Series Title | European Voice |
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Series Details | 13/06/96, Volume 2, Number 24 |
Publication Date | 13/06/1996 |
Content Type | News |
Date: 13/06/1996 By TRANSPORT ministers will spend two days in Luxembourg next week studiously avoiding any discussion of their most embarrassing flop - rail liberalisation. To the public, Europe appears on the verge of a railway renaissance, with several high-profile launches of high-speed rails services. The latest, Thalys, has trimmed 30 minutes off the journey between Amsterdam, Brussels and Paris. Meanwhile, Richard Branson, the billionaire owner of Virgin Atlantic, is applying his marketing verve to Eurostar, the cross-Channel rail service which has so far failed to attract as many passengers as had originally been hoped, and the German parliament has just approved the construction of a 450km/hour magnetic levitation train track between Berlin and Hamburg costing 4.7 billion ecu. But the picture is completely different in the freight sector, where rail's share of the European market has crashed from 32&percent; in 1970 to just 15&percent; in 1993, while trucks' take has soared from 48&percent; to more than 70&percent; and is still rising. Europe's rail system remains in the grip of state-owned behemoths five years after EU transport ministers approved a “breakthrough” directive which was rail's equivalent of the Union's 'open skies' regime for air transport. The 1991 directive guaranteed access to all EU rail networks to joint ventures between companies from more than one member state and all firms operating 'combined transport' services - moving cargo through a combination of road and rail. The Commission topped up the directive last July by proposing to broaden access to all EU-registered operators and also permitting cabotage, which would allow Germany's Deutsche Bahn, for example, to run services between Paris and Marseilles. The original directive became a mantra for transport companies hoping to run their own services, free from the inefficient monopolies. But so far, fewer than a dozen private firms have taken advantage of the new opportunity. At first, most member states paid only lip service to the directive: by last July, only four countries - the UK, Denmark, Germany and the Netherlands - had transposed it into national law. Others have fallen into line over the past year, but the Commission has only recently begun the long legal process involved in taking infringement action against Greece, which has not transposed any of the directive, and Belgium, Italy, Luxembourg, Portugal and Spain, which have not implemented it in full. Few governments are even prepared to discuss the “modest” proposals contained in last July's top up, according to a member of Transport Commissioner Neil Kinnock's Cabinet. There are technical barriers to cross-border train services such as differing voltages, signalling systems and safety standards. Rail gauges vary and rail equipment is incompatible. But these are often used as a screen for commercial inertia and blatant protectionism. Kinnock is expected to unveil proposals for sharply higher user fees for trucks to tip the balance in favour of rail at next week's meeting of transport ministers. That is what Karel Van Miert called for during his time as Transport Commissioner, but it came to nothing: truckers also have friends in high places. Bonn, a fervent supporter of the road-to-rail campaign, was responsible for boosting trucking. Deregulation of the rigidly-controlled German transport market in January 1994 unleashed a vicious free-for-all leading to a 50&percent; slump in trucking and Rhine river barge rates that further eroded rail's competitiveness. The Commission's campaign for combined transport - where the initial short journey is by road, the main haul is by rail and the final leg again by truck - also suffered a setback last year. Traffic within Germany fell 15&percent; after Deutsche Bahn, the national rail monopoly, raised rates three times during the year, forcing shippers to return to the clogged autobahns. A five-week strike in France at the end of last year stranded freight wagons throughout the rail network and had a knock-on effect in neighbouring Spain and Portugal. Fears of renewed unrest have made shippers wary of returning to rail and have blunted a nervous French government's questionable commitment to liberalisation. Cross-border traffic, however, surged by 14&percent; in 1995 to the equivalent of more than 2.2 million containers, underscoring the untapped potential of combined transport. The newcomers are finally having an impact. A group of shipping lines - SeaLand of the US and the European companies Nedlloyd Lines, P&O Containers and Maersk Line - have launched independent rail shuttle services from Rotterdam to destinations in Germany and Italy and are considering a service to Lyon. But they encountered numerous obstacles on the way and had to team up with NS Cargo, the Dutch state operators, to break through. The unwritten rule is that nothing gets done without the acquiescence and involvement of the monopolies. Change is coming, however. Only last week, CSX Corporation, one of the largest US railroads, signed a letter of intent for a joint venture with Deutsche Bahn and NS Cargo to provide a door-to-door service across Europe. There are also persistent rumours in the industry that NS Cargo is toying with a plan to run its own logos and wagons on foreign tracks, although the Utrecht-based company, fearing a row with fellow monopolies, hotly denies there is anything afoot. Ironically, it is the UK - where rail's share of the freight market is the lowest in the EU - that is setting the pace. And it is British-styled privatisation, publicly scorned by Kinnock, that takes the credit for an infusion of American blood into the industry. Wisconsin Central Transportation, from Rosemont, Illinois, earlier this year paid 280 million ecu for British Rail's bulk freight operations, recently put in a 310-million-ecu order for locomotives and has said it might lay its own tracks. Freightliner, British Rail's container unit, was sold two weeks ago to its management, which vows to boost traffic by 50&percent; in five years. Railfreight Distribution, British Rail's remaining freight operation which runs services through the Channel Tunnel, has just been put on the block. Meanwhile, Central Railway, a private company with North American involvement, is seeking approval for 2.5 billion ecu for a 180-mile freight railway from the UK's industrial Midlands to the Channel Tunnel. This reads like science fiction on the continent, but there are signs that private operators are preparing to take on the monopolies and their government bodyguards. Compagnie Générale des Eaux, the French water utility which recently acquired a British passenger service, reckons Europe will be wide open if privatised rail succeeds in the UK. Meanwhile, it is doubtful that the positive discrimination espoused by the Commission will tilt the balance from road to rail unless the monopolies become commercial. Pro-rail customers are being forced back on to the more efficient and flexible trucking industry. Avesta, an Anglo-Swedish steel firm, reluctantly cancelled a rail contract for 300,000-400,000 tons of steel a year from a plant in Sheffield, England, to Avesta in Sweden, because of persistent delays. “We have never tried so hard to become a customer and still we failed,” said Evert Wijkander, the company's logistics manager. United Parcel Service (UPS) spends more than 440 million ecu a year on rail in the US but barely 1.5 million in Germany, where it has operated since the 1960s, because the service is not reliable enough for its time-sensitive business. The Commission has taken on the monopolies: it fined Deutsche Bahn 11 million ecu in March 1994 for abusing its dominant market position by rigging rates to favour the German ports of Hamburg and Bremerhaven at the expense of Antwerp and Rotterdam. While the German rail firm is appealing against the fine at the European Court, the Commission is examining a counter complaint by the port of Hamburg that Rotterdam is getting an unfair edge because the Dutch government has given NS Cargo a holiday from track fees until the year 2000. There are some bright spots, notably the 2.3-billion-ecu Betuwe freight-only rail corridor that will link the port of Rotterdam to the German rail network in 2003. But unless EU leaders stand up to their rail monopolies, trucks are set to grab an ever larger share of the continent's freight market. |
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Subject Categories | Mobility and Transport |
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