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Workshop Paper / Transport

2nd European Rail Transport Regulation Summary: Performance and Governance of Railway Markets

Author(s): FINGER Matthias, ROSA Andrea, HOLTERMAN Martin

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The present document summarises the presentations delivered during the forum as well as the ensuing discussion. It is divided in two sections: summaries of the presentations and the synthesis of the debate.

Presentations were given by several rail regulation stakeholders, including national regulatory bodies, an EC representative, railway undertakings, infrastructure managers, and academics. Each of them has offered his/her view on Performance and Governance in Railway Markets on the basis of the questions proposed by the organisers:

  • What is performance in railways? 
  • How can it be achieved? (How) does market organization matter?

Several contributions clarified that performance should have a wide ranging definition, not limited to production, but including elements such as safety, reliability, time, affordability and environmental factors. Several measures of performance were discussed. The forum was reminded that the railway sector is complex and that the definition and measurement of performance must reflect this complexity. One key indicator of performance is growth, in absolute and relative terms (market share, since railways are competing with other modes). Customer satisfaction is also a central indicator of performance. Measures to improve performance were also suggested.

Regulators are central to achieving performance, given the characteristics of the railway sector. The forum called for independent, competent, strong, effective regulators who act rapidly everywhere. It was also said that, while regulation should be based on research, such research needs up-to-date, comprehensive and comparable data, which are still seriously lacking.

Central to performance in the railway sector are infrastructure managers, the charges they apply, as well as their funding. Consequently, the forum debated the alignment of incentives among actors and, more generally, the coordination of the actors pursuing different objectives in a complex system. Access to rail related services was also said to be important and there was some concern for the treatment of such access in the Recast. The need for financial stability and for the conditions leading to innovation has also been highlighted.

Market organisation does indeed matter, as several participants underlined. Several market organisations seem capable of achieving the goal of traffic growth, at least according to one of the speakers. It is however important to choose the correct market organisation for given policy objectives. A presentation linked the growth in traffic to the liberalisation of services, while another showed the performance improvements that may be obtained through the synergies of a vertically integrated railway.