Call for study on liberalisation of railways sparks ‘stalling’ claims

Date: 23/09/1999

By Renée Cordes

FRANCE, Luxembourg and Belgium have called for a three-year study to examine the economic impact of liberalising Europe's railways, prompting accusations they are simply trying to stall moves to open up the market to competition.

The trio argue that the European Commission needs to carry out research comparing markets which have been opened up to competitors with those which have not before mapping out a concrete plan to liberalise the sector.

The call comes after all three made it clear that they remained fiercely opposed to plans to open up the freight industry to competition, despite Finnish attempts to broker a compromise during its EU presidency.

In its latest proposal, unveiled earlier this month, Helsinki suggested that freight markets should be opened up gradually, beginning with domestic transit services and followed three years later by international services. Under the plan, individual member states could be given permission to delay liberalisation, but their operators would then be barred from using infrastructure in countries which had agreed to open their markets.

But even governments which support liberalisation have given Helsinki's proposal only a lukewarm welcome - arguing that it is not ambitious enough - derailing any chances of a deal this year. "At the moment I do not see any middle ground," said a French official.

Critics claim that the call by Paris and its allies for the study into the impact of competition is clearly aimed at putting off liberalisation for as long as possible. "They are pursuing a kind of delay tactic," said one EU official. "The fundamental problem is that the French railways have a very aggressive trade union and they want to make sure that once you start liberalising the railways, you must not forget the social dimension."

But the French, who argue that liberalising the rail sector would lead to widespread job losses as companies sought to cut costs, insist the study is needed to examine whether railways which have been opened to competition have successfully managed to lure freight traffic away from roads.

The move highlights the difficulties that new Transport Commissioner Loyola de Palacio will face in trying to persuade EU governments to agree on the package of proposals unveiled by her predecessor Neil Kinnock last year, which are aimed at ensuring more efficient use of rail infrastructure. Under Kinnock's plan, freight operators would be given greater access to rail networks and more efficient charging systems would be introduced which take into account the environmental and social costs of operating trains.

He also floated plans to force companies which run rail lines and offer rail services to operate as separate entities to introduce more competition into the sector, with the aim of improving services and reducing costs and thereby luring traffic off of congested roads and back onto the railways. Rail now carries less than 14% of EU freight traffic - less than half the figure in 1970.

When they took over the EU presidency in July, the Finns pledged to make getting agreement on the rail sector a priority for their six months in charge of Union business, but they too have run up against French intransigence.

Diplomats say Helsinki's failure to make real headway on the dossier so far is a cause for serious concern. One said Finland was well-placed to broker a deal as it was one of the EU's smallest member states and could balance the interests of the larger countries, adding: "If they cannot resolve this, then no one can."

France, Luxembourg and Belgium have called for a three-year study to examine the economic impact of liberalising Europe's railways, prompting accusations that they are simply trying to stall moves to open up the market to competition.