Transport without politics--? : a study of the scope for competitive markets in road, rail, and air

The author challenges the conventional view that transport requires close governmental control of its structure and management. He traces the origins of this thinking to the emotions aroused by the early railways and questions whether important parts of the transport industry must necessarily be subject to central administration. From these beginnings, administrative regulation of public transport has become all-pervasive, imposing territorial divisions, cross-subsidisation, quantity licensing, and price controls. Its proliferation has been justified by a variety of arguments about economies of scale in the industry, the supposed instability of competition, the requirements of land use planning, and the right of every citizen to mobility. The stifling of market mechanisms has led to misallocations of resources and such large and consistent losses as to create the myth that public transport can never be run profitably. Reform is urgently required to permit the market much wider scope; but little progress can be made as long as the marginal price of using the costly road infrastructure remains zero. The introduction of marginal pricing related to size/weight of vehicle and route congestion would improve efficiency in the use of roads and provide a rational economic basis for reorganizing passenger and freight services throughout the transport industry. A national corporation should be given responsibility for the road infrastructure and subsequently for the rail track to facilitate the decentralisation of the railways and marginal pricing of track use. Cross-subsidisation and standard charging in rail and bus should be abandoned; the territorial bus companies should be phased out and their operations transferred to smaller units operating smaller vehicles at higher frequencies. Conurbation transport authorities should be established to co-ordinate land use and transport policies in the special conditions of major urban areas; they should not own transport undertakings and should have the duty of encouraging decentralisation in the industry. (TRRL)