The Dilemma of British Railway System - Case Study Example

Margaret Thatcher presumed that the British Railways was an exception. During her reign as Britain’s Prime Minister from 1979 to1991, all public services were subject to privatization. But due to her heightened sensing for political danger (which was higher than her ideologies), she deprived the British Railways of investment while saying no to its privatization. This rang true for Thatcher, and it could mean irony for current Prime Minister Tony Blair if the British Railways situation leads to his downfall.

The idea denotes a possibility as well as justice even if it is a residual problem from Thatcher’s successor, John Major before Blair’s Labor government initiated support on privatization. The said efforts included the provision of public funds to shareholders whose operations did not comprise public confidence on the rails safety or reliability, which service is of great importance in Britain – economically and socially (Martin, 2002). In October 2000, the national rail system operations were brought to a halt when major casualties involving 2 collisions caused by a signal malfunction killed 38 people on one location and another crash killing four passengers due to a defective rail outside Hatfield town.

The private company established to take over the railway operations, Railtrack, manages the signals, station as well its development and maintenance. With the loss of confidence on the stature of the company’s assets, Railtrack imposed numerous rulings on speed limits with the Train Operating Companies (TOC) throughout Britain (Kain, 1998; Modern Railways Railtalk, 1999). Four years of the system’s complicated and controversial privatization brought about its collapse. Decentralized into 100+ businesses, the formerly integrated network was held together by contracts.

Aside from Railtrack and companies in charge of their operations, renewal and maintenance, rolling stock leasing and a host of other rail-related establishments were opened for the train service package. A number of the aforementioned companies came from one umbrella during the privatization, though they have eventually outsourced some of the services (Kain, 1998; Modern Railways Railtalk, 1999).