4 ms·

Tracks are certainly very valuable infrastructure, it's just hard to monetize (and very expensive to build, as you say). So in a way it makes sense for the gove

by jabl 5y ago

Tracks are certainly very valuable infrastructure, it's just hard to monetize (and very expensive to build, as you say). So in a way it makes sense for the government to handle it.

pydry 5y ago
The way to monetize is property development and rent around stations. That's how it works in Japan, where private companies sell tickets at a loss and still make profits. In the UK that land got sold off to private equity and the like who are making the real dough while they funnel some of that into donations to the Tory party.
- jabl 5y ago
  > The way to monetize is property development and rent around stations. That's how it works in Japan, where private companies sell tickets at a loss and still make profits. Yes. It's just really hard to do afterwards - having the government expropriate land around the stations and giving it to the railway companies is guaranteed to be wildly expensive and unpopular. Japan's private passenger railways IIRC make about 50% of their income from ticket sales, the rest comes from leveraging the (very!) high value land around the stations. Many other metropolitan rail systems also get about 50% of the income from tickets, but since the railways don't own the land they have to get the rest through some form of government subsidy. I think some of the problems with the British privatized rail system is how fragmented it is, with nobody responsible for the whole. And there's lots of government meddling in every interface between all these myriad private companies, providing ample opportunity for corruption and massively misaligned incentives. I suspect it would be better to either nationalize the whole lot under one roof, or then go back to the old pre-nationalization type regional monopolies with a single company owning tracks, trains, stations as well as operating them (a bit like the privatized Japanese railways).
  - pydry 5y ago
    >Yes. It's just really hard to do afterwards - having the government expropriate land around the stations and giving it to the railway companies is guaranteed to be wildly expensive and unpopular. Expropriation of land would be unpopular (it would get the tabloids in a jitter as they fearmonger that the government is going to expropriate your garden next) but introducing a special tax on nonresidential property within 500m of a train station and subsidizing the price of tickets with it - probably not so much. "Oh look my season ticket got cheaper" while private equity reports lower earnings and google's tax bill shoots up - this is going to be popular. It could then be extended to residential property. The government could also go into business itself - building a shopping mall or two and funding government budgets. This is a frog that could be boiled.
- MomoXenosaga 5y ago
  Yes in the Netherlands the railway operator makes a lot of money from their train stations as well. A train station in 2021 is basically a big shopping mall in a prime location with massive foot traffic.
  - apexalpha 5y ago
    The Dutch Railways even made a slim profit in the UK in 2020 after getting €1,5 billion in subsidies from the UK government through Abellio. No idea how this new nationalisation will work out for either party, though.
ClumsyPilot 5y ago
Track is what defines the railway, maximum speed, 85% of maintenance cost, etc. UK tried to privatise it, but the firm collapsed and had to be nationalised. What do private companies add, if on a good day they earn the profit and on a bad day tax payer picks up the tab.
- jabl 5y ago
  > Track is what defines the railway, maximum speed, 85% of maintenance cost, etc. > UK tried to privatise it, but the firm collapsed and had to be nationalised. Yes, absolutely. > What do private companies add, if on a good day they earn the profit and on a bad day tax payer picks up the tab. I think the best way to run a railway is to either completely nationalize it all under one roof, or then have it completely privatized, with a single company being responsible for everything. Yes, this would create regional rail monopolies, but OTOH they wouldn't be completely free to extract monopoly prices since there's still competition from other modes of transport (cars, airplanes, buses, trucks). The current UK system with a myriad public and private entities with very complicated contractual relationships is just a mess. Unfortunately it seems the EU is hellbent on imposing the same model across the EU.

by jabl 5y ago

Tracks are certainly very valuable infrastructure, it's just hard to monetize (and very expensive to build, as you say). So in a way it makes sense for the government to handle it.

pydry 5y ago

The way to monetize is property development and rent around stations. That's how it works in Japan, where private companies sell tickets at a loss and still make profits. In the UK that land got sold off to private equity and the like who are making the real dough while they funnel some of that into donations to the Tory party.

jabl 5y ago
> The way to monetize is property development and rent around stations. That's how it works in Japan, where private companies sell tickets at a loss and still make profits. Yes. It's just really hard to do afterwards - having the government expropriate land around the stations and giving it to the railway companies is guaranteed to be wildly expensive and unpopular. Japan's private passenger railways IIRC make about 50% of their income from ticket sales, the rest comes from leveraging the (very!) high value land around the stations. Many other metropolitan rail systems also get about 50% of the income from tickets, but since the railways don't own the land they have to get the rest through some form of government subsidy. I think some of the problems with the British privatized rail system is how fragmented it is, with nobody responsible for the whole. And there's lots of government meddling in every interface between all these myriad private companies, providing ample opportunity for corruption and massively misaligned incentives. I suspect it would be better to either nationalize the whole lot under one roof, or then go back to the old pre-nationalization type regional monopolies with a single company owning tracks, trains, stations as well as operating them (a bit like the privatized Japanese railways).
- pydry 5y ago
  >Yes. It's just really hard to do afterwards - having the government expropriate land around the stations and giving it to the railway companies is guaranteed to be wildly expensive and unpopular. Expropriation of land would be unpopular (it would get the tabloids in a jitter as they fearmonger that the government is going to expropriate your garden next) but introducing a special tax on nonresidential property within 500m of a train station and subsidizing the price of tickets with it - probably not so much. "Oh look my season ticket got cheaper" while private equity reports lower earnings and google's tax bill shoots up - this is going to be popular. It could then be extended to residential property. The government could also go into business itself - building a shopping mall or two and funding government budgets. This is a frog that could be boiled.
MomoXenosaga 5y ago
Yes in the Netherlands the railway operator makes a lot of money from their train stations as well. A train station in 2021 is basically a big shopping mall in a prime location with massive foot traffic.
- apexalpha 5y ago
  The Dutch Railways even made a slim profit in the UK in 2020 after getting €1,5 billion in subsidies from the UK government through Abellio. No idea how this new nationalisation will work out for either party, though.

ClumsyPilot 5y ago

Track is what defines the railway, maximum speed, 85% of maintenance cost, etc. UK tried to privatise it, but the firm collapsed and had to be nationalised. What do private companies add, if on a good day they earn the profit and on a bad day tax payer picks up the tab.

jabl 5y ago
> Track is what defines the railway, maximum speed, 85% of maintenance cost, etc. > UK tried to privatise it, but the firm collapsed and had to be nationalised. Yes, absolutely. > What do private companies add, if on a good day they earn the profit and on a bad day tax payer picks up the tab. I think the best way to run a railway is to either completely nationalize it all under one roof, or then have it completely privatized, with a single company being responsible for everything. Yes, this would create regional rail monopolies, but OTOH they wouldn't be completely free to extract monopoly prices since there's still competition from other modes of transport (cars, airplanes, buses, trucks). The current UK system with a myriad public and private entities with very complicated contractual relationships is just a mess. Unfortunately it seems the EU is hellbent on imposing the same model across the EU.