Sir - In Rail Business Report 1998 in the article, ’Infrastructure Separation: What Have We Learned So Far?’, it seems to me that the authors have seriously understated the advantages of not separating the infrastructure but keeping it with operations under one management, as has traditionally been the practice of private enterprise railways in the United States.
I quite agree that, ’we have always done it that way’, is no argument for continuing, but the following should be considered.
When operations and infrastructure are under one ownership and management, decisions affecting both are decided, however imperfectly, on the basis of economic efficiency, not on political ’clout’ or the relative bargaining power of organisations with conflicting interests.
A unified management can, for example, balance the operating economies of higher capacity cars against the increased track maintenance and capital costs caused by heavier axle loadings. It can weigh the operating savings from longer trains against the cost (chiefly capital) of longer sidings on single track. It can balance the cost of overtime rates for track labour against lost revenue from delays to trains.
Competitive pressure on a railway which owns and maintains its infrastructure is effective in stimulating efficient track maintenance and capital expenditure as well as efficiencies in operation and cars and motive power. A separate infrastructure entity would seem to be somewhat insulated from this pressure.
A claimed advantage of separating infrastructure is that it facilitates ’open access’. At least it eliminates the difficulty of the owning railroad discriminating against other users. I would argue, however, that ’open access’ promotes inefficiencies, or rather that unified ownership and management of the different operations permits balancing the requirements of different services, just as unified ownership and management of operations and infrastructure permits balancing operating convenience against the needs of track maintenance.
An instance: I understand that Union Pacific has raised the speed limit for unit coal trains to 96 km/h, and presumably provided the required motive power in order to reduce the interference with fast container trains. A single organisation could determine that the benefit to the container service was worth the cost to the coal operation. Can one imagine that happening if coal and containers were moved by two different companies? And how would a separate infrastructure and dispatching entity balance the priorities of the two operations?
Of course, the counter-example is passenger services - both Amtrak and commuter. In those cases, however, there was no escaping the need for public subsidy, and in the case of Amtrak and some commuter operations the public authorities decided that it would be improper simply to pour money into private companies. In some commuter operations, nevertheless, private companies have been awarded contracts to operate the service. In some instances the same railroad both owns the line and operates the service. With proper cost accounting and clear specification of the service to be subsidised, it seems to me that this can continue to work.
Not only does the article underestimate the advantages of unified ownership and operation, I believe it overstates the advantages of infrastructure separation, although it concedes that Banverket (Sweden’s infrastructure provider) has not done as well as SJ (Sweden’s railway operator).
George B Dutton Jr
Bethesda, Maryland, USA