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Brussels urged to act over SNCF

December 11, 2008

By Guy Dinmore in Rome and Robert Wright in London

Published: December 11 2008

The once-cosy world of European state-owned railways was given a jolt on Thursday as Italy revealed it had teamed up with Germany’s Deutsche Bahn to press the European Commission to act against what they saw as unfair competition and fully liberalise national passenger markets.

Mauro Moretti, chief executive of Italy’s state-owned Ferrovie dello Stato, made it clear that the Italian-German initiative was aimed primarily at France’s SNCF, which he accused of unfair competition and obstruction. “This is our first action [against SNCF],” he told the Financial Times. “If there is not a positive answer we can consider other steps.”

Their action follows raids by the French competition authorities last month against SNCF.

It said it would co-operate fully with the inquiries about the openness of the rail freight market, saying it was “playing the game fairly”.

SNCF also rejected D Bahn’s and Ferrovie’s accusations, pointing out that since its rail freight market started deregulating in 2005, private competitors had taken 8 per cent of the market – a point it said took 10 years to be reached in Germany.

The largest competitor to SNCF in France is D Bahn’s Euro Cargo Rail division. “The French market is open,” SNCF said.

Mr Moretti and Hartmut Mehdorn, chief executive of D Bahn, wrote a joint letter to Antonio Tajani, European transport commissioner, last month asserting that European law required the opening of national passenger markets where train companies of one country could freely operate in another. They proposed setting January 1 2012 as a starting date.

Italy, Germany, Denmark and the UK had liberalised their markets, the letter said, but others had not, so creating “a very negative impact in terms of fair competition and reciprocity”.

The proposed move would be in addition to the liberalisation of international passenger traffic already due to come into force on January 1 2010. International rail freight traffic was liberalised in 2003, while all European countries’ rail freight markets have been open since 2006.

Mr Moretti said last April he had asked SNCF for terms governing Italy’s cross-border ambitions and was told he would be informed by the end of the year.

SNCF has taken a 20 per cent stake in an Italian venture, NTV, which plans to launch Europe’s first privately operated high-speed train service in 2011.

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