Slow going for rail freight liberalisation

The European Commission has issued an update on the performance on the main European networks, including an assessment of the rail freight industry several years after it first initiated legislation leading to deregulation.

In the rail freight sector the main development occurred in 2003 when legislation on market liberalisation entered into force. In theory the directive opened up the trans-European rail freight network to international goods services, with the entire network following in 2008. A second railways package proposed by the Commission in 2002 aimed to open up the national freight markets by 2006 and cabotage (the domestic movement of goods by operators from third party countries) by 2008.

However by 2003, the first package had not yet been fully ‘transposed’ in seven Member States. Countries which have been slow in implementing the requisite legislation are: Austria, Germany, Greece, Ireland, Luxembourg, Sweden and UK. In addition to legislative delays the Commission has found a whole range of other barriers to free market competition being employed by countries seeking to protect its present incumbent.

For instance in Germany the report found that the process to allocate capacities remained problematic as its independence was not guaranteed. In other countries where a proper institutional framework does not exist, a range of informal barriers prevent access to new market entrants. The result has been that in many cases the state owned incumbent still dominates the markets with shares in excess of 90%. However where proper procedures are in place to facilitate private sector competition new market entrants have been forthcoming. This is particularly the case in the Netherlands.