Is London's Tube About To Be Privatized?
October 14, 1999
Since the days of former Prime Minister Margaret Thatcher, who put in motion Britain's aggressive privatization policy, Her Majesty's Treasury has picked up $63 billion from selling off national assets ranging from the country's telephone system to the national sugar company.
In fact, Britain has collected nearly 10 percent of all the money raised globally through privatization since 1990.
Now suggestions are being heard to privatize parts of the London Underground, the world's oldest subway system.
- The London Underground loses hundreds of millions of dollars a year, even with an average one-way fare equivalent to more than $2.80 -- raising the question, who would buy it?
- Yet following the 1996 sale of British Rail -- the country's long-distance passenger network -- major investments have been made in new tracks, cars and updated stations, leading most observers to rate the privatization a grand success.
- And the 1984 privatization of British Telecom resulted in a doubling of investment, followed by substantial reductions in phone rates and waiting times for phones to be installed.
- But any talk of privatization throws British labor unions into a panic.
So the recent train crash in which 30 to 40 people were killed is being used by the unions to undermine privatization efforts.
But supporters point out that 3,500 people die every year on British roads without raising a public outcry. By contrast, prior to the Paddington crash, only 56 people died in train crashes in Britain in the past 10 years.
Source: Greg Steinmetz, "Her Majesty May Sell Part of London's Tube, Angering Some in U.K.," Wall Street Journal, October 14, 1999.
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