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CHAPTER ONE: CONTEXT, AIMS AND OBJECTIVES
Introduction
1.1. On 30 August 2006 Transport Scotland commissioned Steer Davies Gleave to provide research on international comparisons of rail networks and to identify policy lessons for Scotland. Transport Scotland expected that the research should include the Republic of Ireland, Denmark and Sweden and possibly other countries or regions.
1.2. The brief set us the following principal tasks:
- To provide a detailed analysis, both qualitative and quantitative, of the rail network in each selected country or region, and to address each of the issues set out in Table 1.1.
- To identify any areas of success in each of the selected countries or regions (whether in the overall network model or specific elements) and to consider any potential lessons for the development of rail policy in Scotland.
- Where appropriate, to acknowledge any areas of success in the existing Scottish network.
1.3. The focus of our work was therefore on background research on general lessons which could be learnt from comparator railways, rather than to examine the merits of any specific policy initiative in Scotland.
1.4. Our approach included a number of strands of analysis:
- Selection of additional comparator networks which were most likely to provide relevant evidence and insights
- Review of previous work carried out by Steer Davies Gleave on comparisons between European railways including the Railimplement and Servrail studies for the European Commission, including extensive surveys of, and interviews with, industry players
- Desk research on the roles of railways, governments, regional and local authorities and regulatory bodies
- Interviews with selected industry contacts to understand how the formal arrangements worked in practice
Issues to be examined
1.5. Table 1.1 summarises the issues and questions which Transport Scotland asked us to answer.
Table 1.1 Transport Scotland's questions
Area | Analysis required |
Rail policy | Where rail fits within the wider transport provision and policy. |
Market context | The objectives of the controlling authority (or authorities). |
Market evolution | How each of the selected rail networks has evolved. |
Demand | Analysis of market share and mode size. What, if any, are the constraints on demand? |
Government intervention | The extent of government intervention. What is the role of government in the rail markets of each country? Analysis of the level of government spending and extent of price controls. |
Regulatory framework | How each rail market is regulated (in terms of price, safety, standards), highlighting any strengths/weaknesses of particular systems. |
Operational framework | Extent of separation between infrastructure and operations and how this has affected the financial and operational efficiency of the network. |
Infrastructure | Privately or publicly owned? Approaches to rail infrastructure charges. What is the best structure? The capacity and quality of infrastructure. |
Franchising | The passenger franchise structure. Is franchising superior to provision of passenger services by monopoly public or private sector railways? |
Competition | To what extent does competition (on-track and at re-franchising) exist between operators in rail markets? What have been the effects on costs? What are the barriers preventing greater market entry and how may they be overcome? |
Sub-contracting | To what extent are non-core services ( e.g. track maintenance) contracted out and what are the effects on cost and quality? |
The structure of this Final Report
1.6. The remainder of this Final Report describes in sequence:
1.7. Chapter 2 summarises the framework of European railway law, applicable to all the networks except New Zealand, and its implementation in Great Britain and Scotland.
1.8. Chapter 3 provides brief descriptions of the comparator networks and their arrangements for policy setting, government, regulation and operation.
1.9. Chapter 4 describes the markets served by Scotland and the comparators, whether they could be profitable, and hence examines:
- For potentially profitable services, open access or "competition in the market"
- For inherently loss-making services, franchising or "competition for the market"
- Prerequisites of competition, including availability of capacity and rolling stock
1.10. Chapter 5 examines how the public sector manages the railways and how the various functions of railway policy, planning, funding, management and regulation are distributed between different levels of government and regulatory bodies.
1.11. Chapter 6 examines how infrastructure and operations have been separated, and in particular how this affects the planning, funding, commissioning and operation of services requiring coordinated investment.
1.12. Chapter 7 describes where and how infrastructure managers and operators have in turn subcontracted the provision of some or all of their activities.
1.13. Chapter 8 sets out our principal conclusions on the lessons learned from the comparators.
1.14. We also provide a number of Annexes:
- Annex 1 provides a short glossary of terms
- Annex 2 details the exchange rates used in converting financial values
- Annex 3 provides maps of the networks studied
- Annex 4 summarises the key points of European railway legislation
1.15. References are provided at the end of the document
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