Unbundling, public infrastructure financing and access charge regulation in the German rail sector

Abstract This paper provides an analysis of the outcomes of the German model with a focus on unbundling, public infrastructure financing and access charge regulation. It reviews recent regulatory initiatives in Germany such as the regulator’s proposal to introduce a price-cap regulation and the draft of a new regulation law for the German rail sector. The analysis shows that the German Holding model appears to be successful in terms of transport performance and financial outcomes. However, it is characterised by regulatory deficits which have hampered a faster progress in introducing competition in the rail sector. The new regulation law contains a series of measures which will provide more transparency in access and access charges, strengthen the position of the regulator and move the current ex-post regulation towards an ex-ante regulation based on the efficient costs of service provision. However, exclusion of costs for replacements and new investments from access charge regulation leaves only the smaller part of costs for a consistent regulation and will weaken the impacts of regulation.

[1]  Marc Ivaldi,et al.  Intermodal and Intramodal Competition in Passenger Rail Transport , 2005 .

[2]  Chris Nash,et al.  Passenger railway reform in the last 20 years – European experience reconsidered , 2007 .

[3]  Hubertus Gersdorf.  Entgeltregulierung im Eisenbahnsektor , 2007 .

[4]  Rico Merkert,et al.  Looking beyond separation - a comparative analysis of British, German andSwedish railways from a new institutional perspective , 2008 .

[5]  Frank Miram.  Anforderungen an die konsistente Regulierung der Eisenbahnen , 2012 .

[6]  M. Ivaldi,et al.  Density and Integration Effects on Class I U.S. Freight Railroads , 2001 .

[7]  Chris Nash,et al.  Comparing Three Models for Introduction of Competition into Railways , 2011 .

[8]  Ronald R. Braeutigam,et al.  An Analysis of Fully Distributed Cost Pricing in Regulated Industries , 1980 .

[9]  P. Fraser,et al.  Political and Regulatory Risk: Beta Sensitivity in U.K. Electricity Distribution* , 2001 .

[10]  Marc Ivaldi,et al.  Railway (De)Regulation: A European Efficiency Comparison , 2004 .

[11]  Heike Link,et al.  Rail infrastructure charging and on-track competition in Germany - 9 years later , 2003 .

[12]  Arne Jensen,et al.  Economic Impacts of Swedish Railway Deregulation: A Longitudinal Study , 2007 .

[13]  John D. Bitzan,et al.  Railroad Costs and Competition: The Implications of Introducing Competition to Railroad Networks , 2003 .

[14]  W. Baumol,et al.  Contestable Markets and the Theory of Industry Structure , 1982 .

[15]  Rico Merkert,et al.  Success Factors and Pitfalls of Regional Rail Franchising in Germany , 2011 .

[16]  Christian Growitsch,et al.  Testing for Economies of Scope in European Railways: An Efficiency Analysis , 2006 .

[17]  Chris Nash,et al.  The Measurement of Transaction Costs - Evidence from European Railways , 2012 .

[18]  Pedro Cantos-Sánchez,et al.  Vertical and Horizontal Separation in the European Railway Sector and its Effects on Productivity , 2010 .

[19]  Fumitoshi Mizutani,et al.  Does vertical separation reduce cost? An empirical analysis of the rail industry in European and East Asian OECD Countries , 2013 .