Cooperation key to freeways

Date: 20/02/1997

By Tim Jones

CROSS-border rail freeways will come a step closer in the coming days as European Commission officials seek to remedy any anti-competitive impact they might have.

Transport and anti-trust experts are designing ways to allow railway companies to pool their infrastructural resources without impairing free and open competition within the EU.

Officials from the Directorates-General for transport (DGVII) and competition (DGIV) were due to present their first thoughts to a committee of personal representatives of transport ministers today (20 February), and will refine their ideas into legal texts as soon as possible.

Transport Commissioner Neil Kinnock has warned that Europe's railways must radically change their ways if they are not to continue haemorrhaging freight business to road hauliers. The fragmentation of rail operators and track managers has pushed up the rates charged for shifting cargo and encouraged companies to choose lorries.

In his White Paper examining how to revitalise the rail transport sector, Kinnock called on infrastructure owners - the firms which own and operate the tracks, signalling and fixed equipment - to get together and designate train paths for specified trans-European rail freeways.

These would follow the highest-volume freight routes in Europe such as Rotterdam to central and eastern Europe, or Scandinavia to Milan through the Alps.

The infrastructure managers along the route would create a 'one-stop-shop' management, where a goods transporter could go and be given a single quote instead of having to talk to several rail companies.

The freeway would have to be open to all-comers with non-discriminatory fees for users.

The Community of European Railways, which groups together the national operators, is already working on the technical feasibility of these projects and a pilot scheme is expected to be up and running by the end of the year.

The Commission now has to ensure that the managers can cooperate without breaking EU competition law.

They do have precedents in the Community of Common Interest in the Transportation of Automobiles (CIA), in which 13 rail operators move cars between factories, and the Hansa Rail joint venture between the German and Swedish railways.

Officials have not yet decided whether to provide either block exemptions from the Union's normal competition rules once the freeways are established, or draft guidelines, or to require the infrastructure managers to notify their agreements under Article 85 of the Treaty of Rome.

“The key to this is open access,” said a Commission official. “The whole idea of competing infrastructure managers is theoretical and it should not be a problem as long as operational access is open.”

But this will be easier said than done. While most railway companies and governments seem to have accepted the freeways in principle, French, Belgian and Spanish operators still have a problem with the idea of opening their tracks to firms which have spent nothing on developing them.

Moreover, to ensure transparency in the allocation of capacity and charging on the freeways, both directorates-general - and particularly DGIV - will want to ensure that integrated railway firms separate their infrastructure and operations arms into distinct divisions with specified accounts.

Last year, the Commission proposed legislation to force a manager/operator split, with operations companies obliged to tender for public service contracts from the manager of the line.

But this radical reform has been put on hold as the freight freeways project takes centre stage.

Only in the UK has the railway system been formally split between an infrastructure manager, Railtrack, and a series of operators. While several other state-owned railways have separated divisions, others have not, which would always leave open the possibility that the infrastructure manager would favour the local operator.

“We have to make sure that there is open access for everybody and no discrimination should be allowed,” said an official. “The infrastructure owner must be independent of the influence of any individual operator.”

The Commission's work on the anti-competitive effects of cooperation will provide an early indication of how receptive the member states will be to its plans for state-aid guidelines for railways.

In a bid to bring railways in line with civil aviation, Kinnock's staff are planning to come up with guidelines demanding that subsidies should be linked to company restructuring or the fulfilment of specified public service obligations.