Economic evaluation is an essential feature common to all activities of the Agency. Its objectives are:
- To avoid any decrease of the competitiveness of railway transportation, in line with the ultimate objectives of European legislation;
- For that sake, to provide decision-makers with a fair estimate of the effects of Agency recommendations.
Not all effects are monetary; not all causes are technical; not all stakeholders are able to defend their interests. It is the mission of the Economic Evaluation Unit to provide the other units, the Commission and the stakeholders with an adequate overview of concerned parties, causes, and effects.
Economic evaluation should also avoid a mere “accountant’s” vision of the railway system. It shall therefore take into account, as far as possible, its qualitative aspects and its potential for development, i.e. the long-term interests of railway clients and third parties.
As indicated by the White Paper (2001) about the European transportation policy, “a modern transportation system must be sustainable from both an economic, social and environmental point of view”, which basically sums up the concerns of the Agency as a whole, and of its economic evaluation unit in particular.
The tasks carried out are:
- Setting up a general methodology: economic evaluation tools, statistical methods, reporting formats need to be well understood by their users as well as the readers;
- Evaluation tasks: for each recommendation that is prepared by the Agency, and if any significant impact can be foreseen, an evaluation process is set up. This process starts simultaneously with the first drafting of the recommendation. Each evaluation process gives rise to a series of pre-determined documents or "deliverables". The first deliverable is usually an "applied methodology" document setting out how the particular evaluation will be performed, and which data it will require. The last one is the impact assessment report for the recommendation.
- Descriptive tasks: Agency recommendations will usually be transposed into European law, and have a long life cycle. It is essential to rely on a set of coherent data and readable economic models to be able to predict long-term effects, and to be able to perform ex-post evaluation.
The tasks performed are not limited to the above "technicalities". Indeed, European and national railway legislations are complex, and their effects are not easy to predict. The very first task for all members of the unit (and of the Agency) is, maybe, to make a clear picture for themselves and expose it clearly to others. This is the necessary, and most useful, first step for all evaluation work.
The Economic evaluation unit has, so far, produced:
- General methodology guidelines <hyperlink later>, that have been approved in 2007, with planned revision in 2010;
- A number of deliverables for most agency recommendations, including applied methodologies, surveys and questionnaires, compilation of answers, models and impact assessment reports, some of them published;
- A set of rules for handling confidential data securely and in an auditable way. It happens indeed that commercial sensitive data need to be factored into economic evaluation;
- One conference day <link> dedicated to the subtle links between transport safety and transport economy.
As the scope of application of European railway legislation is extending, the effects of European legislation replacing national laws and rules become more and more crucial. Economic Evaluation will therefore play a key role in this field.
As European railway legislation progressively comes into force, it will become necessary to gather the feedback from day to day railway business. In such way, the Agency will be able to set out the recommendations for improving legislation and, ultimately, contributing to the competitiveness of rail. Ex-post assessments will therefore become increasingly important. 2010 will see our general methodology be extended for that purpose.
Maintaining a coherent set of railway data, and being able to produce readable, re-usable economic evaluation models, are a necessary condition for performing useful ex-post assessment. For that purpose, the DREAM database and model-generator project has been launched in 2009 and will come to a provisional end in 2011.
The Economic Evaluation Unit is, and shall remain, a small group of experts with dual competence (economic and technical). Its purpose is to merge the traditional, rather technically-oriented culture of the railway sector, with economic points of view that become increasingly vital.
For that purpose, Economic Evaluation works in close cooperation with the other units that are in charge of recommendations. Staff of Economic Evaluation take active part in Agency working parties, in order to ensure the technicall soundness and the timely delivery of any evaluation work.
In addition, Economic Evaluation has set up one dedicated workgroup, the Economic Survey Group. This group is composed of representatives of the railway sector and of National Safety Authorities. Other bodies, such as UIC or RSSB (Rail Safety & Standards Board, UK) also participate to the works. The Economic Survey Group follows a dual purpose:
Please also see our organisation chart
- Advise and assist the Economic Evaluation Unit in setting up proper methodologies and evaluation tools;
- Check impact assessment reports against the methodology that was defined sometimes years in advance.