Group

RAILWAY INDUSTRY

 
 

Competition and regulation

Preparing for the regulator

09/10/09

The SNCF and the Toulouse IDEI Industrial Economic Institute have been working on the question - 'What regulations are required for competition in the rail sector?'

All present and correct!
On 8 July, French and European rail regulatory authorities and other stakeholders responded to an invitation from the SNCF and IDEI (Industrial Economic Institute). Regulators from other industries, operators, infrastructure managers, lawyers and economists came to discuss the issues around increasing competition in the railway industry.

On schedule
The ARAF ACT was passed at the end of September in the French National Assembly, several months ahead of the opening of international passenger traffic to competition, set for 13 December 2009.

Turning point
The French market has been gradually opening up to competition, following the implementation of European Directives. Goods transport by rail was the first market to open up, with international freight in 2003 and domestic freight in 2006. Private operators now have a nearly 10% market share.
The passenger transport market is now ready to go. Competition will initially be allowed for cross-border journeys (including stops in-country), and domestic legs, as long as they are subsidiary to the main international journey. This means that the Milan-Paris route, with a stop in Lyon, is covered - inasmuch as Lyon-Paris is subsidiary to Milan-Paris.
At the same time, the Public Authorities are currently thinking about opening up the regional passenger transport market, which goes to show that this is just the start of a bigger process.
Against this backdrop, the establishment of a genuine Rail Regulator early next year will be a determining issue. Its job will not only be to monitor fair access to the rail network for the various operators, but also to handle relationships between the Infrastructure Management Company and the Rail Companies, which is crucial for the whole system to run smoothly.
The day conference on 8 July 2009, organised jointly by the SNCF and IDEI and open to other industries, foreign countries and different rail operators, was an opportunity for discussion to begin.
After sharing experiences from other industries that were gradually opened up to competition, discussions were held as to the role of rail regulators around Europe, and the participants expressed their expectations (all very high, but not always identical) with regard to the new Rail Activities Regulatory Authority.

Summary of discussions Conference proceedings