The International Union of Railways marked its 75th birthday with a seminar in Paris on June 19 which revealed just how widely opinions differ on the best way to replace monolithic state-owned railways. But on one point there was consensus: the earthquake that has hit the industry in the 1990s marks the start of a fundamental restructuring that can only accelerate, even though the ideal model has yet to emerge. And as more than one speaker stressed, the UIC must lead that change.
In a recorded video, EU Transport Commissioner Neil Kinnock warned that ’rail has lost and is losing traffic at an alarming rate’ because of ’customer dissatisfaction’. His may be a regional perspective, but then UIC has never really made up its mind whether it is a world body or a co-ordinator of standards for Europe’s state railways. And if railways are winning profitable freight in the USA and passengers in Japan, they are all too frequently on the ropes elsewhere - apart from the few remaining planned economies such as China.
Lou Thompson, Railways Adviser to the World Bank, believed European Commission initiatives designed to expose the railway industry to market forces resulted from ’sheer frustration’ because ’it cannot be denied that the railways of Europe were dying, much as they were in the US in the 1970s’. Indeed, he saw ’very similar dilemmas in many of the countries we are advising.’
Heinz Dürr, Chairman of the Community of European Railways (and of German Railway until last month) criticised governments ’which had let their railway run down over 40 years.’ One legacy was ’railway people who think they have a job for life - they have to recognise that it is the customer who pays them, not the finance ministry.’ He also challenged the separation of infrastructure from operations that is a cornerstone of Kinnock’s open access policy, pointing to the successful vertically-integrated railways of the US and Japan, and was backed by Shuichiro Yamanouchi, Chairman of JR-East. Vince O’Rourke, Chairman of the Australasian Railway Association and Chief Executive of Queensland Rail, was ’very strongly of the view that we should run a vertically integrated railway’ because ’the benefits far outweigh any benefits of separation.’
Thompson predicted great diversity in the structures that would emerge, and cited concessioning of infrastructure that remained in public ownership in Latin America and New Zealand as proof that ’the railways problem can be solved, or at least alleviated.’ He thought independent management of freight and passenger operations was essential, which was why many European railways ’will take advantage of the infrastructure separation model propounded by the EC.’ In the end, what matters is not the structure but ’whether a company lives or dies by its customers.’ As an optimist, Thompson was ’convinced that railways had a major role to play’, and ’when we attend the UIC’s 85th anniversary, I predict that we will see an organisationally focused, market-driven UIC as well.’ o
In Brief
n The International Air Rail Organisation was formally launched at the beginning of July to share best practice between companies involved with airport rail links (RG 1.97 p3). Founder members include Heathrow Express, Netherlands Railways, London Underground, Hong Kong MTRC and Halcrow Transmark.
n CSX and Norfolk Southern filed their operating plan for the proposed carve-up of Conrail with the Surface Transportation Board on June 23. The joint application estimates that the two companies will realise more than $800m through greater efficiencies and increased revenue following the takeover.
n On June 30 the European Investment Bank announced approval for a further Ecu75m loan towards upgrading work on the Czech portion of the Berlin - Praha - Wien corridor.
n Turkish company Kale Group has paid 2bn lira to TCDD for the right to operate freight trains between Bandirma and Sigirci for a year, cutting its transport costs by 40%. Kale is expected to spend US$20m to run its own services.
n Dakota, Minnesota & Eastern Railroad unveiled proposals on June 9 to break into the lucrative Powder River coal business, now served by UP and BNSF. DM&E plans to rebuild its 1050 kmline from the Mississippi River in Minnesota to Rapid City, South Dakota, and build a 400 km link into the Wyoming coalfields. The $1·2bn scheme would take five years.
n Croatian Railways resumed control of its routes in the Serb enclave of Eastern Slavonia in mid-June, following the signing of a UN-sponsored agreement in Vukovar.
n Syrian Railways signed a FFr350m contract in June to buy 30 diesel locos from GEC Alsthom; the deal will be funded by an inter-government letter of credit following President Chirac’s visit to Damascus towards the end of 1996.
n Construction of Atlanta’s North line metro extension from Sandy Springs to North Springs began in June, following the start of work on the 1·1 km from Dunwoody to Sandy Springs last November. Revenue service between Dunwoody and North Springs is due to start in December 2000.
n On June 27 Chile’s Ferrocarril del Pacifico SA announced a US$47·5m investment including acquisition of 15 new locos, refurbishment of 1600 wagons and infrastructure rehabilitation. Fepasa has negotiated loans of US$14·5m from the International Finance Corp and $15·5m from Nissho Iwai American Corp.
n Union Pacific undertook a second blockade of its Powder River coal line from June 16 - 21. The US$10m blitz by 330 staff and 150 machines saw the installation of another 14·5 km of double track, replacement of a bridge, installation of over 12000 sleepers, rail replacement on more than 20 curves and rail grinding on 230 track-km.
n On June 26, the Federal Railroad Administration ordered all US railways to review their safety programmes, following a rear-end collision between two CSX trains in West Virginia and a head-on smash of two UP freights in Texas.
n Negotiations have resumed for construction of rail links between Jordan and Israel, which would give Jordanian industries access to the ports of Haifa, Ashdod and Eilat.
