Applicants told to boost efficiency of railways

Date: 02/03/2000

By Renée Cordes

CENTRAL and eastern European railways must act now to improve efficiency if they want to be competitive with their western counterparts when their countries join the EU, warns a new European Commission report.

The comprehensive study identifies more than 100 areas in which railways in 13 countries need to be improved. Among other measures, it calls for the establishment of autonomous railway safety and licensing authorities, and for firms in the region to separate infrastructure and train operations in the same way that companies in member states are already required to do. It also urges rail firms to develop long-term investment plans.

The dramatic warning is aimed at spurring railway companies in the applicant countries to take immediate action to avoid the problems which their western rivals have already experienced. It comes as EU governments are putting the finishing touches to a long-awaited strategy for creating a single rail market for the Union's existing 15 member states.

"The first thing we are trying to do with the report is instil a sense of urgency," said Mark Brown, a researcher at Halcrow who worked on the study. "There is a potential time bomb, with accession to the EU leading to an explosion of wages in the public sector, making the railways unsustainable. It is a dire situation."

High levels of passenger and freight traffic growth are unlikely in the short term, says the report. As a result, railways will have to work hard to keep their existing market share and income level.

"Railways should be maintaining their competitiveness in international markets, but the lack of adequate administrative, regulatory and operational agreements are increasing delays and costs, and deter many customers," warns the report.

It notes that while the privatisation of railways should automatically lead to improvements, this can also happen if companies remain in government hands as long as there is a shift in thinking towards a commercially-led model of operations.

However, experts acknowledge that making the improvements to the candidate countries' rail networks will be very expensive. In a separate report published last year, the Commission estimated that the countries of central and eastern Europe faced an €86-billion bill for bringing their transport networks up to EU standards.

That study, which was drawn up following two years of talks with the applicant countries, found that Poland had the greatest financial needs because of its sheer size, with an estimated €36 billion required.

The Commission said last week that it planned to spend €7 billion on transport and environmental projects in ten eastern European countries over the next seven years.

Central and Eastern European railways must act now to improve efficiency if they want to be competitive with their western counterparts when their countries join the EU, warns a new European Commission report.