Today, for many of us – international high-speed trains play an important role getting from one European agglomeration to the other. That these convenient services needed a long time to develop is for non-experts difficult to understand.
It was almost 30 years ago when the European Commission summoned the Council to appear before the Court of Justice for failure to establish a common transport policy because nothing had been achieved until the mid 1980! And finally, in 1985 the Court decided in favour and set with its judgment the realization of the common transport policy in motion.
Many things have been achieved since than. Today, the EU railway law consists of several legislative acts which have been issued in a number of so called packages and which, to a certain extent, build upon one another.
Nevertheless, that the problems still persist is evident: Locomotives are changing at cross border stations not only due to differences in train control systems. Europe is still a continent divided into 26 technical and administratively specific railway zones1.
Therefore, the Commission has proposed the so called 4th Railway Package which intends to finalize the legislative ground enabling the railway sector to finally increase the quality and efficiency of its services and complete the process of creating a Single European Railway Area. The 4th Railway Package addressed in its six legislative proposals the following issues:
The organisation of a railway company (integration or separation of railway operator from the infrastructure manager),
The degree of competition in Europe for domestic passenger services by rail (direct awarding vs. mandatory competitive tendering),
The future role of the European Railway Agency,
The safety of the European Railways,
The interoperability of the European Railways,
The establishment of common rules for the normalisation of the accounts of railway companies.
As the S&D1 Shadow Rapporteur on the proposal on opening the market for domestic passenger transport services by rail I will focus in this article only on competition passenger railway market.
The Proposal of the European Commission
The Commission’s proposal amends the already existing Regulation (EC) No. 1370/2007 concerning the opening of the market for domestic passenger transport services by rail. In most Member States the direct award of these subsidised rail services to the former national railway operator still dominates.
In order to lower public expenditure the Commission proposes to make public tendering compulsory as from December 2019 in order to stipulate tendering procedures and hence increasing efficiency and reduce costs. The goal is to create a competitive, service oriented and more cost-efficient passenger rail services
The Position of Shadow Rapporteur
I welcome the attempt of the European Commission to improve the European passenger rail services. However, I believe that increasing competition and thus the market pressure on the railway sectors is not the only way of ensuring mobility to all citizens of the European Union who depend on or choose public transport.
The first question we have to ask is, how much the State is willing to pay for a public service by rail – since non of the European Railway companies generates a profit without tax payers money going into rail infrastructure or directly into rail services. There is no expert needed to see that even with the most efficient competition in the European railway sector – it will never generate a profit without a financial support of the State.
I strongly believe, that competition is a good thing – however, while analysing the cost structure of the European Railway Sector – it is evident that cost reductions will most likely have an effect on salaries and social conditions of the railway workers. As a Member of the S&D I neither can welcome nor support such a possible impact.
Examples, such as in Germany, have shown, that competition in public rail services had positive effects for the customers. But, while public tendering reduced the costs per train kilometre, the German government provided the competent authorities with sufficient public funds to ensure a certain quantity of services. A reduction of subsidies would immediately result into a reduction of rail services. Public tendering processes would only save a few of these services.
Therefor, I believe, we should not only focus on increasing the efficiency of railway services through mandatory tendering procedures but also look at the cost structure of these services. Up to 50 % of the production costs of public services by rail in Europe are resulting from infrastructure user charges. Cutting these costs should be the goal of our policy!
High infrastructure user charges for the railways are the direct result of the lack of internalisation of external costs 1caused by the road sector. If the negative effects caused by road transport such as noise or pollution would be taken into consideration, Member States would need to either introduce or increase road user charges and thus create a level playing field. The costs of mobility for both modes, road and rail, would be completely recalculated, leading to a more competitive rail sector. Only if the decision makers at the national level take this into consideration and act accordingly than the railway sector would come back to its strength it had before the mass motorisation starting after the Second World War.
Hasty law making does not improve the competitivety of the railway sector as such. Taking into consideration that the last attempt of the European Commission to open up the domestic passenger railway market is only a few years ago and some Member States did only enact it by the beginning of 2013 I would opt for a new approach – an approach which focuses on a limitation of European law making on the core issues. This new dogma of European law making was part of the discussions of the European Council on 24th of October 2013 and welcomed by Martin Schulz, the President of the European Parliament.
What we need is a better law making. A law making which does not lead to more bureaucracy focussing on minor issues. What we need is a new approach for the railway sector in Europe. Competition does not solve all the problems. What Europe needs is affordable infrastructure for railway operators.
The Trans-European-Network (TEN-T) is already a good approach but chronically underfinanced. Now, the Member States have to act and develop a strategy how to (co-) finance their railway infrastructure and redesign the infrastructure access fees charged by the national infrastructure manager. As important as financing infrastructure is the question of pricing the use of such infrastructure: What justifies the differences in user charges between rail and road? That is what we have to focus on if we want to promote the railway sector and not on revising a hardly implemented regulation. What I demand is a better law making – a law making with a true added value for the European Citizens!