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Working paper / Transport

Rail transport : a balance sheet

Author(s): MONTERO Juan Jose

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ABSTRACT

The creation of a single European railway area is the overall policy objective of the European Union for the railway industry. Rail infrastructure management is seen as a natural monopoly to be operated at a national scale. Competition is possible downstream in the provision of rail transport services. A European-wide market of rail transport services would benefit from larger economies of scale, and competition would ensure such efficiencies are passed down to European citizens and businesses. However, the reform process has been set back by Member States that disagree with the full vertical separation of infrastructure management and transport service provision, as well as by Member States that want to delay the full liberalization of the industry. As a consequence, inconsistent national models are emerging and non-sustainable asymmetries between Member States are creating tensions. The Fourth Railway Package is the opportunity to conclude the European railway reform process, both for commercial services and for public contract services. Imaginative solutions are necessary to reach a workable consensus.