Prospects for Rail Transport

Railways still enjoy the reputation of being a safe, reliable, environment friendly and - at least from a political-financial aspect - economic means of transport. No one could believe that the railways could one day no longer exist and all traffic could be routed on the roads, in the air or on waterways. It is common knowledge, however, that the amount of traffic on the railways has reduced over the past few years and that the services of the railways have obviously met only a fraction of the wishes of customers.

Science and politics have intensively adopted the railways in the past few years, have analyzed their characteristics, highlighted their advantages and weaknesses, and examined their position on the transport market under legal, organizational and economic aspects. Numerous concepts have been developed on

this principle, the messages of which can be generally summed under the motto ‘change or die’.

This motto might well sound dramatic. However, it should be seen as an expression of trust in the capability of the railways for changes and is based on the conviction that the potential of the railways to perform has not yet been fully exploited.

The present state of the railways must be used as the basis to define the possible and necessary changes. It is generally agree that the railways have held a privileged position over the years. The railways were national companies, their business decisions regarding the transport services, prices offered and tariffs had to

consider the requirement of governments to fulfill public duties to provide transport. In return, the losses of railways were covered by the public purse. The situation protected the railways from the need to compete: with other means of transport and furthermore led to creating relatively closed national networks and systems.

But competition increased sharply after World War II for many of the world's railways. Because of governmental and labour union restrictions as well as large investment requires in railroad fixed plant, it was difficult for the railways to adjust their operations to changing conditions. But the railways could not a just cease operating as they were too essential to the economy of their areas. Thus the solution has been to nationalize them - to have the government to provide the service. But preserving services the nationalization hasn't obviated the need for railways to change, improve, and compete.

Nowadays, railway management faces two ways of further development. The first one is to preserve the nationalized state of railways investing huge funds into technological innovations; the other one is to create joint-stock companies with private capital or to privatize railways completely. This assists railways in competing with other modes of transport, proposing faster, more flexible and cheaper services. Here it is essential to create specific organizations to set up and operate the infrastructure (track, energy supply, signaling) and therefore to separate these from the operation of rolling stock. In Europe, the basics for this were laid down by directive 91/440 to develop the railway companies in the community.

The same directive also put forward a task to harmonize all technical specifications for creating the complete interoperability of all subsystems and their interfaces.

At the beginning of the new millennium the new European transport policy for 2010 was stipulated defining the following objective for rail transport: to revitalize the railways by creating an integrated, efficient, competitive and safe railway area and to set up a network dedicated to freight services. The White Paper points to the lack of infrastructure suitable for modern services, the lack of interoperability between networks and systems, the constant search for innovative technologies and, finally, the shaky reliability of the service, which is failing to meet customers' expectations. However, the success of new high-speed rail services has resulted in a significant increase in long-distance passenger transport.

To improve the situation the European Commission has adopted a second 'railway package' consisting of five liberalization and technical harmonization measures intended for revitalizing the railways by rapidly constructing an integrated European railway area. These five new proposals set out: to develop a common approach to rail safety with the objectives of gradually integrating the national safety system: bolster the measures of interoperability in order to operate transfrontier services and cut costs on the high-speed network; to set up an effective steering body – the European Railway Agency - responsible for safety and interoperability; to extend and speed up opening of the rail freight market in order to open up the national freight markets; to join the Intergovernmental Organization for International Carriage by Rail (OTIF). This 'railway package' will have to be backed up by other measures announced in the White Paper, particularly: ensuring high-quality rail services; removing barriers to entry to the rail freight market; improving the environmental performance of rail freight services; gradually setting up a dedicated rail freight network; progressively opening up the market in passenger services by rail; improving rail passenger rights.

Ukrainian Railways tending to become a part of integrated European railway network are planning to pass three-stage reforms, 2006 to 2013. The first stage includes management reorganization and accounting separation of each activity that will result in establishing a new corporate structure of railways and separate companies (for passenger long-distance and commuter services, freight services, infrastructure). The outcome of the last stage will be increased freight service competition, private ownership on locomotives and wagons, licensing commuter services, and competition in repairing. This reforming is planned according to present-day specialization processes and international labour distribution. Our railways are eager to become a reliable link in the international transport system East-West.