Are rail charges connected to costs?
economics - capital costs, economics - operating costs, mode - rail, place - europe
Rail charges, Railway costs, Marginal costs, Total cost, Charging principles
In rail pricing systems, variable charges and track usage or running charges are supposed to recover the costs that are most directly incurred as a result of operating a train service: the marginal costs of track renewal and maintenance.
This paper studies a series of national charging systems to compare track usage costs and the charges that seek to recover those costs. It also examines the pricing levels applied to railway services to study the coherence between national charging systems and the charging principle on which they are based. The key conclusions are that, in general, the countries that adopt a full cost system recover more costs than those that adopt a marginal cost system. Moreover, the pricing system applied by “marginal cost system countries” varies, depending on the country and type of railway service provided. It has also been found that, no matter which charging principle is adopted, regional, local and suburban trains are the rail services on which more costs are levied, followed by long distance passenger trains and freight trains, with the latter making the lowest contribution to track costs. Another point in common among all countries is the small portion of costs recovered via charges. Finally, the study on coherence showed that some countries do not apply the charging principle of their choice coherently.
Permission to publish the abstract has been given by Elsevier, copyright remains with them.
Calvo, F., & De Oña, J. (2012). Are rail charges connected to costs? Journal of Transport Geography, Vol. 22, pp. 28-33.