Global Economics

First Steps to Railroad Competition in EU


Under new legislation, international passenger rail networks within the bloc will face more competition starting in 2010

European lawmakers gave their final blessing to a package of railway reforms, aimed at injecting more competition into Europe's rail networks as well as introducing an EU-wide set of passenger rights for minimum compensation when trains are delayed.

"This result shows the will of Europe to develop the use of railways and to advance towards the creation of a real European railway space", EU transport commissioner Jacques Barrot said on Tuesday (25 September) in response to MEPs' vote on the topic.

Under the newly-adopted legislation, international passenger rail networks within the 27-nation Union will have to welcome competitors from 2010, with centre-right German MEP Georg Jarzembowski saying "this will lead to more competition and more choice for the customers".

However, MEPs failed to push through their demand to liberalise domestic services from 2017, as several EU capitals -- especially France, Belgium, the Netherlands and Luxembourg, all home to state-owned operators -- were reluctant to set an exact date.

Instead, the European Commission will assess the market situation no later than two years after the directive enters into force and will subsequently suggests whether competition should be injected to domestic services as well.

Thorny issue of passenger rights

In addition, EU capitals have scored one more point regarding the controversial issue of EU-wide passenger rights, similar to air traveller rights which came into force in February 2006.

Under the new rules, all rail passengers will get 25 percent of their fare for a delay of 60 minutes or more and 50 percent for a delay of 120 minutes or more, but only if the operator can be held responsible for this delay.

Compensations will apply to international as well as to domestic travellers.

However, the directive will at the same time allow governments to have generous exemptions -- altogether allowing for a possible 15-year-long transitional period for domestic rail networks.

"The fact that it was so difficult to persuade all member states to grant basic rights to rail passengers shows how poorly railway authorities treat their customers nowadays", Belgian liberal MEP Dirk Sterckx said in response to the parliament's concessions on passenger rights.

"That is a pity but we had to get the new member states on board", he added.

The travellers' rights will enter into force in 2009, with Mr Jarzembowski hoping "the odds are that trains will run on time much more often and railways will become a more popular means of transport".

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