I woke up this morning to the sound of Foxton’s Estate Agent and wannabe Chancellor of the Exchequer George Osborne on the Today Programme calling for a new, £20bn, Maglev train to be built by the private sector - and citing the Channel Tunnel as an example of the past success of private sector infrastructure projects.
After a quick calculation (which could be wrong), I guess the interest on £20bn would be about £2.7m per day - that any private sector organisation would have to recoup before they could start paying off their capital borrowing or indeed pay their shareholders a profit.
And didn’t his boss just admit that rail privatisation was a mistake? By promoting a new, private railway, is Osborne trying to recreate the Blair/Brown rivalry - but writ really really small?
editor[at]recessmonkey.com
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Got to say this reminds me of that Simpsons episode about the monorail.
Stamper said this on August 31st, 2006 at 10:27 am
It is actually worse than the 2.7 million you mention. That’s the sort of figure you get with government borrowing over a 50 year period.
It completely ignores all running costs such as staff, fuel, and maintenance.
If we say a ticket costs 100 pounds single, the sort of level needed to compete with aircraft, then 27,000 people would have to travel between Scotland and England each day.
If we are down at 5000 people making the trip, then the cost of the ticket is 540 pounds just to cover the interest charges.
ie. Its a no starter unless there is massive subsidy.
Cross-rail is exactly the same. The cost of the build does not come anywhere near being economic.
To give an example, at least 40 DLR extensions could be built for the same cost, and be used by far more people as a result.
Nick said this on August 31st, 2006 at 11:05 am
He’s not a Foxtons Estate Agent, he’s a transvestite marionette.
Paul said this on August 31st, 2006 at 11:25 am
The difference with Crossrail of course is that it would be pretty much used to capacity from day one - carrying 200 million passengers each year - and that it would catalyse an increase in GDP of £20bn.
Recess Monkey said this on August 31st, 2006 at 1:18 pm
200 million passengers a year through 6 new stations.
That is about 550,000 passengers a day down a couple of tunnels.
The JLE, another financial disaster, gets 120,000 down a tube the same size.
The passenger journey figures are a work of complete fiction.
The DLR copes with 80K a day. Why not build 40 plus DLR’s for the same cost and spread the benefit, or even more radically, not spend any money and give it back to the people who worked for it in the first place?
Nick
Nick said this on August 31st, 2006 at 2:22 pm
Just another bit of information to make you think.
200 million passengers is 20% of the tubes current passengers.
Cross rail is 6 new stations.
The tube is 287 stations.
Just how is that going to work, if the figure is true and not some pr spin put out by London Transport after a big susbsidy?
Nick said this on August 31st, 2006 at 2:43 pm
You have an interest to declare, Recess?
Dutch said this on August 31st, 2006 at 4:11 pm
Here is a very considered reply [not mine] to maglev:
http://www.transwatch.co.uk/transportwatch-news/05-11-04comments-maglev.htm
Now my response:
Pity about maglev, I like the idea but it won’t wash.
Pity, also, that our Shadow Chancellor didn’t engage brain before opening mouth - estimated cost to taxpayer, please note, one-thousand-million-pounds-per-year-for-ever. And what kind of person would be prepared to pay six-to-niine-hundred pounds for a [subsidised] ticket? Those on expenses? Those on jollies ………………?
pete said this on September 2nd, 2006 at 6:50 am
I doubt the financing for such a large project would be as simple as a £20bn loan at 5% pa - stock and/or loan notes would almost certainly be issued in order to raise part of the capital. This is all academic anyway, as I’m sure Gids probably never intends to put Maglev into operation. The announcement’s real purposes are (i) a desperate attempt to give Scottish voters the impression that the Tories give a shit about them, and (ii) a desperate attempt to raise Osborne’s profile. (Before he finally career shifts and starts driving one of those godawful Foxton’s Mini Coopers.)
Lucretius said this on September 3rd, 2006 at 12:38 pm