2003
DOI: 10.1111/1468-0408.00180
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‘A Lot of Friction at the Interfaces’: The Regulation of Britain's Privatised Railway System

Abstract: This paper examines the regulation of privatised industries, especially the railways. It focuses on the regulation of the infrastructure company, Railtrack, which collapsed into insolvency less than six years after its flotation. It analyses in detail the establishment of a key interface in the railway system, the track access charges, and discusses the extent to which Railtrack's collapse was a failure of regulation. The paper concludes that the key problem was not the regulatory system, but the fundamentally… Show more

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Cited by 14 publications
(4 citation statements)
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“…Similarly Arnold and Cooper (1999, p. 132) have explored the role of the accounting industry in the privatization of a government shipping facility, Medway Port, observing that “the direct role accountancy firms have played in executing the neo‐liberal transformation of international capitalism is nowhere more evident than in the field of privatization.” These studies have provided interesting examples of how accounting agents and technologies were not only central to the Thatcher government's justification for privatization in Britain, but also how these technologies have been crucial in shaping the emergent entities (Humphrey et al , 1993). What is particularly significant about these studies is their somewhat common view regarding the consequences of privatization, and their general suggestion that accounting facilitates both an abdication of the role of the state and a masking of “exploitative relationships that lie beneath the surface of their craft” (Arnold and Cooper, 1999, p. 136; Ogden, 1995; Uddin and Hopper, 2001; Crompton and Jupe, 2003).…”
mentioning
confidence: 99%
“…Similarly Arnold and Cooper (1999, p. 132) have explored the role of the accounting industry in the privatization of a government shipping facility, Medway Port, observing that “the direct role accountancy firms have played in executing the neo‐liberal transformation of international capitalism is nowhere more evident than in the field of privatization.” These studies have provided interesting examples of how accounting agents and technologies were not only central to the Thatcher government's justification for privatization in Britain, but also how these technologies have been crucial in shaping the emergent entities (Humphrey et al , 1993). What is particularly significant about these studies is their somewhat common view regarding the consequences of privatization, and their general suggestion that accounting facilitates both an abdication of the role of the state and a masking of “exploitative relationships that lie beneath the surface of their craft” (Arnold and Cooper, 1999, p. 136; Ogden, 1995; Uddin and Hopper, 2001; Crompton and Jupe, 2003).…”
mentioning
confidence: 99%
“…Rail privatisation in practice increased costs by over £3 billion per year (Crompton and Jupe, 2003b, p. 400) as a result of interface costs and cash leakages (Harris and Godward, 1997, p. 107). Interface costs arose as, with many companies involved in rail's supply chain, there was upward pressure on prices as each company aimed to squeeze profits from its contribution.…”
Section: Rail Privatisationmentioning
confidence: 99%
“…Railtrack was supervised by the Office of the Rail Regulator (later renamed the Office of Rail Regulation) (ORR), but there were problems with the regulatory structure. There was a lack of clarity about the requisite infrastructure expenditure required; the TOCs were regulated by a separate body; and Railtrack's initial operating licence was very weak (Crompton and Jupe, 2003b, pp. 403–7).…”
Section: Rail Privatisationmentioning
confidence: 99%
“…Railtrack increased borrowing to nearly £4 billion to finance this additional expenditure, but was faced with the prospect of breaching its banking covenants as interest coverage by earnings threatened to fall below the crucial level of 2.25 (Crompton and Jupe, 2003b, p. 412). In October 2001, faced with costs on the WCML project spiralling towards £10 billion and increasing demands for additional subsidy, Transport Secretary Byers obtained a High Court order that placed an insolvent Railtrack in administration (Crompton and Jupe, 2003b, pp. 412‐413).…”
Section: Rail Privatisationmentioning
confidence: 99%