Member states set to hit brakes after MEPs give green light to rail liberalisation

Date: 05/12/02

By Peter Chapman

IN 2008, MEPs from Budapest to Bilbao want to be able to get on a train in their constituency and speed all the way to Strasbourg or Brussels on a completely liberalised EU rail network.

Members of the European Parliament's transport committee ratified this liberal vision on 27 November, influenced no doubt by the delays they have suffered at the hands of airlines.

The MEPs argued that without extra competition, under-invested parts of national rail networks would fail to make the grade in the 21st century.

'We need it. If we don't do it some parts of our railways just won't be used any more,' said Belgian Liberal Dirk Sterckx.

If the Parliament has its way, rail freight - shifting everything from gas to girders and even those heavy-metal MEP document boxes - would be fully opened to competition on both domestic and international routes in 2006.

This would trim two years off the deadline suggested by the European Commission. Passenger services would be liberalised by 2008.

But it seems the MEPs are going to be disappointed. The Transport, Energy and Telecoms Council, which meets today (5 December), is expected to slam the emergency brakes on this plan.

It prefers a steadier procession towards rail-market opening - at least when it comes to passenger services. The Commission, too, believes the transport committee's vision is too much, too soon.

'Officially, we will examine the Parliament's proposals. But it [passenger liberalisation] won't happen in 2008,' said a Commission expert.

Even Sterckx admits that he would be 'surprised' if his blueprint wins the support of the full Parliament when it is voted on early in the New Year.

Why this high-speed vision is destined to hit the buffers is clear. Though some member states, such as the Netherlands and Sweden, would like to push ahead, France and its allies in Belgium and Luxembourg cherish their cosseted railway systems too much.

Backing radical rail liberalisation would be unpopular with voters and workers - a powerful combination. This is especially the case in France, where citizens are proud of a rail network that rivals air travel for speed, safety and reliability - and beats it for convenience.

Lurking at the back of ministers' minds is also the fear of any repeat of the debacle of UK liberalisation in the Nineties, when tens of new railway companies were let loose on a privatised infrastructure.

The move cost votes, money and, arguably, lives. Huge swathes of the network have been closed for repairs in recent months following derailments in the London area.

Railway analysts believe that the EU will not wear a UK-style shake-up. 'No one proposes something like that,' said one expert working for a European rail organisation.

'What is being proposed in some quarters is regulated competition with separation of infrastructure from operations and the introduction of more operators. I do not see anyone wanting to privatise the infrastructure,' he added.

More progress is expected on rail freight, which has seen its market share plunge from 21% in 1970 to 8% today.

But again, member states are expected to chug along at a far slower pace than Parliament's transport committee envisages.

Some are likely to want to hold out to see the results of a partial opening of the market in 2003 before making up their minds.

A compromise will need to be found. But experts says freight is less controversial because many member states have already opened up parts of this market.

The success of these forays could make it more difficult for opponents of liberalisation to argue against further freight liberalisation.

The debate comes as the EU's decision-makers examine a raft of draft legislation on rail, unveiled by the Commission earlier this year.

This includes everything from public procurement procedures, interoperability and safety, to the role of a new EU railway agency to oversee standards setting for the industry.

Report on the progress of the European Commission's efforts to liberalise the EU's rail network.