‘Rail freight undertakings should not have special treatment’

Image: Office of Rail and Road(ORR).

In light of the Commission’s revision of state aid guidelines for Railway Undertakings, the European Rail Freight Association (ERFA) emphasises that it’s critical to ensure a level playing field for everyone in the European rail freight market. “Guidelines should play a constructive role and enhance diversity, not provide special treatment”, underlines the association.

ERFA has identified three key areas that need to be addressed in the state aid guidelines revision to modernise them and ensure that they support fair competition. The key areas are the modal shift, state aid for rolling stock and state aid for restructuring or rescuing a rail freight undertaking.

Cautious approach

“Regarding support for modal shift, ERFA believes state aid has an important role to play in supporting a transition towards more sustainable transport solutions”, says the association. This is not something new. However, state aid should abstain from supporting unsustainable business models and focus more on investments in digitalisation, like the ETCS implementation and interoperability. Investments in these business segments should “be increased to 100 per cent”, commented ERFA.

On the other hand, when it comes to support directed to rolling stock, the Commission should be extra cautious and distinguish between passenger and freight rail. ERFA stresses that as the two are fundamentally different, so should be the approach when supporting them. “State aid for purchasing rolling stock should only be allowed where there is a clear and proven market failure. A legitimate application of state aid for rolling stock could be the financing with an added value to environmental goals or for a necessary change in the technological development of rolling stock to achieve market harmonisation and interoperability”, claims ERFA.

Equal treatment for everyone

As for supporting the restructuring or rescuing of an RU, ERFA claims that such a process could prove to be a trap and, in the end, undermine fair competition in the market. “There should be no special treatment for restructuring rail freight undertakings and normal state aid guidelines for rescuing and restructuring should be applicable for all rail freight undertakings”, underlines ERFA.

“We need an evolution in how we think about State Aid. We need to transition to an approach which focuses on sectoral support measures rather than supporting individual operators”, stated Dirk Stahl, ERFA’s president. One instance of possible unfair competition is DB Cargo’s support from the German government.

Brussels is currently scrutinising whether certain federal government aid measures directed to DB Cargo are in line with the state aid guidelines. The investigation has not produced any results yet; however, the complaints that led to the inquiry talked about DB Cargo’s special treatment, resulting in unfair competition for private rail operators.

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Author: Nikos Papatolios

Nikos Papatolios is editor of RailFreight.com, the online magazine for rail freight professionals.

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