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Transportation (2012) 39:12811299
DOI 10.1007/s11116-012-9389-6
Jonathan Cowie Sarah Loynes
Published online: 19 February 2012 Springer Science+Business Media, LLC. 2012
Abstract Over the last decade, British railway engineering efciency has come under close scrutiny, with general perceptions of massive maintenance cost escalations and a general lack of control over these costs. This is exemplied by headline gures such as Roger Fords perceptions of a 50% rise in maintenance costs since privatisation (Mod Railw 638:8, 2001), or the more recent gure of a doubling in all rail costs since privatisation presented by Shaoul (Public Money Manag 26:151158, 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 19802009, which has seen three different infrastructure management regimes in placethe nationalised BR (19801994), the privatised Railtrack (19952001) and the not for dividend Network Rail (20022010). 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 signicantly 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 signicantly.
Keywords Rail infrastructure management X-inefciency Privatisation
Imperfect competition
J. Cowie (&)
SEBE/Transport Research Institute, Edinburgh Napier University, 10 Colinton Road, Edinburgh EH10 5DT, UKe-mail: [email protected]
S. Loynesc/o Jonathan Cowie, Transport Research Institute, Edinburgh Napier University, 10 Colinton Road, Edinburgh EH10 5DT, UK
An assessment of cost management regimes in British rail infrastructure provision
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Introduction
Over the last decade, British railway engineering has come under an unprecedented level of public scrutiny, with general perceptions of massive cost escalations and an organisational lack of control over these costs. Shaoul (2006) for example estimates that all rail industry costs have more than doubled since privatisation, with the infrastructure provider being a major contributor...