Saturday

23rd Sep 2023

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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.

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.

Single EU railway signalling system faces delays

'A reality check shows that we are already falling a little bit behind in the first few years,' said the new coordinator for the European rail traffic management system (ERTMS).

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".

Latest News

  1. Europe's energy strategy: A tale of competing priorities
  2. Why Greek state workers are protesting new labour law
  3. Gloves off, as Polish ruling party fights for power
  4. Here's the headline of every op-ed imploring something to stop
  5. Report: Tax richest 0.5%, raise €213bn for EU coffers
  6. EU aid for Africa risks violating spending rules, Oxfam says
  7. Activists push €40bn fossil subsidies into Dutch-election spotlight
  8. Europe must Trump-proof its Ukraine arms supplies

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us