Future service proposals in Europe
Liberalisation of railway markets in Europe has been on the agenda of the European Union for several years. Several directives on railway market liberalisation have paved the way for reforms and liberalisation programmes in many European countries. Probably the single most important piece of legislation was the 1991 European Council Directive 91/440 EC. This directive states the promotion of the single European market and an increased efficiency of Europe’s railways as prime objective.
However, European railways are still characterised by significant differences in the level of liberalisation and open access. Railway liberalisation in Europe is still in its infancy a decade after the introduction of the Single European Market. Only five European Union (EU) members and Switzerland have made much headway in terms of opening up the market.
In vast contrast to the huge growth in demand for passenger rail seen since the UK railway sector was privatised in the mid 1990s (up by an average 12% per annum since 1996), passenger transport in Europe throughout most of Europe is in decline In 1970, it was still above 10% of the whole public transport market-share (the EU-15). Last year, it was only around 6%. Why is this?
Until some years ago, rail markets of the EU countries still had national monopolies dominated lazy and production-led state-owned rail operators, without market access for providers from other countries. As with British Rail in the 1970s, railway companies in Europe are characterised by all too often serving purely political ends. Due to the lack of intra-modal competition, incentives were too low for state-owned companies to develop innovative solutions which could meet customers’ needs.
But Market liberalisation is not just about rail competition. It is vital to enabling Europe to achieve its Environmental aims. By increasing rail market share, there will be a corresponding reduction in road congestion, with a positive impact on climate change. For every car journey replaced by a diesel driven train journey, CO2 emissions are reduced by 35% and for every ton of goods shifted from road onto diesel train CO2 is reduced by 65%. The effect can be even greater if renewable electricity is used in the train operation.
Renaissance Trains is actively pursuing Open Access opportunities in those parts of Europe that are liberalising fastest, in order to bring free-market led thinking to rail operations in Europe and bring an end to the inefficiencies in the passenger rail sector that are borne of a monopolistic legacy. It is precisely by bringing the lessons we have learned in the UK from pioneering free standing from Government subsidy, customer and market led Open Access railway businesses and making them both successful in terms of financial and customer measures, to a market rich in customers hungry to see the benefits of competition – that we intend to forge entry into and gain access to the vast potential that the European rail infrastructure and market opportunities offer.
