Tuesday, November 6, 2007
Posted by D. Daniel Sokol
The team of Russell Pittman (Director of Economic Research DOJ Antitrust), Oana Diaconu (Department of Economics and Management, Polytechnic University of Bucharest), Emanual Sip (Special Advisor, Viamont, a.s.), Anna Tomová (Faculty of Operation and Economics of Transport and Communications, University of ilina), and Jerzy Wronka (Professor in Economic Sciences, University of Szczecin) have undertaken an analysis of antitrust railroad issues in their article Competition in Freight Railways: "Above the Rail" Operators in Central Europe and Russia.
ABSTRACT: The railways of Russia and the Central and Eastern European countries are in the process of restructuring. In most cases, the "vertical separation" reform model is being pursued, and reformers are seeking to introduce competition among freight train operators through the provision of "open access" to the monopoly infrastructure. This paper shows that, in two countries, Poland and Romania, a good deal of competition has been created by the entry of new freight operators, many of them either large shippers integrating upstream or former freight forwarders. However, in other countries, the incumbent freight operators retain virtually 100 percent of the market. In particular, Russia has taken only the very first steps toward creating competition in this sector, and new freight train operators face significant barriers to competing with the incumbent.