EVES-Rail study: EU-wide imposition of vertical separation in rail would raise costs for society

EVES-Rail study: EU-wide imposition of vertical separation in rail would raise costs for society

Monday, 5 November 2012

A study by an international consortium of   transport economists has concluded that no particular structural model outperforms   all others. No evidence is found that competition within the rail sector   works better with vertical separation than with a holding company. The EU   should therefore opt for a policy of free choice of structural model for the   rail sector.

The study also   develops a structural analysis of the incentives of the infrastructure   manager and of railway undertakings (operators), and how these incentives may   lead to efficient or inefficient outcomes for the rail system as a whole   depending on which structural model is in place.

 

EVES-Rail finds   that the effect of vertical separation on rail system costs is not a single   positive or negative number that would occur identically in every country. On   the contrary, the effect of vertical separation depends on structural   characteristics that vary between countries. The substantial country   differences within the EU thus call for a differentiated approach, rather   than a one-size-fits-all model imposed on all Member States.

 

Looking at rail   sector performance in terms of modal share and in terms of state spending,   EVES-Rail finds no evidence that any particular structural model outperforms   all others. Furthermore, no evidence is found that competition within the   rail sector works better with vertical separation than with a holding company   model.

 

In sum,   EVES-Rail finds that rail sector costs would increase in case of a universal   imposition of vertical separation in the European Union for no added benefits   in terms of any key measure of performance.

 

The EU should   therefore opt for a policy of free choice of structural model for the rail   sector, including the right for Member States to switch freely between the   vertical separation model and the holding company model depending on national   circumstance.

 

“The work done by the consortium is solid and   convincing” stated CER Chairman   Mauro Moretti. “It demonstrates how   the imposition of one single European model for all national rail systems   would lead to increasing costs for all stakeholders. Today member states’   budgets could not cope with the rising costs deriving from such a reform, nor   could the European citizens. We are confident that the European Commission   will carefully reflect on today’s discussion and that the proposal will fully   take into account the results of this study. ”
 
CER Executive Director Libor Lochman stated: “Policy-makers have a duty to ensure that   benefits outweigh costs for any reform they propose. EVES-Rail provides the   cutting-edge analysis they need for the case of rail.”
  

The full study is available here, as well as a summary report.