Peer review: Libor Lochman
Executive Director, Community of European Railway and Infrastructure Companies
Denmark and the Netherlands, both with separated state-owned infrastructure managers, experienced rail freight market share increase of around 60% and 50% respectively between 2002 and 2012. Austria and Italy, both with vertically integrated infrastructure managers, experienced rail freight market share increase by over 40% over the same period.
On the other hand, the Czech Republic, Spain, Romania, France, Slovakia and Bulgaria (separated infrastructure managers) suffered a decrease in their rail freight market share. The rail freight markets of Lithuania, Estonia and Slovenia (integrated infrastructure managers) did not perform well either.
All this serves to illustrate that rail reform in Europe has gone in all directions, despite the increasingly narrow range of possibilities offered by the EU legal framework. Good and bad results have come from different policy approaches - it seems the secret for success lies a little bit beyond choices on governance and ownership. Infrastructure investment enhancing the quality and capacity of the rail network and compliance with harmonised technical specifications are both good choices, as is avoiding geographical fragmentation of management.
The European Commission has been promoting the corridor concept for rail infrastructure operation, upgrading, maintenance and development for years, and this should probably be included in the list of good ideas stemming from the Union’s executive branch. Any sub-national fragmentation should be prevented, since it could re-create at national level those problems we already see at European level, where the said ‘corridor approach’ is often accepted in principle, but in practice often struggles against national priorities.
Also key for any reform of the rail system is co-ordination between rail operations and infrastructure management. Experience shows that vertical integration can be a way for the infrastructure manager to keep a link to market needs via its sister rail operating company. In Member States where the state-owned infrastructure manager is separated, such a link can be emulated by a sound business culture cultivated by the public sector, and by a strong call for efficiency from the public shareholder.
Finally, speaking of efficiency, it is important to incentivise infrastructure managers to run efficiently. But the question is not how to keep customers and shareholders happy at the same time, as if this were a trade-off of some sort. Indeed, it is not only the customers who request efficiency, but also the public shareholder, who in principle should have electoral incentives to request efficiency on their behalf.
If we want to get to the heart of the issue, a lot more should be investigated in this field, beginning with the place that transport policy occupies on the parties’ agendas and the overall quality of EU democracies. Maybe rail scholars should spend more time investigating how transport and rail policies score on the list of hottest topics for political agendas in electoral years. Making transport a political issue could contribute to a better policy – that could be the incentive we need.
