Transport policy goods by rail. The way to an open european rail market

Transcription

1 Transport policy goods by rail The way to an open european rail market

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3 3 Foreword The Confederation of Swedish Enterprise views increasing growth and competition as essential for the creation of a stable and affluent economy. Transport policy is clearly an important link in the overall development policy. We know that Swedish companies have the potential to acquire a larger share of the global market, enabling Sweden to improve its position on international lists, which rank levels of prosperity and competitiveness in different countries. However, in order to achieve this goal, a change in public policy is necessary to stimulate economic growth. A modification of the current tax system and tax base is considered an integral part of this transformation. Since the late 1980 s, a great deal of effort has gone into transforming the Swedish rail system. Invaluable experience has been gained that can now be shared with fellow EU members. In the spring of 2002, the Swedish Shippers Council (SSC) discussed how to improve the rail transport system in order to meet the demands of the business community. The European Union (EU) has already initiated work on this transformation and it is clear that an effective transport system plays an important role for international trade. The next few years will be important in determining the future of the European rail system. We have, in this document, identified a number of key issues that must be addressed by the Swedish business community. We have proposed a framework, a set of rules and prerequisites, as well as proposed resources for investments in the infrastructure. Stockholm, September 2002 Kenneth Ramberg Confederation of Swedish Enterprise Swedish Shippers Council

4 4 Summary An effective trans-national railway system for freight transport is vital for Sweden s prospective to maintain a competitive position as an industrialized nation, characterized by a dynamic and growing economy. EU s railway package has laid the groundwork for improving rail freight transport. Legislation concerning rail traffic and rules for official licenses and fees must be harmonized throughout Europe. It is necessary to establish distinct and separate roles for the various actors on an open European rail market. Rail operators should be responsible for the flow of traffic, infrastructure managers should maintain the tracks, and regulatory authorities should establish a framework of rules equal for all players. The rules of competition applied to European railway companies must be the same as the rules applied for commercial companies. Current exemptions for the railway from EU s rules of competition must be abolished. The Swedish National Rail Administration s maintenance plan for the years , must be based on a corridor strategy for rail investments. Transport hubs should be established, integrating various modes of transport to form a comprehensive Swedish freight supply. Investments in research and development aimed at the owner of goods within the railway system need to be increased.

5 5 Our Vision The Confederation of Swedish Enterprise is working to attain an open and effective European railway market. The goal is an attractive and competitive railway, integrated in a trans-national chain of transport, built upon cooperation between various modes of transport. the need for cross-border transport increases, as business becomes more international. Over the past few years, companies from a broad range of Swedish industries (e.g. steel, forestry, light consumer based industries) have taken initiatives to develop solutions, where the railway works in close cooperation with other forms of transport domestically, as well as internationally. The railway system is ideal for the long distance transport of freight due to its high level of ambition regarding frequency, precision, and capacity. This is relevant for the transport of goods from Sweden to continental Europe, as well as for the transport of raw materials and supplies from Europe for further processing and assembly in Sweden. further development of the railway s role When the right conditions are created in Sweden and the rest of Europe, the railway system will be well positioned to meet the high logistical demands for freight transport. To achieve this, it is essential to develop an efficient infrastructure and transport economy, along with technical and organizational development, and to establish well functioning rules and market conditions. Together with other interested parties, Sweden can assist in accelerating this process by taking a distinct and active role in the development of EU s rail system. The objective is to achieve an open, integrated, European railway market that ope-

6 6 rates across national frontiers. Cost-effective solutions must be designed to meet the high demands for sophisticated logistical solutions, such as reliability, safety, and punctuality. The rail system would cooperate with other modes of transport as a well-integrated part of a total transport network. the railways must be integrated in the eu common market The transformation of the rail system from a national monopoly, exempt from EU s rules of competition, to a matter of European interest and an integrated part of the common market must be accelerated. The Confederation of Swedish Enterprise is convinced that exemptions must be abolished that protect the railway from competition and hinder adaptation to the open market. All commercial companies must work under equal and non-discriminatory conditions in the EU. If the current trend of decreasing market shares in a growing transport market continues, the role of Europe s rail system will diminish. This would be a great disadvantage for Swedish and European industry, and therefore immediate changes are necessary. There is a strong consensus among European players that a more effective utilization of the rail system would make rail transport more attractive. Potential problem areas have been identified and a large number of proposals for the revitalization and development of the European rail system have been presented. Free access to the railway infrastructure for various players will lead to a more effective use of railways as a mode of transport. It is in the best interest of business, and society at large, that the conditions under which the rail market operates are fair and non-discriminatory. The EU has proposed two railway packages that would provide the prerequisites necessary for reforming rail transport regulations. Sweden has been involved in the transformation of the railways for quite some time. At the end of the 1980 s, Sweden developed a model where there is a clear separation of infrastructure management from transport operations. This model has been heralded as a trendsetter and has since been adopted by several other countries in the EU. The basic assumption for the discussions at the Confederation of Swe-

7 7 dish Enterprise has been that Sweden and the other Nordic countries will continue to act as forerunners by opening the railways to other players in the transport market. Current discussions and analysis regarding organizational changes and changes in roles and regulations, will set the stage for this transformation. The Nordic countries can take a leading role by jointly developing a customer oriented, cost effective, and technologically advanced rail system. They can serve as a model by developing joint standardization and harmonization procedures, beginning with standards for heavier and wider trains and new rolling stock. Such efforts would serve as a concrete application of the main principles inherent in EU s rail packages: An open, integrated, Nordic rail market for the transport of goods. railway legislation must be harmonized and modernized. Swedish and European rail legislation must be completely harmonized and modernized. The basis for this must be the EU s railway package, which was adopted in 2000, and followed by a second package presented by the EU Commission in January There are two essential starting points: The first is to achieve a complete separation of roles within the railway sector Infrastructure management, transport operations, and regulatory supervision. Second, the railway must be made part of the common market and subject to EU s rules of competition. The key point of this transformation is to achieve an increased interoperability by coordinating safety, signaling, electric, and regulatory systems for all of Europe, in order to facilitate cross-border rail traffic. The continuous addition of new laws to existing legislation has previously led to uncertainty and interpretive difficulties. The Confederation of Swedish Enterprise envisions a thorough alteration of railway regulatory systems that would reject all inappropriate and outdated rules. Current rules that are relevant for future development, would be harmonized on the EU level and reorganized into a modern, comprehensible regulatory system. To achieve this goal, a separation of infrastructure managers, transport operators, and regulators, is required.

8 8 operator network on the european rail market The Confederations of Swedish Enterprise advocates a Europe-wide market network where a variety of operators are given the opportunity to pursue cross-border rail transport based on equal and non-discriminatory conditions. This development would be based on right of access to rail systems and broadening the definition of the traffic operators to include shippers and freight forwarders, also known as authorized applicants. As a result, Swedish tracks would be open for foreign traffic while Swedish operators would have the opportunity to pursue freight transport on the railway network of other European countries. On the European rail market today, there are numerous mergers and alliances taking place between well-established transport operators. One example is the establishment of Railion, which was formed by the merger of the freight divisions of the German and Dutch railways. Deutsche Bahn is majority owner and has also purchased the freight division of the Danish railway. It is, therefore, essential to guarantee the principle of open access for a great number of traffic operators. An ominous scenario would be a European market totally dominated by one or two players. Other rail operators would then function as feeder companies and the market would be locked in an oligopoly. The European Commissions Competition Directorate must follow competition and development on the rail market closely to ensure that new operators are given access to the rail network under non-discriminatory terms. The effects of mergers, both on a national level and on a European level, must be examined. The emergence of new barriers, hinders to the establishment of new operators, and trends leading to monopolization must be prevented. As a members of EU, the Swedish and other European governments must work towards developing comprehensive rules of competition, equal for all companies, which would obstruct tendencies towards the formation of monopolies and oligopolies. the harmonization of rail fees ensures fair competition As the Swedish business community becomes more international, the level of crossborder transport increases, as do the number of operators and infrastructure mana-

9 9 gers. If the railway is to be considered a viable means of international transport, the infrastructure user fee must be harmonized and non-discriminatory. The principle of marginal cost must be the basis for infrastructure pricing. Long-term stability should be the objective when establishing these principles. Necessary harmonization of european authorities To accelerate cross-border traffic, the authorities must simplify routines concerning operators requests for access to rail corridors. Authorities must also expedite applications for certification of vehicles involved in international traffic. A vehicle approved for rail traffic in one member country, should be approved for traffic along the entire EU rail network. In 2002, IKEA initiated an important pilot project that signifies a breakthrough for cost-effective cross-border rail transport. IKEA Rails has taken advantage of the deregulation of European railways to establish cross-border freight traffic. A concerted effort was made to look at the entire chain of transport, in order to get an overview of the situation and gain control over the pricing structure. This included a description of costs for international rail traffic, as well as a description of the cost drivers. These issues are important and relevant to all shippers and owners of goods. IKEA s project is yet another example of the inefficiency of current licensing procedures. The company has been forced to find a temporary solution for its shipments from Sweden to Germany. There is currently no suitable electric locomotive on the market that is able to function on the different electric systems in Sweden and Denmark and is able to meet Sweden s safety requirements. Infrastructure investments based on a strategy of rail corridors The Confederation of Swedish Enterprise is convinced that the railway s greatest potential as a mode of transport lies in developing integrated transport solutions from a European perspective. The railway would work together with other modes of transport as an integral part of a well-integrated transport system. Therefore, a European perspective is vital and must be the basis for strategic

10 10 decisions regarding development of the rail infrastructure in Sweden during the years The Confederations of Swedish Enterprise has suggested a number of rail corridors in Sweden that should be prioritized for freight transport. The objective is to achieve an effective, flexible, large capacity railroad that can meet the demands of the Swedish business community. In 2001, the Confederation of Swedish Enterprise presented a corridor strategy, whose aim is to concentrate investments to a number of main corridors with transport hubs for integration with other forms of transport. Due to limited economic resources, priorities must be based on potential for growth. The level of investments in the Swedish infrastructure over the past few years has been exceptionally low, considering the need for maintenance and new investments. Sweden s geographical location on the outskirts of Europe warrants a high level of ambition for new investments and maintenance of the infrastructure. It is necessary to compensate for the long distances covered during transport to the European continent. During the coming years, accessibility and capacity could be increased on these main corridors by adhering to these investment priorities. The proposed corridor strategies are based on increased cooperation between the various modes of transport. A number of strategic locations have been identified to serve as main junctions for various forms of transport. New investments in the infrastructure, roads, tracks, terminals, etc. will be aimed at these junctions in order to stimulate cooperation between the different modes of transport. These main junctions will serve as hubs for the influx and reloading of goods. The strategic plan for the development and maintenance of the railway infrastructure that the Swedish National Rail Administration, Banverket, composes, must include investments aimed at connecting transport corridors. It should also include the various pathways that feed into them, for example, via ports and industrial tracks. It is clear that close cooperation between the Swedish National Rail Administration and the Swedish National Road Administration, Vägverket, is necessary. The Swedish National Road Administration must simultaneously develop a comprehensive national policy for the development and maintenance of roads.

11 The objective of developing a well functioning system of freight transport throughout Sweden, will be achieved through investments in combined transport via corridors, hubs, and main junctions. Investments in the rail infrastructure should be carried out by coordinating planning and expansion, irrespective of regional divisions that currently exist in the Swedish National Rail Administration s organization. In line with this strategy, the Swedish National Rail Administration has created a specific entity at its headquarters that will manage investments made in cooperation with the business community. The Swedish National Rail Administration should prioritize the implementation of investments that were agreed upon by the government in the general investment plan for , but which have not yet been carried out. It has been suggested by the Confederation of Swedish Enterprise, that the Swedish National Rail Administration should also be given a specific budget for investments in the infrastructure. The Confederation of Swedish Enterprise has proposed a business oriented investment package divided into several projects. A large portion of the funds for maintenance and expansion should be made available to the Swedish National Rail Administration without being earmarked by the government for specific projects. The Swedish National Rail Administration would then enter upon agreements for these projects with the business community. This method would allow the State to manage the varying transport needs of business, i.e. in conjunction with the changing needs for freight traffic as a result of structural changes. Agreements between the Swedish National Rail Administration and representatives of the business sector is a way of ensuring that agreed upon investments are carried out as planned. Investments in the rail systems should be directed, so that it is possible longterm to separate different types of freight goods on different routes. The long-term goal for the Swedish rail system is to separate passenger traffic, as well as light and express freight, from the transport of standard and heavy freight. It would then be possible to increase capacity, reduce susceptibility to disruptions, and improve the quality of transport. 11

12 12 the capillary rail network ports and industrial tracks. The capillary railway network is an important complement for feeding freight to larger freight routes and junctions to avoid time consuming and costly reloading of freight. The essence of the corridor strategy is to merge smaller freight routes with the main routes, thus generating a larger, more efficient flow of freight traffic. The need for improvements and repairs of the capillary railway network should be an integral part of the Swedish National Rail Administration s plans for a more open distribution of funds intended for infrastructure maintenance and development. Including the capillary railways in the Swedish National Rail Administration s investments in the maintenance and development of the infrastructure, would meet the needs of specific businesses or entire sectors for an advanced system of freight transport and eliminate the need for re-loading. pursue the deregulation of the railway in sweden To achieve further development of the Swedish market for freight transport, it is essential that numerous operators be given the opportunity to act in an environment of real, long-term competition. Therefore, an open European rail market where it is possible to choose between different rail operators is a necessity. The Confederation of Swedish Enterprise would like to encourage the establishment of new rail operators on the Swedish freight market. Foreign operators should be given the same possibilities to establish themselves on the Swedish freight market as domestic operators. Swedish freight operators should simultaneously be given the opportunity to run freight traffic on an open European rail market. Sweden has come further than most other European countries in deregulating the railway market, which has provided the state owned rail companies, SJ AB, Green Cargo AB, and TGOJ Trafik AB, with invaluable experience and knowledge. The benefit of having more experience with an open rail system offers Swedish rail operators a competitive advantage vis-à-vis state-owned operators in other countries. Simultaneously, the establishment of new rail operators has been limited in Sweden. The deregulation of freight transport on the Swedish rail system occurred almost

13 13 six years ago, and the acquisition of market shares by new freight operators is still marginal. Green Cargo s share of the market is over 90 percent. A number of new operators, including several feeder companies, have evolved. Many have left the rail market, and several feeder companies have gone bankrupt. Other companies have been acquired or have closed down operations. The Confederation of Swedish Enterprise is convinced that it is time to take further action to stimulate diversity within the Swedish rail system. TGOJ Trafik AB should be decoupled from Green Cargo and sold. This would establish a new actor with a long history of rail transport, ultimately creating a more dynamic Swedish rail market. The next step in this process should be the sale of Green Cargo AB. There is no reason as to why the Swedish State should own a company for freight transport by rail. On the contrary, the sale of Green Cargo AB may lead to the creation of new constellations on the European rail market. An important prerequisite for this scenario is that the effects of mergers and acquisitions of rail companies, in respect to competition, are examined in the same way that mergers of commercial companies in other sectors are examined today. research and development of the rail systems An important ingredient in a collective Swedish strategy for freight transport is the support for applied research among purchasers of transport services and shippers. The Confederation of Swedish Enterprise believes that railway research currently focuses too little attention on issues associated with the use of the railway as a means of transport. We believe that VINNOVA, as the official authority responsible for transport research, and the Swedish National Rail Administration as the authority responsible for R&D within the rail sector, should prioritize research with a focus on owners of goods. Both authorities should also increase their involvement in disseminating research results of interest to purchasers of transport services and the owners of goods. The introduction of new technology provides potential for increased profitability.

14 14 R&D projects aimed at, for example, higher axle loads and new loading and wagon profiles, should be designed so that new findings can be disseminated quickly and easily throughout all of the EU. technical coordination for cost effective freight transport Implementing new technology within the railway sector is often associated with difficulties, e.g. joining new locomotives and freight wagons with new bogies. New technology is crucial in improving the railways profitability. It can be applied in many areas including cross-border transports, new universal locomotives, higher axle loads, and the design of railway cars that are broader, longer, and lighter. The rate of development is adversely affected by the norms for technical standards that were stipulated many years ago by the international organization, UIC. Manufacturers also have a responsibility to respond quickly to demands for modern rolling stock and to make universal locomotives accessible to the market at reasonable prices. EU level agreements for standardizing new train technology are necessary. The guiding principle must be that a vehicle approved for rail traffic in one member country, is automatically approved for traffic along the entire EU rail network. As a result, the market for rolling stock in Europe would be broadened. Production would be standardized and volumes would increase, ultimately leading to lower prices.

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