Move to push rail liberalisation back on to the fast track

Date: 02/10/1997

By Chris Johnstone

A RAFT of measures to give real meaning to the concept of rail competition across Europe is set to be tabled early next year in a bid to get liberalisation of the sector back on track.

The fresh moves mark an attempt to put the issue at the top of the EU agenda and reflect a recognition that steps taken so far to promote competition on international and freight routes have failed.

Railway liberalisation has been largely sidelined since European governments rejected ambitious measures to open the sector up to cross-border and domestic competition in 1995.

Although that proposal still remains on the table, the focus has since shifted to promoting a series of special pan-European cargo routes to shift freight from the roads and convince sceptical countries that a dose of liberalisation and competition can pay off.

Now Commission officials plan to go further, launching a spring offensive in the form of three proposals setting out a framework for fostering competition on international passenger and freight services.

These will call for the clear separation of railways' management of their infrastructure and passenger operations, or track and trains; demand non-discriminatory charging of rail operators; and insist on a fair and equal chance for all-comers to run services on attractive routes at attractive times.

“We want to make sure that the new rail operator only has to compete with the service competitors and not tackle infrastructure problems as well,” said an official, who added that new operators had so far been reluctant to use existing competition rules to break into a market dominated by monopoly state-owned rail companies.

“For those rules to have any effect, there must be a complaint and that is something small operators are reluctant to do. At the moment, they have to coexist with the big national companies or be destroyed,” he said.

He added that the planned new measures would be a major step towards tackling some of the fundamental obstacles to fair competition by offering tailor-made rules.

They will be followed up by more cautious moves in the delicate area of domestic service, where a first step will be to force governments to sign contracts with railway companies for the passenger services they provide. This would give a clearer idea of the companies' obligations and could prove a stepping stone for some services to be franchised at a later date.

The Directorate-General for transport (DGVII) is also looking to establish rules which would prevent the managers of track, often the state-owned railway giants, from citing insufficient capacity as an excuse to turn away new services.

This would involve screening claims to see whether fresh capacity could be found, in the same way as the Commission currently tackles 'congested' airports.

This focus on capacity follows the success of the Commission's freight freeways initiative in highlighting chronic under-use of main-line track by Europe's railway companies.

Further down the line, some of the myriad cooperation deals between Europe's railway firms could be vetted for the first time to determine whether they break competition rules.

“Relations for international services have never been notified for clearance,” said an official, who added that they might conflict with the single market principles and have to be changed.

But some experts warn that it remains to be seen whether the UK, which takes over the Union presidency in January, will press for agreement on the latest initiatives when they are tabled.