Europe needs a strategy to revive the railway sector on three main axes by gradually introducing conditions that will permit the development of competition in the railway transport market, encouraging standardisation and the technical harmonisationn of the European railway networks with the set purpose of developing the complete interoperability of the European sector and by granting financial support within the community (as we already know through the TEN-T and structural funds).
One of the characteristics of the EU policy over the last years has focused on levelling up the “gaps” in less developed regions and regional state aids could be used to promote the economic, social and land cohesion, as well as the cohesion of member states and of the entire European Union. Another level of public intervention in favour of the railway sector consists in the financial support. This support is many times justified considering the significant adjustment costs in the railway sector.
The granting of state aid to the railway industry can be authorised only where it contributes to the completion of an integrated European market, open to competition and interoperable and to Community objectives of sustainable mobility. Thus, aids are compatible with the common market “if they meet the needs of coordination of transport or if they represent reimbursement for the discharge of certain obligations inherent in the concept of a public service”.
The descending trend of course reflects the difficulties of the railway industry in general, which reduce the incentives for railway undertakings and their capacity to invest in an effort to modernise and/or renew their rolling stock. Such investment is indispensable to keeping rail transport competitive with other modes of transport which cause more pollution or entail higher external costs, this provision being one of the most supported provisions in the EU recently.
Maybe it would be necessary to reanalyze conditions for granting state aids for renewing the rolling stock fleet and for long-distance transport, not just for peripheral regional or for those with a low density of citizens, of course without compromising the actual liberalisation of the international passenger transport and cabotage markets following the application of the Third Railway Package.
Over the past years, most railway passenger transport companies are confronted with a severe drop in the number of passengers and, consequently, rolling stock acquisition investments are minimum or none and most of the times, the modernisation of the rolling stock does not meet the increasing mobility demands.
In the past, operators have known an unbalance between their income and costs, especially investment costs. This has led to major indebtedness, the financial servicing of which represents a very heavy burden on railway undertakings and limits their capacity to make the necessary investments in both infrastructure and renewal of rolling stock.
Several of these railway operators have a level of indebtedness higher than is acceptable for a commercial company, are still not capable of self-financing, and/or cannot finance their investment needs from the revenue from present and future transport operations. Also, in the Member States which joined the Community after 1 May 2004 the level of indebtedness of the companies in the sector is considerably higher than in the rest of the European Union.
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