REORIENT
03.33
From 2005 to 2007
The REORIENT project evaluated the implementation of European rail policy and the effects on the freight sector, including opportunities for new players and business models. TML was involved in developing the ERICCO model, which analyses the costs and benefits of national rail charges on welfare and optimisation of infrastructure charging policies in an international rail corridor.
The REORIENT project assessed progress in implementation of European rail policy and its effects on the market behaviour of players in the European rail freight sector. The project partners examined the opportunities for new players and new business models created by new market conditions. In a second phase, the partners examined the remaining barriers preventing seamless rail transport. Finally, the project provided an overall welfare assessment of changing rail policy. TML participated in this final phase.
As part of the REORIENT research project, we developed the ERICCO model (a calculation and optimisation model of European rail infrastructure charges). This model analyses how national policies of rail infrastructure access charges affect the optimal choice of infrastructure charging in countries in an international rail corridor. REORIENT involved an international corridor of eight countries from northern Europe to south-eastern Europe. The model developed also allows to assess the impact of national policies (in terms of railway charging) on overall welfare in the corridor countries.
The model analyses the problem where the infrastructure managers of the rail corridor countries are responsible for charging for access to their rail network. Indeed, the railway infrastructure is used by railway operators providing domestic and international passenger and freight services. The railway operators come from different EU countries: their production costs and levels of public subsidies therefore differ. Furthermore, these companies operate in an oligopolistic market structure.
The cost of building and maintaining the national railway infrastructure can be financed either by public subsidies or by the user through infrastructure charges. The degree of use of state subsidies determines the infrastructure charging policy in a given EU country. The specific combination of different national regimes in the EU countries along the international railway corridor then results in a certain level of national welfare and overall welfare over the corridor.
National welfare consists of domestic consumer surplus, domestic railway operators' surplus, and railway infrastructure subsidies. Based on the national welfare levels, it is possible to calculate a weighted overall welfare of the countries along the railway corridor.
By optimising the overall welfare of the corridor, it is possible to determine the most welfare-efficient policy of rail charges. This information will help to improve the current national legislative frameworks on infrastructure financing in the countries along the transport corridor and thus the efficiency of transport on this international railway corridor.
The REORIENT project assessed progress in implementation of European rail policy and its effects on the market behaviour of players in the European rail freight sector. The project partners examined the opportunities for new players and new business models created by new market conditions. In a second phase, the partners examined the remaining barriers preventing seamless rail transport. Finally, the project provided an overall welfare assessment of changing rail policy. TML participated in this final phase.
As part of the REORIENT research project, we developed the ERICCO model (a calculation and optimisation model of European rail infrastructure charges). This model analyses how national policies of rail infrastructure access charges affect the optimal choice of infrastructure charging in countries in an international rail corridor. REORIENT involved an international corridor of eight countries from northern Europe to south-eastern Europe. The model developed also allows to assess the impact of national policies (in terms of railway charging) on overall welfare in the corridor countries.
The model analyses the problem where the infrastructure managers of the rail corridor countries are responsible for charging for access to their rail network. Indeed, the railway infrastructure is used by railway operators providing domestic and international passenger and freight services. The railway operators come from different EU countries: their production costs and levels of public subsidies therefore differ. Furthermore, these companies operate in an oligopolistic market structure.
The cost of building and maintaining the national railway infrastructure can be financed either by public subsidies or by the user through infrastructure charges. The degree of use of state subsidies determines the infrastructure charging policy in a given EU country. The specific combination of different national regimes in the EU countries along the international railway corridor then results in a certain level of national welfare and overall welfare over the corridor.
National welfare consists of domestic consumer surplus, domestic railway operators' surplus, and railway infrastructure subsidies. Based on the national welfare levels, it is possible to calculate a weighted overall welfare of the countries along the railway corridor.
By optimising the overall welfare of the corridor, it is possible to determine the most welfare-efficient policy of rail charges. This information will help to improve the current national legislative frameworks on infrastructure financing in the countries along the transport corridor and thus the efficiency of transport on this international railway corridor.
