Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
9. Setting the Regulatory Framework
Experience suggests that it is more difficult to develop competition for rail passenger
services than for freight services, implying that passenger-dominated
railways may need more regulation than freight-dominated railways.
A regulatory regime should be flexible enough to respond to the unexpected, particularly
when traffic fails to meet projections. Flexibility is easier to achieve
through discretionary regulation than through a concession contract, although
sometimes a combination may be the best solution.
External safety and environmental regulation is essential for railways but technical
standards are often best left to the industry.
Institutional arrangements for rail regulation are important. Ideally, economic
regulation should be carried out independent of government and industry; if this
cannot be achieved immediately, it should be an eventual goal.
The World Bank Page 154