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Transcript of Study on Regulatory Options for Further Market Opening in Rail Passenger Transport Stakeholder...
Study on Regulatory Options for Further Market Opening in Rail Passenger Transport
Stakeholder Meeting
10 February 2010
Session 3Possible Regulatory Options
Presented by Robert Skene
Possible Regulatory Options
1. Objectives & Evaluation Criteria
2. Possible Options
3. Selection of Options for Modelling
1. Objectives & Evaluation CriteriaObjectives
The key objectives of the process are to:
Identify 3/4 models for regulatory structure that can be applied across the EU for modelling against Base Option
Models must provide market opening
Options suitable for each market segment must be developed
1. Objectives & Evaluation CriteriaEvaluation Criteria
Evaluation criteria for short listing:
Practical to implement
Compatible with increasing rail’s modal share
Maintains socially necessary services
Provides public benefits
Maintains integrated services & network benefits for users
Minimises public funding
1. Objectives & Evaluation CriteriaBase Option
Selected options will be evaluated against Base Option (2020):
Market opening is not an objective in itself
Base Option is not “exactly as things are now”
Includes:
all states coming into compliance with EU rail legislation,
expansion of high-speed rail network
Other modes evolve over time (e.g. increases in airport landing charges, increased road congestion, expansion of motorway network, etc)
1. Objectives & Evaluation CriteriaDiscussion Session
Questions:
Are the six key criteria identified appropriate for the initial sorting process?
Are there other criteria that you believe to be of equal importance?
2. Possible Options for Market OpeningMain Options - Overview
Fundamentally there are two main options:
competition within the market (e.g. open access)
competition for the market (e.g. public service contracts for the operation of defined groups of services)
There are; however, a number of ways in which these two options can be combined (“Detail Options”)
2. Possible Options for Market OpeningMain Options – Open Access, Pros and Cons
Only profitable services would be operated
Loss of unprofitable socially necessary services
Even potentially profitable services might not operate
Issues of “cherry picking” Network instability likely Difficult to provide co-ordinated
national service with network benefits
Sensitive to differential between infrastructure charges & fare levels
Potential reluctance to commit to contested markets
Services require no financial support
Non-discriminatory for RUs & lowest barriers to entry
On popular routes frequency should increase & fares fall
Gives RUs freedom to develop linkages between origin-destination pairs not currently served
Main advantagesMain advantages Main disadvantagesMain disadvantages
2. Possible Options for Market OpeningMain Options – Public Service Contracts, Pros and Cons
Limited leeway for development of new services
Little scope for innovative ideas & techniques
Public authorities responsible for determining services & quality – not very responsive to passenger needs
Dependent on public funds
No competitive pressures to reduce fare levels
Barriers to entry for new entrant RUs can be high
Ensures that national network of services is provided
With genuine competitive tendering, costs should fall
Facilitates integrated national network & network benefits
Stable for contract duration
Insensitive to level of infrastructure charges
Fare controls/fare regulation possible
Main advantagesMain advantages Main disadvantagesMain disadvantages
2. Possible Options for Market OpeningDetail Options – Overview Group A
Identified options: all or part of network open access only:
Model A: entire network open access only
Model B: as Model A but with support for unremunerative services (on individual basis, by tender)
Model C: as Model B but support provided by fixed public service support payment
Model D: individual train path auction
Model E: open access for profitable parts of network only, public service contracts for remainder
2. Possible Options for Market OpeningDetail Options – Overview Group B
Identified options: public service contracts for whole network:
Model F: open access permitted without restriction
Model G: open access permitted under regulatory control
Model H: open access permitted without restriction, but on certain lines only
Model J: no open access permitted
In all cases the public service contracts would be let by competitive tender, & would comply with Regulation 1370/2007
2. Possible Options for Market OpeningDetail Options – Overview Group C
Alternative model for minor lines:
Model K: vertical micro-franchise
This is a special case applicable to very lightly used lines, which might be used in conjunction with any of the other options. Only applicable for lines that might be regarded as “lines and networks isolated from the rest of the Community”.
2. Possible Options for Market OpeningDiscussion Session
Questions:
Are there any other models that should be considered?
What are the pros and cons of each model?
3. Selection of Options for ModellingPreliminary Evaluation Matrix
Practical to Implement
Compatible with
Increasing Modal Share
Keeps Socially
Necessary Services
Provides Public
Benefits
Integrated Services for
Users
Minimises Public
Funding
Model A some Model B complex some probably
Model C possibly possibly possibly some possibly
Model D possibly possibly possibly Model E
some sub- options possibly some possibly
Model F some possibly
Model G Model H probably
Model J possibly
3. Selection of Options for ModellingDiscussion Session
Questions:
Which models should be taken forward for impact assessment?