# C_2012174EN.01001701.xml

| 16.6.2012 | EN | Official Journal of the European Union | C 174/17 |
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16.6.2012

EN

Official Journal of the European Union

C 174/17

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Action brought on 29 March 2012 — European Commission v Republic of Bulgaria

(Case C-152/12)

2012/C 174/26

Language of the case: Bulgarian

Parties

Parties

Applicant: European Commission (represented by: R. Vasileva and H. Støvlbæk, acting as Agents)

Applicant:

Defendant: Republic of Bulgaria

Defendant:

Form of order sought

Form of order sought

| — | Declare that the
  Republic of Bulgaria
  has infringed its obligations under Articles 7(3) and 8(1) of Directive 2001/14/EC; (1) |
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Declare that the
  Republic of Bulgaria
  has infringed its obligations under Articles 7(3) and 8(1) of Directive 2001/14/EC; (1)

Republic of Bulgaria

1

| — | Order the
  Republic of Bulgaria
  to pay the costs. |
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—

Order the
  Republic of Bulgaria
  to pay the costs.

Republic of Bulgaria

Pleas in law and main arguments

Pleas in law and main arguments

By its application of 16 March 2012 the European Commission (‘the Commission’) seeks to obtain a declaration that the Republic of Bulgaria has failed to fulfil its obligations under Articles 7(3) and 8(1) of Directive 2001/14/EC by not basing the charging scheme of the infrastructure manager in Bulgaria on the costs directly incurred as a result of operating the train service, in accordance with Article 7(3) of Directive 2001/14/EC. Also, Bulgaria has not provided information that it based the charges on a scheme which aims at full recovery of the costs, in accordance with Article 8(1) of that directive. For that reason Bulgaria should in any case have complied with the conditions set out in that article.

The Commission relies on the following essential arguments:

| 1. | By the expression ‘cost that is directly incurred as a result of operating the train service’ are to be understood marginal costs incurred directly as a result of the actual use of the railway infrastructure, that is ‘direct costs’ which arose from a specific train service operation. Accordingly, those are variable costs and dependent on whether the railway infrastructure is used or not. Following that logic, costs arising independently of the actual use of the railway infrastructure could not be regarded as direct costs, even if they concern activities or goods necessary for operating rail traffic on certain routes. Those costs are fixed costs in the sense that they are also incurred when the railway infrastructure is not used. |
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1.

By the expression ‘cost that is directly incurred as a result of operating the train service’ are to be understood marginal costs incurred directly as a result of the actual use of the railway infrastructure, that is ‘direct costs’ which arose from a specific train service operation. Accordingly, those are variable costs and dependent on whether the railway infrastructure is used or not. Following that logic, costs arising independently of the actual use of the railway infrastructure could not be regarded as direct costs, even if they concern activities or goods necessary for operating rail traffic on certain routes. Those costs are fixed costs in the sense that they are also incurred when the railway infrastructure is not used.

| 2. | That interpretation is supported by the wording of Article 7(3) which applies to the cost ‘... that is directly incurred as a result of operating the train service’. Fixed costs, which are linked to the whole railway infrastructure would not therefore be incurred ‘directly’ as a result of a specific train service operation. The expression ‘incurred directly’ therefore applies to additional costs arising from a specific train service operation. The suggested interpretation is also based on the schematic context of Article 7(3). Article 7 governs the principles of charging whereas Article 8 addresses the possible exceptions to those principles. Article 8(1) refers to ‘full recovery of the costs incurred by the infrastructure manager’ which means that the cost referred to by Article 7(3) cannot be the infrastructure manager’s final costs but must refer to the costs incurred as a result of a specific train service operation, that is to say, lower costs than the final costs. That interpretation is supported by recital 7 in the preamble to Directive 2001/14/EC which encourages optimal use of the railway infrastructure by as many transport undertakings as possible, requiring charges to be kept low. |
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2.

That interpretation is supported by the wording of Article 7(3) which applies to the cost ‘... that is directly incurred as a result of operating the train service’. Fixed costs, which are linked to the whole railway infrastructure would not therefore be incurred ‘directly’ as a result of a specific train service operation. The expression ‘incurred directly’ therefore applies to additional costs arising from a specific train service operation. The suggested interpretation is also based on the schematic context of Article 7(3). Article 7 governs the principles of charging whereas Article 8 addresses the possible exceptions to those principles. Article 8(1) refers to ‘full recovery of the costs incurred by the infrastructure manager’ which means that the cost referred to by Article 7(3) cannot be the infrastructure manager’s final costs but must refer to the costs incurred as a result of a specific train service operation, that is to say, lower costs than the final costs. That interpretation is supported by recital 7 in the preamble to Directive 2001/14/EC which encourages optimal use of the railway infrastructure by as many transport undertakings as possible, requiring charges to be kept low.

directly

operating the train service

| 3. | The Commission is of the opinion that the infrastructure manager is to make the infrastructure available to railway undertakings at its own cost, those undertakings having to pay charges equivalent to the direct costs. That can be explained by the need to make the railway infrastructure more attractive for use by a large number of railway undertakings and to increase its optimal use by each one of them. It is possible to apply Article 8(1) of Directive 2001/14/EC only when the conditions laid down in that article are fulfilled: for all market segments, in respect of which the infrastructure manager wishes to levy mark-ups, it must establish whether they could bear such mark-ups. That interpretation follows from the wording of the first subparagraph of Article 8(1), in particular from the formulation ‘if the market can bear this ...’, and from the wording of the second subparagraph of Article 8(1) which reads: ‘The level of charges must not, however, exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service, ....’ |
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3.

The Commission is of the opinion that the infrastructure manager is to make the infrastructure available to railway undertakings at its own cost, those undertakings having to pay charges equivalent to the direct costs. That can be explained by the need to make the railway infrastructure more attractive for use by a large number of railway undertakings and to increase its optimal use by each one of them. It is possible to apply Article 8(1) of Directive 2001/14/EC only when the conditions laid down in that article are fulfilled: for all market segments, in respect of which the infrastructure manager wishes to levy mark-ups, it must establish whether they could bear such mark-ups. That interpretation follows from the wording of the first subparagraph of Article 8(1), in particular from the formulation ‘if the market can bear this ...’, and from the wording of the second subparagraph of Article 8(1) which reads: ‘The level of charges must not, however, exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service, ....’

| 4. | The complete analysis of the costs and income of the Bulgarian infrastructure manager for the years 2005-2008 shows that 60 % to 70 % of the direct operating costs budgeted for in Bulgaria were based on fixed elements, in particular employment charges and social security payments. In accordance with the foregoing, the Commission comes to the conclusion that those costs cannot be regarded as direct cost within the meaning of Article 7(3), because they did not vary according to use of the train service. Thus the income from the infrastructure charges greatly exceeds the general direct operating costs. The Commission therefore concludes that the charges in Bulgaria were not only framed on the basis of costs incurred directly as a result of operating the train service. |
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4.

The complete analysis of the costs and income of the Bulgarian infrastructure manager for the years 2005-2008 shows that 60 % to 70 % of the direct operating costs budgeted for in Bulgaria were based on fixed elements, in particular employment charges and social security payments. In accordance with the foregoing, the Commission comes to the conclusion that those costs cannot be regarded as direct cost within the meaning of Article 7(3), because they did not vary according to use of the train service. Thus the income from the infrastructure charges greatly exceeds the general direct operating costs. The Commission therefore concludes that the charges in Bulgaria were not only framed on the basis of costs incurred directly as a result of operating the train service.

| 5. | On the basis of the information received, the Commission finds that the method used in Bulgaria for levying charges for the use of the railway infrastructure is not clearly in accordance with the concept of direct cost within the meaning of Article 7(3) of Directive 2001/14/EC. |
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5.

On the basis of the information received, the Commission finds that the method used in Bulgaria for levying charges for the use of the railway infrastructure is not clearly in accordance with the concept of direct cost within the meaning of Article 7(3) of Directive 2001/14/EC.

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(1)  Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification (OJ 2001 L 75, p. 1).

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