Impacts of Rail Deregulation on Rail Transport Performance

Comparative Assessment of the
Impacts of Rail Deregulation on Rail
Transport Performance
04.07.2012 & Newcastle University

Erasmus Intensive Railway Programme 2010/211
25th June - 13th July 2012, Newcastle upon Tyne 1/

Team members & Mentors

Team members:

Alexandra Staikou, Athens University of Economics and Business [GR]

Comparative Assessment
Antonios Polychronopoulos, University of Newcastle upon Tyne [UK]
Giovanni Marco Vallera, Università degli Studi di Roma “La Sapienza” [IT]
Liviu Stoican, Universitatea Politehnica din Bucuresti [RO]
Loukia Lolou, Athens University of Economics and Business [GR]
Rodrigo Cruz Dourado, Instituto Superior Tecnico [PT]

Group leaders:Michael Madas (GR), Paulus Aditjandra (UK)
Other mentors: Fabian Meier (GE), Tom Zunder (UK), Dewan Islam(UK)

2/

Introduction

• Railways in the past were very popular
• Due to the evolution of road infrastructure

and cars going faster they lost ground
• Because of this EU tried to balance the
situation through legislations and projects
• Deregulation is in progress

3/

Objectives

• The goal of this project are:
1. Compare the impact of rail

deregulation in the different EU
countries
2. Analyse railway sector performance
and identify problems
3. Propose solutions for them

4/

Methodology

• We tried to achieve this by reviewing
laws and regulations from the Three Rail

Packages.
• Our sources were mostly official like the
EU, OECD and Eurostat publications.
• From them we highlighted the most
important things and used them in our
research.

5/

Methodology

• Review laws and regulations from the 3 packages
• Check for Implementation level on freight and

passenger train reading the indicators
• Analytical information was extracted by the
graphs and tables and after discussed.
• This information leads the research team to the
problems that rose through the deregulation
• We can’t change the law but we have some
recommendations

6/

The EU Railway Packages

Directive 2001/12/EC


1st
Package Directive 2004/49/EC

EU Packages
2nd

Regulation 881/2004
3rd


Regulation 1371/2007

7/


 Open the international rail freight market
 Establish a general framework for the development of European railways
 Relationship between the State and the infrastructure manager
 Relationship between the infrastructure manager and railway undertakings

The First Package
Amend Directive 91/440/EEC by:
 Separating the management of railway operation and infrastructure from the provision
of railway transport services;
 Improving the financial structure of undertakings;
 Ensuring access to the networks for rail undertaking engaged in international
intermodal transport of goods.
Infrastructure licensing and charging must be undertaken by an organization that does not
provide transport operations, in order to create unbiased access to infrastructure.

1st Package 2nd Package 3rd Package
(2001) (2004) (2007)
8/


• Freight operators must meet in order to be granted a
license to operate services on the European rail
network.

The First Package
• Licensing issue body must be independent from rail
undertaking
• Rail undertaking can also refer to the commission if it
claims that the national requirements are applied in a
discriminatory manner. In case of such an appeal, the
Commission must issue a statement.

(2001) (2004) (2007)
9/


• Refers to capacity allocation and infrastructure charging
• Infrastructure manager must publish a network statement
that describes the condition and limitation of the network

The First Package
• Infrastructure manager calculates the charge, takes the
track access fees and use them to fund its business (in
according to Member States rules)
• If the infrastructure manager is not independent from a
Railway Undertaking, an independent body must to do all
these functions and collect itself the fees.

(2001) (2004) (2007)
10/


2004’s Directives and Regulation 881/2004
• Development and improvement of safety on the
European’s railways

The Second Package
• Lay down a procedure for granting the safety certificates
that every railway company must obtain before it can
run trains on the European network
• Member States must establish a safety authority
independent from any railway undertaking or
infrastructure manager and collecting safety indicators

(2001) (2004) (2007)
11/


• Member States must also establish
an investigating body independent
from any rail undertaking or
infrastructure manager. It must

The Second Package
investigate any serious accident and
publish an annual report
• Establishes 1 January 2007 the date to open up both national
and international freight services on the entire European
network
• Creation of the European Railway Agency that will establish
common safety objectives that all Europe's railways must
achieve
(2001) (2004) (2007)
12/


2007’s Directives and Regulation (EC) 1371/2007
• open up the international passenger transport market by 2010

The Third Package
• operators will have the opportunity to pick up and set down
passengers at any station on an international route, including at
stations located in the same Member State
• allow train drivers to circulate on the entire European network
with certification of cross-borders drivers, by respecting some
standards
• regulate passengers’ rights (passengers with reduced mobility,
accidents, personal security)

(2001) (2004) (2007)
13/

Deregulation Impacts on EU-Members

• “Tendering is indeed further related to rising
performances in terms of patronage growth

and service reliability, but empirical analysis
seem to conclude that performances are
more akin to the infrastructure investments
coinciding with tendering rather than the
regulatory reforms themselves”
(Aarhaug, et al.,2011)

14/


• Procedure passing from the first railway
package to the second was considered

successful and productive!
• Stakeholders had another opinion…

15/


Organizational models in EU members,(IBM Deutschland GmbH 2011)

16/


THE REALITY AFTER THE 1ST PACKAGE
IMPLEMENTATION:

• In 2003-2004 the railway undertakings and
infrastructure managers had a yearly income
of 50 million.
• Only 51 of the 95 railway undertakings and
infrastructure European managers have
separate accounts for passenger and freight
transport and/or infrastructure management

17/


• Relation between Infrastructure managers
and Government commitments.

• Market is strongly related with
independence.

18/

Railway Liberalization Index

• Index to measure Implementation level
• Track the degree of market opening in the
European railway transport markets
• Promoted by Deutsch Bahn AG, since 2002

LIB Index
(a year after 1st Rail Package)
• A study conducted by IBM Deutschland
GmbH

19/


• Divided in 3 sub-indexes:
• LEX – degree of transposed laws
• ACCESS - for market accessibility level
• COM - rail’s modal split and intermodal

LIB Index
market share
• Each UE-member is rated to the following
categories: Delayed, On Schedule and
Advanced

20/


Delayed
• High density of barriers in law and market
exists and there’s a long way run. New entrants
would expect difficulties to operate on state-

LIB Index
owned infrastructure
On Schedule
• the process of liberalization is currently on
going, although it may be having some
problems

21/


Advanced
• Favorable environment for private
companies and high level in market opening
implementation process

LIB Index
22/


1 – Sweden
2 – UK
3 – Germany

LIB Index
25 – Lithuania
26 – Greece
27 – Ireland

23/


Index Growth 2007-11

Ireland, Italy, Bulgaria
and Belgium

LIB Index
Spain, Latvia and
Lithuania

24/

Performance of rail transport
Licensing

There are five types of licenses:
• Network license (authorises a person to be the operator of a

network, and trains being used on a network for any purpose
comprised in the operation of the network)
• Passenger train licence (authorises a person to be the operator of a
train being used on a network for the purpose of carrying
passengers by railway)
• Non-passenger train licence (authorises a person to be the
operator of other trains being used on a network)
• Station licence (authorises a person to operate one or more
specified stations)
• Light maintenance depot licence (authorises a person to operate
one or more specified light maintenance depots)

25/

Licensing
The number of the railway licenses increased in most EU members
during the period of 2003-2006.

Development of the number of notified and valid licenses, EU 2006

26/

Freight transport

2000-2007: the rail freight transport increased in most EU countries.

Trends in performance rail freight transport 2000-2007, EC 2009

27/

Freight transport

After 2008, there was a decrease in the rail freight transport, due to
the economics crisis which affected a lot of countries.

Trends in performance rail freight transport 2007-2008, EC 2009

28/

Freight transport

Performance of rail freight transport (2001-2010).

Rail freight transport (thousands mio tkm), Eurostat 2011

29/

Passenger transport

2000-2007: the majority of EU members had an increase in the rail
passenger transport.

Trends in passenger rail transport over the period 2000-2007, EC 2009

30/

Passenger transport

In 2008, passenger transport continued to increase but in low levels.

Trends in passenger rail transport over the period 2007-2008, EC 2009

31/

Passenger transport
Performance of rail passenger transport (2001-2010).

Rail passenger transport (thousands mio pkm), Eurostat 2011

2009-2010: there was a small decrease in rail passenger transport.
The sector with the highest increase in traffic is the high-speed sector.

32/

Quality of service

• Safety
• Punctuality

33/

Safety

One indicator to measure the quality of services is the safety.
We can notice decrease through the years.

European railway passenger fatalities per billion passenger-km 1970-2006, UIC 2010

34/

Punctuality

One of the most important problems for passengers is the
delay over scheduled arrival time.

Punctuality of combined transport trains on eight European freight corridors in 2007, EC 2009

35/

Punctuality

% Punctuality

Evolution of punctuality of the combined transport trains 1999-2007, EC 2009

36/

Conclusions

• EU-Members began the legal process of transposing EU Directives
into national law and they completed the legally separation
between IMs and Operators.

• Although we found divergent interpretation of railway legislation
among the countries.
• The top rated countries are UK, Germany, Sweden and Denmark.
These countries are already providing favorable conditions for new
competitors both in freight and passengers service.
• Safety efforts were made and actually are being implemented
sophisticated safety systems and new regulations that lead the
railways to a one of the reliable and safer transport mode.
• Pax- kilometre data show that countries like Germany, France and
UK have an increased performance in passenger services. On the
other hand, ton- kilometre remain stable since the last years.

37/

Suggestions

• Specific training programs may be needed to help railway workers
acquire new skills in order to obtain jobs in technically advanced
railway companies.

• The rail sector faces the real danger of losing know-how if no
training is provided to the beginners because many railway
undertakings over Europe are facing shortages as a result of the
incentive to early retirements.

• Spreading railway-related information and training on a wider
range should become one of ERA’s role. The performance
indicators should be published regularly by an official source like
ERA, in order to better monitoring the deregulation impacts.

38/

σας ευχαριστώ grazie mulţumesc obrigado

THANK YOU !!

danke teşekkür благодаря thank you dank u
ederim

Impacts of Rail Deregulation on Rail Transport Performance

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