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Britain's privatized railway system
Finance & Accounting
Pages 5 (1255 words)
This literature review will explore various key studies conducted on the privatization of British rail. The Conservative government in the UK began British Rail’s privatization in January of 1993 with the enactment of the British Coal and British rail Act 1993…
This freed up the Secretary of State to give the relevant board directions concerning the disposal of its holdings. This Act was necessary because the government at all times had to act by the rules that were established by various Acts covering transport and railways, which would have stopped the board from disposing of the assets. Following the Secretary of state’s actions, he directed for the formation of Rail-track PLC, which, in turn, paved the way for 1993’s Railways Act. The British Railways Board’s operations were subsequently sold off. At the time, the process was riddled with controversy and some of the results have lent credence to the criticism that came its way. The manner of the privatization also led to widespread criticism from over twenty companies involved, especially for its complexity.
Following the Swedish example that seemed apparently successful, the BEU issued directive 91/440, wishing to enable new rail operators to access the market (Jupe & Crompton, 2006: p1038). EU member states were required to separate infrastructure and railway management operations from transport services with account separation termed, as compulsory to all industries that were formally owned by the state with while separation with institutions being optional. The EU hoped that track operators would levy a transparent fee that would allow operators to run networked trains under open access. British Rail was privatized between 1994 and 1997 with Rail-track given ownership of infrastructure and track in April of 1994. Following this, there was franchising of passenger operations to operators in the private sector with outright sale of freight services. BRB Ltd. got the remaining British rail obligations. ...
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