The debate surrounding the "Liberalization" of the railway system is now (June 1993) at its most interesting. The government's views are being modified by political as well as economic and logistical pressures. This paper is intended to examine the regulatory aspects of the liberalization and to compare the regulatory processes of the Electricity Supply Industry with a) the missed opportunity to privatize the rail industry, and with b) the current government proposals to liberalize the railway network. Many of the conceptual issues surrounding the privatization (and liberalization) of the railways have their origins in the electricity supply industry, but the concept of "Profit" in the railway industry presents additional difficulties to be addressed before the main regulatory problems can be examined. The primary, and probably the most fundamental divergence is the treatment of track costs and is therefore considered as one of, if not the main, issue confronting rail liberalization and its associated regulator functions. An examination of the Road and Rail Track Cost argument should therefore be considered before examining the possible regulatory options. (A)
Abstract