The technical part of the 4th Railway Package is now complete and comes into effect this month. We will see a new European Railway Agency with more powers and responsibilities, and the ability to give technical approvals where national authorities might wish to delay approvals for cost, political of monopolistic reasons. The work of the new ERA should provide a major contribution to lower costs, more efficient working and general interoperability. The rail industry as a whole should get to know ERA well.
The more contention part of the 4th Railway Package only achieved part of the original purpose of the European Commission in seeking to create a liberalised open access railway, where fair competition drove better services, lower costs leading to investment and growth in the sector. Some member states objected to a requirement to tender out regional passenger services, on the basis that their own railway undertakings were doing the work very adequately. The evidence, however, points to much better service quality, investment in new rolling stock etc if a package of services is tendered out. To make it fair, all tenderers must have the same access to rolling stock; it is no good and not fair to allow the incumbent to use its old trains whilst expecting a private sector tenderer to purchase new and then put in a lower price.
So one of the issues debated many times was a requirement that incumbents who owned rolling stock purchased for them by the state should be required to put any surplus on the market either for sale or leased at competitive prices to their potential competitors. Before they cry ‘unfair’, it is worth pointing out that these trains are effectively owned by the taxpayer, and should be available to any operator who can use them efficiently and effectively. Sadly, good quality rolling stock is often destroyed to avoid the coaches getting into the hands of competition.
Freight will also benefit from the 4th Railway Package, but worries remain about the failure of the 4th RP to fully separate railway undertakings (RU) from infrastructure management (IM). There will still be the possibility of a holding company of IM and RU having non-transparent transfer of money between them, with the result that there may be unfair subsidy of the incumbent RU to the detriment of competition. The evidence from the UK, Sweden and Switzerland demonstrates that competition brings growth, improved service quality, investment and efficiencies, whereas in France, rail freight volumes nearly halved in the last ten years.
So it is no surprise that Germany and France led the strong lobby in the Council of Ministers to ensure that there was no fair competition between incumbent and independent RUs, to preserve as much as they can of their monopoly hold on the rail sector, even if it means losing traffic to road.
I hope that other member states will see the benefit of liberalisation of their passenger and freight operations, which can bring major private sector investment at a time when state funding is in short supply.
Now the industry is taking forward the new structure with infrastructure managers forming an association called PRIME Platform of Rail Infrastructure Managers in Europe, and railways undertakings across Europe forming a RU Dialogue to discuss issues of concern and resolve problems. It is a very positive arrangement for such groupings to form and work together to create a truly European rail network with competitive services for passenger and freight being the growing norm.
Contribution by:
Tony Berkeley,
Chairman of the UK Rail Freight Group
Board Member of the European Rail Freight Association.
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