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Paper No. 01-0238
Railroads in Greece: History, Characteristics and Forecasts
John A. Paravantis, Ph.D. Department of Industrial Management, University of Piraeus
80 Karaoli & Dimitriou, 18534 Piraeus, Greece
Panos D. Prevedouros, Ph.D.1 Department of Civil Engineering, University of Hawaii at Manoa
2540 Dole St., 383, Honolulu, HI 96822, USA
Submitted: July 22, 2000
Revised: November 10, 2000 Final Revisions: January 22, 2001
Forthcoming in TRANSPORTATION RESEARCH RECORD 2002 2,000 8 tables/figures/exhibits 5,414 text 7,414 total (max = 7,500)
1 Corresponding author.
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Abstract Greece was relatively tardy in implementing a national rail network. The Greek Railways Organization, OSE, was formed in 1970 uniting a number of regional railroads, some dating back to 1884. The current rail network in Greece has a length of approximately 2,500 km with standard and metric gauge tracks. Disadvantages of the network include a high percentage of single line track, lack of homogeneity of track gauge, inefficient alignment, absence of intermodal connections and many at-grade intersections. Advantages include double tracks in a significant part of the Athens–Thessalonica axis that serves more than half of Greece’s population, improved operational controls and popular Intercity trains offering speedy service. Factors that affect railroad passenger and freight volumes are competition from airlines and motor carriers, gas price, inflation and GNP. These were used to estimate time-series models. Forecasts indicate increasing passenger and decreasing freight demand. OSE could provide a valuable and viable passenger service if cost-effective expenditure for improving it is possible. The future of freight operations is not hopeful. Additional emphasis may be placed on lines with historical and cultural significance. Further study is needed to assess the sustainability of forecasts vis-à-vis actual market shares and costs.
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1. Introduction and Historical Summary
This paper investigates information on the past and present of Greek railroads, as currently
represented by the Greek Railway Organization (OSE), beginning with the birth of Greek
urban and regional railroads in the 19th Century. Models were developed to produce
forecasts that attempt to shed light into the future of intercity railroad transportation in
Greece. Market share and cost issues were not addressed in this research. This work may
be of particular interest to decision makers and rail administrators since large amounts of
European funds are currently invested in upgrading major rail lines such as Athens-
Thessaloniki and Athens-Patras.
The paper is structured as follows. A historical review of railroads in Greece is
presented in this section followed by a description of the railroad network in Greece in
section 2. Section 3 presents basic comparisons with railroad networks in Europe. Positive
and negative characteristics of Greek railroads are described in section 4. Section 5 presents
general and operational characteristics as well as economic variables that affect railroad
transportation. Models and forecasts are presented in section 6 followed by a discussion and
the conclusions.
Although major railroad development began in the early 1800s, Greece was tardy in
implementing a railroad network. Greece was reestablished in 1828 following the War of
Independence against the Ottoman Empire which commenced in 1821. This war left the
land barren due to neglect and destruction (1). The sacrifices made in the war of
independence and numerous external loans that Greece had to contract to meet its
obligations delayed the development of railroads compared to other countries in Europe.
The mountainous terrain and sparse population discouraged private enterprises from
developing private railroad networks.
A number of proposals by Feralde (in 1835), Ragavis (in 1843), British interests (in
1859), Baron Louis De Normand (in 1868), Vitalis (in 1869) and Count Moutressi (in 1879)
met with no success. During 1881-1882 railroads were intensely discussed by the Greek
Parliament as the opening of the Suez Canal in 1869 drew world attention on engineering
feats, and the annexation of Thessaly in 1880 brought Greece closer to its Balkan neighbors
and the European mainland. Prime Minister Trikoupis’ address to the Parliament on May 20,
1882 is regarded as the birth date of Greek national railroads (2). Additional lines were
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added until about 1910 when most of the network was completed. Several of the lines that
form the modern-day network are discussed in the next section.
The Athens – Piraeus transit line has been in operation since 1869 and is the first rail
line to operate in Greece. It has a total length of 25.8 km and a standard track gauge of
1.435 m. Steam trains serviced the line until 1904 when its electrification began.
Electrification was completed in 1954. This metropolitan rail line was the only urban railroad
in operation in Greece until January 2000 when the Athens Metro was put in operation. This
paper focuses on intercity passenger and freight railroads; as such, no further attention is
given to metropolitan rail.
Several old rail lines add aesthetic and cultural value and are connected to national
history (2). Examples of cultural significance include:
• The 22-km narrow-track (0.75 m) route of Odontotos railroad is an Abt-type railroad that uses a rack to move up steep cliffs. It originates at a junction with the Athens – Patras line and terminates at Kalavryta where Greece declared its independence from the Ottoman Empire.
• The 28-km rail line from the city of Volos to the village of Milies in Pelion Mountain is one
of the few 0.60-m narrow track rail lines in the world. This historic route is serviced by steam locomotives and restored wagon-cars and provides access to landscapes of significant sightseeing value.
• The winding route from the city of Drama to the Valley of the Nestos River which
possesses significant ecological importance. The floodplains and associated wetland surrounding the Nestor River are protected by the Ramsar Convention and rail is the only mode that affords views inside the valley.
• Other small routes of historical significance or tourist interest such as Ancient Olympia,
the popular summer resorts of Loutraki and Xylokastro and Nafplio (capital of Greece in the 19th Century).
2. Railroad Networks in Greece
The Greek Railway Organization (OSE) was created in 1970 with Act 674/1970, taking the
lead from the former Railways of the Greek State (SEK). The obligations of OSE were set in
Decree 404/1972, and its Articles of Association in Decree 532/1972. OSE united a number
of separate regional railroad networks, as follows:
• Railways of the Greek State (SEK). Its operation began in the 1904 to 1909 period
and encompassed the standard track gauge Piraeus – Athens – Larissa – northern
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borders line and other minor lines. As Macedonia and Thrace were reunited with
Greece in the Balkan Wars of 1912-13, additional segments were developed and
united with existing rail lines in northern Greece linking Thessalonica to present time
borders with the Former Yugoslav Republic of Macedonia (FYROM) and Turkey.
These older lines in Macedonia and Thrace were constructed during occupation by
the Ottoman Empire and began operations between 1883 and 1892. Rail lines to the
city of Kozani and Sofia (capital of Bulgaria) were constructed in 1954 and 1963,
respectively.
• Railways of Peloponnese (SPAP). This railroad had a total rail length of 726 km with
metric track gauge of 1.00 m. Segments of this railroad commenced operation in
1884 and the entire network was in operation by 1902. Railways of Peloponnese
became the responsibility of the public sector in 1940 and merged with SEK in 1962.
• Railways of Northwestern Greece (SVDE). This railroad had a single line of 61 km
with metric track gauge of 1.00 m. It commenced operation in 1892 and merged
with Railways of Peloponnese in 1953. This line is no longer in operation.
• Thessaly Railways (STh). This railroad had an initial total rail length of 202 km with
metric track gauge 1.00 m. Segments of Thessaly Railways began operations
between 1884 and 1886. The railroad merged with SEK in 1955.
During the 1980s, Acts 1365/1983 and 59/1985 established OSE as a “social”
company with a Board of Directors. Acts 2366/1995 and 2414/1996 partially removed OSE
from political influence and allowed it to form subsidiary companies that manage European
Union funds (e.g., ERGOSE – OSE Constructions – that currently project-manages the
upgrading of railroad infrastructure throughout Greece.) More recently, Presidential Decree
76/1998 stipulated terms and conditions for issuing a license of operation to railroad
companies in preparation for the scheduled, border-free transportation market within the
European Union (3).
Presently the entire railroad network in Greece consists of 2,507 km of track of
standard and metric gauge. The network encompasses three main lines:
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• The 594-km standard gauge (1.435 m) Piraeus – Athens – Thessalonica – FYROM
axis which constitutes a section of the European High Speed Network. This axis is in
immediate proximity to areas that contain 54% of the Greek population (4).
• The 220-km long Athens – Corinth – Patras axis with 1.00 m metric gauge.
• The 632-km long standard gauge Thessalonica – Alexandroupolis – Turkey axis.
Passenger service is concentrated on the Patras – Athens – Thessalonica route while
freight is concentrated on lines connecting Thessalonica to northern (FYROM, Bulgaria) and
eastern (Turkey) borders as well to Athens via Larissa. It is anticipated that the railroad line
Patras – Athens – Larissa – Thessalonica will become a high-speed fully electrified line by the
year 2004, connecting nearly two thirds of the country’s population.
3. Comparisons with European Railroad Networks
This section presents four different comparisons: Characteristics of railroad networks of the
15 European countries in the European Union (EU), passenger and freight characteristics of
EU railroads, passenger and freight characteristics of ten Eastern European countries, several
of which neighbor Greece, and characteristics of tracks.
Railroad networks of the 15 European countries are compared in Table 1 (5,6). With
the exception of the Netherlands and Finland, Greece trails its European neighbors in terms
of railroad coverage both of people and area. The Netherlands is behind Greece in terms of
coverage of people, but it is the most densely populated country and it is performing far
better in terms of area coverage. Finland trails Greece in area coverage, but it is the least
densely populated country in the European Union and it performs best in terms of coverage
of people. Greece falls behind countries such as Spain, Portugal and Ireland that share
common characteristics with Greece and are traditionally regarded as similar among member
states in the European Union.
Tables 2a and 2b (7) present passenger and freight characteristics of the 15 EU
countries and 10 Eastern European countries. Greece lags behind both groups of countries.
To highlight the low usage of rail in Greece, the outcome of 0.2 billion pass-km per person
for Greece could mean that 6 out of 100 Greeks travel once a year by rail over a distance of
300 km. (This is one of an infinite number of possible descriptions.) In comparison, 10 out
of 100 EU residents travel once a year by rail over a distance of 300 km, and 18 out of 100
Eastern Europeans travel once a year by rail over a distance of 300 km.
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Railroad track gauges in Greece and similar to Greece (5) are shown below:
Gauge Greece Spain Portugal 1.000 897 km (36.4%) – 307 km (10%) 1.435 1,565 km (63.6%) 471 km (3.6%) – 1.668 – 12,560 km (96.4%) 2,765 km (90%)
It is evident that 1.668 m gauge railroad lines are prevalent in the Iberian Peninsula
which poses a formidable problem to Spain and Portugal when it comes to merging their
lines with European networks. This currently necessitates the transfer of people and goods
at the borders. The low standard track gauge of Spain corresponds to high-speed railroad
lines. In comparison, Greece possesses both 1.435 m and a high percentage of 1.000 m
railroad networks.
4. Positive and Negative Aspects of Greek Railroads
Major disadvantages of Greece’s railroad infrastructure can be summarized as follows (8,9).
• High percentage of single line track. • Lack of homogeneity in track gauge: the difference in track gauge between the
Peloponesse and Athens – Thessalonica lines severely hinders north-south connections, necessitating multiple transfers and reducing the attractiveness to potential customers. The track gauge difference is an important factor for the poor development of railroads in Greece.
• Unsatisfactory alignment: small horizontal curvatures with radii in the order of 300 m and
steep vertical slopes (often up to 2.5%) prevent the development of high speeds, raise fuel consumption and increase travel times.
• Antiquated tracks that hinder the movement of heavy and high-speed locomotives and
rolling stock. • Insufficient rail connections, yards, ramps and freight-handling infrastructure at the
major mainland Greece ports of Elefsina, Kavala, Piraeus, Patras and Thessalonica hinders or precludes marine-rail intermodalism.
• Lack of a modern and spacious commercial station and marshalling yard in the greater
Athens area. The under construction port of Ikonio is designed to address this and the previous shortcoming.
• Existence of 2,587 at-grade intersections with the highway network, often inside cities,
render high-speed movement of trains impossible and is the cause of serious accidents. OSE trains are forced to cross the distance of Piraeus to Athens with a mean speed between 20 and 30 km/h due to numerous at-grade crossings with local streets. These at-grade crossings essentially bisect Athens and result in long delays to both highway and railroad traffic.
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Advantages of Greece’s railroad infrastructure can be summarized as follows (9).
• Existence and operation of double tracks in a significant part of the main axis Athens – Thessalonica.
• Improved signalization and automation and funds committed for further expansion and updating.
• Popular Intercity trains offer better service to the public (Table 3 provides a comparison). • High frequency of departures.
5. General and Operational Characteristics
Railroads traditionally transport passengers and freight such as coal, grain, oil, chemical
products, pulp, paper and forest products, vehicles, machinery and spare parts. Passenger-
km and freight ton-km show a 50% market share for Greek railroads in both passenger and
freight volumes around 1950, declining to about 11% for passengers and 18% for freight in
1970 and to about 4 to 4.5% for both passengers and freight in 1996 (4). Draft recent data
paint a bleaker pictures with passenger share below 3% and freight share below 1%. The
loss of market share in the last 40 years for Greek railroads is dramatic, especially in the case
of freight where OSE lost almost 90% of ton-km. In contrast, road transport gained nearly
total dominance in passenger transport and more than doubled its share in freight transport,
capturing in both passenger and freight markets more than 95% of total land transportation.
The loss of market share is not exclusive to Greece. Similar highway and railroad
passenger and freight figures prevail in the 15-country European Union as shown below (6).
Notably, in the 1970 to 1997 period, ton-km of freight increased by 107%, but railroad ton-
km decreased by 16%.
PASSENGER (% share) FREIGHT (% share) 1970 1980 1990 1997 1970 1980 1990 1997
Highways 73.6 76.0 78.7 78.5 30.8 33.1 40.6 43.4 Railroads 10.1 8.2 6.5 5.8 21.2 15.2 11.2 8.6
Market research carried out jointly by Olympic Airways and OSE confirmed that
passengers are most annoyed by delays, lack of cleanliness, too many stops, slow speed and
rude behavior of OSE employees (in rough order of preference (10)). More recent market
research carried out between November 1996 and January 1997 showed that freight
customers chose OSE mostly because of competitive pricing and safety (11). On the other
hand, they avoided Greek railroads primarily because of long departure and en-route delays,
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bureaucracy and rude employee behavior (11). It is widely acknowledged that OSE lags in
terms of service quality compared to its competition.
Exhibit 1 presents the trends in passenger and freight loads as a straight measure
and in terms of passenger-km and ton-km. The decline in passenger volume between 1977
and 1983 coincides with the recovery of democracy in Greece after a 7-year government by
a military junta. Austere economic policies were enacted by the democratic government of
Karamanlis. Those led to economic depression resulting in a reduction in both passenger
travel and freight (imports and exports). The consequences to Greek rail were an acute lack
of modernization, lack of rolling stock, lack of proper maintenance of rolling stock (e.g.,
typically 60-70% of rolling stock was unavailable) and poor performance (e.g., average
speed of 60-65 km/h). These conditions created a particularly fertile ground for motor
carriers.
Overall, tons are relatively high and ton-km relatively low. The latter is largely due to
the short distance between the port of Thessalonica and the northern borders with FYROM
(and the rest of Yugoslavia) and Bulgaria. The decrease in both freight tons and freight ton-
km of 1982 was due to:
• the discontinuation of an important grain transport contract that was competitively awarded to motor carriers,
• a significant decrease in lignite (a type of coal) transport for LARCO, a public sector company that in 1982 ceased operation for 8 months,
• decline in tobacco, fruit and grocery exports, • significant decline in agricultural areas available for sugar beet cultivation, and • decline in construction.
A sharp decline in freight tons occurred after 1993. This is attributed to a Europe-
wide economic recession that affected Greece severely. Other reasons include a decline in
the transportation of sugar and sugar beets (produced by a state company), chemical
products, crude oil, fertilizers and military materials. It is interesting to note that the 1993
decline was compounded by OSE’s inability to transport coal for the BIOLIGNIT Company. In
1995, BIOLIGNIT terminated its contract with OSE and turned to private motor carriers. In
the mid-1990s, imports and exports also suffered greatly due to regional wars in Yugoslavia;
this freight was diverted to trucks which transported it to and from Greece via ferry
connections with Italy.
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Income from operations appears to grow considerably in the 1990s particularly for
passenger operations. However, when adjusted for inflation, income from passenger
operations is rather stable from the mid 1980s to the late 1990s, whereas income from
freight has experienced a continuous decline since 1975.
The inability of state-funded OSE to determine prices as freely as a private
transportation company would is shown vividly by the following data (12):
Year Passenger Fare Index Freight Tariff Index Inflation Index 1994 100 100 100 1998 103.3 101.5 130.3
Exhibit 2 presents a series of factors which draw a partial picture of the economy and
transportation in Greece. These factors influence railroad trends directly or indirectly. Most
of these factors were used in developing the forecasting models described in section 6.
The per-capita gross national product (GNP) of Greece has been increasing, though
at a decreasing rate, as the country transitioned from a developing to a developed economy.
With the monetary induction of Greece into the European Currency Unit (ECU based on the
euro) on June 19, 2000, Greece surpassed the lower boundary of a fully developed economy.
Its population has been increasing steadily at a modest rate, higher than the average rate for
Europe but lower than the average rate for the U.S.
Tourist arrivals also have increased annually, but at a decreasing rate as crowding
and unavailability of accommodations in peak periods lead to near-saturation, although
cruises and off-season tourism are developing markets. The small reductions in tourist
arrivals in the 1990s are attributable to wars in Yugoslavia (Croatia, Bosnia and Kosovo
conflicts with Serbia). These conflicts eliminated a direct highway connection between
Greece and the huge tourist market of northern Europe and created oversaturation on the
ferry links between Greece and Italy (i.e., capacity-constrained arrivals.)
Traditionally, Greece has been seen as a sea-fearing and agricultural nation.
However, the contribution of agriculture to GNP has stabilized to slightly below 10% in the
1990s. Thirty years ago, it was three times higher. This condition further reduces demand
for rail freight services. In addition, diversification of agriculture into specialized crops (e.g.,
kiwi, strawberries and other perishable, delicate and high-value agricultural products)
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necessitated the use of motor carriers for speedy transport to export or domestic distribution
centers.
Inflation rates higher than 10% occurred in all but six of the 28 years examined in
this analysis (1970-1998). Inflation was necessary for Greece to reach monetary parity with
its western European counterparts in the Union. Inflation control in the late 1990s was a
precondition for admission to the European Union’s single currency. As a result, the
exchange rate of the drachma vis-à-vis hard currency has suffered between 1980 and mid -
2000. Greece was admitted to the euro-based economy with an equivalency of about 340
drachma to 1 euro, or 360 drachma to U.S. $1. A poor exchange rate affects equipment-
intensive operations such as a railroad that is dependent on foreign technology as it results
in increasingly expensive acquisition of rolling stock, equipment and parts.
Greece’s per capita automobile ownership has greatly increased (e.g., 0.03, 0.09,
0.17 and 0.24 autos per capita in 1970, 1980, 1990 and 1997, respectively) although it lags
behind that of other developed countries. For instance, in the late 1990s, the same rate was
near 0.60 in the U.S., 0.50 in Canada, 0.40 in the Netherlands and the U.K., and 0.30 in
Japan. The trend in truck registration is identical to that for passenger cars (one can create
it by simply dividing the passenger cars trend in Exhibit 2 by 2.5.) The inflation-adjusted
price of gasoline per liter has been decreasing from the highs in the 1970s and has been
rather stable throughout the 1990s making cars an increasingly formidable adversary to the
railroad for intercity travel.
6. Models and Forecasts
This section presents an attempt to connect several performance measures of Greek
railroads with external, explanatory variables such as GNP, gas price, vehicle registrations,
domestic airways passenger loads, inflation, exchange rate and so forth. In addition, basic,
short-term forecasts were estimated for the purpose of revealing a likely trend in the
aforementioned railroad performance measures.
Data were gathered for the period 1970-1998; we elected to start our investigation in
1970 because OSE was formed at that year. These data were collected from the Statistical
Bureau of Greece and cross-validated with OSE Annual Reports since 1970. This is the first
time such a thorough compilation of time-series railway data is presented. Most of the
variables considered are depicted in Exhibits 1 and 2. Both ordinary least squares regression
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(OLS) and auto-correlated regression estimated with maximum likelihood (procedure AREG in
SPSS) were estimated. Nearly 180 models were estimated. The ten best specifications are
presented in Table 3.
The table shows the four dependent variables in the left-most column; they are
railroad passengers, passenger-km, tons, and ton-km. The independent variables column
includes the regression constant (intercept), the explanatory variables and, in the case of
autocorrelated regression, the first order autocorrelation factor AR(1). R2 values are
available for the OLS regression only. A more relevant measure of model fit is the standard
error of estimate (SEE) for the dependent variable; the smaller, the better. It can be seen
that AREG models are superior to OLS models in terms of prediction error. The next two
columns present the estimated coefficients and their associated statistical significance. Most
of the estimates are significant at the 99% level; a few are significant at lower levels. The
models are identified by numbers 1 through 10, and the best for each dependent variable
are plotted in Exhibit 3. The models offer a reasonably tight fit in most instances. The
“Railroad Passengers” graph in Exhibit 3 shows two models, an OLS (model 2) and an
autoregressive one (model 3).
Before looking into the forecasts depicted in Exhibit 3, the independent variables and
their contribution to each model are discussed.
• Rail Passengers (RPASS) is affected negatively by inflation-adjusted gas prices (variable GAS88.) Cheaper gas makes travel by auto more affordable which, in turn, reduces the rail passenger count. Similarly, air travel is a major competitor to rail thus a negative coefficient was estimated for the domestic passenger count for Olympic Airways (variable OLYMPIC). Inflation rate (variable INFLATION) has an effect similar to that of gas price, but the effect of inflation is stronger (as it should be) because it not only affects gasoline, but also other motoring costs such as maintenance, insurance, tolls, etc. The best model is a first order autoregressive one which maintains inflation rate in the specification.
• Rail Passenger-km (RPASSKM) is affected negatively by gas prices and positively by
the GNP trend (variable GNP88$.) The latter is intuitive. A higher GNP (in constant 1988 U.S. dollar terms, per capita) typically corresponds to higher travel activity, some of which is by rail. The best model is a first order autoregressive one which maintains GNP in the specification.
• Rail Freight in metric tons (RTONS) is affected negatively by truck registrations
(variable TRUCKS) and positively by inflation. Both of these outcomes are intuitive. Competition from an increasing pool of trucks reduces the freight carried by rail. Inflation affects rail freight positively because it takes a toll on motor carrier costs and pricing. In contrast, OSE increased freight prices by 1.5% while inflation
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increased by 30% (see earlier data). The best model is a first order autoregressive one which maintains inflation rate and truck registrations in the specification.
• Rail Freight in metric ton-km (RTONKM) is affected negatively by truck registrations
and positively by gas price. Both of these outcomes are intuitive for reasons which are similar to those discussed above. The best model is a first order autoregressive one which maintains gasoline price and truck registrations in the specification.
As expected, most models suffered from auto-correlation since they were estimated
with time-series data. In addition, many independent variables were highly correlated with
each other. As a result, all but one independent variable was included in the final model in
some cases. For example, high correlation exists between constant GNP and constant
gasoline prices. Exchange rate and passenger cars are also positively correlated since both
of them grew rapidly in the time period examined and they also correlate with the passenger
loads carried by Olympic Airways domestically, for the same reason. Tourist arrivals, GNP
growth rate and exchange rate proved to be weak variables and do not appear in any of the
models. Truck registrations appear in freight models. Passenger car registrations had a
strong negative association with railroad passenger loads but were excluded from the final
specifications due to collinearity with inflation.
In addition to a visual depiction of model fits, Exhibit 3 presents short-term forecasts
through 2005. These forecasts were prepared by making a number of assumptions based on
reports in The Economist (Jan. 30, 1999, p. 106, May 27, 2000, p. 108) and the OECD
(www.gsu.edu/~wwwrer/Annotated/Global_Markets/greece1.htm). The following growth
rates were used:
• GNP: 3% per annum.
• Inflation: 5% for 1998, 4% for 1999 and 3% for 2000 to 2005.
• Gasoline price: increases are equal to rate of inflation.
• Domestic airline passenger growth: 5% for all years; same as for the 1991 to 1998
period.
• Truck registrations growth: 3.5% for all years; same as for the 1991 to 1998 period.
The forecasts indicate increases in passenger measures and decreases in freight
measures. These outcomes also are intuitive. OSE can provide a valuable and viable
passenger service which should remain competitive given that steps are being taken to
improve service. Examples of such steps include the speedy service on dual rail trucks along
main corridors, the 26 new diesel locomotives which were delivered in 1997, and electric
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traction which was introduced in 1997 at the Thessalonica – FYROM border line. Roadway
and airport congestion on one hand, and rail efficiency (which enables lower fares) on the
other hand are elements that support demand for passenger service.
The future of freight operations is not hopeful. Strong decreasing trends are
observed which are consistent with observations such as:
• Greece has never relied on heavy industry. As its economy enters a developed state, it is further diversifying into services and high technology industries (computers, telecommunications, etc.) which require little heavy transport capability.
• Agriculture, as shown in Exhibit 2, continues to decrease in significance.
• New pipelines through former Soviet nations carry oil and natural gas directly to
Balkan nations. A rail link to the Mediterranean Sea is becoming less important.
• Military needs are decreasing as local wars and diplomatic efforts appear to have sorted-out several long-standing disputes caused by end of WWII arrangements and by Cold War era policies.
A strong caution must be raised here: This paper did not examine OSE’s fiscal
documents and trends and it did not investigate actual market shares and average cost per
trip. It is possible that OSE’s value of service is both miniscule in terms of share and it is
negated by continuous operating deficits and extraordinary costs for capital improvements.
7. Discussion and Conclusions
Greece is characterized by several peculiarities as a member of the European Union such as
extreme southeastern location in European Union thus low transit volumes, lack of borders
with other European Union members, relatively undeveloped transportation infrastructure,
and relatively low value of commercial exports to other European Union members (5). In an
effort to bridge the gap between Greece and the EU, the Maastricht Treaty of 1991 and
directions adopted in Edinburgh in 1992, encourage and support Greece to invest in new
transportation infrastructure that will facilitate a seamless transportation in the entire
European Union. High-speed, fully electrified rail service is a priority for Greece, especially
along the Patras – Corinth – Athens – Larissa – Thessalonica – northern borders route. The
modernization program of OSE is supported and financed by the Community Supporting
Frame II and the European Cohesion Fund.
Railroad passengers and passenger-km reached a low in the early 1980s and have
been increasing since then except for marked decreases in 1994 and 1998. Our short-term
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forecasts paint a hopeful picture. It appears that strong attributes of OSE passenger services
are low fares and the provision of fast service to compete with air transport, particularly on
the Athens — Larissa — Thessalonica axis that covers a market of 6 million people.
Freight tons and ton-km exhibit a steady decrease in the last 30 years. Although the
overall picture is consistent with similar trends in most developed economies, low service
quality and tardiness in modernization contributed to Greece’s lagging position among EU
members. Our models show that competition from motor carriers is a strong negative factor
and low rail prices are a positive factor. However, Greece’s location and economy (lack of
heavy industry, low exports, decreasing needs for agricultural product transport) and its
mountainous geography do not bode well for railroad freight transportation.
The overall findings suggest that OSE should concentrate passenger operations.
Additional emphasis may be placed on historical and cultural railroads which, with proper
restoration, marketing and accessibility may provide an supplementary source of income. A
detailed study that includes analysis of market shares (to assess OSE’s contribution to
transport demand) and costs (to assess the true cost of providing existing and improved
service) is needed. This future study should determine whether OSE’s role in Greece’s
transportation system is a productive and cost-effective one.
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9 Greek Ministry of the Environment. Greece as an Ecological and Cultural Resource: Facts, Actions and Programs for the Protection of the Environment [State of the Environment Report, in Greek], Athens, July 1995.
10 Profyllides, B. Transportation Economics [in Greek], Yahoudi – Yapouli Publications, Thessalonica, 1993.
11 Profyllides, B. Feasibility Study for Establishment by OSE of Transit Company [in Greek], Research Program Final Report (Phase B), University of Macedonia and Greek Railway Organization, Thessalonica, May 1997.
12 Greek Railways Organization. 1998 Annual Report of the Chairman of the Board of
Directors [in Greek], Athens, 1999.
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17
Table 1: European Union Railroad Networks
Country
Population (millions)
Area
(1,000 km2)
Density (persons per km2)
Network Length (km)
Network km per 100 000 inhabitants
Network km per
1,000 km2 Austria 8.1 91.9 96 5,643 70 61
Belgium 10.2 30.5 333 3,410 33 112 Denmark 5.3 43.1 122 2,232 42 52
Finland 5.1 338.1 15 5,867 115 17 France 58.6 544 108 31,727 54 58
Germany 82 357 230 38,450 47 108 Greece 10.5 132 79 2,503 24 19 Ireland 3.7 68.9 53 1,945 53 28
Italy 57.5 301.3 191 16,041 28 53 Luxembourg 0.4 2.6 160 274 69 105 Netherlands 15.6 41.5 376 2,805 18 68
Portugal 9.9 91.9 108 2,856 29 31 Spain 39.3 506 78 12,303 31 24
Sweden 8.8 450 20 11,156 127 25 UK 59 244.1 242 16,847 29 69
Europe 373.9 3,236.3 116 154,059 41 48
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18
Table 2a: Characteristics of EU Railroads
Table 2b: Characteristics of Eastern European Railroads
COUNTRY1997 RAIL
PASSENGERS(billion pass-km)
1997 RAIL FREIGHT
(billion ton-km)
PASS-KMPER PERSON
PER YEAR
BILLION PASS-KM
PER PERSON
BILLION TON-KM
PER PERSONBelgium 7.0 7.5 688 0.69 0.74Denmark 5.0 1.6 948 0.94 0.30Germany 64.0 72.7 780 0.78 0.89Greece 1.9 0.3 180 0.18 0.03Spain 17.3 11.5 441 0.44 0.29France 61.8 53.9 1055 1.05 0.92Ireland 1.4 0.5 375 0.38 0.14Italy 52.1 23.0 906 0.91 0.40Luxembourg 0.3 0.6 711 0.75 1.50Netherlands 14.4 3.4 925 0.92 0.22Austria 8.3 14.2 1032 1.02 1.75Portugal 4.6 2.2 460 0.46 0.22Finland 3.4 9.9 659 0.67 1.94Sweden 6.3 19.1 711 0.72 2.17UK 34.4 16.9 583 0.58 0.29EU15 average 18.8 15.8 696.9 0.75 0.63
COUNTRY1997 RAIL
PASSENGERS(billion pass-km)
1997 RAIL FREIGHT
(billion ton-km)
PASS-KMPER PERSON
PER YEAR
BILLION PASS-KM
PER PERSON
BILLION TON-KM
PER PERSONBulgaria 4.7 7.4 704 0.56 0.88Czech Republic 7.0 20.7 756 0.69 2.03Slovak Republic 3.1 12.4 575 0.57 2.30Estonia 0.2 4.8 179 0.13 3.20Hungary 6.8 8.1 645 0.67 0.80Lithuania 0.7 8.6 206 0.19 2.32Latvia 1.1 14.0 464 0.44 5.60Poland 20.6 67.7 516 0.53 1.75Romania 13.4 22.0 699 0.59 0.97Slovenia 0.6 2.6 314 0.30 1.30CEC average 7.0 16.7 523.2 0.55 1.60
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19
Table 3: Total Travel Times of Alternative Land Transportation Modes
Origin Destination Intercity Bus Automobile Athens
(dist=508 km) Thessalonica (gateway to north)
5 h 50 min 7 h 20 min (80 km/h)
6 h 15 min (95 km/h)
Athens (dist=213 km)
Patras (main port to Italy)
3 h 30 min 3 h 35 min (80 km/h)
2 h 50 min (95 km/h)
Thessalonica (dist=341 km)
Alexandroupolis (near Turkey)
5 h 30 min 6 h 05 min (80 km/h)
4 h 55 min (85 km/h)
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20
Exhibit 1. Major productivity statistics of Greek passenger and freight railroads.
Passengers (000s)
10000
11000
12000
13000
14000
70 74 78 82 86 90 94 98
Passenger-kilometres (million)
1200
1500
1800
2100
70 74 78 82 86 90 94 98
Income from passenger ops. (million drahma)
0
5000
10000
15000
70 74 78 82 86 90 94 98
Income from passenger ops. (const. '88 million)
0
2500
5000
7500
10000
70 74 78 82 86 90 94 98
Metric tons of freight (000s)
1000
2000
3000
4000
70 74 78 82 86 90 94 98
Metric ton-kilometres (million)
0
250
500
750
1000
70 74 78 82 86 90 94 98
Income from freight ops. (million drahma)
0
5000
10000
15000
70 74 78 82 86 90 94 98
Income from freight ops. (const. '88 million)
0
2500
5000
7500
10000
70 74 78 82 86 90 94 98
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21
Exhibit 2. Selected vital statistics of Greece.
Per capita GNP in const. '88 U.S. $
4000
5000
6000
7000
8000
9000
10000
70 74 78 82 86 90 94 98
Agriculture's contribution to GNP
0%
5%
10%
15%
20%
25%
30%
35%
70 74 78 82 86 90 94 98
Resident population (million)
8.5
9.0
9.5
10.0
10.5
70 74 78 82 86 90 94 98
Inflation rate (%)
0
5
10
15
20
25
30
70 74 78 82 86 90 94 98
Gasoline price in const. '88 drahma
50
100
150
70 74 78 82 86 90 94 98
Tourist and Visitor arrivals (million)
0
2
4
6
8
10
12
70 74 78 82 86 90 94 98
Passenger cars (million licenses)
0
0.5
1
1.5
2
2.5
3
70 74 78 82 86 90 94 98
Exchange rate: Drahma to U.S. $1
0
50
100
150
200
250
300
70 74 78 82 86 90 94 98
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22
DEPENDENT VARIABLE
INDEPENDENT VARIABLE(S) R
2 SEE as % of mean
β 1−α model number
Intercept 15,157.6 0.999GAS88 -20.3 0.994
OLYMPIC -0.0014 0.996
Intercept 13,783.5 0.999INFLATION -76.93 0.996OLYMPIC -0.0008 0.905
Intercept 12,523.2 0.999AR(1) 0.675 0.999
INFLATION -39.94 0.891
Intercept 1,607,254 0.999GNP88$ 60.68 0.973GAS88 -4,107.7 0.992
Intercept 1,131,949 0.995AR(1) 0.752 0.999
GNP88$ 72.98 0.887
Intercept 3,032.2 0.999INFLATION 56.42 0.995
TRUCKS -0.001 0.986
Intercept 3,276.9 0.999AR(1) 0.608 0.998
INFLATION 36.71 0.926TRUCKS -0.001 0.811
Intercept 946,943 0.999TRUCKS -0.544 0.999
Intercept 633,480 0.999TRUCKS -0.447 0.999GAS88 2,773.3 0.993
Intercept 672,674 0.999AR(1) 0.737 0.999
TRUCKS -0.453 0.991GAS88 2,229.8 0.988
RPASS
RPASSKM
RTONS
RTONKM
1
2
3
4
10
0.43
0.45
n.a.
0.39
n.a.
0.37
n.a.
0.71
5
19.2%
15.7%
15.3%
9
6
7
8
Table 3: Estimated Models
13.1%
9.2%
0.8
n.a.
6.6%
6.5%
5.5%
9.5%
7.0%
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23
Exhibit 3. Actual and predicted measures.
Railroad Passengers (000s)
10,000
11,000
12,000
13,000
14,000
1970 1975 1980 1985 1990 1995 2000 2005
actual
M2
M3
Railroad Passenger-km (000s)
1,400,000
1,700,000
2,000,000
1970 1975 1980 1985 1990 1995 2000 2005
actual
M5
Railroad Freight (000s metric tons)
1,000
2,000
3,000
4,000
1970 1975 1980 1985 1990 1995 2000 2005
actual
M7
Railroad Freight (000s metric ton-km)
200,000
400,000
600,000
800,000
1,000,000
1970 1975 1980 1985 1990 1995 2000 2005
actual
M10
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24
Figure 1: Partial map of Greece showing its entire rail network