RAILWAY ECONOMICS

SHE Level 3
SCQF Credit Points 10.00
ECTS Credit Points 5.00
Module Code M3L123780
Module Leader Adrian Caltieri
School School for Work Based Education
Subject SCWBE
Trimesters
  • A (September start)
  • B (January start)
  • C (May start)

Summary of Content

The aim of this module is to support those employed in railway operations or seeking a career in railway operations, to function effectively in the railway operations context, and to provide them with the necessary knowledge and understanding of the elements shown in the syllabus. -3 This module covers the financial and economic background to the railway industry, and how it affects decision-making by railway managers. It also considers the nature of the costs of a railway company, and how these costs can change in different circumstances and over different timescales. This module introduces how income for a new or altered train service is predicted and how costs and benefits of investment projects are compared so as to select appropriate projects. The module then considers the public interest in railways, including why subsidies might be paid to different types of railway services.

Syllabus

-360 Economics and business issues Railways as a business -360 Railway Costs - cost structure, fixed and variable costs, cost allocation, the contractual matrix -360 Railway Revenues - sources of revenue, forecasting demand, characteristics of the National Rail Passenger market in Britain, fares, revenue distribution Rail Investment - making the case, matching costs and benefits -720

Learning Outcomes

On successful completion of the module students should be able to: 1. Demonstrate a critical understanding of the characteristics of different freight and passenger markets including how customer demand for rail services is forecast and products are designed for their target markets.2. Apply knowledge, skill and understanding to cost benefit analysis of investment projects on their railway including subsidy potential.

Teaching / Learning Strategy

This module is designed to be relevant to the student's workplace. The module teaching materials will be made available through GCULearn, the GCU on-line learning environment. It is hoped students will participate in discussions on-line. Support will be offered on the web by e-mail on-line discussion and telephone. A tutorial event at the start of the module will bring students together from the programme. This also provides the opportunity to meet their tutors. Formative assessment will be used not only to encourage knowledge of the subject, but also to help develop transferable skills. Summative assessments will provide evidence of the learning achieved throughout the module. Summative assessments are compulsory .

Indicative Reading

Essential Cole, S (2005) Applied Transport Economics, (3rd edition) London: Kogan Page Recommended Gubbins, E. (2003) Managing Transport Operations (3rd edition) London: Kogan Page Harris, N. and Godward, E. (1992) Planning Passenger Railways, Glossop: Transport Publishing Company. Harris, N. and Schmid, F. (eds) (2003) "Planning Freight Railways" A&N Harris DfT A broad understanding of TAG (Transport Analysis Guidance) is helpful, especially if a company is likely to be involved with major infrastructure projects. The main front page is at: <http://www.dft.gov.uk/webtag/index.php> It is worth being familiar with the background to the multi-modal concept and the importance of having an appraisal system to determine investment spending priorities. The Introduction section on TAG is probably sufficient for most people unless directly involved in the appraisal of schemes. <http://www.dft.gov.uk/webtag/documents/overview/unit1.1.php> Other useful documents are: <http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/> ORR <http://www.rail-reg.gov.uk/server/show/nav.1089> I n the context of the seven-day railway. -360b7 Fixed track charges schedule: <http://www.rail-reg.gov.uk/upload/pdf/cp4-pl-fixed_track_charges_sched_181208.pdf> Track usage price list (includes passenger and freight variable usage charge, electrification asset usage charge, coal spillage charges and freight only line charge): <http://www.rail-reg.gov.uk/upload/pdf/cp4-pl-track_usage_181208.pdf> -360b7 Capacity charge rates: <http://www.rail-reg.gov.uk/upload/pdf/cp4-pl_cap_charge_rates_181208.pdf> -360b7 Long term charge for stations: <http://www.rail-reg.gov.uk/upload/pdf/cp4-pl_long_term_charge4stations_181208.pdf> -360b7 Traction electricity consumption rates: <http://www.rail-reg.gov.uk/upload/pdf/cp4-pl_traction_elec_consump_rates_181208.pdf> The information regarding what each charge is designed to recover can be found in chapter 19 in the Periodic Review 2008: Determination of Network Rails outputs and funding 2009-14 document: <http://www.rail-reg.gov.uk/upload/pdf/383.pdf> The document setting out the assessment of the costs of freight only lines can be accessed at: <http://www.rail-reg.gov.uk/upload/pdf/316.pdf> Network Rail It is worth looking at some of the summary documents on the NR website relating to investment/finance processes. <http://www.networkrail.co.uk/aspx/4171.aspx> GRIP process <http://www.networkrail.co.uk/documents/5390_RateofReturn.pdf> ORR letter setting out RoR requirements <http://www.networkrail.co.uk/aspx/1604.aspx> High level summary of investment process ATOC <http://www.atoc.org/clientfiles/File/publicationsdocuments/Cost_savings_final.pdf> Sets out ATOC thoughts on the franchising process <http://www.atoc.org/clientfiles/File/publicationsdocuments/nps6E1F_tmp.pdf> - Paper from ATOC on carbon footprint. Of course, at the time of writing the objectives and practices of the franchising process are under review, and funding constraints will override anything else, so anything written under the previous government should be treated with caution and a flow of more current documents can be anticipated.

Transferrable Skills

-360 Written communication skills Personal and interpersonal skills Information gathering skills Problem solving Critical thinking and reflection Assessment and evaluation skills Negotiation, time management and forward planning skills.

Module Structure

Activity Total Hours
Assessment (PT) 20.00
Independent Learning (PT) 80.00

Assessment Methods

Component Duration Weighting Threshold Description
Course Work 01 n/a 100.00 40% 100% CourseworkThe assessments are work based and negotiated between the Institution of Railway Operators and Glasgow Caledonian University. For example, this may include a short answer questions to assess the understanding and principles and terminology and an essay Part B.