Competition Policy and Railway Investment in Australia

Abstract:     
This project sought to examine the impacts of National Competition Policy (NCP) on investment in Australian general freight and passenger railways, and more generally to assess the rationale underlying NCP and related economic reforms applied to Australian railways. It does not appear that NCP and related reforms have yet had a negative impact on investment. Indeed, vertical separation may have improved investment, at least that being sourced from the public sector. However, there are some intrinsic issues associated with the application of economic regulation which could in the future retard investment, and with the predominantly public sector origin of much of recent investment. In particular, the case for economic reform seems to be weakly made: there are few rents of the type economic regulation can moderate in the logistics chains served by rail in Australia, and there seems only limited scope for sustainable competition in the above-rail task.

Number of Pages in PDF File: 25

Keywords: Australia, Railway, Economic Regulation

JEL Classification: O56, L92, L51

working papers series