International Railway Cooperation in a Changing Europe Klaus Ebeling

Features International Cooperation (part 2)

military conflicts, the European railways of the former Council for Mutual Eco- Introduction have developed solutions to enable cross- nomic Assistance (COMECON) of the border traffic in Europe and beyond. former USSR and its satellite states. Europeans immediately understand rail- These solutions could be described as In western Europe, the railways have seen way cooperation to mean international compatibility or interoperability and the a substantial fall of market share, espe- cooperation, because they are used to the railways had already created organiza- cially freight due to the enormous devel- idea of national railways. This coopera- tions such as the Railway Technical Unity opment of road traffic and many years of tion has a long tradition. Europe has many (UT) association, and the RIV/RIC regula- neglect in transport policy (Fig. 3). Their sovereign states of different sizes that have tions governing reciprocal use of wagons, struggle for fair treatment in competition not always been friendly, and each na- carriages and brake vans in international with other transport modes has borne fruit tion possesses a railway with a business traffic, by the turn of the century. Since only slowly and has still not lead to satis- field limited in principle to its territory. 1922, the International Union of Railways factory results. However, the problems Under these circumstances, it is surpris- (UIC) in Paris has been the instrument of of pollution, congestion and consumption ing that international railroad traffic can international coordination in technical of scarce energy resources caused by road cross the borders of many different coun- development of railway systems. The UIC traffic are becoming increasingly appar- tries without changing carriages, espe- collaborates with the Organisation for The ent and the one-sided policy is now see- cially since the systems for power supply, Collaboration of Railways (OSShD) based ing signs of reversal. signalling, safety, coupling, and even in Warsaw, to ensure cross-border traffic In this context, the European Union (EU) gauges are different (Figs. 1 and 2). De- beyond western Europe by cooperating has made incisive basic decisions. A fun- spite being national railways and past with this organization within the sphere damental reason for the competitive

Figure 1 European Railway Figure 2 European Railway Gauges Power Systems

Broad gauge Spain, Portugal (1,668 mm) Broad gauge Ireland (1,600 mm) Direct Current Alternating Current Broad gauge CIS, Finland (1,524 mm) 3,000 V Narrow gauge 15 kV, 16 2 3 Hz Various gauges 1,500 V 25 kV, 50 Hz Standard gauge (1,435 mm) 850 V conductor rail

18 Japan Railway & Transport Review • December 1997 Copyright © 1997 EJRCF. All rights reserved. weakness of the European railways was their poor financial situation, originating Figure 3 Trends in Freight Market Share Totals for Different Transport in accumulated old debt and non-profit- Modes in 15 European Countries able subsidized public services. The EU 80 76.8 initiated financial reconstruction of rail- Rail 76.1 Road 74.4 ways, but since this reconstruction must Inland Waterways 69.5 be carried out within national confines, 70 66.3 the situation differs between individual 63.4 countries. However, Deutsche Bahn AG 60 (DB AG) can already look back on sev- 55.6 eral years of very successful operation due to reforms made possible by EU legisla- 50 tion. However, despite the free movement of people and goods within the EU, the rail- 40 ways are still subject to limitations that Market Share (%) look increasingly anachronistic. Unfor- 31.1 30 tunately, the long-standing cooperation 25.0 between railways has been surpassed by 23.0 21.1 road transport where traffic now flows 20 17.2 between countries without restrictions of 15.9 15.4 13.3 any kind. Furthermore, this area of free 11.6 10.7 9.4 movement promises to widen further to 10 8.4 8.0 7.8 include central and east European nations that are re-examining their stance towards 0 the EU since the disappearance of the 1970 1975 1980 1985 1990 1994 1995 Soviet bloc. Developments are already (Source: ECMT ’Trends in the transport sector 1970–1995’) moving towards a greatly-expanded EU membership, and the EU is making far- sighted efforts towards developing a pan- erns access across national borders. To owners to use the infrastructure, and may European infrastructure network. In this prevent the infrastructure owner from dis- also buy traction or shunting services if context, the current territorial limitation criminating against other operators, the needed. These developments could lead of railways will prove an increasing im- infrastructure must be separated from op- to the formation of general transport com- pediment that may undermine financial erations, at least in accounting. panies using the most suitable form of reconstruction. Therefore, new forms of This new arrangement will lead to transport for each service. cooperation between railways, as well as changes in cooperation between railways, These concepts may lead railway com- between railways and other transport but the nature of the changes is not yet panies to become similar in some respects modes must be developed. clear because the system still remains to to airline companies. However, a major be established. For example, the tradi- difference will always be that rail trans- tional timetabling meetings will be re- port has a closer relationship between Future Cooperation placed by a body established to allocate infrastructure and rolling stock than ex- or sell train slots to operators according ists between roads and vehicles. Never- The EU has already pushed through fun- to demand. Such a body will have to be theless, in the long run, these changes damental changes and established codes supervised to ensure discrimination-free might have far-reaching consequences on of behaviour for railways within its region. allocation. shaping the railway market. In fact, in- To encourage free competition, European The operators will be able to run direct stead of cooperation, the railways may Directive 91/440 EEC grants equal access trains, which remain under their control experience a noticeable increase in com- to railway networks for all qualified third- from origin to destination (OD), across petition between themselves, because dif- party operators. This directive also gov- borders. They will pay the infrastructure ferent operators on the same route may

compete to attract traffic (e.g. trans-alpine areas for improvement. For example, Global System for Mobile Communica- traffic, North-Sea-port traffic, Scandinavia- technical standardization permits econo- tions (GSM) standard, and is indispens- to-Italy north-south traffic). Conversely, mies of scale and reduces costs, and also able to a Europe-wide high-speed train code sharing may become possible. allows international procurement, which network. The ETCS parameters have been Railways may even adopt the same rules is natural in a single market like the EU. determined by consultations between rail- governing competition as airlines. The However, a unified manufacturing sector ways in cooperation with industry under line between cooperation and competi- could act as a cartel against the bargain- EU supervision. Development of ETCS tion has yet to be drawn and the railways ing power of individual railways. Conse- owes its existence to the cooperation be- may still have some battles to fight with quently, UIC’s attempts to promote tween France and Germany in setting up the EU Free Trade Commissioner, with collective purchasing have had few suc- DEUFRAKO, a framework programme for whom they already have been at logger- cesses. How far we can go in this area cooperation in high-speed ground traffic. heads over some issues. should be challenged further. SNCF and DB agreed to cooperate in the The EU is trying to promote interoperabil- project in 1989. This approach has the ity with the help of a research programme. advantage of providing some degree of Technical Interoperability It is supporting the ambitious European institutional cooperation between indus- Railways Traffic Management System try, railway operators, and governments, From the perspective of cross-border co- (ERTMS), also known as the European and the EU participation gives a suprana- operation and competition, it is clear that Train Control System (ETCS). This signal- tional dimension. the railways urgently need to improve ling system (Fig. 4) is to be introduced This opens up the opportunity of achiev- interoperability. There are still several gradually throughout Europe using the ing a synergistic effect for railways. The

Figure 4 Block Diagram of ERTMS Functional Module Terminator outside RBC

ERTMS ON-BOARD FUNCTIONAL National Juridical Diagnosis CONSTRAINTS Emergency Equipment Driver Recording Recording Brake 'train integrity only Support Support required for level 3'

National FFFIS FFFIS European FIS National FFFIS(ergonomic aspects only) FFFIS National FFFIS ERTMS On Board watchdog

Safety Train Juridical Diagnosis Control Command Interface Module MMI Functions (FMS) Recording Functions (National FMS) (FMS) (National FMS) (FMS) National FIS FIS (EUROPEAN ONBOARD FIS FIS FIS FIS FIS FIS FIS KERNEL) FIS (Interface B) FIS Interface Non Safety Balise Train/RBC National Odometric and Loop STM Functions Control Command Communication for other STM Functions Communication (National FMS) (National FMS) Functions Interface (FMS) (National FMS) (FMS) Functions 'not required (FMS) for level 1'

National National FFFIS FFFIS FFFIS (Interface A) FFFIS FFFIS Existing National Euroloop On Board GSM FFFIS Odometric Other Eurobalise 'trackside Equipment Sensor equipment' STM 'trackside 'not required for Equipment equipment' 'not required for level 2/3' level 1'

FFFIS FFIS = Form Fit Interface Specification 'only required FIS = Functional Interface Specification Interface C for level 1' FMS = Functional Module Specification (Source: European Comission)

20 Japan Railway & Transport Review • December 1997 Copyright © 1997 EJRCF. All rights reserved. EU is soon to abolish monopolies in tele- communications—data transfer has already been liberalized, and full liberal- ization of telephone communications is due shortly. The railways have wide- spread telecommunication networks throughout the whole European continent. Conversion to modern optical fiber cables will leave substantial over-capacity beyond railway needs, which can be used by offering commercial telephone services and high-capacity data links. Linkage of different railway communication networks is particularly interesting with re- Dual-current locomotive crossing River Oder between Frankfurt an der Oder and Kunowice (DB AG) gard to the international market. It will

Figure 5 Towards a Pan-European Transport Network (Source: European Commission)

Pan-European Corridors

I Helsinki-Tallinn-Riga-Kaunas-Warsaw (road component: Via Battica) (rail component: Rail Battica) & Riga-Kaliningrad-Gdansk (road & rail section: Via Hanseatica)

II Berlin-Warsaw-Minsk-Moscow-Nizhny Novgorod IX III Berlin/Dresden-Wroclaw-L'vov-Kiev IX IX � I II IV Berlin/Nuremberg-Prague-Budapest-Constanta/ IX Thessaloniki/Istanbul I IX II (at present ferry across Danube bridge to be discussed if traffic requires it) IX IX IX IX V Venice-Trieste/Koper-Ljubliana-Budapest-Uzgorod- VI I II IX VI L'vov/Minsk with branches V II II Branch 1: Rijeka-Zagreb–Budapest-Ukraine- VI III VI Uzgorod-L'vov-Kiev IV III Branch 2: Bratislava-Zilina-Kosice-Uzgorod IV IV VI V V IX Branch 3: Ploce-Sarajevo-Osijek–Budapest and V their interactions with infrastructures and IX transports in all modes on the same or V VII IV reasonably related routes V VII V IV VII V IX VIII VI Gdansk-Warsaw-Zilina continued by corridor V to VIII V Bratislava and branch to Katowice via Prerov to IV Vienna VIII VIII IX IV VII Danube

VIII Durres-Tirana-Skopje-Sofia-Varna

IX Helsinki-St. Petersburg-Moscow/Pskov-Vitebsk/ -Kiev-Ljubasvika-Kichinev-Bucharest-Dimitrovgrad and branches: 9A: Odessa-Ljubasivska/Razdelnaya, 9B+D: Kiev-Minsk-Vilnius-Klaipeda/Kaliningrad

0 500 1000 km

fight for this treasure house, which should Figure 6 Crete Corridor II West to East (Berlin–Warsaw–Krakow–Moscow) not be relinquished too carelessly. To ensure an interoperable railway telecom- Berlin (Seddin) Malaszewicze/Brest Moscow turntable turntable turntable munications network throughout Europe, Mannheim it is very important to guarantee techni- Hanover cal compatibility, as shown by the opera- Hamburg Direct train Nuremberg (conventional traffic tions control system. + container) Warsaw Although the EU is legally limited to the Lodz territory of its members, it has found ways Katowice Smolensk Poznan marshalling yard of promoting European unification outside South-east North these borders. The Maastricht Treaty Minsk Russia Volga Frankfurter Urals coined the term ‘Trans-European Net- Allee Siberia/Far East works’ for the transport, telecommunica- tions and energy supply sectors, thereby

Container block train initiating a development of far-reaching Warsaw political significance. After a trial transi- Lodz Katowice tion period, these networks will be freely available to all railway operators in these North Minsk Volga markets. The Pan-European Transport Urals Siberia/Far East Conferences in Prague (1991) and Crete (1994) changed the approach towards 1 day 1 day 2 days favouring a ‘European Network’ of trans- (Source: DB AG) port routes including the entire continent and even extending to countries not ex- pecting to become EU members any time also offer interesting possibilities for the Railways in central, east and south-east soon (Fig. 6). railways themselves such as electronic Europe still under the thumb of telecom Spending of EU research funds is restricted seat reservation, freight tracking and com- monopolies should realize how to posi- to benefit member states, but the EU has munications with customers to control tion themselves based on EU develop- set up special technical assistance logistics and production in railway-related ments and should seek advice from programmes (PHARE and TACIS) for de- plants. western railways. There will be a fierce velopment of non-EU countries. The fact Typically, although the railways themselves have long foreseen this development, they have lacked the courage, power or will to cooperate to turn this promise into success. The UIC Handling European Railways Messages Electronic System (HERMES) project on a data trans- mission network connecting Europe’s railways set out on the right track, but has probably been overwhelmed by the size of the task and, perhaps, by political con- siderations. Consequently, the individual railways have formed their own telecom- munications companies, which will probably have to join the bigger telecom companies in one form or another in the long term, due to the severe competition for this huge market. Eurocity 42 Berolina arriving at Berlin Central Station from Warsaw (DB AG)

22 Japan Railway & Transport Review • December 1997 Copyright © 1997 EJRCF. All rights reserved. border is exceeded. This is not expected soon due to the considerable decrease in east-west traffic after the collapse of the Soviet bloc. On the other hand, substantial social problems lurk behind the conversion to automatic change-of-gauge because automation would put many thousands of people out of work. Accord- ingly, it would be advisable to use the EU PHARE and TACIS programmes to develop a well-timed plan preparing for gradual conversion and personnel retrain- ing. The railways should present their Lifting jacks for changing bogies (DB AG) ideas on this subject soon. The same that the EU intends to extend the ETCS to amining which solution is preferable from problem arises wherever the two systems non-EU countries by financing pilot lines the technical and economic viewpoints meet, such as at Corridor III (Berlin– confirms its strong commitment to an all- for overcoming system differences. The Krakow–Kiev) and Corridor IX (Greece– European railway network. EU has offered to finance an economic Russia–Finland). efficiency study comparing different meth- A special problem is the differences be- ods for automatic change-of-gauge at tween the transport laws in western Eu- The Crete Corridors break-of-gauge points. rope, eastern Europe and Asia. The In addition to technical cooperation, the west-European countries have signed the Concrete implementation of the all-Euro- groups are also discussing improvements COTIF convention concerning interna- pean railway network will be approved in freight and passenger traffic. Presently, tional carriage by rail which differs from by the Transport Group of the Group of a marketing study on passenger traffic has the rules adopted by OSShD members in Twenty-Four (G24) under the supervision examined interest in a direct TALGO train some basic points, especially concerning of the EU Commission. This Group has (with automatic change-of-gauge) be- liability. This means each shipment re- been charged with development of the tween Moscow and Berlin. The findings quires new bills of lading at each border— corridors agreed at the 2nd Pan-European are being analyzed and creation of a joint many years of intensive discussions have Traffic Conference of Crete (14–16 March operating company is under discussion. still not resolved the differences between 1994). The member states committed An example of a success in freight traffic the two legal systems. For Corridor II, the themselves to cooperate in development is the East Wind container shuttle from Russian Railways (RZD) and DB AG have of a number of transport corridors in a Russia to Germany. The twice-weekly 5- prepared a contract that has already been Memorandum of Understanding, and their day west-to-east trip is running at a load- approved by the German government and railways have followed example. Special ing rate of 60%. This success is raising is expected to be accepted soon by the steering groups are discussing which in- expectations for an increased frequency Russian government. The next step is for ternational railway lines will be recog- and shortened journey time. Unfortu- Germany, Poland, Belarus and Russia to nized as major international connections nately, so far, the west-east flow has not work out the details of this compromise, and are examining what investments will been matched by east-west traffic and a which might serve as a future model for a be required in these lines to fulfill the West Wind service has yet to start. A mar- comprehensive international agreement. stipulated requirements. The task is not keting study shows that the future of east- However, both the working and steering limited to railway infrastructure but bound traffic does not hinge only on group discussions as well as the G24 touches all aspects of railway systems, combined traffic—there will be continued meetings must not be confined to propos- including signalling, operation control, demand for wagon-load traffic too, and als for improving facilities and services in etc. The Steering Group for Corridor II the concept of direct trains between Ger- the corridors. The essential point is to (Berlin–Warsaw–Minsk–Moscow), which many and Russia was developed. promote them as projects that can be pre- connects the standard-gauge European The implementation of automatic change- sented to banks for financing. For this system and the wide-gauge system of the of-gauge depends on when the capacity reason, the sessions are attended by rep- former USSR and its satellites, is also ex- of reloading plants at the Polish-Russian resentatives of international financial in-

on market-economics and capitalism. This synergy is amplified by the fact that the EU, and international financial insti- tutions in central, east and south-east Eu- ropean countries, are financing studies on restructuring railways in countries preparing to join the EU. The EU railways are supporting these efforts with information seminars. A special aspect of Europe is the large number of national borders. As men- tioned above, the EU has largely abolished Broader internal border controls but presently feels gauge bound to increase protection of external borders. Consequently, many of the efforts towards improvement of traffic connections with countries outside the EU are severely hindered by administrative for- malities at borders. This is particularly worrying because a multi-million dollar

© best use of scarce finances and prioritize investment options, all possible ways of Narrower optimizing existing infrastructure, in- gauge cluding improved scheduling, through op- erations, and cross-border carriage

TALGO train with automatic gauge change system (TALGO) management, etc., are being analyzed using a commercial method of pinpoint- stitutions, especially the World Bank, the Delors, the former EU President, suggested ing weaknesses in infrastructure systems. European Bank for Reconstruction and formation of public-private partnerships Development, the European Investment to finance large investments. In this re- Intermodal transport Bank, and Kreditanstalt für Wiederaufbau spect, representatives of private banks are The concept of European networks is not (KfW), etc. In view of the present eco- also welcomed at the Corridor group ses- confined just to railway connections but nomic situation, which characterized by sions, and thanks to their influence, the extends to other transport modes. This empty public coffers and large amounts discussions with governments and rail- idea suggests the need to examine the of profit-hungry private capital, Jacques ways are turning into an ongoing seminar possibilities for intermodal transport. It

24 Japan Railway & Transport Review • December 1997 Copyright © 1997 EJRCF. All rights reserved. also suggests the occurrence of modal competition. Since the PHARE and TACIS programmes are allocated according to national demand, railways must make appropriate and well-founded proposals to get the attention of the financial insti- tutions. However, the railways do not make applications themselves, but de- pend on their governments to submit the projects. A drawback of this system is that in practice, some governments give pref- erence to road projects. Unfortunately, the suggestion by the EU to adopt forward- looking balanced transport policies and avoid making the earlier mistakes of the west regarding road transport, is still met with doubt at times.

Traditional Railway Cooperation and Corridors

In the traditional cooperation between Container train in Germany (DB AG) railways, the basic questions on cross- border traffic have always been tackled well-recognized strength of railways in by the existing international organizations. long-distance competition with road trans- Supervision of Interoperability This method is imperative when funda- port. Furthermore, the removal of border mental standardization and normalization obstacles and political divisions in Europe In the distant past, securing compatibility of the railway system are at issue. How- presents unique opportunities for long-dis- or interoperability between European rail- ever, reaching a solution can take an ex- tance railways, which benefit from econo- ways was handled by UT—this authority traordinarily long time due to the complex mies of scale like no other surface carrier. still exists but only as a legal framework, consultation procedures and entangle- The Crete corridors provide a good op- not an organization. After the railways ment with national interest groups. Ac- portunity to try technical solutions to established UIC in 1922, most become cordingly, the European railways have cross-border traffic without going through national corporations, and the govern- often not achieved the required results on the general standardization procedure for ment agencies gradually ceded authority time and have frequently lost the oppor- the whole European continent first. This to their trusted railways. In this way, the tunity to make decisive changes. Some greatly reduces the risks. Timely partici- UIC became the guarantor of pan-Euro- examples of these failures are automatic pation by the UIC can assure that the fun- pean compatibility. Presently, the collec- coupling, electronic bills of lading, auto- damental rules and interests of later tion of UIC memoranda is the most matic vehicle identification, and develop- standardization are taken into account. comprehensive description of all of the ment of a Global Distribution System The possibility of a ‘limited initiative’ frees rules and procedures for cross-border rail- (GDS) that would have raised interna- proceedings that were frequently too way systems. In the field of high-speed tional train reservations system to the level heavy-handed in the past, and brings the traffic, the initial parameters were defined of airline reservation systems like animating element of competition into jointly at first but, subsequently, tradi- Amadeus, Galileo, and Sabre, etc. play. This makes it possible to defuse the tional national interests took over to In the commercial sector, there is also the fundamental dilemma of standardization obstruct rapid development. The EU in- danger that railway cooperation will focus that is either too late or too early—the tervened and, to speed up preparations on immediate neighbours, with whom ties former paralyzes progress, and the latter for a continental system, assured that the are naturally strongest, instead of on long- endangers the success of the interop- necessary elements were worked out by distance relationships. This contradicts the erability policy. establishing the Association Européenne

pour l’Interopérabilité Ferroviaire (AEIF), in cooperation with railway companies and industry (represented by their asso- Figure 7 Freight exchange (both directions) of DB AG and SNCF with other European railways ciations). This shows that the political initiative of 16,000 the EU has had a beneficial effect, despite 1993 some criticism by railways of certain as-

14,270 1994

pects of railway policy. On questions of 14,000 13,774 1995 interoperability, it is the only authority in DB AG SNCF Europe with credible political power to carry things through. It assures that the 12,000 11,077 legal and de facto rules established by the 10,989 10,679 10,549

Union so far are respected by states pre- 10,238 9,962 paring to join the EU. This will gradually 10,000

bring increasing legal and economic har- 9,014

mony, which should lead to relatively 8,324 7,927 7,840 8,000 7,825 smooth and trouble-free membership in 7,247 7,148 6,962 6,918 the future. In this respect, the coopera- 6,936 6,134 tion of railways with respect to the Crete Freight (1,000 te) 5,902 5,872

6,000 5,749

corridors will play a valuable and support- 5,458 5,110 5,109

ive role. 4,666 4,322

The future importance of other interna- 3,983 4,000 3,808 3,414 3,336 tional European organizations such as the 3,251 Economic Commission of UINO (ECE) in 2,902 Geneva and the Conference of Transport 2,000 Ministers (CEMT), remains to be seen. For the time being, it may be assumed that the EU administration will rely in many 0 FS OBB PKP CD SNCB SNCF NS SBB/BLS SJ FS SNCB respects on technical assistance from spe- cialized organizations. I see this as the Notes: FS : Italian Railways SNCF : French National Railways OBB : Austrian Federal Railways NS : Netherlands Railways future role of organizations like the UIC, PKP : Polish State Railways SBB : Swiss Federal Railways CD : Czech Railways BLS : Berne-Loetschberg-Simplon Railway which can play a useful role with expert SNCB : Belgian National Railways SJ : Swedish State Railways work and balanced representation of its members. (Source: UIC Statistics)

Special Situation of DB AG all directions across Europe and can only tomers’ needs. Therefore, it is only natu- be developed fully if compatible systems ral that DB AG will assume a pronounced DB AG is bound to play a key role in co- that work smoothly are keyed to its cus- role in work on the Crete corridors. I operation between European railways. Not only is the company a leader in technical development, it is also the largest Klaus Ebeling railway in the EU and the largest transit railway due to Germany’s geographical Mr Klaus Ebeling is Director of International Affairs and Executive Board Director for East-West Rela- and economic conditions (Fig. 7). Accord- tions and for Reconstruction in ex-Yugoslavia with DB AG. He was Deputy Secretary General of UIC from 1979 to 1995. He has also been an advisor to the World Bank and the Senior Chairman of ingly, DB AG is bound to have a strong German Federal Railways. He has published many articles on all aspects of railways. interest in future-oriented positive development of all railways in Europe. The company’s commercial interests extend in