An effort to liberalize European rail service, including a proposed separation of track managers and train operators, was the focus of the European Parliament's Committee on Transport and Tourism this week.

The committee discussed the Fourth Railway Package at a day-long hearing in Brussels, which was attended by transport experts, systems operators, infrastructure managers, manufacturers, and freight, passenger and employee representatives. The EU's package is looking to boost competition by ending the practice of integrated companies dominating both the rail network and the trains that use it, opening up the rails to new operators. The proposal also would implement a single, EU-wide certification process for railway cars and locomotives—a move proponents say would help the industry by saving both time and money.

The move is no small undertaking, considering the 212,345 kilometers of track in use in Europe and the industry's 73 billion euros in annual turnover. The Fourth Railway Package was first introduced in February by transport commissioner Siim Kallas, with the overarching goal of completing a single European railway area. The EC is proposing to open domestic rail passenger markets to competition by 2019.

Proponents are framing the proposal of separating track from train as a common sense issue, pointing out that airports are not run by airlines. Opening up the industry to greater competition could boost punctuality and the quality or service while lowering ticket prices, they argue.

“If we had the same situation in aviation as we have in railways, not a single Airbus would fly across Europe,” said Brian Simpson, chair of the transport committee.

However, some members questioned whether new regulations would exacerbate costs and reduce the quality of service. There were also different opinions as to how infrastructure managers and rail operators should be split, and the extent of the separation needed. Rail operators and regulatory authorities argued that adequate oversight from regulatory bodies mattered more than a full separation.

Mauro Moretti, chair of the Community of European Railway and Infrastructure Companies (CER), told committee members the industry already struggles to meet constantly changing EU regulations. The regulatory risk is high, and it hampers business development, Moretti said.

Moretti, CEO of Ferrovie dello Stato Italiane, pointed to previous liberalization efforts he said have actually had negative results. He focused on the freight sector, which has new entrants since 2007 reforms but is losing modal share to other forms of transit.

Moretti wholeheartedly rejected what he called the “dogmatic and anti-business analysis” calling for greater separation of track and trains. Instead, the group suggested strengthening regulatory bodies to ensure non-discriminatory access to infrastructure.

The railway package also addresses the need for uniform rules on safety and technical standards.

Manufacturers' representative Jose Gortazar Obieta, technology director of CAF Beasain in Spain, stressed the need for unified standards throughout the European rail industry. Manufacturers currently must seek separate authorization from every member state, which all have their own specific rules.

“There are about 11,000 different national rules, so this is a very huge problem,” Obieta, a member of the manufacturers group UNIFE, told the committee. He called on the committee to make the European Railway Agency (ERA) a “one-stop shop” for authorization.

Obieta estimated there are assets worth 1.2 billion euros awaiting authorization. The process can take more than two years, he added.

Industry group CER concurs with Obieta about the need for uniform standards on interoperability and safety. Because of the high cost associated with delays in vehicle authorizations and safety certifications, the group is urging the committee to split the railway package in order to approve the unified process under the ERA while tackling the more contentious issues later.

“Each year the European railway sector spends in these processes as much as the air sector worldwide—around half a billion euro,” a CER statement released this week said. “It is imperative that legislators discuss the text, vote it, and implement it without further hesitations.”

CER Executive Director Libor Lochman argued that would do just as much to open the market and improve performance and costs.

Before any overhaul of the railways can proceed, the package needs approval by the European Parliament and the member states. Draft reports from rapporteurs are due in July. The transport committee is scheduled to vote on the recommendation in November. The MEPs are expected to vote on the package during the January 2014 plenary session.

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