ABSTRACT
An efficient structure of rail access charges should provide appropriate incentives for the effective management of the existing network and provide adequate financial resources to allow for its enhancement when this is justified by market demand. The basic problem with the EC proposal is considered to be its sharp focus on short run marginal cost pricing (SRMC) which is defined to include ‘congestion and environmental costs but not capital costs’. Starting with an assumption of a constant cost network optimally adjusted, the EC proposal for charges based on SRMC, where the latter include the costs of congestion, will allow for an adequate financial return. Both politics and economics might suggest that the introduction of cordon pricing in the City and elsewhere could be accompanied by the removal of parking meters. The imbalance between spending and taxes is considered to be particularly marked in the case of inter-urban roads.
