1. EPTO 28, Quai d. Charbonnages B-1080 Brussels M.: +32-2-6636632 F.: 0049-1212-666655626 E.: jan.moellmann@epto.net Building the new railway economy Challenges and opportunities RAILWAY PRO Investment summit Piers Marlow President Bucharest Tuesday 6th October 2015

2. Founded in 2006 8 largest private public transport companies in Europe Min. 80% of business won in competition qualify for membership 80 000 vehicles operated 255 000 employees 12 bn passengers/year Services in 22 EU countries Network with all other private sector associations EPTO 28, Quai d. Charbonnages B-1080 Brussels M.: +32-2-6636632 F.: 0049-1212-666655626 E.: jan.moellmann@epto.net Objectives Development of a competitive market structure Support the opening of the passenger transport market for competition Watch, monitor and push for fair market development

3. European context After the impact of the Global recession many European economies are recovering well with consistent growth forecasts With growing congestion, environmental pressures and the acceleration of new technology especially in social media and the internet there has never been a better time for the Rail Industry to respond Against the background of EU 1370 and the potential impact of 4 th Rail Package the conditions can be ideal for commercial development, liberalisation and continuing increases in quality and frequency of service for the customer But is every country responding to the opportunities offered and seeing the improvements the passengers want and deserve?

4. Europe – 2015 report EU 1370 and 4 th Rail Package have been instrumental in improving the adoption of good practise in many areas Early versions of 4 th Rail package especially encouraging Since 2014 a number of parties have played crucial roles in “watering down” key elements of the 4 th Rail package This is disappointing – but not surprising A - Against this background there remain a number of countries and regions that provide excellent examples of best practise B – But there are areas who claim to be fully supportive of reform but use the detail inherent in tendering to resist change C – And those who simply do not adopt change or embrace tendering We have seen progress overall but we feel that potential is far greater than what has been achieved so far

5. Examples of “A list” areas Tenders/franchises where significant passenger growth has resulted Quality levels and service provision has improved Innovation has been encouraged and even rewarded Customer and stakeholder scoring has underpinned progress Value generated by Public spending has significantly improved Sweden - Regional and suburban Rail also linked in some cases to multi modal tendering Netherlands – Regional Rail often linked to Multi modal solutions Germany – All Rail including allowance for open access solutions UK – All rail incorporating growth of open access companies such as Grand Central and Hull Trains

6. Examples of “B list” areas Tendering proposed but may not have continued or started Pace of reform and change very slow Tenders processes can discourage new entrants or conditions can be impossible to deliver Where used properly tendering has produced benefits Denmark – an early leader in tendering that has not progressed despite clear benefits of Jutland tendering Poland – wholly reliant on local voivoidships to drive change and after initial activity has created a political rail structure which can stifle reform and innovation Czech republic – small tenders only to date with little success for new entrants. A more significant tendering programme proposed but postponed and delayed several times Italy – promise of new tender opportunities yet to be realised

7. Examples of “C list” areas No attempt to offer any rail tendering In some cases stated belief that the benefits of Rail reform cannot be realised in these areas Prime movers in delaying the 2019 start date as far into the future as possible France – incumbent operator supported by central government not adopting any aspect of Rail liberalisation. Recent local legislation has taken the situation further away from the aims of the 4 th Rail package Belgium – No attempt to introduce rail tendering Slovakia – no rail tendering but has allowed open access however has not dealt with resultant price dumping by State operator

8. Challenges and Opportunities The taxpayer can pay less The customer can get more trains, quicker journeys and better quality With the right public/private schemes and partnerships the train can really challenge the private car But Politics and Influence of key groups in certain countries will not accept change despite the benefits Change is always a problem for many Some countries simply ignore the EU Directives and they have proved difficult to enforce until now Well managed and maintained infrastructure operated in an open transparent way is vital to success Long distance coaches also provide a growing challenge and alternative

9. Conclusions All areas that have adopted tendering have seen benefits Even in the areas that are slow to respond or have only adopted small tender exercises have also seen benefits Customer and passenger services have consistently improved wherever tendering has been adopted Resistance to change is still evident in many areas ensuring the “status quo” continues In these areas customers could be denied the benefits that innovation and quality improvements could bring Clear evidence demonstrates that the cost to the “public purse” is significantly greater in these areas Real progress if liberalisation fully recognised in many areas but overall there is a huge amount of work to do What challenges will Long Distance coaches produce in the future?

10. THANK YOU FOR YOUR ATTENTION! www.epto.net EPTO 28, Quai d. Charbonnages B-1080 Brussels M.: +32-2-6636632 F.: 0049-1212-666655626 E.: jan.moellmann@epto.net