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Privatisation and Franchising of British Train Operations

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  • Carmen A. Li
  • John Stittle

Abstract

type="main"> The Railways Act 1993 privatised the British railways industry resulting in the separation of ownership and control of the railway infrastructure (track, signals and stations) from that of passenger train operations. The Great North Eastern Railway (GNER), a major train operator, was unable to meet its contractual obligations shortly after successfully re-tendering for its second franchise. By referring to the organisational form and structure of the franchising process, this paper discusses the main financial and operational problems that specifically contributed to the collapse of GNER. In particular, the paper argues that the fragmented structure of privatised train operations, the lack of industry coordination and the inherent problems of franchising an essential transport service explain the demise of GNER and have undermined the general objectives of railway privatisation. Overall, the paper highlights that privatisation of train services has failed to deliver both travelling benefits for the public and financial benefits to the state.

Suggested Citation

  • Carmen A. Li & John Stittle, 2014. "Privatisation and Franchising of British Train Operations," Australian Accounting Review, CPA Australia, vol. 24(1), pages 53-65, March.
    • Handle: RePEc:bla:ausact:v:24:y:2014:i:1:p:53-65
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    File URL: http://hdl.handle.net/10.1111/auar.12016
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    2. Jurikovič Martin & Tomeš Zdeněk, 2017. "Public and Private Provision of Railway Services: A Case Study from Slovakia," Review of Network Economics, De Gruyter, vol. 16(2), pages 187-201, June.

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