Railway Days: Encouraging the private sector is vital for railway development

The railway sector needs private investments. “Formally, the railway market is open to new entrants for both the freight and the passenger sector. They bring competition, which creates improved service levels, stimulate innovation and increased efficiency, leading to growth.
In practice, state railway undertakings and their state owners seek to strangle newcomers and retain monopolies for as long as possible.  Hence their opposition to the Governance part of the 4th Railway Package. This also puts off new private investments; the private sector may find the political risks  of fighting state monopolies too great”, declared Lord Tony Berkeley, Chairman of the European Rail Freight Group-UK (ERFA).
Fair and transparent structures between IM and all railway undertakings will encourage investment and minimise the political risks which currently exist because of the close relationship between state-owned RUs, their IM and the Public Administration.
The IM must offer optimum operating conditions to all RUs, with no special privileges to the RU owned by the same Holding. There must be full transparency of financial flows between different parts of the holding; remove the unfair practices outlined above and proactively encourage competition; strong, independent regulation to oversee all elements of these structures.  This is necessary, but is not a substitute for the structure.
“The most efficient way to guarantee a truly open market is to eliminate the need for discrimination at the root. The market pillar of the 4th Railway Package includes efficient solutions”, explained Berkeley.


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