Modalities for the determination and computation of direct cost

Modalities for the determination and computation of direct cost

Tuesday, 22 October 2013

Rigorous, transparent and fair calculation of track access charges (TAC) is of fundamental importance in order to provide correct economic incentives to infrastructure managers (IMs) and railway undertakings (RUs).

While the total level of TAC may also include mark-ups (Article 32 of the Recast Directive), this note deals with the calculation of the cost directly incurred, or direct cost (Article 31, paragraph 3). Other relevant principles for direct cost are contained in Article 30, paragraph 8, and in recital 39 (cost causation). Article 31, paragraph 6 (computation of averages) should also be taken to be relevant for the present discussion.

As a reminder, CER wishes to stress the fact that, according to Article 32(1), the total level of charges “shall not, however, exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service, plus a rate of return which the market can bear.”

The aim of specifying the notion of ‘direct cost’ is two-fold: enabling the infrastructure manager to recover the costs directly incurred (the other costs being covered by revenues from mark-ups and from state funding), and sending fair but effective price signals to railway undertakings which may contribute to limiting infrastructure costs, e.g., where feasible, by incentivising the use of rolling stock that causes less wear-and-tear, other things equal.