Governance and structure of the railway industry : three pillars

In China and in many other countries there is a compelling public interest in the railway industry. How do different countries try to pursue the public interest in railways? This paper finds common elements of governance and institutional structure in eight countries whose diverse railway industries collectively carry about two-thirds of all the railway traffic in the world outside China: Australia, Brazil, Canada, France, Germany, Japan, Russia, and the USA. These common elements are: the existence of a Ministry of Transport with oversight and multi-modal transport policy responsibility; separation of government policy and regulatory functions from the commercial management of railway services; overwhelming preference for company structures (whether private or state-owned) to deliver railway services; multiple service providers; and divisional or institutional separation of freight from passenger services. China's railway industry governance structure is not based on these elements. But changes in transport competition and in the scale of China's railway industry, together with the desirability of a more coordinated national transport system, suggest that now there may be useful lessons for China from the international experience. The paper speculates on three common policy 'pillars' upon which China may wish to base alternatives for consideration.