Bridging the gap between infrastructure capacity allocation and market-oriented railway: an algorithmic approach

The European Commission initiated the process of liberalization and introducing competition in the European railway sector more than twenty-five years ago. Despite the liberalization of the railway sector, train paths are currently administratively allocated in all EU countries using the train service priority criterion, which may not treat all train operators equally. This is especially evident in those network sections where demand exceeds the available capacity. In these situations, economic theory suggests the implementation of a market-based mechanism for allocation of capacity, such as auctions. However, due to its incompatibilities with priority criteria in the process of the capacity allocation, it is necessary to develop a new procedure to support the implementation of an auction. In this paper, the proposed algorithm fills the technological gap between train timetable design and train operator requests. The new algorithm for decentralized capacity allocation is the result of a multidimensional approach, which encompasses setting new relations between train operators and the infrastructure manager, train timetable drafting and resolving the conflicting request. In addition, the algorithm provides a feasible solution ensuring equal treatment of train operators and efficient allocation, in order to foster the development of the competition in the European rail market. First published online 10 September 201