Rail freight plans gather momentum

Date: 14/11/1996

By Bruce Barnard

THE battle to liberalise Europe's railways will enter a critical phase in the coming months as the industry's key players respond to European Commission moves to inject competition into the freight sector.

The situation is finely balanced, with rail unions in several countries plotting to derail liberalisation while private operators fine-tune plans to launch pioneering cross-border services.

French Transport Minister Bernard Pons cited “anxiety and doubt” among rail unions and MPs when he postponed this week's national assembly debate on plans to reform the state railway SNCF.

Meanwhile, the Brussels-based EU Federation of Transport Workers has called for a day of action across Europe next Tuesday (19 November) to protest against Transport Commissioner Neil Kinnock's White Paper on rail strategy.

The pro-market countries are, however, striking back, raising hopes that at least part of the Union will enjoy genuine competition within a few years.

The Danish government has just unveiled plans to streamline its state railway DSB on 1 January and to open its network to competition from private and foreign firms for freight and passengers.

The Danish move paves the way for the creation of a competitive north-south rail network across the liberal continental nations from Sweden through Denmark, the Netherlands, Germany and Austria.

This free market corridor will probably take in Italy, where day-to-day cooperation between private freight operators and the state railway FS more than compensates for the inactivity of the Rome government.

The gathering momentum behind liberalisation after decades of inertia has infected Kinnock, who is suddenly getting bullish about a sector that has sorely tested his patience since he arrived in Brussels.

Cheered by strong backing from Bonn on top of earlier support from Austria, Denmark and the Netherlands, Kinnock believes his plans for open access 'freight freeways' will get off the ground.

He told a recent meeting of European shippers in Antwerp that it was “realistic to anticipate the first freeway in not much more than a year's time” if the “significant” progress made so far by a high-level working group was maintained.

“We can expect three of these four countries [Austria, Denmark, Germany and the Netherlands] to figure in the development of the first freeway,” he said, forecasting that this would lead to the rapid development of other corridors.

But Kinnock does not play down the hurdles facing his initiative to transfer freight from clogged roads to under-utilised rail tracks even if the rail monopolies are dismantled.

“At the moment international freight services are an afterthought in Europe's railway system,” he acknowledged.

In a bid to hasten liberalisation, Kinnock said that he had decided not to get involved in lengthy court actions against those countries (Belgium, Luxembourg, Spain, Portugal, Italy and Greece) which still have only partially transposed a landmark directive on open access to the track which came into force in 1993.

The pro-market camp will get a powerful fillip in early January when NDX Intermodal, a joint venture between CSX Corp, the giant US railroad, and the Dutch and German railways, launches a regular service between the port of Rotterdam and Munich.

“It is the first pan-European operation of its kind,” said John Padalino, general manager of NDX Intermodal.

NDX plans to start other services from north European ports to Germany and northern Italy during 1997 before the first EU 'freight freeway' is operational.

The cooperation of Union governments and their railway protégés is easing the process of setting up private operations, although the involvement of state firms is still needed to smooth entry into the industry.

It took over a year to set up European Rail Shuttle (ERS), an independent service between Rotterdam and Milan which is held up by the Commission as a role model for other operators.

Kinnock is meanwhile picking up plaudits from both sides of the industry. Padalino praised his “persistence and vision”, while Hendrick Baasch, chairman of the European Shippers' Council, said he was the “most prolific of Transport Commissioners”.

Kinnock himself is sounding apocalyptic about his mission, which he says is “to rescue part of the rail system from termination in the next ten to 12 years”.