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Opinion of the Committee of the Regions on the Revised proposal for a Regulation of the European Parliament and of the Council on public passenger transport services by rail and by road

(2006/C 192/01)

THE COMMITTEE OF THE REGIONS,

HAVING REGARD TO the Revised proposal for a Regulation of the European Parliament and of the Council on public passenger transport services by rail and by road (COM(2005) 319 final) — 2000/0212 (COD);

HAVING REGARD TO the Council's decision of 27 September 2005, under the first paragraph of Article 265 and Article 71 of the Treaty establishing the European Community, to consult it on this matter;

HAVING REGARD TO the decision of its President of 23 March 2005 to instruct the Commission for Territorial Cohesion Policy to draw up an opinion on this issue;

HAVING REGARD TO Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as last amended by Regulation (EEC) No 1893/91;

HAVING REGARD TO the Proposal for a Regulation on action by Member States concerning public service requirements and the award of public service contracts in passenger transport by rail, road and inland waterway (COM(2000) 7 final, as amended by COM(2002) 107 final);

HAVING REGARD TO its opinion (CdR 292/2000 fin (1)) on the Proposal for a Regulation of the European Parliament and of the Council on action by Member States concerning public service requirements and the award of public service contracts in passenger transport by rail, road and inland waterway COM(2000) 7 final — 2000/0212 (COD);

HAVING REGARD TO the judgment of the Court of Justice of 24 July 2003 in Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH and the judgment of the Court of Justice of 11 January 2005 in Case C-26/03 Stadt Halle and RPL Recycling Park Lochau GmbH v Arbeitsgemeinschaft Thermische Restabfall- und Energiverwertungsanlage TREA Leuna;

HAVING REGARD TO the draft opinion on this issue (CdR 255/2005 rev. 1) adopted on 2 December 2005 by the Commission for Territorial Cohesion Policy (rapporteur: Mr Bernard Soulage, First vice-president of the Regional Council of Rhône-Alpes (FR/PES));

adopted the following opinion at its 63rd plenary session, held on 15 and 16 February 2006 (meeting of 16 February).

I.   General comments

The Committee of the Regions:

believes that the creation of a level playing field and the reduction in legal uncertainty will help to promote public transport;

thinks that harmonisation and clarification of competition conditions in the provision of public transport services are necessary in order to ensure greater transparency with regard to public service obligations and the remuneration of services provided.

1.   With respect to contractual arrangements for public service obligations:

2.   With respect to the organisation of services:

3.   With respect to public transport providers:

4.   With respect to the form and substance of the text:

II.   Recommendations

Amendments

Recommendation 1

Article 1(2)

Reason

As regards the scope of the regulation, the CoR regrets the modal approach adopted in the proposal, which underestimates the importance of promoting intermodality in integrated local transport policies. The CoR would like to see consideration given to intermodality issues in order to encourage authorities to award public service contracts based on multimodal transport systems (underground railway, trams, buses, funicular railway, inland waterways, parking services, car and bicycle hire, multimodal stations, information systems, etc.).

Recommendation 2

Article 2(j): Definitions

Reason

The CoR calls for a more precise definition of internal operator and of the rules governing the control exercised over an internal operator by the competent authority.

The initial recommendation is, in fact, in line with the precedent established by the judgment in the Stadt Halle case of 11 January 2005 (Case C-26/03), which, in paragraph 49, states that: ‘... the participation, even as a minority, of a private undertaking in the capital of a company in which the contracting party in question is also a participant excludes in any event the possibility of that contracting authority exercising over that company a control similar to that which it exercises over its own departments’.

The Stadt Halle ruling clearly means that participation by any private operator, irrespective of its level of involvement, in a local or regional public undertaking requires application of Community regulations in the area of public procurement, where red rape is extremely burdensome. In addition, it effectively calls into question the neutrality of ownership, as enshrined in Article 295 of the EC Treaty, and restricts the scope for action of public-private partnerships (PPP). The Stadt Halle judgment creates more problems for mixed-economy companies than it solves.

Therefore, the CoR asks the European legislative authorities not to accept that Community legislation be dictated by Community case law and to propose a maximum threshold below which the competent authority is considered to exercise control similar to that which it exercises over its own departments, in which case it would be exempt from the requirement for competitive tendering.

The purpose of the draft regulation is to create a regulated competitive market in the European Union. This cannot happen without functioning operators, whether they are public or private. The aid rules in the EC Treaty are intended to prevent state authorities from using public funds to distort competition in favour of certain businesses. However, they are not intended to force public enterprises out of the market. So that public-sector transport operators are able to prepare for the opening of the market, transitional provisions are needed. Otherwise, such operators will be at a disadvantage vis-à-vis private businesses due to ‘burdens’ associated with their public service obligation (such as standard wages and services at off-peak times and for certain population groups). Therefore, for a pre-defined transition period, public enterprises should be allowed to achieve competitiveness through private investment without this — during the transition period — automatically requiring a call for tenders. Otherwise public enterprises would be left with the choice between forced privatisation or doing without more efficient structures.

Recommendation 3

Article 2 (m): Definitions

Reason

It would be regrettable if legal uncertainty were to arise in this area because of diverging interpretations of the derogation in Article 5(6). To improve the definition of regional or long-distance transport services, the CoR proposes either making clear in the text that Member States will themselves have to specify which services fall within the scope of Article 2(m), or choosing a definition which uses terms that have been tested in law. In the latter case, the CoR proposes that the definition based on geographical needs (‘conurbation’, ‘urban centre’, ‘suburbs’) be replaced by one that is service-based and which, inter alia, would be consistent with the ‘railway packages’. Directives 2001/13/EC (Article 1(2)(b)) and 2001/14/EC (Article 1(3)(b)) refer, in this connection, to ‘urban or suburban rail passenger services’. A similar service-based classification has been used since 1991 in Regulation 1191/69 (Article 1(1), as amended by Regulation No 1893/91).

Recommendation 4

With respect to projects where the public procurement directives are applicable, the Committee of the Regions:

Recommendation 5

Article 4(6)

Reason

The derogation in Article 4(6) concerning the depreciation of assets must not be such as to constrain competition by extending the duration of contracts without economic justification.

Recommendation 6

Article 4 (add a new paragraph)

CoR amendment

Reason

The CoR proposes that work and operating concessions be made the subject of a separate article, as the duration of the operation is a key factor for the economic balance of the project. In such cases, provision must be made for a derogation from the maximum duration of 22.5 years provided for in the proposed regulation.

Recommendation 7

Article 5(4)

Reason

The CoR proposes that a competent authority be expressly prohibited from making a direct award of several contracts to the same service provider where the total combined value of the contracts exceeds the threshold set in Article 5(4). This article must not be used to circumvent the requirement to organise an invitation to tender, but rather to avoid the transaction costs involved in an invitation to tender where the service which is contracted out is of a ‘small scale’ or where the competent authority offsets the competitive pressures associated with an invitation to tender by making a comparison between different ‘small operators’ active within its territory. In addition, the CoR suggests that each Member State fix the threshold value in line with national economic conditions.

Recommendation 8

Articles 8(2) and 8(3)

Reason

As they stand at present, these two paragraphs will cause major difficulties for competent authorities wishing to entrust the operation of their transport network to a single operator. Within four or five years, they would be required to establish a public service contract and organise competitive tendering.

Recommendation 9

Article 8(5)

Reason

Contracts established before the entry into force of the regulation and expiring before the end of the transition period for application of the regulation should be continued until they expire so as to avoid legal proceedings relating to compensation for losses.

Recommendation 10

Article 8(6) (delete)

Reason

The article is particularly ambiguous and could lead to discrimination and disputes.

Brussels, 16 February 2006

The President

of the Committee of the Regions

Michel DELEBARRE

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(1)OJ C 253 of 12.9.2001, p. 9.

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