Monday, September 28, 2009

EU Rail Continues Swing Back To State Ownership

Veolia Sale Indicates Possible Future of Rail Freight
Shipping News Feature

EUROPE – After freeing up national rail freight systems in a wave of privatisation moves, the EU is seeing a rapid return toward what is effectively monopolisation, if not nationalisation, after a series of deals involving the Unions rail companies this month.

The takeover moves we reported in June have resulted in a joint venture between SNCF and Eurotunnel taking control of the assets of twenty or so subsidiaries of the Veolia Cargo Group. The deal assists Veolia’s French parent group Veolia Environnement SA to reduce debt but means SNCF obtain ready made rail facilities in Germany, Holland and Italy to add to its already recently expanded portfolio; this, after the sixth Government bail out in recent years. Opponents point out this deal is diametrically opposed to the EU’s pronounced liberalisation of the industry.

Several industry figures have complained that the latest moves further reduce competiveness in the freight rail sector and pointed out that the latest French government move to support SNCF’s ailing freight division was interference in the supposedly open market.

Meanwhile Eurotunnel takes on all the French assets including Socorail and further strengthens its own monopoly position as the only rail through-point to the UK. Deutsche Bahn meanwhile have moved lately to increase their own share of the freight rail network outside their native Germany with major acquisitions in Poland and Switzerland to add to their European wide holdings.