CAMPAIGNS: JUDGE AND JURY; PR was on the right track with privatisation save or return

Although Railtrack did not raise the billions anticipated by the Government, things might have been a lot worse but for some sound PR work, says David Wynne-Morgan, director of WMC Communications

Although Railtrack did not raise the billions anticipated by the

Government, things might have been a lot worse but for some sound PR work, says David Wynne-Morgan, director of WMC Communications



Railtrack, seen as one of the most difficult of the privatisation sells,

was a mammoth success. True, it only raised pounds 1.9 billion instead

of the pounds 2.5 billion the Government had hoped for, but it attracted

applications from nearly 2 million private investors, of whom nearly

600,000 got share allocations, while the shares available to

international institutions were over subscribed 14 times.



Was this due to the brilliantly innovative marketing campaign of the

Govenrment, the new company and its advisers? I’m afraid not. Is this

latest triumph going to widen and deepen the long-term desire for share

ownership? Again I’m afraid that is not the case.



The Railtrack privatisation success was living proof that if you price

something cheaply enough, it will sell. What other share could you

purchase that would virtually guarantee you a 25 per cent return in the

first year with a a discount on sales price and a guaranteed 18 per cent

divident at the end of February next year?



Equally ten per cent of the lucky 600,000 who got shares had sold them

and taken their profit at the end of the first day and I suspect a lot

more will do so after getting their dividend at the end of February.



Dewe Rogerson, the great Government privatisation specialists, did their

usual competent job. They are not in the risk business. They have the

lion’s share of the Government’s privatisations. They are not a low

risk, but a no risk decision for any Government civil servant. Their job

is to ensure the privatisation gets away and is seen to be successful,

and it is largely a matter of price. They have never failed. I suspect

that as long as they exist and as long as privatisation continues, Dewe

Rogerson will be the leaders.



The marketing campaign was in fact extremely low-key. However, it got

off to a bad start. It became a political football with Labour, both new

and old, attacking the whole concept on every possible occasion.



There is no doubt that Phillip Dewhurst, the director of public affairs

and perhaps even more Roger Shire, the veteran head of media relations,

did a supremely professional job for Railtrack. What they did was to win

back credibility for the company. Had they not done so, I believe they

may have had to price the shares even lower.



All the advisers concerned involved with the media did a good, if safe,

job. By the time the offering took place, all applicants were guaranteed

a profit, and for those who were interested in the long term, the

communicators had won a new respect for the Railtrack management.



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