Rail access charges in France: Beyond the opposition between competition and financing

Yves Crozet () and Florian Chassagne
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Yves Crozet: LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique
Florian Chassagne: LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique

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Abstract: Access charges to the railway infrastructures, and in particular of the high speed lines, poses many theoretical and practical questions. Besides the need to decide whether it is better to apply a principle of marginal cost or a full cost approach, a difficulty arises with regard to the possibilities of competition between various operators. France is especially affected by this problem since access charges are particularly high while at the same time competition is non-existent. Is this absence of competition explained by the high level of access charges? After describing the principles which underlie the pricing scheme for high speed trains in France, this paper attempts to find out if these tolls constitute a barrier to entry. After building a model that summarizes the components of supply and demand on the Paris-Lyon journey, this paper shows that the considerations relating to demand (peak hour or off-peak hour) are more fundamental than access charges, which do not in themselves constitute a barrier to entry. Barriers exist, but they involve access charges in relation to the allocation of slots which would make it possible to guarantee certain profitability to a new entrant. Break-even points are proposed which show that SNCF's potential competitors have margins for manoeuvre.

Keywords: Access charges; Barriers to entry; Competition; Marginal cost; High speed rail; Infrastructure financing; Mark-up; Welfare economics; Case studies (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

Published in Research in Transportation Economics, 2013, 39 (1), pp.247-254. ⟨10.1016/j.retrec.2012.06.021⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01021433

DOI: 10.1016/j.retrec.2012.06.021

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