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Liberalization of the Railway Industry in Europe: Toward a Sustainable System
through Process View
Bulcsu Szekely
Lappeenranta University of Technology, Kouvola Research Unit
Prikaatintie 9, FIN-45100 Kouvola, Finland
E-mail: bulcsu.szekely@lut.fi
Abstract:
In this research the target is to tackle the evolutional development of the railway
segment. The objective is to shed a light on the transformation schemes in Europe so
that it would be possible for countries to set up better policies to manage their efforts.
In overall it can be claimed that the ability of governments to leverage lean strategies
is the key. In addition it is essential to impose regulatory measures to be able to
control the efficiency of consolidation procedures of core service providers.
Stimulating competition is the hardest issue for Poland and Hungary.
Keywords: railway, liberalization process, system, sustainability, Europe, Poland,
Hungary
Reference to this paper should be made as follows: Szekely, B. (2008)
‘Liberalization of the Railway Industry in Europe: Toward a Sustainable System
through Process View’, Int. J. Sustainable Economy, Vol. x, No. y, pp. 000-000
Biographical notes: Bulcsu Szekely is currently working as a project
researcher at the Lappeenranta University of Technology (LUT) in Kouvola,
Finland. His research interests are concentrated the effects of railway logistics
privatization and deregulation, supply chain management and logistics IT-
systems. Mr Szekely has been a co-writer to a couple of journal articles and a
NOFOMA international conference paper.
Introduction
Globalization is one of the central trends nowadays in the world economy and the
phenomenon makes itself visible also in the orchestration and optimization of
transportation infrastructures. Many multinational enterprises have already reached a
dominant position in the markets and cost versus quality considerations are
becoming number one factors for these entities in accomplishing their strategies: In
relation to transportation management there are certain elements that play central
role in decision making: Time to market, price considerations, service quality
practices, sustainable technology applications, safety regulations and stability are of
significance (Phusavat et al., 2008; Smith, 2008; Shintaini et al., 2007; Ivanova,
2007). Government’s role is to emphasize the sustainability aspects that are often in
contradiction with the objectives of multinational corporations. In order to find the
optimal measures for maximizing investment returns, it is viable option to take the
tools offered by system approach. There are many countries all over the globe where
reforms targeted on railways industry take very first steps. However there are also
examples of US, Sweden, UK that managed to render this previously loss generating
sector into a profitable one. Even though the pioneer economies managed their
transformation endeavour well, some of them had painful moments - the UK with
Railtrack bankruptcy - and there are still areas that need attention – the loss
generating Amtrak in the US. It can be assumed that these reengineering initiatives
bound to become increasingly complex for governments to implement in the future as
the consequence of ongoing globalization of the world trade and logistics services
(Arvis et al., 2007; Economist Intelligence Unit, 2007). Therefore there is a need for
exploration of international railway transport development to shed a light on the
context of fair competition (Gomez-Ibanez and De Rus, 2006). The central objective
is to elaborate a high level process view on liberalization scheme so that it would be
possible for countries to set up better policies to control the efforts in an integrated
manner. The focal research questions are the following ones: Which stages in the
liberalization process pose most pressures on countries of investigation? What are
the major difficulties the examined countries experience in implementing the
liberalization agenda?
By establishing phases for these kinds of policy packages, measures can be set up
to be able to monitor the efficiency of the sets of activities to be carried out. In
addition, by gaining further understanding on these initiatives, one can also predict in
a more precise manner the magnitude and nature of investments needed to help this
transportation mode to gain ground in comparison with road, maritime and air
transport. It can be argued that these aims are especially pivotal in the case of
railway, since regional interoperability and productivity enhancements in Europe are
highly troublesome to achieve as the consequence of historical development:
Railway industry possess more country specific technical standards compared to
road infrastructure.
This scrutiny is structured in a following manner: in Section 2 the experience of
western economies are examined to extrapolate the main stages of these large scale
transformation programs. Here the attention is on the US, the UK, and Sweden. In
Section 3 the focus is on Poland and Hungary whereas in the fourth section the
process model for liberalization initiatives is at stake and the examined countries are
compared to each other. Finally some concluding remarks are presented and future
research paths are proposed.
Railway industry liberalization: review through the glance of pioneer countries
Liberalization of the railway industry is defined here in the context of this scrutiny as a
combination of set of measures of deregulation and privatization policies targeted at
the business models of railway undertakings with the aim of cutting operating costs
and maximizing profits. During the last thirty years three basic options of
implementation strategy have evolved: leaving operational and infrastructural
management as a one entity so that undertakings could own their own railway lines
and rent them to other parties to use, separating these two set of issues or applying a
holding company structure.
The US has been referred in many contexts as to one of the special case with regard
to railway restructuring policies. This is because the whole system of railway network
is in the hand of private actors and the sector is not entitled to any financial support
from the government for example in relation to infrastructure upgrading investments
(Silverthorne, 2008). Since the beginning of the 1980‘s through a set of considered
policy agendas the US government managed to minimize its involvement in the
industry that is now a viable option to any investor. Actually very recent research
studies showed that inter-modal rail freight is a more sustainable option compared to
road haulage in terms of social and private costs (Gorman, 2008). The firm and
precise implementation of Staggers Act opened up competition through which the
strongest operators evolved to control the markets: Burlington Northern Santa Fe
(BNSF) is nowadays a global firm engaging in business creating in China.
The main themes of the still ongoing process were the integrated model of operation
control and infrastructure management, rail track renting, massive layoffs and
customised solution provision for contractual partner enterprises through service
level agreements (Szekely and Hilmola, 2007). A more detailed investigation reveals
that the sequence of procedures were in line with a specific pattern: first legislative
measure was adopted by the government and the decision on the implementation of
it was confirmed. After that as a result of increasing competition there was a “play-
offs” between railway companies for market share capturing. In the third stage further
consolidation took place among the actors after which the willingness of investors
began to reappear: Warren Buffet reinvested into BNSF during 2007 many times. Still
there is a need for new investments into the infrastructure as railways in the US
cannot realize its full potential without public backup (Association of American
Railroads, 2008).
The way of progress in the UK, confirms that this line of occurrences might not be
just a matter of chance. After British Railways was split according to a governmental
decision, little by little small operators emerged but as Railtrack (currently Network
Rail Ltd) exemplified, the situation was not that bright: This network manager firm
that should have planned the strategic moves for long term investment scenarios,
focused on short term objectives and in the end it was delisted from stock markets
and bankrupted in 2001. Nowadays there are however many business actors on the
railway market that is a target of mergers and acquisitions (Haywood, 2007). In 2002
huge investments plans have been accepted worth of £34 billion to raise safety level
and renew infrastructure (Hilmola, Ujvari and Szekely, 2007).
Sweden chose the same strategy as the UK, but in overall for this country the
progress was not that speedy. The main reason is the retention of the control in the
hand of the government. On the freight side there are already a great amount of
private operators though the position of the governmental owned former incumbent
company – Green Cargo – is still well over 70 percent whereas on the passenger
side only specific routes selected by officials are open to free competition (Hilmola,
Ujvari and Szekely, 2007). The process is not going that much forward as a
consequence of lack of increasing demand and proper incentives but nevertheless
the final outcome is still positive (Jensen and Stelling, 2007). Especially the
passenger side need more radical changes to render competition and to create
favourable condition for the entry of private companies.
Place for Figure 1
The business transformation efforts tend to last many years, but rather decades while
the complexities involved are extensive. Figure 1 above is to depict the developed
process model for liberalization of railways industry. It can be pointed out that in the
course of proceedings from stage to stage profitability of this transportation mode is
improving only little by little: During the first phase railways are producing deficits and
governmental support has been increasing for a long period of time. In the second
phase leading companies break-even, but governmental extensive subsidiaries are
still needed though in some cases in smaller scale. Mergers and other consolidation
procedures on the markets take off. In the course of third stage consolidation
processes of the markets continue in a greater intensity and governments can reduce
their role in the industry. During the last interval, profits might evolve from the
operations and also dividends may increase, and eventually shareholders fuel new
capital into the businesses. In an optimal case these development trends can lead to
environment which is an incubator for novel business models or completely new
activities. Still sustainability is not achieved unless social values of the new system
do not satisfy the individual actors and social cohesion between groups and teams
within and between collaborative organizations cannot be strengthened.
The initiative is to exploit the available resources with advanced technologies and
investments so that the generations of the future could meet their own needs without
constrains created by the present. Tao and Hung (2003, 3331) define sustainable
transportation as follows: “The achievement of continued transportation activities
supported by environmental, economic and social objectives at various space-based
scales of operation.” With this regard system approach is to specify the interactions
between economic, social and environmental factors in order to be able to show how
these subsystems work together to their mutual advantages or disadvantages
(Moneva and Ortas, 2008). To be able to do this, various scenarios are determined
including static and flow variables. In describing intrinsic dynamics usually
mathematical functions are employed and in the case of transportation systems the
most often used model for optimization is linear programming (Tao and Hung, 2003).
Since there is no generally accepted set of methodologies in evaluating
transportation investments there is only possible to set out processes that are of
different emphasis or value in a model of a country (Quinet and Vickerrmann, 2004).
In practice there are many additional problems faced: how to analyze risk, what is the
ideal balance between technical and economic aspects, the effect of delay,
asymmetric information available to parties included etc. As transport infrastructure
investments have a multiple role in an economy their implications for it depends on
the context in which they are implemented. To find the optimal solution the tools
offered by system approach is an effective set of measures striving toward
sustainability.
The following sections review the progress of liberalization in the railway
transportation sector in the above mentioned countries. The objective is to reveal the
sources of divergent forces inhibiting the full implementation of EU directives and the
reasons for stagnating of the rail sector in general. It seems to be nowadays a
general trend to impose more market oriented approach in the EU in many industry
segments to respond to the threats generated by the dynamic nature of globalisation
(Vaughan, 2007).
Railway industry liberalization: review on Poland and Hungary
The situation in Eastern Europe is similar into a large extent to that of in the western
economies. Previously state supported sectors having monopoly position in the
market have great difficulties to break even despite radical measures. In both
countries of cases being target of exploration, the former incumbent enterprises can
still restrict the competition according to their preferences despite the impressive
amount of issued operating licences. In both cases umbrella organization has been
created to limit the costs for coordination problems.
Place for Figure 2
In Poland from novel information on the market it can be seen that the symptoms are
just the same as in Hungary both on the passenger as well as the freight side: Not
enough demand and road is actually eating rail share all the time (Wolek, 2008;
Melck, 2008; Hungarian Rail Office, 2008). In fact it has been forecasted that by 2020
in Poland railway passenger service would decrease by 15 to 25 percent and
simultaneously individual transport would surge by 50 to 75 percent (United Nations
Economic Commission for Europe, 2007b). These trends prevail despite the fact that
in the long term rail service should be of a better, more sustainable solution for the
complications caused by congestion and pollution. Poland on the other hand
managed to stop the declining tendency at least with regard to cargo and showed up
impressive results: From 1997 to 2006 the volumes in tonnes (thousands) rose from
8078 to 150923 which is equal to 18 fold increase. Passenger volumes dropped from
330313 to 217410 (thousands) during the same period equalling to a fall of 34
percent. The tendency is kind of similar in relation to passenger and freight tonnes
kms: Between 1997 and 2006 passenger kms came down by 15 percent from 19928
to 16971 millions kms. On the freight side in Poland a huge increase took place: from
1859 to 42651 kms, being a 23 fold upsurge. At the same time on the human
resource side from 1997 to 2006 the number of employees working for PKP Group
was reduced by 45 percent from 226369 to 125894. (International Union of Railways,
2007.)
Place for Figure 3
When examining the available statistics available on time series data of rail traffic
between 1997 and 2006, in the case of Hungary volumes on the passenger side
came down and with regard to freight transportation the situation essentially
remained the same. Freight cargo figures improved by 2.9 percent from 45492 to
46777 thousands tonnes while passengers volume decreased by 2.8 percent from
123210 to 119814 thousands. In terms of tonnkms the figures stayed approximately
the same level: A slight increase of 5 percent from 6394 to 6742 millions km can be
noticed In Hungary again growth was not that significant during this 10 year period: a
19 percent upswing is noticeable from 7803 to 9279 millions km. Employment in the
railway industry dropped too: From 61557 to 38084 i.e. being a 38 percent decrease.
(International Union of Railways, 2007.) In order to be able to have a view on the
potential of railway in the future to become a real competitor for road haulage in
these countries, statistical data was examined on volumes of freight intermodal traffic
on railway. The results are than compared to the development of total volumes of
freight cargo on rail.
Place for Figure 4
From Figure 4 it can be seen that in from a long term view the PKP Group is more
competitive with respect to the amount of intermodal cargo transported, though the
level is still much lower when compared to MAV Cargo. Volumes have been on rise
in Poland steadily since 1997 ending up in 2006 with a figure that is 217 percent
higher in comparison to the one in 1997. MAV Cargo on the other hand has had
many fluctuations in between and especially the drop from 2002 to 2003 is
significant: a 20 percent decrease from 6138 to 4889 thousands tonnes. When
focusing on data on intermodal freight tonne-km available in the same database, the
difference between these counties becomes even more obvious: Poland is way
ahead of Hungary. For example, in 1997 PKP Group carried freights along 1859
millions tonne-km whereas the same indicator for MAV was 7803 millions tonne-km.
In 2006 the same measure for PKP Group was 42651 millions tonne-km, but MAV
reached only 9279 millions tonne-km. In so it can be claimed that PKP Group
managed its transformation process much better in comparison with MAV.
When looking at the total tonne-km on country level, the data available from the EU &
Eurostat (2007) reveals that during the period of 1995 – 2006 in Poland freights
travelled on tracks decreased significantly. From 68.20 billions tonne-km in 1995 to
53.62 billions tonne-km in 2006: A drop of 21 percent took place. In Hungary one can
perceive an increase of 21 percent from 8.40 billions tonne-km in 1995 to 10.17
billions tonne-km in 2006. In this light the achievement of PKP Group is even better.
Methodology
The research approach used in this work can be seen as qualitative case study. The
emphasis is on the comprehensive understanding of the phenomena of evolving
business conditions in the railway sector in Europe. A short review is given on railway
liberalization process in countries that are considered to be the best in their way of
managing this transformation of rail sector. These are meant to be a starting point for
further investigation of Poland and Hungary. From this point of view this scrutiny can
be classified as a cumulative case study since it collects the knowledge from
previous literature available and its aim is on building further body of understanding
these dynamic complex processes in their own natural context (Palmquist, 2005).
The data gathered is analysed by coding in order to be able to break the available
evidences about this phenomena into parts. This approach is one that can be
claimed to be fruitful as transportation networks are a typical example of dynamic and
complex real-world systems that are almost impossible to depict in an accurate
manner by a mathematical model for analytical evaluation (Saranen, 2008). The
primary sources of information are the websites of secured parties such as public
international agencies such as the European Union and The World Bank. Scientific
journals and books are reviewed too to secure the reliability of the main arguments.
To complement the qualitative platform also an electronic survey (see the Appendix)
was sent to Polish and Hungarian railway operators during April 2008 in order to be
able to obtain more detailed picture on the state of quality of operations of these
actors and their future outlook. Unfortunately only one answer was submitted from
Poland and three from Hungary. Given the large number of private railway
undertakings in these case countries it has been concluded that it is not possible to
utilise the results of the survey at all. Therefore this scrutiny relies mainly on
secondary data. One additional limitation was that the focus of the numerical data
analysis was on former incumbent companies, ignoring the emerging group of revival
firms.
Discussion
Based on the data analysis above one can argue that the process framework
presented does not that well describe the situation neither in Poland or Hungary. It
seems that these countries are somewhere in between the process stages of three
and four where mergers and acquisitions takes place on the markets while new
investments occur as a result of additional assigned EU fund sources and emerging
entrepreneur groups. On the other hand one can claim that these countries have not
even achieved the state of free markets as so called “hidden monopoly
organizations” are monitoring the conditions. With reference to these matters it
seems more obvious that these countries can be placed to between the process
stages of one and two. In both evolving process of liberalization of railway industry
the time passed since the inception of initiatives is long and it is clear that the
productivity and efficiency of resources used is low. In turn these facts lead to the
output of inappropriate service level by the acting operators and their
competitiveness continue to decrease despite the efforts put into enhancing and
accelerating deregulation and privatization of the markets.
The literature revealed already that one source of uncompetitiveness in the analyzed
countries stems from the inappropriate level and structure of the track access
charges (Volkenandt,, Auner and Kirchner, 2007; Volkenandt, and Auner, 2006;
Nazarko, Dobrzynski and Ryciuk, 2006) It can be seen that both in Poland and
Hungary these charges are based on multiple requirements and so they are not
flexible enough to respond the change in the economic environment (Melck, 2008;
Belmonte, 2007). Especially as setting track access charges might work as a double
edged sward: The infrastructure manager use them to maintain and develop the
network, but the higher the price level is fixed at, the more share it takes from the
income of the operators. In a loss producing industry, if access charges rise too
much, operators that run publicly subsidized passenger connections might need to
opt for more direct subsidies from the government. On the other hand, in case
decision makers allow dropping fees in a significant manner, sooner or later this
maneuver might lead to over-charging freight trains and/or postponing renewals into
future and resulting in a lack of capacity of the network in the short term (OECD,
2005).
In theory the guidance is set: Charges should stimulate incentives in using the
infrastructure more efficiently, it ought to be in connection to the costs caused by the
maintenance and development needed and disclose the possibility of discriminating
users (Belmonte 2007). Even the European Commission has already prepared
further communication package as to how to implement the price system in order to
be able to fulfill the requirements (OECD, 2005). Still the interpretation of these
principles differs between countries thus leading to divergent practices that disturb
the output in the end. These lines of procedures are understandable as even within
the EU countries are in a very different economic situation. It can be however argued
that in the long run as economic integration goes ahead, every country should apply
the basic principles in the same fashion and have a space for adjusting within a
frame of additional specific rules. Recently a study shed a light on different types of
practices where the inappropriate setting of track access charges stimulates
exceptional financial uncertainty and therefore weakens the competitiveness of
railway sectors.
There are countries where the fees determined are far below the minimum required
represented by marginal costs covering renewals. Marginal cost should be seen as a
definite lowest possible point for charges. In some other cases there are instances
where freight service ends up covering the gap caused by the costs of passenger
connections to be able to minimize the need for public support for these loss
producing passenger lines. According to the findings this is the state of matters
especially when the infrastructure manager is to operate under a high or full cost
recovery scheme, while the network under control is not used to full capacity. A third
kind of obstacle can be observed in the strategy countries structure charges along
international corridors. Some implementations support incentives to consolidate
loads and run fewer but longer trains in one country, whereas the other mainstream
approach is to promote operating short, light trains in other country along the
corridor. These divergences in strategic considerations cause increasing coordination
costs of international connections as a consequence of the complexities caused by
these in train path planning procedures. (OECD, 2005)
With regard to Poland and Hungary the competitiveness of the rail sector is weak as
track access charges are relatively on high level from a European perspective and
the networks are used below their capacities (OECD, 2005). To improve the state of
circumstances these countries are eliminating the unprofitable parts of the networks
though without social acceptance (United Nations Economic Commission for Europe
2007a). Still cross financing passenger rail traffic from the profits of the freight sector
is a fact that undermine the competitiveness of this mode. In striving for reducing this
trend officials are about to deploy another solution: Replacing passenger rail
connections with bus service is a viable option to save costs.
It can be argued that while Hungary and Poland are both similar transition
economies, these countries are at the moment not the same stage in the
liberalization process: In Poland the progress has already been visible, showing
positive results; PKP Group has the chance of being able to produce profit within the
next decade. The dominancy of the former monopoly operator has considerably
weakened, while at the same time recently large amount of licenses has been
issued. Still now in 2007 only PKP Intercity was able to show profits while the debts
of the Group remained at the same level and infrastructure is worsening all the time
without being able to guarantee the capacity extensions needed (United Nations
Economic Commission for Europe, 2007b; Kühl, 2007; Grudzinska, 2006). For
infrastructure upgrade projects the Group uses its own budgets or financial support
from the EU (ConstructionPoland, 2008). In Hungary the situation is much similar: the
debts of MAV Group are immense, there is no available capital for infrastructure
investments (United Nations Economic Commission for Europe, 2007a). Investments
into the infrastructure would be essential to be able to locate future growth into the
sector and leverage its effects of positive externalities (Quinet and Vickermann,
2004). In both cases the governments has realised the seriousness of the situation
and are about to take action to make improvements on the state of issues: In Poland,
official initiative was launched to prepare a feasibility study on investigating the
construction high speed passenger rail connection between major cities of Warsaw
Poznan and Warsaw Wroclaw (PMR Ltd., 2008). In Hungary the circumstances were
such that the decision makers simply put on the shares of MAV Cargo onto a public
offering competition that was won in the end by the Austrian Cargo (New Europe,
2008). In so Hungary bypassed the phase of competition and entered straight to
mergers & acquisitions. Currently former incumbent operators can still influence
decision making processes into such an extent that they are able to manipulate the
parties so that the final conditions on fees favor them in the face of smaller
companies. In this sense it could be reasonable to require that countries abolish their
own existing regulation and only imposing the EU ones. Network access contract
could be standardized with regard to contents as much as possible to avoid the pitfall
of regional adjustment and to create transparency, continuity and predictability of
financial flows. A supranational EU level organization could be set up to solve the
possibly emerging problems related to interpretation of underlying rules of law with
regard to the contracts. At the same time, as price level of the track access charge is
complex to set, it could be easier for parties to implement common practices in case
EURO would be required as a tool for exchanging currency. In the end the final goal
is to find an optimized solution where increasing track access charges add to the
welfare of the system in a way that the price level of fees does not outset the
possible positive effects of rising demand for rail services.
Conclusions
The central difficulty inherent in carrying out the transportation reforms is the
orchestration of contextual settings: The system through which railway transportation
could evolve in an optimal way – i.e. the economic and technical regulations and the
incentives around them to stimulate growth and equality (Quinet and Vickermann,
2004). These complexities are reflected in the lengthiness of timeframe needed in the
countries to revitalize their railway business. As a consequence it can be argued that
the critical factors of shortening the liberalization process of the railway industry are
the abilities of governments to leverage lean strategies onto the interfaces of process
stages. In addition it is important to implement regulatory measures to monitor the
consolidation dynamics of the markets. It is still impossible to evaluate how long
these reform processes will take: In any case it can be stated that both countries will
need still several more years to be able to show up significant improvements in terms
of overall freight and passenger volume growth. In financial terms the development
will be weaker: Profitability in the passenger segments with a sustainable manner
can be a question of a decade from now on. Freight markets on the other hand in
these two countries might become profitable in relatively shorter time: Even five
years from now might be enough in case sufficient demand can be stimulated in the
region. The objective to become competitive both domestically and internationally in
the long term might be the real goal toward sustainability push (Bojnec and Fertő,
2008). The countries targeted in this research are having difficulties in entering the
second phase of the liberalization process and they are incapable of introducing
strategies to enhance competition on the rail markets. Still Poland is ahead of
Hungary especially with regard to freight rail services (Volkenandt, Auner and
Kirchner, 2007). Both governments have difficulties in combining economic and
technical regulations to optimise the general setup of inter-firm relationships so that
productivity and growth of the market could be possible. The positive externalities of
track access charges would not be enough even itself, but a proactive approach to
competition by the incumbent operators is required (Milfelner and Snoj, 2008; Gomez
– Ibanez and De Rus, 2006; Boeri et al., 2006). This is essential as liberalization
schemes themselves do not seem to boost infrastructure investments that are
needed to accommodate future capacity (competition) and are risky and lengthy
operations especially in the case of rail. (Hilmola et al., 2007) Consequently the
strategy of separating infrastructure and operational activities might not work in every
EU countries. In some cases vertical integration might work better along a
transportation corridor.
One possible path forward would be to conduct targeted interviews with predefined
organisations in these transition economies to gain a deeper insight into the state of
matters so as to be able to specify the process model introduced in this study into a
more detailed level. In addition it can be argued that it would be fruitful to continue to
explore the industry activities within the Eurasian landscape, and examine the
business processes of wholly privately owned railways operators: To investigate how
these companies adjust their business models over time to create maximal
shareholder value and how they consider sustainable dimensions of the economy.
Further it would be valuable to explore under what circumstances the strategy of
vertical integration is better in comparison to separating infrastructure and
operational activities and under what conditions the combination of these two sets of
strategies is possible to implement successfully.
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Figures
Figure 1. The process view on liberalization of railway industry (Adapted from
Szekely and Hilmola, 2007)
Figure 2. Railway network-map of Poland (Komusinski, Simon; Korycki, Tomasz and
Bruchertseifer, Jörg, 2008)
Contr
ol
Comp
etiton
M & A
Investm
ents &
Value
added
Extensive
governmental
support
Extensive
governmental
support
Moderate
governmental
support
Moderate
governmental
support
Monopolistic
system
Profitable
System
Time frame: five years to three decades
Business model evolution process
Figure 3. Railway network-map of Hungary (György, Vince Bela, 2008)
0
1000
2000
3000
4000
5000
6000
7000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Tonnes (thousands)
PKP
MAV Cargo
Figure 4. The performance development of incumbent companies of Poland and
Hungary in intermodal freight traffic in terms of tonnes. (International Union of
Railways, 2007)
Appendix