Working paper / Energy
Different Approaches and Responsibilities for Investment Sustainability in EU Railway Infrastructure: Four Case Studies
This paper describes the approach to investment in rail infrastructure in four different European countries (Great Britain, France, Germany, and the Netherlands) with a view to understanding whether and how these countries differ in their approach to the sustainability of investment in infrastructure. We compare and contrast different approaches to investment, such as: The direct role of government; The role of the economic regulator, where available; The influence of particular ownership agreements, such as the use of concessions for high speed lines; Any differential treatment of different assets, and any differential treatment of different items of expenditure, such as maintenance, renewals, and enhancements; The role played by private capital (in infrastructure as separate from passenger and freight train operations); and The existence of a (more or less unlimited), either direct or indirect, state guarantee on debt issued to fund investment in network assets. In analysing the European case studies, the paper asks the following questions, which may differ across infrastructure categories (for instance track/signalling, stations, and high-speed lines): (i) What is the ownership structure of each IM? (ii) Who “sponsors” and specifies investment? (iii) Who is responsible for planning and approving investment? (iv) What are the ultimate funding sources of investment? (v) Who is responsible for delivering investment? (vi) What is the role of the independent economic and technical regulator (where availble) vis-à-vis the government? (vii) Is there any (direct or indirect) market mechanism, for instance as part of incentive regulation, that is mimicked when incentivising the monopoly provider of infrastructure to achieve a sustainable level of investment? The paper concludes with some policy considerations and recommendations based on the four case studies examined.