Gathering New Data for Efficient Transport Policies

Recently, the Federal Minister of Transport, Alexander Dobrindt, announced a 350-million-euro subsidy for 2018, designed to lower track charges for freight transport and encourage shippers to move from roads to rails. The basic question in this context is: How fair is the competition between trains, buses, planes and the other main mode of transport, cars? In other words, is a euro of public funds better spent for maintaining streets or expanding rails or adding another runway? And will each infrastructure’s users contribute equally to its funding, or will there be competitive distortions between them?

In its recent report “Railways 2017: Construction sites in competition policy,” the German Monopolies Commission attempts to address these questions. One of its focus areas is how state funding affects competition between road and rail transport. For instance, in 2017 alone, Germany will spend 8.6 billion euros for highway upkeep and expansion, and directly invest 5.8 billion euros in rail infrastructure. 2017 also includes funds for other transport sector projects, such as 150 million euros for noise reduction.

The report also highlights that users contribute to infrastructure funding in various ways. This year, the vehicle tax and the HGV toll are expected to generate 8.8 billion euros and 4.3 billion euros, respectively. The track fees paid by rail companies are estimated to total 4.6 billion euros in 2017. But it is hard to say how government spending and user charges affect competition between roads and rails. Unfortunately, Germany lacks the data for comparing the total costs and benefits of particular modes of transport. Without such a comparison, however, it is impossible to assess how government funding in the transport market affects competition.

Switzerland serves as an example

The data is much better in Germany’s neighbour Switzerland. There, officials specifically gathered statistics on various cost parameters for individual modes of transport, allowing direct comparisons between them. The statistics also consider how the modes of transport pay for the environmental costs they create, such as air pollution, or for costs caused by noise and accidents. The analysis of this data then serves to guide Switzerland’s transport policy decisions.

The report from the Monopolies Commission calls on Germany to develop evidence-based transport policies like those in Switzerland. This will require building a comprehensive database for the entire transport sector that can be used to perform a total cost-benefit analysis of the German market. Only then will Germany be able to create a fair system of grid fees, taxes and tolls for trains, road vehicles, planes and maritime ships, and thus create fair competition in the transport market.