“If we want to bring change to the use of the railway, it is crucial
to create a single European railway area that deserves its name”
The committee on Industry, Research and Energy of the Eurpean Parliament, wants to maintain a strong industrial base to help the railway industry. Martina Werner shares with us the main actions that will be implemented.
You are currently a member of the Industry, Research and Energy Committee of the European Parliament (ITRE). Which are the main areas of activity and objectives of this Committee?
I am the spokeswoman for industrial and energy policy for the German social democrats in the EU Parliament. My main focus in industrial policy is on how to keep a strong industrial base in Europe. That includes for instance working on measures to support the digital transformation of manufacturing industry and generally stimulating industrial growth and securing jobs in the EU. With regard to energy policy my main objective is to ensure a successful transformation to renewable energy and the design and implementation of a functioning Energy Union.
As you know, the European railway sector accounts for 46% of the global rail market, which proves to be a key sector for the growth of the European industry. What is this Committee currently working on in relation to our sector?
The ITRE Committee was the body in the European Union which put a spotlight on the rail supply industry by deciding to take up the work to draft a resolution on the competitiveness of the sector. In addition to that there are of course many other areas we are working on that have an effect on the rail supply industry – from research and digitalisation to the setting up of the European Funds for Strategic Investment. The latter is a guarantee facility, which already enabled the funding of a transport project in Spain that dealt with rail and road access investments in state-owned ports.
In April, the draft motion for resolution proposed to improve the competitiveness of the European Rail Supply Industry, presented by you and your team in this Committee was approved. Could you please share with us more details regarding this resolution and explain how it will help European railway companies?
The resolution is a strong political signal that the European Parliament wants the Commission and the Member States to be more active in supporting the rail supply industry. It proposes concrete actions in nine chapters in support of the sector – from innovation and skills development to the EU’s trade instruments, public procurement and the boosting of investments. Maybe most importantly we expect from the Commission to install a permanent high level dialogue for the rail supply industry. Such a forum would enable a continuous discussion on the challenges of the sector and possible solutions. This way the follow-up to the resolution is institutionalised. In addition to that we ask the Commission to develop a long-term industrial strategy for the rail industry and to include it in the general EU industrial policy strategy that is announced for 2017.
In some cases, we see with a certain distance the measures and actions presented and implemented by the EU, and especially those regarding small and medium enterprises. In this sense, how is the ITRE Committee going to support SMEs in the railway sector with such resolution?
Supporting SMEs was one of the central goals of the resolution. We decided to include a dedicated SME chapter. SMEs in the rail supply industry tend to depend on one dominant national system integrator. We ask the Commission to upscale its support to SME internationalisation. Sector groups on rail in the framework of the Enterprise Europe Network could be valuable in this regard. We also highlight the problems that exist with regard to access to finance. The SME instrument in the EU’s research programme “Horizon2020” makes it easier also for SMEs to apply for research funding. However, we need more instruments like that which don’t put a huge bureaucratic burden on small companies. The SME participation in the dedicated rail research joint undertaking “Shift2Rail” is unfortunately low. I doubt that many SMEs will profit from the 920 Million Euro available. Therefore, we pressure the Commission to adjust the programme to fit the needs of SMEs.
The European rail sector invests around 2.7% of its annual turnover in R&D, which is one of its strengths in terms of global leadership. How do you think the European institutions should support the industry so that this percentage is similar or even higher in the future and maintain the current global leadership of the European rail industry?
First and foremost it is in the companies’ own interest to keep on investing in research and innovation. Asian manufacturers have turned away from mere mass production. By now, there is high-tech made in China, too. The first fuel cell tram in operation might very well come from Changchun in China. The EU has limited resources at hand to support investments in rail R&D. Therefore, concentrating on areas where there is a clear added-value is essential. This is the case for investments in interoperability, digitalisation, reliability and noise reduction as they contribute to making rail transport more attractive. A second focus should be the support of rail innovation clusters such as the Spanish ‘Railgrup’. Supporting clusters is also a strategy with a special benefit for SMEs. We are calling for an increased engagement of the Commission in this regard. Thirdly, the rail supply industry is a very diverse sector. Therefore, different financial sources at EU level are available. The Connecting Europe Facility with a budget of 26 billion, the Structural Funds, the research programme “Horizon 2020” with Shift2Rail and the new European Fund for Strategic Investment all come to mind. The EU is working on ways that make it easier to combine several funds for one project, but this has to be sped up. Finally, homework for the rail supply industry itself: the sector should start thinking outside the box. I suggest to reach out to the ICT world and the financial sector.
The railway is known to be one of the most sustainable and respectful with the environment transport means, as well as a key element of competitiveness for our industry. In your opinion, which measures should be implemented in order to support the objectives of modal shift to railway included in the Transport White Paper of 2011?
Two thoughts on this question. Firstly, we still have a highly fragmented market in Europe. Travelling by car or plane across borders still tends to be easier for customers than to take the train. If we want to achieve a shift to sustainable mobility – and that means a shift to rail – it is crucial to create a Single European Rail Area that deserves its name. Therefore we support our colleagues in the Transport Committee by endorsing the swift implementation of the fourth railway package. In my view a leading role of ERA, but also the thorough involvement of CEN/CENELEC is important. Secondly, there has to be a fair competition of the different modes. This is currently not the case. Due to track access charges and other factors rail transport has a competitive disadvantage towards road transport. This is especially a call to action for member states.
The European Union is open to competition from companies from developing countries. However, access for European companies to other markets does not offer the same or similar reciprocity in many cases. The industry demands to gradually correct this inequality. What do you think should be done or is being done by the European institutions in this regard?
Indeed this is a particularly important issue. The European Parliament has been pushing for a reform of the trade defence instruments for a long time. It is blocked by member states in the Council. Don’t get me wrong. We do certainly not want to start trade wars, but reciprocity has to be the guiding principle of our trade policy. It is about creating a level playing field. Companies from third countries especially from China and Japan are entering the European market, but at the same time they increase the obstacles for European competitors. This is not acceptable. The Commission has to address this imbalance in all negotiations on trade and investment agreements. Finally, the new EU public procurement directives allow authorities to choose the most economically advantageous tender (MEAT) which includes criteria such as life-cycle costs. Many companies from third countries still compete merely on the basis of the lowest price. Therefore, European companies still possess a competitive advantage. We need to push member states to implement this framework thoroughly.
And finally, recently you have maintained an intensive contact with European railway associations. What is your opinion about the work they do? What would you recommend them?
I have indeed met with a lot of representatives from the industry in the last months. I met highly innovative and healthy companies. I spoke to motivated and very skilled employees. In my view, the industry could try to collaborate on more projects than they currently do. CRRC is more than double the size of all three major European players combined. This is probably going to be the competitive setting of the future. Europe should join its forces especially in research and development. My conviction is that this will contribute to industrial growth in Europe and secure jobs and long-term global competitiveness.