Railway Reform and Entrepreneurship: a Tale of Three Countries



Railway Reform and Entrepreneurship: a Tale of Three Countries

Authors

PRESTON J, University of Oxford, UK, VELDE, D van de, Erasmus University, The Netherlands, HULTEN S, Stoekholm School of Economies, Sweden and MIZUTANI F, Kobe University, Japan

Description

Many European railways currently find themselves confronted with extensive reforms. Common elements in those reforms are the introduction of competitive elements, contractual elements and/or performance checks. Main triggers for these reforms were the she

Abstract

Many European railways currently find themselves confronted with extensive reforms. Common elements in those reforms are the introduction of competitive elements, contractual elements and/or performance checks. Main triggers for these reforms were the sheer unbearable railway debt and the growing discontent of authorities with the achievements of railway undertakings in terms of market share. Besides this the EC rail transport policy and, in particular, the Directive 91/440 were main external trig- gers to reorganise the railway sector in Europe on the basis of some form of separation between infrastructure and operations.

The question for most countries now is how to reform the railway markets and what use to make of competition such as to achieve more efficiency and effectiveness. Many options are thinkable. To name but a few: competition off (or for) the tracks (tendering/franchising), competition on the tracks (intramodai competition on the same tracks), competition between tracks (intramodai competition on different tracks - parallel lines serving the same main cities but serving different local markets), com- petition besides and above the tracks (intermodal competition with car, bus and plane), competition between companies owning their tracks (yardstick competition by the authority, competition for residents along the tracks, and/or profitability competi- tion on the stock exchange) and competition in the train (competition between differ- ent quality of service on board the same train, such as in night trains).

Comparing various recent models (van de Velde and van Reeven, 1998), one has to observe a wide diversity between and within countries in the role of competition (e.g. between long distances and short distances) and the position of infrastructure. Fur- thermore countries often choose a step-by-step approach, only sketching future steps, recognising that further adjustments will be needed. Among those countries chosing for competition, competition on the tracks is not a very popular model. Even countries going furthest in this approach, as Great Britain, tend to see it as a rather long-term aim to be introduced gradually and with adequate care.

In this paper we will focus on Great Britain, Sweden and Japan, three countries pre- senting radical differences in railway organisation and in the role of competition within those models. This paper will start by a description of the reform implemented in those countries and some of the observable consequences of reform up till now. After this, the paper will focus on the more entrepreneurial aspects of the new organ- isational forms. We think that this aspect deserves much attention as long term suc- cess in the railway sector will be dependent upon the sector's ability to maintain and develop its market by ensuring that its services are constantly adapted to changing mobility needs and wishes in service characteristics. We concentrate here on passen- ger transport but many of the aspects are also valid for freight.

Publisher

Association for European Transport