A COMPARATIVE-ASSESSMENT OF THE PRODUCTIVITY OF AUSTRALIA PUBLIC RAILSYSTEMS 1971 72-1991/92/

There is a growing interest in the establishment of suitable measures of the overall performance of government business enterprises, particu larly railways, which are a major recipient of government subsidy. The y must improve their performance and become more cost efficient. Any p olicy designed to reduce costs must consider the implications of resul tant actions on the overall productivity of a business. We propose the use of the total factor productivity index as an appropriate referenc e benchmark to enable each railway to evaluate the productivity implic ations of any change to the operating and managerial environment. Usin g the Institute of Transport Studies' rail database, total factor prod uctivity indices are derived annually from 1971/72 to 1991/92 for the 5 major public rail systems in Australia and sources of variation are identified. The paper recognizes the need to identify sources of varia tion in productivity which translate into operational guidelines for m anagement in assisting them to improve performance over time. A contri bution is the recognition of the importance of including both demand s ide (final output) and supply side measures of output (intermediate ou tput). Final output may be more important for monitoring the performan ce of an enterprise from a cost-effectiveness perspective, but a suppl y side measure is often more useful to operators because it is the dim ension of output over which they have more control.