PSO Regulation: Against the liberalisation of the railways

In early summer 2023, the EU Commission published the so-called PSO Regulation on the award of railway services for passenger transport, which could have a drastic impact on rail transport in Austria and other countries. The guideline states that direct award in rail transport will only be possible in certain exceptional cases since 25 December 2023. In Austria and other countries, direct award is common and proven, as it sometimes protects against short-term decisions in favour of profits. It enables long-term and stable timetables, the sustainable expansion and maintenance of the rail network and ensures stability. This has so far been most evident in times of crisis. During the pandemic, for example, despite low passenger numbers, the service was maintained, allowing passengers to travel to school, work or the doctor at no additional cost. And in the spring of 2022, after the outbreak of the Russian war in Ukraine, special trains were set up at short notice to make it easier for Ukrainian people to flee.

Threat to jobs and democracy

Olivia Janisch, Deputy Chairman of the Board of Directors vida chairwoman, is strongly opposed to the regulation: "In Europe, more than 70 percent of rail passenger kilometres are organised and financed through direct awards, and for good reason. Sacrificing successful and safe railways at the altar of the liberalisation religion would endanger public transport and would also have serious negative effects on employees and working conditions at the railways." The threatening counter-model would be a compulsory tender, which would have a negative impact on jobs, safety, affordable tickets and quality for passengers. If a company that has worked reliably so far loses a tender against a low-cost bidder, many experienced railway workers are left without a job. And all this in favor of profits for a few. Competitive pressure on the railways would therefore have not only economic, but also social effects. 

Two professors of public law and European law,  Jean-Philippe Derosier and Konrad Lachmayer, have prepared a legal opinion on the procurement guidelines. This report highlights serious problems with the rule of law. In addition, the professors explain how attempts are being made to use the guidelines to undermine democratically taken decisions in the European Parliament.

Negative example Deutsche Bahn

Experience from countries such as the United Kingdom, Greece and Germany shows that the liberalisation of the rail sector is leading to siding. The railways are not becoming more efficient. Rather, liberalisation leads to poorer services, higher ticket prices for passengers and wage and social dumping for employees. In addition, security often fell by the wayside in favor of profit optimization. Overall, the experience with liberalised railways also shows macroeconomic and ecological downward trends. Our rail system works, says Lukas Oberndorfer, Head of the Department for Environment and Transport at AK Vienna: "Nobody in the EU travels as much by train as people in Austria". A look across the border to Deutsche Bahn shows the consequences of liberalization: More market brought less reliability and predictability there.

"We cannot afford a deterioration in the railway sector in view of the climate crisis", said the AK expert. In Austria's climate balance, which largely excludes air traffic, 99 percent of traffic-related greenhouse gas emissions are attributable to road traffic. "The direct award quickly helps to create new and denser train connections. Tenders, on the other hand, take a long time and delay the urgently needed mobility turnaround," emphasizes Oberndorfer.

Background to the PSO Regulation

Good and low-threshold public transport does not cover costs, but is co-financed by public money. The so-called PSO Regulation (Public Service Obligation, Regulation (EC) No. 1370/2007 or 2016/2338 on public passenger transport services by rail and road of the European Parliament and of the Council) regulates the organisation, awarding and financing of public service transport services in the EU. This regulation provides for the choice between direct award and competitive tendering in rail passenger transport. 

You can find out more about the campaign "Our Railways - Future on Rail" at www.unsere-bahnen.at!