No to social and wage dumping for railway employees and securing high quality for railway passengers: these were the key demands by Sylvia Leodolter of the Austrian Federal Chamber of Labour and Andreas Rauter of “Verkehrsverbund Ostregion“ this week during a panels discussion with MEPs on the new liberalisation proposals of the European Commission in the railway sector, which had been organised by the Austrian Association for Public and Social Economy (VÖWG) and the Austrian Federal Chamber of Labour.
AK expert Leodolter: draft proposal is a danger to highly qualified employees

The head of the Department for Transport and Environmental Policy at AK Vienna, Sylvia Leodolter, warned that the liberalisation measures within the scope of the so-called Fourth Railway Package aimed at by the Commission would lead to a number of negative effects: deterioration is to be expected both with regard to wages and working conditions of employees as well as in respect of services for passengers. Apart from that, the plans of the Commission would put rail transport safety at risk and distort competition. One would look in vain for regulations concerning a harmonisation of social aspects in the proposals of the Commission, said Leodolter. According to the AK expert, domestic railway passenger services (PSO) in Austria would have a well-functioning rail transport system with highly qualified employees. Mandatory tendering for all PSO routes, as envisaged by the Commission, would result in cuts being made with regard to social aspects and employees’ qualification. Sylvia Leodolter therefore demands all tenders to take mandatory social criteria into account. Apart from that, it had to be ensured that employees of the previous operator in the event of transfer of undertakings, i.e. when a new operator takes over the service after successful tendering, have to be employed by the latter to the same condition and wages.

Rauter, Verkehrsverbund Ostregion: high additional costs to be expected

Andreas Rauter, expert at Verkehrsverbund Ostregion, VOR described, which effect the proposed EU legislation would have in practice: participating in tenders would entail high costs - up to 1.2 million Euros had to be allowed for preparatory work and the expertise required. Only major companies, such as Deutsche Bahn or the French operator SNCF would be able to afford participating in such tenders; costs were far too high for small competitors, in particular if the bidder was not successful. In addition, the proposal of the Commission would make it significantly more difficult to coordinate the VOR transport network. Even private bus operators are opposed to the legislative proposals as they fear high costs and too many provisions and targets to be observed. Reuter used the example of what recently happened at Westbahn to explain the impact private rail operators could have on commuters: from next Monday, commuters would have to pay 2 Euros more for each journey, which adds significantly to their monthly expenses and probably means that many customers will desert private operators. However, ÖBB reacted swiftly and changed its timetable to absorb any passengers affected.

Study: since rail liberalisation in Sweden, cost for the public sector have increased by 700 %

During the event, author Fjodor Gütermann presented a study on the economic effects of liberalisation on railway operators. The study was commissioned by VÖWG in cooperation with the Austrian Association of Cities and Towns (ÖSTB), the Austrian Municipal Employees Union GdG-KMSfB, the Transport and Service Union vida and AK Vienna. Gütermann presented case examples from Sweden and Great Britain, who had already liberalised rail transport in the 80ies and 90ies.

Sweden had succeeded in developing her rail transport and increasing passenger kilometres by 58 percent. However, subsidies by the public sector had exploded since the liberalisation in 1988: costs for the state had risen by 700 percent. In addition, fares between 1988 and 2003 had increased by 125 percent, whilst the consumer price index has only risen by 57 percent. A study, commissioned by the Department for Transport in Great Britain in 2011 declares the British railway system ineffective. The public sector in Great Britain for example, would pay at least 30 percent more subsidies than those in France, the Netherlands, Sweden and Switzerland. Apart from that, fares, compared to these countries, were at least 30 percent higher. In addition, trains both in Sweden and Great Britain would not always run on time and there were problems with changing trains, commented the author of the study.

MEPs were impressed

Both, the MEP Jörg Leichtfried (SPÖ) and Ismail Ertug (SPD) are far from being enthusiastic about the proposed Fourth Railway Package. According to Ertug there is no need for a Fourth Railway Package; the only sensible thing would be to solve existing technical problems. Leichtfried also firmly rejects the legislative package. The Commission would act on a purely ideological basis. The proposal would only benefit a small number of multinationals; one could compare the situation with the energy sector, which had undergone a similar development following liberalisation. However, the Spanish MEP Ines Ayala-Sender demonstrated that different opinions are possible - even within the European Social Democrats: the first three liberalisation packages had been successful, because punctually had been increased. Apart from that, the new package would promote cross-border transport.

Sylvia Leodolter and Andreas Rauter firmly rejected this opinion: Austria had a number of cross-border transport services, for example to Slovakia and Slovenia. This was possible because of the constructive cooperation with other rail services. Competition between rail operators would signal the end of cooperation. A number of direct cross-border rail services, for example to Paris, Brussels or Venice had been discontinued; hence, the opposite of what the MEP wanted, had occurred.

The discussions in the Transport Committee of the European Parliament show that a broad majority of the European People’s Party welcomes the Fourth Railway Package, with the exception of MEP Georges Bach. The Conservative Luxembourger emphasised that cross-border cooperation was vital and that the legislative package would surely not aid the process. Unfortunately, representatives of the Liberals and the Greens did not take part in the event. Both political groups had repeatedly welcomed the Fourth Railway Package in the debates on the liberalisation package.

The vote on the Fourth Railway Package in the Transport Committee of the European Parliaments has been scheduled for the end of November. The plenum will make its decision in January 2014.