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Reforming a publicly owned monopoly: costs and incentives in railway maintenance
Örebro University, Orebro University School of Business, Örebro University, Sweden.
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The railway system is often considered to be an industry where a monopoly occurs “naturally”, which can explain the public ownership and the use of regulations. However, railways in Europe have been subject to reforms during the last three decades. The use of tendering has increased, which is a way of introducing competition for the market in absence of competition within the market. Still, contracting out services previously produced in-house places a heavy burden on the client, where contract design and its incentive structures can be decisive for the outcome of the reform.

This dissertation provides empirical evidence on costs and incentives in a publicly owned monopoly that is subject to reforms, namely the provision of railway maintenance in Sweden.

Essay 1 estimates the effect of exposing rail infrastructure maintenance to competitive tendering. The results show that this reform reduced maintenance costs in Sweden by around 11 per cent over the period 1999-2011, without any associated fall in the available measures of quality.

Essay 2 estimates the relative cost efficiency between and within maintenance regions in Sweden. The results indicate considerable efficiency gaps together with economies of scale not being fully exploited.

Essay 3 analyses the effect of incentive structures in railway maintenance contracts. An increase in the power of the incentive scheme reduces the number of infrastructure failures according to the results. In addition, the estimated effect of the performance incentive schemes suggests that more effort towards preventing train delays is made at the expense of preventing other failures.

Essay 4 comprises an estimation of marginal costs of rail maintenance. The static model produces slightly lower marginal costs compared to previous estimates on Swedish data. The results from the dynamic model show that an increase in maintenance costs in year t - 1 predicts an increase in maintenance costs in year t. Indeed, there is an intertemporal effect that depends on the performed maintenance activities (governed by the contract design).

Place, publisher, year, edition, pages
Örebro: Örebro university , 2015. , 26 p.
Series
Örebro Studies in Economics, ISSN 1651-8896 ; 30
Keyword [en]
cost efficiency, contracts, tendering, rail infrastructure, maintenance
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:oru:diva-46383ISBN: 978-91-7529-106-2 (print)OAI: oai:DiVA.org:oru-46383DiVA: diva2:866551
Public defence
2015-12-21, Forumhuset, Biografen, Örebro universitet, Fakultetsgatan 1, Örebro, 10:00 (English)
Opponent
Supervisors
Available from: 2015-11-03 Created: 2015-11-03 Last updated: 2015-12-21Bibliographically approved
List of papers
1. Assessing the cost impact of competitive tendering in rail infrastructure maintenance services: evidence from the Swedish Reforms (1999 to 2011)
Open this publication in new window or tab >>Assessing the cost impact of competitive tendering in rail infrastructure maintenance services: evidence from the Swedish Reforms (1999 to 2011)
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:oru:diva-46887 (URN)
Available from: 2015-12-01 Created: 2015-12-01 Last updated: 2015-12-01Bibliographically approved
2. Benchmarking in a publicly owned monopoly: estimating the dual-level cost efficiency of railway maintenance in Sweden
Open this publication in new window or tab >>Benchmarking in a publicly owned monopoly: estimating the dual-level cost efficiency of railway maintenance in Sweden
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:oru:diva-46888 (URN)
Available from: 2015-12-01 Created: 2015-12-01 Last updated: 2015-12-01Bibliographically approved
3. Contract design and performance of railway maintenance: effects of incentive intensity and performance incentive schemes
Open this publication in new window or tab >>Contract design and performance of railway maintenance: effects of incentive intensity and performance incentive schemes
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:oru:diva-46889 (URN)
Available from: 2015-12-01 Created: 2015-12-01 Last updated: 2015-12-01Bibliographically approved
4. Estimating the marginal cost of rail infrastructure maintenance using static and dynamic models; does more data make a difference?
Open this publication in new window or tab >>Estimating the marginal cost of rail infrastructure maintenance using static and dynamic models; does more data make a difference?
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:oru:diva-46891 (URN)
Available from: 2015-12-01 Created: 2015-12-01 Last updated: 2015-12-01Bibliographically approved

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