 13 May 2013 13:54

Transport for London revealed further information about how the Crossrail franchise is to be run yesterday, confirming that it would be run as a managed concession in the style of the London Overground.

TfL will stipulate the services which must be provided, as well as owning the trains and track. The private company which wins the franchise will be responsible for running the train services and the crossrail-specific stations along the route, as well as providing staff, but it will not be given the freedom, which most national rail franchises have, to dictate hours of operation and staffing levels.

The news comes as TfL announced the branding that Crossrail would receive as part of London's transport mix; the service will get its own roundel, in a fetching purple shade (that's it above). As the London Reconnections blog points out, that's a more notable piece of news than it first appears:

As Crossrail’s TBMs tunnel beneath London, and its stations begin to take shape (more on both of those shortly) it is easy to forget that there are still some important questions that remain to be answered politically and strategically about the line.

The funding question may have dominated the discourse whilst the line pushed for approval, but it mustn’t be forgotten that Crossrail will also push well beyond London’s borders. In doing so, it will take TfL—and more importantly their authority and systems—with it. At a time when TfL and the DfT have yet to agree on what role London’s transport authority will have with regards to franchising, that’s potentially a very hot political potato.

The most similar existing train franchise to Crossrail, the Thameslink service, is a typical national rail service, run by the First group. As such, First runs its stations, Oyster cards are not accepted outside of travelcard zones 1-6, and TfL has very little say over most of the operations.

Owing to the devolved nature of London transport, the capital is slowly building a different model of how to run a suburban rail system to the one preferred by the Department for Transport. There is still hefty private-sector involvement, but the planning is far more centralised, and, cable-car aside, TfL has seen far fewer missteps than its competitors.

Earlier this week, the Department for Transport was forced to back down on a plan to increase commuter pricing even more than it currently does. The Financial Times reported on Sunday that:

The government was also urged just weeks ago by the Commons’ transport committee to rule out a shake-up of fares.

The committee said it feared that proposals for more “flexible ticketing” would end up being a “tax on commuters” who had no choice over when or how they travelled. The committee said there were limits to what the policy could achieve: “Many lower-paid workers have no choice but to travel at peak times,” the report said.

The first Crossrail services will run from May 2015 between Liverpool Street and Shenfield, Essex. Commuters on that line will see double the number of trains per hour, and new rolling stock from 2017. For them at least, the change is likely to be undeniably positive.

Image: Transport for London

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump