Explanatory Memorandum to COM(2013)29 - Amendment of Directive 2012/34/EU, as regards the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure - Main contents
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| dossier | COM(2013)29 - Amendment of Directive 2012/34/EU, as regards the opening of the market for domestic passenger transport services by rail and ... |
|---|---|
| source | COM(2013)29  |
| date | 30-01-2013 |
In its 2011 White Paper on transport policy adopted on 28 March 2011[1], the Commission put forward its vision of a Single European Railway Area with an internal railway market where European railway undertakings can provide services without unnecessary technical and administrative barriers.
Several policy initiatives have recognised the potential of rail infrastructure as a backbone for the internal market and a driver of sustainable growth. The European Council conclusions of January 2012 highlighted the importance of unleashing the growth potential of a fully integrated Single Market, including measures with regard to network industries. The Commission Communication on Action for Stability, Growth and Jobs adopted on 30 May 2012 stressed the importance of further reducing the regulatory burden and barriers to entry in the rail sector. Likewise, the Commission Communication on strengthening the governance of the single market, adopted on 8 June 2012[2] also stressed the importance of the transport sector.
At the same time, the Commission has proposed for the next 2014-2020 multi-annual financial framework to create the ‘Connecting Europe Facility’ (CEF) and allocate € 31.7 billion to transport infrastructure out of the total € 50 billion envelope.
In the last decade, three legislative 'railway packages' have progressively opened up national markets and making railways more competitive and interoperable at the EU level. However, despite the considerable development of the ‘EU acquis’, the modal share of rail in intra-EU transport has remained modest. This proposal targets the remaining obstacles that limit the effectiveness of railway markets.
Remaining obstacles relate first of all to the access to the market for domestic passenger services. In many Member States these markets are closed to competition, which does not only limit their development, but also creates disparities between those Member States that have opened their markets, and those that have not.
The majority of domestic passenger services cannot be provided on a commercial basis alone and require support from the State. They are performed under public service contracts. Therefore this legislative package also addresses the issue of competition for public service contracts, and additional points such as the availability of rolling stock for potential bidders for such contracts, and integrated timetabling and ticketing systems where they benefit the passenger.
A second set of problems which prevent the rail market from developing its full potential are issues relating to the governance of infrastructure managers. Since infrastructure managers are natural monopolies, they do not always react to the needs of the market and its users, thus hindering the performance of the sector as a whole. In a number of Member States infrastructure managers are unable to fulfil their tasks, since their functions are separated between different bodies. Moreover, the current legal framework has not led to improved cross-border cooperation among infrastructure managers.
In addition, a number of market entry barriers result from situations where infrastructure management and transport operations are part of the same integrated structure. In such a case, infrastructure managers face a conflict of interests as they have to take account of the business interests of the integrated structure and its transport subsidiaries and have an incentive to discriminate in the provision of access to the infrastructure.
Finally, integrated structures make it much more difficult to enforce the separation of accounts between infrastructure management and transport operations. Regulators find it difficult to trace financial flows between the different subsidiaries and the holding company in an integrated structure. Accountancy tools allow for the artificial increase or decrease of the results of the respective subsidiaries. Cross-subsidising practices and transfers of infrastructure funds to competitive activities are a serious market entry barrier for new operators that do not have the possibility to rely on such funds. Cross-subsidising practises may also imply State aid granted to competitive activities.
The main objective of the European Union’s transport policy is to establish an internal market through a high degree of competitiveness and the harmonious, balanced and sustainable development of economic activities. The 2011 Transport White Paper stated that rail should account for the majority of medium-distance passenger transport by 2050. This modal shift would contribute to the 20 % reduction of greenhouse gas emissions foreseen in the Europe 2020 Agenda for smart, sustainable and innovative growth[3]. The White Paper concluded that no major change in transport would be possible without the support of adequate infrastructure and a smarter approach to using it.
The overall objective of the Fourth Railway Package is to enhance the quality and efficiency of rail services by removing any remaining legal, institutional and technical obstacles, and fostering the performance of the railway sector and its competitiveness, in order to further develop the Single European Railway Area.
This proposal encompasses provisions with the following aims:
a) The opening of the market for domestic passenger transport services by rail with the objective of intensifying competitive pressure on domestic rail markets, in order to increase the quantity and improve the quality of passenger services. These proposals have to be seen alongside the proposed amendments to Regulation 1370/2007/EC (Public Service Obligations) and in this context aim to increase the efficiency of the public financing of passenger services.
b) Enhancing governance of the infrastructure manager with the objective of ensuring equal access to the infrastructure. This should be achieved through the removal of conflicts of interest affecting decisions of the infrastructure manager on market access and the elimination of the potential for cross-subsidisation, which exists in integrated structures. The proposal also aims to ensure that all of the infrastructure manager’s functions will be managed in a consistent manner. Finally, the proposal aims at strengthening coordination between infrastructure managers and rail operators to better address market needs and at enhancing cross-border cooperation between infrastructure managers.
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
- LEGAL ELEMENTS OF THE PROPOSAL
- 1.2. Problems to be addressed
- 1.2 General Objectives
- 1.3. Specific Objectives
- 3.1. Definition of the infrastructure manager (Article 3(2))
- 3.2. Definition of international passenger services (Article 3, point 5)
- 3.3. Separation of accounts within an integrated group (Article 6(2))
- 3.4. Institutional separation of the infrastructure manager (Article 7)
- 3.5. Independence of infrastructure managers within vertically integrated undertakings (Articles 7a and 7b)
- 3.6. Verification of compliance (Article 7c)
- 3.7. Coordination committee (Article 7d)
- 3.8. European Network of Infrastructure Managers (Article 7e)
- 3.9. Conditions of access to railway infrastructure (Article 10)
- 3.10. Limitation of the right of access (Article 11)
- 3.11. Common information and integrated ticketing schemes (Article 13a)
- 3.12 Capacity rights (Article 38(4))
In order to support the Commission in the impact assessment process, an external consultant was asked to prepare a support study and to undertake a targeted consultation. The study was started in December 2011 and the final report was delivered in December 2012.
To gather the views of the stakeholders, a variety of targeted consultation methods was preferred to an open consultation. Between 1 March and 16 April 2012, tailored questionnaires were sent to 427 rail-related stakeholders (railway undertakings, infrastructure managers, public transport ministries, safety authorities, ministries, representative bodies, workers’ organisations etc.). The response rate was 40 %. The views of passengers were collected through a Eurobarometer survey that reached 25 000 members of the public evenly spread over the 25 Member States with railways. The network of the Committee of the Regions was used to reach local and regional authorities and the Sectoral Dialogue Committee on railways has also been consulted.
These consultations were complemented with a stakeholder hearing held on 29 May 2012 (with some 85 participants), a conference with some 420 participants on 24 September 2012 and with interviews with specific stakeholders throughout 2012. Commission staff met with representatives from the Community of European, the European Passenger Transport Operators, the European Transport Workers’ Federation, the European Passengers’ Federation, the European Rail Infrastructure Managers and UITP – the International Association of Public Transport. Visits and face-to-face interviews with stakeholders were also organised in Italy, France, Germany, the Netherlands, Poland, Hungary, Sweden and the United Kingdom.
The majority of stakeholders agreed during the targeted consultation that the quality of rail services and the competitiveness of the sector in the EU were being affected by different access barriers for railway undertakings. 69 % found different interpretation of legislation to be an issue. Infrastructure capacity constraints were considered to be the main access barrier for railway undertakings (quoted by 83 %).
The result of the consultation showed that views are highly polarised regarding the appropriateness of solutions that should ensure the independent and efficient governance of railway infrastructure. A large majority of transport ministries, competition authorities, regulatory bodies, independent infrastructure managers and railway undertakings, passengers and freight forwarders’ associations advocated a complete separation which would ensure full transparency and a level playing field for all operators. In contrast, holding companies, infrastructure managers depending on such holdings and workers’ representatives referred to scientific literature that highlights the disadvantages of separation, such as higher transaction costs and the risk of disconnection inefficiencies. These stakeholders thought that a stronger role of regulatory oversight could be sufficient to solve the issues. 64 % of respondents supported the idea of creating a specific body of representatives from all infrastructure users to ensure interests are taken into account in a non-discriminatory way.
Throughout the consultation process the Commission took a proactive approach to prompting stakeholders to participate. Given that all relevant parties were given the opportunity to express their opinions, the Commission’s minimum consultation standards were met.
Based on the external study mentioned above and the conclusions of the stakeholder consultation process, the Commission made a quantitative and qualitative assessment of the impact of the proposed measures. This evaluation examined alternative options for new measures aiming to modernise the existing regulatory framework.
The clarification sets out all the relevant functions of infrastructure management that are to be performed by the infrastructure manager, in order to ensure that all these functions are fulfilled in a consistent manner. It abolishes the option set out in the existing text for functions of the infrastructure manager on a network or part of a network to be allocated to different bodies or firms. It also clarifies the meaning of the different functions of infrastructure management.
The fifth Point of the existing Article 3 defines international passenger services. With the opening of the market for domestic passenger transport services by rail, the distinction between international and domestic passenger services becomes irrelevant for the purpose of this Directive. This definition is therefore deleted.
The existing Article 6(2) allows for the possibility of organising infrastructure and transport services within a single undertaking while fulfilling the requirements of a separation of accounts. Since the proposal contains specific rules on the separation of the two activities, this provision has to be deleted.
This provision establishes that infrastructure managers should be able to fulfil all the necessary functions for the sustainable development of the infrastructure. It also introduces the institutional separation of the infrastructure manager from transport operations, by prohibiting the same legal or natural person from having the right to control or exercise influence over an infrastructure manager and a railway undertaking at the same time. It allows for the possibility of a Member State to be owner of both legal entities, in which control should be exercised by public authorities that are separate and legally distinct from each other.
3.5. Independence of infrastructure managers within vertically integrated undertakings (Articles 7a and 7b)
The proposal allows vertically integrated undertakings, including those with a holding structure, to maintain ownership of the infrastructure manager. However, it clarifies that this is only permissible if conditions are fulfilled which ensure that the infrastructure manager has effective decision-making rights for all its functions. It further sets out that this must be guaranteed by strong and efficient safeguards protecting the infrastructure manager’s independence. It specifies that these safeguards should be in place with regard to the structure of the undertaking, including the separation of financial circuits between the infrastructure manager and other companies of the integrated group. It also sets out rules on the management structure of the infrastructure manager.
This provision establishes a possibility for Member States to limit access rights of railway operators which are part of vertically integrated undertakings, in case the Commission is not a position to confirm that safeguards to protect the independence of the infrastructure manager have been effectively implemented.
This provision seeks to ensure good coordination between the infrastructure manager and the users of the network which are affected by his decisions, including applicants, representatives of passengers and users of freight services, and regional and local authorities. It lists the issues on which the infrastructure manager should take advice from the users which include their needs on the development of the infrastructure, performance targets, allocation and charging.
The proposal creates a forum for the cooperation of infrastructure managers across borders, with a view to developing the European rail network. This includes cooperation on the establishment of the core network corridors, the rail freight corridors and the implementation of the European Rail Traffic Management System (ERTMS) deployment plan. The proposal also covers the role to be played by this Network in monitoring the performance of infrastructure managers with the aim of improving the quality of services offered by infrastructure managers.
Article 10(2) is amended to grant to European railway undertakings access rights for the purpose of operating domestic passenger services. Since the distinction made in the existing legislation between international and domestic services is removed, Article 10(3) and 10 i, whose purpose had been to determine the international or domestic nature of a service, have to be deleted.
This provision gives Member States the possibility to limit access rights for the purpose of operating domestic or international services if the exercise of this right would compromise the economic equilibrium of a public service contract. As is currently the case for international services, the provision stipulates that regulatory bodies have the responsibility to determine whether the economic equilibrium of a public service contract is being compromised by a domestic service according to common procedures and criteria.
In order to ensure that passengers continue to benefit from network effects, this provision gives Member States the possibility to establish information and integrated ticketing schemes common to all railway undertakings operating domestic passenger services in a way that does not distort competition. In addition, it provides for the adoption of coordinated contingency plans by railway undertakings to provide assistance to passengers if there is a major disruption of traffic.
With a view to giving all market players sufficient legal certainty to develop their activities, this provision is amended. It defines the time frame within which regulatory bodies should assess whether the economic equilibrium of a public service contract would be compromised. This is consistent with the process for the allocation of infrastructure capacity.