Assuming that some privatization is accepted as “needed” to improve American rail service, in what form should it be implemented?
In general, there are four rough frameworks for such privatization:
1. Publicly owned tracks with competition for services. This is being implemented in mainland European countries under E.U. regulations; public sector track owners (such as RFF in France) allow operators — both public and private — to run competing services on the same lines.** This allows riders to choose operators on journeys with the same origins and destinations, just as can be done for airline journeys.
2. Publicly owned tracks with competition for contracts. This is the network organization in the United Kingdom; public Network Rail owns the tracks but then leases the rights to operating rail corridors to private companies. In general, contracts last around seven years and give each operator close to monopoly rights over each corridor.***
3. Privately owned tracks with competition for contracts. This was the system previously operated in the U.K.; the privately controlled Railtrack owned all tracks in the country between 1994 and 2002. The tracks were moved into the control of a public operator, as described in the second alternative.
4. Privately owned tracks with one private operator. This is how intercity rail operations are managed in Japan.
— Yonah Freemark, The Transport Politic