REGULATORY FINANCIAL TESTS FOR RAIL ABANDONMENT DECISIONS

This article identifies the appropriate economic principles that should govern the regulatory financial tests for discontinuance of service and abandonment of property from rail service (exit from rail industry). It specifically addresses: 1) the appropriate role for 'opportunity costs' in a rail abandonment proceeding; 2) the roles of the nominal and real cost of capital in determining opportunity costs; 3) the Interstate Commerce Commission's decision to reduce opportunity costs (and return on investment in subsidy proceedings) by an amount equal to any projected holding gains (or losses) that would accrue to the carrier from retention of the branch line assets for a one-year period.

  • Corporate Authors:

    Association of Transportation Practitioners

    1725 K Street, NW, Suite 301
    Washington, DC  United States  20006-1401
  • Authors:
    • TYE, W B
  • Publication Date: 1990-7

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00604207
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Feb 28 1991 12:00AM