Deregulation and reform of rail in Australia: Some emerging constraints Sophia Everett * The Australian Centre for Integrated Freight Systems Management, Melbourne University, 442 Auburn Road, Hawthorn, Vic. 3004, Australia Received 24 November 2004; revised 7 August 2005; accepted 11 August 2005 Available online 7 November 2005 Abstract The Australian Government over the last two decades has embarked on an intensive microeconomic reform program. Associated with this has been the deregulation of the rail sector. The mechanism of deregulation has been by vertically separating the below and above rail infrastructure and the creation of a number of rail access regimes. Evidence is emerging which indicates that the mechanism of deregulation is an impediment to the development of an integrated national network, the objective of deregulation and rail reform. This paper will discuss the mechanism of deregulation in Australia within the context of developments overseas. In particular it will discuss the development of a number of state specific rail access regimes and raise some problems and constraints being encountered in the reform process. The paper adds to a growing body of knowledge relating to infrastructure reform and deregulation and highlights some major constraints embedded in the model. The concluding section will discuss the relevance of past and current reform of Australian policies to rail policy makers outside Australia. q 2005 Elsevier Ltd. All rights reserved. Keywords: Deregulation; Australia; Constraints 1. Introduction In November 2002 the Australian Commonwealth Govern- ment released its AusLink Green Paper (Auslink, 2002) which is a blue print for a long-term National Land Transport Plan. AusLink’s subsequent White Paper outlines the proposal for an integrated land infrastructure network based on clear national objectives and priorities that focus on meeting the major transport challenges facing Australia (AusLink, 2004). This development with a national focus has become an important aspect of government policy in recent times. The Auslink, 2002 strategy followed closely upon the release of the Review of the National Road Transport Commission Act 1991, which made the recommendation to the Australian Transport Council in August 2002 that the National Road Transport Commission be replaced with a National Transport Commis- sion (NRTC, 2003). This new authority, effective as from 1st January 2004, has the responsibility for national approaches to both road and rail and assist in the integration of what have hitherto been perceived as quite distinct modal entities. These developments are also consistent with the Common- wealth Government’s establishment in 1997 of the Australian Rail Track Corporation (ARTC) with the responsibility for administering the interstate rail network and provide a ‘one stop shop’ for rail access seekers under a deregulated rail model. These developments and strategies for rail reform more generally follow similar strategies implemented overseas National land transport strategies, as those proposed in AusLink (Fig. 1), demand not only the inclusion of rail, but of an integrated interstate rail network. It is within this sector that some constraints are now emerging which are likely to impede an effective national focus being realised. The striving for the development of a national network is not new and has been called for since the early 20th century. It has failed to eventuate for a number of reasons, which included initially the physical barriers as a result of gauge differences. Further barriers to the development of a national network in the past were also institutional and jurisdictional—railways were state government monopolies and operations were confined by the relevant state boundaries. Under this system, rail operators were unable, by legislation, to transport goods beyond state borders. 1 This impediment was resolved with the deregulation of the rail sector and the breaking up of state government monopolies. Arguably, with the deregulation of rail and the removal of the physical constraints, it would appear that Transport Policy 13 (2006) 74–84 www.elsevier.com/locate/tranpol 0967-070X/$ - see front matter q 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.tranpol.2005.08.003 * Tel.: C61 3 9810 3187; fax: C61 3 9810 3149. E-mail address: s.everett@muprivate.edu.au. 1 The establishment of the National Rail Corporation in 1991 constituted the joint venture between the Commonwealth Government and the state governments of Victoria and New South Wales and represented the first interstate rail operator.