Commercial Conditions

FTE members believe that customer-oriented capacity management is key to railway success. This requires stimulating the market-oriented, capacity-friendly behaviour of the involved actors.

The key instrument for this is branded under the name Commercial Conditions (hereafter CC). Since of discontinuation of the joint IM-RU project in 2020, the FTE RUs decided to take an active role in the topic and develop their position.

You can download the official position of FTE, ERFA and Allrail from 2022.

Following the publication of the proposed “Regulation on the Use of Railway Infrastructure Capacity”, the FTE RUs continuously develop a comprehensive vision on the Commercial Conditions.

RU Vision on Commercial Conditions

The RU Vision on Commercial Conditions, developed by FTE RUs, outlines reciprocal commercial conditions (CC) for both Infrastructure Managers (IMs) and Railway Undertakings (RUs) to enhance the capacity management process in the European railway sector. The document integrates feedback from various stakeholders, including Infrastructure Managers, Regulatory Bodies, and international associations, to propose a comprehensive CC system aimed at improving railway operations and customer satisfaction.

Key Components of Commercial Conditions for IMs

  1. Motivational Incentive:
    • Encourages IMs to make path changes due to Temporary Capacity Restrictions (TCRs) as early as possible.
  2. Standardised Compensation:
    • Provides higher market predictability by compensating RUs/market for additional costs due to IM decisions not anticipated at contract signing.
    • Uses flat standardised rates (to reduce bureaucratic burden) for various impacts, including no train run, re-routing, prolonged travel time, and changes in train composition.
  3. Traction Support:
    • Keeps railways competitive during major infrastructure works by offering IM-provided locomotives for re-routing lines with worse infrastructure parameters.

Key Components of Commercial Conditions for RUs

  1. Motivational Incentive:
    • Encourages RUs to modify or cancel paths as soon as possible to free capacity for others.
  2. Multiannual Commitment Charge:
    • Prevents strategic misuse of multi-annual booking of capacity.

Further Aspects

  • Exceptions: specific situations exempt from CC, such as force majeure, state authority decisions, and consensual optimisations.
  • Further information in Annexes on topics such as:
    • Positive impacts of CC for IMs (reciprocity)
    • Examples of reciprocal CC examples from countries like France, Switzerland, the UK, the Czech Republic, and Hungary.
    • Market needs behind the standardised compensation
    • Potential issues of CC calculated from Track Access Charges
    • Pros and cons of the curve and cascade approach
    • Why compliance with TCR deadlines shall not be an exception from CC?

This vision aims to create a balanced and fair system that incentivises timely and efficient capacity management, ultimately benefiting the entire railway ecosystem, from IMs and RUs to end customers.

Downloads