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Road and rail freight infrastructure pricing

Inquiry report

This inquiry report was released on 13 April 2007.

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  • Contents

Cover, Copyright, Letter, Terms of reference, COAG communiqué , Contents, Abbreviations, Glossary, Key points, Overview, Key findings and recommendations

1   About this inquiry
1.1   What has the Commission been asked to do?
1.2   Reasons for the inquiry
1.3   How has the Commission approached its task?
1.4   Guide to the Report

2   Road and rail freight in Australia
2.1   The freight task in Australia
2.2   A comparison of road and rail freight
2.3   How freight transport is changing
2.4   Regulation, funding and charging arrangements
2.5 Summing up

3   Efficient pricing of land freight infrastructure: some threshold issues
3.1   Efficiency in land transport
3.2   Efficiency in natural monopoly infrastructure
3.3   What is efficient pricing?
3.4   Pricing distortions and efficient investment

4   Assessing road infrastructure costs
4.1   Financial or economic costs?
4.2   Does PAYGO provide a subsidy?
4.3   Limitations of PAYGO: would other approaches do better?

5   Attribution and recovery of road infrastructure costs
5.1   What costs should heavy vehicles pay?
5.2   What costs should be excluded from the cost base?
5.3   What costs should be allocated to heavy vehicles?
5.4 Do road user charges achieve cost recovery?
5.5   Summing up

6   Rail infrastructure costs and cost recovery
6.1   Introduction
6.2   Determination of 'below-rail' costs
6.3   Impact of third party access regulation on cost recovery and pricing
6.4   To what extent is rail freight infrastructure subsidised?

7   Road and rail freight externalities
7.1   Introduction
7.2   Quantifying externalities from road and rail freight
7.3   Implications for freight infrastructure pricing
7.4   Summing up

8   Implications for competitive neutrality
8.1   Why is competitive neutrality an issue?
8.2   How should competitive neutrality be assessed?
8.3   Assessing (relative) subsidies for road and rail freight infrastructure use
8.4 Relative costs of externalities
8.5   What are the implications for freight activity and modal shares?
8.6   Summing up

9   Pricing reform options for road and rail
9.1   Introduction
9.2   The objectives of pricing reform
9.3   Road infrastructure pricing reform options
9.4   Improving current charging arrangements
9.5 From taxes to direct road user charges
9.6   Rail pricing reform options

10   Reforming road institutions
10.1   Deficiencies in current funding arrangements
10.2   Implications of the 'disconnect' in road demand and supply
10.3   Pressures on the current road funding model
10.4   Institutional approaches
10.5   Departmental approach, but with hypothecation?
10.6   A Road Fund (or Funds)?
10.7   A public utility model?
10.8   Some (more) private provision of roads?
10.9   Summing up

11   Addressing non-price impediments
11.1   Road-specific impediments
11.2   Rail-specific issues
11.3   More general road-rail issues
11.4   Enhancing intermodal connections
11.5   Summing up

12   Improving efficiency in road and rail: ways forward
12.1   Improving the efficiency of rail freight
12.2   Improving road's performance
12.3   Concluding remarks

A   Public consultation

B   Issues in road infrastructure cost allocation

C   Quantifying externalities of road and rail freight

D   Road pricing overseas

E   Access regimes for rail

F   Estimating road and rail freight elasticities

G   Modelling impacts of reform

H   Road pricing technologies