Of Cherries And Railway Competition

After many years, the railway development entered its next stage by a new operator arriving on the Prague to Ostrava route. Competition brought higher comfort and lower prices, but it also brought some negatives. With a return or network ticket, you can no longer use any train of your choice. If you want to take advantage of the new operator’s service, you need a different ticket, which is practically unavailable before peak-time departures.
It’s the same situation as the one in the long-distance bus transport. But the bus operators have a full right for this, as their long-distance services run on purely commercial basis, and thus have no obligation to send auxiliary vehicles when needed.
Back to the trains. In the morning peak, three trains depart Ostrava for Prague within 11 minutes, and then there’s a two-hour pause with no direct train to Prague. The passengers can choose the operator, but the offer of trains is quite uneven during the day.
Waiting time is in fact a very important parameter of public transport quality and competitiveness – you can start your car’s engine anytime you want.
Instead of creating together a system competitive against the road transport, the train operators simply compete with each other. The purely commercial trains may not accommodate all passengers, as the operator follows the maximum ridership. Nobody is going to pay them for higher expenses associated with adding railcars that run only on few trains per week. This way, the network effect of the railway is reduced to mere A to B transport, in direct trains and at defined times. The public service has thus turned into a natural effort of profit maximization, which makes the customer the one who suffers losses.
Similarly to bus transport, the current situation of Prague to Ostrava train leg is a product of unregulated competition of commercial operators. It is a result of long missing state concept in the field of railway transport, in which, a “wild competition” has won. But the competitiveness of the rail transport as a branch against the much more supported road transport is not dealt with at all, anywhere.
Public service trains, with good capacity and timetable connections between them, should be the backbone of the public transport. A proven solution is the regulated competition, where the operators do not fight each other on the certain line, but compete to get the rights for the line by tendering. The contract should last for up to 15 years due to train amortization issues. Upon choosing the operator, the most decisive factor is the price for which the operator guarantees the required time and quality level of service. The operator is still motivated to have the maximum number of passengers, but cannot run his trains during the most desired times only, disregarding the rest of the passengers.
Regulated competition has proven itself in Bavaria, where it led to significant cost saving. Neither Switzerland knows competition in its Czech version, although it knows dozens of railway operators, and, for over 100 years, Switzerland knows a common tariff. A ticket there is valid for all of the public transport, even if you change operators during your trip.
The decision of the government to introduce regulated competition was a right one. Now it has to deal with “picking the time-slot cherries”, to prevent one operator luring the same time-slot passengers away from another operator who has won the tender and thus has a long-term obligation. Without this, there is no reason to expect any willingness to invest in railway enterprising.

By Michal Drábek
The author is a member of Centre for Efficient Transport

Published in Hospodářské noviny on 11 October 2011, p. 12

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