Rail freight in Portugal holds a modal share of only around 12 per cent. The trend over the past few years has not always been positive for various reasons. Miguel Rebelo de Sousa, Executive Director of the Portuguese Association of Railway Enterprises (APEF), underlined that the main causes behind this are an uneven playing field and inefficiencies in managing policies, investments and construction works.
This is the second part of the interview. In the first one Rebelo de Sousa discussed the current state of rail freight in Portugal, the issues of different gauges and the lack of a state-owned operator. In this second part, he underlined the main obstacles for the industry, such as the implementation of ERTMS, and what operators need to be competitive.
What are the main needs for operators to make rail freight competitive?
First and foremost, competitive pricing compared to the road. To promote modal shift to rail, we need to ensure equal treatment between modes of transport. Governments must be coherent in terms of public policies regarding the different modalities.
Another important aspect is predictability of investments in the rail infrastructure, which requires better approaches for the search of solutions to the obstacles posed by the works. If an alternative route cannot be provided when there are construction works, customers will turn to the road and they will likely not return in the medium term. We need to provide solutions to prevent losing clients, and the infrastructure manager must be a part of this. Works cannot be overdue, they need to be concluded on time.
We also need stability of regulation. Rail freight is a business with tight margins and its cost structure is very rigid. We need to know what we can count in terms of Track Access Charges and energy costs, in order to be able to provide the more competitive terms to our potential clients for long term partnerships. Long term partnerships with clients allow more investment from the operators to provide better quality of service and flexible solutions.
Finally, we should embrace intermodality. Rather than conventional rail services, we must provide intermodal ones, including other modes of transport if that is the best solution. For each case, we should use the most efficient mode, which we recognize is complex, but requires solutions fit for the customer needs.
What are the main current obstacles for the Portuguese sector?
There is an important investment plan by the infrastructure manager for the renovation of the rail infrastructure, but it is taking much longer than expected. All the works are late and constraining rail activity, making it difficult to implement new services. The quality of service is worse than expected and suffers from a lot of operating inefficiencies, degrading its potential synergies and efficiencies.
Besides this, there is a problem of costs. Rail transport in Portugal has high Track Access Charges while road transport is benefiting from exemption of toll roads, creating an uneven playing field. This requires deliberate and oriented public policy, consistency with the strong investment done in the infrastructure and an integrated transport strategy. Clients are not going to choose rail just by having new infrastructure. Rail needs to be more competitive.
Regarding the near future, I would like to emphasize the importance of adaptation of the rail infrastructure to enable innovative services such as rail motorways.
The ERTMS implementation plan is also an important piece for rail growth as the Portuguese national signalling system is overdue and being discontinued. If operators wish to switch from diesel to electric-powered vehicles, a new signalling system is necessary. It would be recommendable to consider investment at ERTMS. The problem we feel is that there is no concrete implementation plan other than saying it is expected to have the Portuguese rail network with ERTMS by 2040. It is not enough if we want to develop the market here.