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Noise Differentiated Track Access Charges

In the green transport package, published in 2008, the European Commission has published a communication “Rail noise abatement measures addressing the existing fleet”. An impact assessment study has identified as the more appropriate incentive solution to support freight wagon retrofitting, a combination of noise-differentiated track access charges, noise emission ceilings and voluntary commitments.

In 2007, UIC published a study on the implementation of noise related track access charges and related questions. This report highlighted the difficulties and the complexity of implementation these noise related track access charges. UIC, CER CER Community of the European Railways and EIM EIM European Rail Infrastructure Managers have also in summer 2009 worked on the possible scenarios of implementation of NRTAC. The conclusions of this work are gathered in an annex to the previous report. An executive summary of the status report and the annex report has been worked out in English.

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Executive summary on NRTAC
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Status report and background on noise related track access charges - English version

Also available in German and French

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Implementation annex to UIC report on NRTAC - English version

Also available in German and French

In October 2009 EC DG TREN published on its website the report “Analyses of preconditions for the implementation and harmonisation of noise-differentiated track access charges”, established by a consultant’s consortium of KCW, Steer Gavies Gleave and TU Berlin for EC DG TREN. As UIC in collaboration with CER and EIM in summer 2009 analyzed this issue it seemed to be justified and useful to evaluate and summarize the KCW study in a critical overview from the railway sector. Therefore the evaluation paper below intends to summarize the finding of the KCW study and to point on –if there are any- misinterpretations of data, diverging opinions or positions of the railway sector. It is structured in a synthesis with the main content of the KCW study and the main results of the evaluation which is followed by a detailed evaluation of the study. The evaluation paper is only available in English.

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Evaluation of the final report “Analyses of preconditions for the implementation and harmonisation of NRTAC” - English version

Study to determine the transaction costs of different incentive models for retrofitting the freight wagon fleet with composite brake blocks

Results of this study, established in May 2011 by the German Consultant KCW (Berlin) for the commissioning Consortium VDV, DB Netz AG, DB Schenker Rail, VPI, UIC, AAE and ERFA ERFA European Rail Freight Association are clear: economic incentives for retrofitting rail freight wagons to low noise brake systems may cause very high administrative and system costs - so-called transaction costs. The study investigates in depth the processes and procedures needed in the German rail freight market and the related costs to implement noise differentiated track access charging, and extrapolates the results as an estimate to Europe as a whole. It shows that the administrative and system structure of some incentive models will cause even higher costs than the retrofitting of the rail freight wagons to low noise brakes: over the period of the eight years investigated some of the examined models will cost Germany between 500 million € and a billion € in transaction costs. Extrapolated to Europe the respective costs (for 8 years) are in the range of 2.3 – 5.8 billion €. The crucial point is that with all these models the magnitude of the annual system operation costs will be in the order of over 50 Mio. € (for Germany) and 200 Mio. € (for Europe) will occur as long as the systems are used, even when all wagons will be silent.

As an alternative the German Rail Sector proposes a mileage and noise dependent bonus model whereby wagon keepers are to retrofit their rail freight wagons with low noise brakes within eight years. As an incentive they would receive bonus payments for each kilometer a retrofitted car travels on a network. The bonus paid however is limited to a maximum of the actual costs for the retrofitting and its additional operational costs. This model would result in sum with 81 million € of transaction costs over the given period of 8 years. In contrast to the noise differentiated track access charge systems, the proposed model and its transaction costs would be terminated after 8 years.

The study concludes that the mileage and noise-dependent bonus model is the best suitable to achieve the goals of noise reduction due to a fast retrofitting of freight wagons to low noise brake types. Contrary to the NDTAC models a finitude of the incentive model is consciously specified here in order to attain a stringent and fast achievement of objective without market distortions.

At a press presentation of the study in Berlin on 20th April 2011 and at a meeting with the European Commission on the 12th July 2011 it was pointed out the importance that the German Government and the Commission to take note of the results of this study when implementing noise differentiated track access charging. The implementation of systems other than the one proposed by the rail sector will have the high risk to produce unnecessary expenditure of many hundred million of EUR through thoughtless organisations, without direct benefit in terms of noise reduction. In addition the study points to the fact, that direct funding would by far cause the lowest administrative costs, a fact the rail sector has been promoting for a long time. Unfortunately however this solution is still rejected due to legal reasons.

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Transaction cost study_Summary_English version
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Study to determine the transaction costs of different inventive models for retrofitting the freight wagon fleet with composite brake blocks
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Studie zur Ermittlung von Transaktionskosten verschiedener Anreizmodelle für die Umrüstung
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Press Release from the 12th July 2011: EU incentive regimes to reduce rail freight noise will cost up to 1 billion EUR in administrative costs - sector urges the EC to opt for a ‘direct funding model’ to make rail freight noise reduction a success!