Privatising Network Rail will mean more fare rises, union says


Privatising Network Rail could result in annual fare rises of 15% or an increased cost to the taxpayer of £1.4 billion a year,  a rail union has warned. 

The Rail, Maritime and Transport union said the figures were calculated on the basis of profits private investors would take and the additional costs that would be accrued by the outsourcing of rail maintenance.

NR's predecessor Railtrack had a profit margin of 8% and today's investors will want the same, according to the union.  

The warning was made ahead of a report on the future of NR by Nicola Shaw, expected to be published in the coming days, with speculation that she will recommend part privatisation.

RMT general secretary Mick Cash said: "It has been widely trailed that the Shaw Report, expected to be published this week, is likely to give the green light to the further break-up and privatisation of the publicly-owned Network Rail.

"Our research shows that not only would such a move hammer down on safety it would also hit passengers in the pocket with massive increases in fares to pump up the private sector profit margins.

"In the week when the country is braced for even more austerity from (George) Osborne's Budget, passengers who already pay the most expensive fares in Europe will be appalled when they find out that the real burden of delivering returns to the private sector will fall directly to them.

"RMT will fight any attempt to bust apart the Network Rail operation and sell it off piecemeal in a return to the corporate greed and lethal days of Railtrack."

A Department for Transport spokesman said: "Safety and value for money for passengers and taxpayers will continue to drive our approach to the railways.

"Rail fares are supporting the biggest modernisation to the railways in over a century but we do not want hardworking people to pay more than necessary.

"That is why we have capped regulated fares for the past three years and up to 2020.

"The Shaw report is independent and we will consider its recommendations carefully once it is published."