Rail investments in CEE
In most countries of Central and Eastern Europe, the situation of rail transport is critical. The infrastructure is rapidly deteriorating. Freight, but also passenger volumes are dropping. In the context of the current economic crisis, the financial situation of railway operators and infrastructure managers is deteriorating rapidly.
In some countries, operators are not adequately compensated for their Public Service Obligations and Infrastructure Managers do not receive enough funding to maintain their network. Besides, the business structures inherited from the past need to be modernised and rationalised. Strong political will and reforms are needed to develop the railways in Central and Eastern Europe and to preserve the rail modal share significantly higher than in Western Europe.
However, there are also huge opportunities in Central and Eastern Europe, as the European Union provides important funding to modernise infrastructure and rolling stock.
As for infrastructure, for the period 2007-2013, the EU Regional policy provides approximately EUR 16 bn for rail infrastructure, although most of the available money still goes to other modes of transport, mainly roads. It is therefore necessary to push for a more balanced allocation of the funds. On the other hand, the TEN-T budget focuses on rail projects (73%/EUR 4bn of the budget for priority projects is granted to rail). However, the amount cannot cover the needs. Thus, Member States still need to bear a large part of the total costs.
UNIFE has identified three key measures to make best use of the available EU funds for infrastructure:
- A Master Plan setting clear priorities and a timeframe for infrastructure development should be designed and endorsed by the national government and the parliament in order to guarantee an optimal commitment.
- Turnkey contracting should be preferred to specialised contracts in order to overcome the limited project management resources and increase the speed of project implementation.
- When tendering, the best offer should be preferred to the cheapest offer in order to get a better outcome and minimise maintenance costs.
As for rolling stock investments, the needs in Central and Eastern Europe are huge, as most trains are old and worn ones. Under specific conditions, the EU can provide funds to finance rolling stock through regional aid.
UNIFE has identified two key measures to make best use of the available EU funds for rolling stock:
- It is preferable to purchase new rolling stock rather than refurbish old trains, as this brings immediate benefits: it attracts new passengers, complies with the latest interoperability and environmental standards and decreases maintenance costs in the long-term.
- It is worth exploring new financing schemes, such as leasing, as they allow for financing more rolling stock at the same time. UNIFE is currently investigating ways to finance leased rolling stock with regional aid, which would strongly benefit the Central and Eastern European countries.
For more information, please contact:
Jérémie Pélerin
Corporate & Public Affairs Manager
+32 2 642 23 25
UNIFE Links
On 19 and 20 October 2009, UNIFE organised a dedicated workshop on rolling stock financing in Warsaw. To access UNIFE's news release (20.10.2009) please click here
To access UNIFE’s publication "Rail Investments in Central and Eastern Europe: Towards a Competitive Railway System" please click here
To access UNIFE’s position paper on territorial cohesion (04.03.2009) please click here
In January 2009, UNIFE organised a workshop on Rail Investments in Bucharest. To access the UNIFE's press release on this event, please click here
External Links
To access the website of DG Regional Policy, please click here
To access the European Commission’s Green Paper on Territorial Cohesion, please click here
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