Plans, timetables, and delays: Progress with railway reform in transition economies

This paper analyses the extent and speed of railway reform in transition economies. EU-accession railways, which are financially weak and losing market share to road transport, have advanced on the railway reform path more than cash-flow rich CIS railways, which enjoy a captive market in freight. Reform agendas are ambitious on paper but suffer from implementation delays. The combination of favourable financial conditions, inelastic demand, and heavily politicised decision-making slows down reform. The success of railway reform depends on building institutional capacity and promoting wider reforms in the economy, such as enterprise restructuring and financial sector development. It also depends on the capacity to overcome the coordination problems inherent in the “vertical separation” model, including regulatory design, and in facilitating private sector involvement.