Re: GOVERNMENT FAVOURS DOMESTIC AIRLINES OVER RAIL FOR ANGLO/SCOTTISH PASSENGERS

On 31 Jul, 23:13, The Good Doctor <nos...@xxxxxxxxxxxxxx> wrote:
Philip <phi...@xxxxxxxxxxxxxxxxxxxxxxxx> wrote:

I'm not sure whether the Treasury is decider rather than provider
makes much difference. They decide on how taxpayers' money should be
spent.

... or whether it should be spent at all. The Treasury has a
statutory duty to obtain value for money from the taxpayers' money it
invests. Value for money is defined by several parameters that need
to be achieved, notably a real rate of return on the capital sum
invested.

Despite all the concern about the impact of flights on global
warming (due to the altitude of the emissions, they cause more damage
apparently), and I understand aviation is the fastest growing
contributor to greenhouse gases, the Government still favours airlines
for longer-distance passengers. This is evidenced by their opposition
to high-speed rail in the White Paper.

No, those are two separate things. On the one hand, high speed rail
involves very large investments and a rate of return that is not
sufficient to meet Treasury rules. It doesn't meet the needs of
private investors either, which is why the propoters of high speed
rail have no option but to go cap in hand to Government in the hope of
getting state handouts.

From a Government point of view, air travel is much more
cost-effective because the airports are funded by landing charges
which are paid for by airlines out of their revenue. The only cost to
the Government is a small subsidy to air traffic control. The
remainder of the cost is paid by the airlines out of revenue. As a
commercial venture, air travel is low risk and profitable, as long as
governments don't try to run the airlines.

Where there is a will, there is
a way, and the Government can choose to spend the money on HS2 if it
wishes, but as others have pointed out, maybe private industry might
be willing to fund it or contribute.

Once again, you have missed the point. The Treasury will only allow
investment if a satisfactory rate of return can be achieved. Private
industry will not fund it for the same reason. A partnership between
the two doesn't work either - the CTRL project (High Speed 1) hasn't a
hope of ever repaying its construction and financing costs, so why
would High Speed 2 be any different?

As for questioning "why the train?" for travelling from London beyond
Exeter, Cardiff, Preston and Newcastle, that is not the sort of
question asked in other European states! Paris-Marseille in 3 hours,
the same distance as London-Dundee! This would mean London-Edinburgh/
Glasgow in 2½ hours!

The construction of the French high speed lines incurred huge debts
for SNCF and the French government. There is no way those debts can
ever be repaid out of revenue from the TGV services. TGVs make a good
operating profit but the original capital investment will have to be
written off. The economics simply do not stack up.

Actually, for west of Exeter I know someone who
got the train to Exeter St David's and was picked up by colleagues to
drive the rest of the way to a meeting in Liskeard - it was quicker,
so pathetically slow is rail west of Exeter! Taxpayers' money was
spent on upgrading the A38 and other roads. Again, it's the
Government's choice, preferring to upgrade the road system and expand
airports.

94% of surface journeys are made by road. Only 6% are made by rail
(figures from the DfT) Yet rail gets a wholly disproportionate very
high share of transport investment. Road investment in the UK is very
low by European standards.

The Government's vision, and expenditure for rail seems to
be concentrated on relieving overcrowding by provision of extra
carriages and expanded stations, which is all welcome, but perhaps
only what is necessary to prevent railways becoming a vote-losing
issue among commuters.

Government's vision for rail is to address increased ridership while
making the system more cost-effective. That's Government doing its
job. High speed lines are not cost effective. They may possibly
become more cost-effective when greater capacity in the form of new
routes is needed.

Equally, however, the new routes might have conventional trains
running at up to 140 mph on revived outes like the former Great
Central. There is a large credibility gap between the claims made by
enthusiasts for high speed rail and the facts, because the economics
just don't stack up.

Whether that gap can be be bridged between now and the time when those
decisions need to be made (say 2015) is up to the supporters of high
speed lines. They have an awful lot of effort to expend to convince
Government that the figures can be made to work, as they are miles
away right now.

Good Doctor, In regards to Government needing value for money and cost-
effectiveness, does everything the Government spend money on represent
value for money and cost-effectiveness? They seem particularly
anxious to apply these criteria to rail. Now as regards the figures
you quote that DfT and Treasury use to justify minimum investment -
94% land journeys are made by road, and only 6% by rail - this fails
to mention the external and social value that thiose those 6% of
journeys give to everyone, e.g. in reducing road congestion in the
corridors served. Also improved rail links, particularly high-speed
ones, have been proved crucial in bringing regeneration and greater
prosperity to areas served - Lille in northern France being an
example. Also, it has been argued that HS2 to Scotland would be very
profitable due to the large numbers of passengers won from the
airlines, and would represent v good vfm.
Philip

.

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