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Privatisation Era - Why Privatisation
Happened
In 1991, the Swedish railway network was successfully
privatised, which inspired the European Union to create
Directive 91/440. This Directive required that all member
states to separate:
 "the
management of railway operation and infrastructure from the
provision of railway transport services, separation of
accounts being compulsory and organizational or
institutional separation being optional"
This idea would allow private companies to own the railway
infrastructure (tracks, signals, etc) and they would be able
to charge train operators to use the tracks, in effect
giving an 'open access' railway network.
 During
1990, John Major (pictured right) replaced Margaret Thatcher
as leader of the Conservative Party, a party that had
already privatised nearly all state own industries; British
Coal, British Steel, British Telecom, etc.
In its 1992 Party Manifesto, the Conservative Party laid out
plans to privatise British Rail, but didn't explain how it
could and would be done. John Major had an idea for a
'British Rail PLC' type organisation, similar to the 'Big
Four' of 1948.
However, the Treasury disputed this idea and suggested that
at least 7 franchises should form the new railway system.
This figure is now over 20.
Privatisation Era - The Privatisation Process
 In
1993, the British Government published the Railways Act
(1993), which outlined an extremely detailed structure of
the railway network. The plan was to break up British Rail
in over 100 different companies, these companies would then
be supervised by the Office of the Rail Regulator.
The bill was unpopular and opposed by the Labour Party and
the British public.
One of the biggest critics to the privatisation plans was Conservative
MP and Chairman of the Transport Committee, Robert Adley. Adley was
passionate about the railways and understood exactly how they could
be run. He famously described the Government plans as a 'poll tax on
wheels'. Unfortunately Adley died before the Bill was passed through
Parliament. The Labour Party even vowed that if it was returned to
power at the next election, it would renationalise the railway if
privatisation was successful.
The Government misunderstood how the railways could operate as a
commercial venture. Splitting the railway into many different
companies would create competition amongst itself, when in fact, the
major threat of competition was from shipping companies, domestic
airlines and road hauliers.
The Railway Bill became the Railways Act on 5th November 1993. The
structural organisation of the new railway network was to come into
place on 1st April 1994
These organisational units became:
Railtrack - A new company formed to own the
tracks, signals, stations etc., Under the plans, Railtrack
was to be the last part of British Rail to the sold off.
However, in 1996, Railtrack was privatised by the
Conservatives to prevent any plans by Labour to reverse the
process.
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Train Operating Companies - The 25 new TOC's split
the country up into geographical sectors.
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Rolling Stock Leasing Companies - The 3 new
ROSCO's, Angel Trains, Porterbrook
Leasing and Eversholt Trains (now HSBC
Rail), were allocated British Rail locomotives, carriages
and multiple units. The plan was that the ROSCO's could
lease its rolling stock to the newly formed TOC's.
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Freight Operators - Freight operation was to be
divided into 3 geographical sectors; Mainline Freight,
which was to serve the South East, LoadHaul
serving the North and Trans-Rail serving the
West. However, on the 24th February 1996 these three
companies were sold to North & South Railways
a subsidiary of the American Wisconsin Railroad
Company. The owners shortly renamed the operation to
English, Welsh and Scottish Railways. It then
didn't take long for EWS to acquire Rail Express
Systems (parcel and mail distribution),
Railfreight Distribution and National Power's
freight operation.
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