This is how we could describe the current situation concerning the liberalisation of the Slovenian market, in the sense that the small ex-Yugoslavian country records positive figures year after year, despite the fact that it holds one of the last places in terms of railway liberalisation. The national operator is concerned that the new regulations may change this situation. Although the liberalisation is moving forward rather slowly, the Slovenian market has found other alternatives to stimulate the competition, maintaining the costs at an acceptable level, developing customized and flexible services, adapted to the specific requirements of the end customers, as well as attracting other economic sectors (tourism) have ensured a positive evolution for the Slovenian railway sector, who is constantly seeking new solutions so that the liberalisation would not affect the current situation.
With a population of only 2 million inhabitants, Slovenia recorded 17 passengers carried in 2008. In comparison, the Romanian operators carried around 80 million passengers the same year, two times less from the point of view of the population/passengers ratio. Slovenia recorded one of the highest percentages in freight transport in Europe, almost half of the railway traffic recorded being represented by freight transport. What effects could the acceleration of the railway liberalisation process have on these positive statistics?
According to Goran Brankovic, General Manager Slovenske Zeleznice (SZ), the national Slovenian operator, the influence of the railway passenger market liberalisation in 2010 will largely depend on the degree of importance of public transport as an alternative to road transport. In Slovenia, the road passenger transport market has been liberalised, affecting the activities of the national operator SZ, who wants to maintain its position on the market in order to allow the entrance of other foreign players.
Goran Brankovic estimates that, considering the specificity of the country in terms of population density and potential number of passenger, the interest manifested by the passenger operators will be conditioned by the sources of income that will have to cover the difference between cost and profit. Brankovic stated for Club Feroviar that, based on other similar cases recorded in Europe, the market will be divided between the State operator, who will continue to manage the long-distance transport, and the private operators, who will serve the local and regional interests and who will take over the existing market of short and medium-distance transport.
CASETA:
Keeping current tariffs. Development around tourism
Slovenia will have to make use of its advantages, such as the tourist potential and the fact that it stands at the intersection of several European commercial routes, elements with a positive influence on the transport sector. Its location as a connection point between Eastern, South-Western and Western Europe has turned Slovenia into the main access gate towards the Balkans and the countries of the former Yugoslavia. This will surely attract large passenger operators. The fact that Slovenia has become a tourist attraction, thus influencing the passenger transport sector in a positive manner, SZ plans to customize its services in order to satisfy the requirements of the foreign tourists, as potential customers, as well as the private operators. Hence, the liberalisation will influence the quality of the services, seeing as the new target public wants a higher degree of quality, without having to increase the tariffs.
“The liberalisation of the passenger market has to take into account the existing characteristics of the commercial system so as not to affect competition by introducing new or excessive regulations”, explained Goran Brankovic.
Regional passenger links with Austria and Italy
Slovenske Zeleznice plans to develop several projects so that the liberalisation will not catch the State company off guard.
Mirjam Kastelic, International Business Manager at SZ, declared that the company plans to introduce international regional services between Slovenia and Austria, initiate discussions about the development of regional rail links with Italy, diversify the publicity offer, introduce attractive tariffs and calculate them based on a single grid for all the categories of passenger services, modernise the ticketing system (introduce automated ticket vending machines, as well as the on-line ticket purchase alternative), set up a transport centre in Ljubliana that can satisfy the requirements of the tourists encountered in this transit point between Western and Eastern Europe, speed up the implementation of the new regulations on passenger rights etc.
SZ also plans to renew its cooperation agreements with the foreign operators. The company’s vision is that the cooperation with other companies provides the possibility to enter on new markets and diversify their services.
The national operator will not limit itself only to railway transport, SZ will also provide complete, multi-modal packages that meet the expectancies of the passengers who travel as tourists. To that effect, the company plans to open its own travel agency.
Port of Koper will contribute to the arrival of new freight operators
Unlike passenger traffic, freight traffic encountered numerous obstacles. SZ recorded a 30.7% drop in the volume of carried freight in the first nine months of 2009, representing a loss of EUR 31 Million.
This drop was caused by the economic and financial crisis. The company claims that the medium-term objective is to develop a strategic partnership, thus increasing and developing the freight sector through the application of precise and clear measures.
However, the situation in the past was not the same. This was the first year that freight traffic dropped following a fruitful period which began after the fall of Yugoslavia. This was mainly due to the fact that the Slovenian operator leases more space in freight cars than any other State-owned company in Europe. Another element of success was the lease of space in wagons directly to the customers at competitive prices, thus eliminating from the final cost the tariff for the shipping houses.
This strategy, together with maintaining reasonable prices and developing international routes for operators such as Deutsche Bahn or Rail Cargo Austria, have maintained SZ’s market share at a constant level.
The arrival of the first private operator in 2008, Adria Transport (AT), owned by Luka Koper (50%), completely changed the situation. The new operator recorded positive figures following the acquisition of new and high-performance rolling stock. The company’s philosophy focused on customized services, adapted for every customer. The company motto illustrates the additional advantages provided by AT: A team is stronger than the sum of singles!
Ivo Konstantinov, Market Manager Romania and Bulgaria at Luka Koper Group stated at the Romanian Railway Summit 2009 that any private initiative has higher chances of success compared to a State initiative and that private investments should be supported by private groups. According to him, it’s better to join efforts than wait for State support.
Konstantinov’s prognosis is already coming true. Adria Transport estimates that traffic will double in 2010. Meanwhile, SZ announced that they expect drops in the volume of carried freight in 2010.
Another aspect relevant for the freight market is the fact that the operator was set up by the company that manages the port of Koper, the largest intermodal hub in Slovenia. While in the period of the former Yugoslavia the main port at the Adriatic Sea was Rijeka (Croatia), which benefited from the largest share of State investments, the new political-economic context turned Koper into a transport hub of European importance. According to experts, in the future, the access route to the port of Koper will compete, in terms of traffic, with the routes of Pan-European Corridor V, a route which by-passes Koper.
Hence, the stakes of the liberalisation process increase, generating the premises for the creation of new freight operators on routes leading to Corridor V or the port of Koper, as well as the development of new terminals near Koper. New forwarders may also derive from port and maritime operators. The arrival of some of the largest container operators such as Maersk in the port of Koper could also influence the railway market. In this context, the fact that SZ wants to develop a strategic partnership with a powerful group is well justified.
Alin Lupulescu
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