More on How Not to Deregulate

Many of the commenters to my post about the rail network have made valuable points about the German rail system — notably, the fact that it is been partially de-regulated, and that the availability of trains even to somewhat remote places varies from Bundesland to Bundesland.  Of course, I happily defer to the commenters, who seem highly knowledgeable. 

I was merely reporting my personal experience of die Bahn, not attempting a formal assessment of its performance.  I travel mostly in Nordrhein-Westfalen, where the rail network is very dense.  I have often ridden trains in which I was one of perhaps 5-6 paying passengers on the whole train.  Although there may be different service providers, the experience as a passenger is of one uniform entity.  When I book an ICE train from Duesseldorf to Hannover, for example, I know exactly what that train will look like.  It will be sleek and white.  It will be filled with comfortable seats, helpful blue displays, and doors that open and close automatically, just like the doors on the U.S.S. Enterprise.

The key point I was trying to make is that whatever de-regulation has happened in Germany, it hasn’t wrecked the entire rail network.  In Britain, it is now a settled consensus among all political parties that the deregulation of the rail industry is a catastrophic failure.  Costs have skyrocketed and service suffered.  Here is a conclusion from page 14 of a recent parliamentary report:

As public sector support for the railway has tripled, underlying spend has doubled and revenue has remained static; while the SRA’s graph reveals the industry’s inability to sustain and improve its performance. The taxpayer has paid progressively more in this period for a declining service. …[T]he enormous increase in the cost of the railway places its future in grave serious doubt.  It is essential that costs are brought under control for the future of the railway.  Professor Roderick Smith of Imperial College gave evidence to us that the cost of one entirely new railway system was in the range £11 – 27 billion. The sums which have been used ineffectively by the Government’s railway structure in propping up the present, poorly performing system, could have paid for a large proportion of a new railway network.

And what kind of service have these billions brought to British rail travelers?  The graph below, also from the above-mentioned report, gives you an idea; it shows the on-time performance of British trains dropping from 90% to 75% in the aftermath of the 1996 privatisation, which split the British rail system into 100 competing service providers.  Oh, and don’t forget the string of recent train crashes in Britain, in which dozens of people have died and thousands were injured.

All I wanted to say to Germany is: don’t let this happen to you, and be thankful for what you’ve got!


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