Vertical Separation, Disputes Resolution And Competition In Railway Industry

Abstract

There might be various aims for the vertical separation in railways such as the one instituted by the European Commission. One aim might be to improve efficiency, another one might be to introduce competition, as a mean, precisely to improve efficiency. Vertical separation creates, by itself, some disputes between the Infrastructure manager and the so called railways undertakings. So a dispute resolution system is necessary. First, this dispute resolution system is costly and thus might offset the efficiency benefits associated to the introduction of vertical separation. Second, this dispute resolution system can create a kind of collusive agreement where there is a quasi vertical re integration which does not favor competition. The paper is organized as follows : First the various kinds of disputes are analyzed. They are presented according to the following categories : - access to the track - slots allocation ; - timetable establishment ; - adjustments to the initial timetable ; - train circulation - delays - maintenance and renewal works - safety - estate - real estate sharing; - network minor changes - new lines Secondly, the methods by which those difficulties are dealt with are presented for two countries : UK and France. The British dispute resolution system relies heavily on cooperation and contracts within the railway industry whereas the French system is more hierarchy oriented, thus generating less conflicts but which are, maybe, more difficult to solve. But we can wonder whether the present British system, together with the Network Rail status doesn’t lead to a more integrated railway industry trough long term co-operation. Conversely, the difficulties that the French railway industry is presently experiencing might lead to define a dispute resolution system more able to favor some forms of competition