The Uneasy Progress of High-Speed Trains and Railway Liberalization
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10 AND YET IT MOVES : THE UNE A S Y PROGRESS OF HI GH -SP EED TR ai NS A ND Rai LW ay LIBERALIZATION Mauro Tebaldi On 5 December 2009, Prime Minister Silvio Berlusconi, together with the director-general of the Ferrovie dello Stato (FS), Mauro Moretti, officially opened the new high-speed/high-capacity railway line, link- ing Turin, Milan, and Salerno at the central station in Milan.1 The work, which had taken almost 40 years to complete, had involved the laying of just less than 1,000 kilometers of track that is specially designed to carry high-speed trains. The following day, the high-speed train service provided by Trenitalia began operating on the line with the latest ETR (Elettro Treno Rapido) 500 Frecciarossa and ETR 600 Frecciargento trains. The year 2010, therefore, marked the official operational start of the project that had first been drawn up by FS in the early 1960s with the aim of providing high-speed rail links for the main Italian cities along a north-south axis in response to two clear challenges—the growing competition from airlines2 and an increasing preference for road use.3 Although 2010 marks an important stage in the development of high-speed/high-capacity railways in Italy, it should be pointed out that it represents only a partial completion of what had been a long- standing and somewhat drawn-out policy that had been characterized by infighting, vetoes, poor planning strategies, judicial investigations, financial problems, and bitter disputes within the three main areas Notes for this chapter begin on page 257. And Yet It Moves 239 of public policy: the infrastructural, the operational, and the tech- nological. As far as the infrastructural area is concerned, it should suffice to remember that the executive planning of the cross-border lines—especially the Turin-Lyon line (i.e., one of the mainstays of the European high-speed network)—remains in a stalemate position, and there appears to be no simple solution. As for the operational area, the spotlight moves to the controversial process of liberalization of the Italian railway market, which is due to be completed in 2010, and the ways in which this will actually become reality within the strategic sector of high-speed trains. Finally, when considering the technological area, it will be necessary to await the outcome of the intricate dealings (horse-trading, collusion, competition, etc.) between politicians, financial bodies, railway operators, and various Italian and international manufacturers of the sub-systems (rolling stock, signal- ing equipment, energy supply, and other earthing systems) that make up the technological puzzle that high-speed systems involve. It is easy to infer that, while the three areas outlined above can be analyzed separately, there are strong correlations between these dimensions and that one may influence another, as we will attempt to show in this chapter. It is equally obvious that, within each area, the description of the “facts of the year” cannot neglect a careful analysis of what had been inherited from the past and of the main contextual factors that have influenced decisions and actions. In exploring these considerations, we shall attempt first of all to examine the framework of opportunities and restrictions provided by the European Union within the area of high-speed rail developments. We will then show, for each of the relevant dimensions, the evolution of public policy over time, its current state of development, and its future prospects. The European Union and High-Speed Railways: Technological Heterogeneity and Integration When we examine the starting point for the development of high- speed rail networks and the actual shape that they took, a variety of technological characteristics can be seen in the European countries in which the system has been implemented. The heterogeneity of the system is of some importance, and it occurred as a consequence of various factors that came into play: (1) the specific socio-economic and territorial needs of the single states; (2) the strategies adopted by the governing authorities within the context of their respective transport policies; (3) the condition of the rail companies, in terms of financial, administrative, and planning resources; and (4) the capacity 240 Mauro Tebaldi of industries, especially domestic ones, to formulate new technologi- cal solutions and to overcome the barriers impeding decision-making processes. While this led to numerous projects and technologies, there is widespread agreement that two different conceptions of the high- speed rail network—the French and the German—gained the upper hand over the others, due to the extent of the networks that they had already built and to the commercial success of the technologies that they had utilized, both within and outside Europe. These conceptions brought about two development models, each put into practice via a number of strategic, organizational, and managerial steps, which made it difficult to integrate the two systems and to enable them to work together. The French system (TGV) was designed exclusively for the trans- port of passengers between large metropolitan areas, and, in order to achieve this objective, special lines were built on which trains could reach average speeds of around or above 350 kilometers per hour. The German system (ICE), on the other hand, was designed to cater to mixed transport (passengers and freight) between urban centers, including medium-sized ones, with considerable use of existing con- ventional track, duly upgraded, to carry trains traveling at a range of speeds, but normally not above 300 kilometers per hour. These stra- tegic differences led to differing technological concepts—taking into account the rolling stock, the energy supply, and the high-speed rail- way infrastructure—both at the planning stage and during the build- ing stage.4 The two models took shape between the early 1980s and the 1990s, forming natural poles of attraction for any other countries (and railway construction companies) who either sought to emulate them or, at the very least, take them into account when they showed an interest in moving into the high-speed market. This was certainly the case in Spain and in Italy, although there were significant innova- tions (particularly in Italy) as a result of the plans of the rail compa- nies and the technological status of domestic industries. It is also widely known that, in light of this degree of heterogene- ity, the EU had, from the early 1990s, launched an ambitious devel- opment plan for an integrated European high-speed network.5 The measures taken by the EU institutions are underpinned by two objec- tives: first, eliminating the artificial barriers created over time by the individual states and promoting and supporting the building of a fully compatible network along high-priority routes; second, setting rules that operators and financial supporters would have to abide by in order to run the program under free-trade conditions. Taking the lat- ter consideration first, among the main points in the reorganization program, the Commission focused on the liberalization of the railway And Yet It Moves 241 market through a series of directives, starting in the early 1990s up to the last “railway packet” of 2007, as a fundamental condition for the achievement of the other objectives. Through these measures, the Community executive laid down, within a time frame ending on 1 January 2010, the following organizational and operational criteria for rail transport: (1) the independence of rail service providers within an environment of competition in the free market of rail transport; (2) a clear separation between companies providing the infrastructure and those providing and selling transport services; (3) the right of access to national networks for individual companies or international groups of rail transport providers; and (4) the creation within each member state of a regulating authority that would supervise and set standards for the rail industry. As far as support activities are concerned, thanks to the relevant article (XV) of the Treaty of Amsterdam, the EU has recognized the development of the main transport networks (the Trans-European Transport Networks, or Ten-T) as a vital instrument for the economic and social integration of the Continent, whose actual realization would need to guarantee fast and reliable links between conurbations, large and medium-sized, and outlying regions in the EU—hence, the pre-eminent role attributed to the creation of a high-speed European network. With this aim in mind, as far back as 1990, the Commission laid out the European master plan for the high-speed network, to be completed by 2010. At the Essen Summit of December 1994, the Com- mission’s Christopherson Group selected a list of 14 priority projects, 9 of which involved the building of high-speed rail lines. With the enlargement of the EU, the key projects of the European high-speed network were further extended by the Van Miert Group in 2003 and confirmed by Decision No. 884/2004/CE, which placed Italy at the heart of three priority projects: Project 1, along the Berlin-Verona- Bologna-Rome-Reggio Calabria-Palermo rail line; Project 6, along the Lyon-Turin-Milan-Trieste-Ljubljana-Budapest line; and Project 24, which links Genoa, Milan, Basel, and Rotterdam. To enable these large-scale infrastructural developments to take place, the EU set aside sufficient funds (up to a maximum of 20 per- cent, rising to 30 percent for cross-border sections) for the priority proj- ects of common interest and co-financed feasibility studies (up to 50 percent of their cost) in specific Ten-T budget lines,6 via the Cohesion Fund and the European Regional Development Fund. It also offered guarantees on loans, reduced interest rates, and, in some cases, made direct loans through the European Investment Bank.