REORIENT

Effects of European railway policy on transport of goods

The REORIENT project assessed the progress in implementation of the European rail legislation and its subsequent impacts on the market behaviour of the European rail freight industry. The project partners investigated the opportunities of the new market conditions for new entrants and new business models. In a second phase, the partners also investigated the remaining barriers to set up seamless rail transport. Finally, the project made a general welfare assessment of the changing rail legislation in the corridor. TML participated in the latter phase.

As a part of the REORIENT research project, TML constructed the ERICCO model (European Rail Infrastructure Charges Calculation and Optimization model). The model studies the influence of national rail infrastructure policies on the optimal choice of the infrastructure charge. In REORIENT, this was an international railway corridor crossing 8 countries from Northern Europe to South-East Europe. It also calculates the influence of the national infrastructure charge policies on the general welfare in the corridor. The model takes the elements below into account for its analyses.
The model 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, the railway operators, 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 an 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 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.

reports

March 27, 2008, ETC paper of Olga Ivanova, Bruno Vanzeebroeck and Karel Spitaels: "Optimal Infrastructure Charging in a Multi-Country Railway Corridor" (pdf)

period

2005 - 2007

funded by

European Commission, 6th Framework Programme

researchers

Bruno Van Zeebroeck, Olga Ivanova, Karel Spitaels

partners

Isdefe (coordinator, E), TOI (coordinator, N), TNO (NL), Demis (NL), DLR (D), Napier University (UK), University of Bologna (I), University of Maryland (USA),...

contact

Griet De Ceuster

+32 16 31.77.30