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European Commission

Siim KALLAS

Vice-President of the European Commission

Unleashing the potential of rail in the EU

CER 25th anniversary, Brussels

17 June 2013

Ladies and gentlemen,

Many thanks for inviting me to your 25th anniversary event this evening. It is a pleasure to be back with you again.

Cast your minds back to the late 1980s, when CER was founded with just 12 members with a mission to establish stronger links with the EU institutions. Today, your membership has ballooned to around 80 railway undertakings, infrastructure companies and vehicle leasing companies.

This impressive growth in membership is not only the result of EU enlargement. As an organisation, you have also grown in influence and importance, even outside the European Union’s borders. From the start, CER’s members have shown their commitment to making the best and most of Europe’s railways.

The late 1980s was also when the Commission was preparing the first proposals that later became the First Railway Package. The 1991 directive – the first real attempt to de-monopolise railways – was our first step towards creating a more efficient rail network by creating greater competition.

It was a time when the push towards a full internal market was already affecting other means of transport. Rail had to follow suit: freight transport by road was becoming more competitive and railway businesses were performing poorly.

Today, CER is celebrating its first 25 years. A quarter-century of history that has been marked by three Railway Packages, one recast, a fourth package now being discussed, and nine European transport commissioners. And a lot more besides!

It’s normal that the views of CER’s members and those of the Commission will differ on occasion – sometimes widely, sometimes only marginally. It would be unusual if they didn’t.

I’m sure that we share the same objectives: making rail better and stronger. But we may differ over the ways to achieve them, particularly about when to let market forces do their work.

We want to promote and strengthen European railways. We want to raise their market share – because, much as we love them, too many are in decline.

Rail’s share of European passenger transport is stable at just 6%. Freight’s share has fallen from 11.5% in 2000 to 10.2% today. Since 1990, the EU’s rail network has diminished by 6%.

Above all, we want to make sure that railways remain an integral and vital part of a sustainable pan-European transport network. They have to be safe, efficient, reliable and offer high-quality services that give customers value for money.

The main goal of the European Community has always been to promote the efficiency and competitiveness of the common market with closer economic integration, by opening up national markets and removing cross-border barriers.

EU policy has also focused on shifting the transportation of goods and people from road to rail. This shift gives more business – more life – to our railways.

In the early 19th century, the steam locomotive heralded the start of modern travel in Europe. Rail, with its speed and convenience, ushered in the industrial age. In the last century, rail transport developed mostly within national borders.

Each country tended to set up its own system with its own technical and operational standards. Today, we are still living with the consequences of that fragmented market. We have a collection of national railways that differ in track gauge, electrification, signalling and in many other technical areas. Rail is just not as competitive as it should be. It is not realising its full potential.

Together, we have achieved a lot in the last 25 years. It has been an uphill struggle. Looking to the next 25, there are still several obstacles – technical and administrative - that prevent us from completing a genuine single European railway area.

But I still believe we have never been closer to turning the dream of a single unified European rail area into a reality. Rail is still one of the best opportunities for unlocking a new age of sustainable economic development.

There is clearly a great deal of work ahead.

Rail must enhance its appeal to customers, and to do that it has to be properly opened to competition. It should be an attractive alternative to road transport if it is to take a greater share of medium and long distance freight.

The Commission’s 2011 white paper on transport develops many of these ideas and goes further. It calls for the existing high-speed rail network to be tripled by 2030, for example. It forms the philosophy behind the Fourth Railway Package.

It sets out long-term targets for a major shift in passenger and freight traffic away from roads, given that demand for mobility will continue to grow.

But there is more. ERA’s role should be enhanced, so as to accelerate and streamline the process of certifying rolling stock and railway undertakings.

We made important progress here at the recent transport council, with political agreement on the first of our six proposals in the fourth rail package.

We are also pushing hard for pan-European deployment of the ERTMS system, as well as to maintain and further develop infrastructure.

That all means considerable investment to expand and upgrade capacity - which is where the Connecting Europe Facility and the Trans-European Transport Network will play a key part. It will also important to develop more high-speed rail, which has transformed European railways over the last three decades.

We have to continue to invest heavily in research and innovation to make sure that rail stays competitive against other forms of transport, to maximise its efficiency and minimise its environmental impact.

The Shift2Rail initiative will be instrumental in driving innovation in the years to come and I would invite CER’s members to participate in this project and show that rail can be an innovative industry.

You already know the details of our fourth package proposals: to facilitate certification of rolling stock and railway undertakings by an enhanced role for ERA. To open up national passenger markets, with the obligation to tender for public services. To ensure non-discrimination for all rail undertakings, independent infrastructure managers and financial transparency.

These proposals are not about challenging successful business models. But we do want to create fair conditions for all operators and shorter times to market. The single european rail area will allow more and better services for passengers and customers.

We have already achieved a lot. Europe is now a leader in high-speed rail. Rail freight markets have become more and more European. We were able to stop the long downslide of rail freight in relation to road, and reverse the trend, in those countries which have liberalised their markets successfully. But the economic crisis has brought renewed challenges that we need to address urgently.

At the same time, the European “rail landscape” has altered almost beyond recognition. Just look at how much the rail sector and the regulatory environment in which it operates have changed over the last 10 years.

Rail has had to move with the times. I applaud all the efforts that the European rail industry has made to improve its efficiency and move passengers and freight users towards the heart of its development strategy.

We can take the tough decisions now that are needed to restructure Europe's railway market to encourage innovation and the provision of better services.

The alternative is not so palatable. We can accept an irreversible slide down the slippery slope to a Europe where railways are a luxury toy for a few rich countries – and are unaffordable for most in the face of scarce public money.

It would be naïve to expect the negotiations to be easy. But I would encourage CER’s members to play an active and constructive role as discussions progress. This is how we can unleash rail's true potential, to raise the quality of service so it becomes a real and attractive alternative. And that is in everyone’s interests.

Thank you for your attention.


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