An approach to mark-ups through capacity charges

Abstract

Charges related to rail infrastructure capacity in the European rail network show great diversity and are not sufficiently transparent. This paper develops a simple and transparent methodology that takes the main aspects related to rail infrastructure capacity into consideration to give an approximated value of the maximum capacity charge (initial mark-up). The method can be used (as a basic calculation tool) to develop a uniform (and thus, interoperable) charging system. According to the hypothesis formulated, the result of the method's application to typical railway services was from higher to lower initial mark-up: suburban trains, intercity trains, regional trains, express freight trains, conventional freight trains. After this preliminary valuation is reached, the railway undertakings' willingness to pay and the socioeconomic aspects of transport come into play for setting the definitive mark-ups, thereby establishing the final charging level.