Socio-economic optimal pricing of railroad infrastructure

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Efficient and reliable movement of freight and passengers is a key component for economical growth in today's society. For this reason, significant resources have been invested in building transportation infrastructures. A railroad infrastructure is very costly to develop, yet it enables the movement of large quantities of goods and passengers. Hence, even small improvements in its utilization have a significant impact on the return on investment. Consequently, removing bottlenecks and shifting traffic fr om peak periods to non-peak periods has a strong positive effect on the return on investment, as it allows for shifting passengers and freight from roads to rail, and limits the need to invest in additional road infrastructure. Such a shift will also redu ce emissions of CO2, noise, or accidents associated with road transportation. We will develop methods to encourage efficient utilization of existing infrastructure, thereby making rail transportation more competitive in comparison to other modes of trans portation. The proposed methods rely on setting tariffs/subsidies for using various parts of the railroad infrastructure during the day. Such tariffs provide incentives to the railway operators for economically optimal usage. Using tariffs (subsidies) to reduce (increase) demand for access rights to different parts of the railroad infrastructure during the day will help to relieve congestion as well as stimulate usage in low traffic periods. The challenge in such an approach is that the tariffs/subsidie s for every part of the network during the day must be set simultaneously, taking into account each and every railway operator's optimal response to tariffs and subsidies. This is a very difficult problem which becomes increasingly complex with the number of railway operators and network size. In order to deal with the modelling and solution challenges, the project combines cutting edge research from several areas and develops new approaches.