Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
9. Setting the Regulatory Framework
In the United States, the Federal Railroad Administration (FRA) is responsible
for environmental regulation and environmental impact assessments. In contrast,
in the EU, most countries assign environmental regulation to their environmental
agencies, not a sector regulator.
9.3.5 Technical regulation
Technical regulations may be required to meet safety, environmental, or operational
standards. A key form of technical regulation aims to ensure that track and
wheels are compatible with each other on all lines. For example, EU directives on
interoperability use provide a degree of technical harmonization and procedural
standardization. Soviet standards, which still apply in former Soviet Union countries,
have the same function.
Often, technical regulation standards are set too high, which makes them uneconomic.
Regulations should not be overly prescriptive—national standards should
not be misused to protect national industries, and all regulations should be
evaluated for cost effectiveness, a task better performed by industry associations
than by regulators.
• For example, in the U.S., the safety regulator, FRA, implemented legislation that
forced the industry to adopt ‘positive train control’, a system designed to improve
train safety. The regulator is convinced of operational advantages but the railroad
industry disagrees and claims that the small benefits are far outweighed by
high system costs.
• Similarly, the EU is convinced that a cab-based signaling system—European
Railway Traffic Management System (ERTMS)—is essential to create a seamless
European system and increase rail transport competitiveness. However,
some parts of the industry will incur major costs from ERTMS, which could
actually reduce rail’s competitiveness.
These examples demonstrate the risk of unintended outcomes when governments
or super-national agencies determine technical regulations and set standards
without understanding the industry’s pragmatic cost-effective requirements.
Regulators should avoid imposing standards, implementation methods, or timescales
that are unrealistic or unaffordable.
Often, industry associations develop voluntary standards, which reduces industry
costs because effective design and standardization facilitates greater competition
among suppliers. Voluntary standards developed by major industry associations
are most effective when rail-specific national rules and standards align with international
standards.
The World Bank Page 142