Financing Railway Infrastructure:
How To Invest And What Maintenance Policy?
Author(s)
M. Vidaud, O. Bernard, S. Crouïgneau, Y. Putallaz,
J.
Lévêque
& R. Jacquier
Abstract
Financing railway infrastructure:
M. Vidaud1, O. Bernard1, S. Crouïgneau1, Y. Putallaz2,
J.
Lévêque3
& R. Jacquier4
1OXAND, France
²IMDM, Switzerland
3RFF, Laboratoire d’Economie des Transports, France
4RFF, France
Abstract
This article presents three different ways of predicting investment needs to
maintain and renew railway infrastructure. The ‘Level 1’ approach is based on
financial ratios and does not take into account the infrastructure’s history or
maintenance strategies. This simplified approach can be used provided that the
components age pyramid is uniform. The ‘Level 2’ approach considers the age
pyramid’s general impact without integrating budget constraints and possible
specific optimization at the component level. This approach is useful and gives
interesting rough estimates for macroscopic finance audits; it does not require an
exhaustive knowledge of the owner’s material assets. The advanced ‘Level 3’
approach enables planning of detailed investment needs on short, medium and
long-term scales. It considers both physical and economic lifetimes for each
component of the infrastructure as well as taking into account the budget
constraints of the infrastructure’s manager. It also allows the possibility of
quantifying risks related to performance failure due to underinvestment. Using
these different approaches, or cost models, with different European infrastructure
managers enabled demonstration that investment needs and thus potential
regulated returns (for regulated railway network management), strongly depend
on infrastructure history and components age pyramid as well as physical and
economic lifetimes. The article shows that management policy decisions and
balance between renewal and maintenance, crucial in securing long-term
network integrity (or ‘substance’) and in deciding on short-term investments, can
Keywords
railways, asset management, investment needs of infrastructure, CAPEX, OPEX, age pyramid
Related Book
Other papers in this volume
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