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The Railways - 8 January 2007

The Railways - Better off Privatised?

This Problem Based Learning (PBL) activity looks at the railways. In January 2007, prices of train tickets rose for the fourth year running at rates well above inflation. Is the rail system a victim of its own success or are passengers having to pay for the fact that they have some element of monopoly power? One of the reasons for privatising the rail system was to improve efficiency and quality of service. Has the result of privatisation seen such improvements in quality and efficiency? Are such price rises justified? Are the railways part of the solution to road congestion or are the price rises contributing to the cause?

These are just some of the problems that could be investigated in this topic.

Learning Objectives

At the end of this PBL activity, students might have covered some of the following areas:

• The difference between privatisation and nationalisation
• The reasons for privatisation
• The market structure of the railway industry
• An assessment of the success of rail privatisation
• Solutions to road congestion
• The regulation of pricing in privatised industries
• A justification for price increases above inflation
• Improving the efficiency of the rail system
• Factors affecting the demand for rail use
• The need for regulation in former nationalised industries

Resources:

• The Problem: Useful or Wasted Energy?
• References for Investigation