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Rail across Europe: Public, private and beyond

6 January 2014

Britain is almost unique in its degree of private rail ownership and fragmentation, but that doesnÂ’t mean having a unified national operator is the norm across Europe. Paul Salveson investigates the mix of systems that many countries operate.


Europe’s railways have experienced dramatic change over the last 20 years, with the traditional state-owned railway corporation controlling both track and trains becoming a rarity. Countries including Sweden, Germany, the Netherlands and Denmark have made radical reforms to the way in which both passenger and freight services are provided. In the case of regional passenger services, these changes are, in most cases, based upon strong devolved government, to mainly regional bodies (see TSSA Journal March 2012). However, inter-city and freight have not been immune from radical changes either. Some of the impetus for reform has come from the European Union, through a series of ‘rail packages’ which have liberalised the market for both international passenger and freight services. A ‘fourth rail package’ is currently being debated by the European Parliament and if adopted will take ‘liberalisation’ of rail operations much further. Labour’s rail spokesperson Lilian Greenwood has strongly opposed its proposals for compulsory competitive tendering of ‘domestic’ rail passenger services. She told TSSA Journal: “No-one should doubt that this is an ideologically driven agenda. Even the European Commission concedes that the evidence for imposing rail privatisation is ‘ambiguous’ and describes compulsory tendering as a ‘political choice’.”

Labour's Lilian Greenwood: "compulsory tendering as a ‘political choice’.”

So how far has liberalisation gone in Europe? It should be noted that the initial changes which began in the 1980s, in Sweden and then later in Germany, were not a result of an ideologically-driven desire to curb state ownership, unlike in the UK. The driving force behind change was a recognition that some rail services, particularly regional passenger services and freight, were under-performing. There was a desire to make better use of regional rail by devolving responsibilities to regional authorities who were more in tune with local people’s needs, and could integrate rail and bus more effectively. In the case of freight, the issues were more complex, with a highly competitive road haulage sector which was increasingly able to cross national borders with minimal obstacles. International rail freight had to contend with different operational regimes, voltage systems and in some cases gauges.

However, a political momentum developed within the EU which was part of a wider neo-liberal approach aimed at encouraging ‘competition’ and, by implication, privatisation. The first stage of this process was in the opening up of international services to competition. If passed, the current ‘fourth package’ proposals will see all rail services, passenger and freight, being opened up to compulsory competitive tender. The effect will be to seriously limit any attempt to develop a publicly owned and accountable railway, whether in the UK under a future Labour government, or elsewhere in Europe.

How are railways run in Europe?

There is immense variation in how rail services are delivered within the EU, reflecting differing national priorities. In the case of Germany, the main structural changes have been in creating a more deregulated market for both passenger and freight. The 1994 ‘railway reform’ legislation was aimed at attracting more traffic to the system, keeping control of costs and encouraging a more ‘commercial’ approach by the state-owned railway. It also provided for opening up a degree of competition in services, primarily freight and regional rail. The huge and monolithic Deutsche Bahn (German Rail) was broken up into two bodies: DB Netz for infrastructure and DB AG as the operator, which remains state owned and continues to operate most inter-city services, including the successful ICE high-speed network. Its operations include DB Regio, focused on regional passenger operations whilst DB Schenker looks after freight and of course has strong UK interests. The deregulated environment means that DB has faced stiff competition from open access freight operators, whilst regional agencies have let franchises to a range of operators, including some foreign stateowned operators such as Abellio, owned by Netherlands Railways (NS) and Italian state-owned operator Netinera. Unlike the situation in the UK, DB is able to fight back and win franchises in other countries, not least the UK. Its purchase of British-owned Arriva has given it a strong presence not only in Britain but also in countries such as the Netherlands. In the Netherlands itself, NS remains by far the biggest operator, and longer distance services are protected from competition. However many regional operations are provided by private companies on contract to provincial governments via regional transport authorities. DB-owned Arriva is the biggest independent operator in the Netherlands.


The election of a socialist government in France led to a major about-turn in France’s approach, which was heading towards greater liberalisation. Whilst SNCF had been split into operations and infrastructure, there is a process of re-integration taking place which will keep within the letter, if not perhaps the spirit, of EU law. France has seen substantial devolution of powers over regional passenger services to provincial governments, with very positive results. However, unlike Germany, there is only one operator – SNCF – despite the efforts of Paris-based multinational Veolia, with operations across much of Europe, to enter ‘its own’ local market. Whilst advocates of privatisation suggest SNCF’s ‘sole provider’ status brings all the downsides of having a ‘monopoly supplier’, the provincial governments have been able to drive hard bargains with SNCF to deliver high quality services.

Spain offers an example of the different results from an increasingly decentralised country, with left-wing governments in some regions (Basque Country, Catalonia) and a right-wing central power. The national state-owned operator, Renfe, has experienced substantial budget reductions since the right-wing government came to power, with suggestions of a UK-style privatisation. Some regional passenger services are under threat of closure. However, the Basque government owns its own metre-gauge regional passenger network – Euskotren – which goes from strength to strength with new trains (built locally) and infrastructure investment such as track doubling and new stations. Meanwhile the neighbouring state-owned metre-gauge network operated by Renfe, which also runs some services in the Basque Country, faces an uncertain future.

In Italy, the traditional state operator, now trading as ‘TrenItalia’, remains a major player in the inter-city as well as local market, though some inter-city routes have been opened up to private competition. Italy also has a number of independent, publicly-owned local railways which are often verticallyintegrated, with the regional council owning the rolling stock.

Further north, the Scandinavian countries offer different experiences. Sweden was at the forefront of separating operations from infrastructure back in the 1980s. The government encouraged well-funded county transport authorities to take over responsibility for both rail and bus operations. State-owned SJ remains the predominant operator for inter-city services with its highly successful X2000 services. Denmark has also liberalised its regional services and DB-owned Arriva has won some contracts. Denmark has long had a network of community-owned local railways which mostly operate passenger services, though some also run freight.

Non-EU Norway has not gone down the liberalisation road, but has invested substantially in its national network. Switzerland, also outside the EU, has long had a complex, but highly successful, rail network based on the main state operator, Swiss Federal Railways (SBB) and a plethora of small, mostly community-owned regional railways. The local and regional services are typically provided by locally-owned arms-length railway companies with vertical integration between operations and infrastructure.

Time for action

Each European country has its own approach, and the extent to which there is a desire for ‘liberalisation’ depends largely on the complexion of individual governments. The EU’s ‘Fourth Package’ proposals for compulsory competitive tendering impose an unwelcome uniformity which risks undermining many of the successful regional and inter-city operations across Europe. The European Transport Workers’ Federation, which unites transport unions across the EU, is strongly against the Fourth Package liberalisation plans. TSSA branches should mobilise to campaign against the proposals and work with sister unions, community rail groups and local Labour Parties to lobby their MEPs. The time is now.

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