Interview: EU mobilises all available solutions to reach the 2030 target

The Single European Rail Area. The most ambitious transport target of the European Union which attracts changes, transformations, challenges, tens of strategies and hundreds of projects, financing and agreements, hundreds of companies – from operators and infrastructure managers to the rolling stock manufacturing industry, infrastructure elements, communication and safety systems and solutions; all of these things at first glance are even deeper if we look closer. The fact is that the whole system is very important for the EU economy as it provides direct jobs for 1 million citizens (railway undertakings, infrastructure managers) and transport for 9 billion passengers and 1.6 billion tonnes/year. Therefore, in order to meet the objectives, the railways have great potential in developing a sustainable transport system to support the economy, provide economic and social cohesion and connect Europe.

In the interview below, Mr. Henrik Hololei, Director- General for Mobility and Transport, kindly answered our questions on the situation of EU objectives and the role railways play in creating a fully innovative and connected transport of the future, but also on the importance of European financing and implication of the private sector.

Could you explain for our readers how railways play an irreplaceable role in meeting EU’s objectives, from the establishment of the single market to reducing the environmental impact? How would you describe a sustainable European future considering the importance of railway transport in meeting the UN Sustainable Development Goals and those of the Paris Agreement on Climate Change?

Travelling by rail in Europe is becoming more popular, innovative and competitive. It is also one of the greenest modes of transport. But if rail is to play a bigger role in reducing the environment’s footprint of transport and alleviating congestion, we need a much more efficient and connected network.
A significant amount of our infrastructure funding through Connecting Europe Facility (CEF) is oriented towards projects which support more sustainable modes of transport, including railways. Since 2014, CEF has already supported altogether 690 transport projects, with around
€23 billion and out of this 71% is dedicated to rail projects. Through Shift2Rail, with the participation of the Commission, rail suppliers and the railway undertakings, we are funding an integrated rail research and innovation programme, with almost EUR1bn. The results from Shift2Rail will help us to build the railways of the future that deliver higher capacity, lower costs and greater flexibility.
As the efficiency of rail transport increases, it will further foster the decarbonisation of transport, supporting social cohesion and connectivity across Member States, and continuing in their role as a significant pillar for the EU’s single market.

What do you think about the railways’ share in the development of EU transport regarding the establishment of a single transport market and of a Europe that tends towards digitalization?

Between 2001 and 2016, four legislative packages gradually developed a competitive rail transport industry and created a single market for rail services: a Single European Railway Area. In achieving this the Commission has focused on three major areas: making rail more competitive, improving interoperability and safety, and developing rail transport infrastructure.
The focus on infrastructure involves the development of a Europe-wide network of railway lines (on TEN-T corridors) that requires interconnections and interoperability between national transport networks. Just as for other transport modes, we are certain that rail has much to gain from new technologies. Seamless ticketing will permit the integration of rail with other modes and offer more efficient and more reliable system.
We have a clear focus on promoting the digitalisation of rail, both through our technical regulations and the work of Shift2Rail. Autonomous train operation should rapidly become a reality, delivering higher levels of safety and more flexibility. New technologies can also reduce costs (for example by eliminating the need for much signalling equipment) and allow greater reliability (e.g. automated traffic management). Achieving rapid system- wide deployment of these technologies is vital – but also challenging, given long asset life and the complexity of the system.

Investments of EUR 750 billion are necessary by 2030 to meet the objective of developing the TEN-T Core Network Corridors. There are parties claiming that this deadline is unlikely to meet. What should the EU do to meet this objective?

To have the TEN-T core network in place by 2030, we have proposed a number of streamlining measures. These include simplification of the granting of permits and cross-border public procurement in order to deliver more efficiency, transparency and public acceptance. In doing so, we are targeting the existing red tape that is hampering effective implementation of TEN-T and CEF projects. We continue to work closely with the TEN-T European Coordinators to promote an EU-wide approach to infrastructure planning and implementation of projects with high EU-added value. These are for example cross- border connections where we concentrate on getting rid of bottlenecks and deliver missing links. We will also continue to cooperate with the European Investment Bank (EIB) and other financial institutions to mobilise all available solutions and make sure that we are on-target for 2030 deadline. Following the positive experience we have had with innovative financial schemes, such as blending calls under CEF, we have just launched a CEF Blending Facility for alternative fuels and ERTMS – a first of its kind at EU level.

Necessary investments are huge compared to EU’savailable financing (at least in the current and future MFF), but also with national budget limitations. Also, in some countries, mostly in Eastern Europe, the implementation of projects through the implication of the private parties is still in incipient phases. What is DG MOVE’s approach towards this matter and what stimuli could you use to accelerate the implementation of rail projects?

The choice of procurement (public-private partnership or other) lies in the hands of the Member States. They are also responsible for ensuring the best value for money when investing EU funds, whatever procurement option they choose. Our priority is to check that EU-funded projects are completed and operational on time. We provide guidance to the Member States on preparation and procurement for these projects, especially via JASPERS, the pool of independent experts specialised in large infrastructure projects, and the Advisory Hub. Advisory services will even be further reinforced under the future InvestEU.

Investment in ERTMS deployment is also huge. The report published by the European Court of Auditors emphasizes the poor implementation of the system which endangers meeting the 2030 targets and the development of Single European Railway Area. Although there is the ERTMS Deployment Action Plan, many European countries are facing problems in this chapter. In your opinion, what is the real issue, how could it be tackled and what is EC’s policy to accelerate the harmonisation of the rail system based on the ERTMS?

CEF Transport projects expected results
CEF Transport projects expected results

ERTMS deployment is vital for the rail system of the future – in particular for long-distance freight operations. It has the potential to increase safety, dramatically reduce infrastructure costs by eliminating trackside signalling, as well as boosting capacity. In addition to working with Member States to ensure they implement ERTMS according to the Deployment Plan, we are also working with the industry to address cost issues – particularly in relation to retrofitting rolling stock – and individual ERTMS incompatibilities. The integration of new radio communications systems, automated train operation (ATO), satellite positioning, moving block and new train integrity systems into ERTMS is the next priority. This should further improve the business case, together with the elimination of legacy ‘Class B’ signalling systems and their associated costs.

What do you think about the challenges posed by the Fourth Railway Package in Member States, as important element supporting the vision of the Single European Rail Area?

Once the Fourth Railway Package has been implemented, rolling stock will only need to be authorised once, by the European Union Agency for Railways (ERA), to operate across Europe. The case for full and rapid implementation is therefore evident. Similarly, rail undertakings would in the future need only one safety certificate, issued by the Agency. This means that launching new and innovative services shouldbecomemucheasier. Thenewsystemwould be a substantial change, and ERA will need to cooperate closely with National Safety Authorities. Together with ERA, we have been working hand in hand with the sector to ensure that all players are ready to take advantage of the new processes from June onwards. Many existing national rules, which form a barrier to the smooth operation of the single European Railway Area, are also being abolished. We expect tendering for Public Service Obligation (PSO) services to lead to higher quality and improved efficiency. Nonetheless, Member States will need to develop the expertise to manage the tendering process.

This MFF has a year left. What are the main results of this programming period in terms of rail transport?

CEF funding by transport mode Legend: € billion; (number of projects)

The CEF programme supports the TEN-T objectives in completing the Core Trans-European Transport Network by 2030, and the Comprehensive network by 2050. It also funds projects that enhance rail interoperability, and enable the deployment of a sustainable and efficient transport system. So ultimately, CEF is promoting decarbonisation and the reduction of emissions from all transport modes along the Core and the Comprehensive Network, improving safety and security and encouraging alternative and innovative transport solutions.
In the period 2014-2018, the CEF programme supported more than 250 projects related to completing the railway infrastructure network, deploying ERTMS, improving railway interoperability standards and reducing noise from rail freight. For these priorities, the European Commission’s Directorate General for Transport (DG MOVE), through the Innovation and Networks Executive Agency (INEA), has provided EU support of more than EUR 16 billion (representing 71% of the total CEF Transport budget), triggering overall investment of more than EUR 30 billion.
While the majority of CEF-funded projects are ongoing, some important results are already visible, such as the complete deployment of European Railway Traffic Management System (ERTMS) Level 1, Baseline 2, for
29.5 km along the double-track rail section Ans-Angleur (Belgium). This has helped improve railway traffic management and safety for both the Rhine-Alpine and the North Sea-Baltic Core Network Corridors.

Over 70% of the current CEF Transport went to railway projects, clearly expressing EC’s commitment to decarbonise the economy and favour environmentally friendly transport, especially railways. What strategy do you have to pursuit this trend within the Connecting Europe Facility 2021-2027?

The proposed CEF 2021-2027

The new programme will support infrastructure for sustainable, smart, inclusive, safe and secure mobility, and will prioritise environmentally more friendly modes (such as rail and inland navigation) and the development of charging points for vehicles using alternative fuels. We have proposed a binding target: allocating 60% of the budget to tackling climate change. I am very happy that the Council and Parliament support this direction

The dual-use (civil and military) transport infrastructure and adapting the infrastructure to military mobility were debated for the first time within CEF. What would be the balance between the decision power of a Member State and that of the EU since, on the one hand, there would be some exposure regarding the security of an individual Member State, while, on the other hand, there is the EC policy on creating a fully-fledged Defence Union by 2025?

Defence policy remains the responsibility of the Member States, and the European Commission fully respects national decision-making autonomy. It is therefore up to individual countries to identify what infrastructure investments are required to deliver seamless military mobility across Europe. They are not obliged to submit proposals for financial support if they assess that it would expose classified information. Our role is to facilitate project implementation by providing co-funding. We are currently working on a strategy outlining how to protect sensitive information when dual-use project proposals are submitted and funding is granted.

What results do you expect from the CEF Transport Blending Facility regarding railway projects?

We launched the CEF Transport Blending facility this year. The new tool aims at increasing, through blending, private sector investment in trans-European transport infrastructure. To put the new system in place, we are working with partners such as the EIB and National Promotional Banks (NPBs). For the railway sector, the facility foresees almost €100 million for the deployment of ERTMS functionalities, for on-board (ERTMS Baseline 3-equipped vehicles) and track-side equipment (including ETCS and/or GSM-R and/or interlockings). The facility is expected to trigger a higher share of private investment, helping us achieve our TEN-T objectives. This is a pilot in view of larger scale operation in the context of the future InvestEU instrument, available from 2021. I am eager to see how the sector will respond.

Although they benefit from additional financing, Eastern countries are facing great challenges and gaps compared to Western Europe. How should this problem be approached so that Europe could reach the maturity of a real Single European Rail Area?

CEF funding by country (2014-2016)

After breaking free from communist chains and with the subsequent economic challenges that affected most countries in Central Europe, maintenance of the existing, fairly dense, railway network was neglected for quite a while. Capital expenditure in the final years of the communist era was not sufficient to keep pace with development in neighbouring countries, particularly in Western Europe. This resulted in creation of a significant gap in technical standards between different railway networks within the EU.
Today the countries from the Eastern part of the EU are however rapidly catching up in terms of infrastructure quality and EU support plays here a significant role. For example, CEF earmarked EUR 11.3bn for the development of the TEN-T network in Central Europe and the Mediterranean under the Cohesion Fund. The entire amount has been allocated, mostly to rail projects, and we are happy with the pace of implementation.
On this basis and knowing, the need to catch up I am convinced that we should keep a specific financial envelope for these countries also during the next programming period, and I am therefore happy with the agreement between the Council and Parliament on CEF for 2021-27. This will enable us to continue closing the gap and address historical challenges, like connecting the Baltic States with the rest of Europe through European gauge 1435mm railway line. There are also significant interoperability challenges which are present in all parts of the EU, like the ERTMS deployment which we need to speed this up significantly.

What are the challenges and the mistakes of Eastern European countries when it comes to the absorption of the European funds and implementation of rail projects?

Design on the future Praha-Vysočany Source: SZDC

EU funds come with specific rules on eligibility, timeframe and reporting requirements that all national administrations have to follow. At the same time the lack of administrative capacity in some member states results in long procedures, delays and cost overruns. Implementing a large number of projects in a relatively short period of time also puts pressure on civil contractors, inflating prices as we have seen in some member states. The Commission is aware of these challenges and we work closely with the authorities, to support capacity-building and the exchange of best practices.
Through the CEF and the Structural Funds, the EU offers a lot of support to rail projects in cohesion countries. Even though there are encouraging developments in absorption rates of the transport infrastructure financing, some complex projects such as ERTMS are lagging behind. That is why we support capacity-building also through a variety of tailored measures, from JASPERS consultancy, in cooperation with the EIB, to ERA and the ERTMS Deployment Management Team.

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