Different Ownership Models in UK Transport: Do they matter?
The ongoing liberalisation of the UK’s transport industry has seen the emergence of a wide range of ownership models across the sector. These range from the PLC shareholder model increasingly used by many operators, to control by private equity groups, public ownership, or the use of a regulated company limited by guarantee. The jury is out on how these various models affect the running of our transport networks, and which have best served users and stakeholders. With fresh changes in ownership being mooted in the light of a number of recent reports the time is ripe to consider how and why these different ownership models matter. In response to these developments the ITC invited leading figures in UK transport to debate the question of models of ownership at a discussion evening on 9th July 2012.
ITC Chairman Simon Linnett introduces the debate
Simon Linnett, ITC Chairman and an Executive Vice-Chairman at Rothschild, chaired the evening, which involved more than 50 leading experts. Delegates listened to a distinguished panel representing the four main modes and comprising: Graham Dalton, Chief Executive of the Highways Agency; Paul Plummer, Group Strategy Director at Network Rail; Patrick Walters, Commercial Director of Associated British Ports; and Roger Maynard, Special Advisor to International Airlines Group.
Paul Plummer explains Network Rail's ownership model
Speakers focussed on the merits and difficulties associated with the ownership models of their respective organisations. Graham Dalton noted the benefits of consistent management and lean overheads with a government agency model. Paul Plummer noted the powerful capital raising capabilities and evolutionary aspects of the company limited by guarantee. Patrick Walters praised the advantages of long-term capital planning and good governance which could be found with a private limited company, while Roger Maynard noted the efficiencies and lower consumer prices that had arisen as a result of airlines becoming public limited companies.
ORR Chairman, Anna Walker, in discussion
The discussion raised a number of good points which should be taken into account when considering the best ownership models for transport organisations. These included the scale of risk, the importance of incentives to attract the best talent, the importance of competition for efficiency, and the different requirements associated with fixed and movable assets. Participants welcomed the ITC’s work in promoting the debate, a summary of which was circulated after the event.