Wednesday 25 May 2011
Noise / railway freight

Rail Noise: Incentives to be set for the retrofitting of freight wagons

Current study shows efficiency of a mileage and noise-dependent bonus model

Share this article

The results of a current study, established by German consultant KCW (Berlin) for the Commissioning Consortium VDV, DB Netz AG, DB Schenker Rail, VPI, UIC, AAE and ERFA 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 actual retrofitting of rail freight wagons to low noise brakes: over the period of the eight years investigated some of the examined models will only cost Germany between 500 million € and a billion € in transaction costs. Extrapolated to Europe the respective costs (for eight 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 M € (for Germany) and 200 M € (for Europe) for as long as the systems are used, even when all wagons are 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 kilometre 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 a sum of 81 million € of transaction costs over the given period of eight years. In contrast to the noise differentiated track access charge systems, the proposed model and its transaction costs would be terminated after eight years.

The study concludes that the mileage and noise-dependent bonus model is the most suitable to achieve noise reduction goals due to swift retrofitting of freight wagons to low noise brake types. Contrary to the NDTAC models the finiteness of the incentive model is consciously specified here in order to achieve objectives quickly and effectively without market distortions.

At a press presentation of the study in Berlin on 20 April it was pointed out that it was important for the German Government 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 carries a high risk of producing unnecessary expenditure of many hundreds of millions of € through thoughtless organisation, 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.

The German version of the report is available on the UIC homepage: An English version will be available on the same homepage by the end of June.

For more information please contact Lisette Mortensen:

0 vote
Cumulative transaction costs in Germany for the four incentive models investigated for 8 years in the comparison (in EUR millions)