Challenges and Prospects of European Railways

In the present paper, challenges and prospects of the European railways, along with a proposal for a new strategy policy and specific measures are presented. The declining course of European railways concerning traffic and revenues is first analyzed. Conditions to introduce intra-modal competition are surveyed, among them separation of infrastructure from operation as it has been applied in a mosaic form in the various European countries. Distortions in the transport market are identified and effects of an eventual internalization of external costs are quantified. A new strategy for both passenger and freight rail traffic is presented. Recent developments in the implementation of interoperability are discussed. Moreover, the effects of the debt crisis in Europe on railway costs are explored and specific measures to overcome the current critical situation are suggested. In addition, a framework to implement a more aggressive commercial and tariff policy and to assure a better quality of service is delineated. Finally, the critical question if and why we really need the railways within the present and future context is addressed.