Cost Structure, Efficiency and Productivity in Hellenic Railways

In this paper we analyze the cost structure of Hellenic Railways (OSE) over the period 2000-2006 using plant-level data. Our estimates provide marginal costs, which are essential for rational pricing policies in view of Article 7 in the Commission Directive 2001/14/EC. We find cost efficiency close to 64 percent in rail circulation and 84 percent in maintenance. Technical progress has been substantial in maintenance of rail track but almost zero in rail circulation. Policy measures and recommendations are provided based on our empirical results.