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Governments underwrite 88% of rolling stock procurement

The Rail Working Group together with the Consulting firm Roland Berger have published the second part of a new study examining the extent to which rolling stock procurement in Europe is, directly or indirectly publicly funded. The Study, now expanded to cover Eastern Europe, analyses by country and sector 370 rolling stock procurement projects in 19 countries across Europe over the years 2011-2013, costing on average EUR 13.3 billion per annum. However EUR 11.645 bn. (88%) representing 303 of 370 projects (82%), was directly or indirectly financed by governments.

The expanded study reaffirms the clear correlation between the deregulation of rail markets and private finance: the more markets are opened up, the greater role private capital plays in financing new railway equipment. “The Study also shows that, with limited exceptions, private finance has only played a role in procurement of freight equipment and there are few opportunities to bring in private finance for passenger rolling stock outside of the UK” commented Roland Berger partner Andreas Schwilling, one of the authors of the report. “This has to change as governments look more creatively to save precious public resources” he adds. The new study was launched today at a special event at the British House of Lords on the Luxembourg Rail Protocol.

Howard Rosen, Chairman of the Rail Working Group, observed that there needs to be a new common legal infrastructure across Europe to attract private capital at reasonable rates. “This is where,” he added, “the Luxembourg Protocol comes in since, when adopted, it will introduce those rules and make private finance for much needed new investment in rolling stock much more secure – and therefore more available and cheaper. It’s a win for the public and a win for the rail industry”.

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