The regulatory developments taking place in the European passenger rail market represent a huge market opportunity for the industry, potentially worth billions of pounds a year in passenger revenue terms, according to research by advisory firm KPMG.
The latest edition of KPMG’s publication Transport Perspectives: Competition in the European Passenger Rail Market looks at the possible ramifications of the Fourth Railway Package which was unveiled in January 2013.*
The research discusses the current state of the passenger rail market liberalisation in the UK, Sweden, Germany, Italy, Spain and France and the extent to which further market opening can be expected between now and 2019.
Some of the key findings
Spain represents a potentially big opportunity as it has begun a process of liberalisation of domestic passenger rail services, partly driven by budgetary pressures. The proposed regime will be aligned with the provision of the Fourth Railway Package with competitive tendering for regional and suburban public service contracts and open access competition in commercial inter-city segments.
The liberalisation of the German passenger rail market is advancing, driven by a ruling by the German Federal Court of Justice in February 2011 mandating that all regional passenger rail contracts be competitively tendered. By the end of 2011, competitors to the state operator, Deutsche Bahn, had increased their market share to nearly 25%. The last two years have seen strong tendering activity and up to 50% of the market is due to be tendered via 27 regional tendering authorities over the next 3-5 years.
Helge Ramboel, Associate Director at KPMG’s Rail Advisory Team comments: “The introduction of competition to the European rail markets, if established and delivered in the most effective way, has the potential to deliver cost savings, improve service quality and lead to growth in rail use. With growing budgetary pressures, such potential benefits may look increasingly attractive to national governments looking to improve infrastructure performance in order to stimulate growth.
“Rail owning groups must therefore continue to monitor market developments in the EU closely in order to position themselves for the opportunities which may arise. In addition, state-owned railway operators and infrastructure managers need to ensure they are adequately prepared for what has the potential to be the most radical change in their history.”
Note to editors:
*The Fourth Railway Package unveiled by the EC in January 2013 proposes new legislation mandating that all passenger rail services provided under public service contracts (PSC) in the EU become subject to mandatory competitive tendering from December 2019.
Katrin Boettger, Senior PR Manager
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