Modeling Total Cost of Ownership of Rail Infrastructure for Outsourcing Services

Abstract

In the recent years, outsourcing services has become a part of the strategy for cost and risk management. Outsourcing reduces upfront investments in infrastructure, expertise and specialised maintenance facilities. However, decision on this need to take into account the total cost of ownership rather than the usual practice of procurement cost. The primary objective of this paper is to develop models for prediction of total cost of ownership and contract price for outsourcing services rail infrastructure. Total cost of ownership model is developed considering procurement, maintenance, inspection and risks associated with operation of rail network. Contract price for outsourcing services is modelled considering million gross tonnes of traffic under specific axle load.