Wednesday

13th Dec 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

Facebook to shift ad revenue away from Ireland

Public pressure about low corporate taxes appear to have pressured Facebook to launch plans to stop routing international ad sales through its Dublin-based headquarters in Ireland.

Facebook to shift ad revenue away from Ireland

Public pressure about low corporate taxes appear to have pressured Facebook to launch plans to stop routing international ad sales through its Dublin-based headquarters in Ireland.

News in Brief

  1. MEPs vote to allow phosphate additives in kebabs
  2. Babis government sworn in in Czech Republic
  3. Russia looks to crypto-currencies to evade EU sanctions
  4. Juncker embroiled in Luxembourg wire-tapping trial
  5. Kurz close to forming new Austrian right-wing government
  6. Ministers reach deal on fish quotas but overfishing continues
  7. UK parliament to vote on right to veto final Brexit deal
  8. French government rules out Corsican autonomy

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. Brits in EU-27 are uncertain, alone and far from protected
  2. 2018 fishing quotas agreed - but Brexit muddies waters
  3. Medical HQ to spearhead EU military push
  4. Facebook to shift ad revenue away from Ireland
  5. EU renews glyphosate approval, pledges transparency
  6. Romania searching for EU respectability
  7. Last chance for Poland to return property to rightful owners
  8. Commission attacks Tusk on 'anti-European' migrant plan