Mr Johannes Ludewig, executive director of CER, summarised some of the frustration railways feel regarding the funding of rail transport. "In a normal business, revenue is sufficient to cover costs and development, but in transport it doesn't work. Prices are distorted and revenue doesn't cover costs. This is a scandal - we are not living in a market economy but something else. Taxation on every mode is different, for example airlines don't pay fuel tax. Some countries understand the situation and fund the modes adequately, but in other countries this is not the case. We want to draw political attention to financing. Without it, liberalisation will be very difficult and we will have a better rail service in some countries and not others."
Funding of rail transport in Europe is a mess and varies widely from country to country despite numerous directives and so-called railway packages. Access charges vary widely. Some countries are still failing to compensate their railways for providing socially-necessary but loss-making services. Some governments have dealt with the long-term debts of their national railways while others have not. The gap between the level of investment in eastern and western Europe is widening rather than narrowing.
The problem now is with many European governments adopting austerity programmes to solve their national debt problems there is unlikely to be much appetite for addressing railway funding issues. Nevertheless, railways must continue to state the case for rail.
Of more immediate concern is the huge transformation taking place in the structure of Europe's railways. The incumbent state-owned railways, in particular German Rail (DB) and French National Railways (SNCF), are frantically acquiring as many smaller state-owned or private operators as they can in a bid to grab market share and eliminate as many of their competitors as possible.
Mr Andrzej Wach, CEO of PKP Poland, was particularly scathing. "The European railway market is in the process of deep transformation through capital acquisition. We should bear in mind the threat the expansion of the biggest European railways poses. Liberalisation should not lead from national monopolies to global monopolies. Fair competition needs to be creative not destructive, and equal for all companies. This is only possible through the right legal framework."
Mr Jannie Haek, CEO of SNCB Holding, Belgium, told me after the debate: "I don't think it will long before we are swallowed up. I am very much against what is happening. We should either have proper liberalisation or none at all; artificial liberalisation does not work."
Beleaguered operators are unlikely to find much support from DG Move if Ruete's remarks are anything to go by. "This is a very difficult subject to comment on," he told delegates. "I'm a strong believer that we need to make rail fit to compete with other modes. Railways must no longer think of themselves as national carriers. As with the mergers taking place in aviation, this transformation is happening in other sectors."
Does this mean an end to Europe's bold policy to create a single market for rail transport by breaking the monopolistic grip of the old national railways to encourage open access and competition in a bid to increase rail's overall market share?
Ruete is wrong if he thinks there are similarities between air and rail transport. Entry into air transport is far easier than it is for rail, and it was the advent of the low-cost airlines like Ryanair and easyJet which broke the national monopolies, resulting in real competition and lower air fares. This has yet to happen in rail, despite some valiant attempts by open-access operators.
Perhaps Ruete's remarks explain why the EC's half-hearted attempts to get many of the European Union's (EU) recalcitrant national governments to adopt EU railway liberalisation measures have so far failed.
The European Parliament has instructed the EC to issue infringement proceedings against member states that have failed to open their rail networks to competition. The First Railway Package, designed to ensure fair access to rail networks, should have been transposed into national law by 2003! Don't expect a flurry of activity any time soon. In the meantime, expect the acquisitions and jockeying for position to continue unabated.
