More investments help crisis recovery 12-18-2009 16:42  CER (Community of European Railway and Infrastructure Companies) welcomes the recognition in the Communication of Commission that carbon emissions from the transport sector need to be reduced and that energy security needs to be addressed. However, we consider that insufficient weight is given to environmental issues and that too much emphasis is given to technology and the setting of standards as providing the main solutions to the emissions problem. Prices, whilst mentioned in the Communication, are given insufficient weight - they are a key part of the solution to transport emissions. Not only will prices that internalise external costs, under the ‘polluter pays principle’, change the behaviour of the users of the transport system, they will also lead to wider changes in society that will reduce demand for less sustainable transport modes and encourage innovation in technology and operational practices.
In this recently published paper, CER pointed out the community's views on the Commission’s Communication, “A Sustainable Future for Transport” published in June 2009. The focus of the paper is on the rail sector but we also consider the role of rail in the overall transport sector and its potential contribution to reducing the growing environmental effects of transport.
Clear priorities
The Communication states that, while it is too early to fully assess the impact of a number of policy measures taken in the last few years, the objectives set out in the 2001 White Paper and its mid-term review of 2006 have been largely achieved.
However, whilst some advances have been made in liberalisation within modes, two other major policy orientations of the White Paper, described there as necessary to achieve the desired modal shift to more environmental friendly modes such as rail, have not been realised in most countries: adequate financing for infrastructure and public service obligations of the railway sector and fair inter-modal competition. As a result, since 2001, rail’s modal share has declined (though admittedly less rapidly than before 2001) and the modal split targets of the 2001 White Paper have not been met. Liberalisation, on its own, cannot revitalise the rail freight business, even in countries where the market share of new entrants has reached impressive levels.
Therefore, CER considers that the objectives of the 2001 White Paper, which it supports, have only been achieved to a limited extent as they affect the rail sector. When formulating policy for the next decade, it must be recognised that there is a need for adequate financing of the railway sector and a proper framework for inter-modal competition, anchored in comprehensive, multi-modal national transport strategies which encompass clear priorities. These other conditions have to be pursued as a package, together with the liberalisation of the railway sector, if there is to a significant modal shift to rail.
An important change since the 2001 White Paper is that 12 Member States have joined the EU since 2004, of which 10 have railways. The railways in these countries generally have different and more difficult problems to tackle than the railways in the EU15. The poor financial architecture for rail and the unfair competitive conditions, arising mainly from unbalanced infrastructure access charges, has caused rail freight traffic to decline rapidly over the past few years in these states.
The financial situation is now getting critical and this will worsen unless action is taken.
Investments in sustainable projects
The railway decline works against the major goals of EU transport policy: to make the transport sector more sustainable and to create a “single European railway area”. This single European railway area is being threatened by the emergence of a “two speed Europe” for railways. Multi-annual contracts between the State and infrastructure managers (discussed below in our response to Question 1) can play a major part in addressing the problem of financial architecture of railways in Central and Eastern Europe.
Paradoxically, in these countries, the decline in traffic may have been aggravated by market opening. Indeed, market entry has been realised in the most profitable market segment of the rail business, the block-trains market, which is generally less at risk of being challenged by road transport. As a result, the rates for block trains have fallen, reducing the self-financing capability of the rail sector.
On of the problems approached in the brochure recently published by the Community of European Railway and Infrastructure Companies (CER) is the current economic crisis which affected and continues to affect of the countries in the Union, especially in Central and Eastern Europe.
In addition to the climate change crisis, the world is now experiencing a second crisis, an economic
Whilst there are signs that some economies are now beginning to emerge from the recession, this is not the case throughout the EU. Also unemployment is continuing to grow in most countries and this may be expected to have an effect on passenger demand for some time.
Further, most commentators predict that that it will be 5-7 years before we return to pre-crisis rates of economic growth. Like the threat from climate change, the economic crisis requires urgent action in the transport sector through investment in sustainable projects which will also help reduce greenhouse gas emissions.
In practice, most member states are providing support not to the industries they own (like railways) but to the private sector, presumably in the belief that they can sort their own industries out later.
However, in Central and Eastern Europe, there is a danger that, in some countries, the cost of dealing with the consequences of failures of state owned companies after the crisis may be far greater than dealing with them now. The EU may then not be able to help member states resolve their problems, CER representatives say.
CER gives the alarm call
It is vitally important that the industry sectors that can really contribute to more sustainable growth in the future (such as rail) are not hit so hard by the recession that they cannot survive until the situation improves. In particular, it is worrying that so many of the efforts of member states to tackle the recession are directed towards the car-related industries, without really demanding any changes to more sustainable business strategies. It is important that growth is based on sustainable transport solutions, capitalising on the strengths of different modes.
CER representatives say there is a need for more investments in rail renewal, particularly in Central and Eastern Europe, small, high return projects to remove bottlenecks in most countries, stations (as carried out in Germany under its recovery plan) some invest Governments should urgently act to develop an equal level of development conditions by ensuring the adequate resources for the railways necessary to provide better services to the customers, as well as a clearer direction of priorities by increasing managerial independence in areas which could allow them to improve their financial performances, such as restraining work force and commercial practices. Elena Ilie
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