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After decades of public or private vertically integrated monopolies, the organisation of the European railway sector was re-structured. The European Commission has been seeking to improve the efficiency of the railways to strengthen the position of railways vis-à-vis other transport modes. Important steps of the railway reform were the separation of accounts of the State and the railways, between infrastructure management and transport operations, and the introduction of access charging. As access charging is based on marginal cost pricing, the income normally does not cover all costs and the deficit is paid by the public. Funding may be ensured by multi-annual contractual agreements which shall set incentives to the infrastructure managers (IM) to reduce the costs of the infrastructure service provision and the level of access charges with due regard to safety, and to maintain and improve the quality of the infrastructure services. Such contractual agreements are called performance contracts (PC) as they define the performance goals to be achieved and probably also the State contributions for covering the deficit in advance. Performance contracting is principally not new. However, the contract design described in EU Directive 2012/34/EC is a recent development in rail regulation. Empirical results with respect to the implementation of such contracts is limited. This thesis attempts to answer two related research questions: 1. How do set performance contracts incentives for the IMs so as to improve their performance? 2. Did the IMs improve their performance after the introduction of performance contracting? The content, the implementation and effectiveness of already existing PCs is analysed, and, hence, this thesis is categorised as evaluation research. Based on a public management literature review and a theo-retical review based on contracting theory and theory on human motivation, a conceptual framework for the evaluation is developed. Two extreme poles of contract types are defined. One pole is the "hard" type of performance contract, which focus primarily on extrinsic motivators. The other pole, the "soft" type of performance contract, is based on few or no extrinsic incentives. Performance is distinguished into effectiveness and efficiency. The evaluation is an embedded multiple-case study with four cases studies: Schweizerische Bundesbahnen AG (Switzerland), Deutsche Bahn AG (Germany), Infrabel (Belgium) and ProRail (the Netherlands). The cases are grouped into the vertically integrated railways (SBB and DB) and the vertically separated infrastructure managers (Infrabel and ProRail). Overall, performance contracting in this context is judged positive and performance contracting is de-scribed as a "learn-as-you-go" process. Even though, performance improvement with respect to the four case studies is mixed. The results of the cross-case analysis suggest that performance improved in particular for the vertically separated IMs. In other words, performance improvement was higher in the presence of an increased degree of vertical separation of the IM with respect to the studied cases. Overall, it may be argued that effectivity increased rather than (financial) efficiency with respect to infrastructure services. ...
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