The Results and Efficiency of Railway Infrastructure Financing Within the EU
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DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT D: BUDGETARY AFFAIRS The Results and Efficiency of Railway Infrastructure Financing within the EU STUDY Abstract Upon request by the Committee on Budgetary Control (CONT) this study analyses the results, efficiency and effectiveness of the EU investment in rail infrastructure with a special focus on cross border rail projects. Beginning with a discussion of the reasons for the moderate success of EU railway policy it investigates four case studies with a focus on effectiveness of funding schemes and success of removing bottlenecks, particularly at border crossings, to improve attractiveness of the railway mode. Recommendations are given for a more efficient joint development of a European rail network by the Member States and the EU and a further development of funding schemes tailored to railways. IP/B/TRAN/FWC/2010-006/LOT4/C1/SC8 30/09/2015 PE 552.308 EN This document was requested by the European Parliament's Committee on Budgetary Control. It designated Mr Markus Pieper, MEP, to follow the study. AUTHORS Mr Claus DOLL, Fraunhofer Institute for Systems and Innovation Research ISI Mr Werner ROTHENGATTER, Karlsruhe Institute of Technology Mr Wolfgang SCHADE, M-Five GmbH Mobility, Futures, Innovation, Economics RESPONSIBLE ADMINISTRATOR Ms Vera MILICEVIC Policy Department D: Budgetary Affairs European Parliament B-1047 Brussels E-mail: [email protected] LINGUISTIC VERSIONS Original: EN Translation: FR, DE ABOUT THE EDITOR Policy Departments provide in-house and external expertise to support European Parliament's committees and other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU policies. To contact the Policy Department or to subscribe to its newsletter please write to: [email protected] Manuscript completed in October 2015. Brussels, © European Union, 2015. This document is available on the Internet at: http://www.europarl.europa.eu/studies DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy. The Results and Efficiency of Railway Infrastructure Financing within the EU ____________________________________________________________________________________________ CONTENTS CONTENTS 3 LIST OF ABBREVIATIONS 7 LIST OF TABLES 11 LIST OF MAPS 11 LIST OF FIGURES 11 EXECUTIVE SUMMARY 13 1. INTRODUCTION 19 2. EUROPEAN RAILWAY POLICY 21 2.1. Railway Market organisation and competition policy 22 2.2. Variety and Regulation of Technical Standards 24 2.3. Infrastructure Investment Policy 26 2.4. Policy Achievements 27 3. EUROPEAN RAILWAY INFRASTRUCTURE FUNDING 31 3.1. European Funding Options for rail projects 32 3.1.1. National Funding 32 3.1.2. EU Funding of transport infrastructure 34 3.1.2.2 EIB-Loans and Loan Guarantee Instrument for TEN-T Projects (LGTT) 36 3.1.2.3 EU Project bonds 36 3.1.2.4 Developing new schemes for European Infrastructure Projects 37 3.2. Past EU Railway funding 2000 – 2006 and 2007 – 2013 39 3.2.1. Expenditures in the funding period 2000 – 2006 39 3.2.2. Expenditures in the funding period 2007 – 2013 43 3.3. TEN-T and CEF funds for 2014 to 2020 48 3.4. The role of EFSI and CEF 51 4. CASE STUDIES 53 4.1. Case Study Selection and Design 53 4.2. PP11: Öresund fixed link 54 4.2.1. Transport impacts and bottlenecks 54 4.2.2. Impact assessment and funding 55 4.2.3. Regional and cross-border impacts 55 4.2.4. Conclusions 55 4.3. PP2: The pbkal northern european high speed netWOrk 55 3 Policy Department D: Budgetary Affairs ____________________________________________________________________________________________ 4.3.1. Transport impacts and bottlenecks 56 4.3.2. Impact assessment and funding 57 4.3.3. Regional and cross-border impacts 58 4.3.4. Conclusions 58 4.4. PP3: HSR southwest Europe 59 4.4.1. Transport impacts and bottlenecks 60 4.4.2. Impact assessment and funding 61 4.4.3. Regional and cross-border impacts 62 4.4.4. Conclusions 63 4.5. PP22: Railway axis Athens-Budapest-Dresden 63 4.5.1. Transport impacts and bottlenecks 64 4.5.2. Impact assessment and funding 64 4.5.3. Regional and cross-border impacts 66 4.5.4. Conclusions 66 5. EUROPEAN ADDED VALUE OF CROSS-BORDER INVESTMENTS 67 6. CONCLUSIONS 69 6.1. European railway policy: A long-run challenge 70 6.2. Central issue: Removing cross border bottlenecks 70 6.3. To be streamlined: HSR-Network and Rail Freight Corridors 71 6.4. Financial sources for railway investments 72 6.5. Impacts of EU railway funding 74 6.6. Issues for assessing the efficiency of railway investments 75 6.7. Flexible planning of core network corridors 75 7. REFERENCES 77 ANNEXES: CORRIDOR CASE STUDIES 83 1. ANNEX PP11: ORESUND FIXED LINK 85 1.1. Description of the project 85 1.2. Transport demand 87 1.3. Bottlenecks and barriers to implementation 88 1.4. Assessment of the project 88 1.5. Funding of the project 89 1.6. Regional impacts of the project 89 1.7. Conclusions 90 1.8. References 90 2. ANNEX PP2: PBKAL NORTH-WEST EUROPEAN HIGH SPEED NETWORK 91 2.1. Description of the project 91 2.2. Transport demand 92 4 The Results and Efficiency of Railway Infrastructure Financing within the EU ____________________________________________________________________________________________ 2.3. Bottlenecks and barriers to implementation 94 2.4. Assessment of the project 95 2.5. Funding of the project 97 2.6. Regional impacts of the project 98 2.7. Conclusions 99 2.8. References 100 3. ANNEX PP3: THE SOUTH-WEST EUROPEAN HIGH SPEED NETWORK 103 3.1. Description of the project 103 3.1.1. The Mediterranean Branch 105 3.1.2. The Atlantic Branch 105 3.2. Transport demand 106 3.2.1. France – Spain via the Mediterranean corridor 106 3.2.2. France – Spain via the Atlantic corridor 109 3.2.3. Spain - Portugal 110 3.3. Bottlenecks and barriers to implementation 110 3.3.1. Barriers to railway operations 110 3.3.2. Barriers to project implementation 111 3.4. Assessment of the project 112 3.4.1. The Spanish high speed network 112 3.4.2. Delays and cost overruns 114 3.5. Funding of the project 114 3.5.1. Funding sources 114 3.5.2. Innovative funding mechanisms 116 3.6. Regional impacts of the project 117 3.6.1. General regional accessibility, economics and employment 117 3.6.2. Direct impacts of construction works 118 3.7. Conclusions 118 3.8. References 119 4. ANNEX PP22: RAILWAY AXIS ATHENS-BUDAPEST-DRESDEN 122 4.1. Description of the project 122 4.2. Transport demand 124 4.3. Bottlenecks and barriers to implementation 125 4.3.1. Rail infrastructure 125 4.3.2. Delays at border sections 127 4.3.3. Rail intermodality and level of service 130 4.4. Economic Assessment of the project 130 4.5. Funding of the project 131 5 Policy Department D: Budgetary Affairs ____________________________________________________________________________________________ 4.5.1. Aggregate funding of railway projects 131 4.5.2. Funding of PP22 132 4.6. Regional impacts of the project 134 4.6.1. Wider economic impacts 134 4.6.2. Regional impacts 135 4.7. Conclusions 136 4.8. References 136 6 The Results and Efficiency of Railway Infrastructure Financing within the EU ____________________________________________________________________________________________ LIST OF ABBREVIATIONS AG Aktiengesellschaft (stock exchange company) AT Austria ATL Atlantic (core network corridor) ATM Air Traffic Management AWP Annual work programme BCR Benefit Cost Ratio BE Belgium BG Bulgaria CBA Cost Benefit Analysis CEF Connecting Europe Facility CF Cohesion Fund CNC Core Network Corridors CO2 Carbon dioxide CTRL Channel Tunnel Rail Link CZ Czech Republic DB Deutsche Bahn AG DBF Design-Build-Finance PPP model DBFO Design-Build-Finance-Operate PPP model DE Germany DK Denmark DG-MOVE Directorate General for Mobility and Transport DG-REGIO Directorate General for Regional Policy 7 Policy Department D: Budgetary Affairs ____________________________________________________________________________________________ EAV European Added Value EC European Commission EERP European Economic Recovery Programme EESC European Economic and Social Committee EFSI European Fund for Strategic Investments EIAH European Investment Advisory Hub EIB European Investment Bank EIPP European Investment Project Portal EPEC European PPP Expertise Centre ERA European Railway Agency ERDF European Regional Development Fund ES Spain ERTMS European Rail Traffic Management System ETCS European Train Control System EU European Union EUR Euro, European Currency FOB Funding Objectives FR France GDP Gross domestic product GR Greece HSR High speed rail HU Hungary Hz Hertz ICE Inter-City Express (of Deutsche Bahn AG) 8 The Results and Efficiency of Railway Infrastructure Financing within the EU ____________________________________________________________________________________________ IM Infrastructure Managers of railway networks INEA Innovation and Networks Executive Agency ITF International Transport Forum, OECD organisation ITS Intelligent Transportation Systems KPI Key performance indicator kV Kilovolt LGTT Loan Guarantee Instrument for TEN-T Projects LGV Ligne à Grande Vitesse (high speed line) m Metre MAP Multi-annual work programme MED Mediterranean (core network corridor) MFF Multi-annual financial framework MoS Motorways of the Sea MS Member State NGO Non-governmental organisation