Appraisal of Non-commercial Passenger Rail Services in Britain

Abstract

The appraisal of proposals for adding or withdrawing individual rail services is inevitably complex, because it needs to recognise interdependence both within the rail network and between transport modes, and to account for externalities affecting non-users. Since 1960, British appraisal procedures have changed greatly, as has the institutional setting, especially following privatisation. In May 1999, the government regulator took a major step forward when it adopted the use of cost benefit analysis for the appraisal of non-commercial services. Yet there is a need for elaboration of the rules that deal with jointness in costs and in revenues, and for extension of the appraisal scheme to permit multi-modal application. Government policy-makers should also address institutional barriers that may hinder the development of valuable alternative supply arrangements, and instigate a review of existing marginal services to see if they are all worthwhile.