Railway nationalization is the act of taking rail transport assets into public ownership. Several countries have at different times nationalized part or all of their railway system.
More recently, the international trend has been towards privatization. In some areas, notably Great Britain, resultant problems with track maintenance have led back to a more mixed solution, with a nationalised infrastructure operator but privately run train operating companies.
National characteristics influenced the structures under which countries' rail networks developed. Some national railways were always under direct State management, some were State-planned but privately operated (as in France), others were wholly private enterprises lightly regulated (as in Great Britain, Ireland and Spain).[citation needed] Nationalization was therefore a bolder step to take in some countries than in others. While ideology has played a role, so too has the need for systematic reconstruction of vital infrastructure devastated by war, often following a period of state control over private companies initiated during the conflict.
Russia
Railroads in the Russian Empire were built by both the state and capitalists. After communist takeover the whole railway system was brought under the state control and remained so after fall of the communist rule. Nowadays the Russian Railways state-owned company holds monopoly on this sphere of transportation.
The Argentine railways developed with private British, Argentine and French capital and were nationalized by the state in 1948 during President Juan Perón's first term of office and merged into the existing state-owned railways. In the 1990s, following Carlos Menem's neoliberal reforms, services were privatized through concession, with infrastructure still belonging to the state. After a series of high-profile accidents and serious deterioration of services under privatization, most rail lines have returned to state control by 2015, in effect re-nationalizing them.
In 1878, the French government took over ten small failing railway companies and established the Chemins de fer de l'État. The company absorbed the Chemins de Fer de l'Ouest in 1908. In 1938, the French state took 51% ownership of the newly formed SNCF merging of France's five main railways (100% in 1982).
Germany
The earliest railways in the German states were often run by private entrepreneurs. Beginning in 1879, the Prussian government nationalized the major railways.[1] After World War I, the German Reich took over control of the state railways of Prussia, Bavaria, Saxony, Württemberg, Baden, Mecklenburg-Schwerin, Hesse and Oldenburg. The individual railways were merged into the Deutsche Reichsbahn-Gesellschaft in February 1924.[2] The DRG was the largest publicly owned company in the world when the Nazis privatized it in 1937. In the lead up to, and during, World War II the DR assimilated a great number of railway companies in the German-occupied territories as well as several smaller, previously privately owned lines in Germany.
Post-World War II, after being under Allied administration between 1945 and 1949, the DR was split up into the Deutsche Bundesbahn and Deutsche Reichsbahn (East Germany), both state-owned. Private railways continued to exist in the West German realm of the DB, but DB and DR accounted for most of the rail traffic in post-war Germany. After German reunification, DB and DR became Deutsche Bahn in 1994.
Whilst DB AG is a public limited company, all its shares are presently owned by the government of the Federal Republic of Germany. DB AG is now facing stiff competition in the freight and short-distance passenger sector (the latter of which is subject to franchising), although they still hold a quasi-monopoly in the long-distance passenger sector (which does not receive subsidies), which was starting to crack until the opening of the long-distance bus market destroyed the business case of any open access competition. The IPO, originally planned for 2008, has been postponed indefinitely and is currently not on the agenda of any major political party.
India
Indian Railways has been state owned since 1951. However, in 2020, the Modi government announced plans to privatize some routes. But as per the articles published in various media reports Railway Minister Sh. Piyush Goyal assured that Railway will never be privatized however private investment will be encouraged for efficient functioning of National Transporter.[3]
Ireland
In Ireland CIÉ was formed from the merger of the Great Southern Railways with the Dublin United Transport Company on 1 January 1945. Initially a private company limited by shares, CIÉ was nationalized in 1950. The final privately owned mainline railway company on the island, the Great Northern Railway, was nationalized under joint control of the Irish and Northern Irish governments in 1953. It was wound up in 1958 and its assets split between CIÉ and the UTA.
Following unification, the Italian Government entrusted the railways to five regional concessionaires. The arrangement did not work well and, long before it was due to expire, the railways were nationalized in 1905. The nationalized operator is known as Ferrovie dello Stato. Italy has an open access high-speed rail operator competing against the national railway; Nuovo Trasporto Viaggiatori which is part owned by SNCF and private investors.
Japan
In Japan, the Railway Nationalization Act of 1906 brought most of the country's private railway lines under public control. Between 1906 and 1907, 2,812 miles (4,525km) of track were purchased from seventeen private railway companies.[4] The national railway network grew to about 4,400 miles (7,100km) of track, and private railways were relegated to providing local and regional services.[4] In the 1980s the process of privatizing Japanese National Railways begun that is not entirely finished as of 2016 with both entirely state and private members of the JR Group.
Spain
After years of declining profitability, the national rail network was devastated by the Spanish Civil War. In 1941, the broad gauge railways were nationalized, as RENFE (Red Nacional de los Ferrocarriles Españoles). The narrow gauge railways were also later nationalized; some of these have since been transferred to the autonomous regional governments where contained within a single region. The standard gauge high-speed lines were built as a state owned venture from the start.
United Kingdom
Rail Passengers in Great Britain from 1829 to 2021
In 1914, the railways were taken into Government control - but not ownership - due to World War I, but were returned to the original owners in 1921, three years after the war had ended. However, in that same year, the government introduced the Railways Act 1921. This forced the 120 railway companies then operating to merge into just four. This grouping officially took place on 1 January 1923. The four railway companies formed from the grouping were: The Great Western Railway, the Southern Railway, the London & North Eastern Railway, and the London, Midland & Scottish Railway. After World War II, the railways were taken into State control. They were heavily damaged by enemy attacks and were run down aiding the war effort, as well as still suffering financially from the Great Depression even with it mostly ending before the war. After the war, the Transport Act 1947 provided for nationalizing the four major railways. On January 1, 1948, the railways were nationalized and British Railways was created, under the overall management of the British Transport Commission, later the British Railways Board.
Railways in Northern Ireland were nationalized in the 1940s under the Ulster Transport Authority (UTA). The former LMS lines managed by the Northern Counties Committee, nationalized by the Westminster government, were sold to the UTA by the British Transport Commission in 1949.
British Rail was privatised between 1994 and 1997, involving the transfer to a series of private-sector operators of responsibility for the provision of services under contract. In all, more than 100 companies took over from British Rail. In 2001 the track operator Railtrack went bankrupt; it was reconstituted and renamed as Network Rail, a private company with no legal owner but effectively government-controlled via its constitution and financing. The United Kingdom government continues to invest in the railways, financing, for example, the acquisition of some InterCity rolling stock.[citation needed]
The positive impact of privatization is disputed, with passengers numbers more than doubling (see graph) and increasing customer satisfaction[5] balanced with worries about the level of rail subsidies and criticism of the fact that much of the system is now contracted out to subsidiaries owned by the state owned railways of France, Germany and the Netherlands.[6]
Only 20% of Southern trains arrived on time in the year from April 2015 to March 2016, and there was an ongoing industrial dispute over driver-only operated trains.[7][8] In June 2016, amongst criticism of the performance of its services, Go-Ahead Group warned of lower than anticipated profits on its Govia Thameslink Railway franchises, leading to 18% drop in the Go-Ahead share price.[9]
Unlike British Rail, the Northern Ireland Railways remain state owned.
The franchisee system for passenger rail effectively ended in March 2020, when the Department for Transport switched every passenger line to an "Emergency Measures Agreement",[10] whereby the franchisees would still operate the line, but the government would take all cost-risk and all revenue.[11] This was initially supposed to be a temporary measure to keep trains running during the pandemic, but in September 2020, the Minister for Transport, Grant Shapps published a press release entitled "Rail franchising reaches its terminus as a new railway takes shape".[12] The government acknowledged in this release that rail privatisation "was no longer working",[13] and that a transition away from privately run passenger rail would begin with "Emergency Recovery Measures Agreements" with rail franchisees, which have much stricter guidelines that operators must adhere to.[14]
It took control of the railways on 28 December 1917, and introduced several reforms to increase efficiency and reduce costs. It standardized rolling stock and steam locomotive designs. The war ended in 1918.
In March 1920, control of the railways was returned to their original owners. Freight operations and most of the track have remained private enterprises, even as changing markets forced railroad companies to restructure in the post-World War II years. On December 27, 1943, President Roosevelt nationalized the railroads for a few weeks to settle a strike.[15]
Due to changes in transportation after the construction of the interstate highway system in the postwar years and a shift to trucking, railroads in the late 20th century went through widespread restructuring and reduction. Passenger traffic particularly had declined as more families owned and used private automobiles or took flights for long distance trips. Under President Richard Nixon, Amtrak was established to try to continue passenger operations by using existing tracks. It has been subsidized in order to continue service to some areas that had no alternative transportation, as well as to relieve congested roadways in more dense areas, as on the Northeast corridor. Amtrak subsequently bought some tracks from bankrupt railways as well as Conrail.
Gatwick Express is an express rail passenger service between London Victoria, Gatwick Airport, and Brighton in South East England. It is the brand name used by the Govia Thameslink Railway train operating company on the Gatwick Express route of the Thameslink, Southern and Great Northern franchise.
Southern is the brand name used by the Govia Thameslink Railway (GTR) train operating company on the Southern routes of the Thameslink, Southern and Great Northern franchise in England. It is a subsidiary of Govia, a joint venture between transport groups Go-Ahead and Keolis, and has operated the South Central franchise since August 2001 and the Gatwick Express service since June 2008. When the passenger rail franchise was subsumed into GTR, Southern was split from Gatwick Express and the two became separate brands, alongside the Thameslink and Great Northern brands.
The Deutsche Bahn AG is the national railway company of Germany, and a state-owned enterprise under the control of the German government. Headquartered in the Bahntower in Berlin, it is a joint-stock company (AG) and the largest railway company in the world.
The privatisation of British Rail was the process by which ownership and operation of the railways of Great Britain passed from government control into private hands. Begun in 1994, the process was largely completed by 1997. The deregulation of the industry was in part motivated by the enactment of EU Directive 91/440 in 1991, which aimed to create a more efficient railway network by creating greater competition.
A train operating company (TOC) is the term used on the railway system of Great Britain for a railway undertaking operating passenger trains under the collective National Rail brand. TOCs have existed since the privatisation of the network under the Railways Act 1993.
The Go-Ahead Group Limited is a passenger transport company based in Newcastle upon Tyne, England. The majority of its operations are within the United Kingdom, Ireland, Australia, Singapore, and Norway. Go-Ahead was formerly listed on the London Stock Exchange prior to being purchased by Kinetic Group and Globalvia by 2022.
The history of rail transport in Germany can be traced back to the 16th century. The earliest form of railways, wagonways, were developed in Germany in the 16th century. Modern German rail history officially began with the opening of the steam-powered Bavarian Ludwig Railway between Nuremberg and Fürth on 7 December 1835. This had been preceded by the opening of the horse-drawn Prince William Railway on 20 September 1831. The first long-distance railway was the Leipzig-Dresden railway, completed on 7 April 1839.
Keolis is a French transportation company that operates public transport systems all over the world. It manages bus, rapid transit, tram, coach networks, rental bikes, car parks, water taxi, cable car, trolleybus, and funicular services. Based in Paris, France, the company is 70% owned by SNCF and 30% owned by the Caisse de dépôt et placement du Québec.
The Southern Region was a region of British Railways from 1948 until 1992 when railways were re-privatised. The region ceased to be an operating unit in its own right in the 1980s. The region covered south London, southern England and the south coast, including the busy commuter belt areas of Kent, Sussex and Surrey. The region was largely based upon the former Southern Railway area.
Govia is a transport company based in the United Kingdom. It was formed in November 1996 as a joint venture between Go-Ahead Group (65%) and Keolis (35%) to bid for rail franchises during the privatisation of British Rail.
First Capital Connect (FCC) was a British train operating company, owned by FirstGroup, that operated the Thameslink and Great Northern sectors from April 2006 to September 2014 which later became the Thameslink, Southern and Great Northern (TSGN) franchise.
Thameslink was a train operating company in the United Kingdom owned by Govia that operated the Thameslink franchise between March 1997 and March 2006.
London & South Eastern Railway Limited, trading as Southeastern, was a British train operating company owned by Govia that operated passenger rail services in South East England. It was the key operator of commuter and regional services in South East London and Kent, and also served parts of East Sussex.
Passenger rail franchising in Great Britain is the system of contracting the operation of the passenger services on the railways of Great Britain to private companies, which has been in effect since 1996 and was greatly altered in 2020, with rail franchising being effectively abolished in May 2021.
Thameslink, Southern and Great Northern (TSGN) is a management contract for the provision of passenger services on the Thameslink and Great Northern routes to Bedford, Luton, Peterborough, King's Lynn, Cambridge, London King's Cross, London Moorgate, Sutton, Wimbledon and Brighton, as well as the whole Southern network and the jointly operated First Capital Connect Southeastern services, which were added to the franchise on 25 July 2015, with the Southern and Gatwick Express brands retained.
Govia Thameslink Railway (GTR) is a train operating company that operates the TSGN rail franchise in England. Within the franchise, GTR runs trains under the sub-brands Thameslink, Great Northern, Southern and Gatwick Express. GTR is a subsidiary of Govia, which is itself a joint venture between the British Go-Ahead Group (65%) and French company Keolis (35%).
The Association of British Commuters (ABC) is a UK passenger lobby group for people who commute. It was formed in September 2016 by a group of passengers, disaffected by Govia Thameslink Railway's service on the Southern routes of the Thameslink, Southern and Great Northern franchise, after months of delays, cancellations, overcrowded conditions, and strikes.
DfT OLR Holdings Limited (DOHL) is a holding company established by the Department for Transport in the United Kingdom to act as operator of last resort for rail franchises that are nationalised.
References
↑ Ing. M. Alberty, Der Übergang zum Staatsbahnsystem in Preussen (Jena: Verlag von Gustav Fischer, 1911)
↑ Verordnung über die Schaffung eines Unternehmens "Deutsche Reichsbahn" vom 12. Februar 1924, RGBl. I Nr. 10, February 14, 1924, p.57
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