Edinburgh Napier University

  Growing of the automobile industry and the demand for personal car use and chronic financial deficits in the balance sheets of rail operators have significantly affected the rail industry deterioration since 1970. However, gradual rail reforms were carried out by many countries to eliminate financial and operational issues and to develop their rail transportation systems. Sri Lanka has more than 150 years of history in railway operations, yet it is still in a weak position in terms of the operational efficiency and the financial position. The main purpose of this paper is to explore the key issues and root causes for the operational and financial deficiencies of Sri Lanka Railways and identify the best reform model in the light of world rail reform experiences and rail industry experts’ opinion. A semi-structured questionnaire was employed to interview twelve railway industry experts. Content analysis, Analytical Hierarchy Process (AHP) Method, and Policy Delphi Method were the main analytical techniques employed in the study. The results of the analysis showed that the vertical separation of the ownership between rail service operation and rail infrastructure provision is suitable for Sri Lanka Railways and, given the existing operational and financial characteristics, the reform steps should mostly be designed as in the case of the German- Sweden hybrid model of rail reforms.