Liberalisation of passenger rail services


Where it has occurred, liberalisation of passenger rail services in Europe has largely been successful, with improved services, increased traffic and reduced support from public finances. This offers lessons for markets that are yet to be liberalised. It also points to a number of key questions and difficult issues that policy-makers will have to address. These are the findings of a new report on ‘Liberalisation of passenger rail services’, published today by the Centre on Regulation in Europe (CERRE), the Brussels-based think tank acknowledged for its academic independence, the quality of its expertise and the relevance of its contributions to the policy and regulatory process.

In markets, such as France, which have yet to undergo liberalisation, the report identifies a number of trade-offs to be faced by policy-makers. Those include:

  • Choosing a path to liberalisation – through competitive tendering for public service contracts, or open access for the operation of commercial services, or some combination of the two;
  • Deciding which levels of government should be responsible for competitive tendering: devolving this to regional administrations or maintaining central coordination;
  • Determining the optimal size and duration of franchises to maximise economies of scale and density;
  • Allocating risk-sharing between private operators and the state;
  • Dealing with the political and social implications of potentially transferring large numbers of public-sector staff to private companies.

CERRE Director General, Professor Bruno Liebhaberg, says: “Through its wide geographical scope, its robust analyses and its clear policy recommendations, this new CERRE report highlights the benefits of liberalisation, to both users and taxpayers, in the countries where that process has been completed. As such, it should provide a valuable contribution to the current debate around rail transport reform which is currently going on in many Member States.

Professor Chris Nash, Professor Yves Crozet, Dr Heike Link, Professor Jan-Eric Nilsson and Professor Andrew Smith