Railway Competition : Options for the Russian Federation

Like other countries with vertically integrated, state-owned railroads, the Russian Federation has begun a process of corporate restructuring designed to lead to full vertical separation of train ownership from track operation. This model is popular with economists and reformers around the world, but it may not be the best available for Russia. This paper argues that preserving the vertical integration of Russian railroads while breaking them up horizontally, according to the model of railway reform adopted by Mexico, may, if done carefully, create geographic competition that could protect many shippers while not requiring more sophisticated regulatory oversight than may be available in Russia