Joint rail project could open 'Pandora's box'

30 October 2003
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30 October 2003 | Liam O'Brien

The European Union's competition regime could unravel if a controversial plan by three rail companies to bypass the rules is successful.

Professor Christopher Bovis, Jean Monnet professor of European and business law at the University of Central Lancashire, said moves by Deutsche Bahn of Germany, SNCF of France and FDS of Italy to jointly develop a high-speed train risks opening "Pandora's box".

The three companies already operate their own systems. But they want to develop a train together, saving money through using common services and components, for operation by 2010.

They have asked the EU competition authorities to exempt them from rules against organisations banding together to create a buyers' market, driving down prices and, in theory, putting suppliers out of business.

Bovis said: "To bypass competition rules you must demonstrate that the market will remain competitive, but their action would eliminate competition."

A decision on whether the project will be granted an exemption is due by early 2004.

SMoct2003

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