Capacity pricing schemes to implement open-access rail in Tanzania

Abstract

We analyze alternative capacity pricing schemes (access charges) to implement an open-access railway system in Tanzania. We show that the implementation of variable access charges widely used in the railway industry may result in levels of traffic lower than the traffic operated by an integrated railway company. We propose the use of fixed access charges to avoid this problem and discuss the main advantages and disadvantages to implement them in the context of multiple freight train services in Tanzania.