Sunday, September 19, 2010

EU Commission Look At Rail Freight Competition

Division of Infrastructure and Service Provision Ownership Proposed
Shipping News Feature

EUROPE – It seems just as we were writing about the fight in the US by rail freight companies to protect their profits after attempts to repeal the Staggers Act seem to be gaining momentum, the authorities in Europe were simultaneously launching their own initiative to increase competition in both the freight and passenger sectors.

On the 17th September the European Commission adopted a proposal to provide better rail services by increasing competition on the railway market, strengthening the power of national regulators and improving the framework for investment in rail. The European Commission has published a proposal for a Directive establishing a Single Rail Area as an exercise in legislative simplification and consolidation with the merger of the three directives in force and their successive amendments into one coherent text.

Whilst detailing the Single European Railway Area the Commission outlined additional initiatives that they could launch in the next five years. Also, on 30 August 2010 the Commission published its Opinion concerning a European rail network for competitive freight. A consultation will take place on this basis. A detailed study on opening the market for domestic passenger traffic is also to be published.

If they can actually follow through all their intention successfully there is undoubted merit in the proposals and Transport Commissioner Siim Kallas struck a positive note when announcing the details. Following further questioning however it appears that the intention to analyse the separation of infrastructure and rail services is, at the moment, just an intention with no clear route to achievement.

The actual situation throughout Europe is, to say the least complex, if not chaotic, and the examples given by the Commission as to how they propose to proceed look very long term. For example they intend to insist on improved access to rail related services for cargo and passenger trains from competing companies, to establish rules governing “conflicts of interest and discriminatory practices in the rail sector” and to strengthen regulatory supervision.

Rail freight services have been completely liberalised throughout the EU since 2007 and the Commission clearly intends to ensure customers are getting the best possible choice and value for money. Full details of the new rules on infrastructure and charging are viewable HERE.