RAIL

NE
LIBERALISATION www.neurope.eu
A NEW EUROPE POLICY REPORT

Monika Heiming, Secretary

General of the European Rail
Freight Association, outlines
what needs to be achieved in the
recast of the 1st Railway
Package. .Page II

The European Parliament's

rapporteur on the recast, Debora
Serracchiani, discusses the
importance of rail liberalisation
for European market. .Page II

DG Transport answers
questions on its continuing role
in the opening up of the rail
freight market.

.Page III
Europorte's Director of Strategy
Francois Coart explains why
deregulation in France has so far
only been a part success.
.Page III

Brian Simpson, the chair of the

European Parliament's Transport
Committee, takes the member
states to task over their failure to
implement the law. .Page IV

Freightline's Business
Development Director, Konstantin
Skorik looks at how liberalisation
can overcome current stagnation in
the market
.Page V
MEP Michael Cramer looks at
the economic, environmental and
social benefits of rail
liberalisation.
.Page VI

Jeroen le Jeune, Chief Executive

of Crossrail, says that rail freight
transport needs to be given a
better chance if it is to achieve a
bright future.
.Page VII

The Managing Director of ERS

Railways, Frank Schuhholz, says
that the Railway Package needs to
be more ambitious if it is to achieve
a level-playing field. .Page VII

MEP Dirk Sterckx laments the

lack of political will in Europe
which is delaying
implementation of full
liberalisation. .Page VIII
 NEW EUROPE
Page II| New Europe
November 14-20, 2010

By Monika Heiming
Ambitions …
ERFA, the European Rail Freight Asso-
ciation, was set up in July 2002 as a direct
“spin-off ” of the liberalisation of the EU
rail freight market by the EC. The mem-
bers of ERFA at that time were a few rail
freight operators in just 6 countries.
Today, the association counts 31 members
in 16 countries. The common objective of
all of them is the same since 2002,
though: they want to seize the market op-
portunities that the EC intended to create
RAIL LIBERALISATION
Rail freight liberalisation
– Ambitions, Problems, Solutions
with the 1st Railway Package in 2001. In
concrete terms, this means a market
which is fully open, which is economically
attractive, which offers optimal operating
conditions, which is interoperable and
which has the same safety standards. In
brief, a competitive, attractive and open
single EU market for rail freight.
Problems …
In 2010, this objective has still not been
reached. In fact, the market for rail freight
services is not functioning due to the in-
correct or incomplete transposition of
Community law by Member States. This
is also underlined in a report to Jose Bar-
roso in May this year, written by Mario
Monti, the former Competition Commis-
sioner.
In June, the EC referred no less than 13
Member States to the EU's Court of Jus-
tice for not having implemented correctly
core elements of the 1st Railway Package:
insufficient independence of the rail in-
frastructure manager, inadequate rail ac-
cess charges and insufficient regulatory
bodies.
On the market, these failures have a di-
rect effect on the business of the members
of ERFA. Since 2007, the number of
complaints for market obstruction, mar-
ket distortions and market discrimina-
tions has increased 6 times. Worse,
though, these problems affect not only the
members of ERFA, but the entire supply
chain: state railways operating in foreign
countries, customers, shippers, forwarders,
wagon keepers, terminal operators, infra-
structure managers.
Systematic problems are experienced in
Italy, Poland and Belgium whilst specific
problems are reported from Austria,
France, Germany, Lithuania, the Nether-
lands, Sweden and others. All are obsta-
cles to enter a market or to operate and
develop on a market on an equal level
playing field, such as:
• Infrastructure managers are discrimi-
nating against new entrants in terms of
slots, resources, information and service
provision;
• Terminals are closed without the con-
sultation of any market actor;
• Requests to use certain infrastructure
sections are not answered or prohibited;
• Energy supply conditions are not trans-
parent and not liberalised;
• Shunting services are priced excessively
by the incumbent monopoly supplier;
• Independent service providers are pre-
vented from entering certain market sec-
tions;
• Safety certifications are awarded for
limited infrastructure sections only;
• Network usage conditions require huge
investments by new entrants in terms of
reserve rolling stock;
• Access to terminals is refused or priced
in a prohibitive way;
• Infrastructure sections are closed or dis-
mantled at short or without prior notice;
• Complaints of competitors are not
treated by regulatory authorities;
• The return of wagons to workshops is
priced excessively;
• State railways are protected against
bankruptcy by law;
• Discriminatory and non-transparent ac-
cess conditions are imposed on workshops
and terminals for their connection to the
national infrastructure;
• Subsidies are given to the national state
railway only;
• Incumbents act de facto as legislator,
regulator and operator;
• Freight facilities and services are trans-
ferred to the national incumbent.
Unfortunately, this list is not exhaustive.
The measures above have already trig-
gered a shift from rail back to road.

INTERVIEW| DEBORA SERRACCHIANI MEP

An efficient rail market will deliver

high quality transport services
How important is rail freight transport in general for
Europe ?
It’s extremely important because in the last ten years, the air
traffic has made a big progress with free liberalization; the
freight transport is liberalized while the rail transport has
made no progress on this. The main aim is that the rail trans-
port freight will be competitive in Europe thanks to the inter-
operability and the revision of infrastructure charges.
What do you think about further liberalisation and more
competition in rail freight ? Is it necessary ? Do you believe in
competition and liberalisation ?
Liberalization exists already but it did not give any results.
There is a lack of interoperability and the infrastructure con-
nections to ports, where they exist, are not well developed.
There are also a lots of technical and administrative barriers to
entry in the EU rail market.
How do you judge the situation on the Italian rail freight
market ? For example, the Italian incumbent Trenitalia ap-
pears to be progressively abandoning the rail freight market
and more goods are shifted from rail to road, including dan-
gerous goods.
Rail freight market is not performing at all but I believe that
liberalization in Italian freight market will be important for
Trenitalia in order to develop the potential that it has in this
sector.
Looking at the situation in Italy: critics say that terminals and
infrastructure sections are being closed, employment is re-
duced in workshops and that the Italian rail freight market is
jeopardised by the monopoly strategy of Trenitalia. How ac-
curate is this?
Yes it is true that the situation in Italy is critical: there is a lack
of infrastructure investment and interoperability and the con-
nections to the ports are poor. That is not Trenitalia’s fault, but
in the last ten years no government has invested in infrastruc-
ture.
If the current trend of “TI policy only” continues in Italy, is
there a possibility the rail freight market is going to collapse ?
No, I don’t think so because Italy has still an important inter-
nal market that guarantees it will survive; the point is that we
do not want just to survive and, to do so, we need to do more.
How important is, do you think, private investment in the
rail freight sector ?
It is extremely important as it can contribute to better develop
this sector. One of the weaknesses of the rail sector is the low
level of public and private investment which cause a very low
quality in infrastructure and services.
What is you opinion on on independent and private opera-
tors in the rail freight market ?
I am totally agreed with the Commission, as I do believe that
there should be independent and private operators in order to
guarantee a major competitiveness in rail sector.
What are the most important elements for you in the Recast
? For example, investments in the infrastructure, more regu-
lation or more independence ?
I think that is very important to increase public and private
investment, as I think it is necessary to delete barriers to mar-
ket access. I believe it is quite important to have also an inde-
pendent regulatory body with specific competencies as an
adequate supervision of the market is necessary to prevent
conflicts of interest and ensure fair competition. But also I
support the unbundling between the infrastructure manager
and the services operators.
How important is the Recast for the rail freight sector in gen-
eral ?
It is extremely important as it contributes adequately to citi-
zen’s mobility and economic growth. A more efficient rail
market can deliver high quality, reliable, safe and secure trans-
port services. It can also contribute to new forms of mobility
that are environmentally friendly.
DEBORA SERRACCHIANI IS THE EUROPEAN
PARLIAMENT’S RAPPORTEUR ON THE RAIL
RECAST
 New Europe | Page III
NEW EUROPE November 14-20, 2010

Solutions …
The problems outlined above, and the
measures taken on EU level are evidence
that the national rail freight markets are
not functioning correctly. The Recast must
tackle all these issues by reducing the anti-
discriminatory potential to the strictest
minimum possible, whilst paving the way
for access for all actors to each sector of the
market:
• To ensure fair competition, the infra-
structure manager must be fully neutral
from all rail operators and therefore sepa-
rated from operations;
• To ensure liberalisation of all market seg-
ments, rail-related services must be open
to all undertakings at clear conditions;
• To ensure rail freight perspectives, infra-
structure investments must follow long-
term strategies which reflect the needs of
all market actors;
• To ensure rail freight market growth,
public assets (terminals, workshops) must
be offered for sale or rent to the market if
they are not used any more;
• To ensure rail freight competitiveness, in-
frastructure access and usage conditions
must be non-discriminatory and regu-
lated;
• To ensure a better rail freight market
functioning, the national rail regulator
must be independent and more compe-
tent.
A strong Recast can provide the EU with
a strong, competitive, innovative and at-
tractive rail freight market. That’s why it
needs a strong support of the EU: the
Commission, the Council and, above all,
the Parliament!
Monika Heiming, Secretary General,
ERFA
RAIL LIBERALISATION
Transport Commissioner Siim Kallas: The Com-
mission is currently pursuing 13 member states
through the courts over failure to liberalise the
rail network
1) How important is rail freight transport
in general, and how important is rail
freight liberalisation in terms of more
volumes and better competitiveness and
modal shift?
While the share of railways in the freight
transport market fell constantly in previ-
ous decades, the situation has stabilised
since the early 2000s when the first result
of the EU's rail freight liberalisation be-
came visible : in EU 27 countries, the rail
share, in tonne-kilometres, in the freight
sector fell from 12.6 % in 1995 to 10.6 %
in 2002, before increasing to 10.8 % in
2008.
After several years of a constant decrease
which was particularly marked in new
Questions for the
European Commission
Member States, rail freight transport has
grown at a not insignificant rate between
2000 and 2007. This is particularly the
case in certain countries where non in-
cumbent rail undertakings have acquired
significant market shares. Example:
freight performance in the UK 13,3
MTK in 1995, 24,8 in 2008.
2) How necessary is further liberalisation
and more competition in rail freight ?
The above mentioned examples show
that rail freight will only be able to fulfil
its role as an environment-friendly trans-
port mode if it becomes competitive in
relation to other modes, in particular if it
becomes customer friendly and if is able
to offer good and reliable services at com-
petitive prices. The development in pre-
vious decades has shown that this is not
possible in a monopolistic environment,
but only where railway companies are
subject to intra-modal competition.
3) How important are private invest-
ments in the rail freight sector ?
If competition is to be developed, it is of
course not enough to have the (ex)state-
monopolist, but private companies must
also have a possibility to enter the mar-
ket and grow.
4) How important is the unbundling
issue and the independence of operators ?
The independence of the infrastructure
manager for decisions on track access and
access charging is essential in order to
create a level playing field and to guaran-
tee that the incumbent operator which
also controls the infrastructure will not
discriminate against new entrant opera-
tors in order to protect the business in-
terests of its own transport operators. An
important aspect in this regard is the sep-
aration of accounts between infrastruc-
ture and transport operation, in order to
exclude that public funds spent on infra-
structure are used to cross-subsidise
transport activities of an integrated in-
cumbent.
5) With 13 ongoing infringement pro-
ceedings against Member States, how is
the effective implementation and appli-
cation of EU legislation best maintained
- at what point does the Commission feel
it needs to intervene?
The Commission is in close contact with
Member States to discuss on infringe-
ment issues in order to solve these issues
bilaterally. Where the Commission has
come to the conclusion that bilateral dis-
cussion will not bring about a solution, or
in cases in which there is a disagreement
with the relevant Member State on the
interpretation of the railway directives,
the Commission has no choice but to
refer these issues to the Court of Justice
for clarification.

French deregulation shows

positive and negative trends
By Francois Coart

Deregulation is France a paradox. In less than 5 years the
market shares of new entrants is over 15%. It took 15
years to achieve the same results in UK, and over 20 years
to achieve 20 % in Germany.
Despite those positive results, the situation seems disap-
pointing as regards volumes, which have been stagnating
since the opening of the market. They dropped by over 20
% in the last 10 years.
The reasons of this lack of performance are numerous:
• Lack of investment on the conventional network with
bottlenecks.
• A priority given to passenger-oriented investments.
• An inefficient system of infrastructure management,
delegating the operation of the system to the historic op-
erator, which triggers unavoidable conflicts even if both
parties are trying to make it neutral.
• A poor path allocation system.
• A complex safety certificate system.
• Sophisticated homologation process for the new loco-
motives triggering shortage and high prices.
• Some operators having a predatory pricing policy, but
neglecting quality.
But the overall picture is far from negative
• RFF, the infrastructure manager, is undertaking a huge
renewal process of the conventional network which will
benefit all operators.
• The government is clearly supporting modal transfer to
the rail network.
• Shortliners initiatives are developed all around France.
• An ambitious, very high speed rail freight schema, Euro-
carex is being implemented from Roissy CDG airport to
London, Amsterdam, Liège, Lyon and Germany.
The recast of the first railway package offers a unique pos-
sibility to continue the opening of the market.
• Giving the necessary tools and means to the infrastructure
managers to ensure open access, empowerment, service
quality and neutrality.
• By making some open access notions on essential facilities
more clear.
• By guaranteeing clear rules and legal background in easy
to understand manner.
• By empowering national regulators to ensure the enforce-
ment of national and European regulations at all levels.
Franois Coart, Director of Strategy, Europorte

Page IV| New Europe
November 14-20, 2010
INTERVIEW| BRIAN SIMPSON MEP
“Member states
should abide by the law”
In a recent transport committee meeting,
you compared the current set-up to
“Thomas the Tank Engine and the Trou-
blesome Trucks”. Can you expand upon
this?
In railway terms, what we have said is
true: the member states are the ones who
are causing the problems, because they
haven’t implemented the first railway
package, so it's member states failing to
implement something that they've already
signed up to. One of the reasons for that is
that there has been certain pressures in
some member states from the national
railway operator, but at the end of the day,
the member states have signed up, so that
is why I call them the “Troublesome
Trucks” because that's exactly what they
are!
This first railway package is not some-
thing we passed last week and expect
them to implement tomorrow. This has
been going on for a number of years, and,
frankly the member states have not put
into action what they agreed to do in the
first railway package, and that is why the
Parliament is cheesed off.
If the Parliament is “cheesed off ”, then
what's the Commission's position?
I think the Commission is as frustrated as
we are. The Commission have a role to
uphold the treaties and enforce Union law,
and in this instance they are trying to do
that, which is why they have taken out
court proceedings against many member
states; and incidentally, once those pro-
ceedings were taken out, some member
states all of a sudden started to take ac-
tion, so I do think they are as frustrated as
we are on this matter.
The first railway package was the first step
in rail liberalisation, and in opening up the
railway market and access to infrastruc-
ture, but it's a bit like running the Grand
National: there's thirty fences to jump and
we haven't jumped the first one yet!
There are thirteen court proceedings at
the moment, the Commission says possi-
bly another nine. Out of the twenty-five
rail networks in the EU, that's still a huge
hurdle to jump.
What we want to see is progress being
made. The frustration from Parliament is
that some member states have done ab-
solutely nothing in regards to implement-
ing the first railway package. Some
member states hide behind the issue of no
NEW EUROPE
RAIL LIBERALISATION
Brian Simpson: Member states are like
"troublesome trucks"
This first railway package is not some-
thing we passed last week and expect
them to implement tomorrow. This has been
going on for a number of years, and, frankly
the member states have not put into action
what they agreed to do
money or no finance or whatever, but the
fault with this is the member states. They
have obligations, they have responsibili-
ties and we are calling them to account.
Which is Parliament's role.
What is a typical argument that a mem-
ber state might put up?
There argument is that if they open up,
then they will damage their own national
railway operators, particularly on freight.
They also say that they think by splitting
their infrastructure it causes a disjointed
railway. The arguments are spurious. They
hold no water, because all these guys
signed up to the package, so therefore,
whatever their excuses are, I don't give a
damn – they signed up! They should abide
by the law, and some of them aren't abid-
ing by the law.
How can you convince people that this
process will not lead to some of the old
problems of privatisation that they had in
the UK, for example?
Let's distinguish between liberalisation
and privatisation. Liberalisation does not
necessarily mean privatisation; privatisa-
tion was the route that the British went
down, liberalisation is a completely differ-
ent route, the route the Swedes went
down.
We're not advocating privatisation, or na-
tionalisation. What we are advocating is
that the rail market has to be liberalised,
and it has to be open so that people can
come in and compete. It may be that it is
the German national railway that is com-
peting with the French national railway
that is competing with the Italian national
railway; that's not private, that's national
railways competing. Half the problem
with this is that certain national railways
are not happy at having competition on
their networks. That's the top and bottom
of it: they want to keep their cosy arrange-
ment in place.
You look at the UK, and yes, it's had its
ups and downs, but one thing you can't
deny is that having had many years of
having no new rolling stock, privatisation
did bring about new investment in rolling
stock. Now, it's not enough, but if we'd
have been waiting for British Rail to build
a new high-speed train, it wouldn't have
happened, if we are to be brutally honest.
Let's look at modal shifts in rail freight,
the connecting of rail to ports. The truck-
ing industry argues that it is are more
flexible than rail. Have the trucks got it
right?
Yes. A truck is inter-modal. It can go
across borders. Other modes of transport,
like maritime, haven't got it right, because
they are always faced with national bu-
reaucracy over customs and goodness
knows what, railways haven't got it right
because they can't deliver, because they
have different systems. The truck has an
easy ride as far as freight is concerned.
There is no competition to it; it's the only,
truly inter-modal form of transport. It's
environmentally a bit of a disaster, but in
transport terms, it works.
Are the Parliament pushing that environ-
mental aspect?
Very strongly. For us, the major issue is a
bout sustainability – economic, social and
environmental. They are the three key is-
sues in any transport policy. And clearly,
if you have a transport policy that forces
everything to go by road, then it falls
down on the key area on environmental
sustainability. But the question I pose is,
why does it go by road? It goes by road be-
cause the railway can't deliver.
How important, then, is private invest-
ment in all this?
Private investment is crucial. If you look
at where we are with public spending at
the moment, it is going to be very limited,
and restrictive. So, private investment is
crucial. But you ain't going to get private
investment on a railway network that
can't give you sure-fire delivery dates or
when it can run the trains and so forth.
There has to be a return in it for private
investors, and there has to be a surety of
service, and this is where railways, and rail
freight fall down. They need to know that
there is political stability, but they need to
know also that the railways can deliver;
the surety of delivering the service.
If you look at America, it is the reverse of
Europe. There they have 90% rail freight,
10% passengers. In America, the passen-
ger train has to give way to the freight
train, in Europe it's the other way round,
so the freight operators are trying to get
slots after the passengers have been given
them. And that is the dilemma we face.
We have to get the railways to move for-
wards, to move into the 21st century, in
the way that they work with each other
and the way that we work towards mak-
ing the railway fully interoperable. If we
fail to do this, then I believe the future if
rail freight in particular is bleak.
Brian Simpson is chair of the European
Parliament's Transport Committee

By Konstantin Skorik
Freightliner Group is the 2nd largest rail
freight operator in the UK, operating
since 1965. Following the liberalisation of
the UK rail freight market, the company
increased its annual turnover from £95m
in 1996 to over £250m in 2009 turning
from loss-making to healthy profitability.
During this period, we created some 1000
additional jobs, increased the daily volume
of intermodal containers from 1.850 to
2.800 and entered the UK bulk freight
market where we currently operate some
1.000 bulk trains per week. This growth
was achieved with investments in excess
of £300 million in new locomotives, wag-
ons and terminal equipment.
In 2007 Freightliner started its Polish
operation that today employs 120 staff
and operates some 100 bulk trains per
week. Freightliner Poland has grown into
"With liberalisation, customers have almost instantly turned to new, innovative offers on rail instead of road"
NEW EUROPE
RAIL LIBERALISATION
Rail freight stagnation at its
best – despite a huge potential!
one of the largest independent freight
railway undertaking in Poland.
Whilst in the UK, the rail freight sector
has benefited from liberalisation of the
rail freight market with a fully independ-
ent infrastructure manager, pro-active reg-
ulatory body, fair infrastructure access
charges and transparent consultation pro-
cedures, other countries on the continent
are still protecting their old-fashioned
railways and not moving fast enough to-
wards opening of their markets.
Such policies in Poland resulted in stag-
nation of the rail freight over the past
decade, while road freight volumes have
more than doubled. Poland started liber-
alising its railways in 2002 opening mar-
ket to competition. It led to modest
revival of rail freight volumes during
2004-2007. During these years, the Pol-
ish incumbent PKP Cargo failed to in-
crease its productivity and to become
more competitive and lost 30% market
share to its competitors.
To ensure PKP Cargo’s survival, the
market access barriers to competitors in-
vesting in the Polish market have been
steadily increasing since 2007. Whilst the
Polish regulatory authority UTK at-
tempted to prevent the homologation for
new locomotives, PKP Cargo obstructed
access to critical infrastructure and sidings
to the competitors so that they cannot
enter certain market segments. The infra-
structure manager PLK, owned by PKP
Group, has excessively increased infra-
structure access charges (e.g. 300% in-
crease for intermodal trains introduced in
December 2009), as the network quality
and performance remained inadequate
and the trains continued to be delayed or
suffered from congestion. The tranship-
ment terminals on the Eastern Polish bor-
ders remained under PKP Cargo effective
control as it charges 5-6 EUR per tonne
to competitors for the last mile services
abusing its monopoly position. These
practices do not effectively eliminate com-
petition, but make rail freight uncompet-
itive compared to road.
Furthermore, PKP Cargo is not only
protected from bankruptcy as per Polish
legislation, but also it squeezes out com-
petitors by applying dumping prices de-
spite mounting losses (PKP Cargo
recorded a loss of 120 Euro million in
2009). Eventually, the increasing debt of
PKP Cargo will have to be paid by the
Polish taxpayer.
The liberalisation of rail freight markets
has proven to be beneficial for rail freight.
With liberalisation, customers have al-
most instantly turned to new, innovative
offers on rail instead of road. Whilst in
the UK rail is becoming a preferred mode
of transport even for time-sensitive goods
and short distances, rail freight in coun-
tries like Poland is stagnating or decreas-
ing because of the national incumbent
New Europe | Page V
November 14-20, 2010
powers to eliminate competition and pro-
tect its home market. This neither leads to
innovation, customer-focus or higher ef-
ficiency nor encourages much needed in-
vestments in locomotives and rolling
stock. Nor it gives any confidence to the
public authorities that taxpayer’s money in
rail freight is well spent.
Therefore, rail freight liberalisation is a
must for the revitalisation of this mode of
transport. The liberalisation requires well
managed open access rail infrastructure
separated from its largest customer - the
national incumbent. The infrastructure
manager should be equipped with sidings
and last mile lines and encourage devel-
opment of open access commercial termi-
nals. Governments have an opportunity to
invest into rail infrastructure and magnify
effect of these investments by granting rail
regulators a stronger role in driving in-
creased infrastructure productivity and ef-
ficiency, ensuring open access and
controlling pricing of the infrastructure
manager.
These measures would attract private
investments, increase rail competitiveness
against road and lead to a strong growth
of rail freight across Europe, not just in
the UK!
Konstantin Skorik, European Business
Development Director, Freightliner.

Page VI| New Europe
November 14-20, 2010
INTERVIEW|MICHAEL CRAMER MEP
Competition leads to economic,
environmental and social success
Michael Cramer: Environmentally-sound trans-
port system is being undermined
In your view, how important is unbundling,
and maintaining the independence of the rail
companies from the regulators?
First of all I would ask, how important is com-
petition? Because we have an opening of the
sky, we have an opening of the roads for trucks,
and in these sectors there is a big increase in the
volume of use. You can feel that it is good for
Europe, but bad for the environment. The rail-
ways, the environmentally-friendly mode of
transport, there we have seen a nationalist area;
and therefore it is necessary to have a European
situation where the access must be for the
whole network across the whole European
Union, and that was the First Railway Package.
For freight transport it was from 1 January
2007, and because the date was fixed very early,
some countries in Europe have said they will
open our networks before this date. There you
can see the following consequences: the UK
has an increase in freight transport by opening
the network for other railway companies; an in-
crease of 60%, the Netherlands, 42%, Poland
30%, Germany 25%, and France in the same
period has a decrease of 28%. So now you can
say that this freight transport is now on the
road, and the jobs are gone. And I say it also to
the unions that it was crazy to fight against the
access to the network because because of the
loss of jobs and because of the climate.
In the First Railway Package it was clear that
there must be a difference between the network,
the infrastructure, and the railway companies,
and we as Greens say that the infrastructure
must remain in public ownership after the dis-
aster in Great Britain, or the disaster in New
Zealand, or Estonia, but we want competition
on the network. Therefore it is crucial that the
organisation is independent. In Germany, we
NEW EUROPE
RAIL LIBERALISATION
It is right that the Commission has
gone to court, because the Commis-
sion has to look after the Treaties,
and the Treaty is clear: there must be a sepa-
ration.In 13 countries, that is not the case
have different railway companies, but under the
head of the German railway authority. So there
is a disadvantage and a discrimination for a lot
of other railway undertakings.
It is right that the Commission has made a re-
port on it, that they have gone to court, because
the Commission has to look after the Treaties,
and the Treaty is clear: there must be a separa-
tion. In 13 countries, that is not the case.
Lots of MEPs have spoken about Modal
shifts. How will the Railway Package facilitate
this?
If you have a truck it is easy for you to take the
truck from Tallinn to Lisbon. In the railways it
is more complicated, because we have more
than 20 different signalling systems, we have 6
power systems, and we have 4 different gauges.
And so, we are looking for a European-wide
signalling system, which is called ERTMS, and
that should be installed in 6 corridors for
freight.
If we have only one system, then the locomo-
tives will be cheaper, because it is different if you
produce 50 locomotives for Germany, and an-
other 50 for Great Britain, and another 50 for
France. But if you can produce the same type,
150 locomotives for all three countries, it is
cheaper, a question of scales.
The lawmaking process goes back about 10
Moving freight by rail can be difficult compared to roads
years, and it might seem to an outsider that it
hasn’t gone as smoothly as it could. How effec-
tive do you you think the implementation of
this has been?
Those countries that are in favour of competi-
tion, they have has big successes, and the oth-
ers not so; but there are hurdles. For example, in
each European country they could only run
their locomotives there if the security system
was OK for that particular country; and that is
the hurdle which is used, not for reasons for
reasons of security, but for reasons of providing
obstacles for competitiveness.
Therefore, we have a Directive, on cross-bor-
der acceptance, that each locomotive in the Eu-
ropean Union, which is accepted in one
member state, is accepted in the whole Union
as long as a country doesn’t say ‘that is not good
enough for us’. If they do, then, they have to say
why it is not good enough. Before, they’d say
no, and other countries would just keep asking
‘why, why, why?’ So, now we have a change, that
those countries have to say why it is not possi-
ble. That is the law, but in reality there are still
big, big, big obstacles.
The European railway agency must have more
power, the agencies in the member states must
give up some sovereign rights to the European
one. They have only to look on the German sit-
uation, or the French situation. All the 25 rail-
way agencies have the same power. That is
ridiculous. There must be an institution above
it, and that must look at security issues, for ex-
ample, and then the member states can look at
the situation in their own country.
How important has the liberalisation of legal
and technical issues been in the evolution of
European railways?
We now have a European licence for locomo-
tive drivers, there was also the passenger rights
in the Third Railway Package, and there is an
opening of the international long distance
trains, which was from 1 January 2010. There-
fore the train will go from Frankfurt via
Cologne and Brussels to London, or to Paris
and so on. Before, it was only if the two agreed,
but now you have a right as a company to go
there.
Also, for tunnels, we need a security law which
is for all Europe, not just for special tunnels, like
the channel tunnel, because then companies say
‘our company has built the trains for this tun-
nel, and the others cannot go there’. And that is
ridiculous.
Where do the Greens stand on private invest-
ment in the rail sector, which in the worst case
can lead to a monopoly?
We are against monopolies in state ownership
or in private ownership. We, as Greens, want to
have competition. We have private companies,
and they have private infrastructure, but the
companies won’t get sate money, or taxpayers’
money, for their infrastructure, and that we
want to change, because it is a discrimination
of private companies by state-owned compa-
nies; they have to pay more for using the system
than the others, because they are not backed by
the state. But what does competition mean?
The German railways wanted to cut a line in
Germany from Kaarst via Düsseldorf main sta-
tion to Mettmann because on one day there are
maybe only 500 passengers. Then the local au-
thorities didn’t want it, and they took away the
line, and called for tender.
The new investor changed the stations away
from the green grass to the places where peo-
ple are living, and they made a combination
with the timetables of buses in the region and
the other trains from the main station in Düs-
seldorf, and after 10 years they’ve had 20,000
passengers. If you had a state monopoly, all the
20,000 passengers would now be on the road,
where today they are using rail. Therefore: no
monopoly. They can decide they don’t like it,
but they should not decide, we don’t like it but
another organisation is not allowed to do it.
Michael Cramer is a Member of the European
Parliament's Transport Committee

By Jeroen Le Jeune
The private rail freight operator Crossrail
was set up in 2002, as one of the very first
operators in Belgium following the adop-
tion of the First Railway Package to lib-
eralise rail freight in the EU. Crossrail
started with a handful of employees.
Today, Crossrail is running trains with
own resources in five countries: Belgium,
The Netherlands, Germany, Italy and
Switzerland. The most liberalized coun-
try of those five is Switzerland, a country
outside the EU.
After 8 years of operational experience
on the market as a private rail freight op-
erator, it is evident that liberalisation in
rail freight has saved the market from a
further downturn. Clients have gone back
to rail freight, new products been devel-
By Frank Schuhholz
ERS Railways was established as private
railway company back in 1994.Today it
is a company which is a 100% owned by
the A.P. Moller-Maersk group. Since
the very first beginning ERS manage-
ment as well as its shareholders were
convinced that the upcoming liberalisa-
tion process within Europe would facil-
itate faster, more efficient and thus
more competitive, intermodal hinterland
NEW EUROPE
RAIL LIBERALISATION
Rail Freight has a great future
…if it is given the chance!
oped and jobs created.
However, our company would like to
develop more destinations and products
but is not able to! We can run trains from
point A to point B, crossing several bor-
ders, with high quality and being prof-
itable. However, we cannot enter certain
terminals, we cannot have access to cer-
tain ports, we cannot use certain services.
Conclusion: we are excluded from ap-
proximately 50% of the market. Even
worse, the facilities and services we want
to use and pay for are mostly subsidised
by public money and they are sometimes
rather destroyed than give others the
chance to use them.
All this does not do any good to rail
freight, but rather the contrary: customers
and industry do not fully trust rail freight
and its potential for growth. But without
rail freight, the EU cannot solve its prob-
lems, like congestion, CO2 reductions and
safer transportation.
More than ever, the EU needs a highly
competitive internal market to be able to
compete with other markets, such as Asia
or India. Such an internal market needs
highly efficient, innovative, reliable rail
freight services to transport goods. And
this transport of goods must be as green
Level playing field essential
for future of freight
connections. Today ERS Railways BV is
the biggest 100% privately owned rail-
way undertaking in Europe active in in-
termodal rail transportation.
How does the management of ERS
Railways see the future of the liberaliza-
tion process within the European rail-
way industry? A lot of positive initiatives
have been launched during the past
years. All were meant to make the rail-
way based intermodal supply chains
more competitive and therefore attrac-
tive for customers like carriers, for-
warders, logistics companies and last but
not least manufacturers.
When looking at today's European rail-
way industry it becomes clear that many
initiatives regarding infrastructure or
harmonized operating and IT systems
have not materialized yet and are even at
risk not to be implemented partly or at
all due to a multitude of political and in-
as possible. Switzerland shows that in-
vesting in rail together with a liberalized
policy does not harm the economic posi-
tion of the country, but instead made it
number one! It also does not harm their
ecological system.Therefore, liberalization
must go on, but we only have achieved
50%.
This is even more astonishing as virtu-
ally all other sectors have been liberalised.
People can choose amongst different tele-
com operators or airlines or shipping
lines. This is not the case in railways.
Therefore, the European Parliament, the
Council of Ministers and the European
Commission must ensure an equal level
playing field for all without any discrimi-
nation.
Thus, the Recast of the 1st Railway
Package is highly important for our com-
pany and its future development. We ex-
pect, and so do our customers, that
infrastructure will be fully neutral and
offer all services necessary for all opera-
tors. This can only be achieved by making
infrastructures fully independent from all
operators, which is not the case today.
Otherwise, it is the same as if a trucking
company builds and owns a majority part
of the roads in a certain country with pub-
dustrial interests as well as budgetary
constraints of many member countries.
In a nutshell: today's European railway
systems are still very fragmented and
complicated to operate on.
In case railway based intermodal supply
chains are expected to cope with a sub-
stantial higher amount of cargo infra-
structure, systems and processes need to
be harmonized and simplified in a way
that railway undertakings as well as op-
erators will be enabled to assume their
roles as important pillars of sustainable
and safe pan-European transport net-
works.
This also requires that national rail au-
thorities, infrastructure managers, en-
ergy providers and state incumbents
understand the need to accept a multi-
tude of railway undertakings (and oper-
ators) rather than accepting or
supporting reverse developments where
New Europe | Page VII
November 14-20, 2010
lic money, collects usage fees from com-
petitors to use those subsidized roads and
use the profits coming out of this activity
to buy other competitors. Today, this is
common business in the railway world!
So, to liberalise the rail freight market,
the European Parliament must pave the
way for the remaining 50 %, which is
made up of single wagon traffic . Single
wagon traffic puts goods on rail than road
right from the start or keeps it there much
longer. To do so, we need free access to
terminals, railports, shunting yards &
services, etc.
In some countries, though, it is almost
too late. For example in Italy, the national
state railway is closing down single wagon
services. Since then, customers are turn-
ing away from rail and put their goods on
lorries again. This applies also to danger-
ous goods, which are transported on road
and in tunnels.
So, if Europe wants to create growth,
jobs, innovation, CO2 reductions, it must
opt for a much stronger rail freight liber-
alisation. Europe has no choice other than
to go forward.
Jeroen Le Jeune, Chief Executive Officer
Crossrail
a few big players dominate this industry
limiting the positive effects of competi-
tion like increased efficiencies, compet-
itive pricing models, innovations etc.
Therefore, the Recast of the 1st Railway
Package must be more ambitious to
achieve and maintain a level playing
field between incumbents and private
operators. Some measures are absolutely
essential, e.g. clearer infrastructure
prices, more independence of service and
facility providers and stronger regulators.
However, these measures must be im-
plemented in a controlled, harmonised
and interoperable way in the EU. So far,
this was not the case, leaving many "no-
go areas" for independent and private
railway operators on the European rail-
way map.
Frank Schuhholz, Managing Director
ERS Railways
 NEW EUROPE
Page VIII| New Europe
November 14-20, 2010

RAIL LIBERALISATION
INTERVIEW| DIRK STERCKX MEP

Lack of political will

is holding things up
than on the department of justice – so
they can’t say that the government is It's a culture; there is an opposition
neglecting them financially. It’s difficult
to say, it’s a culture; there is an opposition to opening up the markets, a general
to opening up the markets, a general idea
that you shouldn’t liberalise railways.
idea that you shouldn't liberalise rail-
In an opinion poll that asked should we ways...there is no political will to try the
liberalise railways, I think you would have
a large majority saying no, because most alternative, so it is forced upon us
people do not see what the alternative
Dirk Sterckx: Too much "monopoly thinking"
could be. And there is no political will to clients chose someone else. That’s the way years ago already. The Commission said,
try the alternative, so it is forced upon us. Europe come in. that is what is happening We absolutely need rail as a transport
There have been problems with the rail now for international passengers and what mode for freight at European level, not at
It is like the postal service in Belgium.
network in Belgium over the ability to will happen when the national markets national level, because the national level
People don’t see the necessity to open up
liberalise the rail networks. What are are opened – you see other people coming doesn’t help us.
the postal market, but the postal organisa-
these problems? in and offering services in a much more We see market share going down dramat-
tion is doing it already – under pressure
from the European Union. But they are efficient way, and cheaper. ically since the 1950s, and we have to do
There has never been a willingness, not in something about it, because rail is an
preparing because the opening of the
the railway companies, and not in the That’s the passenger market. With important part of your modal split. But
market is the end of this year. They have
political majority, to open up the railways freight there are technical issues to be over the last twenty years you don’t see
been preparing for a number of years, but
and to think of the role that Belgian rail- overcome as well. this market share growing dramatically,
our railway company just had a strike
ways can play in Europe, in the European and this is where the European network
because some of the union leaders said
network, let’s say. We have always politi- There’s technical issues, and all kinds of should help.
they are opposed to the fact that our boss-
cally opposed ourselves to opening; both incompatibilities, like in workforce, sig-
es are preparing the freight branch for the
the Belgian state and the railway compa- nalling, licensing, can your driver drive a Is the reason for this lack of growth a
liberalised market. That’s the kind of situ-
nies. train in another country – yes or no? All member state problem? Is it fair to blame
ation we are in.
these things have been originally made for individual countries?
What is their justification for that? national use and not as a cross-border
At what point, and how effectively, can
the EU intervene in the situation? operation in general, and most of them Why not? They are the ones that do it.
The argument is just monopoly thinking. still are. They are all, or almost all, state-owned
They think that this is normal, like,’why companies. No one told the incumbents
Since the freight market has been opened,
would we change after 150 years?’. I don’t It’s not illogical to assume that rail freight that they couldn’t do it – there was no law
you see that others are taking care of some
think that the conviction that change has a cross-border dimension to it. at European level that said you can’t work
of the freight that has to be moved in
would bring improvement is there: they together as railway companies! Yes, they
Belgium. So we have six or seven railway
think they can do it themselves. It is only Of course, and that is what the did work together, but in such an old-
companies working on Belgian tracks.
slightly comparable, but I worked for the Commission has been saying since the fashioned and nationalistic way that it
That’s where you see the way our incum-
Flemish public broadcasting company, beginning of the 1990s, which is twenty never worked; which means that the level
bent is organised; it’s not efficient. So
and we thought we were the only ones of service quality is lower than it should
who could lake TV. They think they are be. They have never really worked on a
the only ones who can make trains. And European collaboration, they have always
they still think that. worked for national protection. And now
you see these things moving slowly, but
Where, though, is this lack of conviction very slowly! There are a few countries
coming from? where it works, and a few countries where
it doesn’t work at all.
I think it’s a habit. People still think it’s
there god-given task to do it. Of course, When they signed up to the Railway
rail is a heavy instrument, it is not easy to package, did they give any assurances that
open up, you need huge companies to do they would sort things out?
it. You can have smaller companies doing
smaller parts of, for instance, freight traf- Yes, that they would separate track and ser-
fic on the market, but in general, like for vice. And it happened legally, it didn’t hap-
the infrastructure manager, it is always pen in practice. This is why the Commission
one of the largest companies in a country has sent so many letters to so many member
by workforce, capital and so on. states, and why the Commission now has
It is not a question of not enough public come out with this recast.
money going to railways. Belgian railways
have a yearly subsidy of more than €3bn, Dirk Sterckx is a member of the
which is huge sum of money, more than European Parliament's Transport
Will rail freight be brought to a standstill in Europe? | Jason Roberts
what we spend on the military, and more Committee