▶ A new academic report shows that falling track access charges (TACs) increase societal welfare. Conversely, higher TACs have a negative impact on it.

▶ Germany already has the highest track access charges in Europe, with a further increase of around 20% by 2025.

▶ Reducing track access charges to marginal cost level is the most economically efficient measure to increase rail transport.

A new report by Prof Dr Thomas Ehrmann (of Münster University in Germany) looks in detail at the impact of track access charges (TACs) on the level of welfare in society. The latter is defined as the sum of the net benefits for both passengers and railway operators.

The study comes to the conclusion that overall social welfare is significantly higher in a fair duopoly organised as a commercially viable ‘Open Access’ market than as a profit-maximising monopoly.

In a fair duopoly, two or more rail operators strive to attract passengers with the best offers. In this scenario, the operators’ profits may fall, but the resulting benefit to passengers would more than compensate for this loss, leading to significantly higher overall societal welfare.

ALLRAIL Secretary General Nick Brooks says: “This new report is particularly relevant in the context of the current situation of TACs in Germany, where they are the highest in Europe, and are expected to rise by almost 20% for long-distance rail services by 2025. It is also relevant for the EU Commission’s forthcoming guidelines on TACs.“

To read the Executive Summary of the Report, please click here

To read the Report in full, please click here