The privatization of passenger rail services in Great Britain: an evaluation of competition for the market and competition in the market

The background to the research reported here is the reorganization and privatization of passenger rail services in Great Britain. This process, enacted by the 1993 Railway Act, made provision for competition in the supply of passenger rail services by fostering competition for the market through a process of franchising, and competition in the market by allowing for the possibility of on-track competition. The attempt to couple both forms of competition is novel and complex, and warrants investigation. In this paper we provide a background to the privatization process and report on the results of models that we have developed to predict and assess the outcome of off-track and on-track competition. On the basis we highlight the principal gains and losses brought about as a result of the regulatory changes and make some suggestions of how rail privatization could be improved