Opening national rail passenger markets in Europe to competition is an important step for increasing the quality and productivity of passenger services, the Community of European Railway and Infrastructure Companies (CER) confirmed on 12 March. Meeting in Brussels with Henrik Hololei, Head of Cabinet of European Commission Vice-President and Transport Commissioner Siim Kallas, CER also referred to a data analysis indicating that market opening as a basic condition for better rail services needs to coincide with other complementary conditions to make it a true success story.
“An analysis of European Commission data reveals that market opening is a necessary but not a sufficient condition for a harmonious development of rail transport in Europe,“ CER Executive Director Johannes Ludewig emphasised in the meeting with Henrik Hololei.
Developments seen over the last few years in the rail freight market – fully liberalised since 2007 - show that market opening alone has often failed to encourage competition and growth. The analysis of European Commission data, carried out by CER in February 2010, reveals that other conditions play an important complementary role. These conditions include mainly the financing of infrastructure, fair competition between modes, the eradication of historic debt, and compensation for public service obligations (PSOs).
“Liberalisation is highly likely to bring about positive effects for rail transport in those EU member states where all conditions are met,“ Johannes Ludewig explains. “While the results of the analysis do not suggest that there are any preconditions to liberalisation, it clearly shows that all conditions should ideally be met at the same time to increase the market share of rail transport.“
Sweden is, in that respect, a perfect example of good implementation of the principles set out in the 2001 Transport White Paper. Between 2002 and 2007, Sweden increased its rail freight modal share from 34% to 36%. In 2007, 33% of rail freight was in the hands of new entrants. The overall level of public financing to rail was EUR 85,000 per track-km per year and Sweden also boast one of the lowest levels of track access charging in Europe (EUR 0.48 per train-km).
Conversely, in Romania, with a comparable level of freight business in the hands of new entrants (34% in 2007), market opening accelerated decline. Block train prices went down, undermining the already limited ability of the rail system to self-finance itself in a context of otherwise very poor public rail financing. Only EUR 30 were spent per track-km per year since 2002 and very high track access charging applied (EUR 3.87 per train-km). As a result, the overall modal share of rail freight in Romania fell almost by half, from 34% in 2002 to 19% in 2007.
Developments seen over the last few years in the rail freight market – fully liberalised since 2007 - show that market opening alone has often failed to encourage competition and growth. The analysis of European Commission data, carried out by CER in February 2010, reveals that other conditions play an important complementary role. These conditions include mainly the financing of infrastructure, fair competition between modes, the eradication of historic debt, and compensation for public service obligations (PSOs).
“Liberalisation is highly likely to bring about positive effects for rail transport in those EU member states where all conditions are met,“ Johannes Ludewig explains. “While the results of the analysis do not suggest that there are any preconditions to liberalisation, it clearly shows that all conditions should ideally be met at the same time to increase the market share of rail transport.“
Sweden is, in that respect, a perfect example of good implementation of the principles set out in the 2001 Transport White Paper. Between 2002 and 2007, Sweden increased its rail freight modal share from 34% to 36%. In 2007, 33% of rail freight was in the hands of new entrants. The overall level of public financing to rail was EUR 85,000 per track-km per year and Sweden also boast one of the lowest levels of track access charging in Europe (EUR 0.48 per train-km).
Conversely, in Romania, with a comparable level of freight business in the hands of new entrants (34% in 2007), market opening accelerated decline. Block train prices went down, undermining the already limited ability of the rail system to self-finance itself in a context of otherwise very poor public rail financing. Only EUR 30 were spent per track-km per year since 2002 and very high track access charging applied (EUR 3.87 per train-km). As a result, the overall modal share of rail freight in Romania fell almost by half, from 34% in 2002 to 19% in 2007.
Note to the editor:
The CER position paper ”Market opening of domestic passenger traffic and further European integration of railway markets” is available for download on www.cer.be in the section “Latest Publications".
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