# EUR-Lex - 52013PC0028 - EN

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# 52013PC0028

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EC) No 1370/2007 concerning the opening of the market for domestic passenger transport services by rail /* COM/2013/028 final - 2013/0028 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

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[2], adopted on 6 June 2012, stressed
the importance of the transport sector.

In the last decade, three legislative ‘railway
packages’ have aimed at opening up national markets and making railways more
competitive and interoperable at EU level. Regulation 1370/2007 on public
passenger transport services by rail and by road, published in December 2007,
set out a framework for awarding public service contracts and compensating for public
service obligations but not a common approach to awarding contracts for rail
passenger transport. Despite the new EU legislation, the modal share of rail in
intra-EU transport has remained modest.

1.2       Problems to be addressed

Stakeholders consider that, under the
current legal framework, rail passenger services are underperforming in terms
of quality of service and operational efficiency. 54 % of respondents to the
2012 Eurobarometer survey were not satisfied with their national and regional
rail systems. Within the Consumer Scoreboard 2011[3] the overall satisfaction of
train passengers was 6.7/10, well below of the most consumer goods and
services. Among consumers rail services score worse than all other transport
modes (urban transport and airlines in particular scored better) and are ranked
27th out of 30 services markets. There are considerable gaps in operational
efficiency between the best and the worst performing railway systems. These
gaps reflect significant differences in asset utilisation such as rolling stock
and infrastructure as well as labour productivity. These operational efficiency
gaps lead to a substantial need of public funding compared to other economic
sectors (leaving infrastructure funding aside) as many railway undertakings are
loss making.

There are a number of obstacles to
improving railway companies’ quality of service and operational efficiency. These
relate first of all to access to the market for domestic passenger services and
the lack of competitive pressure. In many Member States this market is closed
to competition, which not only limits growth, but creates disparities between those
Member States that have opened their markets and those that have not. Different
national approaches to opening of the market for domestic passenger transport
services by rail prevent the emergence of a genuine Internal Market for rail
passenger services.

However, the overwhelming majority of
domestic passenger services is not provided on a commercial basis, and is
therefore performed under public service contracts. Given that no common EU
rules on the award of such contracts apply, some Member States have introduced
competitive tendering for these contracts, while others award them directly.
This patchwork of regulatory systems in the EU makes it difficult for railway
companies to exploit the full potential of operating in a Internal Market. Therefore,
this legislative package also covers competition for public service contracts,
barriers to competition such as the availability of suitable rolling stock for
potential bidders for such contracts, and non-discriminatory access to
information systems and integrated ticketing systems where they benefit the
passenger.

1.3       General Objectives

The main objective of the European Union’s
transport policy is to establish an internal market for transport contributing
to 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 provided for in the Europe 2020 Agenda
for smart, sustainable and inclusive growth[4].
The White Paper concluded that no major change in transport would be possible
without the support of an adequate rail infrastructure and a smarter approach
to using it.

The overall objective of this proposal, as part
of the Fourth Railway Package, is to improve the quality of rail passenger
services and to enhance their operational efficiency, thereby improving the
competitiveness and attractiveness of rail vis-à-vis other modes and developing
further the Single European Railway Area.

1.4       Specific Objectives

This proposal encompasses common rules on
the award of public service contracts for passenger transport by rail, together
with accompanying measures to increase the success of competitive tendering procedures.

The objective of mandatory competitive tendering
for public service contracts is to intensify competitive pressure on domestic
rail markets, in order to increase the quantity and improve the quality of
passenger services. Competitive tendering for rail contracts can also ensure
better value for money spent on public transport services. Common rules on the
award procedure contribute to creating more uniform business conditions for
railway companies. These proposals have to be seen in connection with the
proposed amendments to Directive 2012/34/EU of the European Parliament and of
the Council of 21 November 2012 establishing a single European railway area
(recast)[5],
which introduce open access rights for railway undertakings and strengthen
provisions on non-discriminatory access to the rail infrastructure.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

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 started in
December 2011 and the final report was delivered in September 2012.

To gather the views of stakeholders, a
broad mix 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 views of passengers
were collected through a Eurobarometer survey of 25 000 respondents 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.

Consultations were complemented by a
stakeholder hearing held on 29 May 2012 (with some 85 participants), a
conference (with some 420 participants) on 24 September 2012 and by interviews
with specific stakeholders throughout 2012. Commission staff met
representatives from Community of European Railways (representing railway companies),
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). Dedicated
meetings with stakeholders were also organised in France, Germany, Netherlands,
Poland, Sweden and the United Kingdom.

The majority of respondents (60 %)
agreed that additional new open access rights, compulsory competitive tendering
or a mix thereof could stimulate market integration. Open access for domestic
rail passenger transport subject to an economic equilibrium test assessing its possible
impact on the viability of public service contracts was the most popular option
(55 % of respondents) The current arrangements were viewed very negatively
(with only 20 % supporting them).Workers representatives expect that any opening
of the market for domestic passenger transport services by rail will result in
worse working conditions and more strikes.

Regarding compulsory competitive tendering,
45 % of respondents favoured flexible options akin to those of the
negotiated procedure for public procurement and transitional periods for
gradually putting all public service contracts out to tender (80% of
respondents).

The majority of respondents (60 %)
agreed that the creation of rolling stock leasing companies would help to
improve access to rolling stock and a large majority (75 %) called for
full access to technical information to be provided by the infrastructure
manager. As regards integrated ticketing, there was a preference for
non-binding provisions or enabling clauses for voluntary agreements rather than
compulsory measures at EU level or at Member State level.

The Sectoral Social Dialogue Committee on
railways was consulted on 26 March and 19 June, in particular on the options
and the assessment of their social impact.

Based on the external study mentioned above
and on the conclusions of the consultation process, the Commission made a qualitative
and quantitative assessment of the impacts of the various options for modernising
the existing regulatory framework.

The impact assessment showed that a
combination of the following would fare best in terms of economic,
environmental and social impacts, generating a net present value of between €21
and €29 billion from 2019 to 2035:

–
broadly defined open access rights subject to a
test of their impact on the economic equilibrium of public service contracts;

–
competitively awarded public service contracts;

–
voluntary national integrated ticketing systems;
and

–
an obligation on Member States to ensure
non-discriminatory access to suitable rolling stock for railway undertakings which
want to participate in a public tender procedure.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

3.1       Definition of competent local
authority (Article 2, point c)

This amendment increases legal certainty by
specifying that a ‘competent local authority’ covers urban agglomerations or rural
districts, not large parts of the national territory.

3.2       Specifications on how competent
authorities define public service obligations and the geographical scope of
public service contracts (Article 2, point (e) and new Article 2a)

This Article provides a flexible but
formalised and transparent procedure for defining public service obligations
and the geographical scope of public service contracts, if competent
authorities consider that public intervention is necessary to ensure a
politically desirable level of mobility in the territory under their
responsibility. It requires competent authorities to establish public transport
plans defining the objectives of public passenger transport policy and supply
and performance patterns for public passenger transport. It also requires competent
authorities to justify the kind and extent of public service obligations they
intend to impose on public transport operators and the scope of the public
service contract with a view to achieving the objectives defined in the public
transport plans. They must apply criteria based on general Treaty principles
such as appropriateness, necessity and proportionality, as well as economic
criteria such as cost-effectiveness and financial sustainability. This Article
also requires the competent authority to ensure appropriate consultation of
interested parties, e.g. passenger and employee organisations and transport
operators. For rail transport, it requires independent rail regulatory bodies to
ensure legal review of the procedure. In addition, it sets a threshold for the
maximum volume of passenger transport by rail under each public service
contract, in a flexible manner, in order to ensure effective competition while
taking account of the varying size and administrative structure of rail
passenger markets in Member States.

3.3       Provision of operational,
technical and financial information about passenger transport covered by a
public service contract to be put out to tender (Article 4(6) and new Article 4(8))

This new provision in Article 4(8) obliges
competent authorities to provide certain operational, technical and financial
data to potential bidders for a public service contract so that they can make a
well-informed bid and hence ensure enhanced competition. The amendment of
Article 4(6) clarifies that competent authorities have to clearly indicate in
the tender documents whether they require public service operators to comply
with social standards or criteria.

3.4       Upper limits for the direct award
of small volume contracts and direct awards to small or medium-sized
enterprises (Article 5(4))

This provision introduces specific upper limits
on the value of direct awards for small volume contracts for rail transport.
The existing limits are geared to transport by bus and track-based transport
modes other than rail. The proposed limit for rail follows the logic of
permitting direct award if the cost of organising a tender procedure outweighs
the expected benefits. The corresponding limit in terms of train-kilometres reflects
the average unit cost of rail transport provision.

3.5       Mandatory competitive award of
rail contracts (Article 5(6) and Article 4)

Deleting Article 5(6) denies competent
authorities the option of deciding whether to award a public service contract
for rail directly or based on a competitive tender. The general rule of
competitive tendering will also apply to rail.

3.6       Restrictions
on award (new Articles 5(6))

In order to enhance competition after the
introduction of competitive tendering for rail contracts, this provision
enables competent authorities to decide that contracts for rail passenger
transport covering parts of the same network or package of routes will be
awarded to different railway undertakings. To this end, the competent
authorities may decide to limit the number of contracts to be awarded to the
same railway undertaking following a competitive tendering procedure.

3.7       Access to rail rolling stock (new
Article 5a and new Article 9a)

Introducing an obligation on Member States
to ensure effective and non-discriminatory access to suitable rail rolling
stock for operators wishing to provide public passenger services by rail
addresses a major barrier to effective competition for public service
contracts. In Member States where there are no well-functioning leasing markets
for rail rolling stock it is up to competent authorities to take measures to
ensure access to rolling stock in order to open up the market. However, as the
situation and needs may vary from country to country, the new provision leaves
competent authorities broad scope to choose the most appropriate ways of
achieving the objective, while indicating the most frequently used measures.
The details of the procedure and measures to ensure access to rolling stock
shall be defined in implementing acts based on the examination procedure
referred to in Article 9a of this Regulation.

3.8       Publication of certain
information on public service contracts (Articles 7(1) and 7(2))

This provision obliges competent authorities
to include information about the starting date and duration of public service
contracts in their annual reports on public service obligations as well as in
their prior information notices on envisaged tender procedures. This additional
information and the obligation on Member States to facilitate access to the
annual reports published by competent authorities will increase transparency regarding
the public service contracts awarded and likely new awards, and hence help transport
operators prepare for future tender procedures.

3.9       Transition period applied to
competitive tendering (Article 8(2))

This provision makes it clear that the ten-year
transitional period to 2 December 2019 applies only to Article 5(3) on the
obligation on competent authorities to organise a competitive tendering procedure.
All other provisions of Article 5 (e.g. on the option of making a direct award
to an internal operator, for a small-volume contract or as an emergency measure,
and legal review of the award decision) are immediately applicable.

3.10     Transition period for existing
directly awarded rail contracts (new Article 8(2a))

This provision introduces an additional
transitional period for public service rail contracts that are directly awarded
between 1 January 2013 and 2 December 2019. Those contracts may remain in place
until they expire but only up to 31 December 2022 at the latest. This gives
those railway undertakings that have been directly awarded a public service
contract sufficient time to adapt and prepare for competitive tendering procedures.

3.11     Adaptions of provisions of
Regulation 1370/2007 related to the exemption of state aid notification and the
conditions of state aid compatibility due to Treaty requirements

In its proposed draft amendments to
Regulation (EC) No 994/98 (Enabling Regulation)[6],
the Commission proposed also an amendment of Regulation (EC) No 1370/2007
bringing, in accordance with the procedures foreseen in Articles 108(4) and 109
of the Treaty, aid for the coordination of transport or reimbursement for the
discharge of certain obligations inherent in the concept of a public service as
referred to in Article 93 of the Treaty under the scope of the Enabling
Regulation. The Commission currently expects a
consequential, future block exemption Regulation to reproduce the substance of
the current exemption, except to the extent that Regulation 1370/2007 is
amended by this legislative proposal relating to the rail sector.

2013/0028 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

amending Regulation (EC) No 1370/2007
concerning the opening of the market for domestic passenger transport services
by rail

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning
of the European Union, and in particular Article 91 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[7],

Having regard to the opinion of the
Committee of the Regions[8],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       Over the past decade, the
growth of passenger traffic by rail has been insufficient to increase its modal
share in comparison to cars and aviation. The 6% modal share of passenger
transport for rail in the European Union has remained fairly stable. Rail
passenger services have not kept pace with evolving needs in terms of
availability and quality.

(2)       The Union market for
international passenger transport services by rail has been opened to
competition since 2010. In addition, some Member States have opened their
domestic passenger services to competition, by introducing open access rights
or tendering for public service contracts or both.

(3)       In its White Paper on
transport policy of 28 March 2011[9]
the Commission announced its intention to complete the internal railway market,
allowing railway undertakings of the Union to provide all types of rail
transport services without unnecessary technical and administrative barriers.

(4)       When competent authorities
organise their public passenger transport services they need to ensure that
public service obligations and the geographical scope of public service
contracts are appropriate, necessary and proportionate to achieve the
objectives of the public passenger transport policy in their territory. This
policy should be set out in public transport plans leaving scope for market
based transport solutions. The process of defining public transport plans and
public service obligations should be made transparent to relevant stakeholders
including potential market entrants.

(5)       To ensure sound financing
to meet the objectives of public transport plans, competent authorities need to
design public service obligations to attain public transport objectives in a
cost-effective manner taking account of the compensation for the net financial
effect of those obligations and they need to ensure long-term financial sustainability
of public transport provided under public service contracts.

(6)       It is particularly
important that competent authorities comply with these criteria for public
service obligations and the scope of public service contracts if the market for
public passenger transport by rail is to run smoothly, because open access
transport operations need to be well coordinated with those under public
service contract. For this reason, the independent rail regulatory body should
ensure that this process is correctly applied and transparent.

(7)       A maximum annual volume of
a public service contract for passenger transport by rail needs to be set to
facilitate competition for such contracts while allowing competent authorities
some flexibility to optimise the volume according to economic and operational
considerations.

(8)       To facilitate the
preparation of tenders, and hence enhance competition competent authorities
need to ensure that all public service operators interested in making such a
submission receive certain information on the transport services and
infrastructure covered by the public service contract.

(9)       Certain upper limits for
the direct award of public service contracts need to be adapted for rail
transport to the specific economic conditions under which tender procedures
take place in this sector.

(10)     The establishment of an
Internal Market for passenger transport services by rail requires common rules
on competitive tendering for public service contracts in this sector to be
applied in a harmonised manner in all Member States.

(11)     In view of creating
framework conditions for enabling society to fully reap the benefits of
effective opening of the market for domestic passenger transport services by
rail it is important that Member States ensure an adequate level of social
protection for the staff of public service operators.

(12)     Where the market does not
ensure it under suitable economic and non-discriminatory conditions, public
service operators' access to rail rolling stock needs to be facilitated by competent
authorities through adequate and effective measures.

(13)     Certain key features of
upcoming tender procedures for public service contracts need to be fully
transparent to enable a better organised market response.

(14)     Consistent with the
internal logic of Regulation (EC) No 1370/2007, it should be made clear that
the transitional period until 2 December 2019 refers only to the obligation to
organise competitive tendering procedures for public service contracts.

(15)     Preparing railway
undertakings for mandatory competitive tendering for public service contracts
requires some extra time to allow effective and sustainable internal
restructuring of companies to which such contracts were directly awarded in the
past. Transitional measures are therefore necessary for contracts directly
awarded between the date of entry into force of this Regulation and 3 December
2019.

(16)     Once opening of the market
for domestic passenger transport services by rail is achieved, as competent
authorities may need to take measures to ensure a high level of competition by
limiting the number of contracts that it awards to one railway undertaking,
adequate provisions should be provided for.

(17)     In order to ensure uniform
conditions for the implementation of Article 5a of this Regulation,
implementing powers should be conferred on the Commission. Those powers should
be exercised in accordance with Regulation (EU) No 182/2011 of the European
Parliament and of the Council of 16 February 2011 laying down the rules and
general principles concerning mechanisms for control by the Member States of
the Commission's exercise of implementing powers[10].

(18)     In the context of
amendments to the Regulation (EC) No 994/98 (Enabling Regulation)[11],
the Commission proposed also an amendment of Regulation (EC) No 1370/2007
(COM(2012) 730/3). In order to harmonize the approach to block exemption
regulations in the field of State aid and, in accordance with the procedures
foreseen in Articles 108(4) and 109 of the Treaty, aid for the coordination of
transport or reimbursement for the discharge of certain obligations inherent in
the concept of a public service as referred to in Article 93 of the Treaty
should be brought under the scope of the Enabling Regulation.

(19)         Regulation
(EC) No 1370/2007 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1370/2007 is amended as
follows:

1.           a) Point (c) of Article 2
is replaced by the following:

"(c) "competent local authority"
means any competent authority whose geographical area of competence is not
national and which covers the transport needs of an urban agglomeration or a
rural district;"

b) Point (e) of Article 2 is complemented by
the following:

"The scope of public service obligations
shall exclude all public transport services that go beyond of what is necessary
to reap local, regional or sub-national network effects.

2.           The following Article 2a is
inserted:

"Article 2a

Public transport plans and public service
obligations

1.      Competent authorities shall establish
and regularly update public passenger transport plans covering all relevant
transport modes for the territory for which they are responsible. These public
transport plans shall define the objectives of public transport policy and the
means to implement them covering all relevant transport modes for the territory
for which they are responsible. They shall at least include:

(a)
the structure of the network or routes;

(b)
basic requirements to be fulfilled by public
transport offer such as accessibility, territorial connectivity, security,
modal and intermodal interconnections at main connecting hubs, offer
characteristics such as times of operation, frequency of services and minimum
degree of capacity utilisation;

(c)
quality standards related to items such as equipment
features of stops and of rolling stock, punctuality and reliability,
cleanliness, customer service and information, complaint handling and redress,
monitoring of service quality;

(d)
principles of tariff policy;

(e)
operational requirements such as transport of
bicycles, traffic management, contingency plan in case of disturbances.

In establishing public transport plans,
competent authorities shall have regard in particular to applicable rules
regarding passenger rights, social, employment and environmental protection.

The competent authorities shall adopt the
public transport plans after consultation of relevant stakeholders and publish
them. For the purpose of this Regulation, relevant stakeholders to be taken
into consideration are at least transport operators, infrastructure managers if
appropriate, and representative passenger and employee organisations.

2.      The establishment of public service
obligations and the award of public service contracts shall be consistent with
the applicable public transport plans.

3.      The specifications of public service
obligations for public passenger transport and the scope of their application
shall be established as follows:

(a)
they shall be defined in accordance with Article
2 (e);

(b)
they shall be appropriate to achieve the objectives
of the public transport plan;

(c)
they shall not exceed what is necessary and
proportionate to achieve the objectives of the public transport plan.

The assessment of appropriateness referred to
in point (b) shall take into account whether a public intervention in the
provision of passenger transport is a suitable means of achieving the
objectives of the public transport plans.

For public passenger transport by rail the
assessment of necessity and proportionality referred to in point (c) shall take
into account the transport services provided under Article 10(2) of Directive
2012/34/EU of the European Parliament and of the Council of 21 November 2012
establishing a single European railway area (recast)[12] and consider all information
given to the infrastructure managers and regulatory bodies pursuant to the
first sentence of Article 38(4) of that Directive.

4.      The specifications of public service
obligations and the related compensation of the net financial effect of public
service obligations shall:

(a)
achieve the objectives of the public transport
plan in the most cost-effective manner;

(b)
financially sustain the provision of public
passenger transport in accordance to the requirements laid down in the public
transport plan in the long term.

5.      When preparing the specifications, the
competent authority shall set out the draft specifications of public service
obligations and their scope, the basic steps of the assessment of their
compliance with the requirements laid down in paragraphs 2, 3 and 4, and the
results of the assessment.

The competent authority shall in an appropriate
manner consult relevant stakeholders such as a minimum, transport operators,
infrastructure managers if appropriate and representative passenger and
employee organisations on these specifications and take their positions into
consideration.

6.      For public passenger transport by
rail:

(a)
compliance of the assessment and of the
procedure set out in this Article shall be ensured by the regulatory body referred
to in Art 55 of Directive 2012/34/EU including on its own initiative.

(b)
the maximum annual volume of a public service
contract in terms of train-km shall be the higher value of either 10 million
train-km or one third of the total national public rail passenger transport
volume under public service contract."

3.           Article 4 is amended as
follows:

(a)
In paragraph 1, point (a) is replaced by the
following:

"(a) clearly define the public service
obligations laid down in Article 2(e) and Article 2a with which the public
service operator is to comply, and the geographical areas concerned;"

(b)
The last sentence of paragraph 1, point (b) is
replaced by the following:

"In the case of public service contracts not awarded according to Article 5(3), these parameters shall be
determined in such a way that no compensation payment may exceed the amount
required to cover the net financial effect on costs incurred and revenues
generated in discharging the public service obligations, taking account of
revenue relating thereto kept by the public service operator and a reasonable
profit;"

(c)
Paragraph 6 is replaced by the following:

"Where competent authorities, in
accordance with national law, require public service operators to comply with
certain quality and social standards or establish social and qualitative
criteria, these standards and criteria shall be included in the tender
documents and in the public service contracts."

(d)
The following paragraph 8 is added:

"8. Competent authorities shall make
available to all interested parties relevant information for the preparation of
an offer under a competitive tender procedure. This shall include information
on passenger demand, fares, costs and revenues related to the public passenger
transport covered by the tender and details of the infrastructure
specifications relevant for the operation of the required vehicles or rolling
stock to enable them to draft well informed business plans. Rail infrastructure
managers shall support competent authorities in providing all relevant
infrastructure specifications. Non-compliance with the provisions set out above
shall be subject to the legal review provided for in Article 5(7)."

4.           Article 5 is amended as
follows:

(a)
Paragraph 4 is replaced by the following:

"4. Unless prohibited by national law, the
competent authorities may decide to award public service contracts directly:

(a)
where their average annual value is estimated
at: less than EUR 1 000 000 or less than EUR 5 000 000 in the case of a public
service contract including public transport by rail or,

(b)
where they concern the annual provision of less
than 300 000 kilometres of public passenger transport services or less than 150
000 kilometres in the case of a public service contract including public
transport by rail.

In the case of a public service contract
directly awarded to a small or medium-sized enterprise operating not more than
23 road vehicles, these thresholds may be increased to either an average annual
value estimated at less than EUR 2 000 000 or to an annual provision of less
than 600 000 kilometres of public passenger transport services."

(b)
Paragraph 6 is replaced by the following:

"Competent authorities may decide that, in
order to increase competition between railway undertakings, contracts for
public passenger transport by rail covering parts of the same network or
package of routes shall be awarded to different railway undertakings. To this
end the competent authorities may decide before launching the tender procedure
to limit the number of contracts to be awarded to the same railway
undertaking."

5.           The following Article 5a
is inserted:

"Article 5a

Rolling stock

1.      Member States shall in compliance with
State aid rules take the necessary measures to ensure effective and
non-discriminatory access to suitable rolling stock for public passenger
transport by rail for operators wishing to provide public passenger transport
services by rail under public service contract.

2.      Where rolling stock leasing companies
which provide for the leasing of rolling stock referred to in paragraph 1 under
non-discriminatory and commercially viable conditions to all of the public rail
passenger transport operators concerned do not exist in the relevant market,
Member States shall ensure that the residual value risk of the rolling stock is
borne by the competent authority in compliance with State aid rules, when
operators intending and able to participate in tendering procedures for public
service contracts so request in order to be able to participate in tendering
procedures.

The competent authority may comply with the
requirement set out in the first subparagraph in one of the following ways:

(a)
by acquiring itself the rolling stock used for
the execution of the public service contract with a view to making it available
to the selected public service operator at market price or as part of the
public service contract pursuant to Article 4(1)(b), Article 6 and, if
applicable, to the Annex,

(b)
by providing a guarantee for the financing of
the rolling stock used for the execution of the public service contract at
market price or as part of the public service contract pursuant to Article
4(1)(b), Article 6 and, if applicable, to the Annex. Such a guarantee may cover
the residual value risk while respecting the relevant state aid rules when
applicable,

(c)
by committing in the public service contract to
take over of the rolling stock at the end of the contract at market price.

In the cases referred to in points (b) and (c),
the competent authority shall have the right to require the public service
operator to transfer the rolling stock after the expiry of the public service
contract to the new operator to whom a contract is awarded. The competent
authority may oblige the new public transport operator to take the rolling
stock over. The transfer shall be done at market rates.

3.      If the rolling stock is transferred to
a new public transport operator the competent authority shall make available in
the tender documents detailed information about the cost of maintenance of the
rolling stock and about its physical condition.

4.      By [18 months after the date of entry
into force of this Regulation] the Commission shall adopt measures setting out
the details of the procedure to be followed for the application of paragraphs 2
and 3 of this Article. Those implementing acts shall be adopted in accordance
with the examination procedure referred to in Article 9a(2)."

6.           In Article 6 paragraph 1
is replaced by the following:

"1. All compensation
connected with a general rule or a public service contract shall comply with
Article 4, irrespective of how the contract was awarded. All compensation of
whatever nature connected with a public service contract not awarded according
to Article 5(3) or connected with a general rule shall also comply with the
provisions laid down in the Annex. "

7.           Article 7 is amended as
follows:

(a)
Paragraph 1 is replaced by the following:

"1. Each competent
authority shall make public once a year an aggregated report on the public
service obligations for which it is responsible, the starting date and duration
of the public service contracts, the selected public service operators and the
compensation payments and exclusive rights granted to the said public service
operators by way of reimbursement. The report shall distinguish between bus
transport and rail transport, allow the performance, quality and financing of
the public transport network to be monitored and assessed and, if appropriate,
provide information on the nature and extent of any exclusive rights granted.
Member States shall facilitate central access to these reports, for instance
through a common web portal."

(b)
In paragraph 2, the following point is added:

"(d) the envisaged
starting date and duration of the public service contract."

8.           Article
8 is amended as follows:

(a)
The first subparagraph of paragraph 2 is replaced
by the following:

"2. Without prejudice
to paragraph 3, the award of public service contracts by rail with the
exception of other track-based modes such as metro or tramways shall comply
with Article 5(3) as from 3 December 2019. All public service contracts by other track-based modes and
by road must have been awarded in compliance with
Article 5(3) by 3 December 2019 at the latest. During the transitional period
running until 3 December 2019, Member States shall take measures to gradually
comply with Article 5(3) in order to avoid serious structural problems in
particular relating to transport capacity."

(b)
The following paragraph 2a is inserted:

"2a. Public service contracts for public
passenger transport by rail directly awarded between 1 January 2013 and 2
December 2019 may continue until their expiry date. However they shall, in any
event, not continue after 31 December 2022."

(c)
In paragraph 3, the last sentence of the second
subparagraph is replaced by the following:

"The contracts referred to in (d) may
continue until they expire, provided they are of limited duration similar to
the durations specified in Article 4."

9.           "The following
Article 9a is inserted:

Article 9a

Committee procedure

1.      The Commission shall be assisted by
the Single European Railway Area Committee established by Article 62 of
Directive 2012/34/EU of the European parliament and of the Council of 21
November 2012 establishing a single European railway area (recast)[13]. That committee shall be a
committee within the meaning of Regulation (EU) No 182/2011.

2.      Where reference is made to this
paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply."

Article 2

This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

[1]               White Paper : Roadmap to a Single European
Transport Area – Towards a competitive and resource

efficient transport system ;
COM(2011)144

[2]               Better Governance for the Single Market ;
COM(2012)259

[3]               http://ec.europa.eu/consumers/consumer_research/cms_en.htm;

[4]               Communication from the Commission : Europe
2020 ; A strategy for smart, sustainable and inclusive growth, COM(2010)
2020

[5]               OJ L 343of 14.12.2012, p. 32

[6]               Proposal for a COUNCIL REGULATION amending Council
Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and
93 of the Treaty establishing the European Community to certain categories of
horizontal State aid and Regulation (EC) No 1370/2007 of the European
Parliament and of the Council of 23 October 2007 on public passenger transport
services by rail and by road, COM(2012) 730 final of 5.12.2012

[7]               OJ C , , p. .

[8]               OJ C , , p. .

[9]               White Paper : Roadmap to a Single European
Transport Area – Towards a competitive and resource efficient transport
system ; COM(2011)144

[10]             OJ L 55, 28.2.2011, p. 13

[11]             Proposal for a COUNCIL REGULATION amending Council
Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and
93 of the Treaty establishing the European Community to certain categories of
horizontal State aid and Regulation (EC) No 1370/2007 of the European Parliament
and of the Council of 23 October 2007 on public passenger transport services by
rail and by road, COM(2012) 730 final of 5.12.2012

[12]             OJ L 343 of 14.12.2012, p. 32

[13]             OJ L343/32 of 14.12.2012