Options for Industry Structure



Assembling the Building Blocks: Options for Industry Structure

The three building blocks—business organization, market competition, and separability—must be assembled to develop industry structures that improve on the archetypal railway. This toolkit presents policy options that exist within one of two alternative frameworks that emerge from the archetypal railway. Each framework is distinguished by its policy on public ownership and control of the railway infrastructure network.

  • Public infrastructure framework. This option retains public sector ownership and management of the railway infrastructure network. The framework assumes a mix of passengers and freight but the passenger role is substantial because experience shows that under these circumstances, governments are most committed to network ownership.
  • Private infrastructure framework. This option privatizes the national railway network and train services or offers the opportunity of concessions. The framework also assumes mixed passenger and freight but freight services predominate over more marginal passenger services because experience is shows that under these circumstances governments have been willing to privatize their public rail network57.

Both public and private frameworks can yield solutions that involve private sector participation, contestability, and business separation.

    


57 The only exception in the last thirty years was Great Britain, which has a passenger dominated railway network that was nevertheless privatized, though this was later reversed.









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