Rail privatization or a rational transport policy?
PRIVATIZATION of the railways — planned in many
European countries — will bring profits for some but losses for many more.
German Marxist economist
Winfried Wolf who has written many books on transport questions looks at
### UPDATE
Danish parties agree compromise on Maastricht ON October 27, seven of the eight political parties represented in the Danish Parliament agreed on a national compromise about Denmark's future role in the European Community (EC). The agreement is now the mandate for the government in forthcoming negotiations with the other EC countries.
According to the agreement, Denmark will not participate in the parts of the Maastricht accords concerning 1) common defence policy 2) the third phase of the economic union, i.e. common currency and a European central bank, 3) European citizenship and 4) common police and asylum policy.
Now the two big questions are: can the agreement be turned into a concrete proposal by negotiations with the other EC contries? and, would such a proposal be accepted in the next referendum set for 1993?
Both are quite possible. The compromise may look like a rejection of the main ideas behind the Maastricht accords, but it should be remembered that Denmark had, even before the June 2 referendum, expressed reservations about participation in the (military) West European Union and about the third phase of the economic
In short, the compromise can be characterized as a formula which can avoid a break with the EC as such but leave Denmark back in the last wagon - at least for the time being. European integration will continue in other areas, such as economic policy (second phase of economic union); indeed, the Danish compromise underlines the single market.
In parliament only the rightwing Progress Party is against the compromise, standing firmly on the "no" not criticized the details.
Of particular importance is the position of the left social democratic Socialist Peoples Party (SF) which recommended a "no" on June 2. Now it is behind the national compromise, which, indeed, was drawn up by SF, the Social Democracy and the Liberals and then accepted by the government.
Among other things this is a sign of new parliamentary alliances in Danish politics and probably of the coming of a new Social Democrat-led government quite soon. SF's position in negotiations over the compromise was determined by its hopes Skovrind — October 29, 1992 *
, but so far the party has the reality behind the claims made by those promoting the privatization of rail in his country. WINFRIED WOLF*
N JULY 1992, the German government took a crucial decision for the future of German railways. On January 1, 1994, the two railway companies — the Deutsche Reisenbahn (DR) from the former German Democratic Republic (GDR -East Germany) and the Deutsche Bundesbahn (DB) from the former West Germany will be transferred to a newly created limited company, the Deutsche Eisenbahn Aktiengesellschaft (DEAG).
For an initial period all shares in DEAG will be state-owned but the government is intending to sell off the profitable parts to the private sector. Precedents both from Germany and elsewhere such as the two-step privatization of the Japanese railways in 1987 and 1991, the proposed privatization of British Rail or the dismemberment of the German postal service, show where things are heading.
For the moment, however, the details have not been spelt out. There are two reasons for this:
• Firstly, it is extremely difficult to organize the privatization of railways for simple material reasons - for example the difficulty of separating the * This article is translated from the French version which appeared in the Swiss revolutionary Marxist journal La Brèche in its October 2,1992 issue.
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International Viewpoint # 238 • November 9, 1992
TRANSPORT
Privatization coupons tracks from the rolling stock. The privatization of Japan National Railways was relatively simply because at the time car ownership was quite low in Japan, making rail a more profitable industry than in Europe or North America. Even so, the privatization cost the Japanese taxpayer some tens of billions in US dollar terms.
• Secondly, public opinion, railworkers and clients have to be kept in the dark as to the catastrophic consequences of rail privatization. The formation of DEAG is presented as a move in the interests of rail, favouring a more efficient and ecologically acceptable rail system.
Sympathy for the taxpayer
However, it is money that is the key. German Chancellor Helmut Kohl, the transport minister Günther Krause and the head of DR and DB, Heinz Dürr repeatedly insist that this reform will be to the taxpayers' benefit. This is, nonetheless, the opposite of the truth. The reform will mean:
• The creation of a railway for the
• The loss of between 150,000 and 200,000 jobs.
• A massive rise in costs for tax-
As usual the plan is to "privatize the profits and socialize the losses" as Gerfried Scholtz, a leader of the Herman GDBA railway unions has put it. This union has always been thought of as inclined to cooperation with manage-
Another rail union, the GdED, which has always been opposed to privatization at the level of its paper resolutions, seems to have done an about turn over the past year at least as far as its leaders 8 king at the details of the privatization are concerned, restricting itself to pic-
But don't we already own state property? plan.
The same variants are found amongst the Greens and associations concerned with transport issues. There has thus far been little fundamental criticism of privatization as such. However a serious defence of the environment and human values requires a rejection of the logic of the market and its destructive tendencies as is perfectly illustrated by the rail privatization project.
"State economics in general and in the railways in particular are inefficient and costly" claim Kohl, Krause and Dürr. They call for the most thorough and rapid "orientation according to enterprise economics"
In fact, when social activities are entrusted to the private sector there are always serious disadvantages for the community. For example, in olden days taxes and tolls were collected by private entrepreneurs; in the Middle Ages private armies carried on private wars on the current Yugoslav model, private schools catered only for the privileged few and water privatization in Britain has led to further deterioration of the quality of water.
### General satisfaction
It became obvious a long time ago that, even from a bourgeois point of view, if certain services were to be run to general satisfaction, they would have to be run according to other criteria than that of short term profit maximization. This is the case for transport in general and railways in particular.
Until the end of the last century most railways were privately owned. They were nationalized throughout the world insofar as it became necessary to maintain comprehensive national networks rather than a few profitable lines.
Where railways remained in private hands, as in the United States, they have almost disappeared. Where the state has taken a close interest, as in France or Switzerland, they are still in excellent health. Where they have been recently privatized, as in Japan, there has been a massive shutdown of lines and cuts in jobs, a decline in safety and a sharp rise in the price of tickets.
The privatization of bus services in Britain has had the same consequences. In the three years since the sell off there has been no new investment. The average age of the vehicles has risen exactly parallel to the length of time since privatization — to 12 years. Schedules have been cut back and ticket prices raised. Britain's transport planners tremble at the prospect of 1993 when London's still relatively efficient public transport is to be privatized.
"The DR and DB are bottomless pits of subsidies" say Messrs. Kohl, Krause and Dürr. And indeed the official deficit of the two companies for 1992 will be about DM6bn. But an essential aspect of the rail deficit is overlooked. Four fifths of it is interest payments of a DM55bn debt accrued over 45 years. But this debt is the result of a transport policy that has favoured and subsidized road transport for decades. At the same time the railways have had to pay normal interest rates. This is thus not a railway debt but a state debt. If it was considered as such and put to one side, the companies annual deficit, despite policies favouring roads, would be
Ecological content
A transport policy with the slightest ecological content would approach the deficit differently. For example a rise in petrol tax of a mere DM0.20 would raise an additional DM8bn in income. Such a sum used effectively for public transport and rail would not only wipe out the debt but would permit significant modernization and development.
"The DEAG will be freed of debt and this will open new perspectives for rail in Germany", we are told. Ah hah! Suddenly the debt ceases to be a pro-
Unfortunately there is debt relief and debt relief. Supporters of public rail services have called for debt relief so that the rail companies can get on with fulfilling their task of providing transport and services to the community and so that the share of rail in the total volume of transport can be increased. For Kohl and co. the aim of debt relief is to remove a disincentive to private investors interested in buying into
Privatization means concentrating on
European railworkers take joint action
EUROPE's first ever day of joint union action, called for October 27,
1992, by 26 unions from European Community countries to protest against plans for rail privatization, was widely supported by railworkers.
"Railworkers will stop the trains so that passengers can still catch
TRANSPORT figure for road deaths than for the gross national product. In the next ten years around 100,000 people will be killed on German roads and a million seriously wounded. It is telling that these costs, both human and material, which are them in the future" said the appeal for the action. In France, where the movement was supported by all the unions, the railworkers went beyond the one-hour stoppage agreed on, with interruptions of services throughout the day. The one-hour halt was widely observed and there was a big demonstration outside the offices of the French SNCF state rail company. In Belgium and Greece no trains ran between 11am and midday while there were many interruptions of services in Italy and
Spain. In Portugal, where only one of the union confederations, the
CGTB, supported this initiative, some 20,000 workers stopped work.
In Germany where the right to strike is limited to economic demands, the railworkers distributed leaflets and unfurled banners; the same was true in Britain where solidarity strikes are prohibited.
Throughout Europe the notion of profitability is replacing that of public service, following the European directive of June 20, 1991, which calls for the "purification of the financial structure of rail companies".
In line with this EC policy, British Rail will be split into two companies from 1994 onwards, a public company entrusted with managing the tracks and another dealing with passenger and freight traffic, which is destined for privatization. Germany is not far behind (see ding article); here the rail companies will be divided three ways, one for passengers, another for freight and the third for track.
In Italy the Necci plan envisages two companies, one, to go private in 1995, will get the profitable parts of the network and the other, to remain in state hands, will inherit all the debts and difficulties.
In France the SNCF has already got rid of tens of thousands of jobs and imposed a decline in working conditions and safety and there is a plan to split the company up on the same lines and with the same aims as elsewhere.
This is the sort of "convergence" envisaged in the Maastricht Treaty on European union; hopefully the workers' day of action will usher in a process of "counter-convergence" to defend the interests of railworkers and users against the plans embodied in the Treaty. - Helene Viken * profitable fields and shunning the lossmaking. The latter will be shut down or given to regions and municipalities.
The result of privatization will be a reduced rail service and an increase in individual transport. The demand for debt relief for rail has been rejected for decades; now, in a perspective of privatization, it has suddenly become accep-
"There is no reason to treat railway workers like protected species" exclaim the privatisers. In fact between 1980 and 1991 the DB got rid of 120,000 workers which means that now railworkers work some six million hours of non-paid overtime.
At regional and local level schedules have been repeatedly cut back, safety norms lowered, and services such as baggage handling allowed to deteriorate. However now the time has come for another massive cut in staffing levels.
On July 14 the Frankfurter Rundschau announced that a third of the 426,000 staff are to go in the next eight years".
You often hear people say that things cannot go on as they are on the railways and for that reason we have to support the reform. But this is not true from a financial point of view. The taxpayer is not going to pay less. Indeed according to some estimates costs may rise sharply between now and the year
The privatization plans take no account of the costs of sharp cutbacks in personnel. The reform will mean about 150,000 job losses in rail and dependent industries. That is, 150,000 more unemployed people on top of the three million officially recorded in July 1992. This means a further DM4.5bn in unemployment benefit and other forms of welfare.This is getting close to annual deficit of the railways. On top of this are the social costs of a further decline in rail and increases in individual car transport - for example the "costs" that accompany the annual carnage on the roads with 11,248 dead and 503,636 injured in 1991).
### Carnage on roads
These days it is easier to predict the specific to road transport and are several times higher per kilometre travelled than for other forms of transport, never appear in the calculations of the people brandishing the red pencil over the lack of profitability of the railways.
"The new transport policy gives priority to rail" according to Kohl, Krause and Dürr. The grand German transport plan (GVWP) foresees an overall growth in traffic and in road traffic in particular. The GVWP optimistically predicts by the year 2010:
• A growth in individual car traffic
• Road goods transport growth of
• Internal air traffic growth of 140%.
At best, rail will keep its share of the total, at least for carrying people. Its share of goods transport will certainly fall sharply.
These are official government forecasts, which have always in the past been marked by a rosy view of road transport. A recent forecast from the Shell petrol company has predicted a rise in the number of individual cars of 30% by the year 2000 - half the time predicted by the GVWP. Such predictions do not include the impact of massive road construction.
Der Spiegel has written that "transport minster Krause aims to cover the 11,000 kms of road, mostly in the West". But there is a rule that whoever sows the road reaps the traffic. New roads, or indeed new canals such as the new Rhine-Main-Danube canal will take traffic away from rail.
### Emission of pollutants
What is certain is that the emission of pollutants by road traffic will continue to grow. The Federal Environment Office has already noted that even the GVWP figures mean that "the promised reduction in CO, transmissions cannot be implemented"
"The GWP offers the new [East German] regions a modern transport policy". In fact it will the citizens of the ex-GDR who will bear the heaviest cost for these mistaken policies. Currently an orgy of road and concrete construction is underway in the east, facilitated by laws favouring investment and undermining the modest efforts in defence of the environment. Further- 9 more, the biggest job losses will be in
International Viewpoint # 238 • November 9, 1992
TRANSPORT / EUROPE the former East German rail company and dependent industries, while line closures will have their biggest effects there.
"We are finally doing something for the railways". In fact, the application of an exclusively profit-based policy must lead to massive cutbacks. These cutbacks will hit those already disadvantaged who do not have a car, but who similarly cannot pay for the privilege of travelling on a profitable luxury rail service aimed at the elite to which the likes of Kohl, Krause and Dürr belong.
Of course it would be foolish to deny that the existing service is ideal. But privatization is not a solution to the real problems; these will be compounded
A sane transport policy
A sane transport policy would involve:
• A policy of the "shortest route"; the distance between housing, workplaces, and shopping and leisure centres should be drastically reduced;
• A big campaign to promote walking and cycling;
• Firm priority for public transport;
• Modernization and development of the European rail network instead of giving priority to a few high speed lines at the expense of the rest;
• No privatization:
• Debt relief for the railways;
• Abandonment of megalomaniac projects such as the Hamburg-Berlin magnetic high speed train and a shift of the money saved toward the broader objectives mentioned above;
• A rise in petrol prices through a tax increase to provide finance for (1) the modernization of the railways and public transport in general and (2) the acceleration of rail traffic throughout the network through interlocking of schedules;
• Restrictions on truck traffic; a ban on night driving; development of roadrail combinations so that long distance goods traffic goes by rail with only the final distribution by road; generalization of road-rail containers.
Such a policy would require new democratic structures. Transport policy should be the object of a wide public debate in which an ecological and democratic point of view could be put forward.
Rail should be effectively under the control of its users. Switzerland's railway network has largely survived owing to the influence of the country's 10 cantons and communities. *