Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 1 Stefano Impastato - University of Rome “La Sapienza” Mario Vivaldi - Ministry of Infrastructure and Transport 9TH Conference on competition and ownership in land transport Lisbon 04 th -09 th September 2005

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 2 Overview Overview Introduction on Railway European Directive Rail Infrastructure Charge in Europe Rail Infrastructure Charge in Italy  Today  Tomorrow  Procedure for the adoption of a new charge system Conclusion

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 3 The European Directives The European Directives The European Directives (91/440/CE; 2001/14/CE) have the aim to facilitate the adoption of the Community railways to the need of the Single Market and to increase their efficiency; provide the independence of railway undertakings to ensure a good management; provide that all the necessary information for access are to be published in a network statement, to ensure transparency and non-discriminatory access to rail infrastructure for all railway undertakings; have the aim of promoting competition between railways undertakings; define the charge for the use of rail infrastructure;

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 4 Rail Infrastructure Charge Three different approaches to determinate the charge The charge is the marginal cost with a State compensation for the difference between marginal cost and financial cost (SCM); The charge is the marginal cost added with a mark-up in order to reduce (or eliminate) State compensation (MC+); The charge is full financial cost reduced by State compensation (FC-)

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 5 Rail Infrastructure Charge Consideration upon the three different charge approaches The SMC is recommended by Commission, but gives most pressure on the State budgets, even if could bring the most efficient use of the infrastructure; The MC+ takes into consideration efficiency goals and budgetary needs, and reduces the State compensation; With FC- the financial costs of the infrastructure manager are covered by Government (for the difference between revenues from charge and total costs); nevertheless this system has less pressure to reduce inefficiencies in use of the network.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 6 Rail Infrastructure Charge System for calculate the access charge The tariff is calculated according to the use of the network, and it is measured in function of gross tonne-km or train-km (the most common measure of infrastructure use); The tariff is composed by two parts: one part is variable with use, and the other part is fixed in advantage in relation to expected capacity requirements (usually scheduled train- paths or train path-km).

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 7 Rail Infrastructure Charge

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 8 Rail Infrastructure Charge Rail Infrastructure Charge Cost Covered In most Countries of Western Europe, the MC+ tariff system is applied and the cost recovery ranging from 5% (Sweden) to 63% (France) The second tariff system (FC-) is adopted in Germany (60% cost coverage) and Italy (40% cost coverage). The full cost approach is also adopted in Eastern Europe, in the Baltic States (Hungary, Poland and Slovakia). The cost recovery ranges from 50% to 100%. Italy is the unique Country in which maintenance and renewals costs are not charged for: only traffic management is included in the charges.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 9 Rail Infrastructure Charge Rail Infrastructure Charge Costs Maintenance; Renewals; Train Planning and Operations; Congestion and scarcity; Accidents; Environment. Maintenance costs in all Countries are charged for, except Italy. Only in Sweden accidents and environmental costs are charge for, and a special noise bonus is applied in Switzerland.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 10 Rail Infrastructure Charge Rail Infrastructure Charge Rail charges are variable in European countries: they are different for freight and passenger trains. The access charge doesn’t include the cost of electric traction

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 11 Rail Infrastructure Charge Rail Infrastructure Charge Variability of access charges For freight trains, the maximum access charge is requested in Slovakia (8,5 € per train-km ), and the minimum is requested in Sweden (0,3 € per train-km). For passenger trains, the maximum access charges is requested in Germany (5 € per train-km), and the minimum is requested in Sweden and Finland (0,5 € per train-km). Norway is the unique country in which no access charges are requested for passenger trains.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 12 Rail Charge in Italy Rail Charge in Italy Railway in Italy Italian network comprises approximately km of track; The infrastructure manager, Rete Ferroviaria Italiana SPA (RFI), received in 2000 the concession for management of Italy’s rail infrastructure.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 13 Rail Charge in Italy Rail Charge in Italy The infrastructure charge in Italy (D.Lgs. 188/03) Management of network capacity requests in order to conclude contracts; Use of the assigned capacity; Use of point switches, branch lines, and electrical supplying system (excluded electrical power supply); Running control and regulation, and also information concerning traffic; Any other needed information about services.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 14 Rail Charge in Italy Rail Charge in Italy Maintenance costs The maintenance costs are covered by State (through Contratto di Programma) and the running costs are paid by Railway Operator INFRASTRUCTURE MANAGEMENT COSTS += MAINTENANCE COSTS CHARGES PAID by RU’S RUNNING COSTS STATE - Contratto di Programma

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 15 Rail Charge in Italy Rail Charge in Italy The Ministerial Decree 43T/2000. The balance between revenue from charges and the costs of train movement is considered at the national level, and not for singular lines (solidarity of network); The slot price is calculated using an algorithm set out in MD 43T/2000.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 16 Rail Charge in Italy Rail Charge in Italy The system fixed access charge (doesn’t depend on traffic intensity, indifferently applied for passenger and freight trains and contained a train path reservation fee, is differentiated only by quality of the track - 40% of charging ) for node for network variable charge for node (€/min - 12 % of charging) for network (€/km - 48% of charging)

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 17 Rail Charge in Italy Rail Charge in Italy Organisation of the network The network is divided in nodes; trunk network; complementary network; The complementary network is divided between secondary, scarce traffic and shuttle lines 248 sections of track are individuated, and 78 of which are in the fundamental network; Every section has a particular fixed access charge; Nodes (that cover the central area of a city and contain a number of stations and tracks) have a fixed access charge.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 18 Rail Charge in Italy Rail Charge in Italy Node Trunk line netSecondary line net Fixed ACCESS charge + Variable charge (minutes) Fixed ACCESS charge + Variable charge (Km) Fixed ACCESS charge + Variable charge (Km)

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 19 Fixed Access Charge Fixed Access Charge Fixed access charge fees

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 20 Variable Access Charge - Nodes Variable Access Charge - Nodes Variable charge for nodes P node =p base *  *  *t p base = 1 [€/min]  time factor = 0,8  1,3  infrastructure factor =  1  4 t = operational time [min]

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 21 Variable Access Charge - Net Variable Access Charge - Net Usage charges for complementary network P com = p base *s p base = 1 [€/km] s = distance travelled [km]

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 22 Variable Access Charge - Net Variable Access Charge - Net Usage charges for trunk network P com = p base *M*s p base = 1 [€/km] M = coefficent of modulation s = distance travelled [km]

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 23 Variable Access Charge - Net Variable Access Charge - Net Coefficient of modulation

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 24 Variable Access Charge - Energy Variable Access Charge - Energy Energy costs A charge based on distance travelled (calculated as the sum of the kilometres travelled on the fundamental network, on the complementary network and on the nodes); All trains paid the same base price without any difference for train type, weight or efficiency; The base price is 0,372 Euro per km.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 25 Access Charge - Today Access Charge - Today Criticism of the actual algorithm The algorithm is not easy to apply; more than different fees; the final amount of the infrastructure charge is known only after the arrangement of the real timetable.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 26 New System - Procedure New System - Procedure Procedure for the adoption of a new charge system 1 INFRASTRUCTURE MANAGEMENT PROPOSAL 2 “CIPE*” EXAMINATION 3 INFRASTRUCTURE / TRANSPORT MINISTRY LEGISLATIVE DECREE 4 INFRASTRUCTURE MANAGEMENT APPLICATION AND CHARGING TRAIN OPERATORS

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 27 New System - Criteria New System - Criteria Aims of the new system have an easier charge system (only different fees); reduce the total amount of the fee for railway undertakings, specially for regional service (review of the perimeter of nodes with enlargement of the borders); homogenise the incidence of fixed access charge through the uniformity of the lines of fundamental network (some lines are united and some other are divided to have similar extension); homogenise the charge of national services through a new arrangement of some complementary lines (in the actual system classified as fundamental lines).

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 28 New System - Criteria New System - Criteria Criteria of Fixed costs

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 29 New System - Criteria New System - Criteria Criteria of variable costs

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 30 Conclusion Every European infrastructure manager has developed its own system of fee; Not all the costs are covered in the same way (maintenance costs in all Countries are charged for, except Italy; only in Sweden accidents and environmental costs are charged for, and a special noise bonus is applied in Switzerland); For freight trains, access charges are variable from 8,5 € per train-km (Slovakia) to 0,3 € per train-km(Sweden); For passenger trains, access charges are variable from 5 € per train-km (Germany), to 0,5 € per train-km (Sweden and Finland). Norway is the unique country in which no access charges are requested for passenger trains.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 31 Conclusion The system of charge in Italy covers the 16 % of total costs. The actual system is not easy to apply. Fee is known only after the arrangement of the real timetable, different fees.

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 32 Conclusion The adoption of a new algorithm easier to applied is proposed. The aim of this new methodology is: to have an easier charge system (about fees); to contain the total amount of the fee for railway undertakings, specially for regional services (review of the perimeter of nodes: enlargement of the borders); to homogenise the incidence of fixed access charge through the uniformity of the lines of fundamental network (some lines united and some other divided to have similar extension); to homogenise the charge of national services through a new arrangement of some complementary lines (in the actual system classified as fundamental lines).

Impastato Vivaldi Regulation and administrative provisions regarding Italian Railway 33 THANK YOU VERY MUCH!!! Contact: Ing. Stefano Impastato University of Rome “La Sapienza” DITS – Transport Area Via Eudossiana n Rome (Italy) 9TH Conference on competition and ownership in land transport Lisbon 04 th -09 th September 2005