Regulation Policy in Land Passenger Transportation in Europe

Abstract

This paper draws on a number of projects undertaken recently for the European Commission. It reviews the changing regulatory policies toward bus, coach and rail travel in the member states of the European Union. It is found that although there have been substantial reforms in individual member states, reforms at a European level have been limited in both their scope and impact. This is despite considerable activity that has included regulation 1893/91 (on public service contracts in local public transport), directive 91/440 (on international rail services) and regulation 12/98 (on international coach services), as well as a number of Green and White Papers. Estimates of the economic benefits of commercialising the passenger rail networks, introducing tendering for local public transport and deregulating express coaches are made. These are contrasted with estimates of the benefits that might be achieved through investing in infrastructure to improve interoperability and interconnection. Organisational issues are also considered. Evidence is presented that European railway companies should be restructured, with some companies being fragmented and others consolidated, with networks re-configured. The evidence on vertical separation is reassessed. For the bus and coach industry, trends towards horizontal integration are noted and the anti-trust implications assessed. It is concluded that continued regulatory and organisational reform is required and that this should probably be based on competition for the market for both the operation and the planning of most scheduled bus and rail services.