Position Papers  

 

Rail Freight in the USA: Lessons for Continental Europe 2008-Jan-01  |  CER Essay Series To stimulate a debate on the future of rail freight markets, Henry Posner III compares the business trends and structural and institutional differences between the U.S. and continental Europe, and offers an insightful analysis into why U.S. rail freight market shares are significantly higher than those in Western Europe.   download PDF (611k)

Rail Operator: re-regulation would hurt shortlines 2007-Nov-12  |  Argus Rail Business Argus Rail Business asks Henry Posner III what the passage of current rail regulation legislation, namely H.R.2125 and S.953, would mean in practical terms for railroads.   download PDF (254k)

Assessing Risk in Emerging Markets Infrastructure -- "It's never what you think." 2007-Jun-28  |  Institutional Investor's Infrastructure Investment Forum, New York "The risk that you think you need to worry about is usually wrong. No amount of due diligence and no amount of lawyering is going to protect you from, for example, a government that decides it's going to change the law to suit themselves, such as happened in Estonia and Guatemala. Expropriation is not limited to developing countries."   download PDF (92k)

Transcontinental Traffic -- why Europe is very different from North America 2007-Jan-30  |  CER EurailFreight 2007, Brussels "...the first thing that customers want is rail as an option. If the rail option doesn’t exist, then everything else is academic.  Where the differences occur, is that in North America there is competition as a result of deregulation, whereas in Europe, you are trying to force competition through regulation.  This is an extremely important institutional point because it has nothing to do with engineering, signaling systems or axle loads. It is an institutional fundamental of the European environment, and I think it is the single biggest problem."   download PDF (485k)

Open Access -- from theory to reality 2006-Oct-12  |  The Lexington Group in Transportation History "We are The Lexington Group in Transportation History and I think we have something of value to offer this country which is more than a little bit of perspective; we can look overseas for examples... "...I have just made some economic arguments, but I would argue that the most fundamental economic force which has emerged in the last several years is 'the marketplace for legislation' vs. 'the marketplace of ideas'."   download PDF (97k)

PANEL:  Improving safety and preventing accidents in African railways 2006-Jun-29  |  Africa Rail 2006, Johannesburg "The single most effective tool for improving railway safety is therefore the development of realistic norms reflective of our operating environment, and the training and discipline necessary to implement them. In this respect, safety is more of an institutional challenge than a technical challenge."   download PDF (34k)

PANEL:  Attracting investment for improved services via railways concessions and privatization 2006-Jun-28  |  Africa Rail 2006, Johannesburg "...improvement of the economics and performance of state railways in Africa point squarely to private sector management despite the unsurprising positions of many such enterprises that private sector interests will, among other things, result in a short-term focus and a disregard for safety."   download PDF (33k)

Rail Privatization in Latin America--15 years of unprecedented change 2006-Apr-06  |  LatAmRail 2006, Miami "Perhaps the greatest challenge in Latin America has been matching the results of privatizations with expectations, from the perspective of all stakeholders...customers, shareholders and host governments."   WHITE PAPER (PDF 128k) PRESENTATION (PDF 782k)   OR   PRESENTATION (HTML)

Partners in Progress?--Estonia's role in the export of oil by rail 2005-Nov-10  |  Transport Infrastructure for Oil and Gas in Russia & CIS, Moscow "...EVR's revenue and cost structures are now controlled by the government. This has been done under the guise of EU regulations, but there is no country in the European Union with regulations like these."    download PDF (190k)

Open-Access Failure in the UK 2005-Sep/Oct  |  Association Highlights (Bi-monthly newsletter of the Association of Transportation Law Professionals, www.atlp.org) "...the economic effect of open access will be the conversion of bulk traffic from the rail industry's highest margin business into its lowest margin business, with a catastrophic impact on the industry's ability to fund its infrastructure."    download PDF (32k)

Financing the Nacala Corridor--First Private Sector Integration of Port and Rail 2005-Jun-22  |  AfricaRail 2005, Johannesburg "I would like to share with you a trip I took on the Nacala Corridor. As a railway investor, the best way to see a railway is from the cab of a locomotive..."    download PDF (519k)  OR   VIEW HTML>>

Safety -- A Global Perspective 2004-Nov-17  |  Rail Industry Safety Conference, St. Louis "...unless you and your employees 'believe' in safety and live it every day at work, none of the so-called programs, processes, or gimmicks is going to work. If you and your employees truly believe in safety, then you probably are operating a safe company and don't have a need for outside help."  download PDF (298k)   OR   VIEW HTML>>

First Privatization of a Former Soviet Railway:  Bringing International Experience and Best Practice to Estonia 2004-Feb-17  |  Reform & Privatization of Russian Railways Conference, Moscow "We are in an extremely competitive business. Estonian Railways has to work very hard to stay ahead of the game, working with the Estonian ports to make Estonia as competitive as possible given that there is a big piece of the pie that we do not control." download PDF (202k)   OR   VIEW HTML>>

A Paradox of Financing:  Privatization of Parastatals by Parastatals 2003-Apr-01  |  Africa Investment Forum - TransAfrica21, London "...we believe that competition from the public sector represents greater risk than floods, famines, giant spiders, etc.  I would encourage you to think back to my previous comment which was, 'What are we looking for in terms of investment parameters?  We are looking for a serious government and rational competition.'" download PDF (103k)   OR   VIEW HTML>>

Confessions of a Monopolist: Investment in, and Management of, the Vertically Integrated Railway 2003-Jan-30  |  Railway Study Association, London "Taking the European definition of a monopoly and applying it to Iowa, we are the "monopoly" in Newton, Iowa, to the extent that we are the exclusive railroad going into the Maytag washing machine plant in Newton. But that's not to say that BNSF couldn't send a truck over to take that traffic 25 miles across to their main line. What I'm saying is that we have a competitive advantage against trucks or rail-truck intermodal service because we have steel wheel right into the siding, which means for that particular movement there is no trucker involved."   download PDF (432k)   OR   VIEW HTML>>

Rail Freight in New York City:  A Global View 2002-May-06  |  Transportation Research Forum, New York "The New York Central was 'The Road to the Future' -- this, my friends, is the Road to Nowhere."    download PDF (242k)   OR   VIEW HTML >>

Financing Rail Freight:  A Global View 2002-Feb-28  |  Railroad Finance Forum, New York "...as long as there is an undisciplined political component to the business, doing business in the USA, or at least in New York, may in fact be more risky than going to a poor country like Peru..."   download PDF (152k)   OR   VIEW HTML>>

P&LE -- The Final Years 2002-Feb-16  |  "Railroads in Western Pennsylvania" Seminar, Pittsburgh "We will discuss the P&LE's final years, not from a rail history perspective, but rather from a business perspective...I want to drive a stake into the ground as far as what really happened internally in its final years...This is a very interesting piece of history, and there are still lessons to be learned..."  download PDF (42k)   OR   VIEW HTML>>

Freight Privatisation -- Franchise structure must drive investment 2001-Oct-01  |  Rail Investment 2001   (a supplement to Railway Gazette lnternational) "In some cases, it becomes clear that despite a formal bidding process there is also a hidden agenda, with an intended winner waiting behind the scenes. This is not limited to developing countries, and we experienced this in the case of the Long Island Rail Road freight privatisation."  download PDF (1,053k) The above excerpt received a response from a representative of the Metropolitan Transportation Authority, and Railway Gazette International published the exchange of letters in their June 2002 issue.  download PDF (87k)

The Structuring of Rail Concessions:  Economics and Ethics 2001-Sep-26  |  World Railway Congress, Vienna "...Don't just look at the economics...look at the game behind the rules."  download PDF (17k)   OR   VIEW HTML>>

Alternative Models for Freight Rail Concessions:  A Comparative Analysis 2001-May-10  |  Africa Investment Forum - TransAfrica21, London "To the extent that this conference covers how we can finance our way out of the problems that exist in Africa, it is worth considering the reaction of the financial markets to what is occurring in the Open Access environment as opposed to the Exclusive Franchise environment...The primary focus of Open Access is political and the secondary focus is on the customer. I do believe that Open Access has created value for the customer; in fact, most of the margins of the freight business have been given to the customer. However, if most of the margins have been given to the customer, then why invest in railways?...To summarize, both the financial and the transportation marketplaces have repudiated Open Access..."  download PDF (153k)   OR   VIEW  HTML>>

Railway Restructuring in the Americas -- Implications for the Former Soviet Union 2000-Oct-18  |  International Railway Seminar, Moscow "...The Former Soviet Union should consider that there are other places than Europe where railways have been restructured and other models to be considered...a competing model to the European model of Open Access is the Exclusive Franchise model..." download PDF (169k)   OR   VIEW  HTML>>

Renegotiation of Freight Railway Concessions 2000-Sep-18  |  20th Pan-American Railway Congress, Havana "...The market in the USA will continue to be extremely competitive and not be a particularly good place for investment because there will be plenty of buyers pushing the prices up. In fact, the focus will be more on how one manipulates the game than the actual price paid... Overseas, since it will be less competitive in a more difficult market, we will be under less pressure to make deals that are fundamentally unhealthy.  RDC is doing more investment in the developing world.  However, success will continue to focus on as much as understanding the country as understanding the railroad business, and a high tolerance of risk..." download PDF (191k)   OR   VIEW  HTML>>

Structuring Railway Concessions in Africa:  An Investor's Perspective 2000-Jun-20  |  AfricaRail 2000, Johannesburg "The fundamentals of Africa's freight railways are sound...In southern Africa the competition for the most part is trucks; in the USA the competition is other railways...In Europe everybody is competing with everybody...In Africa you can have a true franchise business...and is as good as an investment environment as one would find in the USA, Latin America, or any other place...Success will rely on a willingness to take risks...and to be flexible culturally in order to integrate with the local culture." download PDF (353k)   OR   VIEW  HTML>>

Railway Concessioning in Africa -- An Investor's Perspective 1999-Jun-22  |  AfricaRail 1999, Johannesburg "Commercialization is a compromise; concessioning is, in our opinion, the way forward...the benefit is that Africa can look to Latin America to get free consulting, to avoid the mistakes, to look at what went wrong in Latin America, and not repeat it."  download PDF (195k)

Britain's Rail Freight Privatization -- An Investor's View 1995-Jun-29  |  Rail Freight Conference "Under Open Access a franchise is not a franchise at all, because you have intramodal competition, that is rail vs. rail, which is likely to minimize profit margins once Open Access takes hold. I've been spending a lot of time the last couple days asking people to please tell me I'm wrong...Revenue projections are going to be more risky going forward given the unknown structural impact of Open Access...The only analogy I can come up with for what is about to happen in the UK is the US domestic airline industry, which is the best model of Open Access.  You've got the prospect of the same competitive and financial results awaiting, unless I'm wrong." download PDF (58k)   OR   VIEW HTML>>

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