Arguments For Privatizing Public Transport

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4.1 London, England In 1996, Britain privatized its railways, contracting private companies to operate trains and maintain the rail lines. The argument for privatizing public transportation is that private companies pursue cost-minimizing strategies, which means that public transportation can benefit from the more efficient outcomes. This has proven to be the case in London, where the central government’s spending on the railway is mainly payments to franchised train-operating companies and Network Rail, which is a semi-public body. Overall, costs for the railways have been lowered in London “reducing operating costs by about 10 per cent” (White, 2009). Private companies tend to shift the main focus of public transportation from service to profits, which may compromise the original purpose of providing public transport. This has been proven tragic in Britain, where privatization had caused more cost than benefits. These private companies simply focused on profit maximizing and cost-cutting, compromising the safety of the public transportation systems that were already set in place. For example: "Employees took cost-cutting shortcuts when replacing the rails, including skipping a necessary step that would prevent the new track from cracking in cold weather" (Tomchick, 2003), “falsified maintenance records on 40 miles of track” and had "cost-cutting layoffs by London Underground had led to deterioration of the rails." This in turn led to many accidents that cost the lives of citizens. In fact, following Britain's privatization of its public transportation systems, the privatization instead caused more cost than gains. Reports have shown that the public transport's profits had plummeted, "Network Rail has, it is true, slumped from a... ... middle of paper ... ...private, among which two are private and one semi-private (Yvrande-Billion, 2006). Privatizing the transportation systems in France allows for development of new technology. As the private companies aim to be cost-minimizing and competitive, they would pursue developing new and more efficient technology, which would then benefit society as a whole (Amaral, 2013). The French government manages the Urban Public Transport by keeping the number of bidders low, with 3 main French transport operators. The adequate regulations from the French government had aided the public transportation system to work efficiently. It benefits from the competitiveness of the private sector, in cost reduction (Chen, 2013), advancement in technology, etc. Yet, its regulations and contracts ensure that the private companies operate effectively, transparently, with better management of risk.

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