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Incentive-Based Governance of the Swiss Railway Sector

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Incentive-Based Governance of the Swiss Railway Sector Incentive-based Governance of the Swiss Railway Sector A study of the performance incentives created by the financing of the railways May 2013 Authors Prof Matthias Finger, Ecole Polytechnique Fédérale de Lausanne and European University Institute Dr Martin Holterman, European University Institute With the collaboration of Nadia Bert, European University Institute Robert Schuman Centre for Advanced Studies Within the European University Institute (EUI), the Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Stefano Bartolini since September 2006, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union. Details of the research of the Centre can be found on: http://www.eui.eu/RSCAS/Research/ Research publications take the form of Working Papers, Policy Papers, Distinguished Lectures and books. Most of these are also available on the RSCAS website: http://www.eui.eu/RSCAS/Publications/ The EUI and the RSCAS are not responsible for the opinion expressed by the author(s). Florence School of Regulation The Florence School of Regulation (FSR) is a partnership between the Robert Schuman Centre for Advanced Studies (RSCAS) at the European University Institute (EUI), the Council of the European Energy Regulators (CEER) and the Independent Regulators Group (IRG). Moreover, as part of the EUI, the FSR works closely with the European Commission. The objectives of the FSR are to promote informed discussions on key policy issues, through workshops and seminars, to provide state-of-the-art training for practitioners (from European Commission, National Regulators and private companies), to produce analytical and empirical researches about regulated sectors, to network, and to exchange documents and ideas. At present, its scope is focused on the regulation of Energy (electricity and gas markets), of Communications & Media, and of Transport. This research project has been carried out within the scope of the research activities of FSR - Transport Area. For further information Florence School of Regulation – Transport Area Robert Schuman Centre for Advanced Studies European University Institute Via Boccaccio, 151 I-50133 Firenze Tel.: +39 055 4685 751 Fax: +39 055 4685 755 Transport Area E-mail: [email protected] http://fsr.eui.eu 2 Table of Contents List of Tables .......................................................................................................................................... 5 List of Figures ......................................................................................................................................... 5 List of Acronyms .................................................................................................................................... 6 1. Introduction ......................................................................................................................................... 8 2. The financing of the Swiss railway system ....................................................................................... 10 2.1 The financing of train operating companies................................................................................ 10 2.1.1. Fernverkehr (Passengers) ................................................................................................... 11 2.1.2 Cargo .................................................................................................................................... 13 2.1.3 Regionalverkehr (Passenger trains and buses) ..................................................................... 16 2.2 The Financing of rail infrastructure in Switzerland .................................................................... 23 2.2.1 The standard model .............................................................................................................. 23 2.2.2 FinöV ................................................................................................................................... 27 2.2.3 Developments since 1998 .................................................................................................... 29 2.3 Conclusion .................................................................................................................................. 30 3. The Financing of the Railway Industry in Four Benchmark Countries ............................................ 31 3.1 The Financing of the Railway Industry in Germany ................................................................... 31 3.2 The Financing of the Railway Industry in Belgium .................................................................... 35 3.3 The Financing of the Railway Industry in the Netherlands ........................................................ 38 3.4 The Financing of the Railway Industry in Austria ...................................................................... 41 3.5 Conclusion .................................................................................................................................. 44 4. Performance ...................................................................................................................................... 46 4.1 Performance Contracts ................................................................................................................ 46 4.1.1 Switzerland .......................................................................................................................... 46 4.1.2 The Netherlands ................................................................................................................... 52 4.1.3 Germany ............................................................................................................................... 54 4.1.4 Conclusion ........................................................................................................................... 55 4.2 The European Railway Performance Index ................................................................................ 56 4.3 Price ............................................................................................................................................ 57 4.4 Level of Subsidy ......................................................................................................................... 58 4.5 Intensity of Use ........................................................................................................................... 58 4.6 Punctuality .................................................................................................................................. 61 4.7 Safety .......................................................................................................................................... 61 4.8 Conclusion .................................................................................................................................. 62 3 5. A Model of Incentives ...................................................................................................................... 63 5.1. General considerations about incentives .................................................................................... 63 5.2 The financial incentives in the Swiss railway sector .................................................................. 66 5.2.1 Passenger TOCs ................................................................................................................... 66 5.2.2 Freight TOCs ....................................................................................................................... 67 5.2.3 Infrastructure companies ...................................................................................................... 68 5.2.4 The Funds ............................................................................................................................. 70 5.2.5 Other actors .......................................................................................................................... 71 5.3 Mapping ...................................................................................................................................... 72 5.3.1 Price ..................................................................................................................................... 73 5.3.2 The level of subsidy ............................................................................................................. 75 5.3.3 The Intensity of Use ............................................................................................................. 78 5.3.4 Punctuality ........................................................................................................................... 79 5.3.5 Safety ................................................................................................................................... 81 5.4 Conclusion .................................................................................................................................. 83 6. An Evaluation of Policy Alternatives ..............................................................................................
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