Sat, Sep 06, 2003 page8

• Rail system must not be privatized

  • By Feng Chien-san 馮建三
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  Should the Taiwan Railway Administration be reformed? Yes. Should it be privatized? No. The failures of the UK and Japan serve as examples.

  Britain has had the highest ticket prices in Europe since British Rail was privatized in 1996. Train companies are all happy to receive massive government subsidies. However, the quality of its service is poor, as train delays and accidents often occur. According to a study conducted in March, the rail system may have to cut over 8,000km of railway lines and can-cel about one-tenth of its over 17,000 train services. The British government may also have to put as much as ?33 billion (NT$1.78 trillion) into the rail system in the next decade.

  Thus, the luck has turned in conglomerates' favor, as those being regulated have now kidnapped the government which originally had the power to regulate them. No wonder that the results of a recent opinion poll conducted by The Guardian showed that as many as 73 percent of the respondents were in favor of nationalizing British Rail again.

  Is Japan a role model then? Not necessarily. First, Japan's motive for privatizing railways was indecent, and was not to improve transportation efficiency. Japan's then-prime minister Yasuhiro Nakasone privatized the Japan National Railways in 1987. But he admitted 10 years later during an interview: "My intention was to destroy the General Council of Trade Unions of Japan. If the National Railway Union [with over 200,000 members before the privatization] collapsed, then the general council would collapse inevitably."

  Second, although privatized Japan Railways have been profitable in the densely-populated Tokyo area, they can hardly profit in other areas. Due to the profit factor, capitalists have been reluc-tant to invest. Improving service has become impossible. In addition, Japan Railways has been hard on employees after the privatization. Over 1,000 union members were inappropriately dismissed. Labor agencies under both local and central governments found that such a move violated the principle of fairness and discriminated against union members, and therefore requested that these members be reinstated. The matter is now in arbitration.

  It's certainly necessary to reform railway services. But those in power should never become prisoners of the privatization ideology, and they should find another way out. As President Chen Shui-bian (陳水扁) recently commented: "The priority of state-run business reform is corporatization, not necessarily privatization."

  His words essentially tally with the core of modern economic theories. In a more competitive environment, whether a business is a private one is irrelevant to efficiency. The only difference is that if the business is public in nature, the management is more likely to ensure reasonable working conditions, as well as to achieve rational social distribution of profit. Although Taiwan Railway Administration monopolizes the railway lines, the company is facing severe competition from air and land transportation -- not to mention that the competition will become even more severe after the Taiwan High Speed Rail Corp joins the game.

  Unfortunately, Chen may say one thing and do another. What's even worse is that the government seems to be determined to go another way, vowing to complete Taiwan Railway's corporatization next year, as well as its privatization by 2007, when related laws are established or amended.

  It's better if the Ministry of Transportation and Communications could wake up to reality and give up the planned privatization, and provide the same treatment for the Taiwan Railway as it does for Taiwan High Speed Rail. Otherwise, the Taiwan Railway Labor Union can do nothing but take the necessary steps to save itself.

  The union then cannot be blamed for deciding to stage a strike by holding a membership conference on Mid-Autumn Festival -- which falls on Sept. 11 this year. More importantly, however, the union has to clear the outside world's doubts.

  For example, the media often say that the Taiwan Railway is overstaffed. But looking at the Netherlands, which is about the same size as Taiwan with an almost 25 percent smaller population, although Dutch railway companies have to assume sole responsibility for their profits or losses, they employ more than 20,000 workers.

  Are the Taiwan Railway's 13,000-plus workers really too many from the perspective of ensuring safety?

  Moreover, the railway company had revenues of NT$22 billion last year, with NT$10 billion in book losses. Without those factors for which the company should not be responsible, such as discounts for both the elderly and the disabled, and subsidies for less popular routes, the company actually enjoys a profit. If these facts are all true, such positive information should be widely disseminated.

  Besides, the union has to come up with its own corporatization and reform plans. It should never let the government feel that its actions are taken merely to exchange for better severance pay. It should let society understand that the railway company is able to fulfill people's needs better without privatization. It should also present its views in a concrete and comprehensible way, rather than to keep repeating its principles.

  Feng Chien-san is a professor of journalism at National Chengchi University.

  TRANSLATED BY EDDY CHANG
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