Sustainable Management of Railway Companies Amid Inflation and Reduced Government Subsidies: A System Dynamics Approach

Abstract

Sustainable transport is a critical and complex issue that the world is currently facing. Managers of railway companies in particular face significant challenges in achieving self-sustainable management of their assets. This paper introduces a new causal loop and explores the interaction among company dimensions—including financial, social, and environmental aspects—in order to assess the financially sustainable management of Raja Corporation, one of the largest railway companies in Iran. Our main contribution is the proposed system dynamics (SD) model, which can aid in policy analysis for Raja, a company that operates multiple routes within the country. The presented model compares different strategies employed by Raja using economic, social, and environmental indicators to evaluate the financial sustainability of the company. Our findings demonstrate that government subsidies may boost the company’s revenue, but they also hinder the rate of profits. Additionally, we highlight the impact of inflation on the company’s financial sustainability, showing that higher ticket prices may have a considerable impact on profits. The proposed approach of using the SD model may help specialists evaluate the sustainability management of transport sector corporations and significantly enhance their performance. This study highlights the importance of taking a comprehensive approach to assess the financial sustainability of railway companies, considering the interdependencies among various dimensions of each company. The findings of this study may have implications for policymakers, managers, and researchers in the transport sector, especially those who are interested in sustainable management practices.