RAIL

NE
LIBERALISATION www.neurope.eu
A NEW EUROPE POLICY REPORT

Monika Heiming, Secretary

General of the European Rail
Freight Association, outlines
what needs to be achieved in the
recast of the 1st Railway
Package. .Page II

The European Parliament's

rapporteur on the recast, Debora
Serracchiani, discusses the
importance of rail liberalisation
for European market. .Page II

DG Transport answers
questions on its continuing role
in the opening up of the rail
freight market.

.Page III
Europorte's Director of Strategy
Francois Coart explains why
deregulation in France has so far
only been a part success.
.Page III

Brian Simpson, the chair of the

European Parliament's Transport
Committee, takes the member
states to task over their failure to
implement the law. .Page IV

Freightline's Business
Development Director, Konstantin
Skorik looks at how liberalisation
can overcome current stagnation in
the market
.Page V
MEP Michael Cramer looks at
the economic, environmental and
social benefits of rail
liberalisation.
.Page VI

Jeroen le Jeune, Chief Executive

of Crossrail, says that rail freight
transport needs to be given a
better chance if it is to achieve a
bright future.
.Page VII

The Managing Director of ERS

Railways, Frank Schuhholz, says
that the Railway Package needs to
be more ambitious if it is to achieve
a level-playing field. .Page VII

MEP Dirk Sterckx laments the

lack of political will in Europe
which is delaying
implementation of full
liberalisation. .Page VIII
 NEW EUROPE
Page II| New Europe
November 14-20, 2010

RAIL LIBERALISATION
Rail freight liberalisation
– Ambitions, Problems, Solutions
with the 1st Railway Package in 2001. In complaints for market obstruction, mar- vented from entering certain market sec-
concrete terms, this means a market ket distortions and market discrimina- tions;
which is fully open, which is economically tions has increased 6 times. Worse, • Safety certifications are awarded for
attractive, which offers optimal operating though, these problems affect not only the limited infrastructure sections only;
conditions, which is interoperable and members of ERFA, but the entire supply • Network usage conditions require huge
which has the same safety standards. In chain: state railways operating in foreign investments by new entrants in terms of
brief, a competitive, attractive and open countries, customers, shippers, forwarders, reserve rolling stock;
single EU market for rail freight. wagon keepers, terminal operators, infra- • Access to terminals is refused or priced
structure managers. in a prohibitive way;
Problems … Systematic problems are experienced in • Infrastructure sections are closed or dis-
In 2010, this objective has still not been Italy, Poland and Belgium whilst specific mantled at short or without prior notice;
reached. In fact, the market for rail freight problems are reported from Austria, • Complaints of competitors are not
services is not functioning due to the in- France, Germany, Lithuania, the Nether- treated by regulatory authorities;
correct or incomplete transposition of lands, Sweden and others. All are obsta- • The return of wagons to workshops is
Community law by Member States. This cles to enter a market or to operate and priced excessively;
is also underlined in a report to Jose Bar- develop on a market on an equal level • State railways are protected against
By Monika Heiming roso in May this year, written by Mario playing field, such as: bankruptcy by law;
Monti, the former Competition Commis- • Infrastructure managers are discrimi- • Discriminatory and non-transparent ac-
Ambitions … sioner. nating against new entrants in terms of cess conditions are imposed on workshops
ERFA, the European Rail Freight Asso- In June, the EC referred no less than 13 slots, resources, information and service and terminals for their connection to the
ciation, was set up in July 2002 as a direct Member States to the EU's Court of Jus- provision; national infrastructure;
“spin-off ” of the liberalisation of the EU tice for not having implemented correctly • Terminals are closed without the con- • Subsidies are given to the national state
rail freight market by the EC. The mem- core elements of the 1st Railway Package: sultation of any market actor; railway only;
bers of ERFA at that time were a few rail insufficient independence of the rail in- • Requests to use certain infrastructure • Incumbents act de facto as legislator,
freight operators in just 6 countries. frastructure manager, inadequate rail ac- sections are not answered or prohibited; regulator and operator;
Today, the association counts 31 members cess charges and insufficient regulatory • Energy supply conditions are not trans- • Freight facilities and services are trans-
in 16 countries. The common objective of bodies. parent and not liberalised; ferred to the national incumbent.
all of them is the same since 2002, On the market, these failures have a di- • Shunting services are priced excessively Unfortunately, this list is not exhaustive.
though: they want to seize the market op- rect effect on the business of the members by the incumbent monopoly supplier; The measures above have already trig-
portunities that the EC intended to create of ERFA. Since 2007, the number of • Independent service providers are pre- gered a shift from rail back to road.

INTERVIEW| DEBORA SERRACCHIANI MEP

An efficient rail market will deliver

high quality transport services
How important is rail freight transport in general for I am totally agreed with the Commission, as I do believe that
Europe ? Looking at the situation in Italy: critics say that terminals and there should be independent and private operators in order to
It’s extremely important because in the last ten years, the air infrastructure sections are being closed, employment is re- guarantee a major competitiveness in rail sector.
traffic has made a big progress with free liberalization; the duced in workshops and that the Italian rail freight market is
freight transport is liberalized while the rail transport has jeopardised by the monopoly strategy of Trenitalia. How ac- What are the most important elements for you in the Recast
made no progress on this. The main aim is that the rail trans- curate is this? ? For example, investments in the infrastructure, more regu-
port freight will be competitive in Europe thanks to the inter- Yes it is true that the situation in Italy is critical: there is a lack lation or more independence ?
operability and the revision of infrastructure charges. of infrastructure investment and interoperability and the con- I think that is very important to increase public and private
nections to the ports are poor. That is not Trenitalia’s fault, but investment, as I think it is necessary to delete barriers to mar-
What do you think about further liberalisation and more in the last ten years no government has invested in infrastruc- ket access. I believe it is quite important to have also an inde-
competition in rail freight ? Is it necessary ? Do you believe in ture. pendent regulatory body with specific competencies as an
competition and liberalisation ? adequate supervision of the market is necessary to prevent
Liberalization exists already but it did not give any results. If the current trend of “TI policy only” continues in Italy, is conflicts of interest and ensure fair competition. But also I
There is a lack of interoperability and the infrastructure con- there a possibility the rail freight market is going to collapse ? support the unbundling between the infrastructure manager
nections to ports, where they exist, are not well developed. No, I don’t think so because Italy has still an important inter- and the services operators.
There are also a lots of technical and administrative barriers to nal market that guarantees it will survive; the point is that we
entry in the EU rail market. do not want just to survive and, to do so, we need to do more. How important is the Recast for the rail freight sector in gen-
eral ?
How do you judge the situation on the Italian rail freight How important is, do you think, private investment in the It is extremely important as it contributes adequately to citi-
market ? For example, the Italian incumbent Trenitalia ap- rail freight sector ? zen’s mobility and economic growth. A more efficient rail
pears to be progressively abandoning the rail freight market It is extremely important as it can contribute to better develop market can deliver high quality, reliable, safe and secure trans-
and more goods are shifted from rail to road, including dan- this sector. One of the weaknesses of the rail sector is the low port services. It can also contribute to new forms of mobility
gerous goods. level of public and private investment which cause a very low that are environmentally friendly.
Rail freight market is not performing at all but I believe that quality in infrastructure and services.
liberalization in Italian freight market will be important for DEBORA SERRACCHIANI IS THE EUROPEAN
Trenitalia in order to develop the potential that it has in this What is you opinion on on independent and private opera- PARLIAMENT’S RAPPORTEUR ON THE RAIL
sector. tors in the rail freight market ? RECAST
 New Europe | Page III
NEW EUROPE November 14-20, 2010

RAIL LIBERALISATION
Solutions …
The problems outlined above, and the
measures taken on EU level are evidence
Questions for the
that the national rail freight markets are
not functioning correctly. The Recast must
tackle all these issues by reducing the anti-
discriminatory potential to the strictest
European Commission
minimum possible, whilst paving the way
for access for all actors to each sector of the Member States, rail freight transport has manager for decisions on track access and
market: grown at a not insignificant rate between access charging is essential in order to
• To ensure fair competition, the infra- 2000 and 2007. This is particularly the create a level playing field and to guaran-
structure manager must be fully neutral case in certain countries where non in- tee that the incumbent operator which
from all rail operators and therefore sepa- cumbent rail undertakings have acquired also controls the infrastructure will not
rated from operations; significant market shares. Example: discriminate against new entrant opera-
• To ensure liberalisation of all market seg- freight performance in the UK 13,3 tors in order to protect the business in-
ments, rail-related services must be open MTK in 1995, 24,8 in 2008. terests of its own transport operators. An
to all undertakings at clear conditions; important aspect in this regard is the sep-
• To ensure rail freight perspectives, infra- 2) How necessary is further liberalisation aration of accounts between infrastruc-
structure investments must follow long- and more competition in rail freight ? ture and transport operation, in order to
term strategies which reflect the needs of The above mentioned examples show exclude that public funds spent on infra-
all market actors; that rail freight will only be able to fulfil structure are used to cross-subsidise
• To ensure rail freight market growth, its role as an environment-friendly trans- transport activities of an integrated in-
public assets (terminals, workshops) must Transport Commissioner Siim Kallas: The Com- port mode if it becomes competitive in cumbent.
be offered for sale or rent to the market if mission is currently pursuing 13 member states relation to other modes, in particular if it
they are not used any more; through the courts over failure to liberalise the becomes customer friendly and if is able 5) With 13 ongoing infringement pro-
rail network
• To ensure rail freight competitiveness, in- to offer good and reliable services at com- ceedings against Member States, how is
frastructure access and usage conditions 1) How important is rail freight transport petitive prices. The development in pre- the effective implementation and appli-
must be non-discriminatory and regu- in general, and how important is rail vious decades has shown that this is not cation of EU legislation best maintained
lated; freight liberalisation in terms of more possible in a monopolistic environment, - at what point does the Commission feel
• To ensure a better rail freight market volumes and better competitiveness and but only where railway companies are it needs to intervene?
functioning, the national rail regulator modal shift? subject to intra-modal competition.
must be independent and more compe- While the share of railways in the freight The Commission is in close contact with
tent. transport market fell constantly in previ- 3) How important are private invest- Member States to discuss on infringe-
A strong Recast can provide the EU with ous decades, the situation has stabilised ments in the rail freight sector ? ment issues in order to solve these issues
a strong, competitive, innovative and at- since the early 2000s when the first result If competition is to be developed, it is of bilaterally. Where the Commission has
tractive rail freight market. That’s why it of the EU's rail freight liberalisation be- course not enough to have the (ex)state- come to the conclusion that bilateral dis-
needs a strong support of the EU: the came visible : in EU 27 countries, the rail monopolist, but private companies must cussion will not bring about a solution, or
Commission, the Council and, above all, share, in tonne-kilometres, in the freight also have a possibility to enter the mar- in cases in which there is a disagreement
the Parliament! sector fell from 12.6 % in 1995 to 10.6 % ket and grow. with the relevant Member State on the
in 2002, before increasing to 10.8 % in interpretation of the railway directives,
Monika Heiming, Secretary General, 2008. 4) How important is the unbundling the Commission has no choice but to
ERFA After several years of a constant decrease issue and the independence of operators ? refer these issues to the Court of Justice
which was particularly marked in new The independence of the infrastructure for clarification.

French deregulation shows

positive and negative trends
By Francois Coart

Deregulation is France a paradox. In less than 5 years the erator, which triggers unavoidable conflicts even if both • An ambitious, very high speed rail freight schema, Euro-
market shares of new entrants is over 15%. It took 15 parties are trying to make it neutral. carex is being implemented from Roissy CDG airport to
years to achieve the same results in UK, and over 20 years • A poor path allocation system. London, Amsterdam, Liège, Lyon and Germany.
to achieve 20 % in Germany. • A complex safety certificate system. The recast of the first railway package offers a unique pos-
Despite those positive results, the situation seems disap- • Sophisticated homologation process for the new loco- sibility to continue the opening of the market.
pointing as regards volumes, which have been stagnating motives triggering shortage and high prices. • Giving the necessary tools and means to the infrastructure
since the opening of the market. They dropped by over 20 • Some operators having a predatory pricing policy, but managers to ensure open access, empowerment, service
% in the last 10 years. neglecting quality. quality and neutrality.
• By making some open access notions on essential facilities
The reasons of this lack of performance are numerous: But the overall picture is far from negative more clear.
• RFF, the infrastructure manager, is undertaking a huge • By guaranteeing clear rules and legal background in easy
• Lack of investment on the conventional network with renewal process of the conventional network which will to understand manner.
bottlenecks. benefit all operators. • By empowering national regulators to ensure the enforce-
• A priority given to passenger-oriented investments. • The government is clearly supporting modal transfer to ment of national and European regulations at all levels.
• An inefficient system of infrastructure management, the rail network.
delegating the operation of the system to the historic op- • Shortliners initiatives are developed all around France. Franois Coart, Director of Strategy, Europorte
 NEW EUROPE
Page IV| New Europe
November 14-20, 2010

RAIL LIBERALISATION
INTERVIEW| BRIAN SIMPSON MEP

“Member states
should abide by the law”
In a recent transport committee meeting, problems of privatisation that they had in reaucracy over customs and goodness
you compared the current set-up to the UK, for example? knows what, railways haven't got it right
“Thomas the Tank Engine and the Trou- because they can't deliver, because they
blesome Trucks”. Can you expand upon Let's distinguish between liberalisation have different systems. The truck has an
this? and privatisation. Liberalisation does not easy ride as far as freight is concerned.
necessarily mean privatisation; privatisa- There is no competition to it; it's the only,
In railway terms, what we have said is tion was the route that the British went truly inter-modal form of transport. It's
true: the member states are the ones who down, liberalisation is a completely differ- environmentally a bit of a disaster, but in
are causing the problems, because they ent route, the route the Swedes went transport terms, it works.
haven’t implemented the first railway down.
package, so it's member states failing to We're not advocating privatisation, or na- Are the Parliament pushing that environ-
implement something that they've already tionalisation. What we are advocating is mental aspect?
signed up to. One of the reasons for that is that the rail market has to be liberalised,
that there has been certain pressures in and it has to be open so that people can Very strongly. For us, the major issue is a
some member states from the national come in and compete. It may be that it is bout sustainability – economic, social and
railway operator, but at the end of the day, the German national railway that is com- environmental. They are the three key is-
the member states have signed up, so that peting with the French national railway sues in any transport policy. And clearly,
is why I call them the “Troublesome that is competing with the Italian national if you have a transport policy that forces
Trucks” because that's exactly what they railway; that's not private, that's national everything to go by road, then it falls
are! Brian Simpson: Member states are like railways competing. Half the problem down on the key area on environmental
This first railway package is not some- "troublesome trucks" with this is that certain national railways sustainability. But the question I pose is,
thing we passed last week and expect why does it go by road? It goes by road be-
them to implement tomorrow. This has cause the railway can't deliver.
been going on for a number of years, and, This first railway package is not some-
frankly the member states have not put How important, then, is private invest-
into action what they agreed to do in the thing we passed last week and expect ment in all this?
first railway package, and that is why the
Parliament is cheesed off. them to implement tomorrow. This has been Private investment is crucial. If you look
at where we are with public spending at
If the Parliament is “cheesed off ”, then going on for a number of years, and, frankly the moment, it is going to be very limited,
what's the Commission's position? and restrictive. So, private investment is
the member states have not put into action crucial. But you ain't going to get private
I think the Commission is as frustrated as investment on a railway network that
we are. The Commission have a role to what they agreed to do can't give you sure-fire delivery dates or
uphold the treaties and enforce Union law, when it can run the trains and so forth.
and in this instance they are trying to do There has to be a return in it for private
that, which is why they have taken out investors, and there has to be a surety of
court proceedings against many member money or no finance or whatever, but the service, and this is where railways, and rail
states; and incidentally, once those pro- fault with this is the member states. They are not happy at having competition on freight fall down. They need to know that
ceedings were taken out, some member have obligations, they have responsibili- their networks. That's the top and bottom there is political stability, but they need to
states all of a sudden started to take ac- ties and we are calling them to account. of it: they want to keep their cosy arrange- know also that the railways can deliver;
tion, so I do think they are as frustrated as Which is Parliament's role. ment in place. the surety of delivering the service.
we are on this matter. You look at the UK, and yes, it's had its If you look at America, it is the reverse of
The first railway package was the first step What is a typical argument that a mem- ups and downs, but one thing you can't Europe. There they have 90% rail freight,
in rail liberalisation, and in opening up the ber state might put up? deny is that having had many years of 10% passengers. In America, the passen-
railway market and access to infrastruc- having no new rolling stock, privatisation ger train has to give way to the freight
ture, but it's a bit like running the Grand There argument is that if they open up, did bring about new investment in rolling train, in Europe it's the other way round,
National: there's thirty fences to jump and then they will damage their own national stock. Now, it's not enough, but if we'd so the freight operators are trying to get
we haven't jumped the first one yet! railway operators, particularly on freight. have been waiting for British Rail to build slots after the passengers have been given
They also say that they think by splitting a new high-speed train, it wouldn't have them. And that is the dilemma we face.
There are thirteen court proceedings at their infrastructure it causes a disjointed happened, if we are to be brutally honest. We have to get the railways to move for-
the moment, the Commission says possi- railway. The arguments are spurious. They wards, to move into the 21st century, in
bly another nine. Out of the twenty-five hold no water, because all these guys Let's look at modal shifts in rail freight, the way that they work with each other
rail networks in the EU, that's still a huge signed up to the package, so therefore, the connecting of rail to ports. The truck- and the way that we work towards mak-
hurdle to jump. whatever their excuses are, I don't give a ing industry argues that it is are more ing the railway fully interoperable. If we
damn – they signed up! They should abide flexible than rail. Have the trucks got it fail to do this, then I believe the future if
What we want to see is progress being by the law, and some of them aren't abid- right? rail freight in particular is bleak.
made. The frustration from Parliament is ing by the law.
that some member states have done ab- Yes. A truck is inter-modal. It can go
solutely nothing in regards to implement- across borders. Other modes of transport, Brian Simpson is chair of the European
ing the first railway package. Some How can you convince people that this like maritime, haven't got it right, because Parliament's Transport Committee
member states hide behind the issue of no process will not lead to some of the old they are always faced with national bu-
 New Europe | Page V
NEW EUROPE November 14-20, 2010

RAIL LIBERALISATION

Rail freight stagnation at its

best – despite a huge potential!
one of the largest independent freight Group, has excessively increased infra- powers to eliminate competition and pro-
railway undertaking in Poland. structure access charges (e.g. 300% in- tect its home market. This neither leads to
Whilst in the UK, the rail freight sector crease for intermodal trains introduced in innovation, customer-focus or higher ef-
has benefited from liberalisation of the December 2009), as the network quality ficiency nor encourages much needed in-
rail freight market with a fully independ- and performance remained inadequate vestments in locomotives and rolling
ent infrastructure manager, pro-active reg- and the trains continued to be delayed or stock. Nor it gives any confidence to the
ulatory body, fair infrastructure access suffered from congestion. The tranship- public authorities that taxpayer’s money in
charges and transparent consultation pro- ment terminals on the Eastern Polish bor- rail freight is well spent.
cedures, other countries on the continent ders remained under PKP Cargo effective Therefore, rail freight liberalisation is a
are still protecting their old-fashioned control as it charges 5-6 EUR per tonne must for the revitalisation of this mode of
railways and not moving fast enough to- to competitors for the last mile services transport. The liberalisation requires well
wards opening of their markets. abusing its monopoly position. These managed open access rail infrastructure
Such policies in Poland resulted in stag- practices do not effectively eliminate com- separated from its largest customer - the
By Konstantin Skorik nation of the rail freight over the past petition, but make rail freight uncompet- national incumbent. The infrastructure
decade, while road freight volumes have itive compared to road. manager should be equipped with sidings
Freightliner Group is the 2nd largest rail more than doubled. Poland started liber- Furthermore, PKP Cargo is not only and last mile lines and encourage devel-
freight operator in the UK, operating alising its railways in 2002 opening mar- protected from bankruptcy as per Polish opment of open access commercial termi-
since 1965. Following the liberalisation of ket to competition. It led to modest legislation, but also it squeezes out com- nals. Governments have an opportunity to
the UK rail freight market, the company revival of rail freight volumes during petitors by applying dumping prices de- invest into rail infrastructure and magnify
increased its annual turnover from £95m 2004-2007. During these years, the Pol- spite mounting losses (PKP Cargo effect of these investments by granting rail
in 1996 to over £250m in 2009 turning ish incumbent PKP Cargo failed to in- recorded a loss of 120 Euro million in regulators a stronger role in driving in-
from loss-making to healthy profitability. crease its productivity and to become 2009). Eventually, the increasing debt of creased infrastructure productivity and ef-
During this period, we created some 1000 more competitive and lost 30% market PKP Cargo will have to be paid by the ficiency, ensuring open access and
additional jobs, increased the daily volume share to its competitors. Polish taxpayer. controlling pricing of the infrastructure
of intermodal containers from 1.850 to To ensure PKP Cargo’s survival, the manager.
2.800 and entered the UK bulk freight market access barriers to competitors in- The liberalisation of rail freight markets These measures would attract private
market where we currently operate some vesting in the Polish market have been has proven to be beneficial for rail freight. investments, increase rail competitiveness
1.000 bulk trains per week. This growth steadily increasing since 2007. Whilst the With liberalisation, customers have al- against road and lead to a strong growth
was achieved with investments in excess Polish regulatory authority UTK at- most instantly turned to new, innovative of rail freight across Europe, not just in
of £300 million in new locomotives, wag- tempted to prevent the homologation for offers on rail instead of road. Whilst in the UK!
ons and terminal equipment. new locomotives, PKP Cargo obstructed the UK rail is becoming a preferred mode
In 2007 Freightliner started its Polish access to critical infrastructure and sidings of transport even for time-sensitive goods
operation that today employs 120 staff to the competitors so that they cannot and short distances, rail freight in coun-
and operates some 100 bulk trains per enter certain market segments. The infra- tries like Poland is stagnating or decreas- Konstantin Skorik, European Business
week. Freightliner Poland has grown into structure manager PLK, owned by PKP ing because of the national incumbent Development Director, Freightliner.

"With liberalisation, customers have almost instantly turned to new, innovative offers on rail instead of road"
 NEW EUROPE
Page VI| New Europe
November 14-20, 2010

RAIL LIBERALISATION
INTERVIEW|MICHAEL CRAMER MEP

Competition leads to economic,

environmental and social success ridiculous. There must be an institution above
It is right that the Commission has it, and that must look at security issues, for ex-
ample, and then the member states can look at
gone to court, because the Commis- the situation in their own country.

sion has to look after the Treaties, How important has the liberalisation of legal
and the Treaty is clear: there must be a sepa- and technical issues been in the evolution of
European railways?
ration.In 13 countries, that is not the case
We now have a European licence for locomo-
have different railway companies, but under the years, and it might seem to an outsider that it tive drivers, there was also the passenger rights
head of the German railway authority. So there hasn’t gone as smoothly as it could. How effec- in the Third Railway Package, and there is an
is a disadvantage and a discrimination for a lot tive do you you think the implementation of opening of the international long distance
of other railway undertakings. this has been? trains, which was from 1 January 2010. There-
It is right that the Commission has made a re- fore the train will go from Frankfurt via
port on it, that they have gone to court, because Those countries that are in favour of competi- Cologne and Brussels to London, or to Paris
the Commission has to look after the Treaties, tion, they have has big successes, and the oth- and so on. Before, it was only if the two agreed,
and the Treaty is clear: there must be a separa- ers not so; but there are hurdles. For example, in but now you have a right as a company to go
tion. In 13 countries, that is not the case. each European country they could only run there.
their locomotives there if the security system Also, for tunnels, we need a security law which
Michael Cramer: Environmentally-sound trans-
port system is being undermined Lots of MEPs have spoken about Modal was OK for that particular country; and that is is for all Europe, not just for special tunnels, like
shifts. How will the Railway Package facilitate the hurdle which is used, not for reasons for the channel tunnel, because then companies say
In your view, how important is unbundling, this? reasons of security, but for reasons of providing ‘our company has built the trains for this tun-
and maintaining the independence of the rail obstacles for competitiveness. nel, and the others cannot go there’. And that is
companies from the regulators? If you have a truck it is easy for you to take the Therefore, we have a Directive, on cross-bor- ridiculous.
truck from Tallinn to Lisbon. In the railways it der acceptance, that each locomotive in the Eu-
First of all I would ask, how important is com- is more complicated, because we have more ropean Union, which is accepted in one Where do the Greens stand on private invest-
petition? Because we have an opening of the than 20 different signalling systems, we have 6 member state, is accepted in the whole Union ment in the rail sector, which in the worst case
sky, we have an opening of the roads for trucks, power systems, and we have 4 different gauges. as long as a country doesn’t say ‘that is not good can lead to a monopoly?
and in these sectors there is a big increase in the And so, we are looking for a European-wide enough for us’. If they do, then, they have to say
volume of use. You can feel that it is good for signalling system, which is called ERTMS, and why it is not good enough. Before, they’d say We are against monopolies in state ownership
Europe, but bad for the environment. The rail- that should be installed in 6 corridors for no, and other countries would just keep asking or in private ownership. We, as Greens, want to
ways, the environmentally-friendly mode of freight. ‘why, why, why?’ So, now we have a change, that have competition. We have private companies,
transport, there we have seen a nationalist area; If we have only one system, then the locomo- those countries have to say why it is not possi- and they have private infrastructure, but the
and therefore it is necessary to have a European tives will be cheaper, because it is different if you ble. That is the law, but in reality there are still companies won’t get sate money, or taxpayers’
situation where the access must be for the produce 50 locomotives for Germany, and an- big, big, big obstacles. money, for their infrastructure, and that we
whole network across the whole European other 50 for Great Britain, and another 50 for The European railway agency must have more want to change, because it is a discrimination
Union, and that was the First Railway Package. France. But if you can produce the same type, power, the agencies in the member states must of private companies by state-owned compa-
For freight transport it was from 1 January 150 locomotives for all three countries, it is give up some sovereign rights to the European nies; they have to pay more for using the system
2007, and because the date was fixed very early, cheaper, a question of scales. one. They have only to look on the German sit- than the others, because they are not backed by
some countries in Europe have said they will uation, or the French situation. All the 25 rail- the state. But what does competition mean?
open our networks before this date. There you The lawmaking process goes back about 10 way agencies have the same power. That is The German railways wanted to cut a line in
can see the following consequences: the UK Germany from Kaarst via Düsseldorf main sta-
has an increase in freight transport by opening tion to Mettmann because on one day there are
the network for other railway companies; an in- maybe only 500 passengers. Then the local au-
crease of 60%, the Netherlands, 42%, Poland thorities didn’t want it, and they took away the
30%, Germany 25%, and France in the same line, and called for tender.
period has a decrease of 28%. So now you can The new investor changed the stations away
say that this freight transport is now on the from the green grass to the places where peo-
road, and the jobs are gone. And I say it also to ple are living, and they made a combination
the unions that it was crazy to fight against the with the timetables of buses in the region and
access to the network because because of the the other trains from the main station in Düs-
loss of jobs and because of the climate. seldorf, and after 10 years they’ve had 20,000
In the First Railway Package it was clear that passengers. If you had a state monopoly, all the
there must be a difference between the network, 20,000 passengers would now be on the road,
the infrastructure, and the railway companies, where today they are using rail. Therefore: no
and we as Greens say that the infrastructure monopoly. They can decide they don’t like it,
must remain in public ownership after the dis- but they should not decide, we don’t like it but
aster in Great Britain, or the disaster in New another organisation is not allowed to do it.
Zealand, or Estonia, but we want competition
on the network. Therefore it is crucial that the Moving freight by rail can be difficult compared to roads Michael Cramer is a Member of the European
organisation is independent. In Germany, we Parliament's Transport Committee
 New Europe | Page VII
NEW EUROPE November 14-20, 2010

RAIL LIBERALISATION

Rail Freight has a great future

…if it is given the chance!
oped and jobs created. as possible. Switzerland shows that in- lic money, collects usage fees from com-
However, our company would like to vesting in rail together with a liberalized petitors to use those subsidized roads and
develop more destinations and products policy does not harm the economic posi- use the profits coming out of this activity
but is not able to! We can run trains from tion of the country, but instead made it to buy other competitors. Today, this is
point A to point B, crossing several bor- number one! It also does not harm their common business in the railway world!
ders, with high quality and being prof- ecological system.Therefore, liberalization So, to liberalise the rail freight market,
itable. However, we cannot enter certain must go on, but we only have achieved the European Parliament must pave the
terminals, we cannot have access to cer- 50%. way for the remaining 50 %, which is
tain ports, we cannot use certain services. This is even more astonishing as virtu- made up of single wagon traffic . Single
Conclusion: we are excluded from ap- ally all other sectors have been liberalised. wagon traffic puts goods on rail than road
By Jeroen Le Jeune proximately 50% of the market. Even People can choose amongst different tele- right from the start or keeps it there much
worse, the facilities and services we want com operators or airlines or shipping longer. To do so, we need free access to
The private rail freight operator Crossrail to use and pay for are mostly subsidised lines. This is not the case in railways. terminals, railports, shunting yards &
was set up in 2002, as one of the very first by public money and they are sometimes Therefore, the European Parliament, the services, etc.
operators in Belgium following the adop- rather destroyed than give others the Council of Ministers and the European In some countries, though, it is almost
tion of the First Railway Package to lib- chance to use them. Commission must ensure an equal level too late. For example in Italy, the national
eralise rail freight in the EU. Crossrail All this does not do any good to rail playing field for all without any discrimi- state railway is closing down single wagon
started with a handful of employees. freight, but rather the contrary: customers nation. services. Since then, customers are turn-
Today, Crossrail is running trains with and industry do not fully trust rail freight Thus, the Recast of the 1st Railway ing away from rail and put their goods on
own resources in five countries: Belgium, and its potential for growth. But without Package is highly important for our com- lorries again. This applies also to danger-
The Netherlands, Germany, Italy and rail freight, the EU cannot solve its prob- pany and its future development. We ex- ous goods, which are transported on road
Switzerland. The most liberalized coun- lems, like congestion, CO2 reductions and pect, and so do our customers, that and in tunnels.
try of those five is Switzerland, a country safer transportation. infrastructure will be fully neutral and So, if Europe wants to create growth,
outside the EU. More than ever, the EU needs a highly offer all services necessary for all opera- jobs, innovation, CO2 reductions, it must
After 8 years of operational experience competitive internal market to be able to tors. This can only be achieved by making opt for a much stronger rail freight liber-
on the market as a private rail freight op- compete with other markets, such as Asia infrastructures fully independent from all alisation. Europe has no choice other than
erator, it is evident that liberalisation in or India. Such an internal market needs operators, which is not the case today. to go forward.
rail freight has saved the market from a highly efficient, innovative, reliable rail Otherwise, it is the same as if a trucking
further downturn. Clients have gone back freight services to transport goods. And company builds and owns a majority part Jeroen Le Jeune, Chief Executive Officer
to rail freight, new products been devel- this transport of goods must be as green of the roads in a certain country with pub- Crossrail

Level playing field essential

for future of freight
connections. Today ERS Railways BV is dustrial interests as well as budgetary a few big players dominate this industry
the biggest 100% privately owned rail- constraints of many member countries. limiting the positive effects of competi-
way undertaking in Europe active in in- In a nutshell: today's European railway tion like increased efficiencies, compet-
termodal rail transportation. systems are still very fragmented and itive pricing models, innovations etc.
How does the management of ERS complicated to operate on. Therefore, the Recast of the 1st Railway
Railways see the future of the liberaliza- In case railway based intermodal supply Package must be more ambitious to
tion process within the European rail- chains are expected to cope with a sub- achieve and maintain a level playing
way industry? A lot of positive initiatives stantial higher amount of cargo infra- field between incumbents and private
have been launched during the past structure, systems and processes need to operators. Some measures are absolutely
years. All were meant to make the rail- be harmonized and simplified in a way essential, e.g. clearer infrastructure
By Frank Schuhholz way based intermodal supply chains that railway undertakings as well as op- prices, more independence of service and
more competitive and therefore attrac- erators will be enabled to assume their facility providers and stronger regulators.
ERS Railways was established as private tive for customers like carriers, for- roles as important pillars of sustainable However, these measures must be im-
railway company back in 1994.Today it warders, logistics companies and last but and safe pan-European transport net- plemented in a controlled, harmonised
is a company which is a 100% owned by not least manufacturers. works. and interoperable way in the EU. So far,
the A.P. Moller-Maersk group. Since When looking at today's European rail- This also requires that national rail au- this was not the case, leaving many "no-
the very first beginning ERS manage- way industry it becomes clear that many thorities, infrastructure managers, en- go areas" for independent and private
ment as well as its shareholders were initiatives regarding infrastructure or ergy providers and state incumbents railway operators on the European rail-
convinced that the upcoming liberalisa- harmonized operating and IT systems understand the need to accept a multi- way map.
tion process within Europe would facil- have not materialized yet and are even at tude of railway undertakings (and oper-
itate faster, more efficient and thus risk not to be implemented partly or at ators) rather than accepting or Frank Schuhholz, Managing Director
more competitive, intermodal hinterland all due to a multitude of political and in- supporting reverse developments where ERS Railways
 NEW EUROPE
Page VIII| New Europe
November 14-20, 2010

RAIL LIBERALISATION
INTERVIEW| DIRK STERCKX MEP

Lack of political will

is holding things up
than on the department of justice – so
they can’t say that the government is It's a culture; there is an opposition
neglecting them financially. It’s difficult
to say, it’s a culture; there is an opposition to opening up the markets, a general
to opening up the markets, a general idea
that you shouldn’t liberalise railways.
idea that you shouldn't liberalise rail-
In an opinion poll that asked should we ways...there is no political will to try the
liberalise railways, I think you would have
a large majority saying no, because most alternative, so it is forced upon us
people do not see what the alternative
Dirk Sterckx: Too much "monopoly thinking"
could be. And there is no political will to clients chose someone else. That’s the way years ago already. The Commission said,
try the alternative, so it is forced upon us. Europe come in. that is what is happening We absolutely need rail as a transport
There have been problems with the rail now for international passengers and what mode for freight at European level, not at
It is like the postal service in Belgium.
network in Belgium over the ability to will happen when the national markets national level, because the national level
People don’t see the necessity to open up
liberalise the rail networks. What are are opened – you see other people coming doesn’t help us.
the postal market, but the postal organisa-
these problems? in and offering services in a much more We see market share going down dramat-
tion is doing it already – under pressure
from the European Union. But they are efficient way, and cheaper. ically since the 1950s, and we have to do
There has never been a willingness, not in something about it, because rail is an
preparing because the opening of the
the railway companies, and not in the That’s the passenger market. With important part of your modal split. But
market is the end of this year. They have
political majority, to open up the railways freight there are technical issues to be over the last twenty years you don’t see
been preparing for a number of years, but
and to think of the role that Belgian rail- overcome as well. this market share growing dramatically,
our railway company just had a strike
ways can play in Europe, in the European and this is where the European network
because some of the union leaders said
network, let’s say. We have always politi- There’s technical issues, and all kinds of should help.
they are opposed to the fact that our boss-
cally opposed ourselves to opening; both incompatibilities, like in workforce, sig-
es are preparing the freight branch for the
the Belgian state and the railway compa- nalling, licensing, can your driver drive a Is the reason for this lack of growth a
liberalised market. That’s the kind of situ-
nies. train in another country – yes or no? All member state problem? Is it fair to blame
ation we are in.
these things have been originally made for individual countries?
What is their justification for that? national use and not as a cross-border
At what point, and how effectively, can
the EU intervene in the situation? operation in general, and most of them Why not? They are the ones that do it.
The argument is just monopoly thinking. still are. They are all, or almost all, state-owned
They think that this is normal, like,’why companies. No one told the incumbents
Since the freight market has been opened,
would we change after 150 years?’. I don’t It’s not illogical to assume that rail freight that they couldn’t do it – there was no law
you see that others are taking care of some
think that the conviction that change has a cross-border dimension to it. at European level that said you can’t work
of the freight that has to be moved in
would bring improvement is there: they together as railway companies! Yes, they
Belgium. So we have six or seven railway
think they can do it themselves. It is only Of course, and that is what the did work together, but in such an old-
companies working on Belgian tracks.
slightly comparable, but I worked for the Commission has been saying since the fashioned and nationalistic way that it
That’s where you see the way our incum-
Flemish public broadcasting company, beginning of the 1990s, which is twenty never worked; which means that the level
bent is organised; it’s not efficient. So
and we thought we were the only ones of service quality is lower than it should
who could lake TV. They think they are be. They have never really worked on a
the only ones who can make trains. And European collaboration, they have always
they still think that. worked for national protection. And now
you see these things moving slowly, but
Where, though, is this lack of conviction very slowly! There are a few countries
coming from? where it works, and a few countries where
it doesn’t work at all.
I think it’s a habit. People still think it’s
there god-given task to do it. Of course, When they signed up to the Railway
rail is a heavy instrument, it is not easy to package, did they give any assurances that
open up, you need huge companies to do they would sort things out?
it. You can have smaller companies doing
smaller parts of, for instance, freight traf- Yes, that they would separate track and ser-
fic on the market, but in general, like for vice. And it happened legally, it didn’t hap-
the infrastructure manager, it is always pen in practice. This is why the Commission
one of the largest companies in a country has sent so many letters to so many member
by workforce, capital and so on. states, and why the Commission now has
It is not a question of not enough public come out with this recast.
money going to railways. Belgian railways
have a yearly subsidy of more than €3bn, Dirk Sterckx is a member of the
which is huge sum of money, more than European Parliament's Transport
Will rail freight be brought to a standstill in Europe? | Jason Roberts
what we spend on the military, and more Committee