Rail Economics, Policy and Regulation in Europe

Rail Economics, Policy and Regulation in Europe

Edited by Matthias Finger and Pierre Messulam

The European railway sector has undergone profound and predominantly institutional changes over the past 20 years, due to the initiatives of the European Commission. This book constitutes a first systematic assessment and account of the recent transformations of the industry along a series of critical yet contentious issues such as competition, unbundling, regulation, access charging, standards and interoperability, and public–private partnerships. It also covers the main railways sectors including passenger transport, high speed and freight.

Chapter 5: Commercialization and managerial independence

Silvia Olsen, Nils Fearnley and Julie Runde Krogstad

Subjects: economics and finance, transport, politics and public policy, regulation and governance, urban and regional studies, transport

Extract

Over the past 20 years, the European railway sector has undergone major transformations. Rail administrative reforms have been carried out in terms of market orientation, and many traditional state rail monopolies have been organized as limited state-owned companies with increased autonomy and managerial independence (Nash, 2010; Finger and Holvad, 2013). The gradual opening of the rail market to competition has enabled railway companies to access other markets. The new market situation has facilitated the establishment of new privately owned railway companies, which co-exist and compete with national state-owned companies (Alexandersson, 2009). This chapter provides a closer study of the growing market orientation of railways in Europe and what they make of their growing managerial independence. The EU Commission has gradually established a rail strategy with an overriding goal of introducing market forces into European railways. The issue was first raised in Council Directive 91/440, which stated that railway undertakings should have an independent status and be managed according to principles that apply to commercial companies, with activities adjusted to the market. Over the past two decades, EU legislation and regulations have been developed and specified, and define a framework in which European rail services can be performed. However, these EU directives allow national authorities to choose the form and methods by which results can be achieved. This has led to organizational differences in the rail services provided in European countries, particularly in relation to separation of rail infrastructure management and train operations.

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