This week, the British government published its long-awaited and somewhat delayed review into the British railway network.
The proposals — putting infrastructure, timetables, fares and tickets back into government hands but allowing private companies to run the trains — are a step in the right direction, but they would keep the network in a twilight zone.
British rail is neither fully private nor fully public, despite the government and the Treasury in particular having control over many aspects of the railway. Accountability is murky. Industry fragmentation — 29 train companies, fifteen leasing companies — has only made it worse. Read more “Great British Railways: Neither Public Nor Private Enough”
Germany is investing €86 billion over the next ten years in its aging rail network. The hope is to shift Germans toward less carbon-intensive forms of travel.
The federal government will cover the bulk of the cost, €62 billion. Deutsche Bahn, the state-owned railway company, will pay the remaining €24 billion. The money will be used to update tracks, stations, signal boxes and energy supply systems.
The government also intends to cut fares by 10 percent for trips of 50 kilometers or more in order to incentivize the use of trains for long-distance travel.
With this package, Germany kills two birds with one stone: it modernizes its infrastructure while reducing carbon emissions.
Friday’s foiled terror attack on the high-speed train from Amsterdam to Paris is no reason to reinstate border controls in Europe. The freedom of movement is one of the European Union’s greatest accomplishments and one that most directly benefits its citizens.
Earlier this week, the East Coast rail franchise that links London to Inverness via key cities such as Doncaster, York, Edinburgh and Glasgow was handed back to the private sector. Given the past performance of companies operating the franchise, the handover has not been without controversy.
The first operator, GNER, owned by Sea Containers, paid £1.3 billion to run the franchise for ten years. This was a third higher than rivals FirstGroup, Virgin Rail and a joint venture between Denmark’s DSB Railways and freight operator EWS had offered. It also worked out at significantly more than the £22 million they had been paying in previous years. A year later, the government took away the franchise when GNER faced financial difficulties, including the bankruptcy of its parent company.
Then in 2007, National Express won the contract. They outbid rivals Arriva, First and Virgin Rail and promised to pay a £1.4 billion premium to the Department for Transport over seven years.
But just two years later, National Express announced it was pursuing talks with the government for possible financial assistance in operating the franchise. Little came of the talks and National Express said it would default on the franchise before the end of 2009. Read more “East Coast Rail’s Problematic Return to Market”
Arun Jaitley, India’s finance minister, unveiled a series of tax reforms and infrastructure initiatives on Saturday in the conservative government’s first full budget since Narendra Modi came to power last year.
Jaitley said a national sales tax would be in place by April next year to replace a complex regime of local fees that hampers business growth.
He also announced a reduction in the corporate income tax rate from 30 to 25 percent and a simplification of the code.
President Barack Obama offered opposition Republicans a “grand bargain for middle-class jobs” on Tuesday that would reduce corporate tax rates while investing billions of dollars in infrastructure projects.
The president, who previously appeared to have little interest in tax reform, proposed to cut America’s corporate tax rate of 35 percent — the highest in the industrialized world — to 28 and give manufacturing companies a preferred rate of 25 percent. In a speech in Tennessee, he also suggested that a minimum tax on foreign earnings should be instated to fight tax evasion.
President Vladimir Putin on Friday promised to invest more than $13 billion in updating Russia’s infrastructure but cautioned that there was no “magic wand” that could resolve the nation’s economic problems altogether.
Speaking at a business forum in his hometown of Saint Petersburg, the Russian leader announced plans to build a new ring road outside Moscow as well as a high-speed rail connection from the capital to Kazan, an industrial hub in Tatarstan. He also seeks to update the Trans Siberian railway to Russia’s Far East.
To finance the projects, the government will tap into the $87 billion National Welfare Fund, otherwise intended to provide for pensions.
But with inflation at 7.4 percent and growth forecast to be 2.4 percent this year, even the promise of a lucrative energy deal with China valued at $270 billion might not lift the nation’s spirits. Foreign investors worry that liberals are increasingly marginalized in favor of conservatives in Putin’s government who advocate a more statist economic policy. Read more “Putin Promises Infrastructure Spending, Investors Skeptical”