Only intermodal corridors should be promoted

Interview with Johannes Ludewig, CER Executive Director

The evolution of railway freight transport liberalisation can stand as lesson for the liberalisation of passenger transport which entered a straight-line starting January 1, 2010. What mistakes to avoid and what examples are worth following in the liberalisation of the cargo market to make passenger market liberalisation successful, but also the next steps to take in cargo market liberalisation, these were the discussion topics approached by Railway Pro in its interview with Johannes Ludewig, CER’s Executive Director. We wanted to find out what’s new in the European authorities’ legislative approach on railway market liberalisation and how CER’s initiatives impact on this process. Among these initiatives, the prioritisation of intermodal corridors against unimodal corridors and the development of the “Green Corridors” concept.

Railway Pro: What lessons should we have learnt from the almost 4 years since the liberalisation of freight transport and what should the passenger transport libe-ralisation learn from this experience?

Johannes Ludewig: Developments seen over the last few years in the rail freight market show that market opening is an important step in order to create a competitive playing field in Europe. At the same time we have also learned that other complementary conditions need to be taken into account. These conditions mainly include the financing of infrastructure, fair infrastructure charging between modes, the eradication of historic debt, and proper compensation of public service obligations. In many countries, mostly in Western Europe, the importance of these complementary conditions has been more ore less recognised by go-vernments, therefore market opening and liberalisation has led to real improvements for rail. In other countries, mostly in Central and Eastern Europe, however, transport priority number one is road, whereas rail is far from getting adequate political and financial attention. Therefore market opening and liberalisation in these countries has not been a real success story, in quite a number of cases just the contrary.

Railway Pro: How does the interoperability help diversifying the transport offer of European railway companies and how can it stimulate the shift of a bigger number of passengers and a higher volume of freight from road to rails?

Johannes Ludewig: When looking at interoperability we need to take into account both the technical and administrative aspects involved. As rightly underlined at the Global Rail Freight Conference, held by the UIC in July, the administrative interoperability (i.e. tax issues, loading and consignment bills…), or actually the lack of it, remains a barrier to developing the rail freight business today. There is a need to harmonise transport laws, rules and regulations, which still differ from country to country or are interpreted in a different way. As far as the technical interoperability is concerned, it is quite clear that the more homogeneous the technical parameter of infrastructure and trains, the more fluid traffic will be. Many initiatives are underway today in the field of telematics and signalling systems. But one should bear in mind that the migration towards the use of new common technologies is very costly and will require some years before the benefits can be seen concretely.

Railway Pro: Is it useful to talk about competition between pan-European corridors or should the railway sector be exclusively seen as a counterbalance to roads in the attempt of balancing the modal share of transport modes at EU level?

Johannes Ludewig: Competition between rail corridors, road corridors, waterways corridors etc has been pretty much the rule so far; this is unfortunate because road corridors have mostly benefited from public investments. In the perspective of deve-loping a more sustainable transport system, it is quite clear that, in the future, we must think more in terms of “intermodal” and “green” corridors, whereby the long distance backbone of a corridor is dedicated to environmentally friendly modes (like rail) and whereby the short distance capillary distribution parts may be covered partly by road. Considering the environmental challenges which transport causes and a possible future increase of energy prices, it does not make sense to develop a fully-fledged Trans-European Network for road. Only “intermodal” corridors should be promoted. CER hopes that the European Commission will take this simple principle into consideration in its current revision of the TEN-T policy and in its attempt to develop a concept of “Green Corridors”, which can of course be rail corridors.

Railway Pro: How should we approach the European legislation on the development of corridors to satisfy both national and community interests?

Johannes Ludewig: The European Parliament and Council have just approved in second reading a proposal for a regulation on rail freight corridors, the so-called “Regulation concerning a European rail network for competitive freight”. The regulation aims at setting a framework for the selection and establishment of pan European rail corridors, based on an analysis of existing and expected future market needs and on a number of selection criteria. However, CER still believes that legislation alone will not be enough; political drive is decisive. CER therefore invites transport ministries to organise high-level ministerial corridor conferences in order to set up new corridor structures or improve existing corridor structures. The Commission’s role would be to mobilising ministers along corridors and setting up these top-level ministerial corridor conferences.

The TEN-T budget should be increased

Railway Pro: Do you believe the current European legislation satisfies the demand of European operators in regards to pan-European freight corridors?

Johannes Ludewig: The upcoming regulation for a competitive rail freight network is defining a first list of “initial corridors” based on political choices. Further corridors will then be established based on selection criteria, which include market considerations. The regulation fixes rules according to which each member state will be obliged to put in place a corridor within a specific timeline. Moreover, the TEN-T guidelines are being revised, opening more opportunities for a better connected European transport network, including rail corridors. It is difficult at this point in time to evaluate how these discussions are going to evolve. But it is quite clear that CER encourages that corridors are primarily defined based on market and demand criteria and not simply national political ambitions or considerations. This being said, the map of European rail freight corridors will only evolve if appropriate financial means are put into the balance. Today, unfortunately, most national investments still go to building new roads, especially in Eastern and Central Europe. To reverse this trend, it is the responsibility of the European institutions to drive the process and to mobilise member states to re-orientate infrastructure funding. In order to help achieve this, the future TEN-T budget for the period 2013-2020 should be increased to at least EUR 30 Billion (compared to only EUR 8 Billion in the current period), the level of EU co-financing should also be increased and neither TEN-T nor cohesion funds should be used to develop long-distance road projects any longer.

Railway Pro: Is there a completely transparent and efficient method of calculating the infrastructure access charge so that players on the international railway market would be able to compete with road operators and inland waterways transport?

Johannes Ludewig: The proposal of the recast of the first railway package contains provisions aimed at providing more precision on the track access charging system, particularly on the definition of direct costs and on market segmentation. The Commission hopes that its proposals will encourage greater differentiation of charges between market segments enabling lower track access charges (TACs) to be levied where railway undertakings are unable to afford high charges. The context for TACs varies widely between member states. TACs should not be considered in isolation from wider issues, particularly state funding of infrastructure (the other major source of funding for infrastructure) and compensation for meeting public services obligations (whose absence in some member states has a major and negative effect on the finances of railway undertakings). Although CER supports the Commission’s objectives of developing rail and attracting traffic to rail, CER does not consider that regulations established at EU level in the area of track access charging are the best way to achieve these objectives. However, it is quite clear that, in most European countries, the difference of infrastructure charging in rail and in the other modes puts rail at a compe-titive disadvantage compared to these other modes. This difference of charging between modes must be addressed. In this respect, we are grateful that the Belgian Presidency has put the revision of the Eurovignette Directive back onto the agenda of the Council of European Transport Ministers.

Recorded by Alin Lupulescu

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