WESTbahn fights for fair open-access conditions in the Austrian rail market
Posted: 6 August 2015 | | No comments yet
Few private rail operators have entered into open-access long-distance travel – incumbents try to keep the monopoly alive, and it seems the way to non-discriminatory integration of all railway companies is difficult. Ever since WESTbahn’s operational launch, the private railway company has been fighting against discrimination in the Austrian open-access market. WESTbahn has contributed significantly in creating an extended public transport network without subsidies, but has had to cope with many obstacles placed by the incumbent ÖBB. Erich Forster, Managing Director of WESTbahn, explains further.
WESTbahn has faced some obstacles over recent years. For instance, in 2011, ÖBB-Infra AG offered track paths for 2012 with excessive travel time reserves and an eight minute stop including an overtaking by a train run by ÖBB-PV AG. Despite intervention of the railway regulator (Schienen Control) which ultimately stopped the overtaking idea, WESTbahn had to accept a travel time extended by 15 minutes compared to what would have been possible under fair conditions.
It seemed ÖBB-PV AG also hampered WESTbahn when joining transport associations in the Eastern Region, Upper Austria and Salzburg, and furthermore with traffic associations.
Because of massive problems and even exclusion from revenue allocation (in Salzburg’s traffic association) for WESTbahn in the transport associations Salzburg and East Region of Austria, economical problems appeared and finally caused WESTbahn’s exit from these associations at the end of 2013. WESTbahn only remained a member in the association in Upper Austria – it being the only one with fair conditions due to a stronger traffic association management and fewer influences of the incumbent to control the revenue sharing.
ÖBB-Infra AG declined to provide real-time data about the status of connections for WESTbahn’s passenger information system until the regulator decided that ÖBB has to provide the data for WESTbahn.
From the moment WESTbahn started operating long-distance trains, a generally higher infrastructure fee and even a newly created long-distance-traffic infrastructure fee surcharge was applicable in addition to the normal station fee, until the regulator stopped this.
ÖBB-Infra AG invented a new surcharge for trains with a top speed over 160km/h, which did target 20% of ÖBB’s trains, but also targeted 100% of WESTbahn’s trains. The regulator stopped this before the introduction of the surcharge.
ÖBB-PV AG launched national promotion prices for long-distance trains at an extremely low level for the first time three months before the start of WESTbahn in December 2011.
Having made significant annual tariff increases until 2009, ÖBB more or less stopped doing so in 2010 and 2011 before WESTbahn’s operational start – and even now the price development signals a clear difference to the time before competition began in Austria.
WESTbahn was forced to pay extensively for promotion in railway stations while (as a regulator proceeding later on showed) ÖBB-PV AG did not have to pay the same amount. The regulator declared these contracts anti-competitive and thus void.
ÖBB-Infra denied WESTbahn to position advertising displays in Salzburg, Amstetten and St. Pölten railway stations, until the regulator forced ÖBB-Infra to accept it.
WESTbahn was not integrated in the timetable-information tool ‘Scotty’ until a court decision forced ÖBB-PV AG to allow it.
Until WESTbahn went to the competition authority, ÖBB did not sell WESTbahn tickets – the case is still pending but ÖBB have signalled to be ready to negotiate about sales conditions.
WESTbahn was not given access to the train cleaning facility in Vienna Floridsdorf (an ÖBB-PV AG train washing facility) until the regulator stopped ÖBB from excluding WESTbahn. Also, WESTbahn was not given access to maintenance facilities of the ÖBB-PV affiliate company ÖBB-TS (Technical Services). Only after involvement of the regulator and long discussions could an agreement be found.
These examples give a good overview about the start and the stepwise development to a reasonable basis by support of the regulator and the court. The main problem is that there is no support for WESTbahn in acting against the negative activities because the Austrian Ministry for Traffic (BMVIT) is a 100% shareholder of the incumbent ÖBB. Officially the Austrian government opened for competition, but in reality they seem to work on keeping the market closed, even with violation against EU regulations.
These circumstances caused WESTbahn to complain twice to the European Commission. The first complaint, submitted on 10 January 2014, was about the State Aid in terms of illegal subsidies to the benefit of ÖBB at DG Competition. The second complaint, submitted on 7 February 2014, was an infringement complaint against Austria for non-compliance with EU-legislation, especially Regulation 1370/2007 (PSO-regulation) at DG MOVE. In addition to these complaints, the European Commission ex officio initiated infringement proceedings against the Republic of Austria, due to the lack of separation of accounts for public transport services and open-access services, plus the consequent lack of transparency in the use of public funds for the financing of local and regional traffic.
WESTbahn currently has to face a new problem; the Ministry of Transport drafted a new Austrian railway law, originally to introduce the Recast (to Railway Package 1) with optimisation of rights for newcomers. But the draft of the new law (besides the sections related to the Recast) provides in addition a tricky introduction of an ‘integrated timetable-strategy’ with the central outcome that in case of conflicts between path orders only that supplier will be preferred who can offer an Austrian-wide integrated regular interval timetable. As currently only the incumbent railway operator can operate the whole Austrian rail network with an integrated regular interval timetable, others who cannot offer these services similarly will be refused profitable paths. This must be considered a clear discrimination of the competition, especially since WESTbahn invested in 10 new trainsets to enlarge the offer which will naturally bring about some path conflicts due to the simple need of additional paths. An integrated regular interval timetable in principle is useful, yes – but only really useful when it is customisable, fair and without any discrimination.
It is crucial that ÖBB-Infra AG has started to work according to the principles and priority rights of an integral regular interval timetable already, although the corresponding law is not yet effective. For example, WESTbahn was denied a framework agreement for an hourly service from Vienna via Linz–Salzburg (- Innsbruck) for the end of 2017, although already submitted on 11 October 2014, in particular stating that the desired routes of WESTbahn would not be compatible with the gradual development of the integrated regular interval timetable (meaning the timetable development of a competitor).
Thus access to the Salzburg–Kufstein path, which had already been confirmed by a framework contract in Germany, was blocked even though the law is not yet in place. WESTbahn therefore complained to the EU-Commission about this Railway Act. The General Director of DG MOVE clearly positioned himself against the Republic of Austria due to concerns of the Commission and asked for a non-discriminatory law. Most of the political parties in Austria and the Chamber of Commerce also took action and asked the Minister of Transport to elaborate a new draft changing all sections that hamper competition.
The current status is that the decision about the law was not taken to the Transport Commission of the Austrian Parliament and therefore the law has not passed the plenary yet. WESTbahn hopes that in the meantime the growing alliance against the restrictions of competition and path allocation on basis of a national railway law will convince even the Austrian Transport Ministry to develop fair law concepts.
From the perspective of WESTbahn, all railway companies must be treated equally by appropriate measures of the Federal Ministry of Transport. Therefore, the access to the integrated regular interval timetable has to be opened to any Austrian railway company. The integrated regular interval timetable has to be organised in the future by a neutral institution (no longer by ÖBB-Infra AG under the ÖBB Holding) really paying attention to equal involvement of all potential railway companies for the benefit of customers and Austrian taxpayers. In addition, PSO-orders must be made accessible to all railway companies for regional traffic as at the moment in Austria not one single PSO contract is based on competitive tendering, but 100% on direct awarding from the Ministry of Transport (with the subsidiary for orders) and the regions.
WESTbahn’s positive development
Despite the fact that WESTbahn has repeatedly had to fight for fair competition, the private railway company shows a very positive development on the market and with regard to customer satisfaction. More than four million passengers chose WESTbahn for long-distance travelling in 2014. WESTbahn reached the operative break-even in 2014. This is a great success, considering the difficulties open-access providers possibly face during their start-up phase. In 2014, WESTbahn performed an excellent punctuality value of 96.9% in long-distance transports and in 2015 the level of punctuality (including May) is 97%. Currently WESTbahn offers 3.5 million train kilometres per year and more than 1.5 billions seat kilometres on the Vienna–Salzburg route. As a recent article on pressetext.com says, WESTbahn is also the energy-saving champion and thus highly environmentally oriented.
Additionally, WESTbahn won the European rail congress award in November 2014 for ‘Best Intercity Provider 2014’. The key to success is unconditional customer orientation through the highly motivated crew. An emotional relationship with the customer is essential, because personal customer relationships lead to customer satisfaction and, consequently, to long-term customer loyalty.
In 2015, WESTbahn placed an order for 10 new trainsets in order to expand its offer. Again, double-deck ‘KISS2’ wagons from Stadler Rail AG have been selected, including some improvements compared to the original series. Functional technology, lightweight construction and service-friendly design are still representing the premise for WESTbahn trains to keep energy and maintenance costs low. The investment amounts to €180 million.
Along with this investment, the company shares changed in April 2015. The new shareholder structure is as follows: Haselsteiner Privatstiftung, 49.90%; Augusta Holding, 32.70 %; and SNCF, 17.40%
Since May 2012, Erich Forster has been the CEO of WESTbahn Management GmbH. Prior to this position he was the CCO from April 2011. Between 1975 and 2011, Erich worked at Österreichische Bundesbahnen (ÖBB) finishing his career there as Managing Director of the Long Distance Traffic dvision. Erich was awarded a PhD in Psychology from the University of Vienna.