How is the revenue cap determined?
The revenue cap for a given crop year will be derived using "base year" information. For each crop year, starting in 2000/2001, the Agency will adjust each railway's base year revenue figure to reflect inflation, the actual tonnage moved and the corresponding actual average length of haul. The Agency will determine the level of inflation before each crop year begins (by April 30), and will determine the actual tonnage moved and actual average length of haul after each crop year ends (by December 31). These determinations will be applied to a formula set out in the legislation to generate each railway's revenue cap.
I take according to this rule the revenue cap is determined by the previous years grain movement. If so there is not much incentive to move a much higher percentage of grain the following year. Not sure but anyone have more info on this revenue cap and how it works? Is it flawed could there be a better system?
The revenue cap for a given crop year will be derived using "base year" information. For each crop year, starting in 2000/2001, the Agency will adjust each railway's base year revenue figure to reflect inflation, the actual tonnage moved and the corresponding actual average length of haul. The Agency will determine the level of inflation before each crop year begins (by April 30), and will determine the actual tonnage moved and actual average length of haul after each crop year ends (by December 31). These determinations will be applied to a formula set out in the legislation to generate each railway's revenue cap.
I take according to this rule the revenue cap is determined by the previous years grain movement. If so there is not much incentive to move a much higher percentage of grain the following year. Not sure but anyone have more info on this revenue cap and how it works? Is it flawed could there be a better system?