Rail access charges and the competitiveness of high speed trains

Document Type

Journal Article

Publication Date

2010

Subject Area

economics - pricing, organisation - competition, place - europe, mode - rail

Keywords

User charges, Social costs, Railroad transportation, Rail transportation, Pricing, Marginal costs, Infrastructure, High speed trains, High speed rail, Externalities, Europe, Competition, Barriers to entry (Competition), Access fees

Abstract

This paper examines rail access charges for high speed trains on new high speed lines in Europe and the impact these have on the market position of high speed rail. It examines the latest evidence on the marginal infrastructure and external costs of high speed rail, finding that the best evidence is that these are both not more than 2 €/train-km. However, current legislation states that environmental costs should not be charged for unless they are charged for on competing modes. Mark ups based on Ramsey pricing principles might reasonably raise prices by 100-200%, given that infrastructure charges are only a part of the final price of rail. The paper then examines the actual prices charged in the main European countries operating high speed trains and the impact these are likely to have on traffic levels and mode split. It is found that mark ups often exceed even the optimal Ramsey levels, with a significant impact on rail volumes and market share. It is concluded that, whilst it is not surprising that governments wish to recover some of the construction costs of new high speed rail lines from users, they should consider carefully whether the level of charges is actually significantly reducing traffic on and benefits from these lines.

Comments

Transport Policy Home Page: http://www.sciencedirect.com/science/journal/0967070X

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