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Saint Pancras Station, London, 2011


Infrastructure, economic regulation and competition





  Towards a more efficient railway: the Beesley lecture
Richard Price, the IEA's 22nd annual Beesley lecture series, London, 1 November 2012

In this lecture, Richard Price points to the successes of Britain’s railways over the last decade, but argues that the rail industry needs now to change to sustain the remarkable progress of the last decade.  To get the best service for its customers and a good deal for the taxpayer, the industry needs the freedom to innovate, to deliver better value and to make rail more attractive for passengers and freight. For too long the rail industry, the government, and the regulator have created ever more byzantine funding and decision-making structures, and since privatisation regulator and government have been drawn into operational detail instead of being focused on what matters – ensuring the industry serves its customers at the best price for the taxpayer.

Link: Download speech (PDF, 7.6 MB)
  Risk-based safety regulation on Britain's railways 
Richard Price, speaking to the International Railway Safety Conference,
St Pancras, London, 8 October 2012

At the International Railway Safety Conference in London, ORR Chief Executive Richard Price set out how why a focus in excellence in management is central to risk-based safety regulation, but also complements the drive for greater efficiency, better customer service and a more commercial approach across Britain's railway industry.

Link: Download speech from the Office of Rail Regulation
Ian Prosser, Safety Director, and Richard Price, Chief Executive, Office of Rail Regulation
Innovation and the modern railway - 'An eagerly-sought objective'
Richard Price, Chief Executive, speaking to the Modern Railways Railway Industry Innovation Awards Ceremony, Paddington, London, 22 June 2012

Richard Price sets out why innovation matters so much as demand for rail grows; why the challenges of greater efficiency and investment are a huge plus for the industry; how value for money is the industry's license for growth; and calls for rail businesses and innovators to do more to shape their own destiny.  

Link: Download speech from the Office of Rail Regulation
Richard Price, Modern Railways Innovation Awards
  The Periodic Review, innovation and the supply chain
Richard Price, Chief Executive, speaking at Railway Strategies Live, Birmingham, 21 June 2012

In this speech to the rail industry's suppliers, Richard Price explains the opportunity of the periodic review and sustained investment in Britain's railways. He sets out why Network Rail's relationships with the supply chain are so important to the industry's future, including its ability to innovate, serve customers and secure value for money.  He calls for a better understanding of the barriers to innovation.  

Link: Download speech from the Office of Rail Regulation

  Regulation: When less is more
Richard Price, speech to an industry conference, London, 11 June 2012

Richard Price, Chief Executive of the Office of Rail Regulation (ORR) sets out the purpose of regulation in the railway industry, how independent regulation can help reduce micromanagement from government - as in other sectors - and sets out a vision of less intervention, and more scope for the industry to take more of its own decisions on how best to invest, serve its customers and grow.

Link: Download speech from the Office of Rail Regulation
Costs, customers and safety:
How rail businesses can gain the confidence of customers and taxpayers; and how regulation can help
Richard Price, Rail Industry Reform conference, 28 February 2012

Speaking at a rail industry event Richard Price, Office of Rail Regulation (ORR) Chief Executive, said:

"Our prime motivation ... must be to ensure that [people] get what they pay for through their taxes and through the farebox.  I believe that this requires a collaborative whole-industry approach between Network Rail and train operators.   It is how the industry performs as a whole, how it establishes partnerships, how it shares risk and reward so that interests are aligned around improving efficiency and performance, that will make the difference.

"Network Rail will be the focus of the Periodic Review, but the industry as a whole needs to work together to get results across the system.  ORR is looking to the industry to take the initiative. Our interest is in efficiency and in what is delivered, while interfering as little as possible in how it is delivered."
Link: Download speech from the Office of Rail Regulation
  Reforming Rail: Changing industry, changing regulation
Richard Price, Rail Summit, 12 October 2011

Office of Rail Regulation (ORR) Chief Executive Richard Price outlined some of the key challenges emerging from Sir Roy McNulty's rail value for money review and how these are being reflected in priorities for the rail regulator.

Speaking at a rail industry event Richard Price identified the following challenges:

  • the need for greater transparency on funding flows and costs across the sector.
  • assuring delivery of current performance commitments and safety standards during a period of industry change.
  • successful delivery of the periodic review (PR13) and ensuring that this provides effective incentives across the sector.
  • ensuring that industry reform, including Network Rail's devolution and changes to rail franchises, delivers real and lasting benefits to rail users and taxpayers.

Richard Price also confirmed that the ORR Board has commissioned a review of ORR’s capabilities against its current roles and any potential expanded regulatory role.

Download speech from the Office of Rail Regulation
  Performance and efficiency: the challenges for Britain's railway in the 2013 Periodic Review and beyond  
Richard Price, Speech at the Office of Rail Regulation’s London launch of the 2013 Periodic
Review of Network Rail, London, 12 July 2011

In a speech at the London launch of the Periodic Review of Network Rail's charges, funding and outputs, Richard Price sets out the challenges of efficiency and reform facing Britain's railways between now and 2020, and the
 pressure to achieve greater value for money as, for the first time in generations, the railways meet sustained growth for their services.

Link:  Download speech from the Office of Rail Regulation (PDF, 446 KB)  

  Regulator warns rail industry to reduce costs
Robert Wright, Financial Times, 20 June  2011

The British railway industry is “on notice” that it has to cut costs to continue receiving recent levels of government investment, according to the new head of the industry’s regulator. Richard Price, who takes over on Monday as chief executive of the Office of Rail Regulation, was speaking in the wake of the McNulty review, which said costs could be cut by 20 to 30 per cent over the next eight years.

Link:  Full article at       


  Freight and the future of rail 
Richard Price, Rail Freight Group Annual Conference, June  2011

This speech reflects on the signficance of the rail freight sector, as a part of the infrastructure for growth and for the distribution of economic activity within the UK.  The quality and reliability of freight services make locations with good rail access more attractive places to locate, grow and invest in businesses across Britain.  The reliability and cost of rail as part of the supply chain and the distribution network for goods – including connectedness to global markets, in turn helps to drive the competitiveness of UK businesses.  Freight will be given due weight in the assessment of the industry's investment priorities and funding needs.  

Link:  Download speech from the Office of Rail Regulation (PDF, 503 KB)      


  Investment, Reprocurement and
Franchise Contract Length in the British Railway Industry 

Luisa Affuso and David Newbery, November 2000

This paper studies the interaction between repeated auctions of rail franchises of different lengths, uncertainty, and incentives for investment in rolling stock, following the privatisation of British Rail. Theoretical predictions are tested empirically using a unique  panel of data. 

Theory suggests that short franchise lengths reduce incentives to invest in specific assets. Our empirical results suggest that competition and strategic behaviour at  the re-procurement stage can create incentives for delayed investment. Investing just before  the end of the franchise enhances the incumbent's probability of having the contract  re-awarded and provides it with a first-mover advantage, while raising the entry cost for other  potential bidders.

Link:  Paper available from the website of the CEPR - follow this link.


Comparing Investment on New Transport Infrastructure: Roads vs. Railways 

Luisa Affuso, Julien Masson and David Newbery, University of Cambridge, September 2000

This paper contributes to the debate on investment in transport infrastructure and the allocation of public funds between road and railway projects. We use a consistent social cost-benefit methodology to appraise investment in typical new inter-urban road and rail project. Our results suggest that road improvements have substantially higher returns than railway schemes. These findings cast doubt on the rationale of the new transport policy for the UK which proposes to allocate more public funds to the (private) railways than total new investment in strategic roads.

Download: Click here to download from the Department of Applied Economics website, University of Cambridge.


Measuring the efficiency of Britain's privatised train operating companies
Luisa Affuso; A. Angeriz; and Michael Pollitt: London, 2002, London Business School  Regulation Initiative Working Paper Series Number 48. 

Twenty-five operating companies (TOCs) were created between 1994-1997, as part of the restructing process of the railway industry in Great Britain. The TOC operate monopoly franchises for the provision of passengers of passenger rail services over certain routes - some of which continue to receive government subsidies. 

This paper investigates how the efficiency of these train operating companies has evolved over the period since privatisation using data envelopment analysis (DEA) and corrected ordinary least squares (COLS). Our data allows us to look at the evolution of relative efficiency and productivity through the privatisation and to perform second-stage regression analysis of the effciency scores using safety, quality and environmental data. The analysis sheds some light on the success and failures of the UK's most controversial privatisation to date.

Download: Click here to download this paper

Reforming Russian Infrastructure for Competition and Efficiency

Organisation for Economic Cooperation and Development, 2001

Infrastructure sectors - particularly railways, telecommunications, electricity and natural gas - are vital in providing necessities of life to the Russian Federation’s citizens and key inputs into the rest of the economy. 
A top priority of the current government in Russia is to reform the infrastructure sectors, specifically in such sectors as rail transport and electric power, to create an efficient and effective regulatory regime that supports the creation of competition where possible and provides more effective protection to consumers in those spheres where competition is not possible. 

This book compiles the proceedings of four meetings held at the request of the Minister for Antimonopoly Policy of the Russian Federation, on the reform of railways, telecommunications, electricity and natural gas, during December 2000-September 2001. This review is part of the OECD's ongoing co-operation with non-Member economies around the world.

Download: Available from the OECD bookshop online.


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