, Volume 39, Issue 6, pp 1281–1299 | Cite as

An assessment of cost management regimes in British rail infrastructure provision



Over the last decade, British railway engineering efficiency has come under close scrutiny, with general perceptions of massive maintenance cost escalations and a general lack of control over these costs. This is exemplified by headline figures such as Roger Ford’s perceptions of a 50% rise in maintenance costs since privatisation (Mod Railw 638:8, 2001), or the more recent figure of a doubling in all rail costs since privatisation presented by Shaoul (Public Money Manag 26:151–158, 2006). Little, however, has appeared in the academic literature on the subject. This paper considers these issues through an examination of British railway infrastructure costs over the period 1980–2009, which has seen three different infrastructure management regimes in place—the nationalised BR (1980–1994), the privatised Railtrack (1995–2001) and the not for dividend Network Rail (2002–2010). Infrastructure costs are examined in total for all operating costs (including maintenance but excluding renewals and depreciation), and under two sub categories, signalling and management costs. The results show that in the case of total operating costs, by the end of the period (up to 2010) these had returned to pre-privatisation levels. The results also show that costs increased significantly following privatisation due to imperfect competition in sub contractor markets, but large declines in the last 6 years have eradicated most of these costs increases, although still do not match the best achieved under full public sector management. Management costs associated with the infrastructure on the other hand have increased significantly.


Rail infrastructure management X-inefficiency Privatisation Imperfect competition 



The authors would like to express their thanks to three anonymous referees and Martin Richards (Editor-in-Chief), who provided detailed and carefully considered observations that proved to be very valuable in the completion of this paper. Any errors or omissions that may remain in the paper, however, are entirely the responsibility of the authors.


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Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.SEBE/Transport Research InstituteEdinburgh Napier UniversityEdinburghUK
  2. 2.c/o Jonathan Cowie, Transport Research InstituteEdinburgh Napier UniversityEdinburghUK

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