The theoretical and practical aspects of railway reform: implications for Saudi Arabia

Abstract

The Saudi government has started to reform its railway industry by following the international trends in railway reform. These reforms can be described as organisational reforms, but the railway’s industrial organisation can be seen as not fully developed compared to other industries. Practically, railway reform can be clustered into three blocks based on country experiences, which are regulation, structural and ownership reforms. Based on the literature, the impacts of railway reform on performance vary between each form. Thus, this research aims to determine the optimal organisation of rail services in Saudi Arabia as an example of a country that has not fully developed its rail network. To deliver the research aim, this research conducted technical, cost and welfare assessments to select the optimum railway organisation. To carry out these three assessments, this research performed analytical techniques that are built on quantitative and qualitative analyses. This research also conducted interviews with Saudi rail experts to validate the research recommendations. The results of this research conclude that the vertical separation between infrastructure managers and train operations could improve the efficiency of the Saudi railway system, particularly the institutional separation. Meanwhile, the regional division of rail services is not recommended for the Saudi rail system, and the horizontal separation between passenger and freight rail services is not supported by the findings of this research. With regards to the competition forms, this research has a mixture of results between the three assessments to determine the impact of on-track and off-track competitions. Finally, the results show that combining rail policies (competition introduction, vertical and horizontal separation) reduces railway efficiency. Based on these results, this research does not recommend introducing these reforms as one package, although the Saudi rail experts recommend this option.