COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the Treaty concerning the Common position adopted by the Council with a view to the adoption of a Directive of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development of the Community's railways

EXPLANATORY MEMORANDUM

1. Historical background of the proposal

On 22nd July 1998 the Commission adopted a proposal [1] for a Council directive amending Directive 91/440/EEC on the development of the Community's railways [2].

[1] COM(1998) 480 final 22.7.1998.

[2] Council Directive 91/440/EEC of 29 July 1991; OJ L 237, 24.8.1991, p. 25.

The purpose of the proposal was to clarify the separation of accounts between infrastructure management and transport services, to introduce the separation of accounts between passenger and freight transport services, and to ensure that a regulatory function that determines access to railway infrastructure is carried out by bodies or undertakings that do not provide rail transport services themselves. The proposal also clarified the role of the State in providing railway infrastructure.

The European Parliament approved the Commission's proposal at its plenary session on 15th September 1999.

The Economic and Social Committee and the Committee of the Regions adopted their opinions on 26th May 1999 [3] and 17th November 1999 [4] respectively.

[3] OJ C 209, 22.7.1999, p. 22.

[4] OJ C 57, 29.2.2000, p. 40.

On 25th November 1999 the Commission adopted an amended proposal following the first reading of the European Parliament.

At its session on 9th and 10th December 1999 the Council reached a political agreement on the proposal in view of the adoption of a Common Position.

At its session on 28th March 2000 the Council adopted the Common Position.

2. Background of the Commission's proposals

Note: The proposal dealt with in this Communication forms part of the so-called "infrastructure package" consisting of a proposal [5] for a Council directive amending Directive 91/440/EEC on the development of the Community's railways [6] this Communication deals with, a Council directive amending Directive 95/18/EC on the licensing of railway undertakings [7] and the proposal for a Council Directive on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification.

[5] COM(1998) 480 final 22.7.1998.

[6] Council Directive 91/440/EEC of 29 July 1991; OJ L 237, 24.8.1991, p. 25.

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

The Commission originally only intended to clarify the legal situation as regards the separation between activities relating to infrastructure management on those activities relating to transport operations. However, as far as market opening is concerned the Commission has made a proposal in 1995 [8].

[8] Proposal for a Council Directive amending Directive 91/440/EEC on the development, of the Communitys railways, COM (95)337 final.

3. Modifications introduced into the text in relation to the amended proposal of the Commission

In its first reading the European Parliament made clear that it wanted to introduce another step in the creation of the single market for rail transport services into the Directive. After intensive discussion in the Council the idea of the definition of a network for international freight services emerged. This idea was developed into the Trans-European Rail Freight Network (TERFN) which is being introduced by Article 10a and the respective annexes.

In order to better observe the development of the rail transport market being crucial for the development of sustainable transport as a whole a European Rail Observatory System was introduced.

3.1. Trans-European Rail Freight Network (TERFN)

The Commission is of the opinion that the network created (i.e. the maps, the list of ports and the other provisions of new Article 10a) provides for a coherent approach for better and more seamless freight transport operations. It welcomes very much the density and design of the network.

3.2. Separation between infrastructure management and transport operations

The modified Directive has, among others, the objective to clarify the legal situation regarding separation between the tasks related to infrastructure management on the one hand and transport operations on the other. The main aim of this separation being to avoid that integrated railway undertakings (i.e. entities managing infrastructure and offering transport operations within the same structure) would be "judge and party" as regards various functions essential for a proper functioning of the market. The Commission is convinced that these essential functions must not be assured by any undertaking or entity active in the market for transport operations itself. These functions are allocation of infrastructure, charging for its use, safety certification and licensing of undertakings.

However, this solution has been watered down to an extent that could put the concept as a whole in question by introducing Article 6 paragraph 4. This paragraph provides for a derogation from the separation requirement for having established an independent "rail regulator". This formula causes risks regarding the coherence of the whole package: Article 30 of the Directive of the European Parliament and of the Council on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification will oblige all Member States to create a regulatory body. The derogation foreseen in Art. 6 paragraph 4 would only make sense if the regulator referred to has different and further reaching functions than the regulator described in Art. 30, of the above mentioned Directive. The differences between the two concepts are however unclear, and may put the overall objective of Art. 6 in question. Nevertheless in light of the progress achieved in other parts of the package, in particular with regard to the TERFN and the charging and path allocation rules, the Commission would be ready to accept the overall package in its present form.

3.3. Derogation's and transitional provisions

3.3.1. Derogation's

3.3.1.1. Greece and Ireland/Northern Ireland

The Council agreed on derogation's from the requirement to entrust to an independent body the functions determining equitable and non-discriminatory access to infrastructure, as provided in Article 6, paragraph 3, first subparagraph and the tasks set out in Article 7, paragraph 2, first subparagraph, insofar as those Articles oblige Member States to establish independent bodies performing the tasks referred to in the said Articles. This derogation is renewable, time-limited and only remains valid as long as various conditions laid down in Article 14a, paragraphs 2 and 3, are satisfied.

The Commission agrees with the Council in this respect and wishes to underline that it hopes that the geopolitical situation of Greece will develop so that Greece can fully profit from the railway policy initiatives of the European Union.

3.3.1.2. Luxembourg

Luxembourg obtained a derogation until 31 August 2004 from the requirement to award to an independent body the functions determining equitable and non-discriminatory access to infrastructure, as provided for in Article 6, paragraph 3, first subparagraph, insofar as it obliges Member States to establish independent bodies performing the task referred to in that Article.

Also regarding the transitional provision the Commission deems the measure appropriate in order to give Luxembourg enough time to prepare itself for the new situation.

3.3.2. Transitional provisions

3.3.2.1. Belgium and Luxembourg

Given the size and design of the railway network of both Belgium and Luxembourg in relation to the application of the "feeder-line rule" of Article 10a, paragraph 1, subparagraph d), of the Directive in its amended version it appears in line with the tenor of the political compromise found within the Council that transitional periods allowing time for adjustments will be granted to Belgium and Luxembourg.

The Commission therefore can accept this compromise.

4. Conclusion

The Commission tried to take into account as much as possible the views of the European Parliament expressed during the first reading either by taking up the amendment in its exact wording and entirety or by amending its proposal in the spirit of the Parliament's views.

The Commission notes that there are some differences between its proposal and the common position in particular as regards the completion of the common market for rail transport services and the separation between infrastructure management and transport operations.

The Commission is however of the opinion that the overall compromise found by the Council after intensive discussions and efforts of three of its Presidencies is a well-balanced step forward in railway policy. It will contribute to a sustainable development of this mode of transport.

The Commission furthermore underlines that the completion of the single market for rail transport services must remain the final goal.

The Commission is nevertheless convinced that this second step of reform of the legal framework for rail transport services represents an important step and therefore issues a positive opinion.