Regulatory challenges ahead for Europe’s rail sector

Ahead of the publication by the European Commission of its proposals on the 4th Package of rail reforms, CERRE Mobility is publishing a policy paper on the future of European rail regulation.

The paper’s conclusions include the following:

• Since railways are highly dependent on public funds, national and regional authorities should closely monitor the sector’s efficiency. More systematic use of international benchmarking is recommended to that effect;

• Whatever the institutional design of the separation between the infrastructure manager and the incumbent operator, the former’s independence must be ensured and key performance indicators developed to put pressure on the infrastructure manager to improve its efficiency;

• Competition, both on-track and off-track, is a powerful tool to reduce the incumbents inefficiency and to foster innovation (in services, pricing, etc.); The main task of rail regulators (i.e. ensuring non-discrimination) requires their total independence, not only from the incumbent operator but also from public authorities. When it is not yet the case, regulators should be set up as separate entities outside of transport ministries.