Making the CER vision a reality – what needs to be done
EU transport policy has brought major institutional changes for railway companies, and much progress with intra-modal competition. However, much still has to be done by all the stakeholders to achieve the full potential of rail transport. A pragmatic approach is needed now on the following topics: waiting for ideal solutions may result in the "best being the enemy of the good".
What railway companies have to do
Continue to improve customer service quality. In recent years, railway companies have demonstrated their commitment through voluntary charters covering various aspects of customer service delivery. This work must continue.
For freight services, quality standards must become the norm in contractual agreements with customers, and quality management techniques must be applied to freight performance, both nationally and across borders. Recently, Quality Charters have been agreed across the sector – involving shippers, forwarders and railway companies - at national or at least company level, without any regulatory intervention: this progress must be maintained.
For the passenger business, quality standards and charters with appropriate compensation are in widespread use - in many cases, as part of public service contracts. This practice should be the norm everywhere, if the framework conditions allow.
Better international business cooperation is still needed for both the passenger and freight business. Competition does not exclude cooperation: and there are already successful examples - for example on high-speed passenger services and on interoperability issues.
Proactive cooperation is needed to deliver the deployment plan required by EU legislation1 for harmonised electronic data exchange for freight traffic. In the logistics sector, railway companies should more and more provide door-to-door services, in cooperation with other modes.
For passenger services, a decline in the traditional international business and the partial introduction of modern ticketing has resulted in some fragmentation of information and ticketing across borders – while other transport modes have profited from new web-based distribution systems. The development of EU legislation2 provides an opportunity to deliver system compatibility, alongside a voluntary commitment to increased commercial cooperation, where a market exists.
The EU policy and legal framework needs, and in some respects requires, improved cooperation between national rail infrastructure managers. In 2004, a new cooperation3 was created, to improve the coordination of international capacity allocation, access charging and administration. Progress has already been made with ‘one-stop shops’, pricing and train-path information systems – this progress must continue. Innovation is needed in the management of European railway corridors, perhaps through an international subsidiary owned jointly by a number of infrastructure managers.
Actions are needed on specific railway environmental issues, to enhance the railways’ strength as the most environmentally friendly mode of transport:
• further improve energy efficiency in the railway system,
• develop a long-term and coherent fuel strategy.
• further progress on diesel and noise emissions of locomotives and rolling stock.
All of these initiatives need to be supported by innovation within the rail sector. The Strategic Rail Research Agenda (SRRA) published by ERRAC4 in 2002 provides a starting point. All stakeholders need to focus this research on the sector’s business needs.
What politicians have to do
Create fair framework conditions for transport economics, in particular for infrastructure access charging in all transport modes. The inclusion of external costs in access charges - using a common methodology – must be achieved in future EU legislation. The Commission’s work on this common charging methodology (required by mid-2008 under the Eurovignette Directive) must produce the right results. Technological advances in charging systems must be harnessed to introduce road charging schemes where the ‘polluter or user pays’. Customers can then choose the lowest overall transport price (reflecting internal and external costs) for their transport needs.
Integrate policy actions for environment, climate, energy and transport. It is now widely accepted that urgent action is needed to combat the serious effects of climate change. Rail transport is environmentally friendly and energy-efficient: it can play a key role in reducing CO2 emissions. To shift transport to rail effectively, there is an urgent need to re-engineer EU transport, environmental and energy policy. Currently the different EU instruments produce variable effects when treated in isolation: an integrated approach is needed, to achieve the aims of climate and environmental protection and energy-efficient transport.
The environmental compatibility of the different transport modes has to be reflected in market prices, to influence customer decisions. Including external costs – as described above – has to be accompanied by the following measures:
• harmonisation of the framework tax conditions for the different transport modes;
• equal treatment of the transport modes in the EU Emissions Trading Scheme and inclusion in climate protection measures;
• completion of the internal energy market.
Ensure the effective implementation of EU framework legislation. Implementation of the First Railway Package has been variable in a number of areas, for example the creation of effective regulatory bodies. The Package needs to be completely implemented, to support freight market opening in 2007: likewise the Second Railway Package, and the adoption of the Third Railway Package and the Public Service Regulation in 2007. Better rolling stock homologation procedures will improve legal certainty and competitiveness.
There is no case for further framework legislation
Recognise regional differences: for example, both the framework conditions and life-expired rolling stock in the new member states need special attention; and the geo-political situation in the Baltic States and in south-eastern Europe do not fit well with EU rail transport policy.
Ensure a stable financial framework for rail transport and infrastructure. This means creating multi-annual contracts for passenger services provided to meet public service obligations. The practice of direct or indirect cross-subsidy of passenger services by otherwise profitable freight services must cease: public service obligations must be paid for by the authority that creates them. While fully respecting the principle of competition, the option of public funding for specific freight transport flows should be available. Conditions for public funding for combined transport and “rail motorways” through environmentally sensitive areas should be harmonised throughout Europe.
The market needs a stable funding and charging structure for rail infrastructure, balancing income from access charges that the market can bear with other funding. Long-term, incentivised agreements are needed between the rail infrastructure manager and the state, that can strategically support more efficient infrastructure management, and that may involve market forces in some cases. Network rationalisation may be needed in some areas. Furthermore, international differences in the levels and structures of access charges can create barriers to international investment and service development, especially high-speed and freight. The scope for harmonising access charge structures and levels on international corridors should be examined.
These stability issues are particularly important in Central and Eastern Europe, but are also valid elsewhere.
Ensure proper funding to modernise rail infrastructure - both at the national level and through EU TEN-T and Cohesion Funds. Fair economic and pricing conditions in all transport modes are vital prerequisites for this, as the extra revenues generated will allow increased ‘cross-modal’ investment in the necessary railway infrastructure. The possibility, introduced in the revised Eurovignette directive, to implement marks-up on road tolls to fund more environmental friendly modes of transport on the same corridor should be further extended. It is essential that TEN-T projects on the main European corridors are carried out and capacities increased.
Tasks for railway companies and social partners
Railway companies need to do more work with social partners to deliver balanced and flexible social conditions for railway business operations. At the European level, cross- border working conditions set in the EU Directive have to be progressively adjusted in line with changes in rail service provision, without creating unreasonable demands for rail employees, to ensure that rail’s competitiveness can be improved.
An interoperable rail network – a partnership between railway companies, railway suppliers and political institutions
Achieving European rail system interoperability is vital to improving the service offered and, in the long term, to reducing rail equipment costs - thus improving rail’s competitiveness. The European Railway Agency was set up in 2005 to deliver the remaining standards required after 10 years of work by the AEIF5; and to harmonise safety system requirements. The Agency must succeed: rapid progress is needed from the present half-way house of mixed national and European standards and national variants of systems such as ERTMS and GSMR. The Agency requires the support of railway company experts, and national safety authorities: it requires sufficient resources and the right mandate.
The corridor-based delivery of ERTMS6 is one of the most important interoperability priorities. The implementation work started in 2005 on 6 important corridors, under the control of ERTMS coordinator Karel Vinck, is essential to improving rail competitiveness. It must secure international commitment on what complementary work (e.g. infrastructure modernisation and/or enhancement) is necessary, and on transition funding. The very high costs of a quick migration are uneconomic for railway undertakings: some public funding is essential. “Letters of Intent” for each corridor, signed by the national ministers of transport, are needed to clarify the commitments of each Member State involved. In parallel, the supply industry has to develop ERTMS further, to meet national system requirements, and to reduce costs through standardisation and component interchangeability between suppliers. The development of the Control and Command Signalling (CCS) TSI, which includes ERTMS, is crucial to achieving these objectives.
New interoperability standards will support network development. There is already a development strategy for a European High Speed Passenger Network: the network continues to grow in several countries. A corresponding long-term strategy has to be developed and implemented for freight corridors. This strategy should be based on a "Primary Freight Network" with the right parameters (capacity, performance, quality) to meet long-term market needs. Railway companies have to identify these requirements, and the EU institutions have to provide the right strategic and funding support for the concept.
1) The Strategic European Deployment Plan for the 2004 Technical Specification for Interoperability for Freight Telematics.
2) Technical Specification for Interoperability for Passenger Telematics to be prepared by the European Railway Agency.
3) Railnet Europe, an association of 31 Rail Infrastructure Managers, established in January 2004 in Vienna
4) European Rail Research Advisory Council.
5) International Association for Railway Interoperability
6) European Rail Traffic Management System (for train control and communication)