European Railway's "2019 Hunger Games"

[Giugiaro]

As some may know, starting next year, 2019, the European market for passenger railway services will be liberalized for state owned companies, meaning that any European railway company will be free to operate services in any other EU country, as long as they meet local requirements for establishing a railway connection.

Given how liberalizing railway services to private institutions failed everywhere except in the UK (I feel ya mates), the EU decided to go ahead and try pitting state companies directly against each other.

Since this can mean life and death to some state owned companies (looking at you Portugal), I normally refer to this liberalization as the "2019 Railway Hunger Games".

I'd like to know what are your thoughts on this new "era" in other EU countries, and how the UK's experience could help us foreshadowing the future of railways in each different place.



News has come from Spanish and Portuguese media that Deutsch Bahn subsidiary Arriva has filed for an international service between A Coruña and Porto, marking the first outside competitor to enter the Iberian market. https://www.eldiario.es/economia/Deutsche-Renfe-Espana-Galicia-Portugal_0_768873446.html

Talking about my experience with the Portuguese railways, all I have to say is that the Portuguese state owned company CP - Comboios de Portugal is in no way prepared to take direct competition from the likes of DB, NS and SNCF (and even Renfe!), and is most likely to be taken down in the next few years.

Even if the current government decides to put the plug back on the company to revitilize CP's services, after nearly 20 years of complete neglect, as soon as the Braga-Faro backbone is taken away, the company is sure to colapse completely.
And since it will take about 3 to 5 years for brand new trains to arrive, the death sentence is pretty much final. https://www.publico.pt/2018/04/30/e...mero-de-passageiros-e-reduz-prejuizos-1815862

 

[AlexNL]

I think Belgium and France will be the next bastions to fall, at least when it comes to regional services. Belgium is not prepared for competition at all, although SNCB recognise that they have to reshape themselves if they want to stay relevant. The French government and SNCF recognise that things will have to change, but are being fought heavily by the unions.

 

[Giugiaro]

I was expecting state owned companies to just extend their services outside their own borders, as if Europe was somewhat the same country railway wise, but the fact that Deutsch Bahn has its subsidiary Arriva presenting a file for service. This means that even companies like SNCF who struggle with heavily unionised workers, can still survive through its subsidiaries acting pretty much... elsewhere...

As far as I can tell, neither CP nor Renfe have subsidiaries acting as private companies overseas, meaning that if competition hit these players really hard, they're gone for good. Would that be the case for SNCB?

 

[MarcVD]

No SNCB does not own any subsidiary trying to sell rail services abroad.

 

[Giugiaro]

Then basically their survival will depend on how well and how cheap they can sell and keep up their services, compared with the future competition, if any even gets to enter Belgium.

Also, this is assuming that the government is even willing to keep the service public. Given how bad railways are atm in Portugal, I'd say they are (and always been) very willing to give up public ownership of railway companies as soon as the opportunity arises.

 

[squizzler]

I think it is worth bearing in mind that the it is not in the interest of the contracting authorities for their to be one operator, or even an oligopoly of just a few. Local authorities will want to encourage a variety of operators. I am sure that large parts of the network will prove too slim pickings for the big operators also. The big operators will (one hopes!) also be wary of spreading themselves too thin because, as we have seen, excessively fast growth usually results in bidding for duff contracts and losing control of costs and quality.

Whilst I am sure the operators will fight tooth and claw to establish themselves in new markets I do not think we will see a hunger games style fight to the last man standing. I suspect the more likely outcome is a mixture of big former national operators operating the prestige services on the trunk lines and smaller start-ups on much of the social railway. Consider how it is across the pond: the scene in the USA is dominated by class 1 operators yet there remain many short line operators who keep going on a shoestring with older equipment.

 

[87015]

More likely to be more countries balkanised to death like Germany. A once great railway system turned near omnishambles by political capital.

 

[Adlington]

Deutsch Bahn has its subsidiary Arriva presenting a file for service.

DB subsidiary Arriva Spain confirmed on May 7 that it has filed a request to establish international passenger services connecting La Coruña with Porto.

https://www.railjournal.com/index.p...unch-spain-portugal-open-access-services.html

 

[dutchflyer]

Oh-again those wishyouweredeath thinkers. These strictly and sternly de facto trade-unions governed working state entities (they are those mentioned and in BE and FR with their eternal and all too frequent strikes too) know of sooooo many ways to keep out the unwanted ''competition''. And if not they, the ruling state-entities that regulate traffic probably will. Besides that-many French local regions (contracting the local trains) wish the end of that SNCF-monopoly since many years and feel they can only get better off.
Railways-trains in DE may have been split up in many companies, but in general it has worked pretty fine and led to better service. Some sensible rules for all re tickets/fares etc are also for that-UK take note please! Ditto for the local trains with us in NL-again mostly ARRiva (once a Scottish owned company, now all its fleet-trains and buses-show ''a DB-company'' on them, but not yet here in Budapest for some contracted citybuslines.

 

[Adlington]

For the record: Arriva operates in Poland too. It's DB-owned now but it started as a a joint venture between a Polish rail carrier and the UK operator Arriva Plc.

 

[squizzler]

The OP implies a per sum game in there being a fixed size of rail market over which the various operators must compete. I think this is incorrect and that the UK experience has shown new entrants grow the overall rail market.

Open access operators have, in particular, opened up new routes that were previously ignored by the incumbent franchisee.

 

[Giugiaro]

The OP implies a per sum game in there being a fixed size of rail market over which the various operators must compete.

The idea here being that companies that are used to work without competition, and are attached firmly to the state budget, will eventually fail to perform as well as other companies with more freedom and flexibility to operate and fine-tune their offering. As CP - Comboios de Portugal stands at the moment, it's easy to simply outcompete with it, given how poorly the company is doing in the branch lines, and during peak seasons.

It may be true that, eventually, the amount and quality of railway services in Portugal will, eventually, increase, but unfortunately the 160 year old Portuguese company won't be around in the future, unless it goes through a major reform.

BTW, the timetables for the new Arriva service have been published. I decided to pit it against the current services, and the Arriva one arrives at Vigo more than 40min faster than the current Celta train. Not difficult when the current train is 35 years old and running only at 120km/h, when the route can handle speeds of up to 200km/h...