Commission seeks to put competition on right track
Kallas wants to open up passenger transport; industry says it is in favour, but urges caution.
The European Commission is bidding to force competition in the markets for rail passenger transport, even on routes that do not cross national borders.
Siim Kallas, the European commissioner for transport, will tomorrow (17 September) announce his intention to end the last remaining monopolies in the European rail industry: the domestic rail markets in eight EU countries.
He will be taking on the might of France’s SNCF and the monopoly providers in Belgium, Finland, Greece, Ireland, Lithuania, Slovenia and Spain. In Germany, Deutsche Bahn controls almost 90% of the passenger rail market, so it too will take a keen interest in the Commission initiative.
Domestic passenger transport is something of a last redoubt of monopoly power in the railway industry, the EU having opened up freight transport to competition from January 2007 and international passenger transport from January this year.
But the earlier wave of liberalisation has not been as successful as the Commission wanted, and Kallas will also propose further measures to end anti-competitive practices in the freight market.
The commissioner will publish before the end of 2012 draft legislation on opening up the domestic passenger markets. Proposals might appear even sooner, as other commissioners share his appetite for dismantling the barriers to a single market. “The Commission has reached the view that we want to move forward quite quickly,” said one source.
But no matter how fast the proposals appear, any new rules would take years to come into force. Previous negotiations between the Commission, the European Parliament and the Council of Ministers on rail liberalisation have been protracted and the new law is likely to be particularly complicated.
“It is a much more complex issue to open up domestic traffic”, said the Commission source, citing the need to ensure integrated ticketing systems and to respect public-service obligations.
Rail priorities
The Community of European Railway and Infrastructure Companies (CER), which represents public and private train companies, favours market opening, but insists other priorities also need to be considered. “When you open the market to competition, you have to do it in a fair way,” according to Jacques Dirand, a senior policy adviser at the CER.
The top priority, he warned, is getting the policy on track-charging right, along with identifying the best way to finance public-service obligations and cancel debts run up during years of providing unprofitable services.
“Countries where rail is at a competitive disadvantage, where investment is low and infrastructure charging is high, will feel that the conditions are not really fair for them,” said Dirand.
The European Rail Infrastructure Managers, an association that represents track managers, is broadly in favour of market opening, as long as safeguards (such as on passenger safety) are respected. “Where this experience was tried in Sweden, in Germany and in the UK, it was rather successful,” said Hendrik Abma, its executive director.
Kallas will also propose on Friday to update the legislation on liberalising freight transport. A final draft of the new text says that competition has been “too slow to materialise”. New entrants have faced “persistent discrimination”, struggling to get access to vital “rail-related services”, such as access to power supply and marshalling yards.
The proposed revamped directive will seek to make regulators – which are currently seen as weak – genuinely independent of governments and incumbent operators, and to end protectionism in rail-related services.
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