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Assessing the efficient cost of sustaining Britain’s rail network perspectives based on zonal comparisons

Kennedy, J. and Smith, A.S.J. (2004) Assessing the efficient cost of sustaining Britain’s rail network perspectives based on zonal comparisons. Journal of Transport Economics and Policy, 38 (2). pp. 157-190. ISSN 0022-5258

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Abstract

The objective of this paper is to inform the debate on how efficiency targets for Network Rail (formerly Railtrack) should be set during the 2002/03 Interim Review and beyond. Given the problems experienced during the 2000 Periodic Review, which focused on external benchmarks,we propose an internal benchmarking approach, drawing on data for seven geographical zones within Railtrack. Our approach mirrors the yardstick competition method used in other UK regulated industries. Two efficiency measurement techniques are applied to this data. Our results suggest that Railtrack (as a whole) delivered substantial real unit cost reductions in the early years after privatisation, although these savings were largely offset by the post-Hatfield cost increases. However, looking forward, zonal efficiency differences suggest that the company could make significant savings in future years by applying best practice consistently across the network.

Item Type: Article
Copyright, Publisher and Additional Information: Originally published by the Journal of Transport Economics and Policy and uploaded with their permission.
Institution: The University of Leeds
Academic Units: The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds)
Depositing User: Adrian May
Date Deposited: 02 Aug 2007
Last Modified: 05 Jun 2014 08:37
Published Version: http://www.bath.ac.uk/e-journals/jtep/
Status: Published
Publisher: Journal of Transport Economics and Policy
Refereed: Yes
Related URLs:
URI: http://eprints.whiterose.ac.uk/id/eprint/2432

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