As seen in the previous article, the economic crisis had a negative impact on the countries in the Wider Black Sea Area, but every country has implemented viable measures to face the challenges imposed by the economic and financial crisis. Under the circumstances, the transport sector plays a key role in supporting the economic growth and establishing a safe economic environment. “Despite the crisis and its effects, the transport sector is confident. This affirmation relies on consultancy, cooperation and coordination and will generate a change in the matter. Transport means support in the stimulation of global economy and present activities will contribute to the economic situation in the years to come”, declared during a conference Jack Short, Secretary General of the International Transport Forum.
However, the transport demand is strictly related to global economic performances, so that its growth will always depend on the transport sector growth and vice-versa, in case of a negative economic growth. Consequently, the slowdown in the international economic growth has had a significant negative influence on all modes of transport, including railway transport. “This is valid especially for the countries in Western and Eastern Europe, as well as for several Asian regions, except for China and India. What makes the difference between the current crisis and previous crises is, in fact, the significant drop of transport volumes during 2008-2009, compared to the drop of the Gross Domestic Product. The higher decrease in trade activities is influenced, among others, by geographically fragmented production processes. Consequently, goods transport has known serious drops in this period. However, passenger transport has experienced lower drops, closer to the GDP situation and to the work market challenges”, declared for Railway Pro, Torben Holvad, Economic Advisor of the European Railway Agency (ERA).
The collapse of the railway freight sector began in the last quarter of 2008, when the countries in the Black Sea region began to feel the effects of the economic and financial crisis as well, as presented in the previous article.
According to the latest statistics conducted by Eurostat, the EU railway freight transport (measured by tonnes/km) dropped by 9% in the last quarter of 2009 compared to 2007. In response to the significant growth in tonnes/km during the first three quarters there had been a small increase in the freight volume during 2008-2007. At EU level, the passenger transport increased in 2008 by 4% (by tonnes/km) compared to 2008. Estimates were even more pessimistic in 2009, both for passenger, as well as freight transport. The entire freight transport sector went down in 2009 compared to 2008 by 16.4% in domestic transport and by 25.9% in international transport. In passenger transport, the drop was less significant of just 1.7%.
“The economic growth slowdown has profoundly affected the demand and consequently, the incomes of various companies in the railway sector. For the moment, this limits the investment target and the continuous development of innovative railway services. The key problem is also the fact that capital availability could be restrained due to the risk the investors need to assume. Moreover, the fact that the governments of the European countries introduce budget cuts to reduce public deficits will result in lower available resources for transport investment, at least on the short-term”, the ERA representative explains.
Aside from the consequences on the railway passenger and freight transport demand, other possible effects of the economic downturn consist in the modification of prices and rates. In result, a large number of railway companies have been confronted with a difficult period and many challenges where the main target was mostly to fight for survival rather than develop their business. “This is mainly the case of small and medium-sized companies. During the entire recession, there have been mergers and acquisitions, which managed to carry on the consolidation of the railway sector”, added Torben Holvad.
by Pamela Luică
Share on:
