The document summarizes the current state of the rail sector in Europe. It discusses the EU's regulatory actions to liberalize and reform rail through measures like unbundling infrastructure from services and creating a single market. Implementation has varied by country, with some maintaining state control over ownership, network management and operations. Empirical analysis found a negative correlation between passenger rail prices and levels of regulation and privatization. However, regulation was not correlated with perceptions of service quality, which still varied across countries. State-owned enterprises continue to play an important role in rail.

1. Rail Sector: Current Challenges and Developments
J. Doleschel, G. Esposito, T. Kaloud, M. Mariotti, R. Marzahn, J.A. Urban-Kozlowska
EUSERS SUMMER SCHOOL
Performance and Governance of Services of General Interest.
Critical perspectives on Energy, Telecommunications, Transport and
Water Reforms in the EU
June, 27th – July 1st 2016

2. Agenda
Overview of Network
Industries
Rail Sector:
- EU regulatory action
- Country-level actual
implementation
Empirical Insights Conclusions
1 2
3 4

3. Network Industries
ETCR indicators, selected countries, 1990–2007. Source: Florio (2013)
Telecommunication, electricity and
airlines: quite effective process of regulatory
convergence
Postal services and gas: limited
convergence
Rail: government-owned monopolistic
structure

4. EU Regulatory Innovation
Liberalisation of the rail
services
Creation of the
common and
intermodal transport
market
EU has decided to launch the reform with a view to create a single
efficient and competitive market for rail throughout Europe.
Unbundling regarding
infrastructure and service
level

5. Regulation TimeLine
1985
1991
?
COURT OF JUSTICE
Case 13/83 re. lack of action by
the Council - Common Transport
Policy, (CTP )
91/440
1ST RAILWAY PACKAGE
4TH RAILWAY PACKAGE
2001
2004
2007
2ND RAILWAY PACKAGE
3RD RAILWAY PACKAGE
International Passenger Service
Domestic Passenger Service
Freight Service
Ownership + Unbundling + Liberalization
Liberalization Framework

6. Implementation Status

7. Country-level Implementation
State: owner, planner, client and regulator
Closed
Open
Domestic Market
Open
Closed
Owner Network Manager Service Operator

8. Empirical Results 1/2
Determinants for the Price of Passenger Railway Services
===========================================================
Dependent variable:
---------------------------
PRICE_Passenger
-----------------------------------------------------------
REGULATION_Entry -2.704***
(0.713)
REGULATION_Public_Ownership -2.672**
(1.288)
REGULATION_Vertical_Integration -8.183***
(1.162)
REGULATION_Market_Structure -0.095
(0.825)
KILOMETER_Passenger -0.197
(0.272)
PRICE_Overall 0.059
(0.046)
GDP_PPP 0.00004***
(0.00001)
-----------------------------------------------------------
Observations 363
R2 0.500
Adjusted R2 0.455
F Statistic 47.183*** (df = 7; 330)
===========================================================
Note: *p<0.1; **p<0.05; ***p<0.01

9. Empirical Results 2/2
Punctuality and Reliability vs.
ECTR Overall Score
ECTRoverallscore
0,00
1,50
3,00
4,50
6,00
Punctuality and reliability
45,00% 56,25% 67,50% 78,75% 90,00%

10. Conclusions
RAILWAY
Liberalization + Privatization
Unbundling
Single Common Market
Main Policy Reforms
N e g a t i v e a n d s i g n i fi a n t
correlation between regulation
and passenger railway prices.
Price
Variable Status:
- Advanced
- On Schedule
- Delayed
X-Country Implementation
No correlation between
regulation and quality
perception.
Citizens’ Perceived Quality
1 2
3 4
5
SOEs’ Role
Crucial role in terms of
infrastructure, service
provider and regulator.

11. Empirical Results (back-up)
==============================================================================
Dependent variable:
----------------------------------------------
PRICE_Passenger INVEST
(1) (2)
------------------------------------------------------------------------------
REGULATION_Overall -6.806 361.892
(8.736) (240.307)
REGULATION_Public_Ownership -0.344 48.593
(5.060) (119.016)
REGULATION_Vertical_Integration 0.402 -444.995***
(3.493) (133.781)
REGULATION_Market_Structure 0.266 -265.819**
(2.604) (117.446)
KILOMETER_Passenger 0.086 6.208
(0.390) (24.032)
PRICE_Overall 0.938*** -13.329***
(0.126) (3.744)
GDP_PPP 0.00001 0.001
(0.00001) (0.001)
SUBSIDIES 0.019
(0.019)
------------------------------------------------------------------------------
Observations 108 276
R2 0.604 0.249
Adjusted R2 0.458 0.225
F Statistic 15.624*** (df = 8; 82) 11.817*** (df = 7; 250)
==============================================================================
Note: *p<0.1; **p<0.05; ***p<0.01