Screaming "competition" and then actually doing outsourcing is one of the biggest scams in the whole privatisation circus.

Wow, very true! Would you write a diary on this, it should become a classic.

once the decision has been made (typically for a period of several years and typically on the basis of nothing whatsoever but price), there is no competition.

That's not necessarily true in railfreight. In practice, for medium to large sized customers over medium distances, private railfreight competition can be very lively -- and chaotic and too risky. In Germany, it is a quite frequent occurence that some event -- extra demand, breakdown of a locomotive -- leads to a whole cascade of companies lending locos from other operators  (you read that right: one company borrows another's suplus loco, but the second company then discovers it would still need it and borrows a loco itself from a third company) or passing off a regular transport to another company. Always operating on the edge, bankrupcies happen regularly, which mean quick market re-organisations (remaining operators buy up locos and rush in to take customers).

But, I wonder if lower prices are worth the chaos and unreliability for customers. (Then again customer friedliness and fast response are things most nationalised railways could greatly improve upon...)

_{*Lunatic*, n.
One whose delusions are out of fashion.}

Regarding wasteful redundancies in organisation. The IMO most important aspect of these on railways is maintenance. All private operators need regular loco maintenance bases of their own, either that or use the services of some centralised maintenance shops run e.g. by manufacturers.

But this is very inefficient. In an integrated railway, locos can simply go to the nearest maintenance shop. In the open access system, they have to waste many train-kilometres to reach the own or the manufacturer depot. Already the separation of different operations in a to-be-privatised state railway has this effect.

_{*Lunatic*, n.
One whose delusions are out of fashion.}