Explanatory Memorandum to COM(2010)475 - Single European railway area - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)475 - Single European railway area. |
|---|---|
| source | COM(2010)475  |
| date | 17-09-2010 |
Contents
- Background
- Problems to be addressed
- OBJECTIVES OF THE PROPOSAL
- Horizontal Objectives
- Specific Objectives
- IDENTIFICATION OF THE PROPOSED MODIFICATIONS
- Impact Assessment
- Subsidiarity
- COMMENTS ON THE MAIN MODIFICATIONS PROPOSED
- Independence of essential functions (Article 7)
- Infrastructure development strategy (Article 8)
- Rail-related services (Article 13)
- Cross-border agreements (Article 14)
- Market monitoring (Article 15)
- Network Statement Publication (Article 27)
- Information on charging systems (Article 29)
- Contracts between competent authorities and infrastructure managers (Article 30)
- Principles of charging (Article 31)
- Exceptions to charging principles (Article 32)
- Cooperation between infrastructure managers (Article 37)
- Regulatory bodies (Article 55)
- Functions of the regulatory body (Article 56)
- Cooperation between regulatory bodies (Article 57)
- Classification of rail-related services (Annex III)
- Content of the network statement (Annex VI)
- Contractual agreements (Annex VII)
- Infrastructure costs and charges requirements (Annex VIII)
- Regulatory accounts (Annex X)
After enjoying great prosperity during the 19th century and the first half of the 20th century, the railway sector fell into decline due to the increasing popularity of cars and air travel from 1970 onwards. In order to halt this decline the European Community has adopted a number of legislative measures aimed at reviving the railways by gradually creating a “single European railway area”. The first railway package presented by the Commission in 1998 and adopted at the end of 2000 signalled the desire of both national and European policymakers to reform the regulatory framework to ensure the railway sector's integration at European level and to enable it to face up to the competition from other transport modes on the best possible terms.
The first railway package consists of three Directives:
- Directive 2001/12/EC of the European Parliament and of the Council of 26 February 2001 i, which amended a pre-existing Council Directive of 29 July 1991 on the development of the Community’s railways i;
- Directive 2001/13/EC of the European Parliament and of the Council of 26 February 2001 i, which amended a pre-existing Council Directive of 27 June 1995 on the licensing of railway undertakings i; and
- Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure i.
The entry into force of these Directives in 2003 has had a far-reaching impact on how to do rail business in the European Union (EU). There are two distinct actors – railway undertakings and infrastructure managers. Railway undertakings licensed in accordance with EU criteria should be able to access railway infrastructure on fair, non-discriminatory terms and to offer pan-European services. Infrastructure managers may charge for the use of their networks and must supply a minimum level of service including access to certain facilities. The Directives define access rights for rail freight and passenger services and certain safeguards with respect to the management of railway undertakings to ensure that competitors have non-discriminatory access to the network. The Directives also provide guidance on how independent national rail regulatory bodies should be set up in order to ensure non-discriminatory access and to monitor competition on the rail markets.
With this new regulatory framework, the railway industry has managed to stabilise the volumes transported and, in some Member States, to recover market share from the roads. The fall in employment had also slowed down before the onset of the crisis. However, the growth of rail freight in terms of tonnes transported during recent years has not been strong enough to recover the market share of 2.3 percentage points lost between 1995 and 2003. If the observed trend continues, the overall modal share of rail freight will not improve. For rail passenger transport the decline over the last three decades has been less dramatic than for freight. Rail's share of the total passenger transport market decreased from 10.2% in 1970 to 6.1% in 2003 in the EU-15 (in terms of passenger-kilometres). In the EU-27, the share of rail passenger transport dropped from 6.6% in 1995 to 5.9% in 2003. Since then it has recovered slightly and stabilised.
The current economic climate is exacerbating the weak performance of the rail market. Freight services (including rail) have recently suffered a significant drop in activity (between 20% and 50% depending on the market segment) and passenger service activity has also slowed. Stakeholders have indicated that national recovery plans are not producing investment as rapidly as had been hoped and that major job cuts are anticipated, particularly in the freight sector.
The development of the railway sector and its capacity to compete viably with other modes of transport are still hampered by serious problems related to (a) inadequate financing and pricing of the infrastructure, (b) persistent barriers to competition and (c) lack of appropriate regulatory oversight.
(a) The level of investment in rail infrastructure development and maintenance remains insufficient in a large number of Member States. In many cases, the quality of the existing infrastructure continues to decline. The underinvestment observed at national level is partly due to the absence of clear investment plans and long-term strategies. Poor maintenance, slow modernisation and increasing bottlenecks on the network have a direct effect on rail undertakings as they fail to keep pace with other modes of transport and to attract investment. The inadequate level and structure of infrastructure access charges in many Member States tends to aggravate these difficulties.
(b) Competition between railway undertakings is limited by various factors. Insufficient transparency of market conditions and a poorly functioning institutional framework continue to make it difficult for new entrants to provide competitive rail services. Another important element is the persistent discrimination faced by new entrants in gaining access to rail- related services which are often owned and operated by the incumbent rail undertakings. And discrimination can still be found in the conditions of access to the infrastructure (path allocation and charging).
The problems mentioned above are aggravated by difficulties which regulatory bodies encounter in carrying out their oversight duties, in particular to ensure non-discrimination between rail undertakings and to check whether charging principles are properly applied or whether separation of accounts is fully respected. These difficulties are often due to a lack of qualified staff and other resources. In several cases, insufficient independence from the infrastructure managers, the incumbent rail undertaking or the ministry which exerts ownership rights over the incumbent operator is an aggravating factor.
Full implementation of the existing legislation will contribute very substantially towards resolving these problems. The Commission has therefore moved to ensure that the existing legislation is enforced by bringing infringement procedures against Member States who have incorrectly or incompletely transposed it.
However there are weaknesses, ambiguities and gaps in the current regulatory framework which need to be addressed to meet fully the initial objectives of the legislation. A recast of the first railway package is considered by the Commission as one of the ways to tackle them.
General Objectives
The main objective of the European Union’s transport policy is to establish an internal market by developing common policies to promote a high degree of competitiveness and the harmonious, balanced and sustainable development of economic activities. Complementing and strengthening existing measures adopted at EU level in the rail sector, the proposal to recast the first railway package will contribute to this objective by facilitating the integration and development of the European rail market.
The creation of a genuine internal market is fundamental to the revitalisation of the railway sector and will help to boost the competitiveness of rail freight and passenger transport services, thereby increasing their attractiveness and modal share. Because of rail transport’s higher energy efficiency (especially when compared to road transport), a shift in the modal share of transport from road to rail will result in fewer CO2 emissions and reduce other pollutants.
The aim of simplifying, clarifying and modernising the regulatory environment in Europe is central to the work of the Commission. With this cross-cutting strategic objective in mind, the Commission is pursuing a far-reaching Better Regulation agenda with a view to making progress towards the Europe 2020 strategy.
Legal simplification through consolidation and merger is the first horizontal objective underpinning this recast initiative. Elimination of existing cross-references of the three Directives through restructuring and merging into a single rail access code would be instrumental in attaining this objective.
Secondly, the Commission considers that clarification of some provisions of rail access legislation would facilitate proper transposition and efficient implementation of European Union law in all Member States. As noted above, some provisions of the first railway package are ambiguous and do not sufficiently define means of implementation.
Finally, there is a need to modernise the legislation by eliminating outdated provisions (which were historically relevant prior to full market-opening and may be connected to the traditional fusion of operator and infrastructure manager) and by introducing new provisions which respond more appropriately to the functioning of the market today (for instance, relating to new entrants and full or partial State ownership of infrastructure).
The proposed recast of the first railway package encompasses (a) the adequate financing of and charging for rail infrastructures, (b) the conditions of competition on the railway market, and (c) the organisational reforms needed to ensure appropriate supervision of the market.
(a) Ensuring adequate, transparent and sustainable funding of the infrastructure and, thanks to better predictability of the infrastructure development and access conditions, facilitating investments by railway undertakings, together with a more appropriate level and structure of infrastructure charging, improving the competitiveness of rail operators vis-à-vis other transport modes and contributing to the internalisation of environmental costs constitute the first objective of the proposed recast.
(b) Avoiding distortions of competition due to the use of State funds for commercial activities, preventing commercially sensitive information from being collected by incumbents and used against their potential competitors, eliminating conflicts of interest in the management of rail-related services and increasing their availability for new entrants as well as increasing market transparency to ensure effective competition are a second set of objectives.
(c) Regarding regulatory oversight, the proposed recast intends to ensure that regulatory bodies are in a position to carry out their duties effectively, thanks to reinforced independence, extended competencies, and additional means at their disposal.
Preliminary Screening
Based on extensive research and evaluation, the Commission identified a range of measures that could potentially contribute to achieving each of the objectives outlined in the above section. On the basis of studies carried out over several years i and taking into account input from stakeholders, the Commission came up with 37 measures. A thorough pre-screening of these 37 measures resulted in the selection of a package of 26 measures. The pre-screening process involved two steps – first, taking into account the results of the stakeholders’ consultation and second, carrying out an independent assessment of the measures based on five criteria (effectiveness, implementation time, efficiency, administrative feasibility and consistency with the existing legal framework).
External expertise and stakeholders’ consultation
Following the decision to carry out an impact assessment for an initiative to recast the first railway package, an external study was commissioned to PriceWaterhouseCoopers Advisory (PWC) in the context of DG TREN’s Framework Contract TREN/A2/143-2007 regarding Impact Assessment and Evaluations.
A stakeholders’ consultation involving almost 380 organisations from the EU-25 (EU-27 excluding Cyprus and Malta, which have no railways) was carried out in the context of the external study undertaken by PWC. Stakeholders were asked to highlight specific barriers that, from their point of view, hinder the full opening of the international rail market and the development of rail-related services. In addition, stakeholders were invited to identify areas of the EU legislative framework that could be improved and to give their opinions on the potential effectiveness of the measures envisaged.
Based on the external study mentioned above as well as the conclusions of the stakeholders' consultation process, the Commission made a quantitative and qualitative assessment of the impact of the whole package of pre-selected measures. Where they had not previously been subject to impact assessment, this evaluation examined alternative options for the new measures envisaged to modernise the existing regulatory framework.
Problems affecting the railway sector involve transnational aspects that require action to be taken at EU level. The lack of coordination in the relationships between Member States and other actors reduces the efficiency of international rail transport, risking a shift from rail traffic to road transport which would result in increased congestion and pollution. Clarification of the regulatory framework for rail market access in order to facilitate market entry and competition as well as to develop rail service markets including those linked to rail transport provision can be better achieved by the Union than by Member States individually.
Separation of accounts (Article 6)
The new provisions clarify the necessary separation in railway undertaking accounts to ensure appropriate transparency. They make it compulsory to have separate accounts for activities that enjoy a legal monopoly in contrast to activities that are subject to competition. This measure is a safeguard against State funds devoted to unprofitable activities being shifted to subsidise commercial activities and is thereby necessary for avoiding distortion of competition.
The proposed deletion abolishes the possibility to assign to railway undertakings the collection of rail infrastructure charges. This measure would contribute to fair competition by preventing certain railway undertakings (incumbents) from obtaining access to commercially sensitive information about train path specifications from the invoice for competing railway undertakings (new entrants). It also provides an additional incentive for sound and non-discriminatory financial management of infrastructure.
Under this article Member States will be obliged to publish medium to long-term railway sector development strategies that make it possible to meet future mobility needs and are based on sound and sustainable financing of the railway system. It will stimulate long lifecycle investments on which the rail industry relies. Long-term commitments are necessary for attracting new actors to the market and for developing new services.
The proposed changes relate to the modernisation of rail-related services and are twofold.
Firstly, independence requirements (i.e. legal, organisational and decision-making independence) for the management of service facilities and for rail transport provision are introduced to eliminate conflicts of interest between, on the one hand, the rail-related service providers or owners of the service facilities and, on the other hand, incumbent railway undertakings. This measure will help to ensure non-discriminatory access to service facilities.
The second measure proposed in Article 13 is the introduction of Use-it-or-lose-it provisions for the management of rail-related service facilities. If a service facility is not in use, it must be made available by its owner (on a rent or lease basis) to another interested party. This measure increases the availability of facilities in the market by avoiding problems of artificial saturation.
The proposed provisions clarify general principles applying to cross-agreements between rail undertakings, between Member States and between Member States and third countries. They also entail notification and cooperation procedures allowing the Commission to ensure that agreements comply with European Union law.
The aim is to make it clear that the rail market monitoring tasks of the Commission will cover items such as rail infrastructure investments, price developments and quality of rail transport services and public service obligations for rail passenger transport, and that relevant data must therefore be supplied by Member States as detailed in the new Annex IV. This measure will help identify bottlenecks of the service market.
The proposed provisions clarify the appropriate ways and means for publication of network statements by infrastructure managers. Publishing network statements in a second official EU language and in an electronic form on the portal of the European Railway Agency (ERA) will enhance the accessibility of network statements and thereby improve transparency.
To increase transparency in the use of State funds, it is proposed to require that Member States' charging frameworks and rules be published in network statements.
The proposed changes detail the process for developing and managing contractual agreements between the national competent authorities and infrastructure managers on infrastructure costs and access charges. In particular the regulatory body is empowered to assess the appropriateness of the envisaged medium to long-term budgetary envelope for the high-level infrastructure output specifications for the same period (performance targets). Such independent assessment can diminish the risk of the incumbent railway undertakings using their political strength to influence the agreements.
The content of Article 31 is modified to introduce two separate measures:
The first measure has to do with differentiation of track access charges based on the noise emission characteristics of the rolling stock making up the train. This will constitute a clear incentive to modernise the infrastructure and in particular to invest in more sustainable rail technologies.
To improve transparency of charges, it is made clear that service providers must also provide information on charges for rail-related services to be published by infrastructure managers in their network statement.
To improve the coherence of national track access charging schemes, the introduction of common criteria for identifying 'market segments' on which services might be able to pay mark-ups is proposed. The criteria in question are set out in Annex VIII, paragraph 3.
To shorten the transition period during which lines are equipped with both national signalling systems and the European Train Control Systems (ETCS) and thereby reduce the infrastructure maintenance costs, it is proposed to lower infrastructure access charges for ETCS equipped trains.
As for the allocation of infrastructure capacities under Article 40, the new Article 37 proposes to introduce new measures to ensure that infrastructure managers cooperate for the setting of charging systems on more than one network.
It is proposed to modernise the provisions on regulatory bodies' independence by stipulating clearly that they must be independent from any other public authority. Ensuring independence of regulatory bodies, in particular from the public authority that exercises the ownership rights of the incumbent railway undertaking, will reduce the potential for conflict of interest and thereby enhance their oversight capacity and credibility.
Three measures proposed in Article 56 consist in extending the competencies of regulatory bodies. i Their competences will explicitly cover decisions related to access to and charging for rail-related services which are essential to allow market entry and ensure fair competition. i To improve accounting separation, prevent State funds devoted to unprofitable activities from being shifted to finance commercial activities and thereby avoid unfair competition; regulatory bodies will also have the power to carry out audits or to initiate external audits with the railway undertakings and infrastructure managers to verify compliance with accounting separation provisions. i Finally, to allow regulatory bodies to operate more effectively, cost-accounting data are to be provided by infrastructure managers in an aggregated and standardised format as regulatory accounts.
To enhance cross-border cooperation and improve market entry conditions, regulatory bodies will have to cooperate for the adoption of decisions on access or charging issues relating to international services. In this context, the decision-making process must allow regulatory bodies to exchange information in due time.
The definition of the use of electrical supply equipment for traction current as part of a minimum access package would ensure that such services are subject to non-discrimination requirements. In addition the obligation to show separately the charges for using the electrical supply equipment and for traction current will provide more transparency in the costs of network operation and therefore will give more incentive for the infrastructure managers to reduce the cost of provision of infrastructure.
The measures proposed in Annex VI clarify the content of network statements in order to strengthen their effectiveness and enhance transparency within the railway market. The new provisions stipulate in particular that infrastructure managers must publish i a template form for capacity requests, i detailed information about international path allocation procedures, i information relating to railway licence and rail safety certificate applications, i information about procedures for dispute resolution and appeal relating to market access and i information on access to rail-related service facilities (beyond the tariff information currently required).
The new Annex VII clarifies the content and functioning of the contractual agreements provided for under Article 30 to stimulate the introduction of long-term strategies for the development of railways.
To contribute to sound and sustainable financing of railway systems, the new Annex VIII clarifies certain provisions of Article 31. This includes detailing i the costs that must not be included in the calculation of direct costs of the minimum access package and track access services (as defined in Annex III, paragraphs 1 and 2) and the criteria for identification of market segments on which services might be able to pay mark-ups, i the requirements for differentiation of track access charges based on the noise emission characteristics, i how infrastructure managers will define market segments to evaluate the possibility of introducing mark-ups, and i the main characteristics and general principles of performance regimes.
The new Annex X details the common standardised format for the submission of regulatory accounts. This measure would ensure that regulatory bodies are in a position to analyse infrastructure managers' information in detail and facilitate their supervisory activities.
ê 2004/49/EC Art. 30.1 (adapted)