Airline competition has proved effective in lowering airfares, pleasing customers and ensuring that Ireland retains a strong transport link with the tourism and trading world. Ryanair has been a European pioneer in that regard. But might greater competition also produce a similar revolution in European rail transport? The European Commission, while not making a direct parallel with the airline sector, is nevertheless trying to achieve two worthwhile policy goals: that of making cross-border rail operations in the European Union easier and also ensuring national rail networks become more competitive. The ultimate goal is to establish a single railway area across Europe.
At present Iarnród Éireann, a State company, runs the national rail service. Its 10-year contract expires in 2019, and is then up for renewal. The commission, however, is now pressing the Government to put the next contract out to international tender. Ireland is resisting that proposal.
Instead, the Government is seeking a derogation from that requirement, citing the minuscule size of the Irish market – less than half of 1 per cent of the EU railway sector – as its main reason. The Government is also wary of the industrial relations difficulties that a successful rival bid might present – given the consequent job losses at Iarnród Eireann.
A compromise, nevertheless, seems possible. And one such proposal under consideration would allow the Government to renew Iarnród Éireann’s contract in 2019, but require close monitoring of the company’s operational performance by an independent regulator. Ireland favours a national regulator based in each member state, while the commission prefers a single EU-wide regulator based in Brussels.
The best argument for national regulation is to show that it can work, and will deliver what the commission is seeking – an improvement in “the quality and efficiency of public rail transport”.
With four years remaining before Iarnród Éireann’s current contract expires, there is little time to lose.