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Deja Vu all over again? Rail franchising in Britain

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  • Preston, John

Abstract

This paper reviews the progress of passenger rail franchising in Britain since the mid-1990s, building on earlier contributions to the Thredbo Conferences and identifies five main phases. A welfare assessment suggests that the reforms were mildly welfare positive up to the middle of the third phase, but some concerning trends have emerged, not least the spiralling transaction costs associated with franchise bids and the apparent prevalence of strategic bidding. The problems that emerged, and some of the lessons learnt, in the aborted award of the West Coast franchise in 2012 are assessed. A detailed assessment is also made of the East Coast franchise. The awards that commenced operation in May 2005 and December 2007 (both of which failed) are compared with the new franchise that commenced operations in March 2015. Issues related to the cap and collar regime, GDP support, subordinated loans facility and parent company support are examined. The prospects for movement towards a more variegated set of franchise contracts will be considered.

Suggested Citation

  • Preston, John, 2016. "Deja Vu all over again? Rail franchising in Britain," Research in Transportation Economics, Elsevier, vol. 59(C), pages 107-115.
    • Handle: RePEc:eee:retrec:v:59:y:2016:i:c:p:107-115
    DOI: 10.1016/j.retrec.2016.07.018
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    References listed on IDEAS

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    1. Emile Quinet & Roger Vickerman, 2004. "Principles of Transport Economics," Books, Edward Elgar Publishing, number 2581.
    2. Robert Jupe, 2010. "A model or a policy muddle? An evaluation of rail franchising in the UK," Public Money & Management, Taylor & Francis Journals, vol. 30(6), pages 347-354, November.
    3. John Preston & Gerard Whelan & Chris Nash & Mark Wardman, 2000. "The Franchising of Passenger Rail Services in Britain," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(1), pages 99-112.
    4. Preston, John & Almutairi, Talal, 2013. "Evaluating the long term impacts of transport policy: An initial assessment of bus deregulation," Research in Transportation Economics, Elsevier, vol. 39(1), pages 208-214.
    5. Preston, John & Robins, Dawn, 2013. "Evaluating the long term impacts of transport policy: The case of passenger rail privatisation," Research in Transportation Economics, Elsevier, vol. 39(1), pages 14-20.
    6. Richard D Knowles, 2004. "Impacts of Privatising Britain's Rail Passenger Services—Franchising, Refranchising, and Ten Year Transport Plan targets," Environment and Planning A, , vol. 36(11), pages 2065-2087, November.
    7. Preston, John, 2008. "A review of passenger rail franchising in Britain: 1996/1997-2006/2007," Research in Transportation Economics, Elsevier, vol. 22(1), pages 71-77, January.
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    2. Król, Marcin & Taczanowski, Jakub & Kołoś, Arkadiusz, 2018. "The rise and fall of Interregio. Extensive open-access passenger rail competition in Poland," Research in Transportation Economics, Elsevier, vol. 72(C), pages 37-48.

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    More about this item

    Keywords

    Rail; Franchising; Contract; Incentives; Strategic behaviour;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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