Competition on the Norwegian Railway Network

Commissioned by the Ministry of Transport and Communications, the Institute of Transport Economics has analysed alternative strategies for opening up access to the Norwegian railway network. We recommend to sell the right of use of a route for which there is competition for a fee that will internalise the external congestion costs that use of the route involves. Preferrably, these use rights should be made tradable. Such a system should be introduced gradually. At the same time, barriers to entry must be systematically removed, and the situation should be continually monitored. If it is desired to expose the state-purchased passenger transport services to competition, this should be done by competitive tendering. In the short run, only adjustments to the division of responsibility in the railway sector are necessary to facilitate further liberalisation. A governmental body with responsibility for the tendering processes might be erected. At some points, our proposals run counter to recent proposals from the European Commission.