Track Access Charges: Reconciling Conflicting Objectives

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Track Access Charges: Reconciling Conflicting Objectives Track access charges: reconciling conflicting objectives Case Study – Sweden: Track access charges and the implementation of the SERA directive - promoting efficient use of railway infrastructure or not? Prof. Jan-Eric Nilsson, Swedish National Road and Transport Research Institute 9 May 2018 Centre on Regulation in Europe (CERRE) a.s.b.l. Avenue Louise 475 Box 10|B -1050 Brussels|Belgium +32 2 230 83 60 |[email protected] |www.cerre.eu Table of contents 1. Background .................................................................................................................... 3 2. Charges, Revenue and Financial Costs ............................................................................. 4 2.1 The Minimum Access Package ......................................................................................... 4 2.2 Revenue and spending ..................................................................................................... 9 2.3 The regulatory framework ............................................................................................... 9 3. Marginal cost estimates ............................................................................................... 12 3.1 Noise ............................................................................................................................... 12 3.2 Accidents ........................................................................................................................ 13 3.3 Infrastructure wear and tear .......................................................................................... 15 4. Comparing 2015 track user charges and marginal costs for using railways ...................... 19 References .......................................................................................................................... 21 180509_CERRE_TrackAccessCharges_CaseStudy_Sweden_Final 2/21 1. Background This study is concerned with the way in which track user charges promote (or not) the efficient use of railway infrastructure in four of the European Union’s member states. Section 2 of this mimeo describes 2017 track user charges in Sweden, implemented within the common European framework established by the SERA Directive (2012/34/EU). Section 3 thereafter provides state-of-the-art information about the social marginal costs for using this infrastructure while section 4 compares 2015 marginal costs with track user charges that year. Due to volatile exchange rates, the costs and revenue in SEK have not been adapted to Euro. The approximate exchange rate is, however, SEK 10=€1, making all conversion simple. 180509_CERRE_TrackAccessCharges_CaseStudy_Sweden_Final 3/21 2. Charges, Revenue and Financial Costs The Swedish Railway Act (2004: 519) is Sweden’s version of the SERA Directive. The infrastructure manager, the Swedish Transport Administration (subsequently the IM or Trafikverket) administers the collection of charges and regularly makes changes of levels and charging structure. At the request of the government, and after several years of preparations, Trafikverket published a report in 2014 that establishes a plan for the level and structure of charges for using the infrastructure for the years to come (Trafikverket report 2014:074). The report provides the framework for current levels of charging and establishes a trajectory of annually increasing charging levels. This section first describes the level and structure of the minimum access package for using the infrastructure (section 2.1). This is published as part of each year’s Network Statement. 1 Section 2.2 presents total revenue from these charges as well as aggregate spending on railway infrastructure and section 2.3 provides a brief description of a complementary dimension of the SERA directive, namely Sweden’s version of a Performance Scheme and the role of the regulator. 2.1 The Minimum Access Package 2 The purpose of the track charge is to reflect the short-run marginal cost for infrastructure wear caused by traffic. The basic principle is to differentiate the charge, to account for the fact that different vehicles may cause different degree of wear. In this way, users are given reasons to contemplate the choice of rolling stock, i.e. to consider if they have reasons to purchase locomotives and cars that inflict less wear, in that way paying lower track charges. This illustrates how the track charge may contribute to improving the functionality of the transport system. Table 1 summarises the 2017 track charge. It is based on gross ton-kilometres, and is imposed at varying amounts for both freight and service trains and for passenger traffic. It is also differentiated for the maximum axle load of the train. Trains with a higher axle load thus pay a higher track charge. The level of track charges was previously based on estimates of trains’ wear and tear costs for track maintenance (excluding renewal costs). It is not clear what the rationale is for the current charging structure. The purpose of train path and passage charges is to differentiate the cost for using the infrastructure over time and geography, in that way contributing to the efficient use of existing track capacity. The passage charge contributes to the efficient use of infrastructure by making it 1https://www.trafikverket.se/contentassets/b6f27615be234f1fababa0b1f25196dd/network_statement_2017_edition _20151210.pdf 2 The motives given for the level and differentiation of charges are taken from the original documents. The ability of the current structure to fulfil the stated objectives is addressed in section 4. 180509_CERRE_TrackAccessCharges_CaseStudy_Sweden_Final 4/21 costlier to operate trains at places where there are peaks in capacity use during some time periods of the day. In principle, the train path charge should also account for whether the train operators’ original demand for slots has been met. Table 1: Track charges 2017, SEK per gross ton km Highest Axle Load, ton Charge Freight and service trains load<20 0,0056 20<load≤22,5 0,0070 22,5<load≤25 0,0077 Load>25 0,0084 Passenger trains load ≤20 0,014 load >20 0,0154 The three-level train path charge is based on train kilometres and differs with respect to the degree of capacity utilisation (see Table 2). Railway lines marked with red in Figure 1 are in high demand and are charged more while the lines in green are in low demand. This categorisation changes over time and Table 3 illustrates how specific track sections have been re-defined between the years 2016 and 2017. The change from red to yellow or green (or the other way around) emanates from variations in the demand for slots between years. The changes may emanate from the fact that operators adjust the way in which some services are operated, from the fact that sections of tracks have been upgraded or new sections added, etc. This establishes that the differentiation emanates from scarcity concerns rather than being a means for revenue maximisation. Table 2: Train path charge, 2017, SEK per train km High Medium Low All types of trains 6,30 2,30 1,90 Trains using tracks in Stockholm, Gothenburg and Malmö during three hours in the morning or three hours in the evening on non-holiday weekdays are charged an extra SEK 416 (€43.79) per train passage. Maps (not included here) detail precisely which parts of the network in the cities are charged the extra levy. No evidence is given on the source of the numbers for the differentiated path km charges and the peak surcharges around major cities. It is therefore reasonable to say they are based on judgement. The emissions charge is based on the socioeconomic costs in terms of environmental and health effects generated by the operation of an additional train that is not operated by using electricity. About five percent of total train kilometres operated in the country per year belong to this category. The size of the charge depends partly on the engine's environmental classification and partly on the amount of fuel consumed in the way summarised in Table 4. 180509_CERRE_TrackAccessCharges_CaseStudy_Sweden_Final 5/21 Trafikverket (2014) states that a charge to account for accident risk is difficult to differentiate in a meaningful way. Since there is no corresponding levy for road users, Trafikverket suggests that accident risk is not part of the charging scheme. In addition, the 2014 report also indicates that noise from rail traffic generates a high cost to the environment and that the variation in costs is substantial. Since the Commission has not established the principles for charging for noise, Trafikverket abstains from implementing this type of charge. Freight trains that use the Öresund Link between Sweden and Denmark pay a passage charge at SEK 2,980. These trains don’t pay track charges and train path charges for this section of the journey. Table 4: Emission charges for vehicles using diesel or gaseous fuel Compression ignition engine Spark ignition engine SEK (€)/litre* SEK (€)/m 3** SEK (€)/litre* SEK (€)/m 3** Locomotive, base 3,20 3,76 2,14 2,71 Locomotive, envir. classification Stage 2,07 2,43 2,07 2,43) IIIA Locomotive, envir. classification Stage 1,66 1,95 1,66 1,95 IIIB Railcar, base 3,13 3,68 2,07 2,62 Railcars, envir. classification Stage IIIA 1,72 2,02 1,72) 2,02 Railcars, envir. classification Stage IIIB 1,42 1,66 ( 1,42 1,66 * Liquid fuel ** Gaseous fuel 180509_CERRE_TrackAccessCharges_CaseStudy_Sweden_Final 6/21 Figure 1: Chart describing the level of demand for access to Sweden’s railway network Legend: Red lines are
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