This paper undertakes a systematic review of the potential for on-track com
petition in the passenger railway industry in Great Britain, and concludes
that some such competition is likely. A simulation model is developed and t
ested on an inter-city rail line. The findings in respect of different form
s of competition are examined. It is concluded that on-track competition is
unlikely to promote economic efficiency unless it leads to cost reductions
and/or product differentiation.