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The Voice of European Railways
IDEI and Northwestern University - Toulouse 7-8 November 2003
Railroad Industry Structure,Competition and Investment
-Some remarks from the
Community of European Railways
______________________Dr. Johannes Ludewig
Executive Director Community of European Railways
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The Voice of European Railways
CER: The Community of European Railways
The Community of European Railways brings together 34 railway companies and infrastructure managers from the EU Member States, Norway, Switzerland and the CEEC
The CER deals with all policy areas of significance to railway transport
The CER offers advice and recommendations to policy makers in Brussels
CER works in close collaboration with the Paris-based UIC
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The Voice of European Railways
Development of Railway Lines and Motorways (in KM)in Europe (15) from 1970-2000 (Index 1970 = 100)
50
100
150
200
250
300
350
1970 1980 1990 2000
Motorway Railway
Motorways Rail High Speed Lines
1990 40.000 km 900 km
2000 50.000 km 3.000 km
2010 70.000 km 6.000 km
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The Voice of European Railways
50.0%
12.9%
38.4%
0
10
20
30
40
50
60
1998 2010Road Rail Total
The challenge of demand growth – EU White Paper
Achieve a modal shift towards environmentally less damagingtransport modes (« Revitalising RAIL »).
and White Paper objective
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The Voice of European Railways
“Revitalising Rail”
(1) Competition as a necessary condition (2) Industry structure: Rail as a system
(3) How to safeguard system advantages while allowingfor fair competition
(4) Other needs to realise a sufficient framework
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The Voice of European Railways
(1) Competition as a necessary condition
• Starting point in the rail sector Directive 91/440, followed by 1st and 2nd railway package
• Competition leads to a variety of choices for consumers and increases thereby the overall market volume
• (Potential) competition puts pressure on market players to increase efficiency
The European Union has opened up network industriesfor competition
But: -- historical, political differences in EU Member States (e.g. importance of ‘service publique’ in France) -- opening of rail passenger market not so straightforward, overlap between contracted (public services obligations) and commercial traffic (mostly long distance)
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The Voice of European Railways
(2) Industry structure: Rail as a system
• Railways are a track-guided transport system
• The performance of the system is largely determined through the infrastructure
• Traffic management functions (e.g. signalling) will in future be divided between track and vehicle (ERTMS)
• Investment decisions in new rail infrastructure depend on the planned services (detailed planning including train programme, foreseen time table)
• … just to name some examples …
Technical interdepencies and economics of scope exists
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The Voice of European Railways
(3) How to safeguard system advantages while allowing for fair competition
• Although EU Directive only ask for a separation of essential functions, EU policy is leading in some countries to a very complex structure (e.g. Slovenia)
• Some countries separate infrastructure from operations although no competition on tracks takes place or is actively supported (e.g. Finland)
• In Germany the market is completely open since 1994, more than 200 external operators - the system is still integrated
• Final remark: in other network industries (telecommunications, electricity) only functional separation
It is possible to organise competition in different ways, but it is difficult to safeguard the system advantages in a separated environment
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The Voice of European Railways
(4) Other needs to realise the sufficient framework
Infrastructure as key for future development of the rail mode
• Reduce bottlenecks• Build new lines• Dedicated Freight Network / Priority Network• Harmonize investments on rail infrastructure between EU
Member States at European level
Taking into account the long time delays for infrastructure investments=> Decisions have to be taken now !
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The Voice of European Railways
Lines for trains with high speed
Priority networkSeparation of fast and slower trains andHarmonisation of speed
Mannheim
Dresden
Köln
Hannover
Berlin
Leipzig
Dortmund
Frankfurt/M
Nürnberg
Stuttgart
Kassel
Saarbrücken
Würzburg
Karlsruhe
DüsseldorfHalle
Rostock
Magdeburg
München
Basel
Hamburg
Bremen
Erfurt
Wolfsburg
In planning phase
Important other lines
Lines for trains with lower speed
Dedicated network in Germany
Develop Rail Infrastructure
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The Voice of European Railways
BETUWE-Line
• 160 km new freight line
• 25 tons axle load
• 120 km/h design speed
• Capacity: 10 trains/h per direction
• ERTMS level 2
• Early 2007 in operation
• approximately 4 billion Euro investment costs
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The Voice of European Railways
Iberian Peninsula – Ukraine
Iberian Peninsula – Germany (Slovakia)
Benelux – Italy via Luxemburg
CER Corridor Programme 2003
3 corridors analysed.3 action plans developedinvolving RUs, IMs and States
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The Voice of European Railways
Comparable framework conditions between modes of transport- unbalanced assignment of cost to road and rail
(4) Other needs to realise the sufficient framework
• Infrastructure charging (Eurovignette revision) weak points
(1) insufficient inclusion of external costs(2) unclear definition of cross-modal financing options
• The expected Framework Directive on Cross-Modal Charging & Financing has been abandoned !
• Energy taxation
• VAT question
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The Voice of European Railways
In conclusion:The need for simultaneous action
In order to bring rail in a position to reach the targets,three conditions have to be met at the same time
(1) improve railways’ performance to meet market requirements (task by the railways)
(2) establish fair framework conditions for all competing modes (task for politics)
(3) develop the necessary rail infrastructure so that the expected growth in transport demand can be accomplished (task for MS/EU)
This means: EU Commission / Parliament / Council, national governments and railway undertakings must act according to their responsibilities without waiting for one another!