UK rail system 8th in Europe, service quality main issue

07 May 2015

The UK has the 8th best performing rail system across Europe, according to a recent analysis from BCG. Switzerland comes in number one for the second year running, while France drops to number 4. Finland and the Netherlands are the most cost effective for their performance. The consultancy finds that countries that predominantly invest public subsidies for rail in infrastructure managers perform better down the line.

In a recent report from The Boston Consulting Group (BCG), titled ‘The 2015 European Railway Performance Index’, the consultancy explores the relationship between the quality of rail networks and the kinds of government investments made into those networks – to find if there is correlation between the two. The report, the second of its kind, focuses on producing a Railway Performance Index (RPI), which comprehensively captures the performance of the railway system of European countries across three dimensions: Intensity of Use, Quality of Service and Safety.

The RPI Comprises Weighted Measures Across Critical Dimensions

Intensity of use includes such things as the level of freight utilisation and passenger volume. Quality of service involves the metrics of punctuality of service (both long and short distance), percentage of high-speed service and fare level. Safety involves accidents and fatalities as distinct categories. The RPI is rated on scale of 9, with each of the dimensions given a weight of three, with ‘tier 1’ those scoring above 6, ‘tier 2’ those between 4.5 – 6 and ‘tier’ three, those below 4.5. 

The 2015 ranking
According to the findings, the 2015 ranking is relatively close 2012 ranking. With Switzerland well out in front with a score of 7.1, followed by Sweden at 6.6 and Denmark at 6.4. While France and Germany are relatively close, with 6.4 and 6.2 respectively, the quality of service is considerably better in France, at 1.9 compared to Germany’s 1.3. Great Britain comes in at the top end of Tier 2 countries, with a solid safety record but poor quality service. Tier 3 countries suffer particularly from poor safety records rather than poor quality of service – with Romania, for instance, well above the service quality of Great Britain at 2.1.

While Switzerland keeps its number 1 position, France, formally at number 2 falls to number 4, while Sweden moves up to number 2. Denmark comes in at number 3 – ranked for the first time in 2015. Great Britain slips one position from its 2012 standing, to come in at number 8.

Measuring Country Performance on the RPI

The consistency between the reports’ rankings, according to the management consultancy, is because changes within the rail industry take a considerable number of years to push through – with the industry having been relatively stable over recent years.

Public cost vs RPI
As part of the study, the advisors mapped the relationship between the kind and level of public funding against the RPI to see if public policy related correlations could be found. To identify the country specific public project-based expenditure BCG took the average total expenditure between 2007 and 2012; including the cost of servicing debt and the amount of anticipated future investments. The result show that Switzerland pays relatively highly for its high RPI, while the Netherlands and Finland get the best value for money relative to the RPI. The UK spends a considerable amount on its network for a relatively low RPI. Latvia pays the most for a low quality RPI relative to other Tier 3 countries.

RPI Ratings Correlate with Public Cost, but Some Countries Get More Value for Their Money

To find out what kinds of public subsidy investments are the most valuable form money, BCG differentiated the kinds of investments to identify which correlated with higher RPI outcomes. With the differentiation made between allocating the lion’s share of public subsidies to either infrastructure managers or train-operating companies.

The data shows that value for money seems to be derived from countries that give the majority of public subsidies to infrastructure managers – over train companies. For countries that mix the two, Great Britain does relatively badly for its public investment, as does Austria. France is able to provide high quality service with its diversified subsidy model, while countries that focus on giving their public subsidies to train-operating companies do by far the worst for their investment – and include mainly tier 3 countries.

Allocating Public Subsidies to Infrastructure Managers Generates Greater Value

According to the authors, the findings only represent a correlation – with the reality a complex interplay of historic and current investment trends – however they too note that: “Infrastructure managers can spend the funds in ways that will create the most value, giving consideration to the priorities for the entire national railway system—provided that their governance and operating model allows them to identify and execute those priorities. It is also easier for the national government to oversee the use of funds and thereby help to ensure that they are spent on valuable projects.”