Railway Reform in Europe: Where Are We Now? Railway Operators Facing Competition and Regionalization

Railway Reform in Europe: Where Are We Now? Railway Operators Facing Competition and Regionalization


L Guihery, LET, FR


The aim of this paper is to investigate - through comparative institutional analysis and public economics methodologies - the today situation of the Railway Reform in West and East Europe.


First started in Sweden, then initiated and supported by the European Union, the European railway reform is implemented at this time among the member states of the European Union with some delays depending of the speed ? and the political will - of the implementation of E.U. regulations and laws in national legal systems. Three main directions were designed : first splitting the infrastructure from the activity of railway transport ; secondly opening to competition the access to the network and third achieving a regionalization of passengers regional railway transport. The European Commission adopted on 23 January 2002 a new package ('second package') of measures to revitalize the railways by rapidly building an integrated European railway area. New proposals are today being developed by the European Union : the European Commission has indeed adopted on 3 March 2004 its third railway package containing measures to move the European railways forward.
The aim of this paper is to investigate - through comparative institutional analysis and public economics methodologies (scale and scope economies, benchmarking measures, data on traffic, financial results, productivity and efficiency analysis in Europe and East Europe) - the today situation of the Railway Reform in Europe : where are we now ? How far is competition introduced ? and how ? ? in the railway system ? We will then conclude by showing the challenge and limits of the reform introduced by the Commission. What are the today real brakes of the railway reform ? The development of the reform is then limited by the wish of some public authorities ? France, Germany, Italy - not to destabilize the financial situation ? in the framework of the Maastricht treaty - of the national operators but also to keep the ? leading position of the national operator which is ?satisfactory? at this point for some governments. In France, the financial support of the Central State is an accurate issue of the future of the reform and has to be clarified, maybe also at a European level. Our paper will also highlight the common problems of the railway reform by investigating, for example, entry barriers in railway transport which are very high for newcomers. We will also highlight the impact of the regionalization reform in some countries, for example France. We will show that regionalization is based on a double negotiation process : first, with the central State, it deals with the determining of financial grants due to this transfer of competence without transfer of charges. Secondly, it deals with a negotiation for establishing a convention Transport Authority / Regions and Operators. Organization and financing competence, communication, pricing, quality control will be competencies of the regions. And this is maybe the key point of the future of the Railway reform and its challenge for tomorrow : decentralization in the railway sector?


Bouf D., Crozet Y., Guihéry L., Péguy P ?Y (2002)., Etude du Commissariat Général du Plan : « Performance des entreprises de réseaux ferroviaires en Europe », Laboratoire d?Economie des Transports, juin
Curien N.(2000), « Economie des réseaux », La Découverte, Paris
D. Van de Velde et alii, « Changing train », Oxford Studies in Transport Series, 1999
ECMT (European Conference of Ministers of Transport), 2000 - Summary of Principal Questions on Regulatory Reform and the Development of Rail Freight Markets -CEMT/CM(2000)19/FINAL
ERRAC (European Rail Research Advisory Council), 2003, European Rail Research Agenda available on www.errac.org
European Commission, 2001, - White Paper on Transport Policy for 2010. Time to decide -COM (2001) 0370
Fitzroy F.R., Smith I (1998), « Passenger rail demand in 14 western European countries : a comparative time series study », International Journal of Transport Economics, october, vol. XXV, n°.3
Nash C.A. & Matthews B., 2003, Rail Infrastructure Charges - The Issue of Scarcity ? Papers of the first conference on railroad industry structure, competition and investment - Toulouse, France, 7-8 November 2003
Nash C.A. , 2001, Competition and Growth in Railways: alternative approaches and thoughts on the British experience - Institute for Transport Studies, University of Leeds - Presented at the Conference on Competition and the Development of European Railways, Rome, 14-16 February 2001
News Europe, n°71, 8 janvier 2001
Panzar et Willig (1982), « Contestable Markets and the Theory of Industry Structure », Harcourt Brace, New York
Pietrantoni L. D. & Pelkmans J., « The Economics of EU Railway Reform », Bruges European Economic Policy Briefings, BEEP briefing n° 8, September 2004
Pigou A.C., (1932), « The Economics of Welfare », MacMillan, London, 4th Edition.
Ridley et Terry (1992) « International Review of Railways Privatisation and Major Investment Projects, University of London, Center for Transport Studies
The Economist, 17th march 2001
UIC (2003), « Statistiques chronologiques des Chemins de fer : 1970-1996 », Paris


Association for European Transport