An assessment of cost management regimes in British rail infrastructure provision

Over the last decade, British railway engineering efficiency has come under close scrutiny, with general perceptions of massive maintenance cost escalations and a general lack of control over these costs. This is exemplified by headline figures such as Roger Ford??s perceptions of a 50% rise in maintenance costs since privatisation (Mod Railw 638:8, 2001), or the more recent figure of a doubling in all rail costs since privatisation presented by Shaoul (Public Money Manag 26:151?C158, 2006). Little, however, has appeared in the academic literature on the subject. This paper considers these issues through an examination of British railway infrastructure costs over the period 1980?C2009, which has seen three different infrastructure management regimes in place??the nationalised BR (1980?C1994), the privatised Railtrack (1995?C2001) and the not for dividend Network Rail (2002?C2010). Infrastructure costs are examined in total for all operating costs (including maintenance but excluding renewals and depreciation), and under two sub categories, signalling and management costs. The results show that in the case of total operating costs, by the end of the period (up to 2010) these had returned to pre-privatisation levels. The results also show that costs increased significantly following privatisation due to imperfect competition in sub contractor markets, but large declines in the last 6?years have eradicated most of these costs increases, although still do not match the best achieved under full public sector management. Management costs associated with the infrastructure on the other hand have increased significantly.     

Delivering Value for Money to Government through Efficient and Effective Public Transit Service Continuity: Some Thoughts

Abstract

This paper documents some thoughts on the reform agenda in public transit that is occurring throughout the world. The specific focus is on a growing commitment to competitive regulation through competitive tendering, and the efforts by a few governments (notably in Australia) to take control of the tangible assets used by private operators as a mechanism to exercise the opportunity, if so taken, to put services out to competitive tender. The paper reviews the theoretical arguments and empirical evidence on contracting regimes and asset ownership, and the role that government and the operator might play in a setting in which building trusting and collaborative partnerships has merit in delivering services that are in the main funded from the public purse.     

The Smeed Report 50 years on: a role for the workplace parking levy?

Fifty years ago, Reuben Smeed chaired a study and produced a Report on the Economic and Technical Possibilities of Road Pricing. This report was to consider different methods of charging, including road pricing, to see if different pricing methods could reduce the problems associated with congestion as opposed to the traditional methods in place such as fuel tax. Since that time, various attempts have been made to introduce road pricing schemes but with only modest success so far. By contrast parking policies, a second-best alternative to road pricing, have been extensively used by local authorities as a means of managing congestion. The effectiveness of such policies, however, has been limited by an increase in the proportion of privately owned non-residential parking which is not under the control of local authorities. The aim of this paper is to present the results of an early-stage, post-implementation study of the Nottingham Workplace Parking Levy (WPL) – a measure that charges employers for the number of parking spaces they provide for their staff. Particular emphasis is placed on why a WPL was seen as being favourable compared to a road pricing alternative. The reason for this was that it could be introduced in a shorter time frame and at a lower cost, thus making it a lower risk option when compared with road pricing.     

Acquisition,efficiency and scale economies: An analysis of the British bus industry

The British Bus industry has undergone considerable transformation since privatization. Five major operators have emerged to dominate the market, a position almost exclusively attained through acquisition. This paper reviews the economies of scale argument commonly cited for this change and gives an overview of the acquisition process. It questions whether this argument gives a complete explanation for this industry development. For 58 individual companies, the level of technical efficiency attributable to firms operating at or near the optimum level of output is examined over 5 years to determine if mergers in practice have resulted in scale economies. Technical efficiency is estimated using data envelopment analysis, under assumptions of constant and variable returns to scale. Efficiency scores are then regressed on a time trend and a merger dummy to test whether acquired firms' efficiency has significantly improved above the average. It was found that over the period, efficiency had improved. This improvement, however, cannot be wholly attributed to the achievement of economies of scale. More specifically, there has been an improvement in the internal efficiency of acquired firms and some scale economies within group companies, the latter of which may have resulted from the eradication of competition.     

A review of passenger rail franchising in Britain: 1996/1997-2006/2007

This paper reviews 10 years of passenger rail franchising in Great Britain and highlights problems in three areas: the tension between commercial and social objectives; the presence of risks and uncertainty; and vulnerability to strategic behaviour such as low-balling, chiselling and back loading. It concludes that franchising has had some good features (such as the high level of competitive pressure) but also some bad features (such as a high rate of franchise failures). In addition, an ugly feature of franchising is the scope for strategic behaviour. Further reform is suggested based on a distinction between commercial and social franchises.     

Swimming for survival: A role of phytoplankton motility in a stratified turbulent environment

We investigate a role for vertical migration in stratified coastal water, where the swimming speed is generally significantly less than the typical turbulent fluctuations in a tidally-mixed bottom layer. In our modelling approach we use a k- turbulence model to describe the physical forcing, a Lagrangian random walk model to describe the vertical displacement of individual cells in response to turbulence and due to cell motility, and a phytoplankton growth model to direct the swimming behaviour of the phytoplankton according to their light and nutrient requirements. The model results show how the cells form a stable subsurface chlorophyll maximum (SCM) at the base of the thermocline where episodic tidal turbulence causes erosion of part of the SCM biomass into the bottom mixed layer (BML). We then focus on the question of whether an ability to swim (weakly, compared to typical bottom layer turbulent intensities) provides any advantage by allowing return to the SCM. Our results show that tidal turbulence in the BML helps both motile and neutrally-buoyant cells by periodically pushing them into the base of the thermocline. Motile cells then have the advantage that they can swim further into the thermocline towards higher light which also reduces the likelihood of being re-mixed back into the BML.     

Analysis of Ocean-Space and Sea-Level Rise Policy in Two Coastal Cities

Global sea-level rise (SLR) is among the most alarming aspects of anthropogenic climate change. The human impacts of SLR are experienced unequally between and within municipalities. Existing research has identified social variables that predict municipal adoption of adaptive SLR policy, but this work does not account for the locally specific social factors that shape particular policies to fit particular cases. This study describes social conceptions of the ocean and SLR policy for two coastal cities in western Washington: Aberdeen and Bainbridge Island. Examining conceptions of marine spaces provides insight into the complex process by which local physical and socio-demographic characteristics shape local policy. The study uses a grounded theoretical approach to content analyses, resulting in localized typologies of marine spaces as well as SLR policy profiles for each case. Results indicate that municipalities vary by both social conception of the ocean and SLR policy form. These findings elaborate upon the relationship between socioeconomic conditions and municipal climate change policy adoption, suggesting that in local media and policy discourse, the absence of relevant resources is related to adversarial conceptions of local marine spaces, while abundance of relevant resources is associated with a conception of marine spaces as natural resources.     

Competition in transit markets

Despite regulatory reforms in a number of countries, competition in transit markets is still relatively rare. Moreover, where it does occur it tends to be small group in nature and the outcomes are difficult to predict. In this paper, simulation models of competition in inter-urban rail markets and urban bus markets are developed and applied in studies of Great Britain and Sweden. It is found that on busy routes head-on competition is commercially feasible (although for rail this assumes low access charges) but is not socially desirable. For routes with thin demand (or high access costs), competition may be limited to cream skimming. In most competed cases, there appears to be a tendency for the provision of too much service, at too high price and (at least for bus) at too low quality. Rather than classical Bertrand-Cournot oligopoly models, transit markets may be best described by models of oligopolistic competition based on horizontal product differentiation.     

Rail network accessibility and the demand for inter-urban rail travel

This paper reviews methods that have and can be used to forecast the effect of changes in accessibility to the rail network on the demand for inter-urban rail travel and of available evidence on rail accessibility elasticities. It reveals that relatively little research has been conducted in this area and that the forecasting procedures that could be used imply large variation in accessibility elasticities, which has not been empirically justified. Fresh empirical evidence on two related matters is reported. First, the neglected area of choice set composition is examined and the extent to which rail is considered to be a realistic alternative for inter-urban journeys and the contribution that accessibility to the rail network makes to this are analysed. Second, rail trip rate models are presented that not only contain estimates of accessibility elasticities and of the effects of a range of socio-economic variables on the demand for rail travel, but also that allow tests of the accessibility elasticity variation implied by many forecasting procedures to be conducted. It is found that this elasticity variation is not empirically supported. It is concluded that there is only limited scope for increasing rail demand through improvements in rail network accessibility.     

Role of the Travel Factor Convenience in Rail Travel and a Framework for its Assessment

Abstract

This paper reviews the travel factor convenience with particular regard to rail travel. Past research has shown that convenience is a concept readily associated with the private car and its perceived ability to provide a door‐to‐door journey. Private vehicles such as cars are often key competitors to public transport. However, convenience with regard to public transport has proved to be somewhat of an ambiguous concept, often showing a high degree of overlap with the other main recognized travel factors. This paper shows that it is possible to consider convenience in rail travel as an embodiment of four themes: access/egress, station facilities/environment, frequency of service/scheduling and interchange between train services. A list of physically measurable elements can be produced relating to these four themes in order to assess the convenience of any particular station. A categorization process is proposed based upon the initial findings of a questionnaire designed to obtain a user perspective upon convenience. It is concluded that no definitive measure of convenience can be produced for rail travel, although a proxy measure, based upon categorization, containing some or all of the defined elements should be possible.