Access by freight trains in Australia is generally priced to recover at
least the incremental cost of infrastructure use, which includes the
marginal cost of track maintenance (BTRE, 2003). However, in many
railway systems in Europe and North America the cost recovery objective
is based on the full cost recovery rather than marginal incremental costs. It
is critical to recognize that rail freight infrastructure in Australia operates
within a comparatively limited passenger market to share its fixed costs,
whereas nearly 80 per cent of traffic on interstate road corridors where
road and rail compete is comprised of light vehicles (BTRE, 2006b).
Productivity Commission (2006) has been instrumental in providing
further information on road infrastructure access regimes. Much of
Australia’s rail infrastructure access is based on a negotiate-arbitrate
model, where the access seeker and provider negotiate access but, if
negotiation fails, the regulatory body sets an arbitrated charge that falls
within the floor-ceiling price band (BTRE, 2003). The owners of the rail
infrastructure are obliged, where requested, to provide access to the track
to above-rail train operators with fair and reasonable conditions; the terms
and conditions as well as the price of such access are regulated by Part
IIIA of the Trade Practices Act 1974 or by relevant state legislation