Easter 2015 message from Tony Berkeley
A single market in the rail sector is still years away, with Germany and France leading the opposition. Another example…
Siamese twin rail monopolies; don’t be fooled by DB and SNCF introducing competition within themselves!
France and Germany have long led the opposition to any competition above rail for passenger services, and done their best to frustrate fair competition in rail freight. Now DB and SNCF have both come up with the perfect solution to competition in their own country; they will compete with themselves within their own holding company and keep all others out!
So SNCF TGVs compete with low cost TGV Ouigo, both services run by SNCF, and DB announced recently that it will introduce alternative low cost intercity services, using older rolling stock and allowing cheaper regional tickets, and even introduce Wifi, something that the real competition, HKX, introduced in 2012.
But this new competition above rail is a complete smoke screen!
DB controls the assets, the ticket selling and the timetable of both of the newly created competitors in Germany, as does SNCF in France. If they really wanted competition, then they would also agree to sell tickets for all operators at their outlets, allow other operators to use their state owned rolling stock at competitive prices; in fact, they would welcome proposals in the 4th Railway Package for their infrastructure managers to be not only independent but given responsibilities for capacity allocation, network management and maintenance in a way that treats all operators fairly.
Even SNCF says it now welcomes competition, but not in France, since there are ‘important social issues that must be addressed first’ (SNCF President Guillaume Pepy, in Railway Gazette International March 2015).No doubt this includes reducing the number of strikes from 400 a year, and ‘reviewing’ the remuneration of train drivers, who retire at the age of 50 on a pension of their last year’s salary, no doubt index linked, and reducing the disparity between SNCF. A recent study quoted in ‘la Vie du Rail’ said that SNCF freight and passenger operators used 43% and 22% more staff-hours for the same operation as their competitors. The problem is that rail is in competition with road and air, where such benefits do not apply. SNCF and DB are both feeling the pinch from these other modes, particularly long distance coaches.
The only solution to bringing competition, customer service and growth to the rail sector is to complete the 4th Railway Package as the European Commission proposes, coupled with a full Sector Investigation into the rail sector by DG COMP.
Tony Berkeley 8th April 2015
Tony Berkeley is a member of the House of Lords, chairman of the UK Rail Freight Group and a Board Member of the European Rail Freight Association. The opinions expressed are his own.
What is the cost-effectiveness truth about rail freight ?
Before economics became a schools subject, we watched British National econoomics in the form of long wagon-trainloads of Cornish broccoli, on its way to Covent Garden London to be auctioned off, then re-loaded onto lorries and transported all the way back to be sold at Exeter, Plymouth, Truro, Penzance.
As Professor David Smith told the TV university public in “Australian Environmental Studies’ in the 199Ts
“Some-one has to get it through to the economists that they have a fundamental equation wrong somewhere”.
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I still depend upon our childhood sense of the word “economise|”
for which one needs to steer clear of the ‘broccoli-equation’ and its Economic “fact” that there are “infinite resources available”;
but load after load of precious fossil-fuel guzzling trainloads of fresh farm foods
being traipsed agonizingly for economicly-unconscionable distances, timeframes, and handlings –
ostensibly for handsome Individually-Capitalistic Profits to be ‘made’
by already ‘wealth’-bloated billionaires –
– but for what constructively common purpose ?