Applying social marginal cost pricing in rail PPPs: Present state, drawbacks and ways forward
The application of social marginal cost pricing (SMCP) in PPP's in the railway sector faces several challenges. We examine in detail the practical applicability of SMCP in railway PPPs from the perspectives of cost accounting and effectiveness of SMCP towards the allocative efficiency goal, addressing the likely drawbacks in conciliating the welfare objectives of SMCP with the objectives of project financing (cost recovery) and value for money that justify the realization of PPP's. To this end, we combine theoretical analysis with the observation of empirical results of a case study. We split the analysis per type of private service provision, which can be for service operation or infrastructure management. For infrastructure management, we recommend splitting the operator remuneration and the track access charges. For service operation, we argue that the correct decision on source of funding of the service operator should depend on the characteristics of the contract.
Volume (Year): 30 (2010)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vickerman, Roger, 2004. "Maintenance incentives under different infrastructure regimes," Utilities Policy, Elsevier, vol. 12(4), pages 315-322, December.
- Michael G. Pollitt & Andrew S. J. Smith, 2002.
"The restructuring and privatisation of British Rail: was it really that bad?,"
Institute for Fiscal Studies, vol. 23(4), pages 463-502, December.
- Pollitt, M. & Smith, A.S.J., 2001. "The Restructuring and Privatisation of British Rail: Was it really that bad?," Cambridge Working Papers in Economics 0118, Faculty of Economics, University of Cambridge.
- Rothengatter, Werner, 2003. "How good is first best? Marginal cost and other pricing principles for user charging in transport," Transport Policy, Elsevier, vol. 10(2), pages 121-130, April.
When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:30:y:2010:i:1:p:59-73. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.