Competitive Tendering of Rail Services

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Competitive tendering provides a way to introduce competition to railways whilst preserving an integrated network of services. It has been used for freight railways in some countries but is particularly attractive for passenger networks when subsidised services make competition between trains serving the same routes difficult or impossible to organise. This report examines experience to date from around the world in competitively tendering rail services. It seeks to draw lessons for effective design of concessions and regulation from both the successful and less successful cases examined. The work is based on detailed examinations by leading experts of the experience of passenger rail concessions in the United Kingdom, Australia, Germany, Sweden and the Netherlands.  It also draws on examples of freight rail concessions in Latin America.

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Passenger rail franchising – British experience

European Conference of Ministers of Transport

Given that virtually all British passenger train services were franchised out over the period 1995-7, and many have now been franchised for a second time, Britain should provide an excellent opportunity to study the impact of franchising passenger rail services. Moreover, since several different franchising models have been tried, there should also be some useful evidence on how best to go about franchising. In practice, however, the turbulent history of the British rail industry over this period makes drawing firm conclusions difficult. At the start, it appeared that franchising was very successful with strong competition for franchises, rapidly rising traffic, rising productivity and falling subsidies.

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