Siphoning off public money

I'm taking some comfort in discovering other people, like me, are suspicious of the idea that privatisation and competition are bound to deliver a better-value-for-money service. Since privatisation of the railways it has seemed to me that, in effect, the system was one that appeared to be one where, in effect, the government paid shareholders and my question is why not cut out the shareholders? How would that not be cheaper?

Now,I'm not so naive as to think it is quite that simple. The riposte is that the impetus of competition would cause operators to look at cost savings and clever improvements to produce more service for less money and that the savings would then reward the investment of the shareholders in the form of dividends.

But I say that this assumes too much: first that we have an accurate benchmark for deciding what a publicly run service would cost and charge in order to say to the private sector: 'beat that'. if we don't have a clear view of what the putative savings are, we can't really know whether the companies are just, in the words of the title of the article referred to here, siphoning off money into their own pockets. If we are talking about a subsidised service, how can that not be happening? And given that subsidy has risen not fallen, it would seem that these suspicions are likely true -in spades.

I'm also skeptical that the savings they could produce would actually offset the costs of setting up a private system with all that entails about bidding and risk etc:

... costs of fragmentation and duplication; dividend payments to investors; contractors' profit margins; debt write-offs; and higher interest payments to keep Network Rail's debts off the government's balance sheet. Taken together, those privatisation costs amount to around GBP 1.2bn a year, according to a new thinktank report (Transport for Quality of Life's Rebuilding Rail), while genuine private investment is estimated at barely 1% of the total funding of the railway. It's hardly surprising that the mainly publicly owned rail systems in the rest of Europe – several of which now run bits of Britain's privatised rail – are cheaper.

The artificiality of privatising what is a natural monopoly incurs costs, it is hard to think that those costs would not normally overtop any supposed savings and efficiencies that competition might reasonably be expected to bring. Therefore, if we pay the shareholders, we must be simply giving them money for nothing, in effect. Let's just 'cut out the middle men' and all the costly apparatus that supports them in a manner to which they should not get used. And if you point out that the shareholders are our pension funds, then I simply reply that robbing the state Peter to pay the people's Paul is no solution either.

Worse, there's an incentive for private companies to exaggerate their bids and bear the cost of the penalty because it is less than continuing to make the payments to the government in the latter years of the contract:

Greening claims FirstGroup offers the best deal for taxpayers. In reality it's based on heroic growth expectations of 10.6% a year and payments to government that are heavily loaded on to the contract's last few years. The company in fact has an incentive to dump the franchise as those payments come due, because they dwarf the cost of the bond penalty. If FirstGroup – which is walking away from the Great Western franchise – defaults, it wouldn't be the first time. 

It's no way to run a railway. And in fact we should probably question the privatisation matter more widely than railways: remember the fiasco before the opening of the Olympics when we found that G4 Security had not been able to organise security as per contract from LOCOG? We have to remember that these are not real markets: they are artificial economic environments and so there's no guarantee that the contracts and arrangements have been put together in a way that would justify the belief that the market will deliver; what will be delivered is an outcome that arises from the interaction of the contract and the calculations of the winner bidder. That may or may not be what was intended. And in the meantime, there's no easy way back from a situation where the company simply leaves you in the lurch. 

Let's also recall that 'The market' invoked is usually a theoretical abstraction; a model based on the idea of 'perfect competition'. It is this little thought experiment which usually lies at the root of fetishising  The Market. But of course it is not in any way the situation in these artificial 'garden markets' (let alone in actual life where companies frantically flee perfect competition by differentiation and all sorts of little anticompetitive ruses -and who can blame them: no-one can live for long in the kind of uncertainty and constant vigilance presupposed by the PC model -it makes for bad staffing; how much more enterprises). 

What is needed is real world data filtered from the ideological spin of either left or right, to tell us how things work in actuality. And, impressionistically, I don't think that G4S have given any great confidence that private is always best: 

Whitehall bureaucrats don't have a monopoly on bungling. Private sector providers aren't necessarily the slick, smooth operators they can seem when they bid for work. Despite G4S's massive experience, it appears to have bitten off more than it can chew. If the banking crisis taught politicians anything, it should be that having shareholders, a whizzy logo and a worldwide corporate footprint is no guarantee of competence. (Heather Stewart)

 Rail is a gigantic scam for siphoning off public money | Seumas Milne | Comment is free | The Guardian:

Straddling bus: replacement concept for trams?

I wonder whether this could be a more attractive idea to some cities and towns than tram systems ...
"Beijing’s Mentougou District already has plans to build 186km of infrastructure for the new system with construction starting at the end of the year."
Worldchanging: Bright Green: Bus to the Future: Inventor Song Youzhou Presents the 'Straddling Bus':

Toad of Toad Hall meets the speed camera

You remember: Toad loved to speed and it caught up with him. This is an interesting article in terms of bringing some useful stats to bear on a debate that suffers from a lot of ignorant prognostications (exposed in the article). For evidence of the real war involving motorists, look in the mortuary | George Monbiot | Comment is free | The Guardian The thing I'd wonder about is Monbiot's insistence that the decision to take down speed cameras is about toffs getting caught or not. I actually think it's a cheap bit of attempting populism which may backfire when figures such as this are put into reverse in towns and villages up and down the country: "19% fewer people were killed or seriously injured at accident black spots after speed cameras were introduced, above and beyond the general decline in accidents on the roads." In fact the figures could be even more stark: "A study conducted by the Wiltshire and Swindon Safety Camera Partnership, across the whole county over three years, found that after speed cameras were installed there was a reduction at those sites in deaths and serious injuries of 69%."
Just imagine if you are living near to a speed camera on an accident blackspot and you have children, and you see that statistic ...

Obama Outlines Plan for High-Speed Rail

After I visited the states the last time and travelled from Washington DC into the heart of Virginia by train, I felt that there was money to be made in the USA having a faster rail network. 50MPH top speed is a joke for a national passenger rail system. No wonder flying is a national pastime there! I think I blogged about it. The positive side of that, though was that it was a comfortable journey: there was lots of leg room and the drinks car was a real social centre it seemed. Anyway, it seems the president has been seeing sense: Obama Outlines Plan for High-Speed Rail | Autopia from Wired.com: "Obama outlined a strategy that focuses on 10 rail corridors that slice through regional population centers across the United States. Each state would compete for a chunk of the $8 billion in stimulus money that will be distributed to rail projects in the next two years. Another $1 billion will follow over the next five years. Funds will be awarded according to each states' plan to develop and improve the rail corridors."

I note that one of the rail corridors is pretty much one of those that I rode on back then. I think I mentioned it in a blog post.

'Fuel battery' could take cars beyond petrol

'Fuel battery' could take cars beyond petrol - tech - 25 July 2008 - New Scientist Tech: "Batteries produce electricity from a closed chemical system that is eventually exhausted. Fuel cells use a constant supply of fuel, so they are continually topped up. Licht's cell has features of each.
Its negative electrode, or anode, is made from vanadium boride, which serves double-duty as a fuel too. But unlike the flowing fuel of a fuel cell, the material is held internally, like the anode material of a battery.
The vanadium boride reacts with a constant stream of oxygen, as in a fuel cell, provided by the positive electrode, or cathode. This brings in a supply of air from outside.
The cell has a theoretical energy capacity of 27 kilowatt hours per litre, compared to 9.7 kilowatt hours per litre for gasoline. But both approaches are limited by practical factors to smaller figures.
Licht says his new system would likely have a practical energy capacity of around 5 kilowatt hours per litre. 'But that's two-fold higher than the practical storage capacity of gasoline,' he says."

New Airships Are More Than Just Hot Air

I continue to be interested in the idea of airship travel So, again this article was interesting. I still reckon that it'd be a good seller. If I had Bransons millions, I'd get into this; first as a luxury travel option and a freight thing. Any way the article is here New Airships Are More Than Just Hot Air | Autopia from Wired.com

Airships

Over the years I have occasionally wondered whether anyone has been looking at airships for transport in stead of jets and the like. So I was happy to see this article by George Monbiot touting the same idea and adding a few helpful details like these:

a large commercial airliner cruises at about 900 kilometres per hour, the maximum speed of an airship is roughly 150kph. At an average speed of 130kph, the journey from London to New York would take 43 hours. Airships are more sensitive to wind than aeroplanes, which means that flights are more likely to be delayed. But they have one major advantage: the environmental cost could be reduced almost to zero.

Even when burning fossil fuels, the total climate-changing impact of an airship, according to researchers at the Tyndall Centre for Climate Change Research, is 80-90% smaller than that of ordinary aircraft(4). But the airship is also the only form of transport which can easily store hydrogen: you could inflate a hydrogen bladder inside the helium balloon. There might be a neat synergy here: one of the problems with airships is that they become lighter - and therefore harder to control - as the fuel is consumed. In this case they become heavier.

Bash Airlines All You Want, But Flying Still Beats Driving

Okay, so this Bash Airlines All You Want, But Flying Still Beats Driving is USA-centric, but it's an intriguing possibility that there are times when flying may be better on emissions: "This one's a little complicated, but stay with me. According to Terrapass, my Jetta will spew around 850 pounds of CO2 over 1,000 miles. Airliners.net says an Airbus A320 burns 2.569 gallons per mile, so my thousand mile flight (let's call it 1,500 miles with the connection) requires 3,853 gallons of fuel. The Energy Information Administration says a gallon of jet fuel produces around 21 pounds of carbon, which means my flight is releasing 80,913 pounds of C02. That's horrible, but it's not the whole story. Divide that number by 140 -- the number of passengers packed into that Airbus -- and you arrive at 578 pounds per person.
850 pounds of CO2 driving, 577 pounds flying. Advantage: plane"
I wonder what the figures might be in the UK ...? I suspect, given the nature of the figures they could be similar, though typical car fuel consumption figures could be different, perhaps.

Bioethonol without the major downsides

Coskata's ethanol produces 84 percent less greenhouse gas than fossil fuel even after accounting for the energy needed to produce and transport the feedstock. It also generates 7.7 times more energy than is required to produce it. Corn ethanol typically generates 1.3 times more energy than is used producing it.

Making ethanol is one thing, but there's almost no infrastructure in place for distributing it. But the company's method solves that problem because ethanol could be made locally from whatever feedstock is available

There's still a way to go in terms of scaling it up and distribution, but in principle this looks like a quick way to help in the short to medium term and maybe help with landfill issues too.

Maybe I'm missing something, but it's an optimistic development on first sight.

Ships pulled by kites

Here's a surprising item on the BBC NEWS

A German cargo ship has set sail powered, in part, by a kite in an effort to cut fuel costs and carbon emissions.

and you can see the future on video. It really is happening: a return to maritime wind power, but in a strangely different form. You almost wonder why our ancestors didn't think of doing it this way.

Energy Cool: Sailing Our Way to a Smart Energy Future � Celsias

Sail power could return to shipping but in the form of a kite. "Skysails seeks to adapt advances in kite design and understanding to the merchant marine (and luxury yacht) fleets. As per Skysails founder, Stephan Wrage, I thought the enormous power in kites could somehow be utilised.”.
Estimates of savings in carbon emitting fuels vary between 10% and 50%. This could start to be significant given that shipping is responsible for between 2% and 4% of global emissions.
Energy Cool: Sailing Our Way to a Smart Energy Future � Celsias:

Speed kills, so what of speed cameras?

Taking together the article and the comment responses is a good education in the issues relating to speed camaras. I do confess that I find disturbing those conversations I've been party to where I'm expected to connive at speeding and the demonising of speed camaras. And I am worried that there should be an attitude abroad that it is a right to speed and it's not really a 'real' crime. One of the things that comes home from this, loud and clear, once you have paid appropriate homage to the issues about good and bad driving and looked at alternative strategies, seems to me, is that when all is said and done, the faster you go in these metal boxes that are strengthened for the safety of their occupants (not those outside), the more likely you are to make an error of judgement and the more likely people are to die if/when you do.
Once all the considerations are made it may be shocking but it seems true as one commenter says:
"Campaigning against speed cameras is pretty much equivalent to advocating random acts of homicide".

Interestingly, one of the persistent arguments against speed cameras is their capacity to raise revenue. I grok the emotional appeal of this argument: nasty authorities finding ways to take more money off us (note implicit connotative framing of speaker as innocent victim of acquisitive nanny state by alluding to a stock of cultural 'memes' to that effect). However, they really don't manage to clear the hurdles of the basic facts: the limits are legal limits and "Even if the devices are money makers, who cares? I'd sooner the authorities raise revenue with fees targeted at anti-social behaviour like speeding rather than increasing taxes across the board to everyone." Indeed, and wouldn't it be a great outcome if no-one speeded and they enforcement devices became redundant? The petrol-heads argument exposed hereby as merely a desire for licence to exceed the legal limits without being held to account for it.
One comment makes an interesting point I'd not seen before but resonated with me, as a sometime cyclist, "I'd make everyone ride a bike for 2 years before they're allowed to take the car test - if you don't pay attention to what's going on around you on a bike you end up dead, and you never lose that, whatever form of road transport you choose to take"
I'm not sure how I evaluate the taste of WellArdSpnge, but it's certainly an arresting challenge; "To those who honestly belief that speed has no effect on accidents may I suggest the following little experiment;

I'll take one of your children, or if you don't have any another close and dear relative. Strap them in a car and then run it in to another car travelling in the opposite direction at the same speed. The speed of each car on the initial run will be 5 miles per hour and then on each subsequent run it will increase by another 5 miles per hour, hence closing speeds of 10 mph, 20 mph...... You can let me know at what point you feel that speed may have some 'impact' upon the subject and the results.
- Any takers??"
That said, it may still be an open question as to whether the cameras are actually effective and in what condition and under what kind of usage they are best deployed.
Guardian Unlimited | Comment is free | The anti-speed-camera campaign is built on twisted truth and junk science: