(The following article by David Teather was posted on the Guardian website on June 20.)
LONDON –After Britain, the country that has gone furthest down the rail privatisation route in Europe is Sweden. The Swedish railway is widely praised as being more efficient and better run than that in Britain but the experience has not been free of wrinkles. In the immediate aftermath of privatisation in the mid-1990s, at least one operator went bankrupt. Others were stripped of their licences, which were handed back to the national rail operator.
Sweden has not gone as far as Britain. Only the more popular routes were opened to private operators, leaving the unprofitable rump in the hands of the taxpayer. The network was split from the train operators in 1988 – appearing to disprove the theory that the separation of network and train operators is behind Britain’s woes. The difference is that the rail network business, Banverket, was left in public hands and not motivated by profit.
Elsewhere, there has been limited privatisation in eastern Europe, while the Netherlands has been moving slowly toward selling off its network for much of the past decade.
Competition has been more widely introduced in the freight market. Both the Netherlands and Denmark have privatised their freight operations, which were both swiftly acquired by the German operator Railion. There are also private freight operators in Russia and some of the other former Soviet republics; the Czech Republic, Poland, Italy and Germany. The most open freight markets are in Britain and Estonia.
Japan, where the passenger network has a reputation for efficiency and reliability, is said to run the only profitable rail network in the world.
Tokyo split the national rail network into seven companies in 1987. Two have been completely privatised and the government has indicated that it will finish disposing of its remaining stake in a third, JP Central, by March 2008. It was one of the privatised firms, West Japan Railway, that suffered a terrible derailment last year that left more than 70 people dead and more than 400 hurt.
A difference from Britain is that there are no train-operating franchises in Japan, which kept track and trains under the control of single companies. The government still owns 100% of the other four companies.
Other countries with privatised or partially privatised networks include Australia and parts of South America, including Argentina and Brazil.
Washington would dearly love to privatise its national rail network, Amtrak. The railroad was supposed to have built the US, but these days it is eating up billions of dollars. “If they could get it to make a profit, they would sell if off immediately,” said Ben Jones, of Rail Magazine. Congress has repeatedly tried to privatise it, as it struggles to compete with cheap air fares. This year, the Bush administration threatened to cut off its funding. In the end its subsidy was cut by about $200m to $1.1bn.