# EUR-Lex - 52002PC0023 - EN

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# 52002PC0023

**Proposal for a Regulation of the European Parliament and of the Council establishing a European Railway Agency /* COM/2002/0023 final - COD 2002/0024 */ **

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Official Journal 126 E , 28/05/2002 P. 0323 - 0331 *

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a European Railway Agency

(submitted by the Commission)

EXPLANATORY MEMORANDUM

1. Introduction

The process of creating an internal rail market is only just beginning. Directives 2001/12, 13 and 14/EC laid the foundation for establishing, by March 2003, a common framework for access to railway infrastructure, for licensing and safety certification, for allocation of railway infrastructure capacity and for charging for use thereof. Within this new framework, international freight services will be open to competition from March 2003 on.

To turn such an integrated railway area into reality, it emerged as essential to address the technical regulations and standards. In practice, the characteristic feature of the railway industry was the lack of international technical regulation by the public authorities. In each Member State, standards and procedures have been defined, often directly by the railway companies themselves. Although the cooperation between these companies within the UIC has produced a minimum of common ground, it has not really been able to draw together the different national systems.

Creation of an integrated railway area in Europe therefore entails putting in place common technical regulations monitored, as in other sectors of the economy, by the public authorities.

As a first step, the Community established a framework for progressively setting standards on the interoperability of rail systems (Directives 96/48/EC and 2001/16/EC).

This second package of measures on rail transport is designed to expand this approach, by adding the safety aspects, extending the work on interoperability to new areas and putting it all into a comprehensive, clear and consistent context.

In order to perform these tasks and prepare the individual proposals, a balance must be struck between, on the one hand, the public authorities, which must be subject to democratic control, and, on the other, the players on the market, whose expertise lies at the heart of the process. The balance existing, to one degree or another, in the Member States must also be maintained at European level. To achieve this, it is essential to create a centre of expertise at Community level alongside the public authorities to give guidance on this process.

However, the specialisation and expertise required are arguments against direct involvement by the Commission. The White Paper on European governance [1] served as a reminder that the Commission must concentrate on the tasks conferred on it by the Treaties and avoid having to assign resources to over-technical tasks. The same approach was also advocated in a study conducted for the Directorate-General for Energy and Transport on the externalisation of certain tasks, which focused, in particular, on the drafting of technical standards in the railway sector.

[1] COM(2001) 428, 25 July 2001.

It therefore became clear that the most appropriate instrument for performing these technical tasks with experts from the industry would be an Agency. This solution had been under consideration since 1996 [2] and was recommended again in NERA's study for the Commission on railway safety [3]. This approach was confirmed by the September 2001 White Paper "European transport policy for 2010: time to decide" [4].

[2] The Commission White Paper "A strategy for revitalising the Community's railways" (COM (96) 421 final) clearly identified the lack of interoperability and the incompatibility of the national safety regulations as factors limiting development of the railways. The timetable for action (p. 37) proposed that the Commission should "study various options for the improvement of the institutional framework for future rail development (including the setting up of a European Railway Agency)."

[3] NERA's final report "Safety regulations and standards for European railways" (February 2000) recommended establishment of a Railway Agency "as an EU institution, providing an executive interface between DG TREN and the industry." According to NERA, this Agency must provide a means of developing interoperability and finding common solutions on railway safety in order to make progress towards an integrated European railway area.

[4] COM(2001) 370.

This proposal draws on the earlier proposals for a Maritime Safety Agency [5] and an Aviation Safety Agency [6] and on the Commission's thinking on governance.

[5] COM(2000) 802.

[6] COM(2000) 595.

The White Paper on European governance laid down the conditions for the creation of regulatory agencies at EU level. It recalled that the Treaties allow some responsibilities to be granted directly to agencies. However, this should be done in a way that respects the balance of powers between the institutions and does not impinge on their respective roles and powers. This implies the following conditions:

- "Agencies can be granted the power to take individual decisions in specific areas but cannot adopt general regulatory measures. In particular, they can be granted decision-making power in areas where a single public interest predominates and the tasks to be carried out require particular technical expertise.

- Agencies cannot be given responsibilities for which the Treaty has conferred a direct power of decision on the Commission (for example, in the area of competition policy).

- Agencies cannot be granted decision-making power in areas in which they would have to arbitrate between conflicting public interests, exercise political discretion or carry out complex economic assessments.

- Agencies must be subject to an effective system of supervision and control [7]."

[7] COM(2001) 428, p. 23.

The limits placed on the powers of the Railway Agency to be established under this proposal for a regulation and its institutional set-up are therefore based directly on the approach set out in the White Paper.

2. The European Railway Agency for Safety and Interoperability

2.1. The objective

The objective is to establish a European Railway Agency responsible for safety and interoperability.

2.2. The Agency

2.2.1. Tasks

The Agency will be an integral part of the Community system. It will be the technical body providing the Community with the necessary means to act effectively on railway safety and interoperability. A fuller description of the Agency's tasks is contained in Section 5 ("Comments on articles").

2.2.2. Functioning

(a) Management bodies

If the Agency is to function properly, its Executive Director must be left with a high degree of independence and flexibility on organisation of the internal functioning of the Agency. The Executive Director will also be responsible for preparation and implementation of the budget and the work programme of the Agency and for personnel matters.

In order to provide the necessary legitimacy, the Executive Director should preferably be appointed by the administrative board on a proposal from the Commission.

An administrative board will be established to supervise the Agency. It will be made up of six representatives appointed by the Commission, six representatives appointed by the Council and three recognised experts in the sector, who will not be entitled to vote. This membership is proposed in line with the principles set out in the White Paper on European governance of 25 July 2001 [8]. The administrative board will adopt the Agency's work programme, its general report and, at the beginning of the financial year, the Agency's budget, which it will adjust to the contributions and fees received.

[8] COM(2001) 428, p. 7, footnote 2.

A full description of the powers of the Executive Director and of the administrative board is contained in Section 5 ("Comments on articles").

(b) Personnel

For carrying out the tasks described above, the Agency needs a sufficient number of highly qualified staff. The number of staff required is estimated at around 100 persons.

The personnel of the Agency will be subject to the Staff Regulations applicable to Officials of the European Communities and the Conditions of Employment of Other Servants. The plan is that only a small number of staff will be seconded from the Community institutions. The other personnel will be recruited on the basis of experience and merit. Without prejudice to the need to have stable, qualified staff in sufficient number, the personnel will be employed on temporary contracts with a maximum duration of five years so as to ensure continuous renewal with staff who are abreast of technological developments and maintain the experience built up.

(c) Budget

The Agency needs a budget allocation large enough to hire its personnel as described above, to carry out its tasks and to function smoothly. For the first year this annual budget can be estimated at approximately EUR 5 million, increasing to around EUR 14.5 million when the Agency is fully operational.

The Agency's budget will be financed mainly by a contribution from the Community. The Agency may charge fees for its publications or for its training activities or other services. However, the amount from these fees will remain minor in relation to the total budget of the Agency.

The Community spends approximately EUR 2 600 million a year on financing railway projects (TEN, Cohesion Fund, Structural Funds, ISPA, Research Programme, etc). The Agency's annual budget is equivalent to less than 0.6% of this total and will allow far more efficient use of the Community resources allocated to developing the railways. In proportion to the Member States' spending on railways (approximately EUR 35 billion a year), the Agency's budget represents less than 0.04%.

(d) Location

The Agency will need to be sited at a convenient location where it will be able to build up working relations with the appropriate Community institutions and where it will be easy to organise meetings of experts from the Member States. Taking into account these requirements and the applications received, the Commission will propose one or more potential locations to the competent authorities. On the basis of the resultant proposal, the competent authorities will have to decide the location not later than six months after adoption of this Regulation.

(e) Transparency

The Agency will adopt its rules regarding transparency and access to documents in compliance with the decisions of the European Parliament and the Council, in the context of Article 255 of the EC Treaty.

3. The choice of the legal basis

The legal basis proposed is Article 71(1), which is consistent with the objective of the proposal and with all the legislation adopted or proposed so far in the railways field, particularly on safety, with the exception of the directives adopted on interoperability based on Article 156.

4. Justification of the proposed measure

What are the objectives of the planned action in relation to the obligations of the Community and what is the Community dimension of the problem (for instance how many Member States are involved and what solution has been adopted until now)*

The Treaty provides for the establishment of a common transport policy. The measures envisaged to implement this policy include laying down common rules applicable to international transport and measures to improve transport safety, as provided for in Article 71(1). Establishment of the Agency will help to attain the objectives of the common transport policy by facilitating creation of a European railway area without technical barriers and guaranteeing a high level of safety.

Is the envisaged action solely the responsibility of the Community or is the responsibility shared with the Member States*

The Agency will deal with matters for which the Community is responsible since it will assist in implementing Community legislation. The Agency will allow permanent networking of the national authorities responsible for railway safety and interoperability and will draw on their experience in order to perform its tasks.

What is the most efficient solution taking into account the resources of the Community and the Member States*

Common rules on railway interoperability and safety can only be defined at Community level. For such a highly precise, technical task in a field where the technology is constantly changing, the most appropriate instrument is a specialist Agency and not an institution with general responsibilities like the Commission.

What is the concrete added value of the action envisaged by the Community and what would be the cost of inaction*

The decline of the railways and their inability to recapture market share are due largely to the plethora of incompatible national rules. Establishment of the Agency is one way of contributing to creation of an integrated, competitive railway area.

Without rapid, determined action in this field, it will be impossible to stem the decline of the railways, particularly for freight, at a time when this mode needs to be expanded to allow sustainable mobility.

What forms of actions are available to the Community (recommendation, financial assistance, regulation, mutual recognition)*

A regulation is the only possible way to achieve the objective of the measure. It is also the form of legislation generally used to establish an Agency in the Community.

Is uniform legislation necessary or would a Directive, setting the general objectives and leaving implementation to the Member States, suffice*

As stated in the previous point, the choice of form of legislation is dictated by the very objective of the measure.

5. Comments on articles

Chapter 1: Principles

Article 1

This article provides for establishment of the Agency and states that its objectives will be to provide the Commission and the Member States with technical assistance in order to enhance the level of interoperability and safety of the European rail system. In performing all its tasks, the Agency must take full account of the enlargement process and of rail links with third countries.

Article 2

This article specifies the type of acts which the Agency may adopt, i.e. either recommendations or opinions. This implies that the Agency has no autonomous decision-making powers and that its responsibilities will be limited to carrying out technical work on behalf of the Commission and the Member States.

Article 3

This article establishes the principle of participation by professionals from the sector in the work done by the Agency and defines the form which this is to take.

Article 4

This article establishes the principle of consultation of the social partners, within the framework of the Social Dialogue Committee, on the work done by the Agency of direct relevance to them.

Article 5

This article establishes the principle of consultation of rail freight users and customers on the work done by the Agency of direct relevance to them.

Chapter 2: Safety

Article 6

Article 5 of the Directive on railway safety provides for drawing up common safety targets and common safety methods. The Agency will be in charge of the technical side of drafting these texts.

Article 7

Article 14 of the Directive on railway safety provides for developing a harmonised structure for safety certificates. The Agency will be responsible for developing a harmonised format for safety certificates and for applications for such certificates.

Article 8

This article ties in with Article 8 of the proposed Directive on railway safety concerning examination of new national safety measures. It gives details of the role to be played by the Agency in examining them.

At the request of the Commission, the Agency will examine the measures in question and submit an opinion to the Commission.

Article 9

This article ties in with Article 6 of the proposed Directive on railway safety and gives details of the role to be played by the Agency in monitoring safety performance on the railways.

The Agency will be responsible for establishing common indicators and collecting and processing the data available. To ensure maximum transparency, every two years the Agency will submit a report on safety performance in the railway industry. In order to perform these tasks, the Agency will cooperate with Eurostat.

Article 10

Open access for international freight and the right for operators to move beyond the Member State in which they are based will have to be guaranteed by the bodies regulating the market set up by Directive 2001/14/EC. This, together with Directive 2001/12/EC, provides for the establishment of a committee which should be informed of any problem with access to the infrastructure.

These bodies for regulating the market are neither intended nor equipped to judge safety-related technical issues on their own. However, safety issues could arise in the cases drawn to their attention.

It is therefore essential that the national bodies regulating the market and the abovementioned committees have the possibility to request an independent technical opinion. The Agency will give such opinions within two months.

To ensure transparency, a version of the Agency's opinion containing no data relating to any trade secret will be made public.

Article 11

On open markets documents such as licences, which are valid throughout the Union, and safety certificates should be accessible to all concerned directly, easily and transparently, while keeping commercial data and intellectual property confidential.

This is particularly important for the national authorities which, as the need arises, must be able to check that operators on their territory conform to the rules.

For this reason, the Agency will be responsible for gathering all the relevant documents and making them available to the public on a website. In order to achieve this, it will form a network with the bodies issuing the documents in question and with the competent authorities in the Member States.

Chapter 3: Interoperability

Article 12

The Agency will be the principal implementer of Directives 96/48/EC and 2001/16/EC on the interoperability of the rail system. As such, it will be in charge of the technical side of preparation of the technical specifications for interoperability, taking account of technical progress and of compliance with other European standards.

The Interoperability Directives (96/48/EC and 2001/16/EC) provide for the Member States to designate bodies to assess the conformity or suitability for use of interoperability constituents and to verify subsystems with a view to establishing the "EC declaration". It is essential that these bodies adopt common approaches and methods and exchange experience. It is equally important that they keep abreast of developments on interoperability and, conversely, that they can publicise any difficulties with application of certain specifications. The Agency will therefore be responsible for organising cooperation between the notified bodies.

Article 13

In some cases neutral evaluation of the quality of the work of notified bodies could be desirable. Responsibility for such inspections lies primarily with the Member State which approved the bodies. Nevertheless, the Agency may directly conduct additional inspections on any notified body, case by case. In such cases, it will have no power over the body inspected, but will report to the Commission, which can then refer the matter to the committee of representatives of the Member States provided for in the Interoperability Directives.

Article 14

Constant monitoring of progress with interoperability in the field is indispensable. The Agency will perform this task and present a report every two years.

Article 15

To keep the Union's transport policies consistent, it is important to make sure that, from the technical point of view, the infrastructure projects receiving Community support comply with the rules and objectives on interoperability. At the request of the Commission, the Agency will act as technical evaluator of such projects.

Article 16

This article provides for development of a certification system for maintenance workshops. To limit empty journeys and cut maintenance costs, operators and users must be able to have maintenance operations carried out wherever their rolling stock is located. Often this will not be in the Member State where the rolling stock was registered. In order to achieve this, they must be sure that the maintenance will be carried out correctly from both the quality and safety points of view. A European certification system for maintenance workshops must therefore be put in place. The Agency will be responsible for carrying out the technical groundwork and making recommendations.

Article 17

Today vocational qualifications for train drivers are completely different from one Member State to another and depend largely on the companies themselves. To make progress towards interoperability and allow free movement of workers in this industry, common, recognised training modules must gradually be defined. This key task of taking stock of, analysing and aligning the training systems and diplomas will be performed by the Agency, in cooperation with the social partners. The Agency must draw up, with all concerned, a system for accreditation of training institutes and drivers' diplomas so that they are recognised throughout the Community. It will make recommendations on this subject. As called for by the European Parliament [9], the Agency will also promote exchanges of staff, particularly of drivers, between Member States.

[9] European Parliament legislative resolution on the proposal for a European Parliament and Council directive on the interoperability of the trans-European conventional rail system (COM(1999) 617 - C5-0301/1999 - 1999/0252(COD)).

Article 18

If various operators are to cross national frontiers in an open network, a common system for registration of rolling stock will be needed to enable national authorities and infrastructure managers to check the conformity of the rolling stock and to retrieve information on it (owner, when it was brought into service and by whom, technical data, maintenance record, etc.).

This system need not necessarily be centralised, but a common format combined with interconnection of the databases must allow easy identification of the rolling stock and consultation of information about it.

The Agency will draw up a standard format for the registration of rolling stock. It will make a recommendation to the Commission, which will adopt a decision, as provided for in Article 14 of Directive 96/48/EC and in Article 14 of Directive 2001/16/EC.

Article 19

On open markets documents certifying the conformity of the rolling stock should be accessible to all concerned directly, easily and transparently, while keeping commercial data and intellectual property confidential. This is particularly important for the national authorities which, as the need arises, must be able to check that rolling stock moving around their territory complies.

For this reason, the Agency will be responsible for keeping a public list of all the relevant documents. In order to achieve this, it will form a network with the bodies issuing the documents in question and with the competent authorities in the Member States.

Chapter 4: Studies and promotion of innovation

Article 20

This article stipulates that the Agency can have studies carried out whenever necessary for its work.

Article 21

This article will allow the Agency to promote innovation in the fields of railway safety and interoperability, particularly use of new technologies.

Chapter 5: Internal structure and operation

Article 22

This article stipulates that the Agency will be a Community body with the broadest legal personality in every Member State. Its location will have to be decided by the competent authorities, at the latest six months after the adoption of this regulation, on a proposal from the Commission. The Agency will be represented by its Executive Director.

Article 23

This provision stipulates that, like the European Community, the Agency will also benefit from the same privileges and immunities as set out in the Protocol on the Privileges and Immunities of the European Communities.

Article 24

The Staff Regulations applicable to Officials of the European Communities will apply to the Agency's staff. Only a small number of staff will be seconded from the Community institutions. Most of the personnel will be recruited on a temporary basis in the light of the expertise and experience required. A steady flow of know-how must be ensured between the Agency, the national administrations and the railway industry, in order to have experts who are abreast of the latest technological developments. For this reason, the proposal is to set a maximum limit of five years for the contracts for the Agency's staff, with the exception of the Executive Director (see Article 26).

Article 25

This article establishes the functions and powers of the Executive Director, who must accept no instructions from a government or any other body. However, the Executive Director must comply with all instructions or requests for assistance from the Commission. The Executive Director will also be responsible for management of the Agency and, in this capacity, will prepare and implement its budget and work programme and take charge of all staff issues.

Article 26

This article lays down rules on appointments within the Agency.

Article 27

To allow direct democratic control and budgetary powers, the European Parliament may ask for a hearing with the Executive Director of the Agency on submission of the annual report on the Agency's activities or at any other time.

Article 28

Article 28 lays down the powers of the administrative board. It will appoint the Executive Director and exercise decision-making powers over adoption of the Agency's rules of procedure, budget, work programme and annual report. It must also ensure that the Agency works with the necessary transparency and neutrality.

Article 29

This article specifies that the administrative board will consist of six representatives of the Member States designated by the Council, six representatives of the Commission and three independent members chosen for their recognised expertise in the sector by the Commission.

On the one hand the membership of the administrative board reflects the principle of separation between the executive and the legislator. The European Parliament must remain independent so that it can exercise its democratic control functions and therefore cannot be involved in the decisions of the administrative board of an Agency forming part of the executive which it has to control. At the same time, the membership of the board also reflects the principle of the parity of the executive bodies at Community level.

To enable the administrative board to perform its tasks efficiently and take full responsibility for them, the number of members must be limited.

Article 30

This article stipulates that the administrative board will elect a Chairperson and a Deputy Chairperson from among its members and sets their terms of office at three years, which may be renewed once.

Article 31

This article provides for ordinary and extraordinary meetings of the administrative board. In particular, it states that these meetings must be attended by the Executive Director of the Agency.

Article 32

The administrative board will take decisions by a two-thirds majority of its members, each of whom will have one vote, with the exception of the three independent experts who will not be entitled to vote.

Article 33

This article lays down the conditions under which Agency staff may conduct inspections in the Member States in order to fulfil the tasks entrusted to the Agency.

Article 34

The regime of contractual and non-contractual liability of the Agency corresponds to the regime applicable to the Community by virtue of Article 288 of the Treaty.

Article 35

The Agency will adopt as working languages the languages most widely used in the railway industry. They match the working languages currently used for the work on interoperability in particular. For efficiency reasons, it is proposed that the same working languages should therefore be retained for the Agency's in-house work.

Article 36

This article stipulates that the Agency will be open to participation by European countries which have entered into agreements with the European Community whereby they have adopted and are applying the Community law in the field covered by this regulation.

Article 37

This article stipulates that the Agency will apply Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents.

Chapter 6: Financial provisions

Article 38

The Agency's budget will be financed mainly by a contribution from the Community. Services which it provides (such as publications, training or others) may be paid for in the form of fees. Another possibility is a contribution from non-EU countries participating in the Agency's work as provided for by Article 36.

The Agency requires a sufficient budget allocation to recruit its personnel, as described above, to carry out its tasks and to function smoothly and efficiently.

The Executive-Director will establish a preliminary draft budget to be adopted by the administrative board and then forwarded to the Commission, which, in turn, will process it in accordance with standard budgetary procedures.

Article 39

This article specifies that the Executive Director will be responsible for implementation of the budget. Financial control will be ensured by the Financial Controller of the Commission. The Court of Auditors will examine the Agency's accounts and publish an annual report. The European Parliament, acting on a recommendation from the administrative board, will give a discharge to the Executive Director of the Agency in respect of implementation of the budget.

Article 40

This article specifies that, to help the Agency to prepare and implement the budget, a Financial Regulation will be adopted by the administrative board following the agreement of the Commission and the endorsement of the Court of Auditors.

Article 41

All the Community provisions in force to combat fraud will apply to the Agency and to its employees and any contractors.

Chapter 7: General and final provisions

Article 42

This article provides for the Agency's activities to be phased in over two years.

Article 43

This article stipulates that within five years from the date when the Agency starts up its activities, the Commission will carry out an independent evaluation on implementation of this regulation.

Article 44

This article sets the date when the regulation will enter into force.

6. Final considerations

A financial statement is attached to this proposal. No impact assessment form has been attached since the proposal does not affect businesses.

2002/0024 (COD)

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a European Railway Agency

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 71(1) thereof,

Having regard to the proposal from the Commission [10] [11],

[10]

[11] OJ C , , p. .

Having regard to the opinion of the Economic and Social Committee [12],

[12] OJ C , , p. .

Having regard to the opinion of the Committee of the Regions [13],

[13] OJ C , , p. .

Acting in accordance with the procedure laid down in Article 251 of the Treaty [14],

[14] OJ C , , p. .

Whereas:

(1) The progressive establishment of a European railway area without frontiers requires Community action in the field of the technical regulations applicable to railways with regard to both the technical aspects and the safety aspects, the two being inextricably linked.

(2) Directive 91/440/EEC on the development of the Community's railways, as amended by Directive 2001/12/EC of the European Parliament and of the Council [15], provides for opening up rights of access to the infrastructure to any licensed Community railway undertakings which wish to operate international goods services.

[15] OJ L 75, 15.3.2001, p. 1.

(3) Council Directive 95/18/EC on the licensing of railway undertakings [16], as amended by Directive 2001/13/EC of the European Parliament and of the Council [17], stipulates that all railway undertakings must hold a licence and that a licence issued in a Member State shall be valid throughout the territory of the Community.

[16] OJ L 143, 27.6.1995, p. 70.

[17] OJ L 75, 15.3.2001, p. 26.

(4) 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 establishes a new framework with the aim of creating a European railway area without frontiers.

(5) The technical and operational differences between the railway systems of the Member States have compartmentalised the national rail markets and prevented dynamic development of this sector on a European scale. Council Directive 96/48/EC of 23 July 1996 on the interoperability of the trans-European high-speed rail system [18] and Directive 2001/16/EC on the interoperability of the trans-European conventional rail system [19] defined essential requirements and established a mechanism for defining mandatory technical specifications for interoperability.

[18] OJ L 235, 17.9.1996, p. 6.

[19] OJ L 110, 20.4.2001, p. 1.

(6) Simultaneous pursuit of the goals of safety and interoperability requires substantial technical work which must be led by a specialised body. That is why it is necessary to create, within the existing institutional framework and with respect for the balance of power in the Community, a European Agency responsible for railway safety and interoperability. Creation of such an Agency provides a means of considering the safety and interoperability targets for the European rail network jointly and with a high level of expertise and in this way contributing to revitalising the railways and to the general objectives of the common transport policy.

(7) Directive .../.../EC of the European Parliament and of the Council of ... [on railway safety] [20] provides for the development of common safety indicators, common safety targets and common safety methods. Development of these tools requires independent technical expertise.

[20] OJ L...

(8) In order to facilitate the procedures for issuing safety certificates to railway undertakings, and with a view to mutual recognition of these certificates in the long term, it is essential to implement a progressive approach to mutual recognition of as many elements thereof as possible.

(9) Directive .../.../EC of the European Parliament and of the Council of ... [on railway safety] [21] provides for examination of national safety measures from the point of view of interoperability. To this end, an opinion based on independent and neutral expertise is essential.

[21] OJ L...

(10) In the field of safety, it is important to ensure the greatest possible transparency and an effective flow of information. An analysis of performances, based on common indicators and linking all players in the sector, does not yet exist and such a tool should be introduced. In the case of the statistical aspects, close collaboration with Eurostat is necessary.

(11) The national railway safety organisations, regulators and other national authorities must be able to request an independent technical opinion when they require information concerning several Member States.

(12) Rolling stock maintenance is an important part of the safety system. There is no genuine European market for the maintenance of rail equipment due to the lack of a system for certification of maintenance workshops. This situation adds to the costs for the sector and results in journeys without loads. A European certification system for maintenance workshops should therefore gradually be developed.

(13) Directive 2001/16/EC stipulates that a first group of technical specifications for interoperability must be drawn up not later than 20 April 2004. The Commission has given a mandate to carry out this work to the European Association for Railway Interoperability (AEIF), which brings together the manufacturers of railway equipment and the infrastructure managers and operators. Steps must be taken to preserve the experience built up by professionals from the industry in the context of the AEIF. The continuity of the work and the development of the TSIs over time require a permanent technical framework.

(14) The interoperability of the trans-European network must be enhanced and the new investment projects chosen for support by the Community must be in line with the objective of interoperability set in Decision No 1692/96/EC of the European Parliament and of the Council of 23 July 1996 on Community guidelines for the development of the trans-European transport network [22].

[22] OJ L 228, 9.9.1996, p. 1. Decision amended by Decision No 1346/2001/EC (OJ L 185, 6.7.2001, p. 1).

(15) The vocational qualifications required for train drivers are a major factor in both safety and interoperability in Europe. They are also a precondition for the free movement of workers in the railway industry. This question must be tackled with respect for the existing framework for social dialogue. The Agency must provide the technical support necessary in order to take account of this aspect at European level.

(16) Registration is first and foremost an act of recognition of the capability of rolling stock to operate under specified conditions. The registration of equipment must be transparent and non-discriminatory and falls within the competence of the public authorities. The Agency must provide technical support in order to establish a system for registration of rolling stock.

(17) In order to ensure the greatest possible transparency and equal access for all parties to relevant information, the documents envisaged for the interoperability process must be accessible to the public. The same applies to licences and safety certificates. The Agency must provide an efficient means of exchanging this information.

(18) Promotion of innovation in the field of railway safety and interoperability, particularly use of new technologies, is an important task which the Agency must encourage.

(19) In order to perform its tasks properly, the Agency must have legal personality and an autonomous budget funded mainly through a contribution by the Community. In order to ensure the Agency's independence in its daily management and in the opinions and recommendations which it issues, the Executive Director should have full responsibility and the Agency's personnel should be independent.

(20) The membership of the Agency's administrative board must reflect the balance between the two branches of the Community's executive and safeguard the principle of the executive's responsibility before the European Parliament. Based on the principles proposed in the White Paper on European governance [23], the Commission and the Member States must therefore be equally represented on an administrative board with the powers necessary to draw up the budget, verify its implementation, adopt appropriate financial rules, set up transparent working procedures for the Agency's decisions and appoint the Executive Director. In order to guarantee the transparency of the administrative board's decisions, representatives of the sectors concerned must participate in the deliberations, but without the right to vote, which is reserved for the representatives of public authorities who must answer to the democratic control authorities. These independent members must be designated by the Commission on the basis of their merit and experience in the railway industry and not as representatives of any particular trade associations.

[23] COM (2001) 428.

(21) The Agency's work must be transparent and its management must be subject to all the existing provisions concerning sound management and combating fraud. The effective control of the European Parliament must be ensured and, to this end, the European Parliament must have the possibility of a hearing with the Executive Director of the Agency.

(22) Since the objectives of the action proposed, namely to establish a specialised body to formulate common solutions on matters concerning railway safety and interoperability, cannot be sufficiently achieved by the Member States and, by reason of the joint nature of the work to be done, can therefore be better achieved by the Community, the Community may take action, in accordance with the subsidiarity principle enshrined in Article 5 of the Treaty. In accordance with the proportionality principle enshrined in the same article, this regulation does not go beyond what is necessary to achieve these objectives,

HAVE ADOPTED THIS REGULATION:

Chapter 1: Principles

Article 1

Establishment and objectives of the Agency

1. This Regulation establishes a European Railway Agency, hereinafter referred to as "the Agency".

2. The objective of the Agency shall be to contribute, on technical matters, to implementation of the Community legislation aiming at enhancing the level of interoperability of railway systems and at developing a common approach to safety on the European railway system, in order to contribute to creating a European railway area without frontiers and guaranteeing a high level of safety.

3. In pursuing these objectives, the Agency shall take full account of the process of enlargement of the European Union and of the specific constraints relating to rail links with third countries.

Article 2

Type of acts of the Agency

The Agency may adopt:

(a) recommendations addressed to the Commission concerning the application of Articles 6, 7, 12, 14, 16, 17 and 18;

(b) opinions issued to the Commission or to the authorities concerned in the Member States pursuant to Articles 8, 10, 13 and 15.

Article 3

Participation of professionals from the sector

1. For drawing up the recommendations provided for in Articles 6, 7, 12, 14, 16, 17 and 18, the Agency shall take as a basis the expertise built up by professionals from the sectors, in particular the experience gained by the European Association for Railway Interoperability (AEIF).

2. To this end, following adoption of the annual work programme, the Agency shall agree on the composition of the working parties with the professional organisations from the sector, which shall put forward proposals to the Agency for that purpose. The Agency shall ensure that these working parties are representative and work transparently.

3. The working parties shall be chaired by a representative of the Agency.

Article 4

Consultation of the social partners

Whenever the work provided for in Articles 6, 12 and 17 has a direct impact on the social environment or working conditions of workers in the industry the Agency shall consult the social partners within the framework of the social dialogue committee.

These consultations shall be held before the Agency submits its recommendations to the Commission. The opinions expressed by the social dialogue committee shall be forwarded by the Agency to the Commission and by the Commission to the committee referred to in Article 21 of Directive 2001/16/EC.

Article 5

Consultation of users

Whenever the work provided for in Articles 6 and 12 has a direct impact on customers the Agency shall consult the organisations representing rail freight users and customers. The list of organisations to be consulted shall be drawn up by the committee referred to in Article 21 of Directive 2001/16/EC.

These consultations shall be held before the Agency submits its proposals to the Commission. The opinions expressed by the organisations concerned shall be forwarded by the Agency to the Commission and by the Commission to the committee referred to in Article 21 of Directive 2001/16/EC.

Chapter 2: Safety

Article 6

Technical support

1. The Agency shall recommend to the Commission the common safety targets and the common safety methods provided for in Article 5 of Directive 200./../EC [on railway safety].

2. The Agency shall recommend, at the request of the Commission or of the committee referred to in Article 21 of Directive 200./../EC [on railway safety] or on its own initiative, other measures in the field of safety.

3. For the transition period preceding adoption of the common safety targets (CSTs), of the common safety methods (CSMs) and of the technical specifications for interoperability (TSIs), as well as for matters concerning equipment and infrastructure not covered by the TSIs, the Agency may make any appropriate recommendation to the Commission. The Agency shall ensure consistency between these recommendations and the TSIs already existing or being drawn up.

4. The Agency shall present a cost-benefit analysis in support of the recommendations which it submits pursuant to this Article.

5. The Agency shall organise and facilitate cooperation between the national safety authorities and the inspection bodies defined by Directive 200./../EC [on railway safety].

Article 7

Safety certificates

With a view to application of Article 14 of the Directive on railway safety concerning the harmonisation of safety certificates, the Agency shall draft and recommend a harmonised format for safety certificates, including an electronic version, and a harmonised format for applications for safety certificates, including the list of the essential details to be provided.

Article 8

National safety measures

1. At the request of the Commission, the Agency shall carry out a technical examination of the new national safety measures submitted to the Commission in accordance with Article 8 of Directive 200./../EC [on railway safety].

2. The Agency shall examine the compatibility of the abovementioned measures with the common safety targets (CSTs) and common safety methods (CSMs) defined by Directive 200./../EC [on railway safety] and with the technical specifications for interoperability (TSIs) in force.

3. If, after having taken account of the reasons given by the Member State, the Agency considers that any of these measures is incompatible with the rules mentioned in paragraph 2, it shall submit an opinion to the Commission within two months of transmission of the rules to the Agency by the Commission.

Article 9

Monitoring of safety performance

1. The Agency shall establish a network with the national authorities responsible for safety and the national authorities responsible for the inspections provided for by Directive../../EC [on railway safety] in order to define the content of the common indicators listed in Annex 1 to Directive .../.../EC of the European Parliament and of the Council of ...[on railway safety] [24] and to collect all the data available on railway safety.

[24] OJ L...

2. On the basis of the safety indicators, national reports on safety and accidents and its own information, every two years the Agency shall submit a report on safety performance, which shall be made public. The first such report shall be published during the Agency's third year in operation.

3. The Agency shall draw on the data collected by Eurostat and shall cooperate with Eurostat to avoid any duplication of work and to ensure methodological consistency between the railway safety indicators and the indicators used in other modes of transport.

Article 10

Technical opinions

1. The national regulatory bodies referred to in Article 30 of Directive 2001/14/EC may request a technical opinion from the Agency concerning the safety-related aspects of matters drawn to their attention.

2. The committees provided for in Article 35 of Directive 2001/14/EC and Article 11a of Directive 91/440/EEC, as last amended, may request a technical opinion from the Agency concerning safety-related aspects within their respective areas of competence.

3. The Agency shall give its opinion within two months. This opinion shall be made public by the Agency in a version from which all data concerning any trade or industrial secret have been expurgated.

Article 11

Public register of documents

1. The Agency shall be responsible for keeping a public list of the following documents:

(a) the licences issued in accordance with Directive 95/18/EC;

(b) the safety certificates issued in accordance with Directive 200./../EC [on railway safety];

(c) the inspection reports forwarded to the Agency in accordance with Article 23 of Directive 200./../EC [on railway safety];

(d) the national provisions notified to the Commission in accordance with Article 8 of Directive 200./../EC [on railway safety].

2. The national authorities responsible for issuing the documents referred to in paragraph 1 shall notify the Agency within one month of each individual decision to issue, refuse or withdraw them. The Agency may ask to inspect the files justifying the issue, refusal or withdrawal of one of these documents. In this case, the authorities concerned shall send the file to the Agency within fifteen working days.

3. The Agency may add to this public data base any document or link relevant to the objectives of this Regulation.

Chapter 3: Interoperability

Article 12

Technical support provided by the Agency

The Agency shall contribute to the development and implementation of rail interoperability in accordance with the principles and definitions laid down in Directives 96/48/EC and 2001/16/EC. To this end, the Agency shall:

(a) carry out, on a mandate from the Commission, the work on drafting the TSIs and forward the draft TSIs to the Commission;

(b) ensure that the TSIs are adapted to technical progress and market trends and to the social requirements and propose to the Commission the amendments to the TSIs which it considers necessary;

(c) ensure coordination between the development and updating of the TSIs on the one hand and the development of the European standards which prove necessary for interoperability on the other and maintain the relevant contacts with the European standardisation bodies;

(d) organise and facilitate the cooperation of notified bodies.

Article 13

Inspection and control of notified bodies

Without prejudice to the responsibility of Member States for the notified bodies which they designate, the Agency may, at the request of the Commission or on its own initiative, inspect the quality of the work of notified bodies. It shall submit an opinion to the Commission where appropriate.

Article 14

Monitoring the level of interoperability

1. The Agency shall recommend, at the request of the Commission, procedures for implementing interoperability by facilitating coordination between operators and between infrastructure managers, in particular to organise systems migration.

2. The Agency shall monitor progress with the interoperability of the railway systems. Every two years it shall present and publish a report on progress with interoperability. The first such report shall be published during the Agency's second year in operation.

Article 15

Interoperability of the trans-European network

At the request of the Commission, the Agency shall examine, from the point of view of interoperability, any infrastructure project for which Community support is requested. The Agency shall give an opinion within one month.

Article 16

Certification of maintenance workshops

The Agency shall develop a European system for certification of maintenance workshops for rolling stock and shall make recommendations with a view to implementation of such a system.

Article 17

Vocational qualifications

1. The Agency shall set out the essential qualifications required in order to drive trains as well as the training systems. It shall distinguish between the general qualifications required for each major type of rolling stock and the qualifications specific to each line and each piece of equipment.

2. For the general qualifications, the Agency shall compile, by major type of equipment, the minimum qualifications and training required for drivers in order to ensure safe operation.

3. The Agency shall make recommendations with a view to putting in place a system for accreditation of training institutes and of the diplomas which they issue.

4. The Agency shall promote and support exchanges of drivers and trainers between railway companies from different Member States.

Article 18

Registration of rolling stock

The Agency shall draw up and recommend to the Commission a standard format for the registration of rolling stock in accordance with Article 14 of Directive 96/48/EC and Article 14 of Directive 2001/16/EC.

Article 19

Register of documents on interoperability

1. The Agency shall keep a public list of the following documents provided for by Directives 2001/16/EC and 96/48/EC:

(a) the declarations of verification of subsystems;

(b) the declarations of conformity of constituents;

(c) the authorisations for putting into service, including the corresponding registration numbers;

(d) the registers of infrastructure and rolling stock.

2. The bodies concerned shall submit these documents to the Agency, which shall determine the practical procedures for submitting them.

3. The Agency shall set up an electronic database for these documents. This database shall be accessible to the public through a website.

Chapter 4: Studies and promotion of innovation

Article 20

Studies

Where required for implementation of the tasks set by this Regulation, the Agency shall order studies, financed from its own budget.

Article 21

Promotion of innovation

The Commission may entrust the Agency with the task of promoting innovations aimed at improving railway interoperability and safety, particularly the use of new information technologies and tracking and tracing systems.

Chapter 5: Internal structure and operation

Article 22

Legal status, location

1. The Agency shall be a body of the Community. It shall have legal personality.

2. The location of the Agency shall be decided by the competent authorities, at the latest six months after the adoption of this Regulation, on a proposal from the Commission.

3. In each Member State, the Agency shall enjoy the most extensive legal capacity accorded to legal persons under their national laws. In particular, the Agency shall have powers to acquire or to transfer movable and immovable property and to be a party to legal proceedings.

4. The Agency shall be represented by its Executive Director.

Article 23

Privileges and immunities

The Protocol on the Privileges and Immunities of the European Communities shall apply to the Agency and its staff.

Article 24

Staff

1. The Agency's staff shall be subject to the rules and regulations applicable to the officials and other servants of the European Communities. The administrative board, in agreement with the Commission, shall adopt the necessary implementing procedures.

2. Without prejudice to Article 26, the powers conferred on the appointing authority and on the contracting authority by the Staff Regulations of Officials of the European Communities, as well as by the Conditions of Employment of Other Servants of the European Communities, shall be exercised by the Agency in respect of its own staff.

3. Without prejudice to Article 26(1), the Agency's staff shall consist of temporary employees recruited by the Agency for a maximum of five years. The temporary staff shall consist of:

- staff recruited from among professionals from the sector on the basis of their qualifications and experience in the field of railway safety and interoperability;

- officials assigned or seconded by the Commission to carry out management duties;

- other servants, as defined in the Conditions of Employment of Other Servants of the European Communities, to carry out implementing or secretarial tasks.

4. The experts who participate in the working parties organised by the Agency shall not belong to the Agency's staff. Their travel and subsistence expenses shall be met by the Agency, based on rules and scales adopted by the administrative board.

Article 25

Functions and powers of the Executive Director

1. The Agency shall be managed by its Executive Director, who shall be responsible for the day-to-day management of the Agency and shall act completely independently. The Executive Director shall neither request nor accept any instruction from any government or from any other body or company.

2. The Executive Director shall:

(a) prepare the work programme and, after agreement by the Commission, submit it to the administrative board;

(b) make the necessary arrangements for implementation of the work programme and comply with all requests for assistance from the Commission;

(c) take the necessary steps, in particular the adoption of internal administrative instructions and the publication of orders, to ensure the operation of the Agency in accordance with this Regulation;

(d) establish an effective monitoring system in order to compare the Agency's results with its operational objectives and, on this basis, prepare each year a draft general report and submit it to the administrative board;

(e) establish a regular assessment system corresponding to recognised professional standards;

(f) exercise the powers laid down in Article 23(2) in respect of the staff;

(g) draw up estimates of the revenue and expenditure of the Agency pursuant to Article 38 and implement the budget pursuant to Article 39.

3. The Executive Director may be assisted by one or more heads of unit. The Executive Director may not delegate the powers conferred on him.

Article 26

Appointments within the Agency

1. The Executive Director of the Agency shall be appointed by the administrative board on a proposal by the Commission. The administrative board, acting on a proposal by the Commission, shall have the power to dismiss the Executive Director. The term of office of the Executive Director shall be five years. This term of office may be extended once for a maximum of a further two years.

2. The Executive Director of the Agency shall appoint the other members of the Agency's staff in accordance with the principles laid down in Article 23 of this Regulation.

Article 27

Hearing of the Executive Director before the European Parliament

Each year the Executive Director shall submit to the European Parliament the general report on the Agency's activities. The European Parliament may also ask at any time for a hearing with the Executive Director on any subject related to the Agency's activities.

Article 28

Establishment and powers of the administrative board

1. The Agency shall have an administrative board.

2. The administrative board shall:

(a) appoint the Executive Director in accordance with Article 26;

(b) before 31 March each year, adopt the general report of the Agency for the previous year and submit it to the Commission, the Council and the European Parliament;

(c) before 30 October each year, adopt the Agency's work programme for the next year and submit it to the Commission, the Council and the European Parliament;

(d) adopt the Agency's final budget before the beginning of the financial year and adjust it, if necessary, to the Community contribution and the Agency's other revenue;

(e) exercise its functions in relation to the Agency's budget, pursuant to the provisions of Chapter 6;

(f) exercise disciplinary authority over the Executive Director and ensure that the Agency operates with the necessary transparency and neutrality.

Article 29

Composition of the administrative board

1. The administrative board shall be made up of:

- six representatives of the Council;

- six representatives of the Commission; and

- three independent members, with no vote, appointed by the Commission for their recognised expertise in the sector.

2. The Council and the Commission shall designate their representatives, plus one alternate for each of them, who may represent them and be entitled to vote in their absence. The term of office of the members of the administrative board shall be five years. This term of office may be renewed once.

Article 30

Chair of the administrative board

1. The administrative board shall elect a Chairperson and a Deputy Chairperson from among its members. The Deputy Chairperson shall ex-officio replace the Chairperson in the event of the Chairperson being unable to attend to his/her duties.

2. The terms of office of the Chairperson and Deputy Chairperson shall be three years and shall expire when their membership of the administrative board ends. This term of office may be renewed once.

Article 31

Meetings

1. Meetings of the administrative board shall be convened by its Chairperson. The Executive Director of the Agency shall participate in the deliberations.

2. The administrative board shall meet at least twice a year. It shall also meet at the instance of the Chairperson, at the request of the Commission or at the request of the majority of its members.

Article 32

Voting

The administrative board shall take its decisions by a two-thirds majority of its members entitled to vote. Each member shall have one vote, with the exception of the three independent members and of the Executive Director, who shall not be entitled to vote.

Article 33

Inspections in the Member States

1. In order to fulfil the tasks entrusted to it by Articles 8, 9, 10, 13 and 15, the Agency may, at the request of the Commission, conduct inspections in the Member States. The national authorities in the Member States shall facilitate the work of the Agency's staff to ensure that the inspections proceed smoothly. The Agency officials shall be empowered:

(a) to examine files, data, reports and any other documents relevant to implementation of the Community legislation on railway interoperability and safety;

(b) to take copies of all or extracts from such files, data, reports and other documents;

(c) to ask for oral explanations on the spot;

(d) to have access to any premises, site or means of transport.

2. The Agency shall inform the Member State concerned of the planned inspection, the names of the delegated officials and the date on which the inspection is due to start. The Agency officials delegated to carry out these inspections shall exercise their powers on presentation of a decision from the Executive Director of the Agency specifying the subject-matter and purpose of their mission.

3. At the end of each inspection, and after having listened to the entities inspected, the Agency shall draw up a report and send it to the Commission and to the Member State concerned.

Article 34

Liability

1. The contractual liability of the Agency shall be governed by the law applicable to the contract in question.

2. The Court of Justice of the European Communities shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by the Agency.

3. In the case of non-contractual liability, the Agency shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its departments or by its staff in the course of performance of their duties.

4. The Court of Justice of the European Communities shall have jurisdiction in disputes relating to compensation for the damage referred to in paragraph 3.

5. The personal liability of its staff towards the Agency shall be governed by the provisions laid down in the Staff Regulations or Conditions of Employment applicable to them.

Article 35

Languages

1. The in-house working languages of the Agency shall be English, French and German. The Member States may address the Agency in the Community language of their choice.

2. The translation services required for the functioning of the Agency shall be provided by the Translation Centre for the Bodies of the Union.

Article 36

Participation by third countries

1. The Agency shall be open to participation by European countries which have concluded agreements with the European Community whereby the countries concerned have adopted and are applying the Community legislation in the field covered by this Regulation.

2. In accordance with the relevant provisions of the abovementioned agreements, arrangements shall be made which shall specify the detailed rules for participation by these countries in the work of the Agency, in particular the nature and extent of such participation. These arrangements shall include, inter alia, provisions on financial contributions and staff. They may provide for representation, without vote, on the administrative board.

Article 37

Transparency

Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents shall apply to the documents held by the Agency.

The administrative board shall adopt the practical measures for implementation of Regulation (EC) No 1049/2001.

Chapter 6: Financial provisions

Article 38

Budget

1. The revenue of the Agency shall consist of:

- a contribution from the Community;

- any contribution from third countries participating in the work of the Agency, as provided for by Article 36;

- charges for publications, training and any other services provided by the Agency.

2. The expenditure of the Agency shall include staff, administrative, infrastructure and operational expenses.

3. The Executive Director shall draw up an estimate of the revenue and expenditure of the Agency for the following financial year and shall submit it to the administrative board together with an establishment plan.

4. Revenue and expenditure shall be in balance.

5. The administrative board shall adopt, by 31 March at the latest, the draft budget for the following financial year and submit it to the Commission, which, on this basis, shall enter the corresponding estimates in the preliminary draft general budget of the European Communities, which it shall submit to the Council in accordance with Article 272 of the Treaty.

6. The administrative board shall adopt, by 15 January at the latest, the Agency's budget, adjusting it, where necessary, to the Community contribution decided by the budgetary authority.

Article 39

Implementation and control of the budget

1. The Executive Director shall implement the budget of the Agency.

2. Control of commitment and payment of all expenditure and control of the existence and receipt of all revenue of the Agency shall be carried out by the Financial Controller of the Commission.

3. By 31 March of each year at the latest, the Executive Director shall submit to the Commission, the administrative board and the Court of Auditors the detailed accounts of all revenue and expenditure from the previous financial year.

The Court of Auditors shall examine these accounts in accordance with Article 248 of the Treaty. It shall publish a report on the Agency's activities every year.

4. The European Parliament, acting on a recommendation from the administrative board, shall give a discharge to the Executive Director of the Agency in respect of the implementation of the budget.

Article 40

Financial Regulation

The administrative board, after receiving the agreement of the Commission and the endorsement of the Court of Auditors, shall adopt the Agency's Financial Regulation, which shall, in particular, specify the procedure to be used for drawing up and implementing the Agency's budget, in accordance with Article 142 of the Financial Regulation applicable to the general budget of the European Union.

Article 41

Combating fraud

1. For the purposes of combating fraud, corruption and other unlawful acts, the provisions of Regulation (EC) No 1073/1999 [25] of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) shall apply in full.

[25] OJ L 136, 31 May 1999.

2. The Agency shall accede to the Interinstitutional Agreement of 25 May 1999 concerning internal investigations by the European Anti-Fraud Office (OLAF) [26] and shall immediately adopt the necessary provisions applicable to all employees of the Agency.

[26] OJ L 136, 31 May 1999.

3. The decisions concerning funding and the implementing agreements and instruments resulting from them shall explicitly stipulate that the Court of Auditors and OLAF may, if necessary, carry out on-the-spot checks on the recipients of the Agency's funding.

Chapter 7: General and final provisions

Article 42

Start of the Agency's activities

The Agency shall be operational within 24 months of the entry into force of this Regulation.

Article 43

Evaluation

Within five years of the Agency taking up its duties, the Commission shall carry out an evaluation of implementation of this Regulation, the results obtained by the Agency and its working methods. This evaluation shall take account of the views of the representatives of the profession, of the social partners and of customers' organisations. The findings of the evaluation shall be made public. The Commission shall propose, if necessary, an amendment to this Regulation.

Article 44

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

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

LEGISLATIVE FINANCIAL STATEMENT

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1. BUDGET LINE(S) + HEADING(S)

A new budget heading B2-703 will be created under Title B2-7 "Transport".

This heading will include the appropriations for interoperability entered under headings B2-704 and B5-700 (contributions to the AEIF).

2. OVERALL FIGURES

2.1 Total allocation for action (Part B): Not applicable.

2.2 Period of application: From 2004 on.

2.3 Overall multiannual estimate of expenditure:

(a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

(EUR million to three decimal places)

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(b) Technical and administrative assistance and support expenditure (see point 6.1.2)

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Not applicable.

(c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4 Compatibility with financial programming and financial perspective

|X| Proposal is compatible with existing financial programming.

| | Proposal will entail reprogramming of the relevant heading in the financial perspective.

| | Proposal may require application of the provisions of the Interinstitutional Agreement.

2.5 Financial impact on revenue

| | Proposal has no financial implications (involves technical aspects regarding implementation of a measure).

|X| Proposal has financial impact - the effect on revenue is as follows:

Revenue could possibly be generated from participation by third countries or from publication of documents but cannot be quantified at this stage. It would be minor in relation to the budget of the Agency. For this reason all the costs are covered by a contribution from the Community.

(NB All details and observations relating to the method of calculating the effect on revenue should be shown in a separate annex.)

(EUR million to one decimal place)

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(Please specify each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line.)

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

EC Treaty: Article 71(1).

5. DESCRIPTION AND GROUNDS

5.1 Need for Community intervention [27]

[27] For further information, see separate explanatory note.

In the White Paper "European transport policy for 2010: time to decide" [28] the Commission announced that in 2001 it would be proposing a new package of measures, including the establishment of a Community structure for railway safety and interoperability.

[28] COM(2001)370, p. 31.

In 2001 the Commission ordered a study [29] on the externalisation of certain tasks performed by the Directorate-General for Energy and Transport. This focused in particular on the development of technical standards in the railway sector and concluded that although this was not one of the core tasks of the Commission it was nevertheless the responsibility of the public authorities and must be entrusted to a specialised agency.

[29] 3CE study.

The first reason for establishing the Agency is the need to take action at Community level on railway safety. The forms of action proposed are based on a draft directive on railway safety and on this proposal to set up an Agency. The directive on railway safety lays down the principles and framework for bringing the safety systems closer together and assigns the Agency the task of conducting analyses and technical drafting of the Community measures. In practice, the Community would not be able to take action in this field without the support of an independent technical body to supply it with high-quality expertise while ensuring neutrality vis-à-vis operators on the market and the national authorities.

In the past, railway safety was a purely national matter, in that the national markets were closed. However, as access to railway infrastructure from one Member State to another has gradually been opened up, a need has emerged to develop common approaches to safety for two reasons. First, to ensure high safety standards as the market is opened up to more and more operators. And then to allow efficient use of this access to infrastructure, without which incompatible national safety regulations would create new barriers to entry.

Another reason for establishing the Agency is the need to speed up the progress on interoperability and to provide stable, sufficient means for doing so. In particular, after the start-up phase and given the scale of the task to implement Directive 2001/16/EC on the interoperability of the conventional rail system, it is essential to have a permanent technical body with sufficient resources to steer and coordinate preparation of the technical specifications for interoperability in conjunction with the industry, operators and infrastructure managers and then to apply them.

Today, the task of implementing the Interoperability Directives (96/48/EC and 2001/16/EC) is based on individual mandates given to the European Association for Railway Interoperability (AEIF). This formula was appropriate to launch the process but now the time has come to move on to a more permanent solution bringing together a larger number of stakeholders. The principle of direct participation by the industry and operators in the process of drafting the technical specifications for interoperability will be maintained but the resources will be stepped up.

Finally, there is every justification to deal with interoperability and railway safety together since the two are inextricably linked. Safety is an essential requirement for the technical specifications for interoperability and must be taken into account directly when drafting them. Conversely, incompatible safety regulations could be a major obstacle to interoperability of rolling stock. In both cases the requirements formulated take the same form - technical specifications and European standards.

The measures proposed concern all European citizens since they will contribute to sustainable mobility policy. More specifically, they concern the railways' customers, whether industrial or individuals, since they will make this mode more competitive and guarantee high safety standards. Finally, they directly concern railway companies, railway infrastructure managers and makers of railway rolling stock.

For them approximation of the technical and safety standards should, in the long term, cut the cost of rolling stock and rolling stock maintenance, producing substantial improvements in the competitiveness of the European industry in the process. The European market in railway equipment is worth EUR 13 billion a year. However, because of technical differences from one country to another, there is not yet a full internal market in such equipment. By adding strong impetus to the progress on interoperability, the Agency will speed up the process and cut the cost of rolling stock. The industry (UNIFE) is in favour of the planned Agency, which it considers essential for completing the internal market in railway equipment.

In addition, greater standardisation of equipment, based on the specifications developed by the Agency, will make the European industry more competitive on the world market. European manufacturers account for 60% of world production and employ around 130 000 workers in Europe. This is therefore a very important industry for Europe's exports.

Finally, the Agency will provide a means of ensuring that the public budgets allocated to the railways (over EUR 35 billion a year), including the Community funds, are invested in projects compatible with the objectives of the common transport policy, particularly on safety and interoperability.

Improving spending of the Community funds for the railways

The Community spends approximately EUR 2 600 million a year on financing railway projects (TEN, Cohesion Fund, Structural Funds, ISPA, Research Programme, etc).

The Agency's annual budget is equivalent to less than 0.6% of this total and will allow far more efficient use of the Community resources by ensuring the interoperability of the projects funded.

5.2 Actions envisaged and budget intervention arrangements

The objective is to set up a Community Agency to take charge of the work on railway safety and interoperability. This Agency should be operation in 2005, after a year of installation and phasing in in 2004.

5.3 Methods of implementation

Not applicable.

6. FINANCIAL IMPACT

6.1 Total financial impact on Part B (over the entire programming period)

(The method of calculating the total amounts set out in the table below must be explained by the breakdown in Table 6.2.)

6.1.1 Financial intervention

Commitments (in EUR million to three decimal places)

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Not applicable.

6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period) [30]

[30] For further information, see separate explanatory note.

The Agency will be set up in three phases. The first six months (first half of 2004) will be spent on setting up the Agency, renting offices, recruiting the first group of staff, installing the equipment needed and establishing appropriate IT infrastructure for managing the databases.

In the second phase (second half of 2004) the Agency will take responsibility for the ongoing work on preparation of the TSIs and will set up the system for monitoring railway safety and progress with interoperability.

By the end of 2005 the Agency will be fully operational and will be performing all the tasks set in the Regulation.

Estimate of costs when the Agency is fully operational

(a) Human resources

The Agency's staff will be full-time personnel subject to the Staff Regulations applicable to Officials of the European Communities.

They will be recruited on temporary contracts to obtain experts who have proven experience in the sector and are abreast of the latest industrial and technological developments.

There are also plans to second a small number of Commission staff to the Agency to give it the administrative and legal experience necessary and ensure close cooperation.

The number of staff necessary is estimated at 98 [31] (see table below). This estimate is based on the experience acquired from the preliminary work on interoperability [32] and on comparison with other bodies (such as the European Aviation Safety Agency).

[31] By way of comparison, a permanent staff of 151 is planned for the European Aviation Safety Agency.

[32] The AEIF's permanent structure (15 persons) cost an estimated EUR 2 359 200 in 2001.

The total annual expenditure for full-time staff and their installation is estimated at EUR 10.584 million, based on an average Commission staff cost of EUR 0.108 million per year, including buildings and related administrative expenditure (postal charges, telecommunications, IT, etc.).

TABLE: Estimate of human resources - Breakdown by areas of activity and category (when the Agency is fully operational)

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(b) Equipment costs

The amount of moveable property to be acquired and the associated costs will be high during the first few years. Particular attention must be paid to the computer hardware needed for management of the databases and the website allowing public access to them.

The annual equipment costs, excluding information technology, are expected to total EUR 0.35 million in the first year (installation, furniture, etc.), EUR 0.3 million in the second year and EUR 0.1 million from the third year on.

For acquisition and installation of the central computer hardware [33], establishment of the databases and development of the Agency's website, a sum of EUR 0.7 million is planned for the first year and EUR 0.3 million for the second year (development phase). Thereafter Agency staff will take over management of the databases.

[33] Only the servers and other central hardware; PCs for staff are counted as staff costs.

(c) Operational costs

- Publication: For publication of the Agency's annual reports (annual report on the Agency's activities and reports on progress with interoperability and safety), a sum of EUR 0.2 million is planned from the second year on.

- Translation: To cut the costs and time taken for translation, the Agency's in-house work and documents for the Commission will be available in just one of the working languages. However, documents to and from the Member States will have to be translated. The cost of these translations will have to be adjusted in the light of experience. A sum of EUR 0.2 million is planned from the second year on (EUR 0.1 million for the first year).

- Communication, conferences and missions (excluding website): Establishment of the Agency will need time for all involved to get to know each other to allow close, constant cooperation between the Agency and the national bodies responsible for safety and standardisation. A sum of EUR 0.2 million a year is planned to cover these costs (EUR 0.1 million for the first year).

- Maintenance of the Agency's website: A service provider to take care of maintenance of the Agency's website will cost an estimated EUR 0.2 million a year from the second year on.

- Missions: Some of the tasks performed by the Agency will necessitate visits to the Member States. A sum of EUR 0.1 million for the first year and EUR 0.3 million for the subsequent years is planned to cover the resultant mission expenses.

(d) Financing of meetings of experts

The Agency will have to draw on the support of groups of experts from the Member States and the railway industry to prepare proposals for technical specifications for interoperability and common safety measures. It will therefore need to have direct control over the budget for these meetings and to be able to draw on it itself to ensure transparent, efficient use of these funds. The Agency will bear the experts' travel and subsistence expenses based on the rules and rates adopted by the administrative board.

At the moment the European Union co-funds the AEIF meetings of experts on interoperability, in the form of contributions granted to the AEIF under a cooperation agreement. The estimated cost of these meetings is EUR 19 600 per meeting (12 experts for 2 days, including travel and subsistence expenses).

From the second year on, the annual contribution to the AEIF will end and be replaced by an allocation of EUR 1.1 million to the Agency's budget.

A sum of EUR 0.6 million is planned for the groups of experts working on safety from the second year on.

For the first year, a total of EUR 0.35 million is planned for all the groups of experts.

(e) Studies

A budget of EUR 1 million per year is planned from the second year on to cover the necessary studies mentioned in Article 20.

Overviews of estimated costs:

(a) By type of activity (in 2006)

Commitment appropriations in EUR million (at current prices)

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(b) By type of expenditure

Commitment appropriations in EUR million (at current prices)

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The present financial assessment provides detailed information for the start up period until the year n+3. The adequacy of current and future funding will be evaluated through a review, which will take place during year n+3 in order to ensure that years n+4 and beyond are adequately financed.

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1. Impact on human resources

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7.2 Overall financial impact of human resources

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The amounts are total expenditure for twelve months.

7.3 Other administrative expenditure deriving from the action

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The amounts are total expenditure for 12 months.

1 Specify the type of committee and the group to which it belongs

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8. FOLLOW-UP AND EVALUATION

8.1 Follow-up arrangements

The Agency will be monitored on the basis of the annual report adopted by the administrative board of the Agency for the previous year and the work programme for the next year, both of which will be forwarded to the Member States, the Commission, the Council and the European Parliament.

8.2 Arrangements and schedule for evaluation

The Agency's performance will be subject to regular in-depth evaluations in accordance with Community practices and standards. The first evaluation will be made within five years of establishment of the Agency. The evaluation process and its conclusions will provide solid evidence and recommendations for a review of the basic Regulation and of practices within the Agency. The conclusions of the evaluation will be made public.

9. ANTI-FRAUD MEASURES

Each year the Executive Director will submit to the Commission, the administrative board and the Court of Auditors the detailed accounts of all revenue and expenditure from the previous financial year. In addition, the Commission's Internal Audit Service will assist in management of the Agency's financial operations by assessing risks, monitoring compliance by providing an independent opinion on the quality of management and control systems and making recommendations in order to improve the efficiency and the effectiveness of operations and to ensure economy in the use of the Agency's resources.

The Agency will adopt its Financial Regulation, after having received the agreement of the Commission and the Court of Auditors. The Agency will put in place an internal audit system similar to that introduced by the Commission in the framework of its own restructuring.

The staff subject to the Commission's Staff Regulations will cooperate with OLAF to combat fraud.

The Court of Auditors will examine the accounts in accordance with Article 248 of the Treaty and publish an annual report on the Agency's activities.