Legislators tread carefully over rail liberalisation

EU moves to liberalise European rail networks have proved highly controversial.

The sector, which requires heavy capital investments and significant service commitments, tends to be highly politicised. EU legislators have had to tread extremely carefully.

Liberalisation at EU level is covered by the first, second and third railway packages. The first railway package of 2001 brought the ‘unbundling’ of infrastructure management and provision of services. The second railway package of 2004 opened the freight services market with effect from 1 January 2007. After three years of wrangling, agreement on the third package, which tackles liberalisation head-on, looks close. But its provisions have been watered down considerably by MEPs and member states.

Three out of the four main pieces of legislation contained in the package, covering the opening of international rail markets, passenger rights and driver licensing issues, will be given the green light later this month (28 June). An ambitious law on the liberalisation of domestic markets by 2007, however, will be left by the wayside.

Countries such as Belgium and Luxembourg have been influential in blocking the law on domestic liberalisation. Laurent Dauby, a senior manager for rail at the International Association for Public Transport (UITP), says that the UK’s experience of liberalisation (under the railways act of 1993) was largely to blame for giving liberalisation a bad press.

"The UK had a big revolution where they broke the monopoly of British Rail overnight with all the trouble in terms of reliability, safety and service quality," he says.

"Many issues were to be blamed on the poor conditions of the system following years of under-investments, but rail liberalisation was blamed for everything. Opponents still tap into these arguments. Meanwhile, the UK learned some lessons, but at a high price."

Other countries, such as Germany, the Netherlands and Sweden, he points out, have taken a more "progressive approach" to liberalisation.

Under the surviving elements of the third railway package, international rail markets will have to be opened as of 2010, a date that was delayed by two years by the Council of Ministers. The move will allow foreign companies to operate stops in countries with international lines. Licensing standards for train-drivers on medical fitness, basic education and professional skills will also be introduced.

One remaining thorny issue is a law on passenger rights covering issues such as compensation for delayed or cancelled services and services for people with reduced mobility. According to a European Parliament official, "member states do not want to follow this line because it will be expensive".

EU moves to liberalise European rail networks have proved highly controversial.