Tony Berkeley asks: Is there a future for European rail?
The comments by Transport Commissioner Bulc to the European rail freight sector that ‘rail accounts for 73 per cent of European transport funding but accounts for under 12 per cent of modal share’ is a timely wake up call to the industry and member states.
Although this refers primarily to freight, passenger trains generally run on the same tracks and, outside regions and urban services, often suffer from the same unreliability as freight. Both are in competition with road and air – for cost, for reliability and convenience.
Behind all this is the failure of rail to match the road and air sectors. This reason may be historical – rail had a virtual monopoly of the movement of passengers and freight for 100 years before the air and road services started taking their market share, but rail has also failed to keep up with organisational, employment and customer service changes that air and road have achieved. Across Europe, competition for air services is now very strong on many routes, bringing customers much lower prices and better service quality from a wider range of services and destinations. Competition on the road sector for freight is of course very strong, as it is on long distance bus and coach services. All of these have managed to operate across Europe with minimum frontier, language or licencing or technical approval problems or delays.
In contrast, the rail sector has not achieved anything like a single market in services, either nationally or across Europe, in spite of the valiant efforts of the European Commission and a few smaller operators who challenge the monopolistic approaches of not only the incumbents but their member state owners who still resist any common language across internal frontiers, common signalling or train planning on main routes or diversions. Despite the creation of the European Agency for Rail, set up to overcome many of the national shibboleths, member states still fight any attempt to create a uniform European rail network – as there is effectively on the road and air sectors.
The result is stagnation in many parts of the rail sector; the only exceptions to this are where road traffic is constrained, either by law as in Switzerland, or where road congestion pushes people to demand and use regional or metro rail services.
Rail can survive and prosper, but only on the basis of fair competition, performance and costs to the customer on a pan-European basis.
Thanks to the opposition from many member states, competition above rail is patchy. In some member states, there is a competitive rail freight sector and, in others, competition in the passenger sector has shown some startling growths – both for the incumbent and the newcomer. In Italy, the introduction of NTV services on high speed lines has, in five years, increased the total passenger.km by 78 per cent with an average fare reduction of 41 per cent. In Austria, Czech Republic and Sweden, where competition in the passenger markets occurs, passenger numbers have increased by 25 per cent to 90 per cent in five years, with average fares down by 16 to 42 per cent. Compare this with France where there is virtually no competition and where rail freight traffic dropped by five per cent per year since 2011.
So, where there is competition, both incumbents and new entrants gain traffic, but member states still do their best to restrict competition, either by encouraging their infrastructure managers to give priority to their state-owned operators, by restricting access to maintenance facilities, terminals or station platforms or by seeking to restrict the ability of new entrants to make their own employment negotiations within national legislation. It is hard to imagine that all European air or coach operators or road freight operators should be required to have the same terms and conditions for their employees as the most inefficient state owned one. But that is just what SNCF is trying to achieve in France, and what was proposed in the European parliament as an amendment to the 4th Railway Package legislation – luckily it was defeated!
ERFA and now ALLRAIL are together fighting hard for better service quality, reliability and customer services across Europe to match or beat the road and air competition. The European Commission has done its best to create a programme of liberalisation but has been held back on numerous occasions by member states listening too hard to the railways they own and preventing change whilst, at the same time, paying more and more into the inefficient bottomless pits that are these massive monopolies.
Is there another solution to prevent freight and many passenger services just fading away? Here are seven essential changes that need to be made:
- One single language on all international freight routes and their connections is a simple and easy first step – to be implemented this year.
- One single European infrastructure manager operating the policies, timetables, performance etc. but with subsidiaries in each member state that would be required to compete with each other on costs, delays and customer service, and enforced by a European rail regulator with teeth.
- Abolish completely the remaining vertical integration of IMs with railway undertakings.
- There must be real competition above track within two years, proactively encouraged rather than allowed under sufferance, as happens in so many member states.
- Data on performance, timetables, customer services etc published and open to scrutiny by all.
- The European Agency for Rail, supported by the European Commission, must abolish national rules and actively promote full interoperability.
- And DG COMP must keep a close eye on all potential competition issues as the railway converts from a series of inefficient and declining monopolies into a thriving competitive customer-oriented sector, seeing off competition from road and air.
Sadly, there is little evidence that change is on its way – at the moment, just more talking as a means of delay. Is it not time that the railways, and their managers and the member states stopped behaving like spoilt spoon-fed children and grew up to the world of high tech business which expects cost effective performance with a ‘can-do’ approach incentivised by competition and customer service?
The sector and its political masters must confront the question: ‘do we want rail to survive and grow, or wither as the canals did 150 years ago?’
Tony Berkeley is a member of the UK House of Lords, Chairman of the UK Rail Freight Group and a Board Member of the European Rail Freight Association and of ALLRAIL. The Rail Freight Group (RFG) has been the UK’s leading rail freight trade association since its formation in 1990. It has more than 120 corporate members active in all sectors of rail freight from ports, terminal operators, customers, through to operators and suppliers.