Subsidy requirements in a restructured rail network: With particular reference to British Rail

Peter Else

Transport Policy, 1996, vol. 3, issue 1-2, 13-15

Abstract: This note argues that the effects of the kind of disintegration of the railway industry being attempted in the UK, whilst providing more scope for the operation of competitive forces, is likely to make it much more difficult to sustain current passenger service levels without increased government subsidies. Apart from the possibility that upstream suppliers will tend to charge train service operators prices above marginal cost for their services, the franchising process can be expected to result in less internal funds being available to support unprofitable operations than in a more integrated organisation. More funds will thus be required from government sources if existing service levels are to be maintained.

Date: 1996
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