Ownership

Traditionally, the infrastructure and rolling stock are owned and operated by the same company. This has often been by a national railway, while other companies have had private railways. Since the 1980s, there has been an increasing tendency to split up railway companies, with separate companies owning the stock from those owning the infrastructure, particularly in Europe, where this is required by the European Union. This has allowed open access by any train operator to any portion of the European railway network.

Financing

The main source of income for railway companies is from ticket revenue (for passenger transport) and shipment fees for cargo. Discounts and monthly passes are sometimes available for frequent travelers. Freight revenue may be sold per container slot or for a whole train. Sometimes, the shipper owns the cars and only rents the haulage. For passenger transport, advertisement income can be significant.

Government may choose to give subsidies to rail operation, since rail transport has fewer externalities than other dominant modes of transport. If the railway company is state-owned, the state may simply provide direct subsidies in exchange for an increased production. If operations have been privatized, several options are available. Some countries have a system where the infrastructure is owned by a government agency or company—with open access to the tracks for any company that meets safety requirements. In such cases, the state may choose to provide the tracks free of charge, or for a fee that does not cover all costs. This is seen as analogous to the government providing free access to roads. For passenger operations, a direct subsidy may be paid to a public-owned operator, or public service obligation tender may be helt, and a time-limited contract awarded to the lowest bidder.

Railway company

From Wikipedia, the free encyclopedia

A railway company or railroad company is an entity that operates a railroad track and/or trains. Such a company can either be private or public. Some railway companies operate both the trains and the track, while particularly in Europe ownership of track and train operation is separated in different companies.

Structure

Many countries have a national railway company that owns all track and operates all trains in the country, for instance the Russian Railways. Other countries have many different, sometimes competing, railway companies that operate each their own lines, particularly in the United States and Canada.

In Europe, the EU requires its members to split the railway companies into a number of different companies. Usually public owned companies own the track and other public companies (sometimes owned by regional governments) own the train cars. Public service obligations or franchising is then used to determine the right to operate the line for a limited time period, with multiple private companies bidding for the privilege to operate. Other companies offer trackside and rolling stock maintenance.