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Liberalisation of the railway sector: will it shift more traffic to rail?

Franz Greil

Arbeiterkammer Wien

International Trade Union House (ITUH)

Room B, 1st floor

Boulevard Roi Albert II, 5, Brussels

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About Arbeiterkammer (AK)

represents 3.3 million employees

and consumers in Austria

self-governing body regulated by public

law

main tasks:

• think-thank for Trade Unions

• participation in and control of

legislation

• services to members

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Policy Issues

Shift2Rail

Fourth Railway Package

Liberalisation and Competition in the rail

sector

The Potential for Modal Shift

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Shift2Rail

Objectives of Shift2Rail:

removal of technical obstacles in terms of

interoperability in the European Railway

Area

enhance the attractiveness and

competitiveness of the European railway

system to ensure a modal shift towards rail

support for the European rail industry to

retain leadership on the global market

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Shift2Rail

AK criticized the role of the S2R-joint

undertaking on:

defining technical standards without

legitimation and public involvement

circumventing the European Railway

Agency

no representation of Trade Unions at JTI-

Board

F&E expenditure ignores the needs of the

railway staff

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Fourth Railway Package

EU-Commission proposals tabled in 2013 on

Technical pillar

Role of European Railway Agency

Interoperability of the Rail System in EU

Railway Safety Certificate

Market pillar

opening the market for domestic

passenger rail transport

Rail Governace

railway undertakings” account

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Technical Pillar

Deal between EP and Council (June 2015)

• ERA responsible for authorisations in cross-border

transport

• Choice between ERA and national safety authorities

(NSA) for national transport

• NSA continue to authorise the placing in service of

track-side control-command and signalling, including

ERTMS

• European Vehicle Register

• Safety culture and occurrence reporting

• No provisions on regular maintenance checks

• Compliance of train drivers with rules on working,

driving and rest periods will be monitored

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Market Pillar

Deal between EP and Council in April 2016

opening up of domestic rail passenger markets from

2020

Competitive bidding for public rail contracts will

become the norm for awarding public service

contracts from 2023, except in certain cases

impartiality of railway infrastructure managers to

guarantee non-discriminatory access to tracks for

new railway companies

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Rail Governance

„Vertically integrated undertaking“

(= railway provider and infrastructure

manager“) confirmed

Provisions on management board

Economic equilibrium for public transport

and open access for railway passenger

services

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Awarding of Public Service Contracts

Competitive Tendering will be the rule

Possibility, but no obligation for transfer of

staff in the event of a change in the

operator

Directly awarded public service contracts

have been saved

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Liberalization and Competition

in the Rail sector

Motivation of the EU-Commission

No choice for customers

No efficient use of public money

No sufficient quality in railway services

To stop the decline of the rail sector

Be aware of the legal competences of the

Commission and the European Union!

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Liberalisation IndexSource: IBM-Deutschland/Humboldt-University Berlin, 2011

The Rail Liberalisation Index provides information on the relative

market opening of the railways in the European Union and other

countries in 2011.

The index includes information on freight transport and

passenger transport (public service, commercial service)

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Liberalisation Index

Among the group of “advanced market opening” (800-1.000 points) are:

Sweden (872) , United Kingdom (865) , Germany (842) , (Denmark 825) , The

Netherlands (817) , Austria (806)

In the group “market opening on schedule” (600-799 points) are:

Belgium (753) , Switzerland (714) , Czech Republic (738) , Slovakia (738) , Portugal

(737) , Poland (737) , Italy (737) , Estonia (729) , Norway (729) , Romania (726) ,

Bulgaria (718) , Finland (672) , Slovenia (672) , Hungary (658) , France (612)

In the group of “delayed market opening” (300-599 points) are:

Latvia (592) , Greece (592) , Lithuania (587) , Luxembourg (585) , Spain (583) ,

Ireland (467)

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Customer satisfaction

There is no correlation between the degree of liberalization (LIB-Index)

and customer satisfaction (Eurobarometer-Survey, Commission)!

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Customer satisfaction

Countries with a very low degree of liberalisation have

partly higher satisfaction scores than strongly liberalized

countries

(FR vs GER, LU vs ITA, ES vs BG)

There are also highly liberalized countries with a high

costumer satisfaction (AT, SE)

There are also countries with a low degree of liberalisation

and a high costumer satisfaction (CH, IRL)

A compelling connection between

liberalization and customer satisfaction does

not exist!

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Competitive tendering

The cost for personal makes the difference!

Requirements for the rolling stock are identical for every

enterprise

Infrastructure costs are identical for every enterprise

Costs for energy are identical for every enterprise

Collective agreements do not provide

sufficient protection!

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Impact on Employees

Reduction of salary jumps

No collective agreements (eg in outsourcing) –

Wage reduction (up to 25% for new workers)

Lower wages in case of outsourcing

New entrants have lower wages

Reduction of bonuses

Trends of wage dumping

Immediate reduction of the basic salary are rare

New working time regime: flexibility, compression and extension

Growing intensification of work and stress

Individualization of employment: income insecurity

Introduction of precarious and atypical forms

Reduction of apprenticeships and further education

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Competitive Tendering and Award Criteria

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Compulsory Tendering leads to

OligopoliesNummer of Bidders (Germany)

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Market Share

There is no correlation between the

degree of liberalization and the performance of the railways

Modal Split (Passenger) and index of liberalization

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Passenger Transport and Market

Share of Rail (Source: Eurostat, 2013)

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Market Shares

There is no correlation between the degree of liberalization and the performance

of the railways:

France: 23th place at Liberalisation Index + 3% in the modal split

Germany: 3rd place at Liberalisation Index + 1% in the modal split

Czech Rep. 8th place at Liberalisation Index decline in passengers

Hungary 19th place at Liberalisation Index highest share

The Modal Split is the distribution of

transport volumes on different means of

transport (Road, Rail, Waterways,

Pipeline)

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Freight and Modal Shift

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Freight Transport in EU – Modal Split

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Railways and Market Share in Europa(Source: Eurostat, 2013)

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The Case for Modal Shift

The unequal level-playing field between Road

and Rail:

Enforcement of working times and periods

for rest

Fees for the use of infrastructure

Internalisation of external costs (accidents,

climate change, air pollution, etc)

Investment patterns for new infrastructure

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Comparison Rail-Road:

External Costs in Freight TransportSource: EU-Handbook on external costs in transport

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Length of the NetworkSource: EU-Transport in Figures

Road Rail

4.808.187 km 215.734 km

Road network and rail network EU-28 = 100%

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The Real Potential for

Modal Shift in Freight

Success-Stories in Switzerland and Austria:

government assistance programmes for

connecting railways and terminals with

production sites (“Anschlussbahnen“)

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Franz Greil

Arbeiterkammer Wien

Prinz Eugen Straße 20-22, 1040 Vienna, Austria

Tel: (+43/1) 50165/2262

E-Mail: franz.greil@akwien.at

Thank you for your attention and

comments!

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Comparison Rail-Road:

External Cost in Passenger Transport(Source: EU-Handbook on External Costs in Transport)

(Source: Handbook on External Costs in Transport)