Switzerland: adverse reactions for SBB’s one-off financing and waivers plans
The Swiss Federal Council proposed to provide a one-off financial injection of 1,25 billion Swiss Francs to state-owned SBB and waive long-distance track access charges by 200 million Swiss Francs per year until 2029. The proposal faced resistance from transport associations, political parties and local governments who rejected the plans either fully or partially.
SBB’s financing through the Swiss national treasury and the Swiss railways infrastructure fund (BIF) monopolises public dialogue as the consultation period for the decision ends on 31 March. The Federal Council proposes giving SBB a one-off 1,25 billion Swiss Francs capital injection to help it recover from the dept build-up resulting from the Covid-19 crisis. These funds will be allocated from the Federal Budget.
On the other hand, the Swiss Federal Council aims to waive SBB’s long-distance travel tracks access charges by 200 million Swiss Francs per year between 2023 and 2029. The waiver could result in 1,7 billion Swiss Francs in relief for SBB in the same timeframe. The Council wants to use funds from BIF to make this happen, claiming that it will sufficiently compensate them in the future by fully investing performance-related heavy vehicle fees in BIF. It also reassured that the decreased BIF income in the coming three years would not jeopardise infrastructure expansion plans.
‘No federal loans for SBB’
Swiss rail freight transport association VAP rejected both proposals. For the one-off funding, VAP claimed that “profits generated in the past should enable SBB to bridge the three financially difficult years”, saying that the state-owned company does not need additional financing. As for the charges waiver, VAP commented that such a move would “reduce the entrepreneurial pressure on SBB while also burden the BIF with unnecessary costs”.
“Freight traffic bears the marginal costs of a network that has been expanded to meet the specific needs of passenger traffic”, continued VAP, stressing that implementing the two proposals would affect freight customers directly “as it has far-reaching consequences for intramodal competition in rail freight transport”.
On the other hand, the right-wing and populist party SVP, also a member of the Federal Council, demanded that “SBB is not financed by federal loans, as has been planned up to now, but by issuing bonds and taking out loans on the open capital market”. SVP claimed that SBB should not rely on federal funding that distorts competition but adopt a more entrepreneurial approach, as VAP also suggested.
As a result, it rejected both proposals underlying that a “strategic realignment of SBB and Swiss rail policy is necessary to ensure user-friendly financing”.
Waivers ‘incomprehensible’
Local canton governments also contributed to SBB’s financing dialogue. The cantons of Thurgau and Bern both rejected the charges waiver proposal while accepting the overall plan in principle. The governor of Thurgau said that using BIF funds to improve the debt situation only on long-distance transport is incomprehensible. He underlined that BIF funds are meant to finance only the railway infrastructure. Additionally, he mentioned that such a measure undermines the separation between transport and infrastructure by cross-subsidising the first with money for the second.
The canton of Bern followed a similar line, stating that it’s inappropriate to use BIF funds to alleviate the debt of the long-distance transport sector, also stressing that this move undermines competition. “The federal government’s proposal envisages that only SBB should be able to reduce its debt by reducing the train-path prices. This is an incomprehensible preference for an individual transport company”, said the canton of Bern and added that if SBB’s expenses are waived, the same should apply to other transport companies.
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