The various private rail franchises in Britain have all had their share of difficulties. East Coast actually collapsed, and was renationalized. As a public concern, it has outperformed the private rail franchises.
So now, of course, it is being reprivatized.
Owen Jones in The Guardian, possibly indulging in a spot of hyperbole, says that this suggests that the very success of the public concern is the reason why “free market ideologues” now wish to reprivatize it. East Cost, he writes, has “embarrassed the government with its success”.
East coast depended on less public subsidies than any of the 15 privately run rail franchises. Indeed, the franchise has proved a lucrative cash cow for the state, bringing in around £1bn to the exchequer since 2009.
His colleague Aditya Chakrabortty claims that private rail private franchises are simply a way to move money from the public purse into private ownership.
What all this resembles is a looking-glass version of capitalism. The public are handing money to private businesses for them to take a clip and pay us back the rest. ... And as we’ve seen repeatedly with the east coast line, the ones who don’t make a profit can simply walk away, dumping their service back in public hands. Heads they win, tails you lose.
The obvious implication is that the reprivatized East Coast will simply be a mechanism to give public money to Richard Branson, but this seems unlikely as an actual motive for the actions of the government.
So what is the stated reason for the government’s decision, official or otherwise? Do they offer any explanations for this action?