Hindering Fair Access to 2nd Hand Rolling Stock Will Weaken Commercially Driven Long Distance Cross-border Passenger Rail in Europe, Leading to Unnecessary Public Service Obligations (PSOs)
The EU Commission (‘EC’) announced that it had come to the preliminarily conclusion that the state-owned rail incumbents Austrian Federal Railways (ÖBB) and Czech Railways (ČD) breached EU competition rules by colluding to hinder access to used 2nd hand rolling stock for the commercially driven new entrant cross-border passenger rail operator RegioJet.
But there is a further implication: if the EC’s allegations are true - then hindering access to 2nd hand rolling stock is being used to engineer market failure. New entrant operators are then less able to start commercially driven services, because they are not getting fair access to wagons, and there is very little alternative supply.
Consequently, such engineered ‘Market Failure’ will lead to unnecessary taxpayer-funded Public Service Obligations (PSOs) in long distance cross-border rail.
Incumbent train operators may have colluded against new entrant, European Commission says
The European Commission has sent Czech and Austrian national operators ČD and ÖBB a statement of objections setting out its preliminary view that they may have colluded to prevent new entrant RegioJet acquiring second-hand passenger rolling stock for use on competing services.
According to ALLRAIL, the alliance of new entrants to the passenger market, the lack of access to second-hand vehicles is one of the biggest barriers preventing newcomers from starting commercially-driven open access services. With no functioning market for long distance coaches owned by incumbents, dominant players should be required to sell or rent underutilised vehicles to newcomers without preferential treatment for other incumbents or unnecessary scrapping.
ÖBB and ČD breached EU rules by blocking RegioJet from access to rolling stock
In a preliminary statement made by the Commission, Czech Railways ČD and the Austrian ÖBB boycotted RegioJet to keep the operator from access to used rolling stock between 2012 and 2016.
According to ALLRAIL, unlike in other transport sectors, access to second-hand vehicles is one of the biggest barriers to entry for newcomers and independent operators. There is no functioning market for used long-distance coaches that are currently under the ownership of state incumbents, due to their inherited position as the sole national operator.
Nick Brooks, Secretary General at AllRail will talk about the need for a better market for used rolling stock at the RailTech Europe conference on 23 June. Find more information and tickets here.