Evaluation of Rail Infrastructure Investments Related to the New Rail Regulatory Environment in Some Countries
As for any transportation infrastructure project, rail investment projects are subject to appraisals, which traditionally include an economic evaluation to determine public benefits and a financial analysis to determine the purely financial returns. When the company that owns and manages the rail infrastructure, termed the “infrastructure manager,” is legally different from the company that provides the rail service, appraisals are typically carried out separately for the infrastructure manager and the train operator. The appraisal process is different from the process when the same legal entity owns and manages both infrastructure and train operations. The distinction is especially pertinent for European Union member states. This study proposed a comprehensive methodology for rail investment project appraisal for the case of rail infrastructure and train operations that were owned and managed by separate legal entities. The study defined the socioeconomic viability of a project from the infrastructure manager's perspective, which reflected social welfare, as well as the financial viability of the project from the perspectives of the infrastructure manager and the operator. It was recognized that a project would proceed only if the socioeconomic evaluation were positive. In the case of a negative financial appraisal, which was often the case for low-volume rail links, the study demonstrated how the use of subsidies could render the rail investment financially viable. The methodology was applied for a proposed investment in the western extensions of the railway network of Greece project.
European Rail Reform and Passenger Services: The Next Steps
Whilst the emphasis of European Union rail legislation to date has been on freight, measures such as separation of infrastructure from operations, infrastructure charging regimes and regulation have major implications for the passenger sector. But implementation of these measures in many countries has been inadequate. Crucial to overcoming these problems is the establishment of strong independent regulators in all member states. There is currently no requirement for competition in the passenger sector except for international services, but there is experience both of open access for commercial services and of competitive franchising. However, even where permitted open access competition has been very limited and there is evidence that undesirable cream skimming may be a problem. Experience of franchising has generally been positive, but in some cases it has failed to drive down costs. It is concluded that a combination of more sensible risk sharing, a determination not to renegotiate, longer franchises and limited open access competition where justified by benefits is likely to be the best way forward.
Long-Distance Passenger Rail Services in Europe: Market Access Models and Implications for Germany
This paper focuses on classifying market access for long-distance passenger rail services in Europe into three main models and discusses the advantages and disadvantages of each of these models. The “Tendered Concessions” model aims to introduce competition for the market by which operators are selected in a tendering procedure. The “Monopolistic Network Operator” model aims to sustain network effects by granting a concession to one operator. The “Open Market” model enhances operators’ entrepreneurship by providing opportunities to plan services based on open access to the network. We present the strengths and opportunities, risks and threats without favoring any one model. Classifying the many design options and their different impacts will help to structure the ongoing policy discussion. The paper also gives an overview of the organization of long-distance passenger railway markets in selected European countries, and discusses the development of Germany’s longdistance rail passenger services in particular.