This paper discusses how the current trend towards increased private participation in the rail industry is
reshaping the way in which Governments should address the main regulatory challenges arising from the
particular economic and technical characteristics of this industry. We review the role of railroads in the
last two decades and examine the characteristics of the most relevant processes of private participation
around the world. The lessons learned from these changes suggest that many of the traditional regulatory
paradigms in this industry are being replaced by more flexible schemes of public intervention. Although
this change does not fully preclude direct participation by the Government, it seems that the traditional
monopolistic rail company is dead as the dominant model around the world, and new forms, such as
franchises or concessions competing on the tracks are progressively gaining relevance.
