Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council directive 91/440/EEC on the development of the Community's railways

(presented by the Commission)

EXPLANATORY MEMORANDUM

The completion of an integrated market for rail freight services is a cornerstone of the transport policy vision sketched out in the White Paper on the common transport policy at the horizon of 2010 published in September 2001. A revitalisation of the rail freight sector is needed in order to render it capable of absorbing a higher share of the future increase of freight transport demand. The objective is not to increase the market share of rail against market forces but rather to use market forces to improve its competitiveness in those market segments where rail has a comparative advantage. The Commission believes that opening the rail freight markets will unleash the competition that is necessary to provide market actors with the necessary incentives to become more efficient and more competitive, as well as to do business closer to the customer. It should attract new capital and enterprises, stimulate the development of new services responding to the requirements of the customers and to improve the financial situation of the railway undertakings. This is necessary if the rail system shall be made capable of contributing to a better performing European freight transport sector in the future.

Although some progress has been made with advancing the Single Market project for rail freight, the process is clearly behind other transport modes, in particular road and air transport with which the railways are in competition. In 1995, the Commission made a proposal to open up freight and passenger rail networks in the EU which did find a follow-up. At that time the regulatory framework for the rail sector was not yet sufficiently complete (e.g. related to safety and interoperability) in order to ensure an efficient functioning of open markets. It has been recognised that the railway market should be integrated in steps due to its special features.

The application of the principle of freedom to provide services implies rights of access to rail infrastructure for railway undertakings established and licensed in the European Union. Directive 91/440 made a first step in this direction by establishing rights of access for international groupings and railway undertakings to operate international combined transport. Directive 2001/12 established access rights to the Trans-European Rail Freight Network and at latest from 2008 onwards to the whole European rail freight network for international services.

The Commission considers that there are many arguments in favour of an acceleration of this process. The recent decisions have created a dynamic on the market and new expectations from shippers, operators and potential investors.

These expectations have also been encouraged by the position clearly expressed by the European Parliament in favour of the full opening of the freight market at the time of the conciliation with the Council on the infrastructure package in November 2000 and the formal request made to the Commission to come quickly with new proposals to this effect. It has been followed by the Conclusions of the Stockholm European Council in March 2001 reaffirming the need to complete the internal market in transport, having rail in mind. The prospect of enlargement should also be considered.

It is thus time to prepare the next step of market integration, the opening of domestic rail freight markets (i.e. regular domestic services by a foreign railway undertaking) including the possibility of cabotage (i.e. occasional domestic services while performing international services).

Access to rail freight networks for domestic services by railway undertakings other than the national operator is already possible in a number of Member States such as Austria, Italy, Germany, the Netherlands, Sweden, and the UK as well as in Switzerland, on the basis of national law. The experience with the effects of market opening on competitiveness and service innovation are generally positive.

A number of positive experiences demonstrates the need to accelerate the process and to allow further innovation in the services to be provided:

- new alliances between historical and new operators of countries like Italy, Switzerland, Germany, Austria, Netherlands are being created to operate on international corridors, particularly to carry goods through the Alps and their operations would gain from the full opening of the market by allowing them to integrate international and domestic services in a comprehensive logistic chain ;

- there is, as witnessed in Germany, many new railway undertakings which are willing to complement the activities of the main carriers which want to streamline their business. These small operators should operate feeder lines on the network and should not be limited in their possibility to expand across borders or through alliances with other companies ;

- the IKEA plans to create shuttles throughout Europe to feed its shops and warehouses, with a first line between Sweden and Duisbourg in Germany, would remove many more trucks from road if these international shuttles can be smoothly integrated with further national rail journeys to their final destination ;

- in spite of the problems encountered by the infrastructure manager, the UK rail freight transport has increased regularly since 1994.

Hence, the current proposal stipulates that all railway undertakings established and licensed in the European Union will be granted access to the railway network for domestic and international rail freight services from the date of implementation of this Directive onward. The concept of limiting access for international rail freight services to the Trans-European Rail Freight Network (TERFN) that was in any case only a transitory arrangement until 2008 at the latest will be repealed. Therefore, this proposal deletes all references to the TERFN.

The provisions in Directive 91/440 as amended by Directive 2001/12 that relate to railway safety are deleted in this proposed amendment to avoid any overlap with the proposed directive on railway safety.

2002/0025 (COD)

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council directive 91/440/EEC on the development of the Community's railways

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 [1],

[1] OJ C , , p. .

Having regard to the opinion of the Economic and Social Committee [2],

[2] OJ C , , p. .

Having regard to the opinion of the Committee of the Regions [3],

[3] OJ C , , p. .

Acting in accordance with the procedure laid down in Article 251 of the Treaty [4],

[4] OJ C , , p. .

Whereas:

(1) Directive 91/440/EEC of 29 July 1991 on the development of the Community's railways [5] provides that licensed railway undertakings are granted access rights on the trans-European Rail Freight Network and at the latest from 2008 on the whole network for international rail freight services.

[5] OJ L 237, 24.8.1991, p25. Directive as amended by Directive 2001/12/EC (OJ L 75, 15.3.2001, p1)

(2) The extension of those access rights to all kind of rail freight services, in accordance with the principle of providing services, would improve the efficiency of the rail mode relative to other modes of transport. It would also facilitate sustainable transport between and within Member States, by encouraging competition and allowing entry of new capital and enterprises.

(3) Rail freight services offer considerable opportunities for the creation of new transport services and the improvement of existing ones at national and at European level.

(4) To be fully competitive, rail freight transport increasingly requires the provision of comprehensive services, including transport between and within Member States.

(5) The extension of access rights to all kind of rail freight services requires to repeal the provision limiting access for international rail freight services to the Trans-European Rail Freight Network (TERFN) that was in any case conceived for a transitory period. Therefore, this proposal deletes all references to the TERFN.

(6) Since railway safety is regulated by Directive .../.../EC of the European Parliament and of the Council of [date] on the regulation of safety and investigation of accidents and incidents on the Community's railways [6] as part of a new coherent Community regulatory framework for the railway sector, the provisions on safety contained in Directive 91/440/EEC should be deleted.

[6] OJ L , , p..

(7) Directive 91/440/EEC should therefore be amended accordingly.

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 91/440/EEC as amended by Directive 2001/12/EC is amended as follows:

(1) In Article 3 the fifth indent is deleted.

(2) In Article 7 paragraph 2 is deleted.

(3) Article 10 is amended as follows:

(a) Paragraph 2 is replaced by the following:

"2. Railway undertakings within the scope of Article 2 shall be granted, on equitable conditions, access to the infrastructure in all Member States for the purpose of operating rail freight services and combined transport goods services."

(b) Paragraph 3 is deleted.

(c) Paragraph 5 is replaced by the following:

"5. Any railway undertaking engaged in rail transport services under paragraphs 1 and 2 shall conclude the necessary administrative, technical and financial agreements on the basis of public or private law with the infrastructure managers of the railway infrastructure used with a view to regulating traffic control and safety issues concerning that transport. The conditions governing such agreements shall be non-discriminatory and, if applicable, in conformity with the provisions of Directive 2000/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification[."

( OJ L 75, 15.3.2001, p.29

(d) Paragraph 8 is deleted.

(4) Article 10a is deleted.

(5) In Article 10b( 4), point (c) is replaced by the following:

"(c) the state of the European railway network"

(6) Annex I is deleted.

Article 2

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by [18 months after the entry into force of this Directive] at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

Article 3

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

Article

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

IMPACT ASSESSMENT FORM THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)

Title of proposal

Directive amending Council Directive 91/440/EEC on the development of the Community's railways lastly amended by Directive 2001/12/EC of the European Parliament and of the Council of 26 February 2001

Document reference number

COM(2002)25

The proposal

1. Taking account of the principle of subsidiarity, why is Community legislation necessary in this area and what are its main aims*

The proposed directive aims at providing the regulatory framework for the completion of an integrated European market for rail freight services according to Articles 14 and 80 of the Treaty. In most Member States rail freight markets are still closed whereas in some market opening has already taken place. It is therefore necessary to harmonise the regulatory framework that deals with the access to the rail network at Community level in order to foster seamless rail freight transport within and between Member States.

The impact on business

2. Who will be affected by the proposal*

- which sectors of business

The whole railway sector will be affected by the proposal, including the railway supply industry and rail freight customers such as rail freight forwarders, logistics integrators and shippers. By harmonising national rules and establishing a common framework for access to the rail network for freight services the proposal will foster competition and generate incentives for product innovation, quality improvements and competitive prices. This will increase the attractiveness of rail freight services to rail customers and increase demand for rail freight services. The proposal will enable national railway undertakings that were in the past too much focussed on the national market to pursue a genuine European market strategy. The integration of rail service markets will also have a beneficiary effect on railway supply markets by favouring open and competitive tendering for supplies.

- which sizes of business (what is the concentration of small and medium-sized firms)

Today national monopolistic railway undertakings dominate the sector. In some Member States, there is a certain number of smaller railway undertakings which have however only a minor market share. The proposal is likely to stimulate the entrance of new small and medium-sized operators into the rail freight service market, thus providing for increased competition, innovation and revitalisation of the rail sector.

- are there particular geographical areas of the Community where these businesses are found

National railway undertakings exist in all Member States. Small and medium sized railway undertakings are however concentrated in Germany, Italy, the Netherlands, United Kingdom, and Sweden.

3. What will business have to do to comply with the proposal*

The immediate impact of the proposal, when implemented in Member States' legislation, will be a redefinition of the market strategy of railway undertakings as they will have to face potential competition from domestic and foreign undertakings. Depending on the ensuing degree of competitive pressure railway undertakings will have to restructure their organisation in order to reap existing cost reduction potentials and to redirect business towards growing market segments. There may a switch from the current co-operation mode for the provision of international rail freight services to other production modes such as subcontracting and open access services.

4. What economic effects is the proposal likely to have*

- on employment

Opening rail freight markets will introduce stronger competition within the mode and induce more cost-effective transport solutions, likely to reduce the number of employees. More competitive rail freight services however are likely to increase the market share in those market segments where they have a competitive advantage over other modes. This business expansion will lead to an increase in secure and attractive jobs in the rail sector compared to a baseline development which is characterised by ever decreasing employment if no measures are taken to revitalise the rail freight sector.

- on investment and the creation of new businesses

A more competitive rail system that moves from servicing primarily domestic markets to cover the whole Community market will provide new opportunities for business and stimulate investments. Open service markets and new service ideas will induce investments, for instance, in new rolling stock, train command and control systems, electronic data exchange and customer information systems. New service concepts may lead to the establishment of new market actors.

- on the competitiveness of businesses

Opening of national rail freight markets will unlash incentives to improve the service performance and hence increase the competitiveness of such services. Railway undertakings are likely to orient their business towards the European market. Pursuing such a strategy is likely to induce a consolidation of the sector at European level enhancing the capacity of enterprises to compete at EU level.

5. Does the proposal contain measures to take account of the specific situation of small and medium-sized firms (reduced or different requirements etc)*

The proposal is likely to favour new market entries especially of small and medium sized railway undertakings set up by big rail freight customers or niche market actors such as short line operators.

Consultation

6. List the organisations which have been consulted about the proposal and outline their main views.

The proposal replies to requests for rail freight market opening from major national railway undertakings such as Deutsche Bahn AG, green cargo, and UK rail freight operators, independent rail infrastructure managers and rail freight customers.

On 19 November 2001, the Directorate General Energy and Transport organised a hearing on the elements of the 2nd railway package collecting the opinion of all relevant stakeholders. The results of the hearing can be summarised as follows:

The representatives of rail freight customers, environmental NGO, independent rail infrastructure managers and independent railway undertakings were strongly in favour of an amendment of Directive 91/440 as amended by Directive 2001/12 to open up access to the entire rail network for all kinds of freight services. Fostering competition on domestic and international rail freight markets was considered as the most important prerequisite to improve the competitiveness and service quality of rail freight as well as to increasing its modal share. The importance of realising interoperability for a well functioning rail service market was underlined.

Representatives of national railway undertakings had a mixed opinion about the beneficial effect of market opening on a revitalisation of rail freight. Some were in favour, some were sceptical. They advanced the argument that competition would not lead to an improvement of rail freight's competitiveness if national rail systems are not interoperable, if there are capacity constraints and no level playing field with road haulage, for instance, with respect to infrastructure charging and social legislation.

Companies/associations having taken the floor or sent a written statement:

- Rail freight customers: Transfesa, Dutch shippers council, UIRR, UNICE, European Shippers Council

- National railway undertakings: SNCF, Deutsche Bahn AG, Czech railways

- Independent railway undertakings: Netlog Netzwerk Logistik

- Associations of railway undertakings: Swedish Association of Train Operators, CER

- Independent infrastructure managers: Nordic Infrastructure Managers

- Environmental NGO: T&E