Tue Apr 21st, 2009 at 09:42:21 AM EST
Last week, the liberal party in the EP, ELDR, wrote a letter to the PES and the socialists across Europe. (Hat-tip to nanne.) It is a depressingly crude recital of the market-liberal faith, in the era of the economic crisis brought by that faith. For a light touch, you best read ThatBritGuy's excellent parody. With more seriousness, below, I deconstruct only a single sentence: the through-the-looking-glass part on railways.
Successful cross border projects such as the Thalys or the Eurostar project have served the European consumers while German state-owned railway services become constantly more expensive.
...except they forgot to check the owners of Thalys and Eurostar, the reason for the German railways' woes, and the performance of other state railways... this is like an old Soviet-time joke.
Der Reihe nach...
- Thalys is a subsidiary company owned entirely by SNCF, SNCB and DB: the French, Belgian and German state railways, respectively...
Eurostar was owned entirely by three state railways, too: SNCF, SNCB and British Rail. After the privatisation of the last one, its share in Eurostar was given to a private company, but even that company contracted operations out to a consortium – 50% of which is again owned by SNCF and SNCB...
- Both Thalys and Eurostar provide services thanks to new high-speed lines built & maintained by others (in effect, a form of externalised costs). While for Thalys, those others happen to be simply the constituting state railways resp. state infrastructure managers; for Eurostar, one could say more – it uses:
- the SNCF-built LGV Nord in France – built largely on budget and time;
- the SNCB-built LGV 1 (ex la branche Ouest) in Belgium – built with some delay;
- the public-private partnership High Speed 1 (ex CTRL) in Britain - finally built as a PPP project after long inaction, largely on-budget but that budget was rather heavily overpriced;
- the privately built and operated Eurotunnel – built with delay, and as a financial disaster.
- The German state railways is indeed not in the best possible shape. However, I'd argue that that is the result of mismanagement due to a long adherence to market-liberal ideology.
First, for two decades now, the top goal is to prepare the company for stock market listing. In practice, this meant anorexic cost cuts, and re-organisations that disrupted operations.
Second, mismanagement was not only the result of the goals, but the choice of mis-managers, too. Falling for the neoliberal cult of managers, which worships CEOs as hyper-productive wizards who achieve profit in any field without knowing the technical details, DB's top echelons were staffed with managers from the private sector – and non-rail private sector at that.
Three of the last four CEOs were such private sector champions with no prior knowledge about the workings of railways. (The fourth was a political nominee, an equally rail-clueless economy ministry career bureaucrat.) The last change at the helm was just this month: the previous one was forced to resign in the wake of a scandal about spying on employees, the new CEO is Rüdiger Grube – until now a Daimler manager and EADS supervisory board member...
- The liberals' actual claim about DB's bad performance is that services are getting more expensive. I guess this is backed up by nothing but the belief in competition resulting in reduced prices. Well, the only price cuts on railways I can think of now were special fares to compete with budget airlines – something even DB did.
- Finally, it is rather strange that the ELDR guys had to go as far as Germany for a comparison to Eurostar and Thalys aint' it? Why not pick something closer: SNCF? With well-run TGV services, which, incidentally, include cross-border services to almost all neighbours... Or, one example is no example, what about the well-run AVE services of Spain's state railways RENFE?...
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