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“I do hope that the current geopolitical crisis will not harm the prospects of better and more Eurasian land transport”

José Viegas, Secretary-General of ITF
“I do hope that the current geopolitical crisis will not harm the prospects of better and more Eurasian land transport”

Critical thinking in railway transport development in a dialogue with Mr. José Viegas, Secretary-General of the International Transport Forum, on the macro factors impacting on the sector.  

TR: The International Transport Forum – 2014 Annual Summit will focus on analysing the major factors that change our world and on identifying solutions to keep the transport sector agile in facing these trends. Thinking of railway transport, which one of the economic, political, social or technological factors do you consider having the greatest impact on its development?

International Transport Forum, ITF, 2012, Leipzig, Germany; Jose Viegas, Secretary-General of International Transport Forum (ITF)JV: They are not profoundly different from those that affect other modes. Demographic change will mean urban rail transport will become much more important, as people in emerging countries flood into cities. And ageing societies in the west mean rail will become more important as a mode that is more suited to the needs of elderly than cars are. New technology provides huge possibilities for a mode like rail that is a mass-transport mode bound to timetables, because real-time passenger information can take away some of the inconvenience of having to wait for a train. New technology also changes the infrastructure side, with smart sensors making maintenance much easier and more cost effective, and new construction technologies pushing the frontier of what is possible. Just think of the planned Fehmarn Belt tunnel between Germany and Denmark, for which construction will start next year. It will be the longest “sunk” tunnel in the world, and it will cut rail travel time from Copenhagen to Hamburg to just over two and a half hours.

TR: The political alliances in the East are being strengthened and new trade routes being considered within these frameworks. With Russia as a dominator of the Eurasian land-bridge, how do you see the development of land transport, with particular view on railways?

JV: The rediscovery of the old trade corridors known for centuries as the Silk Route is one of the major global transport developments. Let me give you an example: The International Transport Forum’s Annual Summit takes place in Leipzig in Germany. Leipzig is also home to an ultra-modern BMW car factory. Since two years, this has been connected to a BMW factory in Shengyang in China by a rail link that is almost 12 000 kilometers long, crosses four borders, eight time zone countries and takes 23 days. But it is economically viable, partly because shipping lines have been slow steaming and therefore take longer to deliver. The challenge for the Silk Route corridors is less technical than administrative. Border controls and customs procedures take far too long. Progress on that front would make cut delivery times considerably and make these routes more competitive. Test runs made the journey between Leipzig and Shengyang in only 18 days – that is almost half of what a container ship needs. The prospects are bright, if the regulatory and organisational challenges are met. And I do hope that the current geopolitical crisis will not harm the prospects of better and more Eurasian land transport.

TR: Eurasian cities are considered as the world’s largest experiment in urban development, part of an area characterised by very low density, long distance between main urban poles and many divisions[i]. What should be the policy for encouraging sustainable mobility and how to reach a balance between higher operational costs vs. lower income levels?

JV: There seems to be fairly broad agreement among experts that higher-density urban development around well-conceived, accessible public transport routes is the way forward. Some experts, like Professor Paul Romer, director of the Urbanization Project at New York University, argue that we should build new cities, for which not only the main axes of the urban layout are defined in advance, but also the set of rules that will govern these cities; and that this will facilitate optimal development of urban regions. He calls the concept “charter cities”. It’s a radical thought, but with urban population jumping from 50% today to 8-% by 2050, we’re well advised to also consider unconventional approaches.Other, more traditional, approaches must also be considered, but sustainable mobility will certainly require strategies of densification and functional diversification of the urban cores – thus favouring a higher share for the modes of walking and bicycle – accompanied by carefully designed gradual improvement of the interurban links, with technical features adapted to the expected traffic flows of passengers and freight.

TR: What is the perspective of ITF on EU’s Single Railway Area strategy? And within this perspective, what should be done to encourage public authorities to provide better interoperability in order to increase competitiveness between service providers (e.g. railway undertakings, logistics companies etc.)

JV: The main idea underlying the creation of a Single Railway Area across the EU is to provide the market dimension – in geographical span as well as in traffic flows – that is able to sustain multiple operators competing at high levels of efficiency.This has enormous challenges in terms of interoperability, but not less in terms of real market opening, removing multiple existing non-technical barriers in each country to operators from other countries. The main instruments to promote developments in this direction would be a strong regulatory body with EU-wide powers, who would assess the relevance of the non-technical barriers and mandate their removal, and would also identify the priorities in terms of investments towards interoperability, considering the flows affected by the current incompatibilities in each of those proposed investments. Co-funding of those investments by the European Commission in par with the involved countries would also be a good incentive.

TR: Analyses of 2008 R&D figures at EU level, show that the transport sector is the largest industrial R&D investor, with an investment volume of EUR 39 billion. Out of the amount, only EUR1.2 billion represents the total R&D investment in railways.  How can we address the challenge of increasing investment in railway innovation?

 JV: This small share of R&D investment by the railways is a reflection of two facts: First, its agents mostly feel in their “comfort zone” and do not perceive an absolute need to invest on R&D to sustain good performance levels and survive in the market, as it happens in the other modes, subject to real competition; second, services and prices in the railways are often defined with some intervention from Government, bringing the economic agents in the sector to situations of very low profit margins in their current accounts, and so of virtual impossibility to release funds for investment. The way to address both problems is the same: bring the railway system closer to a normally functioning market, with the associated decisions on business plans for the short and medium term, which will inevitably require more R&D investment.

[i] World Bank Report, Eurasian Cities, New Realities along the Silk Road, 2012

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