Access Prices for Rail Infrastructure

John Freebairn

The Economic Record, 1998, vol. 74, issue 226, 286-296

Abstract: Separation of railway infrastructure, a natural monopoly, from a contestable train operator industry raises policy options for setting the infrastructure access fee and for regulation of the infrastructure supplier. Marginal cost, average cost. Ramsey prices and multipart tariff rules for access fees are assessed. Recognizing the importance of train operator entry decisions, a single access fee per gross tonne kilometre based on a mark‐up of marginal cost is favoured. An independent regulator and the use of price ceilings on the infrastructure supplier are proposed.

Date: 1998
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