Book reviews

The European Community Transport Policy: Towards a Common Transport Policy. By Jurgen Erdmenger (Gower Publishing Co. 1984) [Pp. 155.] £14.50.

Transport Reform: Changing the Rules. By Stephen Plowden. P.S.I. No. 642 (London: Institute, 1985.) [Pp. 250.] £6.50. ISBN 0–85374–258–8.

The Atlas of British Railway History. By Michael Freeman and Derek Aldcroft (London: Croom Helm, 1985.) [Pp. 128.] £12.95.

Losing Track. By Kerry Hamilton and Stephen Potter (Routledge & Kegan Paul in association with Channel Four, 1985.) [Pp. viii + 152.] £7.95. Paperback.     

Passenger railway reform in the last 20 years - European experience reconsidered

It is about 20 years since the rail reform process in Europe began with the separation of infrastructure from operations in Sweden. This paper reviews the entire process, examining the objectives of reform, the different models adopted, and the key elements of separation of infrastructure from operations, competition both through open access and franchising and regulation and infrastructure charging. It is concluded that separation of infrastructure from operations involves costs, but is the most effective way of achieving within mode competition. Where operations do not greatly overlap and open access passenger and freight are unimportant, leasing infrastructure to passenger franchisees may be effective, but the model of vertical integration as separate subsidiaries within a holding company structure makes it difficult to ensure a level playing field for new entrants and is only effective where the vertically integrated operator remains dominant.     

The case for space: the measurement of capacity utilisation,its relationship with reactionary delay and the calculation of the capacity charge for the British rail network

In Britain, capacity charges are levied on train operators to cover the costs imposed by increased reactionary delays – i.e. the delay that an already late train causes to a following train. These charges are based on the link between capacity utilisation and the level of reactionary delay. An established method for measuring capacity utilisation was adopted called The Capacity Utilisation Index (CUI). In this paper, we propose an alternative methodology based on the theory that the level of reactionary delay will be determined by the minimum gaps that exist between trains. We test this measure with a new data-set for the East Coast Main Line and show that it performs better than CUI. Finally, we comment on the implications of this finding for charging and for the construction of timetables.     

Appraisal of rail investment projects: recent British experience

There has long been conflict over the degree to which railways should follow commercial or social investment criteria. This paper outlines the components of a comprehensive social cost‐benefit analysis of railway investment, and then describes the current approach in Britain. British Rail investment proposals are subject to a purely financial appraisal, although in the subsidized sectors of the railway this is subject to the proviso that a ‘broadly comparable’ level of service should be maintained. Local authorities and private operators are able to apply for a central government grant towards the cost of schemes they sponsor. But grant is only payable in respect of external benefits—that is, benefits other than to public transport users. Sponsors are also expected to seek contributions from private developers wherever possible. The difficulties to which this approach leads are discussed, and illustrated with two case studies of actual schemes. In one, it appears that failing to consider disbenefits to bus operators (and in turn to users of bus services) could lead to investments being undertaken which are not justified. In the other, a scheme which yields a high Net Present Value could not go ahead, in the form that we evaluated, because there is no way of recouping enough of the user benefits as revenue. Both are examples of the sort of distorting effect on decision‐making the current regime may have.     

Harmonizing heavy goods vehicle taxes in Europe: a British view

One of the biggest unresolved problems regarding the completion of the free internal transport market within the European community is the problem of harmonization of taxation on the road haulage industry. As the highest tax country, Britain might be expected to have to reduce its level of taxes as part of any harmonization.

This paper considers the current methodology of the British Department of Transport regarding the allocation of the track and external costs of road transport, in the light of developments in methodology and experience elsewhere in Western Europe and North America. We find a number of reasons for believing that, far from overstating the marginal social cost of use of roads by the road haulage industry, the current British approach actually understates it. Thus any move towards harmonizing tax levels may reduce taxes in Britain at a time when they should be increasing.     

Deregulating the bus industry in Britain: a rejoinder

In our critique for the Buses White Paper, we argued that ‘competition for licences’ could achieve most of the benefits of competition without the major disadvantages of ‘competition on the road’. In response to the comments of Beesley and Glaister, we explain how comprehensive franchising of good and bad routes alike would encourage effective competition, whilst providing conditions for the transparent continuation of cross‐subsidy where that was the choice of the local authority in question. We correct their misrepresentation of our arguments on the desirability of cross‐subsidy and on the case for minibuses, and explain why we believe that such cost savings as are achieved will be mainly at the expense of staff or customer service. Finally, we restate the case for believing that a unified planned timetable will provide a better service for a given level of resources than will uncoordinated competitive services.     

Policies towards suburban rail services in Britain and the federal republic of Germany — a comparison

This paper compares the major role played by suburban rail (S‐Bahn) systems in West German cities with the much more limited role of rail in the British conurbations. Clearly, the difference owes much to the institutional and financial arrangements in the two countries. In West Germany, large amounts of earmarked funds have been available for rail investment, whilst the Federal government has been willing to shoulder much of the burden of operating subsidies. The Verkehrsverbund has emerged as a highly effective way of coordinating fares and services without direct ownership of any mode of transport. By contrast in Britain funds for rail investment have been much more limited. Progress with integration has been far slower, and is threatened by current government policies regarding both bus deregulation and the abolition of the Metropolitan county councils. Whilst rail is firmly established in German cities, its future in Britain looks bleak.     

European rail reform and passenger services - the next steps

Whilst the emphasis of European Union rail legislation to date has been on freight, measures such as separation of infrastructure from operations, infrastructure charging regimes and regulation have major implications for the passenger sector. But implementation of these measures in many countries has been inadequate. Crucial to overcoming these problems is the establishment of strong independent regulators in all member states. There is currently no requirement for competition in the passenger sector except for international services, but there is experience both of open access for commercial services and of competitive franchising. However, even where permitted open access competition has been very limited and there is evidence that undesirable cream skimming may be a problem. Experience of franchising has generally been positive, but in some cases it has failed to drive down costs. It is concluded that a combination of more sensible risk sharing, a determination not to renegotiate, longer franchises and limited open access competition where justified by benefits is likely to be the best way forward.     

The treatment of capital costs of vehicles in evaluating road schemes

There are two ways in which new road schemes may influence capital expenditure on vehicles. Firstly, by improving utilisation of existing vehicles, the size of fleet needed to perform a given volume of work may be reduced. This will clearly reduce the amount of capital tied up in motor vehicles at any point in time, and to the extent that vehicle life is determined by age rather than mileage run, will also yield savings in terms of investment in new vehicles. Secondly, by generating additional road traffic, road schemes may lead to an increase in the stock of vehicles in use.This paper argues that the current treatment of vehicle depreciation and interest charges in U.K. cost data fails to allow correctly for either of these items. Errors of logic occur in the way in which the capital stock of vehicles is valued, and in the fact that certain overheads are ignored even when fleet size changes. Moreover, the empirical evidence supporting the current partitioning of depreciation into overhead and running cost components, and the assumption of constant hours in service after an increase in journey speed seems of doubtful validity.An alternative method of calculating vehicle capital costs, based on the concept of annual capital charge, and making explicit the assumptions with respect to vehicle utilisation, is advocated, and the sensitivity of results to the view taken of the latter is demonstrated by means of specimen calculations.