Tag Archives: Freight

Further integration of the European rail system: third railway package

Further integration of the European rail system: third railway package

Outline of the Community (European Union) legislation about Further integration of the European rail system: third railway package

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Transport > Rail transport

Further integration of the European rail system: third railway package

Document or Iniciative

Communication from the Commission of 3 March 2004 entitled “Further integration of the European rail system: the third railway package [COM(2004) 140 final – not published in the Official Journal].

Summary

In 2001 the Commission set out its objectives for the reform of rail transport in the White Paper ” European transport policy for 2010: time to decide “.The present communication announces the third railway package. The Commission proposes the opening-up of services to competition by 2010 and puts forward proposals concerning the certification of drivers and strengthening of passengers’ rights.

This third railway package comprises two directives and two regulations (of which one was rejected by the Parliament):

Proposal for a Directive [COM(2004) 142 final] on the certification of drivers

In its communication the Commission stresses the impact of driver training on safety. It considers that driver skills fall into two categories:

  • general skills relating to the job of driver;
  • more specific skills relating to line knowledge, the rolling stock and the operating procedures of the railway undertaking for which the driver works.

With the opening-up of the rail freight markets, a growing number of drivers will find themselves operating on the network of another Member State. The Commission therefore wishes to establish:

  • a certification system attesting that the driver has sufficient general knowledge, authenticated by a licence issued to the individual driver that is recognised and valid throughout the Community;
  • a series of certificates attesting to specific knowledge (relating to a specific route, rolling stock and railway undertaking) and allowing the driver to operate.

Proposal for a Regulation [COM(2004) 143 final] on passengers’ rights

In order to make the railways more attractive, the Commission also wishes passengers’ rights to be better protected – particularly with regard to reimbursement for train delays. The situation of passengers on international journeys is often less secure. The Commission therefore considers that the current international arrangements, based on the Convention concerning International Carriage by Rail (COTIF), are inadequate and do not directly create passengers’ rights.

Access to information and fares, and the option of buying international rail tickets easily, are in the Commission’s view the very least that is needed to make rail services attractive. In addition, the Commission wishes liability to be clearly defined in the event of accidents, incidents or train delays. On this last point, compensation thresholds should be set and the various channels for passengers’ appeals clearly identified. Lastly, the Commission considers that greater account should be taken of the needs of people with reduced mobility.

In the Commission’s view, these arrangements to protect passengers’ rights will be all the more vital once the market is opened up for certain services.

Proposal for a Directive [COM(2004) 139 final] on opening up the passenger transport market

The Commission stresses the contrasts between regional, national and international rail traffic and wishes to take these diverse segments into account by combining two models for opening up to competition:

  • under the first, a competitive procedure can be used to award a public service contract. In the Commission’s view this model would work well for suburban and regional services, which transport the vast majority of passengers. It forms the basis of the Commission’s proposal to modernise Regulation No 1191/69 on public service obligations;
  • the other model consists in opening up access to the infrastructure for operators wishing to provide international services. This model would be better suited to long-distance services and to specific services where commercial innovation is likely to attract new customers.

The competitors will need to have:

  • rolling stock and drivers authorised for service in the Member States in which they plan to operate;
  • a railway undertaking licence in a Member State;
  • a safety certificate issued by the national safety authority of each of the Member States they plan to cross;
  • infrastructure capacity, in order to provide a regular service.

The Commission therefore wishes all international services to be opened up to competition on 1 January 2010. This opening-up also includes cabotage on international services (carriage of passengers between two places within the same Member State).

Interoperability requirements

The Commission also points out that integrating Europe’s railway systems requires technical harmonisation in order to ensure the interoperability of rolling stock and equipment.

A fourth proposal rejected by the Parliament

The Commission had also made a proposal for a regulation aiming to improve the quality of rail services. It was rejected first time round by the Parliament. In particular the text proposed establishing mandatory minimum clauses in transport contracts, among which there was a proposal for a compensation system in case of freight being delayed or damaged. It would have encouraged railway undertakings and their clients to regulate quality management contractually.

State aid for railway undertakings

State aid for railway undertakings

Outline of the Community (European Union) legislation about State aid for railway undertakings

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Transport > Rail transport

State aid for railway undertakings

Document or Iniciative

Community guidelineson State aid for railway undertakings [Official Journal C 184 of 22.7.2008].

Summary

The objective of these guidelines is to provide guidance on the compatibility of State aid for railway undertakings with Articles 73 and 87 of the Treaty establishing the European Community. State aid which distorts or threatens to distort competition within the Common Market is prohibited (Article 87.1 EC). Derogations are however provided for, in particular when aid promotes the economic development of the European Union in general (Article 87.3 EC).

Also, Article 73 of the Treaty provides that aids are compatible with the Treaty if they meet the needs of coordination of transport or if they represent reimbursement for the discharge of certain obligations inherent in the concept of a public service. Aid relating to Public Service Obligations (PSOs) is covered by a specific Regulation and is consequently excluded from the scope of these guidelines.

Scope

These guidelines apply to railway undertakings as well as to urban, suburban or regional passenger transport undertakings with regard to aid for the purchase and renewal of rolling stock. Public funding for infrastructure managers is not covered.

The guidelines cover the following support measures:

The support of railway undertakings by means of infrastructure funding.

The Commission considers that this type of funding may constitute aid if it allows undertakings to benefit indirectly from an advantage by lightening the burden of charges that encumber their budget. It is therefore important to evaluate whether the measure for infrastructures does actually have such an effect. Where infrastructure use is open to all potential users in a fair and non-discriminatory manner, and access to that infrastructure is charged for at a rate in accordance with Community legislation in force, the Commission considers that public financing of the infrastructure does not constitute State aid. If such financing is considered to constitute aid, it may nevertheless be authorised if the infrastructure in question meets the needs of transport coordination.

Aid for the purchase and renewal of rolling stock.

The Commission highlights the necessity of investing in the modernisation and/or renewal of the fleet of locomotives and carriages used for passenger transport. The Commission considers that such investment is indispensable to keeping rail transport competitive with other modes of transport which cause more pollution, to limiting the impact of this means of transport on the environment and to enhancing the interoperability of national networks.

The compatibility assessment of aid for the purchase and renewal of rolling stock should be made according to the common-interest objective to which the aid is contributing. Within this framework, the Commission applies rules defined for the following aid categories:

  • aid for coordination of transport (Article 73 of the Treaty),
  • aid for restructuring railway undertakings in difficulty,
  • aid to small and medium-sized enterprises,
  • aid for environmental protection,
  • aid relating to Public Service Obligations, regional aid.

Debt cancellation by States with a view to the financial rejuvenation of railway undertakings.

The Commission notes that the level of indebtedness of many railway undertakings remains very high, in particular in Member States who acceded in 2004, the effect of which is the limitation of their investment capacity. Under certain conditions, debt cancellation may be considered as aid compatible with the Common Market if it seeks to ease the transition towards an open railway market, without unduly distorting competition and trade between Member States.

Aid for restructuring railway undertakings.

The compatibility of State aid for restructuring firms in difficulty in the railway industry is assessed on the basis of the 2004 guidelines on aid for restructuring. These guidelines do not provide for derogations for railway undertakings. The Commission nevertheless considers that given the difficulties of the European rail freight sector, it is in the common interest that aid granted to railway undertakings in difficulty might, under certain circumstances, be considered compatible with the Treaty. Derogations will apply under certain conditions, only to the freight divisions of railway undertakings and for restructurings notified before 1 January 2010.

Aid for coordination of transport.

The concept of ‘transport coordination’, used in Article 73 of the Treaty, implies an intervention by public authorities which is aimed at guiding the development of the transport sector in the common interest. Aid for coordination of transport may be in several forms:

  • aid for infrastructure use;
  • aid for reducing external costs designed to encourage a modal shift from road to rail;
  • aid for promoting interoperability, and, to the extent to which it meets the needs of transport coordination, aid for promoting greater safety, the removal of technical barriers and the reduction of noise pollution;
  • aid for research and development in response to the needs of transport coordination.

The Commission presents in detail the method to determine eligible costs, as well as the conditions making it possible to ensure that this aid meets the conditions of compatibility mentioned in Article 73 of the Treaty. Aid for rail infrastructure use, reducing external costs and interoperability is considered as compatible when it is necessary and proportionate.

Aid for research and development is subject to specific provisions set out in Article 9 of the PSO Regulation. The Community framework for State aid for research, development and innovation applies to this type of aid.

State guarantees for railway undertakings.

The Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees sets out the legal requirements applicable to State guarantees, including in the rail transport field.

Implementation

These guidelines apply to all aid, whether or not notified, as from 22 July 2008. Member States must modify their existing aid schemes so as to comply with them by 22 July 2010 at the latest.

Context

The European Community is conducting a policy to revitalise the rail industry, by introducing conditions fostering competition on the rail transport services markets, by encouraging technical harmonisation on the European rail networks and by granting financial support in the TEN-T programme and the Structural Funds framework.

Quality of rail freight

Quality of rail freight

Outline of the Community (European Union) legislation about Quality of rail freight

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Transport > Rail transport

Quality of rail freight

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 8 September 2008 on the “The quality of rail freight services” [COM(2008) 536 final – Not published in the Official Journal].

Summary

This Communication gives an analysis of the quality of rail freight services, the effectiveness of the agreements and voluntary measures implemented by the sector as well as the recommendations for Community action to be implemented in this area. The Commission emphasises that the performance of rail freight has not deteriorated since 2004 and even substantially increased in 2006. It notes however that this trend seems rather fragile since it is the result of external factors such as the increases in oil prices, road congestion and weather conditions unfavourable to inland waterway transport.

The concept of quality can be understood in two ways: the level of service proposed and offered and compliance with contractual commitments. It can also cover other aspects such as availability of the service, safety and security.

Progress made by rail freight

The Commission notes that customer information and the commercial responsiveness of rail freight operators have constantly improved over the last few years. Moreover, the incumbent rail operators have embarked on restructuring their output. The development of competition in particular has stimulated rationalisation, the emergence of new methods, and new production methods and an extension of the services offered. Despite this progress, the Commission regrets that the quality of railway services remains inferior to what the road sector can offer.

The sector as a whole committed itself to improving freight quality, in particular under the framework of a Charter signed in July 2003 by the International Union of Railways (UIC), the Community of European Railway and Infrastructure Companies (CER) and the International Rail Transport Committee (CIT) (Annex I). Furthermore, many incumbent operators have embarked on a policy of certification of the quality of their services (Annex II). Finally, quality clauses are appearing in contracts more and more often.

Guidelines from the Commission

The Commission regrets the lack of information regarding the quality of rail freight. The information most widely available concerns the punctuality of trains, which overall is increasing only very slightly and remains poor (Annexes III and IV). According to the Commission, as a priority, improvements must be made to traffic management, which presupposes in particular the use of new technologies, improvements in infrastructure maintenance, reinforced cooperation between national infrastructure managers and much quicker development of technical and administrative interoperability.

The Commission believes that development of competition is a vital component of improvements in the quality of service, but that this is currently developing too slowly. In order to promote competition, in the short term the Commission will focus on:

  • effective application of the rules concerning competition contained in the 1st and 2nd rail packages;
  • recasting of the 1st rail package.

Monitoring the implementation of the guidelines on State aid to railway undertakings State aid to railway undertakings will also be an important aspect of improving the operation of the rail markets.

Furthermore, the Commission will step up its action to optimise the use of infrastructure, cooperation between infrastructure managers and investment in rail infrastructure, in particular in the context of the following initiatives:

  • the achievement of a European network giving priority to freight COM(2007) 608 final);
  • the TEN-T programme;
  • the Marco Polo programme.

Finally, with the aim of increasing transparency relating to the quality of services and to encourage the sector as a whole, the Commission will continue to encourage:

  • the establishment of schemes for the improvement of performance (Directive 2001/14/EC);
  • the development of tools for measuring the performance of rail freight;
  • the publication of quality indicators.

Context

In 2004 the Commission put forward a proposal for a Regulation on compensation in cases of non-compliance with quality requirements applicable to rail freight services. The proposal, which was prompted by the poor quality of service provided by freight operators and the need for improvements in order to encourage the transport of goods by rail, was withdrawn in the end. Should the current problems not be resolved, the Commission foresees the possibility of putting forward a new proposal.