€20 pass on trains will “cannibalize single rail market” and is “clearly unsustainable”, says European association
The European association of independent rail operators Allrail reiterates that the new 20-euro rail pass will “cannibalize the European Union’s single rail market” and calls for policymakers to intervene to ensure “fair competition.”
“The extremely low price of the new rail pass is clearly unsustainable; it will cannibalize all attempts to open up the long-distance rail passenger transport market,” Allrail said in a statement.
According to the association, the cases of other Member States of the European Union, “from Sweden to Czechia”, show that “subsidies are not necessary to lower prices”, as “this results from market liberalization”.
“On the contrary, in Portugal, new long-distance operators will be forced to compete against taxpayers’ money, which is obviously impossible”, he criticizes.
Pointing out the “absurdly cheap price” of the new pass, Allrail notes that it “offers unlimited travel on all rail services subsidized with taxpayers’ money (including on urban services that are not covered by a metropolitan intermodal pass)” and “can until it was used in long-distance railway services (Intercidades) which were assigned by direct agreement on an exclusive basis to CP, the Portuguese state railway operator”.
It also highlights that “trips of any duration (e.g. more than eight hours in one direction)” and “unlimited trips per month (with the possibility of reserving a seat for two separate trips per day)” are covered”, with “the taxpayer bearing the burden of totality of CP’s losses”.
In this regard, the association quotes Diogo da Silva Branco Magalhães, ‘bid director’ at Deutsche Bahn (German railways), according to whom “the revenue resulting from this new railway pass may not even cover a third of the cost of the service “.
Defending the creation of “conditions for fair competition, allowing independent operators to enter the market”, Allrail contests the “national policies that undermine the European Union’s single rail space and make high-speed investment in Portugal unfeasible”.
“The challenge is tremendous. Urgent and decisive action is needed, asking for the intervention of our political decision-makers”, he maintains.
Quoted in the statement, the association’s general secretary states: “This is not a time for hesitation. It is a time to have the courage to do what is necessary to create a fair and competitive market.”
According to Nick Brooks, “private investors will come to Portugal, but only if there are strong measures against the cannibalization of services that is being borne by taxpayers.”
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Launched on Monday, the Green Railway Pass replaced the national rail pass and allows travel on regional, interregional (2nd class), urban trains from Lisbon and Porto (outside the areas covered by metropolitan intermodal passes), urban trains from Coimbra and intercity trains (2nd class, with mandatory and advance seat reservation).
The pass costs 20 euros for 30 consecutive days of use, but can also be purchased for 60 and 90 days, for 40 and 60 euros, respectively, and is loaded onto the CP Card which, according to the carrier’s website, It costs six euros (three euros for students).
CP will be compensated 18.9 million euros per year, via a public service contract with the State, for the loss of revenue it will have with the entry into force of the Green Railway Pass.
According to the Government, it is estimated that this new pass covers 29.9 million passengers.
On October 8, the CP Workers’ Committee considered that the compensation provided for by the new pass was insufficient, a statement that led to “surprise and rejection” from the CP president, who assured that this amount was accurately calculated by the company .
In the same vein, on Monday, the Minister of Infrastructure said that the measure was launched in coordination with CP and with demand calculations, considering that the increase in demand will be accommodating and guaranteeing that the company “will be reimbursed up to the last cent of the which hypothetically could lose”.
“You can even gain if we increase the payer base, we can even rebalance the accounts”, he assured.
