European non-incumbent railway operators call for level-playing field

Two associations of non-incumbent railway operators Mofair and AllRail have warned the German government of the unreasonable subsidies for the state-owned company Deutsche Bahn. This could violate competition in the rail market, especially in its long-distance segment. All the operators should have a level-playing field for recovering from the coronacrisis.

The Association of Independent Passenger Rail Operators in Germany (Mofair) and the Alliance of Passenger Rail New Entrants in Europe (AllRail) have made statements about the possible unfair subsidising of Deutsche Bahn (DB). According to some reports, the German state-owned company had asked the government to allocate an additional 8-10 billion euros by 2024 for covering losses due to coronavirus. Therefore, two alliances, in their turn, require to uphold the principles of competition in the rail market and to clarify the purpose of these funds.

“When it comes to compensating the rail infrastructure manager DB Netze or the station manager DB Station&Service for lost income due to the crisis, this is right and important. But it must be ruled out that additional taxpayer money is used to support the commercial operations within the DB Group, especially DB Long Distance Trains (DB Fernverkehr) and its exclusive sales facilitator DB Sales (DB Vertrieb), while their competitors are not reimbursed,” President of Mofair Christian Schreyer declared earlier this week.

AllRail supported the sister association. “The EU and its Member States must ensure that all existing long-distance operators can quickly resume business activity as soon as the crisis is over. It is not acceptable for the coronavirus crisis to be used as a reason for a Member State to give preferential treatment to state-owned companies that are in direct competition with private ones,” AllRail’s Secretary-General Nick Brooks noted.

Possible deal?

It is no secret that the travel restrictions caused by the coronavirus outbreak have a great impact on European railway operators, especially on the non-incumbent ones. Despite the low demand for train services, DB continued to perform around three-quarters of its connections. “There was a – possibly implicit – agreement between the DB and its owner, the federal government. Namely: the government imposed that DB Long Distance Trains maintain such a high level of services. After the crisis, the government will then show its appreciation for the fact that this was done – despite it making no economic sense – by reimbursing DB for the costs of doing so. The federal government should have then imposed such an obligation on other long-distance operators too,” AllRail shared its explanations.

Austrian example

In this regard, the non-incumbent operators remind the positive experience of Austria. The local federal government obligated not only the state-owned incumbent company ÖBB but also the privately owned WESTbahn to keep up an hourly service between Vienna and Salzburg by means of a temporary public service obligation (PSO) award. “Whatever the situation, DB and the German government must make it transparent and understandable how much money is needed for which purposes. The real objective cannot be to support those DB subsidiaries that compete with privately-owned entities; instead, financial support must be fair for all companies,” Christian Schreyer summed up.

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Author: Mykola Zasiadko

Mykola Zasiadko is editor of online trade magazines RailTech.com and RailFreight.com.

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