railway restructuring in the western balkans experiences...

Support for Implementing Measures for the South East Core Support for Implementing Measures for the South East Core Regional Transport Network Multi Annual PlanRegional Transport Network Multi Annual PlanRegional Transport Network Multi Annual PlanRegional Transport Network Multi Annual Plan

((EuropeAidEuropeAid/125783/C/SER/MULTI)/125783/C/SER/MULTI)

Railway Restructuring in the Western Balkans Experiences and Lessons Learned

V. Evmolpidis Team Leader and Senior RW Expert – Man. Dir. TRADEMCOp

T. JankovicRegional Railway Expert – MoI Serbia

RailwayRailway Restructuring in the Western BalkansRestructuring in the Western BalkansRailwayRailway Restructuring in the Western Balkans Restructuring in the Western Balkans Experiences and lessons learnedExperiences and lessons learned

ContentsContents1. Scope of the project2 Comparative presentation of railway2. Comparative presentation of railway

restructuring by countrySWOT l i id i EC3. SWOT analysis considering EC Directive 2001/14

d4. Lessons Learned

1 Scope of the project1 Scope of the project1. Scope of the project1. Scope of the project

Goal: “to continue to pursue joint efforts for fostering a harmonised reform and integration process in the transport sector across the SEE region in order totransport sector across the SEE region in order to improve the efficiency of the SEE Core Regional Railway Transport NetworkObjective: To make proposals concerning the degree Objective: To make proposals concerning the degree of alignment of RW laws in SEETO Participants vis a vis EC Railway Directives and particularly 2001/14, with reference to railway reform railway infrastructurereference to railway reform, railway infrastructure access & pricing regime, regulatory institutions and network statements

2 Scope of p esentation2 Scope of p esentation2. Scope of presentation2. Scope of presentation

To present the situation concerning the parameters that d i h li f il f i h i

p g pdetermine the alignment of railway reform in the countries with EC Directives and in particular Directive 2001/14.

These parameters are:These parameters are:- national railway laws- regulatory and other institutions (Regulatory Body,

Li i B d S f t A th it A id t I ti tiLicensing Body, Safety Authority, Accident Investigation Body, Notifying Body) which should be independent

- access charges and pricing regime to RW infrastructureg p g g- network statementconsidering that the transposition of EU Directives is obligatory when they become members of EUobligatory when they become members of EU.

To reach conclusions that will demonstrate lessons to be learned for Greece, a MS since already 29 years

3 1 Albania3 1 Albania3.1. Albania3.1. Albania

Law 9317 of 18/11/2004 The Law caters for private or public RW operators and e a cate s o p ate o pub c ope ato s a d

infrastructure owners from Albania. Foreign operators allowed on reciprocal basis, but only if one end of transport is in Albaniap

Law not aligned with EC Directives, not even, 91/440, but a new law is to be implemented in 2010, to incorporate all Directives, including Dir. 2008/57incorporate all Directives, including Dir. 2008/57

Infrastructure and operations not separated neither as entities nor as accounts (integrated company)M t b l d d f i th L till Most by-laws and decrees, foreseen in the Law still not issued

3 1 Albania3 1 Albania3.1. Albania3.1. Albania

Due to lack of signalisation, not practical to allow third RU to access the network.

Access charges are foreseen, but not calculated yet. Method proposed by project to be implementedP th ll ti f di t R ilN tE Path allocation foreseen according to RailNetEurope

PSO foreseen and implemented through a contract No independent Regulatory Body foreseen Currently No independent Regulatory Body foreseen. Currently

all authorities at Ministry level, but NB not available Draft Network Statement being prepared by TADraft Network Statement being prepared by TA

according to project proposal

….. the market is closed!

3 2 Bosnia & Herzegovina3 2 Bosnia & Herzegovina3.2. Bosnia & Herzegovina3.2. Bosnia & Herzegovina

There are 3 Laws due to the peculiarity of Statehood There are 3 Laws, due to the peculiarity of Statehood FZBiH and ZRS are being promoted as the only IMs and

RUs in the scope of respective integrated companies State and entity Laws not harmonised and not aligned

with Dir. 2001/14 and only partly with Dir. 91/440N di i i t t i f t t f t Non-discriminatory access to infrastructure foreseen at State level, but in practice only operators from 2 entities can run on respective infrastructurep

Readiness to separate accounts in FZBiH but not done yet. No separation in ZRS

Federation Law: All RU’s should have license and safety certificate, but no one has yet

Rep Srpska Law: With 2008 law 5 more years non Rep. Srpska Law: With 2008 law, 5 more years non-licensing of incumbent RW (infrastructure, operations)

3 2 Bosnia & Herzegovina3 2 Bosnia & Herzegovina3.2. Bosnia & Herzegovina3.2. Bosnia & Herzegovina

Access charges foreseen in both entities and partly implemented. In RS access charges foreseen in the recent amendment to the Lawamendment to the Law

PSO foreseen and implemented to cover losses in RS Regulatory Board of BiH RW: mainly for licenses and Regulatory Board of BiH RW: mainly for licenses and

safety. No licenses or certificates granted yet. It is the body assigned to receive appeals for access related issues Regulatory power for international and inter-entityissues. Regulatory power for international and inter-entity operations only (path allocation, timetables, TAC according to common criteria). AIB by the MoT’s. No NB.

Network Statement being prepared in RS

….. the market is closed!

3 3 Croatia3 3 Croatia3.3. Croatia3.3. Croatia

Railway Law adopted in 2003. Follows EU Directives. Several more Laws issued to provide complete alignment with 1st and 2nd EU RW package HZ separated in 2005with 1st and 2nd EU RW package. HZ separated in 2005 into 4 companies: HZ Infrastructure, HZ Passengers, HZ Cargo, HZ Traction. New revision is currently in process.

In Sept. 2006 the Holding Company was created to which all 4 above companies belongWo k hop belong to the l t th ee omp nie Workshops belong to the last three companies

Law on Railway Safety adopted in 2007 Law on Agency for Regulation of the Market enacted in Law on Agency for Regulation of the Market enacted in

2007. Regulatory Body operational since end 2009. Law on Safety Agency in power as of Jan. 2009.Law on Safety Agency in power as of Jan. 2009. AIB formed as a result of reorganizing the MoT

3 3 Croatia3 3 Croatia3.3. Croatia3.3. Croatia

The RU and IM have been licensed automatically by Law The RU and IM have been licensed automatically by Law for 5 years. All debt of infrastructure and operator assumed by the State.

Unknown if in 5 years the financial position of RU will Unknown if in 5 years the financial position of RU will allow its licensing

Track Access Charges foreseen and calculated but not implemented A lump sum amount charged every yearimplemented. A lump sum amount charged every year.

Access to domestic market already possible. Opening the market on reciprocal basis to foreign RU also possiblep g p

Elements for specifying the amount of TAC must be balanced in relation to IMs of EU member states

PSO foreseen and implemented by contract PSO foreseen and implemented by contract Network Statement approved and published for 2009 and

2010 …the market is closed!

3.4. former Yugoslav Republic of 3.4. former Yugoslav Republic of MacedoniaMacedonia

Enacted Laws: RW Law (‘04) Law for (regulatory) Agency Enacted Laws: RW Law (‘04), Law for (regulatory) Agency (‘08), Law for the Transformation of the RW (‘05), Law for RW Transport Safety (‘07) and Law on Contract for RW Transport (‘07)

Almost all requirements of the first EC railway package Directives have been implementedDirectives have been implemented

Infrastructure (IM) and Operations (RU) are separate companies. Passenger and freight accounts separated p g g p

An independent Regulatory Agency established as of Jan. 1, 2009, operational by end 2009.

Access Charges foreseen. Study completed (FC-). TAC calculated as 40 % of RU turnover. MoT revises TAC according to project proposals.according to project proposals.

3.4. former Yugoslav Republic of 3.4. former Yugoslav Republic of MacedoniaMacedonia

No license or safety certificates issued till now IM is licensed automatically according to RW Law

Th RU h fi l h d b bl b The RU has first to resolve the debt problem to be licensed

PSO foreseen and implemented by contractPSO foreseen and implemented by contract No intention to privatise the RU although the Law on

Transformation allows thatN SA d NB t No SA and no NB yet

Network Statement published and being revised as per RNE

…the market is closed!

3 5 Montenegro3 5 Montenegro3.5. Montenegro3.5. Montenegro

The Railway Law was enforced since Jan. ’05 Complemented by the Railway Safety Law in Dec. 2007p y y y Alignment with EU Directives almost complete Infrastructure (IM) and Operations (RU) are separate

dcompanies, since June 2008. Operations separated to Passengers and Cargo

Cargo RU in the process of privatization Cargo RU in the process of privatization Concession to be offered for infrastructure maintenance

and for stations PSO foreseen for passenger transport. Contract signed

.

3 5 Montenegro3 5 Montenegro3.5. Montenegro3.5. Montenegro

Directorate for Railways is the RB and LB and is independent SA d NB t b t d i Di t t f R il SA and NB to be created in Directorate for Railways as independent body.

AIB to be created in MoT Track Access Charges foreseen as MC+ Network Statement approved and published. Produced

according to RNE standardaccording to RNE standard Ready to open the market

…but the market is closed!

3 6 Serbia3 6 Serbia3.6. Serbia3.6. Serbia

Law since 1/3/2005 (18/2005) and Decree (2005) that foresees separation of accounts (operations –passenger/freight- and infrastructure but it is notpassenger/freight- and infrastructure but it is not implemented

Separate entities foreseen for infrastructure and operations but not implementedoperations, but not implemented

Track Access Charges foreseen, study done, not approved. No implementation yet. pp p y

PSO foreseen. Study completed. To be implemented There is no Network Statement. Study done but not

implementedimplemented.

3 6 Serbia3 6 Serbia3.6. Serbia3.6. Serbia

The Directorate of Railways is the Regulatory Authority but with limited regulatory functions. h f l “ d d ” b d The Directorate of Railways is an “independent” body

but liable to the Government which provides the financing. It is basically a licensing body. One, possibly g y g y , p ytwo new railway operator licenses in consideration.

Policy of MoI for opening of the market: 1st step: to dome ti ope to 2nd tep to ope to f om SEETOdomestic operators, 2nd step: to operators from SEETO neighbors, 3rd step: any third party


3.7. Kosovo (under 3.7. Kosovo (under UNSCR1244/1999)UNSCR1244/1999)

The Railway Law (03/L-076 of June 2008) is quite well adapted to EU Directives S l b l d d di Several by-laws and decrees are pending

Separation of accounts for Infrastructure and Operation Directorates exists, even if the separation of p , passets between the two Directorates not completed yet.

Independent Regulatory Authority foreseen but not Independent Regulatory Authority foreseen but not organized yet. Expected in 2010. It will be independent

The Regulatory Authority will act as market regulator The Regulatory Authority will act as market regulator and also as Licensing Body, Safety Authority and Accident Investigation Body

3.7. Kosovo (under 3.7. Kosovo (under UNSCR1244/1999)UNSCR1244/1999)

Licensing of ID and OD granted automatically by LawT k A Ch f d i l d Track Access Charges foreseen and implemented as lump sum amount through a contract

PSO foreseen and implementedPSO foreseen and implemented Network Statement prepare according to RNE standard

but not implemented yetG t illi t l ith EU Di ti d Great willingness to comply with EU Directives and open up the market


3 SWOT Analysis3 SWOT Analysis -- SEETO RegionSEETO Region3. SWOT Analysis 3. SWOT Analysis -- SEETO RegionSEETO Region


Strengths Max. alignment: Croatia, former Yugoslav Rep. of Macedonia,

Montenegro (separate companies implemented)Montenegro (separate companies implemented) Medium alignment: Kosovo (under UNSCR1244/99), Bosnia&

Herzegovina (state) but no implementation Open access to infrastructure foreseen but not implemented Open access to infrastructure foreseen but not implemented. Reciprocal access foreseen in Albania, Serbia, Croatia Regulator exists: Bosnia& Herzegovina, Serbia, former Yugoslav

Rep of Macedonia Montenegro and CroatiaRep. of Macedonia, Montenegro and Croatia All other institutions in place: Serbia, Croatia, former Yugoslav Rep.

of Macedonia. Independence is plausibleAccess charges foreseen in all Participant laws Usually Access charges foreseen in all Participant laws. Usually implemented ad-hoc

Network Statement approved and published in Croatia, former Yugoslav Rep of Macedonia MontenegroYugoslav Rep. of Macedonia, Montenegro


Weaknesses Railway market closed, even on reciprocal basis

Mi i li S bi B i & H i Minimum alignment: Serbia, Bosnia & Herzegovina, Albania: Not even account separation

Necessary by-laws or decrees, not prepared yet inNecessary by laws or decrees, not prepared yet in Albania, Serbia, Kosovo (under UNSCR1244/99)

No regulatory authority: Albania, Kosovo (under UNSCR 1244/99)1244/99),

Other institutions in Ministry: Albania, Bosnia & Herzegovina (entities), Kosovo (under UNSCR1244/99),

IM (ID) and RU (OD) either not licensed, or licensed by law, due to difficulties to comply with financial health.


Opportunities Proactive behavior from Albania, former Yugoslav Rep.

f M d i K ( d UNSCR 1244/99)of Macedonia, Kosovo (under UNSCR 1244/99), Montenegro

Very pro-active, to the degree of privatisation and/or y p , g p /concession: Montenegro

Big networks with a lot of opportunities (including transit) for open access enhancing role of RW’s:transit) for open access enhancing role of RW s: Croatia, Serbia

Small networks with specific transit opportunities: Montenegro former Yugoslav Rep of MacedoniaMontenegro, former Yugoslav Rep. of Macedonia


Threats Too small RW networks in Albania, former Yugoslav Rep. of

Macedonia Kosovo (under UNSCR 1244/99) MontenegroMacedonia, Kosovo (under UNSCR 1244/99), Montenegro Lack of sufficient experts to “man” RU and IM and the required

institutions and the regulator Desire to open the market low in Bosnia & Herzegovina Croatia Desire to open the market low in Bosnia & Herzegovina, Croatia,

Serbia (“if the others do not open the market, why should we” syndrome)

The States do not provide enough funds to maintain and develop e States do ot p o de e oug u ds to a ta a d de e opRW infrastructure

RU’s may be financially not suitable to be licensed Required institutions either not in place or not independent or with Required institutions either not in place or not independent or with

limited authorities or authorities on paper Not harmonized track access charges and level of reform IM’s do not speak to each other IM s do not speak to each other

3. SWOT Analysis 3. SWOT Analysis -- EC MS+….EC MS+….Results of Evaluating the Friendliness of Legislation for External RU-2004,2007

(source:IBM)

0 200 400 600 800 1000 1200

G t B it iGreat BritainGermany

NetherlandSw edenSlovakia

Czech RepublicpPortugalRomaniaDenmarkLithuania

AustriaItaly

PolandNorw ayBelgiumEstoniaFinland

2004

2007

FinlandHungaryBulgaria

SpainLatvia

Sw itzerlandSloveniaGreeceFrance

LuxembourgIreland

3. SWOT Analysis 3. SWOT Analysis -- EC MS + ….EC MS + ….Results of Evaluating the Liberalisation Process in EU RW-2004,2007 (source: IBM)

0 100 200 300 400 500 600 700 800 900 1000

Great BritainGermanySweden

NetherlandAustria

DenmarkSwitzerland

PolandCzech Republic

RomaniaPortugalSl kiSlovakiaNorwayEstonia

LithuaniaItaly

Slovenia

20042007

SloveniaBulgaria

LatviaBelgiumHungaryFinland

SpainLuxembourg

FranceGreeceIreland

4 Lessons Learned4 Lessons Learned4. Lessons Learned4. Lessons Learned

1. Considerable discrepancy and time differential in implementing EU Directives in Railways. But this is not p g yunique to the Region. Same is true for some EU MS

2. Accession Countries in Region closer to complete implementation of EC Directives.

3. Smaller countries are more proactive to implement h b t h l t diffi ltichange but have a lot more difficulties

4. Countries with aligned RW laws, fail to implement them since EU membership is not imminentthem since EU membership is not imminent

5. IM and RU do not speak to each other at regional level or even in the same countryor even in the same country

4 Lessons Learned4 Lessons Learned4. Lessons Learned4. Lessons Learned6 Too many institutions are required and too few people6. Too many institutions are required and too few people

to “man” them,7. Considerable discrepancy in implementing TAC both in

level and in methodology of calculating Oftenlevel and in methodology of calculating. Often arbitrary lump sum amounts. Some operators at the verge of going “broke”,

f8. Track access charges depend on willingness of governments to finance maintenance and development of railway infrastructure,

9. Contracts have to be signed (at least) between:- the State and IM

th St t d t f PSO- the State and operator for PSO- the IM and the operator

and should be adhered toand should be adhered to.

4 Lessons Learned4 Lessons Learned4. Lessons Learned4. Lessons Learned

10. The Directives have been created to improve the competitiveness of Railway as a mode and not to maintain existing railway companiesmaintain existing railway companies

11. Harmonisation of EU Directives’ implementation and of establishment of an open RW market not possible without coordination/communication among IM’s inwithout coordination/communication among IM’s in Region and in neighbouring EU MS

12. This is even more important on Corridors X, Vb, Vc. h h

p , ,But more important, countries in the region have to “create” a network based operation.

13. Opening the RW market in a non-discriminatory and13. Opening the RW market in a non discriminatory and fair manner is at risk without harmonisation of TAC and Network Statements at regional level.

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railway restructuring in the western balkans experiences...

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