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Rail Freight in Europe Falls Off Track FREE FLOW / The Business of Transport

Posted on: Thursday, 24 November 2005, 12:00 CST

By Don Phillips

The battle to open Europe's national railroad systems to private freight competition has grown more heated in the past year and may be reaching a critical stage. And it also has a few new twists.

Jan Scherp, principal administrator for rail transport at the European Commission, said at the "Future of Rail Freight in Europe" conference in Amsterdam this week that 10 European countries had avoided making any real progress toward opening their tracks to private competition.

"Essentially, the market for rail freight is open," Scherp said, "but half of the member states have no new entrants." Topping the list of resistants is France, which so far has allowed only one private international freight train to cross its border. But Scherp pointed out that nine other European Union countries have no real freight competition.

Private railroad companies also say that some European railroad systems that have opened to private freight, like Germany, have a few tricks of their own. They referred to actions in France and Germany that they considered dirty tricks to avoid competition. Joachim Kregel, managing director of BoxXpress, a German private rail firm, said that the French were conducting a version of scorched-earth policy with their older locomotives, suddenly scrapping hundreds of locomotives that have sat around in "dead lines" for years. "They are destroying locomotives with 10 years of life left on them," Kregel said, adding that the locomotives could have provided cheap power for new-entrant railroad companies.

Some conference participants also complained that the French have developed extra-detailed and lengthy lists of mechanical and technical requirements for private locomotives to operate on their tracks.

"The new rules are almost impossible to digest," Kregel said.

Germany, on the other hand, has often been held up as a model of cooperation in opening its tracks to private companies. But that didn't prevent Railion Deutschland, the freight division of Deutsche Bundesbahnen, from being a target of criticism at the conference.

Bernard Kunz, general director of Hupac, a private Swiss rail company, said the German rail freight system does indeed allow competition on its tracks. But if an independent operator becomes truly successful, he said, it suddenly finds the government railway company offering to buy it for a price that can't be refused.

"It's a strange twist," Kunz said. "The independents come on strong, then they get bought out. This integration of national operators slows down the liberalization process."

Denis Doute, vice president of France's SNCF freight network, did not directly address the complaints made about the French rail company. But he did say that no one should think that competition alone is a solution to the rail freight problem. "Intramodal competition seldom brings new traffic," he said.

At the end of the first day of the conference, its chairwoman, Monika Heiming, said she had not realized until then just how vicious the battle had become. "For me, this is a sign the market isn't working," said Heiming, who is secretary general of the European Rail Freight Association.

A consultant, who did not wish to be named because he works for state-owned European rail systems and is not authorized to speak on their behalf, said that independent operators did not understand that major railroad companies are beginning to act like the mature private-enterprise railroads of the United States. Competition can be cutthroat, he said. "Well duh, welcome to the real world." ***

Don Phillips can be reached at freeflow@iht.com.

Source: International Herald Tribune

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