During 2000-2001 the operational business within the Swedish State Railways (SJ) was divided up into six independent limited companies. What did your role as Director General include during this process?
I initiated and spearheaded the whole process. This included the development of the solution and extensive discussions and anchoring among all those concerned including the government, the political parties, regional authorities around the country, unions and customers. The government still owns the two railway operators SJ and Green Cargo and the real estate company owning the stations. The ferry lines, the catering company, and the IT company have been privatized – so far.

How has the privatization of SJ secured the future of rail as a strong and viable competitor in the Swedish transport industry?
The most important change was the split up of the special state owned vehicle that controlled the railway into several focused, limited companies following the normal rules for corporate governance. In doing so we were also able to strengthen the balance sheet. The Swedish railway, as all national railways, was really a diversified investment company in the transportation sector also active in real estate, ferries lines, lorry companies, engineering workshops, catering etc. The lack of focus and the risk of hidden political agendas influencing the operation were making a difficult situation worse. Now the issues are clear to the owners as well as the Boards and management teams running the operations. The solutions can be tailored to the conditions facing each company.

What are your thoughts regarding the future of transport deregulation in Europe?
This process interests me a lot. I was deeply involved in the deregulation of the telecommunication services markets during the 80´s and 90´s and I have been involved in the beginnings of deregulation of the European railways. The transport sector is still heavily regulated. This hampers development and creates all sorts of distortions to the supply of transport services. I believe that the companies in the sector, their customers and society at large would benefit greatly from increased competitive pressure. The transition from the present situation is not easy and I fear it will cause more pain. Many pitfalls might be avoided by learning from deregulation of other markets.

From your broad experience of restructuring in the rail industry, what advice can you offer the global airline industry?
I hesitate to give unsolicited advice to our readers at this time. So I would prefer not to answer this question.

Do you think that combined travel solutions involving rail, road and air transport will become more common in the future?
Yes, I do. The different modes each have their advantages and the increased transparency offered by new technology makes it easier to build attractive packages. But at the same time the market is heading for increased fragmentation of service offerings. Customers increasingly want to tailor their traveling individually. Many want to unbundle the packages. This trend is fuelled by the opportunities made available by the Internet. It is not easy to manage the complexity created by this development.

What opportunities do you see for Carmen with the current developments in the rail and airline industries?
The most challenging issues facing the transportation industry are the huge negative external costs caused by it. Damage to the environment, climate change, noise and accidents related to the transportation system cry out for solutions. Increased efficiency is part of the answer. The railways have efficiency, which is below 50 %. Half of the capacity is wasted – empty chairs, empty freight cars being repositioned, dead heads. The planning and optimization tools developed by Carmen can help make the system more efficient. Our tools can also help to manage the complexity created by the increased service fragmentation in the industry.

In June 2002, Daniel Johannesson, Executive Vice President of Skanska AB was appointed Chairman of Carmen Systems’ Board. Daniel has had extensive experience within the transport industry and was the Director General of SJ (Swedish Railways) from 1998–2001. He was also the former CEO of Industriförvaltnings AB Kinnevik from 1983–1992.

Daniel Johannesson, Chairman of Carmen Systems’ Board