The future recast of Directive 14/2001 is aimed at providing additional details about the track access charge, especially about defining direct costs and market segments. The European Commission wishes that its proposals would encourage a more flexible track access charge depending on market segments which could lead to a lower charge when customers cannot afford paying higher fees.
Track access charges account for a significant part of the cost of a railway operator. The level and structure of the charge are therefore crucial in establishing competition on the rail network. According to government contributions, theses charges are usually the main source of income for the infrastructure manager and represent third the outgoings of a railway company. Therefore the level of track access charges in different countries has a major impact on railway competitiveness.
The way charges are determined is also crucial to a recurring issue all states face: how big a rail network and how many non-commercial passenger services should be supported by the public budget? Undercharging trains threatens the long-term financial sustainability of the network and deferring renewals can increase costs to crisis point in the long run. Undercharging subsidized passenger trains often results in over-charging freight, damaging its competitiveness with road haulage. It is also important to create transparency, continuity and predictability of financial flows. A stable outlook for charges and state contributions to infrastructure financing is of key importance, also because it is a prerequisite for public-private-partnerships for infrastructure financing.
“Often, freight operators pay 5 to 25% of their revenues to the infrastructure managers. Given this proportion, track access charges naturally can be an important policy instrument with regard to rail traffic management”, said in a recent statement Michael Clausecker, Director General UNIFE.
Railway competition needs support
The context for establishing the track access charge vary a lot between member states. It requires various aspects to take into consideration, especially the state infrastructure financing (or other major infrastructure financing sources) and compensation for meeting public obligations (whose absence has a major effect on the financial situation of railway undertakings in some member states). Further clarification on track access charges should not be considered without making decisions that would ensure the appropriate implementation and application of Article 6 of Directive 14/2001 aimed at creating a balance between incomes and costs.
The track access charge and the way in which it should be implemented in order not to perturb the market will be subject of the recast of the first railway package, a document soon to be published by the European Commission.
To reduce transaction costs and provide trade flexibility, orientation on market segments has to be clear, simple and not mandatory. Payment alternatives vary a lot, and not only between different types of traffic, but also between member states, because currently the charge varies a lot also depending on the travel distance. Consequently, it is not possible to standardize necessary market segments.
“The level of track access charges is first and foremost dependent on the level of State funding for infrastructure managers. Levels of charges differ widely across the European Union, and are exactly in line with the level of cost coverage that member state governments offer. The starting point is therefore for member state governments to comply with EU legislation and ensure that the accounts of infrastructure managers are balanced and that track access charges are at levels which the rail market can bear”, declared Johannes Ludewig, Executive Director of the Community of European Railway and Infrastructure Companies (CER) in a recent statement for Railway Pro.
CER believes that the Commission should be careful in defining market segments. CER also believes that the Commission should consider requesting the separation of segments for domestic and international traffic, on grounds that international traffic implies costs which are not included in domestic traffic. However, while international traffic means higher costs for the operator, this is balanced by the fact that international traffic also includes longer distances than domestic traffic and transport is much more competitive on longer distances. Therefore, the payment alternative can be similar and separate segments cannot always be necessary for domestic and international traffic in all member states which, once again, confirm the importance of guidelines rather than that of regulations.
These principles are essential to the economic efficiency of the rail sector. If properly applied, they would offer support not only for the development of container transport, but indeed for all rail market segments.
by Elena Ilie
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