Friday

16th Nov 2018

EU railway law to halt 'stagnation, decline'

  • The commission's ideas are seen as unacceptable by Deutsche Bahn (Photo: Cocoabiscuit)

The European Commission has proposed breaking up national railway monopolies to save passengers money and to stop industry "stagnation."

The draft law, put out on Wednesday (30 January) in Brussels by transport commissioner Siim Kallas, says state giants, such as Germany's Deutsche Bahn or Italy's Ferrovie della Stato, should be split in two, with one part responsible for infrastructure and the other part to run passenger services.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

It recommends full "institutional separation" as the best model.

But it says that a softer option, in which the two parts remain under one "holding structure," but in which day-to-day business is separated by "Chinese walls," is also acceptable.

Firms which fail to do either will be locked out of providing passenger services in other EU countries when the sector opens up fully to cross-border competition in 2019.

The commission said the move will save passengers and railway firms €40 billion by 2035.

It noted that the industry, which is worth €73 billion and which employs 800,000 people in Europe, is "currently facing stagnation or decline," with operators in Belgium, Bulgaria, Portugal and Spain applying for government bailouts in recent years.

"We can take the tough decisions now ... [or] we can accept an irreversible slide down the slippery slope to a Europe where railways are a luxury toy for a few rich countries and are unaffordable for most in the face of scarce public money," Kallas said.

In other measures, the European Railway Agency (ERA), based in Valenciennes, France, is to issue EU-wide "safety passports" for railway vehicles and operators.

The commission said EU countries have 11,000 different safety rules in place and that it can take two years and cost €6 million to get permits for a new locomotive to operate abroad.

It said the ERA move will save firms €500 million by 2025.

Zooming in on the "holding structure" idea, the two parts of the new-model companies will have separate decision-making bodies, separate accounts, separate IT systems to stop leaks of commercially sensitive information from one to the other and "cooling off periods" for executives who switch sides.

The commission said national incumbents currently control over 90 percent of the passenger market in 16 out of the 25 EU countries which run trains.

In one example of how they strangle competition, Deutsche Bahn currently charges passengers up to 40 percent less for tickets than its competitors can. In another case, Austria's OBB Infrastruktur increased track access costs for a competitor, Westbahn, when it started operations on the Vienna-Salzburg line.

The UK-based International Railway Journal, an industry paper, reported on Thursday that Austria, Germany and Italy lobbied to stop Kallas from enforcing the full "institutional separation" model only.

His bill now goes to MEPs and EU countries for amendments.

But a statement by a Deutsche Bahn source to Reuters indicates the lobbying is set to go on. "[The bill is] not acceptable, because the planned remedies actually lead to a separation," the contact said.

"We think the German model, with an integrated company, is a good one, a successful one. These structures in Germany do not only allow competition, they support it," a German transport ministry spokesman noted.

Focus

European Parliament calls for more rail transport

EU lawmakers have called for a change in the European freight transport asking the European Commission to take cargo of the roads and on to the rails, in an attempt to green, diversify and lower the negative impacts of European transport.

EU injects small dose of competition into its railways

European lawmakers gave their final blessing to a package of railway reforms, aimed at injecting more competition into Europe's rail networks as well as introducing an EU-wide set of passenger rights for minimum compensation when trains are delayed.

EU's €23bn for high-speed rail had 'low added value'

Court of Auditors says in critical report that Europe does not have a high-speed rail 'network', "only a patchwork of national high-speed lines, planned and built by the member states in isolation".

Italy defiant on budget on eve of EU deadline

Italy would be committing economic "suicide" if it fell in line with EU rules, its deputy leader has said, in a sign that Rome has little intention of bowing to pressure ahead of Tuesday's budget deadline.

News in Brief

  1. Merkel urged Romania not to move embassy to Jerusalem
  2. Protesters call for Czech leader to step down
  3. Former German chancellor labelled 'enemy' of Ukraine
  4. French lead opposition to Brexit deal on fisheries
  5. Private accounts of Danske Bank employees investigated
  6. UK's May defends Brexit deal to MPs, after ministers resign
  7. Brexit MP calls for 'no confidence' vote on May
  8. Denmark blocks Tanzania aid over homophobic crackdown

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. How the EU commission got tunnel vision on self-driving cars
  2. No-confidence calls against May put Brexit deal in doubt
  3. Key points of the Brexit deal (if it ever comes into effect)
  4. Romania heaps scorn on 'revolting' EU criticism
  5. US steps in to clean up Cyprus
  6. 'Decisive progress' on Brexit as British cabinet backs deal
  7. Asylum for Macedonia's ex-PM puts Orban on spot
  8. How the 'EU's Bank' fails to raise the bar on accountability

Join EUobserver

Support quality EU news

Join us