Explanatory Memorandum to COM(2013)922 - Shift2Rail Joint Undertaking - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)922 - Shift2Rail Joint Undertaking. |
|---|---|
| source | COM(2013)922  |
| date | 16-12-2013 |
1........... CONTEXT OF THE PROPOSAL.............................................................................. 5
1.1........ General context............................................................................................................. 5
1.2........ Reasons and objectives for a Joint Undertaking in the field of rail............................. 5
2........... RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS.......................................................................................................... 6
2.1........ Consultation of interested parties and use of expertise................................................ 6
2.2........ Impact assessment........................................................................................................ 7
3........... LEGAL ELEMENTS OF THE PROPOSAL.............................................................. 7
3.1........ Content of the proposal................................................................................................ 8
3.2........ Legal basis.................................................................................................................... 7
3.3........ Subsidiarity and proportionality................................................................................... 8
4........... BUDGETARY IMPLICATION................................................................................. 8
COUNCIL REGULATION establishing the Shift2Rail Joint Undertaking............................. 9
LEGISLATIVE FINANCIAL STATEMENT........................................................................ 22
1........... FRAMEWORK OF THE PROPOSAL/INITIATIVE.............................................. 22
1.1........ Title of the proposal/initiative..................................................................................... 22
1.2........ Policy area(s) concerned in the ABM/ABB structure................................................ 22
1.3........ Nature of the proposal/initiative................................................................................. 22
1.4........ Objective(s)................................................................................................................. 22
1.5........ Grounds for the proposal/initiative............................................................................. 22
1.6........ Duration and financial impact.................................................................................... 22
1.7........ Management mode(s) envisaged................................................................................ 22
2........... MANAGEMENT MEASURES................................................................................ 22
2.1........ Monitoring and reporting rules................................................................................... 22
2.2........ Management and control system................................................................................ 22
2.3........ Measures to prevent fraud and irregularities.............................................................. 22
3........... ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE.......... 22
3.1........ Heading(s) of the multiannual financial framework and expenditure budget line(s) affected 22
3.2........ Estimated impact on expenditure............................................................................... 22
3.2.1..... Summary of estimated impact on expenditure........................................................... 22
3.2.2..... Estimated impact on operational appropriations......................................................... 22
3.2.3..... Estimated impact on appropriations of an administrative nature............................... 22
3.2.4..... Compatibility with the current multiannual financial framework............................... 22
3.2.5..... Third-party contributions............................................................................................ 22
3.3........ Estimated impact on revenue...................................................................................... 22
1........... FRAMEWORK OF THE PROPOSAL/INITIATIVE.............................................. 23
1.1........ Title of the proposal/initiative..................................................................................... 23
1.2........ Policy area(s) concerned in the ABM/ABB structure................................................ 23
1.3........ Nature of the proposal/initiative................................................................................. 23
1.4........ Objective(s)................................................................................................................. 23
1.4.1..... The Commission's multiannual strategic objective(s) targeted by the proposal/initiative 23
1.4.2..... Specific objective(s) and ABM/ABB activity(ies) concerned.................................... 23
1.4.3..... Expected result(s) and impact.................................................................................... 24
1.4.4..... Indicators of results and impact................................................................................. 24
1.5........ Programme level monitoring and reporting, based on project and work package data, and including the monitoring of the quality of deliverables against a set of satisfaction criteria; the monitoring of project management to verify its overall quality and the compliance with the strategic work programme. Grounds for the proposal/initiative............................................................................................ 24
1.5.1..... Requirement(s) to be met in the short or long term.................................................... 24
1.5.2..... Added value of EU involvement............................................................................... 24
1.5.3..... Lessons learned from similar experiences in the past................................................. 24
1.5.4..... Compatibility and possible synergy with other appropriate instruments.................... 25
1.6........ Duration and financial impact.................................................................................... 26
1.7........ Management mode(s) planned.................................................................................... 26
2........... MANAGEMENT MEASURES................................................................................ 27
2.1........ Monitoring and reporting rules................................................................................... 27
2.2........ Management and control system................................................................................ 27
2.2.1..... Risk(s) identified........................................................................................................ 27
2.2.2..... Internal control system set up..................................................................................... 27
2.2.3..... Costs and benefits of the controls.............................................................................. 27
2.2.4..... Expected level of risk of error.................................................................................... 28
2.3........ Measures to prevent fraud and irregularities.............................................................. 28
3........... ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE.......... 29
3.1........ Heading(s) of the multiannual financial framework and expenditure budget line(s) affected 29
3.2........ Estimated impact on expenditure............................................................................... 30
3.2.1..... Summary of estimated impact on expenditure........................................................... 30
3.2.2..... Estimated impact on operational appropriations......................................................... 32
3.2.3..... Estimated impact on appropriations of an administrative nature............................... 33
3.2.3.1.. Summary..................................................................................................................... 33
3.2.3.2.. Estimated requirements of human resources.............................................................. 35
3.2.4..... Compatibility with the current multiannual financial framework............................... 37
3.2.5..... Third-party contributions............................................................................................ 37
EXPLANATORY MEMORANDUM
Contents
1.1. General context
Ambitious EU goals relating to climate change, energy supply and the environment mean that the railway sector will be required to take on a significant share of the ever-increasing demand for transport in the next decades. In its 2011 White Paper on a Roadmap to a Single European Transport Area, the Commission underlines the importance of creating a Single European Railway Area in order to achieve a more competitive and resource-efficient European transport system. Consequently, the Commission has adopted proposals for a 4th Railway Package which aim to remove remaining administrative, technical and regulatory obstacles holding back the rail sector both in terms of market opening and in terms of interoperability. However, the overarching goal of establishing an internal market for rail and achieving a more efficient and customer-responsive industry will necessarily imply the emergence of innovative approaches throughout the whole of the rail value chain, in business models, services and products, which will, in turn, require a dramatic increase in research and innovation efforts.
One of the main aims of Horizon 2020, the Framework Programme for Research and Innovation covering the period 2014-2020, is to strengthen European industry through actions supporting research and innovation across a range of key industrial sectors. In particular, it provides for the creation of public-private partnerships (PPPs) to support these sectors and help to tackle some of the key challenges Europe is facing. As part of its Innovation Investment Package announced in July 2013 i, the Commission has already put forward a number of legislative proposals for PPPs to be established under the Horizon 2020 Framework Programme in the form of joint undertakings with a view to implementing Joint Technology Initiatives in various industrial sectors. This proposal is fully aligned with the approach to the Joint Technology Initiative joint undertakings of the Innovation Investment Package.
1.2. Reasons and objectives for a Joint Undertaking in the field of rail
Revitalising Europe's railways is a key goal of the EU’s transport policy to enable rail to compete successfully with other modes of transport. New technologies can do much to help modernise Europe’s railways, while also reducing operational and infrastructure costs and creating new business opportunities for the European rail supply industry. In past decades, significant investments in EU rail research and innovation have helped the European rail supply industry to retain a leading position at global level, namely with the development of high-speed trains, ERTMS, automated metro systems, etc. However, a recent Commission study on the competitiveness of the railway supply industry i shows that Asia is steadily overtaking Europe as the largest rail supply market, namely thanks to a surge in research and innovation investments in countries like China and Korea.
At the same time, rail research and innovation suffers from the following important market and systemic failures that justify public intervention:
· High level of product customisation due to the diversity of national standards and operating frameworks;
· Lack of a system-wide approach to innovation due to limited or uncoordinated participation of actors from the full rail value chain and the complexity of interfaces between railway sub-systems;
· Limited private investment in research and innovation and limited market uptake of innovations due to low operational margins and funding gaps in the full innovation cycle;
· Heightened financial risks due to the capital-intensity of investments and long product lifecycles.
Set against these challenges, a coordinated EU approach to research and innovation in the rail sector via the establishment of a joint undertaking is proposed to support the completion of the Single European Railway Area and to increase the competitiveness of the EU rail sector vis-à-vis the other transport modes and vis-à-vis foreign competition.
The general objectives of the proposed joint undertaking on rail are to:
· facilitate joint vision development and strategic agenda setting;
· develop a programming approach in European research and innovation so as to realise a broad-based focus embracing all potential partners;
· build critical mass to ensure the scale and scope required;
· ensure an efficient use of public and private resources.
More specifically, by developing, integrating, demonstrating and validating innovative technologies and solutions for rolling stock, infrastructure and traffic management systems, the joint undertaking will serve to accelerate and facilitate the market uptake of technological breakthroughs that can be measured against the following quantifiable performance indicators, inter alia:
· Life-cycle costs and competitiveness, namely defined as a reduction in the overall costs of rail transport, thereby reducing costs for users and public subsidies for the tax payer.
· Capacity and user demand, namely defined as the frequency of trains/metro/trams per hour available on a specific route, as well as the load factors of passenger and freight travel options;
· Reliability and quality of service, namely defined as the improvement in on-time arrivals, reflecting the need for improved punctuality by rail users but also affecting investment requirements for new fleets as fewer reliable vehicles are needed.
In addition, these breakthroughs will contribute to removing remaining technical obstacles holding back the rail sector in terms of interoperability and efficiency and to reducing negative externalities linked to railway transport.
According to rail industry studies, a coordinated research and innovation effort of EUR 800 million to EUR 1 billion, under the ambit of a well-defined public-private partnership structure, would lead to an overall reduction in life-cycle costs of up to 50%, to an overall increase in capacity of up to 100%, and to an overall increase in reliability of up to 50% in the different rail market segments.
2.1. Consultation of interested parties and use of expertise
Extensive consultations with stakeholders were organised. A web-based open consultation was launched on 28 June 2013. It was open for 12 weeks, until 19 September 2013, and provided all interested stakeholders with a possibility to express their views. 372 responses were received, including 152 responses from individual citizens and 220 from representatives of organisations or institutions. Responses came from 24 different EU countries and are thus highly representative of the whole EU. 60% of responses came from the five countries that currently receive the largest shares of current EU funding for rail research, namely France, Spain, Italy, Germany and the United Kingdom.
The majority of respondents were private companies (42%), followed by research organisations and universities (21.8%), industry associations and chambers of commerce (11.5%), SMEs (10%) and public authorities (5.5%). The remainder included NGOs, self-employed people or other. Respondents were mostly from the rail supply industry (rolling stock, vehicle components, construction and building), with just 5% of responses coming from infrastructure managers and 4% from railway undertakings.
This online consultation was complemented by individual meetings with sector representatives.
A stakeholder hearing was also organised on 12 September 2013, to which 85 stakeholder representatives participated. More details on this consultation process can be found in Annex V of the impact assessment.
2.2. Impact assessment
The proposed Regulation has been the subject of a Commission Impact Assessment which is attached to the proposal. The Impact Assessment analysed different options for implementing future rail research and innovation activities, including the continuation of collaborative research, the establishment of a contractual PPP, the establishment of an institutional PPP in the form of a joint undertaking, or the coordination of research and innovation activities by the European Railway Agency. The Impact Assessment concluded that that, despite the longer set-up time, the establishment of a joint undertaking, taking into account the lessons learned from existing joint undertakings, provides the most appropriate governance structure for implementing future rail research and innovation activities.
The main benefits of the joint undertaking are that the coordination, programming and execution of rail research and innovation activities would be the responsibility of a single, dedicated administrative structure, ensuring more continuity and less fragmentation of research and innovation efforts. The development of a strategic long-term plan and of detailed work programmes, in close cooperation with all market players, will ensure the quality and relevance of future research and innovation projects in terms of supporting the competitiveness of the rail sector. The leading role played by the Commission will also ensure the alignment of the research and innovation strategy with the objectives of achieving a Single European Railway Area. The stable nature of the joint undertaking and the firm, legally binding, commitments from the EU and industry partners will ensure a stronger leverage effect than other options. The joint undertaking also ensures broad and balanced stakeholder participation, thanks to a flexible and transparent management of membership conditions and advisory roles.
The joint undertaking is also the preferred option according to the results of the public consultation. It is judged to be nearly twice as effective as any other option, with four in five respondents judging it would be effective or very effective in responding to the identified challenges.
3.1. Content of the proposal
This proposal concerns setting-up the Shift2Rail Joint Undertaking (S2R Joint Undertaking) under Article 187 of the Treaty on the Functioning of the European Union (TFEU). The S2R Joint Undertaking will share the standard provisions of the proposals for the five Joint Technology Initiative joint undertakings presented in July 2013. Nevertheless, public authorities are expected to play a stronger role in the S2R Joint Undertaking than is the case in the Joint Technology Initiative joint undertakings given its core objective of contributing to implement the Single European Railway Area, hence, the governance structure of the S2R Joint Undertaking will be different.
The S2R Joint Undertaking should be established for a period ending on 31 December 2024. It will be founded by the Union, represented by the European Commission, and by the Founding Members other than the Union, listed in Annex II to this Regulation. The activities of the S2R Joint Undertaking will be jointly funded by the Union and the members of the S2R Joint Undertaking other than the Union.
3.2. Legal basis
The legal basis for the proposal is Article 187 of the TFUE. The Rules for Participation and Dissemination of Horizon 2020 will apply.
3.3. Subsidiarity and proportionality
The objectives of the proposal cannot be sufficiently achieved through national programmes because the scale of the challenge exceeds the capacity of any Member State to act alone. Significant differences exist among national programmes. Their fragmentation and occasional overlapping calls for more efficient action at EU level. The pooling and coordination of research and innovation efforts at EU level stands a better chance of success, given the transnational nature of the infrastructure and technologies to be developed, and also the need to achieve a sufficient mass of resources. The involvement of the EU will help to rationalise research programmes and ensure interoperability of the systems developed, not only through common pre-normative research to support the preparation of standards, but also through the de facto standardisation which will arise from the close research cooperation and the transnational demonstration projects. This standardisation will open a wider market and promote competition. In accordance with the principle of proportionality, the provisions of this Regulation do not go beyond what is necessary to achieve its objectives.
The maximum Union financial contribution to the Shift2Rail initiative shall be EUR 450 million i, including EFTA contributions, paid from the appropriations in the general budget of the Union allocated to the Horizon 2020 Specific Programme implementing the Horizon 2020 Framework Programme. This contribution will be made from the Smart, Green and Integrated Transport Challenge under the Societal Challenges pillar[6]. This amount includes EUR 52 million that has been set aside for funding collaborative rail research actions under the H2020 Transport Work Programme for 2014-2015, while awaiting the launch of the S2R Joint Undertaking. These collaborative research actions will be a precursor to the research and innovation actions that will be funded by the S2R Joint Undertaking. The management of these actions and the corresponding budget, as well as any amounts not committed following the calls for proposals, may be taken over by S2R Joint Undertaking once it achieves the operational capacity to implement its own budget. The funds made available by the Union to cover operational costs will be at least matched by contributions from industry.
The administrative costs of the S2R Joint Undertaking shall not exceed EUR 27 million for the duration of the S2R Joint Undertaking. These costs will be covered through financial contributions in equal parts by the Union and the S2R Joint Undertaking members other than the Union[7].