Presentation on theme: "Study on Regulatory Options for Further Market Opening in Rail Passenger Transport Stakeholder Meeting 10 February 2010 Session 3 Possible Regulatory Options."— Presentation transcript:
Study on Regulatory Options for Further Market Opening in Rail Passenger Transport Stakeholder Meeting 10 February 2010 Session 3 Possible Regulatory Options Presented by Robert Skene
Possible Regulatory Options 1.Objectives & Evaluation Criteria 2.Possible Options 3.Selection of Options for Modelling
1. Objectives & Evaluation Criteria Objectives The key objectives of the process are to: Identify 3/4 models for regulatory structure that can be applied across the EU for modelling against Base Option Models must provide market opening Options suitable for each market segment must be developed
1. Objectives & Evaluation Criteria Evaluation Criteria Evaluation criteria for short listing: Practical to implement Compatible with increasing rails modal share Maintains socially necessary services Provides public benefits Maintains integrated services & network benefits for users Minimises public funding
1. Objectives & Evaluation Criteria Base Option Selected options will be evaluated against Base Option (2020): Market opening is not an objective in itself Base Option is not exactly as things are now Includes: all states coming into compliance with EU rail legislation, expansion of high-speed rail network Other modes evolve over time (e.g. increases in airport landing charges, increased road congestion, expansion of motorway network, etc)
1. Objectives & Evaluation Criteria Discussion Session Questions: Are the six key criteria identified appropriate for the initial sorting process? Are there other criteria that you believe to be of equal importance?
2. Possible Options for Market Opening Main Options - Overview Fundamentally there are two main options: competition within the market (e.g. open access) competition for the market (e.g. public service contracts for the operation of defined groups of services) There are; however, a number of ways in which these two options can be combined (Detail Options)
2. Possible Options for Market Opening Main Options – Open Access, Pros and Cons Only profitable services would be operated Loss of unprofitable socially necessary services Even potentially profitable services might not operate Issues of cherry picking Network instability likely Difficult to provide co-ordinated national service with network benefits Sensitive to differential between infrastructure charges & fare levels Potential reluctance to commit to contested markets Services require no financial support Non-discriminatory for RUs & lowest barriers to entry On popular routes frequency should increase & fares fall Gives RUs freedom to develop linkages between origin- destination pairs not currently served Main advantages Main disadvantages
2. Possible Options for Market Opening Main Options – Public Service Contracts, Pros and Cons Limited leeway for development of new services Little scope for innovative ideas & techniques Public authorities responsible for determining services & quality – not very responsive to passenger needs Dependent on public funds No competitive pressures to reduce fare levels Barriers to entry for new entrant RUs can be high Ensures that national network of services is provided With genuine competitive tendering, costs should fall Facilitates integrated national network & network benefits Stable for contract duration Insensitive to level of infrastructure charges Fare controls/fare regulation possible Main advantages Main disadvantages
2. Possible Options for Market Opening Detail Options – Overview Group A Identified options: all or part of network open access only: Model A: entire network open access only Model B: as Model A but with support for unremunerative services (on individual basis, by tender) Model C: as Model B but support provided by fixed public service support payment Model D: individual train path auction Model E: open access for profitable parts of network only, public service contracts for remainder
2. Possible Options for Market Opening Detail Options – Overview Group B Identified options: public service contracts for whole network: Model F: open access permitted without restriction Model G: open access permitted under regulatory control Model H: open access permitted without restriction, but on certain lines only Model J: no open access permitted In all cases the public service contracts would be let by competitive tender, & would comply with Regulation 1370/2007
2. Possible Options for Market Opening Detail Options – Overview Group C Alternative model for minor lines: Model K: vertical micro-franchise This is a special case applicable to very lightly used lines, which might be used in conjunction with any of the other options. Only applicable for lines that might be regarded as lines and networks isolated from the rest of the Community.
2. Possible Options for Market Opening Discussion Session Questions: Are there any other models that should be considered? What are the pros and cons of each model?
3. Selection of Options for Modelling Preliminary Evaluation Matrix Practical to Implement Compatible with Increasing Modal Share Keeps Socially Necessary Services Provides Public Benefits Integrated Services for Users Minimises Public Funding Model A some Model B complex someprobably Model C possibly somepossibly Model D possibly possibly Model E some sub- options possibly somepossibly Model F somepossibly Model G Model H probably Model J possibly
3. Selection of Options for Modelling Discussion Session Questions: Which models should be taken forward for impact assessment?