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The British Passenger Rail Privatisation: Conclusions on Subsidy and Efficiency from the First Round of Franchises

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  • Jonathan Cowie

Abstract

The paper examines the issue of subsidy cuts and efficiency gains arising from the first round of franchises from the British passenger rail privatisation. A problem is identified in past studies regarding the lack of a progressive dynamic between subsidy and efficiency over time. This paper assesses efficiency changes and productivity gains achieved by the British train-operating companies over an 8-year period, and then attempts to establish a statistical relationship between efficiency gains and subsidy cuts. Although such a relationship is established, the results more broadly indicate winner's curse syndrome and the strong negotiating position of the incumbent. © 2009 LSE and the University of Bath

Suggested Citation

  • Jonathan Cowie, 2009. "The British Passenger Rail Privatisation: Conclusions on Subsidy and Efficiency from the First Round of Franchises," Journal of Transport Economics and Policy, University of Bath, vol. 43(1), pages 85-104, January.
    • Handle: RePEc:tpe:jtecpo:v:43:y:2009:i:1:p:85-104
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    Citations

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    Cited by:

    1. 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.
    2. Smith, Andrew S.J. & Wheat, Phill E. & Nash, Chris A., 2010. "Exploring the effects of passenger rail franchising in Britain: Evidence from the first two rounds of franchising (1997-2008)," Research in Transportation Economics, Elsevier, vol. 29(1), pages 72-79.
    3. Canca, David & De-Los-Santos, Alicia & Laporte, Gilbert & Mesa, Juan A., 2019. "Integrated Railway Rapid Transit Network Design and Line Planning problem with maximum profit," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 127(C), pages 1-30.
    4. Álvaro Costa & Carlos Oliveira Cruz & Joaquim Miranda Sarmento & Vitor Faria Sousa, 2021. "Empirical Analysis of the Effects of Ownership Model (Public vs. Private) on the Efficiency of Urban Rail Firms," Sustainability, MDPI, vol. 13(23), pages 1-14, December.
    5. Preston, John & Bickel, Charles, 2020. "And the beat goes on. The continued trials and tribulations of passenger rail franchising in Great Britain," Research in Transportation Economics, Elsevier, vol. 83(C).
    6. Richard D Knowles, 2013. "Railway Franchising in Great Britain and Effects of the 2008/09 Economic Recession," Environment and Planning A, , vol. 45(1), pages 197-216, January.
    7. Jonathan Cowie & Sarah Loynes, 2012. "An assessment of cost management regimes in British rail infrastructure provision," Transportation, Springer, vol. 39(6), pages 1281-1299, November.
    8. repec:hal:journl:dumas-00793119 is not listed on IDEAS
    9. Fenling Feng & Tianzuo Zhang & Chengguang Liu & Lifeng Fan, 2020. "China Railway Express Subsidy Model Based on Game Theory under “the Belt and Road” Initiative," Sustainability, MDPI, vol. 12(5), pages 1-16, March.
    10. Preston, John, 2018. "The wheels keep on turning: Is the end of rail franchising in Britain in sight?," Research in Transportation Economics, Elsevier, vol. 69(C), pages 187-196.
    11. Wheat, Phill & Smith, Andrew S.J. & Rasmussen, Torris, 2018. "Can competition for and in the market co-exist in terms of delivering cost efficient services? Evidence from open access train operators and their franchised counterparts in Britain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 114-124.
    12. Tolga Ülkü & Vahidin Jeleskovic & Jürgen Müller, 2014. "How scale and institutional setting explain the costs of small airports? -An application of spatial regression analysis," MAGKS Papers on Economics 201435, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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