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After mixed results in Europe, America and Japan, many countries are implementing railway reforms based on key concepts such as ‘separation of infrastructure from operations’ and ‘privatization of rail management.’ However, government often uses these ideas as a good excuse to escape its responsibilities. A sweet—but completely wrong—illusion is that any railway can run without support once it has been privatized or separated from infrastructure.
Safe comfortable railway services depend on good infrastructure, which requires huge sums of money to build and maintain. Few railways without a strong captive market and high productivity can afford independent management bearing infrastructure costs without financial support from public funds. Freight railroads in North America and some of the larger Japanese passenger railways are rare success stories, but most of the world's railways do not enjoy such privileges. Once exempted from the huge burden of infrastructure costs, it is relatively easy for a rail operator to make profits, but somebody must pay to keep the tracks in good condition.
Although Japanese National Railways went bankrupt in 1987 with astronomical debts, its infrastructure was still in relatively good condition due to continued investment even while the losses were mounting. The Japanese government accepted its responsibility by taking over the greater part of the debts. By contrast, British Rail did not leave a huge negative inheritance, but its infrastructure was in relatively poor condition due to long years of underinvestment that Railtrack failed to improve.
Clearly rail reform cannot succeed without government taking some financial responsibility.
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