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1. Introduction
Railways, wherever they are across the globe, are being subject to tremendous change due to privatization and deregulation; for example in US, New Zealand, Mexico and Japan governments have decided to keep companies vertically integrated ([19] Gomez-Ibanez, 2004), and railway companies compete for long-term contracts to operate particular routes; in contrast the EU has decided that infrastructure should be separated from freight and passenger operations. In the beginning of 2007, all EU member states will face a situation where railway freight transportation operations are open to free competition. However, in the literature there are warning examples of painful privatization processes ([47] Tyrrall, 2003; [12] Crompton and Jupe, 2003), but suggestions of successful outcomes can be found from the UK ([31] Mathieu, 2003). However, Sweden ([24] Holvad et al. , 2003) and the Baltic States ([35] Ojala et al. , 2005) have showed a better process of change as well as similar results.
Despite foreknowledge of the significant change coming to this industry, there exist only small amounts of research related to the competitiveness, productivity and efficiency of European railways ([11] Christopoulos et al. , 2001; [15] De Jorge and Suarez, 2003). It is wellknown that passenger transportation is less profitable (e.g. in US railway passenger transportation is certainly not a favoured option for traveling; [7] Blackshaw and Thompson, 1993), and most often supported by local governments, and therefore the future of railway transportation depends largely on freight transportation. In a European context we have faced in the past two decades constant demand decline, and therefore productivity and efficiency comparisons become important, and interesting as the basis of research.
Efficiency comparison using data envelopment analysis (DEA) has been a popular research topic in the previous decade; [8] Charnes et al. (1978) developed the approach originally as a non-parametric efficiency evaluation technique, especially applicable to governmental and non-profit organizations. However, application domains have been diverse:
- [2] Banker et al. (1986) studied Canadian hospital production;
- [28] Jamasb and Pollitt (2003) deregulation effects on European electricity distribution, where [20] Goto and Tsutsui (1998) compared the efficiency of Japanese and US electric utilities;
- [4] Birgun and Akten (2005) as well as [34] Min and Park (2005) have completed comprehensive sea port terminal analysis;
- technical...