Rail liberalisation a milestone but hardly a signal for great change

December 21, 2006

On 1 January, the liberalisation of the European railway market comes into effect – at least legally.

The measure is designed to allow open access to Europe’s rail infrastructure to all recognised rail operators. In practice it’s just the EU’s start date for a process that began several years ago in some states but still has a long way to go overall.

“It’s hardly the big bang,” says Elke Schänzler of the Community of European Railways, “but it’s the final step in the legal opening of the market, which we’re pleased about. However, there are a lot of other preconditions to be fulfilled before we have a genuine single European rail market, notably technical interoperability and certification procedures for rolling stock.”

CER represents both traditional national rail companies and infrastructure managers, and independent operators who provide services on tracks already open to newcomers. CER feels that a serious barrier to the real opening up of the European railway market is the national licensing procedures for rolling stock (the process of eliminating national differences in authorising access to infrastructure is called “homologation”). “Without having every country’s licensing system recognised as legitimate in every other EU member state, the licence can be used as a form of protectionism,” says Schänzler.

In theory, the European Rail Freight Association (ERFA) should be welcoming the liberalisation, but it also sees very little changing on 1 January.

“It won’t change the market much,” says Monika Heiming of ERFA, “because the infrastructure will still be largely in the hands of national rail carriers. More importantly than the infrastructure, the infrastructure-related services like marshalling yards, shunting services and sidings that are so important for running a rail freight service will still be in national carriers’ hands. Unless the market is opened up much further, national carriers will continue to have an unfair advantage.”

Legally, the liberalisation legislation requires the owners of national track and related services to treat all users fairly, whether they are subsidiaries of the track owner or independents. But ERFA is worried that a failure to “unbundled” the constituent parts of the rail operation will continue to discriminate against newcomers to the market.

“What we need is full and harmonised implementation of the first railway package,” says Heiming. “Until we get that, it will remain very hard for new entrants. The rail freight market will probably grow by about 40% over the next 15 years, but unless there is a real opening of the market, the new entrants won’t be able to get their share of the growth.”

CER is less worried about the difficulties faced by newcomers. “It’s never easy to get into a new market,” says Schänzler. “But the number of newcomers, for example in Germany, shows it is possible. What’s important is that there are clear rules for fair competition and independent bodies for companies to complain to in cases of conflict.”

This news story is taken from the December 2006 edition of T&E Bulletin.

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