EU moves to end state rail monopolies

(BRUSSELS) - In proposals likely to infuriate Germany, the EU executive will this month urge an end to Europe's last rail monopolies and so open the lucrative passenger market to competition from 2019.

The toughest opposition to the European Commission plan is likely to come from Germany and its rail giant Deutsche Bahn.

But France's SNCF railways and Italy's FS too are keenly awaiting a package of proposals described by the Commission as "enormous", comprising six lots of draft legislation, one report and two so-called EU "communications".

The package is expected to be formally agreed and released by the European Union executive on January 23 or January 30, with the aim of opening up the around 60-billion-euro market in annual passenger traffic by 2019.

But to do so, Brussels is expected to call on the railways to be split between an infrastructure management side, that is the rails and network system, from actual train operation.

A controversial decision this week by Belgium's Socialist-led government to follow this model schema was therefore welcomed by the Commission in hopes it will prod others, including Italy and Poland, into following the same path.

But the Belgian decision means the loss of an ally for Germany, which wants to maintain the structure of Deutsche Bahn, which also runs track owner DB Netz.

Germany can still count on the support of Austria, which has 10 votes of a total 345 on the EU Council of the governments of the 27-nation bloc, and Luxembourg's four votes to add to its own 29.

But it would need a total 90 to make up a blocking minority.

The Netherlands (13 votes) and the Czech Republic (12 votes) meanwhile are under pressure from their rail operators to return to the German single system, but even their support would likely still leave Germany short.

So France, with its 29 votes, could play a crucial role in the future of European rail.

Officials in Brussels say Paris' position remains ambiguous.

The new French Socialist government has said it plans to create a "single, unified infrastructure management entity" gathering together the current activities of RFF, SNCF Infra and DCF, the dispatching and traffic management authority.

This new infrastructure entity would be complemented by legacy operator SNCF at the heart of a "publicly-funded railway cluster compatible with European regulations."

Experts in Brussels say this a priori resembles the German model. "But when one looks closely at the details, this interpretation becomes less sure," said one expert who asked not to be identified.

So hopes are that France in the last instance will be influenced by Belgium.

Its Transport Minister Paul Magnette said SNCB will in the future be the only operator in direct contact with passenger services, while Infrabel will be responsible for the development and maintenance of the tracks as well as being in charge of the timetable.

Meanwhile, Deutsche Bahn chief Rudiger Grube is expected to try to delay a decision ahead of 2014 European elections and the naming of a new European commission.