The privatization of British Railways(BR) has been deeply controversial. Having concluded thatthe old BR had run out of financial and managerial steam,the Conservative Government of John Major embarked in 1992on a radical reform program involving the breakup of theformerly unitary system into over a hundred parts and theirsubsequent privatization. The Bank's railway borrowersoften react to the British experience (and the similarpolicies in the European Union requiring infrastructureseparation) by arguing either that the situation in the U.K.was so particular that it has little application anywhereelse, or by asserting that the U.K experience was a"failure" and should be ignored: this reportargues that neither assertion is true. Though the assertionsare convenient, governments cannot ignore their railways forall the reasons outlined in a long series of World Bankreports on railway restructuring. Aside from the sheerfinancial and economic burden of an inefficient railway, thenon-market benefits of rail services in urban transport, inrelieving highway congestion and pollution management, andin accident reduction, mandate government intervention ifthey are to be maximized. Accepting the specifics of theU.K. conditions, and with the acknowledged benefit ofhindsight, this report aims to draw some useful conclusions.In short, both restructuring and private sector involvementremain viable options; but, neither is a panacea andimplementing either requires care.
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