The liberalisation of the European Railway Market - Did the railway packages have a statistical significant effect on rail freight in the EU Member States?

Abstract

The European railway market is since 25 years subject to a constant transformation process. The EU’s railway packages, bundles of railway specific legislation, initiate reforms in a sector that was characterised by decade long national fragmentation and a shrinking modal share. National railways used to be run by vertical integrated governmental authorities, which were unable to adjust to changes in the market and new developments like the unprecedented rise of the individual motor car after World War Two. Liberalisation (market opening) and privatisation (franchising private competitors) were the key strategies to overhaul the massive and ponderous state-owned as well as statecontrolled railway sector in order to curb waste of public subsidies and worsening train service. The main objective is the creation of a single European railway market with a high degree of interoperability and competition, similarly to the Single European Sky initiative in the civil aviation. So far three railway packages (2001, 2004 and 2007) have been adopted by the European Parliament and the Council. A fourth one is since 2013 in the making, whereby the technical pillar is closer to an agreement than the highly contested market pillar especially for high-speed long-distance passenger service. The rail freight sector was already liberalised and enjoys free market access for all competitors since 2007. The aim of this paper is to examine the impact of the railway packages in particular on the rail freight transport in the EU Member States. How much influence has the EU legislation in a specific policy area, here transport (impact assessment). In order to answer the research question a sequential multiple regression was chosen. This method allows adding gradually suitable independent variables and dummies in a fixed order to determine their impact on the dependent variable rail freight. The results were humble; the biggest impact on the depended variable had rail passengers with a high statistical significance. A negative impact had EU membership with low significance. All three railway packages had only a marginal impact without significance. Several problems and limitations were faced during the operationalisation and partly explain the poor output.