The article examines the ways in which some European countries have responded to the changes instituted by the Commission of the European Union, with the policy launched in July 1991, based on directive 91-440. The directive is based on the commonly-acknowledged principle that railway infrastructure is an increasing-return-to-scale industry, and that operation is a constant-return-to-scale industry. It establishes the basis for a possible split of the existing incumbent firm into two separate parts, dealing with infrastructure and operations, and for introducing competition in operations, through open access and freedom of entry. Under the Directive it is required that there is accounting separation of infrastructure and operations and that international transit trains and international combined (freight) transport are allowed open access.
Abstract