The focus seems to have turned towards selling parts of the railway which will bring in money to the Treasury coffers.When will this happen and how much are these companies worth?First, none of this may happen. Most services lose money and competition would only spread the loss, while in profitable areas it is difficult to find space on the tracks for extra trains. The rail regulator announced just before Christmas that he did not envisage such new competitors being allowed on to the rails before 1999.Ministers now emphasise the advantage of having private-sector disciplines in the industry. But ministers realised it was very difficult to have two or more companies running competing services on the same track. The train services are now being run by 25 broadly regional companies, called train operating companies which are to be franchised to the private sector.

They have been split from the track and signalling, run by Railtrack, which is scheduled for flotation on the Stock Exchange.Five freight companies are due to be sold as well as three rolling stock companies and 13 track renewal and maintenance companies.Why is the Government doing this despite the unpopularity of the plans?The Government says it wants to improve services and choice. What are the Government’s proposals for the railways?

The privatisation of the railways was a commitment in the 1992 manifesto and fleshed out in a White Paper published that summer.The plan implemented by the Railways Act 1993 is so complicated that ministers often make mistakes when trying to explain it to the public.
The railway has been broken up into a series of businesses. It would cost an estimated £4bn to restore Railtrack to total public ownership. The group is studying the scope for buying back a controlling share, if only 51 per cent is sold. Members of the group are confident it will not be sold before the next general election, because of the unpopularity of the privatisation.Dr Mawhinney has told colleagues he is facing presentational difficulties in explaining the role of the rail regulator, whose proposal to cut through- ticketing stations has caused controversy.The regulator is also about to announce the rates that franchise holders should pay Railtrack, to be followed next month by a potentially contentious announcement on minimum service standards.Leading article, page 13.

He is also determined to privatise Railtrack, creating a further problem for the Prescott group. Labour’s commitments have stopped short of a pledge to “renationalise” British Rail. Mr Prescott’s team is keenly aware that an incoming Labour government would not have the resources to spare to buy back assets that have been privatised.The team’s key strategy is to stop privatisation by warning franchise bidders that a Labour government would use the regulator to impose higher standards of service and safety, cutting their potential profits.Brian Mawhinney, the Secretary of State for Transport, will tell Labour in a Commons debate tomorrow that the franchises will go ahead. How to deal with the franchise operators is one of the most pressing problems facing the group, which includes Gordon Brown, the shadow Chancellor, and Michael Meacher, shadow Secretary of State for Transport. “Nothing is set in concrete.”However, Mr Prescott’s remarks on BBC radio showed no equivocation. It could lead to renewed demands for a tougher commitment as part of the campaign by traditionalists to defend Clause IV of Labour’s constitution.Senior Labour leadership sources later said Mr Prescott was giving examples of the options now facing the rail policy group, which he chairs.

But BR will clearly be operating the major part of those services. Now, when those contracts are up, we want a publicly owned and publicly accountable railway and we are entitled then to allow BR to bid for those franchises.”His disclosure is likely to dismay unions who were reassured by Mr Prescott’s commitment 24 hours earlier that Labour would operate the railways as a “publicly owned, publicly accountable” service. Some of the contracts will run for six years or more.
Rather than buy out contracts and pay compensation to the operators, Labour would allow them to run their course and then allow British Rail to bid for the business.Asked on BBC radio whether Labour would have a publicly owned railway which allowed privately run services to operate on it, Mr Prescott replied: “We will allow those contracts to continue, so the answer to that would be `yes’. Mr Prescott said that a Labour government would continue the contracts, which the Government is preparing to offer for about half of the 26 train-operating companies to run private services.