Historically rail transport systems in Europe have been running as per national standards through the monopolistic and vertically integrated state owned operators. Most of the railway network in Europe is designed for different technical and operational standards of the member states, which makes it impossible or expensive for rail transport across borders. With a vision of achieving a single European railway network, in 1991, the European commission adopted a policy of revitalizing the railway sector to harmonize the technical and operational standards across the member states.
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This policy promotes a single set of Technical Specifications for Interoperability (TSIs)todefine common railway system architectureanda common approach to railway safety management. The long-term objective of such a policy is to open up the rail passenger and freight market for competition and promote the rail transport as sustainable means of transportation. The future of the rail supply industry in Europe is linked to the creation of sustainable transport system, which can only be achieved by increasing the competition in the industry to provide cost effective solutions. Harmonization of the railway networks in Europe will be one of the important driving forces in shaping the rail supply industry in Europe. This paper analyses the current structure of the German rail supply industry and how the industry may evolve given the current drive for interoperability through harmonization of standards and technologies. The policies of interoperability were conceived during the early 90s, but the impact of such policies are yet to be seen due to the lack of co-ordination between the manufactures, the regulatory mechanism, insufficient funding and the political will. Though the rail supply industry of Europe is in favour of achieving the common technical standards, the resulting market dynamics due to the common European market remains unanswered.
The purpose of this paper is to analyse the effects of harmonization of railway infrastructure in Europe on the rail supply industry in Europe with focus on Germany. Various directives and regulations of European commission have set off a series of dramatic changes in the European railway sector. The liberalization process has seen unbundling of the vertically integrated state owned operators. The directive of interoperability is enforcing the member states to transition from the existing signalling systems to common rail traffic management systems across Europe. Besides the control systems, there is significant thrust by the European commission to harmonize the technical and operational standards of the other components of the railway infrastructure like the tracks, electrification, power supply substations etc. These would render common product characteristics across the infrastructure segments with some exceptions in the stations and tunnel construction as the nature of these requirements varies depending on the local needs and resource restrictions and also these components doesn’t contribute to the desired interoperability.
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