Swedish rail liberalisation and sector

development

- past, present and future Dr. Gunnar Alexandersson

Stockholm School of Economics

Ministry of Enterprise, Energy &

Communications

30 May 2013

Outline of presentation

• Brief history of rail liberalisation

• The current structure

• Effects and market development

• The new Government review of the

organisation of the railway sector

Brief history of rail liberalisation and

other (de)regulatory reforms

Pre-history

1960s-1980s: A period of decline and increasing

financial problems for the Swedish State

Railways (SJ)

- line closures

- operating subsidies introduced

- additional state grants needed

1985: New Railway Law:

- the State took additional responsibility for rail

infrastructure

- SJ to separate its accounts

- track access charges introduced

1986: SJ in severe financial crisis; need for 1

billion SEK in additional grants

1988: New Transport Policy Act

Evolution of rail liberalisation (1)

1988: Vertical separation of track infrastructure

(Banverket) from operations (SJ)

Decentralisation of responsibility and resources to regional authorities

1990: First tenders for regional services

1993: First tenders for interregional services

1996: Deregulation of freight services

1998: More functions taken over by Banverket

2000: Break-through for new entrants in several tenders

2001: Separation and corporatisation of SJ’s divisions

Business

Administration SJ

Green Cargo

Banverket

SJ Ltd

Jernhusen

EuroMaint

SweMaint

Unigrid

TraffiCare

ASG

Swebus

Scandlines

Royal Viking Hotel

Traffic Restaurants

1988 1996 1995 2000 2001

Separation and divestment of SJ

Public sector

Private sector

Evolution of rail liberalisation (2)

2004: Swedish Rail Agency is established

2006: Market opening for night trains and chartered

trains

2009: Jan Swedish Transport Agency is formed (out

of several other authorities) with multi-

modal regulatory responsibilities

June Market opening for weekend traffic (rest

capacity)

Oct Market opening for international

passenger services (to comply with EU directive)

Evolution of rail liberalisation (3)

2010: Jan Banverket’s construction and

maintenance unit is separated and

corporatised (Infranord)

April Banverket is merged with the Road

Administration to form Trafikverket - the

Swedish Transport Administration (a multi-

modal infrastructure manager)

Oct Market opening for domestic passenger

services, with full effect from Dec 2011

2012: New law on public transport

Current structure

Overview of regulatory structure

Rolling stock manufacturing

SJ ASEA

Train operation

Swedish railway market 1988 P

asse

nge

rs

Fr

eigh

t

IT services

Pas

sen

gers

Frei

ght

Swedish railway market 2013

Real estate management

Rolling stock manufacturing

Rolling stock management

Licenses, safety, market monitoring

Infrastructure management

EuroMaint Rail Bombardier DSB Vedligehold Midwaggon

Jernhusen Train Alliance (A-train, in-house) (SL, in-house)

SJ Veolia DSB DB A-train NSB/Tågk.

EuroMaint Rail Motala Trains MiTrans

Bombardier Alstom Stadler Siemens Ansaldo

Transitio SL SJ NSB DSB TÅGAB

Regional public transport authorities

IBAB Green Cargo Hector Rail TÅGAB CargoNet TX Logistik

AlphaTrains Mitsui Railpool Hector Rail Green Cargo CargoNet

InfraNord Balfour Beatty Strukton VR Track Baneservice

Infrastructure maintenance

Planning and tendering of public

transport Train operation

Swedish Transport Administration

Swedish Transport Agency

Cleaning

Rolling stock maintenance

Financing

Consultancy services

Rolling stock refurbishment

Mantena Alstom Motala Trains mgw Service

Bombardier DSB Vedligehold

Platforms

Railway tracks, main lines

Depots

Freight terminals

Par-king

Stations

Par-king

Shelf parking

13 Additional complexity when comparing

main system with sideline system

Experience and effects

Rail infrastructure investments and

maintenance

0

50

100

150

200

250

300

350

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Sta

te g

ran

ts t

o r

ail

in

frastr

uctu

re i

nvestm

en

ts a

nd

main

ten

an

ce;

ind

ex (

1989=

100)

Market development

0

20

40

60

80

100

120

140

160

180

200

Ind

ex (

19

88

=1

00

)

Passenger traffic (passenger km)

Freight traffic (tonne km)

Source: SIKA/Trafikanalys

Market development and new

entrants - passenger

0

2000

4000

6000

8000

10000

12000

Pas

sen

ger

traf

fic

(mili

on

pas

sen

ger

km)

SJ Other companies

Market development and new

entrants - freight

0

5000

10000

15000

20000

25000

Fre

igh

t tr

affi

c (m

illio

n t

on

ne

km

)

SJ Gods/Green Cargo Other companies

Subsidy effects from tenders

Lines procured by CPTAs (regional lines) Tender

No.

Year Subsidy effect

Network in county of Jönköping etc 1 1989 -21%

2 1993 -25%

3 1997 Minor increase

Ystad-Simrishamn 1 1995 -18%

2 1998 -10%

Herrljunga-Hallsberg 1 1994 -10%

2 1999 -3%

3 2002 Minor increase

Borlänge-Malung 1 1991 n.a.

2 1994 -20%

3 1996 Minor

Uppsala-Tierp 1 1991 n.a.

2 1999 -20%

Stockholm, commuter trains 1 1998 -32%

2 2005 +10%

Lines procured by the state (interregional lines) Tender

No.

Year Subsidy effect

All lines 1-2 1992-93 -21%

3-6 1994-98 No increase

7 1999 -28%

Northern trains 7 1999 -20%

10 2002 -42%

Capacity Constraints 2010

Track Access Charges

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

To

tal tr

ack

fees

, 200

9 p

rices

(m

illi

on

SE

K)

Source: Banverket/Trafikverket

Forecast

New Government review of the

organisation of the railway sector

Government decision 8 May 2013

• An appointed investigator is to make a

review of the organisation of the railway

sector

• The aim is to come up with suggestions

for improvement to address future

demands on efficiency and sustainability

A two-step approach

• Description of current organisation

• Analysis of how the organisation can be

improved

Ready Oct 2013

Following from

subsequent directives

Directives for step 1

• Using a functional description of the

railway system in order to show the

division of responsibilities and tasks among

different actors

• Describing the organisational develop-

ment since 1988, including motifs and an

explanation of concepts

• Mapping relevant EU law and the room

for national decision-making

• Making an inventory of potential areas of

improvement

• Deadline: 15 October 2013

Thank you!