▶ A new €20 rail pass has been announced by the Portuguese Government. It will give unlimited travel on all subsidised trains around the entire country for a whole month – including long-distance Intercity services.

▶ One Portuguese commentator working at German Railways DB estimates the revenue derived from this pass would fund just 33% of the cost of providing the services.

▶ Meanwhile, commercially driven Open Access services and future high-speed trains on similar long-distance routes as the Intercity services will be severely cannibalised.

▶ Better results would be achieved – with better service and more & better trains – if Portugal were to stop the unjustified subsidy of Intercity long-distance trains.

The taxpayer-subsidised Public Service Obligation (PSO) contract in Portugal is directly awarded (without a tender) to the state operator CP until at least 2029. However, it is also excessive, including long distance Intercity services and all other subsidised trains in the country (except one commuter line in Lisbon).

But on long-distance lines in Portugal, there are already commercially driven Open Access services as well (although until now only operated by the state operator CP)– with new operators hoping to enter this market in the near future, bringing the benefits of liberalisation to passengers (lower fares, new trains, and better quality).

▶ Therefore: there are subsidised PSO long-distance trains in Portugal on overlapping routes with long-distance services which are liberalised – which is totally unjustified.

Moreover, the said PSO contract guarantees CP will get losses refunded by the Portuguese taxpayer without a clear index to quality or efficiency of the services provided. At such a ridiculously cheap price, CP’s long-distance Intercity trains will be overflowing, with no incentive to improve quality.

Therefore, the new €20 rail pass will inevitably result in a massive transfer of passengers, from commercially driven Open Access services to PSO long-distance Intercity services. 

▶ Consequently, the railway passenger market in Portugal will become almost exclusively served under PSO by the state operator CP, placing a significant burden on Portuguese taxpayers due to the additional public expenditure this will entail, jeopardising future high-speed services, and preventing the liberalisation of the sector from being implemented as required under EU rules.

ALLRAIL Secretary General Nick Brooks says: “€20 will cannibalise commercial driven long-distance services – who can compete against the taxpayer?”

Elsewhere in Europe, market opening has been proven to both lower fares and improve quality. In such cases, taxpayer subsidy is then spent on more worthy things, such as improved rail infrastructure.

▶ The new €20 rail pass must not be the ticket to a permanent CP monopoly.