Kinnock rings the alarm bell for rail freight

Date: 18/07/1996

By Tim Jones

RADICAL steps need to be taken if the transport of freight by rail is not to die within the next eight years, Transport Commissioner Neil Kinnock will warn at the end of the month.

In a 40-page White Paper on the future of Europe's railways, he will call for the creation of Trans-European Rail Freeways to cut through the bureaucracy that discourages cross-border freight transport.

The paper also proposes further legislation from the Commission to ensure that railway firms put their infrastructure and operations arms into separate divisions with distinct managements, while operations companies should tender for public service contracts from the manager of the line.

Kinnock will also say that the rules governing the payment of state aid to the companies should be brought into line with those for airlines. Aid should be tied to a major restructuring of the firms, while any subsidy paid to compensate for the fulfilment of public service obligations would be exempt. Only unconditional operational aid would be vetted and perhaps blocked.

The White Paper has been drafted in just three months following a mandate from a meeting of transport ministers in Rome.

“The whole thing has been kick-started by the idea that we are running out of time,” said a Kinnock aide. “It is five to 12 on the clock.”

Over 13 years, railways' share of the European freight market has halved to 15&percent;, compared with the 70&percent; (and rising) market share enjoyed by lorries.

Even the traditionally protectionist Belgian and French railway companies, the SNCB/ NMBS and the SNCF, are edging towards the acceptance of mild liberalisation at the instigation of their cash-strapped governments.

Varied technical standards and, more importantly, the reluctance of old integrated railway companies and their government owners, have kept the European rail system compartmentalised.

This has pushed up the rates charged for moving freight and prompted companies to shift their goods by lorries.

“The way we deal with rail freight is Victorian - the lowest of the low in terms of priority,” said a Commission official.

Governments continue to stress the importance of passenger traffic at enormous cost. Infrastructure managers throughout Europe consistently give priority to passenger trains - and increasingly have to pay compensation to customers for late arrivals - while freight trains are shunted into sidings to let them pass.

A directive agreed as long ago as 1991 and intended to open the system up to market forces has only been transposed into national law by four member states - the UK, Denmark, Germany and the Netherlands - five years later. Six governments are facing infringement action by the Commission for non-implementation.

The Commission is hoping that transport ministers' attitudes have been changed by the economic realities of the past five years. Even Paris has been forced into action against the wishes of SNCF's militant workforce.

At the beginning of June, the French government announced plans to relieve SNCF of its massive 27-billion-ecu debt burden and siphon it into a new state infrastructure company, which will then charge the operator fees for use of the network.

This is exactly what Kinnock wants to see repeated across the Union. He hopes to open the market even further with legislation forcing the operator to bid for contracts to supply services.

Since this would include obligations to service outlying districts, the operator would be compensated. But new service companies should be allowed to compete with the incumbent to provide the services.

The creation of the cross-border freeways is a more immediate step. The Commission wants infrastructure owners to sit down together and designate a train path, with a common manager, standard fees with open access for operators and devoted entirely to the movement of freight.

These would be concentrated on the high-volume routes such as Scandinavia to Milan through the Alps, northern England to France and, further south, Rotterdam to Central Europe or Rotterdam to Milan.

“The major problem is that passenger and freight are two different animals. Maybe we should think more of a network for freight alone,” said a Commission official.

The advantage of this proposal is that it would not require legislation. These train paths could be negotiated between governments and firms, with the Commission taking a supervisory role.

The proposals will be considered at the first transport ministers' meeting under the Irish presidency on 3-4 October.