The Office of the Rail Regulator had committed to conduct a review of the structure of track access charges. This was to take place in between reviews of the overall level of these charges. As a preliminary step in this review, ORR sought advice on the concepts, objectives and economic principles that might underpin the review.
Against a background of previous research on the topic that had been dominated by debates about cost concepts (short-run, long-run, incremental, marginal costs), our approach was more practical than an application of general economic theory. We gave particular attention to the actual structure and governance of the railway industry. We specified a number of hypothetical case studies in which the structure of charges might affect the decisions made.
For each of these cases, we identified: