Monday, 16 July 2012

Who should pay for railways?

I came across the amazing story of the Milwaukee Road quite by chance - it was not a story I knew, but it certainly impressed me and gave me food for thought. Just look at the postcard below - you could have beheld this scene 90 years ago up in Washington State's Cascade Mountains (from the Panecki collection of vintage railroad postcards).

The Chicago, Milwaukee, St Paul and Pacific Railroad, to give it its full name, was the fourth railway line to link America's Midwest to the Pacific ocean. The Pacific extension was privately financed. Soon after it opened, in 1909, the line's directors realised that steam was no good on the mountainous sections in winter, where temperatures fell to -40F (which, coincidentally is also -40C). Electricity was the answer. Hydroelectric power was abundant in the Cascade and Rocky mountains, cheaper than coal.

Five electric engines were built in 1919 (at the same time as Poland regained independence!) for the line; the General Electric EP-2 Bipolars, powered by 12 motors, one in each axle. There were no gears; the engines ran silently. (And British gricers take note - this was 35 years before the electrification of the Manchester-Sheffield Trans-Pennine route!)

The EP-2 locos were amazingly powerful (as well as being 100% green); they were technical marvels; totally reliable, not needing any major refurbishment until 1953. Above is a publicity photo from the early 1920s showing an EP-2 in a tug-of-war with two steam engines, which the electric loco won.

By 1925 the Chicago, Milwaukee, St Paul and Pacific Railroad was bankrupt. It pulled itself up somehow, surviving the Great Depression despite going into bankruptcy again in 1935. After a post-war revival in fortunes, in 1973, the line was disastrously de-electrified just as oil prices were going through the roof. The last train ran over the Milwaukee Road's Pacific extension in 1980, the line was closed. Thankfully, 300 miles (480km) has been converted to a cycle- and walking path, which can be returned to rail should the economic need arise.

Above: view from inside the Snoqualmie Tunnel, now part of the John Wayne Pioneer Trail (photo Jose D. Saura). At least the trackbed has not been abandoned to nature (or turned over to the automobile).

America's great economic dynamism of the late 19th and early 20th Centuries was built on railways and steel, driven by private entrepreneurs not by state planners. Post-WW2, it was the federally-financed highways that boosted the US economy. The car lobby often forgets that roads are planned and paid for by the public sector. Is there not an argument for insisting that governments the world over have a duty to provide rail infrastructure? Rail operators should be private companies - just as bus operators or car hire companies have no right being state-owned - but rail infrastructure needs to be planned, paid for and maintained by the state, just as roads are.

You quibble? During the 19th Century, Britain became the world's most powerful empire largely because of its intensive railway network, linking coal mine to steelworks to sea port to cotton mills to markets; linking metropolis to the provinces, bringing business and jobs and creating wealth. Yet few of the privately owned railway companies ever made money long-term. They did what they did for the greater good (which in Victorian times was not a silly notion).

Coming back to the Milwaukee Road - back in 1919, no one in Washington DC saw the strategic value of driving electrified rails across the Rockies - had they done so, America might have had Shinkansen style bullet trains before the WW2. But then oil was cheap. No one took a 100-year view of things.

I begrudge a lot of what the state sector is squandering money on. But investing in building and maintaining rail infrastructure is money well spent (as long as it's well managed and transparent). Governments at this stage of the economic cycle need to boost demand - they should do so by investing in infrastructure - creating jobs here.

The economy needs us to move around, to spread our spending, to invest in places money's not yet reached. We need road, sea, air and rail transport in equal measure, just as the arrival of smartphones has not killed off the internet, which has not killed off television, which has not killed off radio, which has not killed the press.

The market will decide the precise proportions, as long as the playing field is level and the process is transparent. If roads are paid for from taxes, why should rail infrastructure be paid for solely from tickets?

This time two years ago:
Grunwald - the big picture

This time three years ago:
"Take me right back to the track, Jack"

This time five years ago:
The summer sublime


White Horse Pilgrim said...

An interesting post just as the UK government has announced a wealth of rail investment via HLOS. So far, so good. But how will the most be made of new routes such as Oxford - Milton Keynes? How can train companies on a ten year franchise (if they are lucky!) maximise potential?

Notwithstanding the overall economic benefits, I would argue that railway development in the Victorian era could be haphazard, leading to costly duplicated routes. Lines were built that would never pay for themselves, nor even generate an operating surplus. There again, monopoly breeds abuse. What is the ideal structure?

There are politics being played too. Boris wants to take over all rail transport in London. Hence the absurdity of Crossrail ending at Maidenhead remains with us. So where does London end? I'm sure that Boris would love to control Thameslink all the way between the south coast and Cambridge (a bit like NSE again!) but where does practicality end and vanity take over?

At least a lot of people are travelling by train, railways in the UK are doing well on the whole, and investment is not a dirty word.

Anonymous said...

Interesting excursion into keynesian economics...

Michael Dembinski said...

@ Anon: and road-building and maintenance? As Keynesian as it gets!

@ White Horse Pilgrim:
HLOS - High Level Output Specification - a new one to me - does this acronym suggest a new model for track access charges that offers hope to train operating companies and their passengers?

Dyspozytor said...

A very good article. We will be picking up and developing this analysis in future posts on BTWT.