The role of efficiency estimates in UK regulatory price reviews: the case of rail

This paper reviews the methods that have been applied to assess the efficiency performance of Britain’s rail infrastructure provider since privatisation. The paper shows that a wide range of approaches has been adopted by the ORR. However, we argue that, in contrast to the other regulated sectors, the benchmarking methods developed in rail have not been sufficiently robust to restrain costs to efficient levels. We suggest that the main problem stems from a lack of external comparators based on hard data, such as international benchmarks or comparisons with previous experience under British Rail. Although the ORR obtained an external perspective through bottom-up consultant reviews, we suggest that such studies are not an adequate substitute for quantitative analysis. Looking forward we suggest that more work needs to be done to obtain a better understanding of the reasons for recent cost increases, and also to develop robust international benchmarks against which to judge Network Rail’s relative efficiency position. International comparisons are not straightforward, of course, and it is therefore important to start now, rather than wait until the next review of Network Rail’s finances, by which time it will be too late (again)

Are Britain’s railways costing too much? Perspectives based on TFP comparisons with British Rail: 1963-2002.

Following the Hatfield accident in October 2000, the cost of running Britain’s railways has increased very sharply, leading to considerable debate about whether current cost levels are reasonable. This paper seeks to inform this debate by assessing post-Hatfield cost and TFP levels (2000/01 to 2001/02) against the historical precedents set by British Rail and the early experience of the newly-privatised industry (1963 to 1999/00). The results show that industry cash costs rose by 47% between 1999/00, the last financial year before Hatfield, and 2001/02 - but, surprisingly, with train operating costs (TOCs and freight operators) accounting for 42% of this growth. The results also show that the post-Hatfield cost spike is unprecedented when compared against historical benchmarks, indicating that recent cost rises cannot simply be explained by the investment cycle or so-called “bow-wave” effects. Furthermore, according to the preferred models, post-Hatfield productivity levels are lower than at any time over the last four decades. Analysis of long-term data on quality and safety measures indicates that an excessive focus on rail safety may offer part of the explanation for the recent cost growth, with the emphasis on safety also resulting in less attention to punctuality and reliability

Are Britain’s railways costing too much? Perspectives based on TFP comparisons with British Rail 1963–2002

Following the Hatfield accident in October 2000, the cost of running Britain’s railways has increased very sharply, leading to considerable debate about whether current cost levels are reasonable. This paper seeks to inform this debate by assessing post-Hatfield cost and TFP levels against the historical precedents set by British Rail and the early experience of the newly privatised industry. The results show that industry cash costs rose by 47 per cent between 1999/2000, the last financial year before Hatfield, and 2001/2002 — but, surprisingly, with train operating costs accounting for 42 per cent of this growth. The results also show that the post-Hatfield cost spike is unprecedented when compared against historical benchmarks. Analysis of long-term data on quality and safety measures indicates that an excessive focus on rail safety may offer part of the explanation for the cost growth

Are Britain’s railways costing too much? Perspectives based on TFP comparisons with British Rail 1963–2002

Following the Hatfield accident in October 2000, the cost of running Britain’s railways has increased very sharply, leading to considerable debate about whether current cost levels are reasonable. This paper seeks to inform this debate by assessing post-Hatfield cost and TFP levels against the historical precedents set by British Rail and the early experience of the newly privatised industry. The results show that industry cash costs rose by 47 per cent between 1999/2000, the last financial year before Hatfield, and 2001/2002 — but, surprisingly, with train operating costs accounting for 42 per cent of this growth. The results also show that the post-Hatfield cost spike is unprecedented when compared against historical benchmarks. Analysis of long-term data on quality and safety measures indicates that an excessive focus on rail safety may offer part of the explanation for the cost growth

Pozzolanic and mechanical properties of Date Palm Seed Ash (Dpsa) concrete

This paper presents the findings of a research work conducted on how to improve the mechanical properties of concrete using Date Palm Seed Ash (DPSA) as partial replacement of cement. The DPSA used was obtained by controlled burning of date palm seed in a kiln at a maximum temperature of 630oC for eight hours and air cooled afterwards. The ash obtained was sieved through 75μm sieve and its oxide composition analysed using X-ray fluorescence (XRF) procedures. DoE method of mix design was used to produce concrete ingredients for grade 30N/mm2 giving a water-cement ratio of 0.53. The effect of partial replacement of cement with DPSA on cement paste and concrete using 0, 2.5, 5, 7.5, 10, 15 and 20% DPSA was investigated through consistency and setting times tests, workability test, compressive strength test (at 7, 21, 28 and 56 days curing duration), pozzolanic activity index evaluation and water absorption test. Results show that DPSA has high silicon dioxide (45.50%), aluminum oxide (20.75%) and Iron oxide (7.25%). Findings indicate that the consistency and setting times of cement-DPSA paste increased with increase in the replacement of cement with DPSA. The workability of DPSA concrete decreased with increase in cement replacement. Compressive strength test results show that cement can be replaced with DPSA up to 10% as the compressive strength at 10% replacement is 31.5N/mm2 as against the 31N/mm2 of the normal concrete, at 56 days. The pozzolanic activity index result also show that DPSA concrete meets up the minimum requirement of 75% specified by ASTM C618-15. Also, the water absorption capacity of DPSA concrete at the highest replacement (20%) is 11% less than that at 0%. Keywords: Cement, Compressive strength, Concrete, Date palm seed ash, Partial replacement, Pozzolan

Privacy as a Cultural Phenomenon

Privacy remains both contentious and ever more pertinent in contemporary society. Yet it persists as an ill-defined term, not only within specific fields but in its various uses and implications between and across technical, legal and political contexts. This article offers a new critical review of the history of privacy in terms of two dominant strands of thinking: freedom and property. These two conceptions of privacy can be seen as successive historical epochs brought together under digital technologies, yielding increasingly complex socio-technical dilemmas. By simplifying the taxonomy to its socio-cultural function, the article provides a generalisable, interdisciplinary approach to privacy. Drawing on new technologies, historical trends, sociological studies and political philosophy, the article presents a discussion of the value of privacy as a term, before proposing a defense of the term cyber security as a mode of scalable cognitive privacy that integrates the relative needs of individuals, governments and corporations

Assessing the efficient cost of sustaining Britain’s rail network: perspectives based on Zonal comparisons

The objective of this paper is to inform the debate on how efficiency targets for Network Rail (formerly Railtrack) should be set during the 2002/03 Interim Review and beyond. Given the problems experienced during the 2000 Periodic Review, which focused on external benchmarks, we propose an internal benchmarking approach, drawing on data for seven geographical Zones within Railtrack (over the period 1995/96 to 2001/02). Our approach mirrors the yardstick competition method used in other UK regulated industries. Three efficiency measurement techniques are applied to this data (DEA; COLS; SFA). Our results suggest that Railtrack (as a whole) delivered substantial improvements in productivity in the early years after privatisation, although these savings were largely offset by the post-Hatfield cost increases. However, looking forward, Zonal efficiency differences suggest that the company could make significant savings in future years by applying (its own) best practice consistently across the network.corrected ordinary least squares; data envelopment analysis; efficiency analysis; internal benchmarking; railway; stochastic frontier analysis

Will the latest British reforms to rail passenger service procurement work?

In the 1990s Great Britain embarked on one of the most radical railway reforms undertaken anywhere in the world, with full vertical separation and privatisation of all aspects of the railway and the introduction of competition throughout the sector. However, since then Britain's railways have been plagued with multiple problems, most notably a failure to control costs, as well as multiple franchise failures and problems with developing sensible timetables, with consequent impacts on train performance. Multiple attempts to reform the initial model have failed and in 2018/2019 a fundamental review was undertaken which culminated in the publication of the Williams–Shapps plan for rail which proposes a major step back towards vertical integration with the establishment of a new government owned organisation to take charge both of infrastructure and services, although the latter will be operated by private companies under concessions. This paper reviews the reasons behind the problems experienced by Britain's railways – which led to the review – before setting out the proposed reforms and discussing whether they might solve the problems and what some of the critical success factors might be

The Restructuring and Privatisation of British Rail: Was it really that bad?

Following the government’s decision to place Railtrack into administration (October 2001), attention has focused on what went wrong with privatisation, and how crucial network investment will be financed in future. This paper uses a social cost-benefit analysis framework to assess whether the restructuring and privatisation of British Rail has produced savings in operating costs. The paper shows that major efficiencies have been achieved, consumers have benefited through lower prices, whilst the increased government subsidy has been largely recouped through privatisation proceeds. We find that output quality has also improved (pre-Hatfield). The achievement of further savings will be key to delivering improved rail services in the future. This paper finds that a privatised structure, where shareholders demand a return on their investment, has led to significant improvements in operating efficiency - it remains to be seen whether the new regime, with a not-for-profit infrastructure owner, will deliver the same efficiency improvements.Cost benefit analysis; railway; privatisation and restructuring; efficiency

The problem of homogeneity of rail passenger delay compensation scheme rules in Great Britain: impacts on passenger engagement and operator revenues

Background A rail passenger delay compensation scheme aiming at improving attractiveness of rail services and providing minimum customer service standards for delayed passengers operates in the European Union and Great Britain. British rail passengers are eligible to claim 50% of fare for delays of more than 30 min and 100% for delays of over 1 h. The scheme rules were chosen arbitrarily and are homogeneous across all ticket types and journey lengths. As longer journeys are usually more expensive and subjected to longer delays, long distance operators are likely to see more passengers being eligible to claim compensation. This, combined with higher engagement rates due to differences in sensitivity to lateness or opportunity cost of not claiming compensation is likely to have an impact on the differing revenue burden for operating companies. Objective Against this background, this study aims to quantify the revenue impact of homogeneity of scheme rules for different types of train operators to advance understanding of the scheme’s costs and motivate further research into the economic rationale behind the scheme’s provision and design. Methodology An econometric model was constructed to empirically test the impact of performance levels and train operator characteristics on the compensation payments made to passengers through the ’Delay Repay’ scheme in Great Britain. Results The combined differences in the nature of operation and engagement levels mean that with delay levels and engagement increasing with journey length and fare, short, medium and long distance train operating companies (TOCs) repay on average respectively 0.3%, 0.8% and 1.8% of their ticket revenues, increasing the scheme’s proportionate burden on the revenues of long distance operators. Further research is needed to either explain the economic or regulatory reasons behind the differing revenue impact of the scheme on different types of TOCs or suggest how the scheme can be redesigned to take these differences into account