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Member states undermine Bulc’s plea for an open rail market – 4th RP

At the Transport Council working group meeting this week, UK, DE and FR achieved such a dilution of the conflict of interest clauses as to render them virtually useless.  These small but important changes are clearly one of the last attempts by the Government monopolies to water down the conflict of interest parts.

 Conflicts of interest are everywhere in the integrated railway and holding company groups.  They allow infrastructure managers to give better train paths to their ‘own’ railway undertakings in preference to any independent RU.  These are real complaints which affect independent operators; their performance, their ability to attract new investment or to improve their service quality and compete fairly with the incumbent’s operations.  It means that, in many cases, the monopolies will continue unchallenged indefinitely.

 The ability of the regulatory body to monitor and enforce is also vital, and the ability of the infrastructure managers to act independently of government (and its own railway undertaking(s) on traffic management and maintenance is essential.   Otherwise, there will be less or no growth, more call on state funding by incumbents and more transfer of passengers and freight to other modes. 

So conflict of interest is a real problem on a competitive and open access railways.  Some examples…

 In Germany where independent passenger operator HKX complains that DB was unfairly requiring train paths that blocked unnecessarily blocked the line to the island of Sylt to the detriment of HKX who want to operate competing services.    Elsewhere, Transdev + Keolis + Abellio in Germany are complaining against DB Netz for similar reasons.   And yet another story of DB NETZ saying –‘DB can have a path, but others cannot’; DB and CD used to run integrated passenger services between Prague and Berlin.  CD decided to run its own separately from DB, and applied to DB NETZ for train paths.   This was refused as there was ‘no capacity’.  Somehow, within this integrated holding, DB Fernverkher heard about it and approached CD offering – ‘We hear you want to run your trains to Berlin on DB Netz network.  We can offer a joint service and find paths if you do it with us’.

In France, we have evidence that SNCF/RFF signallers on a Friday evening allowed two SNCF freight trains to leave the port of Marseilles but then close the line for weekend maintenance this trapping two trains operated by another RU for the weekend.    Further evidence that this latest change is wrong: the French view  this dilution is a success – for the monopoly!  

So the French Government is very pleased to have won its lobbying  -for the moment!

Quatrième paquet : la France poursuit son lobbying pour atténuer les règles de transparence [UE/FR]. Le Monde indique avoir consulté trois amendements français resserrant la définition du conflit d’intérêts, consolidant ainsi le modèle français du groupe ferroviaire intégré (holding). Le gouvernement souhaite ôter le rôle “préventif” du régulateur sur un possible conflit d’intérêts, mettant potentiellement en cause son droit de veto.

The UK appears to think that ‘alliances’ or ‘co-operation agreements’ will somehow bring ‘efficiencies in themselves.    Talking together in regular co-ordination meetings between IMs and all RUs is good and allowed for in the legislation.  Giving priority in access, in timetabling or maintenance is very dangerous and inevitably means conflicts of interest.

And do not be influenced by pressure to avoid upsetting the UK before the BREXIT vote.  

This why infrastructure managers should have responsibility for traffic management and maintenance, and be required, under regulatory oversight, to treat all RUS fairly.  If this role is transferred to member states, as DE, FR and UK propose, then nothing will change, and the state will be certain to give its ‘own’ RU priorities.

Many member states will greatly regret any decision to water down the conflict of interest clauses.  This goes against all the principles of the 4th Railway Package, transparency and fair and open access to the network.  It will discourage investment in the railways and the opening of the single market in rail. 

So I urge the Trilogue on 19th April to reinstate the wording to preserve the firmest definition of conflict of interest.  It may seem small, but it really does matter to the future of a liberalised rail sector.

 An irregular comment paper from Tony Berkeley  14 April  2016.
Tony Berkeley is chairman of the UK Rail Freight Group and a Board Member of the European Rail Freight Association.  The opinions expressed are his own.

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