ERICCO model
European Rail Infrastructure Charges Calculation and Optimization model
As a part of the RE-ORIENT research project we have constructed the
ERICCO model (European Rail Infrastructure Charges Calculation and
Optimization model), which can be used to study the influence of the
national policy regimes, related to railways infrastructure provision,
upon the optimal choice of the infrastructure charges in the countries
along the international railways corridor and the overall welfare of the
countries. The international corridor studied is a corridor crossing 8
countries from Northern Europe to South-East Europe. The constructed
model allows for assessing the influence of the national policy regimes,
related to railways infrastructure pricing, upon the overall welfare of
the countries. It analyzes the problem where the infrastructure managers
of the countries along the railways corridor are in charge of the
pricing of an access to their railways networks. The railways
infrastructure is used by the downstream firms to provide domestic and
international, passenger and freight services.
The downstream firms originate from different EU countries and, hence,
their operations are associated with different production costs and
levels of the governmental subsidies. These firms operate under the
oligopoly market structure.
The costs of building and maintaining national railways infrastructures
can be financed either by governmental subsidies or through the user
infrastructure charges. The degree of use of the governmental subsidies
for the financing of the railways infrastructure determines the
infrastructure provision regime in a particular EU country. The specific
combination of different national regimes in the EU countries along the
international railways corridor results in a certain national and
overall welfare related to the railways sector.
The national welfare consists of the following main elements: domestic
consumer surplus, surplus of the domestic downstream providers of
railways services and subsidies for railways infrastructure provision.
Based on the national welfare levels, it is possible to calculate the
weighted total welfare of the countries along the railways transport
corridor.
By optimizing the overall welfare measure of the corridor it is possible
to determine the most welfare-efficient unified international
infrastructure funding regime. This information will help to improve the
present national legislative frameworks on the infrastructure funding in
the countries along the transport corridor and, hence, optimize the
efficiency of the transport operations on this international railways
corridor.
recent projects
| REORIENT | Effects of European railway policy on transport of goods |