Information published on 3 October 2017 in the UIC electronic newsletter "UIC eNews" Nr 564.

Chinese Government and China Railway Corp benchmark European railway financing mechanisms from 25 – 26 September 2017

  • Economy
  • Reporting

UIC Asia-Pacific, together with the French Ministry of Ecological and Solidary Transition, organised a study tour for the National Development and Reform Commission of the People’s Republic of China and China Railway Corporation, in the framework of the reform process currently undergoing in China.

Among many responsibilities, the NDRC is responsible for the regulation of the overall price level and the optimisation of major economic structures, recommendations on the employment of various economic instruments and policies to the National People’s Congress on behalf of the State Council: macroeconomic performance, coordination of major issues in economic operation, adjustment of economic performance of transport, implementation of price policies, tariffs and charges supervision, price regulations, etc.

At the same time, CR is in the process of reforms due to fast-growing high-speed rail activities and needs adjustment in its management mechanisms. Pricing should be the first item to be reformed with the following challenge: How to leverage pricing policy and improve the revenue of the company.

For that purpose, UIC and the French Ministry organised a full coverage of the French experience from the point of view of operations and pricing policy, on conventional and high-speed trains, on subsidised and non-subsidised links, on the regional and national networks.

While CR HS lines tariff policy is liberalised, the priority is still classic trains whose current regulation dates from 1995 and has not changed, with little or gradual improvement and flexibility on pricing for certain added-value services (first class, sleeping berths, …). The next reform will target second class tickets while NDRC is auditing the costs of operation of classic trains.

The purpose of this study tour was to know the points of view of national and regional transport authorities such as the Ministry of Ecological and Solidary Transition, Ile-de-France Mobilités and TER in France and how they supervise train ticket pricing, cost structure and how this has changed with time. The experience of SNCF showed very modern practices and policies, not only in revenue management but also in cost-controlled operations, and mature agreements with authorities, taking into account the current rules and using the latest IT tools and improved services.

Finally, Vincent Vu, Director Institutional Relations & Coordination UIC Asia-Pacific, presented a summary of all those issues from an international and historic perspective while Marc Guigon, UIC Senior Advisor Passenger Transport, presented the activities of the passenger department, especially concerning ticket distribution and timetable exchanges. Discussion of the different ways of distribution in Europe raised high interests from the Chinese delegation as modern distribution system is the one of the keys for revenue management and cost savings.

Jean-Pierre Loubinoux, UIC Director General, highlighted that:

Such experience shared with our members is valuable for everyone.
In this particular case it will help the next steps of the future pricing of Chinese railways as well as for other fast-growing railway companies.
UIC was honoured to contribute to these exchanges between the Chinese stakeholders and their French counterparts, which are also important for the development of railways in the world.

For further information please contact Vincent Vu, Director Institutional Relations & Coordination UIC Asia-Pacific:

vu@uic.org