Two national rail companies will fight over Paris-Milan route
The European Union-required opening of international rail services to competition will begin in 2010 and force existing national rail companies in Europe to begin fighting for the right to serve their previously monopolized markets. The result of this competition will be the increasing privatization of what have been public services in the past, something I’ve railed against before. But it will also mean the commencement of in-fighting between national rail companies over routes between their respective countries.
France’s RFF, which oversees that country’s railroads, announced yesterday that thus far, only one agency has asked for the right to use French tracks: Trenitalia, the Italian rail company. Trenitalia wants to compete with France’s national rail company SNCF on the Paris-Milan route. Several other foreign companies that had been expected to sign on for competitive routes – including Germany’s DB, the private company Veolia Transportation, and Air France – have yet to make their intentions known and may actually be shut out for 2010. One problem for these companies is that they don’t necessary yet have the necessary rolling stock that would allow them to provide service on French lines.
Trenitalia’s interest in moving into the French international rail market is an interesting punch-back, because SNCF is investing directly in the Italian domestic market with a new company called NTV, which is part-owned by SNCF and which will be the first rail company to use the new Alstom AGV trainsets. Trenitalia clearly isn’t interested in being left on the side of the road as its French competitor is aggressively pushing forward.
While I’m not sure that international train routes in Europe should be left only to national rail companies operating under joint agreements – there are some advantages to having competition along international routes – I’m bothered by Europe’s rapid opening of rail services to private industry. While tracks will remain in the public’s hands – à la U.K. post-massive breakdown in its privatization scheme – competition in rail service, if anything, will decrease fares along the most-used routes, such as Paris-Lyon. But what we’re also likely to see is a decrease in service and probably increases in fares along less-used routes. That’s a major problem, and that’s a fundamentally good reason to have one national rail operator running all routes, so that less-used lines are subsidized by the more-used ones. To allow private operators, operating only on their choice routes, to take much of the profitability out of the hands of the public enterprise, doesn’t address the needs of the national rail system as a whole. I wouldn’t be surprised to see French labor unions blocking domestic rail competition in France before it becomes active in 2012 – and I’ll be on their side. Competition in the rail industry is not the best of E.U. ideas, and we shouldn’t even think about emulating the idea now that we’ve suddenly become interested in investing in our rail lines.