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The four “EU railway packages” required old state-owned railways to separate their infrastructure and operations into independent commercial entities. Was this a good idea?

The final criterion is output. If I look at all the programs and check the goals of the EU, I see an absolute failure of the whole policy. One of the problems is the fragmentation of all the systems. In the beginning of the 90s, the EU created two projects, ERTMS (European Rail Traffic Management System) and ETCS (European Train Control System) to unify the more than 20 systems, and the result is that it is much more complicated than ever. The new train, Giruno, linking Switzerland to Italy, has four different ETCS systems. Right there is the source of a lot of problems. Then we heard about European Railway corridors. Nothing happened. Then freight. If you take the effect of liberalisation in freight, over more than 20 years, nothing happened in terms of market shares. The reason is that the European rail system is not built for freight, it is built for passengers. The longest freight train in Europe is 750 metres. In the US, it is up to 5 km, with double stack container transportation. In productivity, we have no chance. Dedicated freight railways were also once in the programme of the EU. But program after program, the outcome is really poor. 

Why? Was it lacking implementation, or was the idea a bad one?

I am against every dogma, with one exception: I am deeply convinced that if you split up railway companies in different parts, like infrastructure and other parts, you will completely fail. I am an empiricist, I want to see where things are working. Japan has the best passenger system. It is an easy one, it is a linear system. And you have the best freight system in the US. Both have unified management of trains and infrastructure. You can perhaps manage the split in Sweden, where there are few trains. Of the complicated systems, it is certain that Switzerland has the best system. It has some advantages because it is a small country. But it is a very complicated system. And we have had a unified tariff system for 100 years. We have a unified production plan and timetable system. Here, it does not make sense to bring in competition in passenger service. 

We spoke with Neil Kinnock, ex-transport commissioner in the 90s. He said they had to kickstart an underfunded and dysfunctional system, but that they did it in a pragmatic way. Do you think it was pragmatic, or ideological?

It was quite ideological. There was this spirit of liberalisation in the 90s. One of the big mistakes was that the European Commission had the same recipe for every sector: energy, airlines, telecoms, postal services, and railways. Every one of these five big sectors is completely different. And they did not see this difference. We lost the very few monopolies we had for freight, for kerosene transport for example. We received more than 20 Swiss francs per ton before liberalisation. After liberalisation, we received below 10.

Wasn’t this good for the economy overall? 

This was good for the economy, but weakened the rail companies when they were already weak. I think I am the only one who can really judge, as I have been at Westbahn for 10 years, since the start. . I am still the president of the supervisory board. I fought for 12 years against the big ÖBB, which is so linked toh the state. What is lacking is a real regulation system. In Germany and in Austria, it is incredible — and the EU says nothing: The big railway companies have the authority to fix the infrastructure fees, and in Austria they are changing all the time.

Is it a lack of competition then?

No. Where we have competition, we don’t have efficient regulation. First of all, everything in that system is artificial. You will never recover the full cost. So the EU declares that the fee is based on marginal costs. But what is marginal costs?  They chose the weight of the train, you could also choose the time a train is using the infrastructure. It is completely arbitrary. And this idea of separation: even in a simple system like Sweden, the first country to do this, theynever did a clear study about the effects. The transfer costs are tremendous. In France, SNCF and RFF (Réseau Ferré de France) both introduced timetable specialists. This was costly and prolonged the processes. In the end, five to six years ago, RFF was reintegrated into SNCF.

Could Switzerland have done what it has done if it was to implement the EU packages?

The directives of the EU never demanded absolute separation. It was always a recommendation. The 91/440 was the decisive one. Already the first point; the independence of management. It is ridiculous. You cannot spend billions to support a railway system, and say “you are independent”. What you need, is a few clear goals and a controlling system, and that’s the responsibility of the state. The third point was the separation of infrastructure and transport companies. It was never declared as an obligation. Fortunately.

But the purpose was to prevent the big, state-owned players from discriminating against new actors?

Of course, the old railway system was under suspicion. These days I think the culture of a company is the most important thing. Every day in Switzerland we have 200 incidents, it is a permanent struggle. So you need a particular culture, discipline.  In Germany, there is only one problem: The punctuality of DB. For me it is clear why they lost their culture. They wanted to bring DB on the capital market. Then they wanted to become one of the biggest logistics companies in the world.  The problem is, in the centre of the system, the train-steering system, nothing happened.  The system of managing trains is based on two elements: The signaling box. Almost 200 years old. Siemens has a great monopoly on that, with a respective financial impact. And the second item of that is ETCS and ERTMS, among the poorest projects I know of.

Could you explain this? ERTMS and ETCS are seen as the missing link in European travel, the system that will harmonise everything once it is installed everywhere. 

The first test we made with ETCS around 2002 was a disaster. We intended to install ETCS on the new line between Bern and Olten; in the end we had to put up temporary signals for a lot of money. And after 30 years, the situation in Europe is more complicated than ever. All the new elements of the new digital world, like censors, radar, cameras, artificial intelligence – nothing is there. I think that with these tools you could get a more powerful, safer and cheaper train control system. I am extremely critical. In general, it is time to say goodbye to certain lies. 

In Norway, the old NSB has been divided into almost 20 entities, in implementation of EU packages. Germany has a holding company that oversees the entities, and you write that this is a good idea. What would you say to the Norwegians, then, who have done this, presenting it as a duty that they had to implement something they went along with, while the big countries do what they want?

If you split the system, every participant is optimising his own part.  The whole system can never deliver what it could if it was well-managed. I am not a centralist. But I think the holding idea is okay, also with some fire walls, and with a very strong regulator. And there is one criteria: non-discrimination. That is the task of the state to assure.

You said it is time to say goodbye to certain big lies. What are these lies?

The transfer of freight to the railway.  After the oil shock, in 1973, one third of the traffic and the revenue of SBB was gone. Since 1973, freight never recovered.  Today, batch transport is based on oil products. What happens with oil products? Even in the middle run, they will disappear.  So we should be realistic. The future of freight are long-haul trains, particularly more and more containers, particularly from the big ports. We have to concentrate on that.

“When I started, railways were the past, now it is the future”.

On the other hand, it has been 40 years since the first TGV ran from Paris to Lyon —and what happened since with passenger traffic is quite amazing. Also the upgrade of lines, up to 200km/hour.. Ιn my opinion that is the future. But I guess in the future, in a radius of five hours by train, we will stop air traffic. That is realistic. 

Another lie is the revival of night trains. It is crazy to have a train weighing more than 400 tons and transporting perhaps 300 persons. If you use night trains then you need a completely new train that you can use also for day traffic, because that night train is sitting idle the whole day. And I don’t understand the Germans building trains with only 900 seats, the new generation of ICEs.  There is no better method to increase capacity other than increasing the number of seats on a train. 

So was the system that enabled privatisation a big lie? Or was it a big failure as you said? 

Also here I am a complete empiricist. In Switzerland in the 19^th century we had about five big railway companies and many smaller ones. Then came the crisis of the 1870s and they ran into severe financial difficulties. And then, of course, you could not let them go bankrupt, because they were system relevant institutions. So, since we are a direct democracy, in 1898 we had a referendum to merge these five companies into a state railway called SBB. It was approved overwhelmingly. 

More recently, in the beginning of the 1990ss McKinsey studied whether trains can be profitable. They started with the best line, Bern-Zurich. It was not able to cover the costs. They said let’s go for more — the feeder lines — but of course then you have the law offalling utility, so you have more costs and less revenue. 

“I am deeply convinced that if you split up railway companies in different parts, like infrastructure and other parts, you will completely fail”.

The French started with Paris-Lyon. Of course that was the best. After that, every line is less profitable. With every unit you spend more as investment, the marginal utility is falling, that is why you need to be very careful with investment. That is why I say we have very good infrastructure, let us do all we can to increase the loading factor of this infrastructure. 

So could it be that all these big monopolies are doing the right thing by keeping competitors away?

No, that is not the problem. The problem is how you install a competition that makes sense. In Switzerland, it doesn’t make sense. In Germany in regional traffic they have a lot of competition. In Austria, WestBahn had a dramatic impact, ÖBB became much better. 

You mentioned the McKinsey study. It is obvious no railway can be sustained without subsidies, but what is the appropriate level of subsidies? 

That is a huge problem. In Switzerland we have a mandate to the SBB, approved by parliament, strategic goals and also financial goals. How do you link some regions that are not central? In Switzerland, our system is that you can go by public transport from everywhere to everywhere at least every hour.  That costs a lot and it is only possible because we are a small country. In Germany, in the north of France, that is not possible. If I take the whole system, the connection to these areas in the periphery is a relatively small part. And they plead so much to maintain this, because that is so important to them. 

So the appropriate level of subsidies is the one that allows you to go from every part of the country to any other part of the country once every hour? 

It was a decision of parliament. There was also a public vote in the late 80s, the so called Rail 2000, that is for me a huge innovation. I am so astonished nobody has copied us yet.

The problem for the rest of us is that Switzerland is spending a lot more per capita on railways than every country in Europe except Luxembourg. 

Yes, but what if we are discussing about climate?The future is the railway. I have spent more than 40 years now in the sector. When I started, railways were the past, now it is the future. 

But how do we get there? Right now, the future looks like low-cost airlines, and cars and buses instead of trains. Parts of rail networks being shut down, that looks like the future. 

There is a categoric imperative, decarbonisation. For the aviation sector it will be a tremendous problem. The car is indispensable, you need the car for areas with low population density, but in the cities. we wont have cars anymore in 30-40 years, because it is pure physics, how do I optimise utilisation through a cross-section of a street or a track. 

How do you improve cross border travel? And could Europe become Switzerland in terms of train infrastructure? 

No, because policy must be defined according to demography and geography. In cross-border, there is one big problem. We once made an inquiry in the wider area of Zurich. Two-thirds of all movements were regional, one third minus 2%  national and 2%  transnational. My hypothesis is that it is about the same everywhere. This explains why the interest is a bit modest.  In big cities around Zurich, now with the tunnels in the Alps it is perfect.

But there are lots of examples in Europe, especially linking the center to the periphery of connections being scrapped, things being worse than before. 

It can’t be the task of international transport to link to the periphery.

So you think Greeks, Norwegians, Portuguese should rather continue to fly?

I would say yes. That’s why I say five hours, when we have a train link below five hours, we should cancel the short-distance flights. And then you could get rid of a lot of aircraft.

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Infobox

Weibel headed what is arguably the most successful railway company in Europe, the Swiss Federal Railways SBB (1993-2006), while also being a member of the board of directors of the French state railway, SNCF (2003-2007). and president of the International Union of Railways (UIC, 2003-2006).He is now chairman of the board of directors of the private Austrian WESTBahn and author, most recently of “Wir Mobilitätsmenschen” (“We mobility people”). Speaking to Weibel, it becomes clear that the most important question in railway policy is the following: do we really want to increase the share of the railways in Europe? If we do, here is how it could be done.