EUROPEAN COMMISSION Brussels, 6.2.2019 SWD(2019) 13 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Sixth report on monitoring development of the rail market {COM(2019) 51 final}



Table of contents 1.The state of the union railway network 1.1Description 1.2Missing links and cross border vision 1.3Infrastructure management 1.3.1Infrastructure governance 1.3.2Infrastructure expenditure21 1.3.3Infrastructure funding and financing26 2.The evolution of rail services32 2.1Traffic volumes32 2.2The passenger market34 2.2.1Evolution of volumes34 2.2.2Evolution of revenues39 2.3The freight market40 2.3.1Evolution of volumes40 2.3.2Evolution of revenues44 2.4The future of rail freight45 2.5Rail noise48 3.The evolution of services supplied to railway undertakings49

3.1Passenger stations51 3.2Other service facilities53 3.3Complaints related to access to service to facilities57 3.4The traction market57 4.The evolution of framework conditions in the rail sector59 4.1Infrastructure charging59 4.2Capacity allocation and congestion68 4.2.1Network utilisation68 4.2.2Managing capacity shortages69 4.3Rail transport services covered by public service contracts74 4.3.1PSO scope74 4.3.2PSO award78 4.3.3PSO compensation84 4.4Licensing86 4.5Degree of market opening and utilisation of access rights89 4.5.1Legal liberalisation and actual entry in the rail market89 4.5.2Freight market opening94 4.5.3Passenger market opening97 4.6Development of employment and social conditions103 4.6.1Employment in rail103

4.6.2Socio-demographic structure of the rail labour market105 4.7Harmonisation113 4.7.1EU legislation113 4.7.2Transposition114 4.7.3Infringements114 4.7.4External dimensions of rail transport policy115 4.7.5Regulatory bodies116 4.8Digitalisation120 4.9Multimodal and intermodal transport124 4.9.1Combined transport124 4.9.2Internalisation of external costs124 4.9.3New tools, consignment notes and cargo and vehicle positioning125 5.The quality of rail services126 5.1Punctuality and reliability of passenger services126 5.2Punctuality and reliability of freight services129 5.3The role of regulators related to quality132 5.4Safety132 5.5Satisfaction with rail services135 5.5.1Satisfaction with passenger services135 5.5.2Satisfaction with Rail Freight Corridors’ services137

6.Performance of the railways140 6.1Performance measured by main inputs and outputs140 6.2The way forward for performance enhancement144 7.Conclusions148 Table of figures Figure 1: Length of national networks in 2016 and relative change 2011-2016 Figure 2: Density of railway network relative to surface area and population in 2016 Figure 3: The proportion of networks electrified, 2016 and change in percentage electrified 2011-2016 Figure 4: Development of high-speed lines in Europe Figure 5: Length of dedicated high-speed line, 2012-2017 Figure 6: Institutional settings in the Member States, 2016 Figure 7: Expenditure on infrastructure and proportion on maintenance and renewals, 2011-2016 Figure 8: Expenditure on infrastructure and proportion on maintenance and renewals per country, 2016 Figure 9: Expenditure on maintenance, renewal and enhancement per line-kilometre, 2013-2016 24 Figure 10: Expenditure by category by country, average of 2015-2016 25 Figure 11: Expenditure on high-speed rail by activity, by Member State, average of 2015-2016 26 Figure 12: State rail infrastructure funding by source and country, 2016 27 Figure 13: Distribution of Cohesion Fund and ERDF funding by Member State, 2014-2020 29 Figure 14: Distribution of CEF funding by Member State, 2014-2016 30

Figure 15: Allocation of CF and ERDF funding per line-kilometre in the 2014-2020 funding cycle 30 Figure 16: Passenger and freight volumes, 2005-2016 33 Figure 17: Passenger and freight volumes, compound average annual growth 2011-2016 34 Figure 18: Propensity to travel by rail 2016 and compound average annual growth 2011-2016 35 Figure 19: Passenger land transport modal split, 2007-2016 35 Figure 20: Passenger land transport modal split by country, 2016 and change in percentage rail 2011-2016 36 Figure 21: Passenger rail, tram and metro mode shares by country, 2016 36 Figure 22: Passenger rail, bus, coach, tram and metro modal split by country, 2016 37 Figure 23: Evolution of rail passenger traffic volumes, 2007-2016 38 Figure 24: Passenger traffic volumes by country, passenger-kilometres, 2016 39 Figure 25: Sources of passenger railway undertakings’ revenue, 2016 40 Figure 26: Rail freight activity per unit of GDP, 2016 and compound average growth rate 2011-2016 41 Figure 27: Freight land transport modal split, 2007-2016 42 Figure 28: Freight land transport modal split by country 2016 and change in percentage rail 2011-2016 42 Figure 29: Evolution of rail freight traffic volumes, 2007-2016 43 Figure 30: Rail freight traffic volumes by country, 2016 44 Figure 31: Freight revenue of railway undertakings by country, 2015 and 2016 45 Figure 32: Average distance between stations by country, 2016 51 Figure 33: Number of stations by passengers per day by country, 2016 52 Figure 34: Stations by passengers per day by country, mix, 2016 52

Figure 35: Facilities: freight terminals by country, 2016 53 Figure 36: Facilities: marshalling yards by country, 2016 54 Figure 37: Facilities: maintenance facilities by country, 2016 55 Figure 38: Facilities: maritime and port facilities linked to rail activities by country, 2016 56 Figure 39: Facilities: refuelling facilities by country, 2016 56 Figure 40: Complaints being processed and decisions made by country, 2016 57 Figure 41: Access charges (excluding mark-ups): passenger trains by type by country, 2016 61 Figure 42: Access charges (excluding mark-ups): suburban and regional passenger trains by country, 2013 and 2016 61 Figure 43: Access charges (excluding mark-ups): conventional long-distance passenger trains, 2013 and 2016 62 Figure 44: Access charges (excluding mark-ups): freight train by type by country, 2016 62 Figure 45: Access charges (excluding mark-ups): freight train average by country, 2013 and 2016 63 Figure 46: Access charges: infrastructure managers’ revenue from passenger trains, 2016 64 Figure 47: Access charges: infrastructure managers’ revenue from freight trains, 2016 64 Figure 48: Access charges (including mark-ups): revenues from passenger trains, 2015 and 2016 65 Figure 49: Access charges (including mark-ups): revenues from freight trains, 2015 and 2016 66 Figure 50: Access charges: revenues from station charges, 2015 and 2016 66 Figure 51: Access charges: revenues from other charges from passenger operators, 2015 and 2016 67 Figure 52: Access charges: revenues from other charges from freight operators 67 Figure 53: Access charges: average revenue from charges for the minimum access package, 2016 68 Figure 54: Network utilisation 2016, compound average growth rate 2011-2016 68

Figure 55: Total length of track declared congested, 2012-2016 70 Figure 56: Principal types of services prioritised by infrastructure managers, 2016 72 Figure 57: Successful and rejected scheduled path allocations, 2015 and 2016 73 Figure 58: Passenger-kilometres on PSO and commercial rail services, 2016 75 Figure 59: Passenger-kilometres on domestic and international PSO services, 2016 76 Figure 60: Competent authorities for passenger rail services, 2018 79 Figure 61: PSOs competitively tendered and directly awarded, 2016 80 Figure 62: PSOs competitively tendered and directly awarded, 2016 82 Figure 63: Apparent average PSO compensation, 2016 85 Figure 64: Apparent proportion of PSO cost recovered through passenger fares, 2016 86 Figure 65: Active licences by country, 2016 87 Figure 66: Average fees to obtain a licence by country, 2015 and 2016 88 Figure 67: Average time to obtain a licence by country, 2015 and 2016 88 Figure 68: Legal liberalisation and first licence in the international freight market 89 Figure 69: Legal liberalisation and first licence in the domestic freight market 90 Figure 70: Legal liberalisation and first licence in the international passenger market 91 Figure 71: Legal liberalisation and first licence in the domestic passenger market 92 Figure 72: Legal liberalisation and first licence in the domestic long-distance passenger market 93 Figure 73: Legal liberalisation and first competitors in the domestic regional passenger market 94 Figure 74: Active railway undertakings in the freight market by country, 2016 95

Figure 75: Competitors in freight, market share, compound average growth rate 2011-2016 95 Figure 76: Effective number of competitors in domestic rail freight, 2011 and 2016 96 Figure 77: Average size of new entrants in freight market by country 97 Figure 78: Active railway undertakings in the PSO and commercial passenger market by country, 2016 98 Figure 79: Competitors in commercial passenger market, market share, 2016 98 Figure 80: Competitors in commercial passenger market, effective number, 2011 and 2016 99 Figure 81: Competitors in PSO passenger market, market share, 2016 100 Figure 82: Competitors in PSO passenger market, effective number, 2011 and 2016 100 Figure 83: Average size of new entrants in commercial and PSO passenger markets 101 Figure 84: Employees of infrastructure managers and railway undertakings, 2016 104 Figure 85: Employees of infrastructure managers, 2011 and 2016 105 Figure 86: Employees of incumbent railway undertakings, 2011 and 2016 105 Figure 87: Employees by gender structure, 2016 106 Figure 88: Employees by age group, 2012 and 2016 108 Figure 89: Employees by age group and country, 2016 109 Figure 90: Employees of main infrastructure managers by contract type, 2016 110 Figure 91: Employees of incumbent or main railway undertakings by contract type, 2016 110 Figure 92: Employees of main infrastructure managers by time worked, 2016 111 Figure 93: Employees of incumbent or main railway undertakings by time worked, 2016 111 Figure 94: Employees of main infrastructure managers in training, 2016 112

Figure 95: Employees of incumbent or main railway undertakings in training, 2016 112 Figure 96: Pending infringement proceedings in the field of rail transport, 13 July 2017 115 Figure 97: Regulatory bodies’ staff dealing with rail market access, 2018 118 Figure 98: Regulatory bodies’ funding in the EU 119 Figure 99: Regulatory bodies with integrated competences for the rail market, 2018 120 Figure 100: Punctuality of regional and local passenger services, 2014-2016 126 Figure 101: Punctuality of long-distance passenger services, 2014-2016 127 Figure 102: Reliability of regional and local passenger services, 2014-2016 128 Figure 103: Reliability of long-distance passenger services, 2014-2016 128 Figure 104: Punctuality of domestic and international freight services, 2016 130 Figure 105: Reliability of domestic and international freight services, 2016 131 Figure 106: Average timetabled speed of freight services, 2016 131 Figure 107: Fatality risk of different transport modes, 2011-2015 133 Figure 108: Significant rail accidents and resulting casualties, 2010-2016 134 Figure 109: Significant rail accidents by type of accident, 2012-2016 134 Figure 110: Overall population satisfaction index with railway transport, 2018 137 Figure 111: Stakeholders' assessment of RFCs' contribution to key rail freight challenges, 2016 139 Figure 112: Trends in input indicators, 2011=100 142 Figure 113: Trends in output indicators, 2011=100 142 Figure 114: Average passenger revenue per passenger train-kilometre, 2016 143

Figure 115: Average freight revenue per freight train-kilometre, 2016 143 Figure 116: Passenger and freight track utilisation, 2016 144 Figure 117: Passenger and freight vehicle utilisation, 2016 144 Table of tables Table 1: Use of high-speed lines for high-speed services, 2016 Table 2: Allocation of EU funds to transport and rail projects for the EU funding cycle 2014-2020 Table 3: Allocation of CEF to railways, 2014-2016 Table 4: Allocation of ESIF to railways, 2014-2020 Table 5: Track and nodes declared to be congested, 2015 and 2016 Table 6: Status of transposition of Rail Directives, 13 July 2017 Table of boxes Box 1: Measuring the high-speed network length Box 2: European Court of Auditors report on the EU high-speed rail network Box 3: European Network of Infrastructure Managers PRIME Box 4: EFSI for rail 30 Box 5: Cross-border harmonisation of technical and operational rules and issues log 48 Box 6: Policy framework for tackling rail noise 48 Box 7: New implementing Regulation on service facilities 49

Box 8: European Rail Facility Portal 50 Box 9: Direct cost-based charging 60 Box 10: New timetabling delegated act and Timetable Review project (RNE) 74 Box 11: Night Trains 77 Box 12: Emergence of low-cost services 78 Box 13: Provisions on competitive tendering of rail PSCs in the Fourth Railway Package 84 Box 14: State of play of market opening in the passenger market 102 Box 15: Implementing act on the Economic Equilibrium Test 103 Box 16: Gender aspects in rail 107 Box 17: Training in the rail sector 113 Box 18: Passenger Rights 129 Box 19: The Safety Culture Twinning Programme 135 Box 20: Monitoring financial performance 140 Box 21: PRIME KPI and Benchmarking Subgroup 146 List of abbreviations CAGR Compound average growth rate CEF Connecting Europe Facility CF Cohesion Fund CMS Consumer Markets Scoreboard CNC Core Network Corridor dB Decibel DG JUST European Commission Directorate-General for Justice and Consumers DG MOVE European Commission Directorate-General for Mobility and Transport DOO Driver-Only Operation ECA European Court of Auditors EFSI The European Fund for Strategic investments EIB European Investment Bank ELETA Electronic exchange of information on Estimated Time of Arrival ERA European Union Agency for Railways (formerly European Railway Agency) ERADIS European Union Agency for Railways database of interoperability and safety ERDF European Regional Development Fund ERTMS European Railway Traffic Management System ESIFs European Structural and Investment Funds, include Cohesion Fund, European Regional Development Fund, European Social Fund, European Maritime and Fisheries Fund and the European Agricultural Fund for Rural Development ETA Estimated Time of Arrival GFC Global Financial Crisis GVA Gross Value Added HICP Harmonised Index of Consumer Prices IM Rail infrastructure manager INEA EU Innovation and Networks Executive Agency IRG-Rail Independent Regulators’ Group – Rail ITU Intermodal Transport Unit km kilometre KPI Key Performance Indicator NIP National Implementation Plan NPV Net Present Value NSA National Safety Authority PAYG Pay As You Go p-km passenger-kilometre PPP Purchasing Power Parity PRIME Platform of Rail Infrastructure Managers in Europe PSC Public Service Contract PSO Public Service Obligation Recast Directive Directive 2012/34/EU establishing a Single European Railway Area REGIO European Commission Directorate-General for Regional and Urban Policy RFC Rail Freight Corridor RMMS Rail Market Monitoring Survey RMMS Regulation Commission Implementing Regulation (EU) 2015/1100 for rail market monitoring ROSCO Rolling stock company RU Railway undertaking RU Dialogue Dialogue of Railway Undertakings SERAC Single European Railway Area Committee SMS Safety Management System SWD Staff Working Document TAF Telematics Applications for Freight TEN-T Trans-European Transport Network TSI Technical Specifications for Interoperability tonne-km tonne-kilometre The Agency European Union Agency for Railways, until June 2016 called European Railway Agency (ERA) train-km train-kilometre UIC Union Internationale des Chemins de Fer UIRR Union Internationale pour le transport combiné Rail-Route

List of countries AT Austria BE Belgium BG Bulgaria CH Switzerland CY Cyprus CZ Czech Republic/Czechia DE Germany DK Denmark EE Estonia EL Greece ES Spain EU European Union EU13 EU Member States having joined EU in or after 2004 EU15 EU Member States having joined EU before 2004 EU28 All Current EU Member States FI Finland FR France HR Croatia HU Hungary IE Ireland IT Italy LT Lithuania LU Luxembourg LV Latvia MT Malta NL The Netherlands NO Norway PL Poland PT Portugal RO Romania SE Sweden SI Slovenia SK Slovakia UK United Kingdom



Introduction This Commission Staff Working Document accompanies the Sixth Report from the Commission to the Council and the European Parliament on monitoring development of the rail market. The data and graphs used in this document have been made available in Excel format on the DG MOVE website . Coverage of the report This document presents a non-exhaustive report covering the main developments in the EU rail market reflecting the topics listed in Article 15 (4) of Directive 2012/34/EU establishing a single European railway area (hereinafter the 'Recast Directive'), according to which the European Commission must report to the European Parliament and the Council every two years on: 1.the evolution of internal market in rail services (Chapter 2); 2.services to be supplied to railway undertakings as per Annex II to the Recast Directive (Chapter 3); 3.the framework conditions (Chapter 4), including inter alia: -infrastructure charging; -capacity allocation; -investment made in infrastructure; -developments with regards to prices; -quality of rail transport services; -rail transport services covered by PSCs; -licensing; -degree of market opening; -harmonisation between Member States;

-development of employment and related social conditions; 4.the state of the Union railway network (Chapter 1); 5.the utilisation of access rights (Chapter 4); 6.barriers to more effective rail services (Chapter 4 and Chapter 5); 7.infrastructure limitations (Chapter 4); and 8.the need for legislation (Conclusions). The focus of this document is on developments between 2011 and 2016. The sources of data include Rail Market Monitoring Survey (hereinafter 'the RMMS') responses, the Statistical pocketbook ‘EU Transport in Figures’ , Eurostat , IRG-RAIL, statistics collected by various sectoral organisations and ad hoc presentations and studies. Contributions have also been considered from the Member States, national regulatory bodies and stakeholders participating in the Working Group for Rail Market Monitoring in the framework of the Single European Railway Area Committee (SERAC). All EU Member States are covered, except Cyprus and Malta which have no railways. Norway participates in the RMMS, but data for Norway are not included in EU totals and averages. The implementing act for rail market monitoring Previous RMMS reports drew on the Member States’ voluntary responses to the RMMS questionnaire. This sixth RMMS draws on the mandatory data collection set out in the Commission Implementing Regulation (EU) 2015/1100 for rail market monitoring (hereinafter 'the RMMS Regulation') applicable from July 2015. The questionnaire annexed to the RMMS Regulation was developed in close cooperation with the Member States and stakeholders participating in the SERAC Working Group for Rail Market Monitoring. While building mainly on the previous RMMS, the new questionnaire added some new indicators, particularly related to revenues and traffic outputs, public service obligation (PSO), infrastructure charges and employment. In addition, under the new regime, Member States' reports have been submitted electronically and validated through exchanges with the Commission. This sixth RMMS therefore benefits from better-defined data requirements, a mandatory collection process, and a validation review, which should gradually lead to more consistent and coherent data after the end of the transitional period in 2018. It is recognised that these refinements of the sixth RMMS may have led some Member States to alter the data and approach they have used to respond, which may result in some issues with comparable time series. However, steps have been proactively taken by both the Commission and Member States to ensure that these comparability issues have been minimised wherever possible. 1.The state of the union railway network 2.Description The rail network is the backbone of the EU’s transport infrastructure. The importance attached to rail as a sustainable and clean mode of transport is reflected in the TEN-T Guidelines, the objectives of the Connecting Europe Facility, and the Cohesion Fund priorities. National and European authorities work together to ensure the necessary support for building new and improving existing rail infrastructure as a part of an EU-wide multimodal network. Figure 1 shows the reported length of the national rail networks of the EU Member States with rail networks, plus Norway (NO). Figure 1: Length of national networks in 2016 and relative change 2011-2016

Source: Statistical pocketbook, 2018. Infill data from various other sources. The total length of the EU rail network in use in 2016 was around 221 thousand line-kilometres, 1,6% shorter than in 2011. Infrastructure density Figure 2 illustrates the diversity of railways in the different States. It compares the number of line-kilometres per ten thousand square kilometres, on the horizontal axis, with the number of line-kilometres per million population, on the vertical axis. Figure 2: Density of railway network relative to surface area and population in 2016 Source: Statistical pocketbook, 2018. At the bottom left of the figure (yellow circles) are networks with low track density per 10 000 square kilometres and per million population. These networks are in the peripheral Member States of Ireland, Spain, Portugal, Italy and Greece. At the top left of the figure (grey diamonds) are networks with a low track density per 10 000 square kilometres but a high track density per million population. These include the Nordic and Baltic States of Norway, Finland, Sweden, Estonia, Latvia and Lithuania. At the top right of the figure (blue triangles) are networks with medium and high track densities per 10 000 square kilometres and per million population. These include primarily Central and Eastern European Member States of Bulgaria, Romania, Croatia, Slovenia, Poland, Austria, Slovakia and Hungary. Finally, at the bottom right of the figure (green squares) are networks with high track densities, mainly in Northern Europe: France, Denmark, the United Kingdom, the Netherlands, Luxembourg, Germany and Belgium. The groupings are particularly striking for: -the Iberian networks of Spain and Portugal, which also share a track gauge; -the Nordic States and the Baltic States; -neighbours Romania and Bulgaria, and Poland, Slovenia, Austria, Slovakia and Hungary; and -the relatively densely populated Benelux countries, Germany, Denmark and the United Kingdom. Electrified lines Figure 3 shows the proportion of each network, measured in line-kilometres, that is electrified, and the EU average. Figure 3: The proportion of networks electrified, 2016 and change in percentage electrified 2011-2016

Source: Statistical pocketbook, 2018. While around 54% of the total EU network is electrified, this proportion ranges from under 3% in Ireland to over 95% in Luxembourg. In Greece and Portugal, over the last 5 years, overall network size has reduced, while additional lines have been electrified, resulting in a sudden increase in the proportion of electrified lines. High-speed lines The Commission regularly reports statistics on high-speed lines defined as the lines or of sections of lines on which trains can go faster than 250 km/h at some point during the journey. Figure 4 shows the development of the EU’s high-speed network, which by the end of 2017 extended to over 8400 line-kilometres. Figure 4: Development of high-speed lines in Europe Source: Statistical pocketbook, 2018, lines or sections of lines on which trains can exceed 250 km/h at some point. It was 1989 before the network reached 1 000 line-kilometres, but since then it has grown by an average of more than 250 line-kilometres per year, and has more than doubled in length in the 13 years since 2003. Box 1: Measuring the high-speed network length Reported length of high-speed network in Europe may vary depending on the reference source. In the annual DG MOVE publication ‘EU transport in figures - Statistical Pocketbook’, the Commission reports as high-speed lines the lines or of sections of lines on which trains can go faster than 250 km/h at some point during the journey. Due to the narrow scope, only 8 434 kilometres are reported as completed high-speed lines in Europe in 2017. The RMMS reporting on high-speed lines is based on this statistical publication. However, high-speed lines could be interpreted more inclusively by counting also lines allowing speeds of at least 200 km/h (and not necessarily exclusively dedicated to high-speed). For example, the TEN-T Guidelines, on which official measurements of the TEN–T network are based, follow this more extended definition of high-speed lines (Article 11( 2 a)), including three categories: ·specially built lines for speeds higher than 250 km/h; ·specially upgraded lines for speeds in the order of 200 km/h; and ·specially upgraded high-speed lines with special features, resulting from topographical constraints etc. This means that 10 600 kilometres are completed on the core network and 805 kilometres on the comprehensive network, or 11 400 kilometres in total. This definition is in line with the Directive 2008/57/EC (‘the Interoperability Directive’), which defines high-speed lines as those that comprise: ·specially built high-speed lines equipped for speeds generally equal to or greater than 250 km/h (kilometres per hour); ·specially upgraded high-speed lines equipped for speeds of the order of 200 km/h (kilometres per hour); or ·specially upgraded high-speed lines which have special features as a result of topographical, relief or town planning constraints, on which the speed must be adapted to each case. This category also includes interconnecting lines between the high-speed and conventional networks, lines through stations, access to terminals, depots, and other facilities travelled at conventional speed by ‘high-speed’ rolling stock. Figure 5 shows how the length of high-speed line has evolved over the four years 2012 to 2017. The first high-speed lines in the EU were in France, which in 2017 overtook Spain as the largest high-speed network. Figure 5: Length of dedicated high-speed line, 2012-2017 Source: Statistical pocketbook, 2018. No new lines have been added to the relatively small networks in the United Kingdom and Belgium, which have now been overtaken by Poland, where since December 2014 high-speed services are operated on the 224 line-kilometres. There has been slight growth in the high-speed networks of Italy. The greatest increases occurred in France, Germany and Spain, which have since 2012 put into service 676, 306 and 296 additional line-kilometres respectively. In France, more than 500 kilometres of new high-speed lines were put into service in 2017, including the new 302-kilometre Tours-Bordeaux line. The newest lines in France allow speeds of 320 km/h. Table 1: Use of high-speed lines for high-speed services, 2016 Proportion of total network consisting of high-speed lines

(proportion of line-kilometres) Passengers carried in high-speed rolling stock

(billion passenger-kilometres) Length of high-speed lines

(line-kilometres) Spain 15.2% 15.06 2 413 France 7.7% 50.54 2 180 Belgium 5.8% 1.50 209 Italy 5.2% 12.79 896 Netherlands 3.9% 0.37 120 Germany 3.8% 27.21 1 475 United Kingdom 0.7% 2.80 113

Source: Statistical pocketbook 2017, UIC data. Many services operated using high-speed rolling stock extend beyond the network of high-speed lines, so passengers carried in high-speed rolling stock are not necessarily travelling on a high-speed line. Spain’s new high-speed network forms nearly one line-kilometre in six (15%) of the national network. In contrast, the United Kingdom has a single short high-speed line from the Channel Tunnel to London (0.7% of total network), although it is used relatively intensively by Eurostar international and Javelin domestic high-speed services. Box 2: European Court of Auditors report on the EU high-speed rail network In a recent special report the European Court of Auditors (ECA) recognises the benefits of the high-speed rail to support EU's sustainable mobility policy. Able to produce a carbon footprint lower than other forms of transport, high-speed rail contributes to relieve pressure on congested road networks, exhibits increased safety levels, provides its passengers with quick and comfortable travel and can provide socio-economic support to regions. The Commission recognised the importance of high-speed rail for a sustainable transport enabling economic growth and job creation. Completing a European high-speed rail network by 2050 and tripling the length of the existing high-speed rail network up to 30 000 kilometres by 2030 was one of the ten goals set in the White Paper on Transport 2011 for a competitive and resource-efficient transport system. According to ECA it is unlikely that these objectives will be achieved. The report concludes that the current high-speed network is a patchwork of national high-speed lines rather than a true European high-speed network. They consider that a seamless and competitive cross-border high-speed rail is still some way off and make recommendations to the Commission on the planning of the EU high-speed rail network, on how to better target the EU co-funding for high-speed rail infrastructure investments, on simplifying cross-border constructions and on possible actions to improve high-speed rail operations for passengers. The 28 Member States have more than 215 000 kilometres of rail lines, so prioritising high-speed rail will not happen overnight. In this context the Commission welcomes the report and recommendations from the Court and is fully supportive of the Court's objective of ensuring public money is well-spent. Several recommendations of the Court are timely, as they clearly support the Commission's ongoing efforts to better coordinate works and investments for the realisation of the Trans-European Transport Network, and to create a genuine level playing field between transport modes. The Commission has now put in place a clear long-term planning and governance, supported by strong rules, sound monitoring and adequate financing as recommended by the ECA. In addition, proposals recently made by this Commission as part of the next long-term budget (‘Connecting Europe Facility’) and Europe on the Move (‘Smart TEN-T’) will accelerate the completion of the high-speed network, while ensuring that public money is well-managed and well-spent. Source: ECA. 3.Missing links and cross border vision The TEN-T railway network, with total length of 163 180 kilometres (both comprehensive and core networks), has in the first instance to be implemented by Member States. In particular, the European Commission facilitates the implementation of the core network as the strategically most important part (43 % of the total length of the TEN-T railway network). The core network should be completed by 2030. The Commission supports the implementation of TEN-T projects in two ways: funding under the Connecting Europe Facility (CEF) and through coordination in the framework of the Core Network Corridors (CNC), including EU level horizontal priorities such as deployment of the European Rail Traffic Management System (ERTMS). Rail projects are addressed in a comprehensive way in the TEN-T Corridor work plans established by the European Coordinators, with the aim of stimulating a shift to rail as a sustainable transport mode. This includes the completion of missing links and the removal of bottlenecks as well as ensuring coherent standards along the corridors (requirements for axle load, train lengths, line speed). Some key cross-border projects (which at the same time overcome geographical barriers, such as the Brenner and Lyon-Torino Alpine tunnels or the Fehmarnbelt Fixed Link) are of special European added value. Besides the rail projects on the core network, smaller railway projects on the comprehensive network and beyond can also be important. In many cases, abandoned, missing or unused rail connections across the borders between Member States limit opportunities for cross-border cooperation between regions. A study on Comprehensive analysis of the existing cross-border rail transport connections and missing links on the internal EU border, completed in March 2018, assesses the situation of such connections. The Commission's proposal for the Connecting Europe Facility 2021-2028 proposes to give increasing importance to such smaller scale rail infrastructure projects located on the comprehensive network of the TEN-T. Other projects, which may also be important as access routes to the TEN-T infrastructure, might be considered for support under other EU instruments, such as Cohesion Fund (CF) and European Regional Development Fund (ERDF). 4.Infrastructure management 5.Infrastructure governance Member States often have a single national infrastructure manager, or a dominant infrastructure manager responsible for the main network and smaller ones responsible for specific lines, regional infrastructure or service facilities. The Fourth Railway Package, whose market pillar was adopted by the co-legislators in December 2016, proposes additional measures to ensure that infrastructure managers manage their networks in an optimised, efficient and non-discriminatory manner. Figure 6 , reproduced from the Commission Staff Working Document accompanying the fifth RMMS, shows the national governance structures of the main infrastructure managers updated to 2016. Partial Scope of IM functions Full Partial Scope of IM functions Full Integrated Organisationally Separated Integrated Organisationally Separated Figure 6: Institutional settings in the Member States, 2016 Integrated Integrated, separate body for essential functions A holding structure with limited independence guarantees A holding structure with strong independence guarantees Separated IM in charge of all functions (incl. capacity allocation and charging) Austria France Germany Italy Latvia Poland Slovenia Belgium Bulgaria Czech Republic Croatia Denmark Estonia UK(GB part) Finland Greece Netherlands Portugal Romania Slovakia Spain Sweden IM in charge of functions except the essential functions (capacity allocation and charging), which are under the responsibility of a separate body Hungary Ireland Lithuania Luxembourg IM in charge of the essential functions, some parts delegated to railway undertaking Source: EC.

No material changes in national governance structures have been reported since 2016. Box 3: European Network of Infrastructure Managers PRIME PRIME brings together rail infrastructure managers at European level with a view to facilitating and improving rail services for transporting people and goods across Europe. PRIME was created on a voluntary basis in 2013 as a cooperation platform between the European Commission and European rail infrastructure managers. In 2017 it become a formal European Network of Infrastructure Managers as foreseen in the Fourth Railway Package. The tasks of the European Network of Infrastructure Managers include: ·developing EU rail infrastructure and tackling cross-border bottlenecks; ·supporting implementation of the single European railway area; ·exchanging best practices; ·monitoring and benchmarking performance, exchanging best practices and contributing to the market monitoring; and ·cooperating on charging systems and the allocation of cross-border infrastructure capacity. PRIME has more than 35 member organisations and is co-chaired by the European Commission and industry. According to the Fourth Railway Package, the Member States must ensure that their main infrastructure managers participate in the work of the PRIME by the end of 2018. Work on specific topics is done in PRIME's six subgroups (KPIs and Benchmarking, Financing, Digitalisation, Safety Culture, Charges and EC Expert Group on Implementing Acts) and in two cooperation platforms - one with Railway Undertakings and another one with Regulatory Bodies. The PRIME KPI and Benchmarking Subgroup published its first Benchmarking report in July 2018. 6.Infrastructure expenditure One of the main objectives of European and national transport policies is to enhance rail infrastructure investments. Over the period 2014 to 2020, the investment required for the implementation of projects necessary to contribute to the TEN-T networks is expected to be EUR 500 billion. By 2030, an additional investment of EUR 750 billion will be required to complete the TEN-T networks. This will be financed primarily from the national budgets of Member States, but with a significant contribution from EU grants. In addition, however, Member States and rail infrastructure managers will need to invest and maintain parts of their national networks which are not included in the TEN-T networks. Figure 7: Expenditure on infrastructure and proportion on maintenance and renewals, 2011-2016 Source: RMMS, 2018. Figure 7 shows that total EU infrastructure expenditure rose continuously from EUR 29.2 billion in 2011 to EUR 49.5 billion in 2015 and then fell by EUR 3.5 billion in 2016, primarily due to lower expenditure on new infrastructure. Of 2016 expenditure, 25% was on maintenance, 29% on renewals, 27% on enhancements, and 19% on new infrastructure. Compared with 2011, total maintenance expenditure in 2016 had increased by 28%, renewals by 30% and enhancements by 28%. Figure 8 shows total infrastructure expenditure by State. Figure 8: Expenditure on infrastructure and proportion on maintenance and renewals per country, 2016 Source: RMMS, 2018. NO, SE included enhancements with renewals. Not all countries were able to distinguish in their reporting the investments in new infrastructure from enhancements, but the information available suggests that France, Italy, Austria, Spain, Norway and Sweden invested most in new infrastructure in 2016. Total infrastructure expenditure was highest in the United Kingdom, Germany and France. In Germany, federal subsidies in 2016 rose by EUR 800 million to support the expansion of the regional railway system. In 2018, incumbent rail operator Deutsche Bahn began a major railway investment plan and intends to spend EUR 9.3 billion (9.4% more than in 2017) on maintenance, renewal and enhancement of tracks, stations, bridges and tunnels. Maintaining and renewing the existing network, to enhance its safety and operational performance, and to ensure reliable service, is a major challenge for infrastructure managers, particularly in conditions of increasing traffic and demanding performance targets agreed between national authorities and operators. Maintenance and renewals expenditure has been relatively low in many Member States, not only because of a shortage of funds, but also because priority was given to investment in new lines. Catching up with underinvestment is often more expensive, in the longer term, than continuous routine maintenance of infrastructure. In 2016, total maintenance and renewal expenditure amounted to EUR 26 billion, i.e. 54% of the total expenditure. The proportion of maintenance and renewal expenditure in the total varied between countries, with Central and Eastern European economies spending a substantial proportion on maintenance and renewal of lines. The highest proportion was for Estonia (100%), and the lowest was for Greece (5%). France, Germany and United Kingdom spent an average of 63% of total expenditure on maintenance and renewal. Between 2014 and 2016, maintenance and renewal expenditure grew by an average of 23%, most significantly in Slovenia, Bulgaria, and Germany, while Hungary and Croatia showed the largest reductions. Figure 9 shows total maintenance, renewal and enhancement expenditure per line-kilometre in each Member State over the period 2013 to 2016. Figure 9: Expenditure on maintenance, renewal and enhancement per line-kilometre, 2013-2016

Source: RMMS and Statistical pocketbook, 2018. No 2013 data for EL. Before 2015, expenditure on new infrastructure was reported as part of enhancement expenditure, so separate data for enhancement infrastructure and new infrastructure are only available for 2015 and 2016. This also means that it is not possible to compare enhancement expenditure in 2011 and 2016. However: -Total EU expenditure on enhancements in 2016 was EUR 13.1 billion, of which 79% was in five Member States: France, Germany, Italy, Poland and the United Kingdom. -Total (EU plus Norway) expenditure on new infrastructure fell from EUR 11.5 billion in 2015 to EUR 9.1 billion in 2016, of which 86% was in six States: Austria, France, Italy, Norway, Spain and Sweden. Figure 10 shows the average annual expenditure in 2015-2016 by the category of infrastructure to which it related. Figure 10: Expenditure by category by country, average of 2015-2016 Source: RMMS, 2018. Estonia reported expenditure of EUR 0.1 billion. Most maintenance, renewal, enhancements and new construction expenditure during 2015-2016 were reported under the category of conventional lines. France and Spain both reported having spent large portions of their overall budgets (EUR 4.36 billion and EUR 3.64 billion respectively) on high-speed rail. Figure 11 shows the data available on the role of expenditure on high-speed lines. In the top four Member States by spend, most expenditure were allocated to the construction of new infrastructure. Figure 11: Expenditure on high-speed rail by activity, by Member State, average of 2015-2016 Source: RMMS, 2018. Expenditure on new infrastructure occurs only on networks which are being started or extended. Of total 2015-2016 expenditure on high-speed infrastructure, new infrastructure accounted for 100% in Denmark, 81% in France and 79% in Spain, but nothing in Germany and the UK, where expenditure was dominated by maintenance of the existing networks. 7.Infrastructure funding and financing Infrastructure managers obtain resources to maintain and improve their rail infrastructure from a variety of sources, including national public funding, project support from the EU and railway-generated funds such as revenue earned from track access charges. The principal source is national government budgets: in 2016 national budgets contributed about 70% to total expenditure and investment. Figu re 12 shows the States’ infrastructure funding by source. Figure 12: State rail infrastructure funding by source and country, 2016

Source: RMMS, 2018. Infrastructure managers’ own resources include infrastructure access charges that can contribute to operations, maintenance and renewals. The proportion of total funding generated internally was highest in Latvia (100%), Lithuania and France (both 81%), followed by Slovakia (69%) and the United Kingdom (42%). In many States, however, funding generated by rail services was less than 10% of the total. In most Member States, infrastructure access charges cover between 5% and 10% of operations and maintenance costs, although this proportion varies widely: -In the Baltic States, high freight track access charges have in the past been sufficient to fund a large proportion of maintenance expenditure. -In Germany, a fund based on a Performance and Funding Agreement between the federal government and Deutsche Bahn AG has been established to cover the maintenance cost of infrastructure. European Union funding is also important for railway infrastructure investments. European Union funding through Cohesion Fund (CF), the European Regional Development Fund (ERDF), the Connecting Europe Facility (CEF), and the European Investment Bank (EIB) contribute an average of 12% of the total funding for investment in rail infrastructure in Europe. Funding is also supported by private financing such as bank loans and by equity capital for large projects. Depending on national policy on the level and structure of access charges, most infrastructure managers also require subsidies to fund their activities. To ensure that they have mid-term assurance on the availability of sufficient funds, Directive 2012/34/EU obliges Member States to conclude contractual agreements between the competent authority and the infrastructure manager covering a period of at least five years, with funding in many States conditional on the achievement of performance targets. As yet, however, there is no comprehensive overview of the level of subsidies provided by national governments to rail infrastructure managers. The RMMS survey asked States to provide information on total compensation from the State pursuant to Article 30(2) of Directive 2012/34/EU. Only 17 Member States provided complete responses, describing compensation arrangements for periods ranging from one year to nearly 30 years. Only 11 Member States reported that the compensation was for a period of five years or more, and only ten reported that performance indicators had been agreed. Many Member States reported a single national total compensation, but Italy listed 17 different compensation packages for various infrastructure managers for periods varying from one to ten years. The reported average annual compensation per network kilometre varied from EUR 37 in Lithuania to more than EUR 3 million in Portugal. EU funding (Connecting Europe Facility and European Structural and Investment Funds) Around EUR 33 billion has been allocated to European railway investments under the current framework. Table 2 shows that 74% of CEF funding and 37% of total EU transport funding has been allocated to the railway sector. Table 3 and Table 4 show the types of projects on which these funds were spent. Table 2: Allocation of EU funds to transport and rail projects for the EU funding cycle 2014-2020 EUR billion All transport projects Railway projects Proportion of total invested in rail ERDF and Cohesion Fund 70.1 18.7 27% CEF 19.7 14.6 74% Total 89.8 33.3 37% Source: Innovation and Networks Executive Agency (INEA), DG REGIO. Table 3: Allocation of CEF to railways, 2014-2016 2014 CEF call 2016 CEF call Number of projects Granted funding,

EUR million Number of projects Recommended funding,

EUR million ERTMS 18 251.5 19 477.8 Rail Interoperability 8 28.1 4 12.0 Rail freight noise 2 6.2 Multimodal logistics platforms 10 30.1 15 63.1 Railways 81 9 339.1 33 4 406.3 Total 119 9 655.0 71 4 959.2 Source: Innovation and Networks Executive Agency (INEA). Table 4: Allocation of ESIF to railways, 2014-2020 EUR million Cohesion Fund European Regional Development Fund Total Railways (TEN-T core) 5 334.9 2 511.0 7 854.9 Railways (TEN-T comprehensive) 4 089.4 424.8 4 614.2 Other railways 194.5 2 64.8 4 159.3 Mobile rail assets 158.9 668.8 2 027.7 Total 12 477.6 6 169.6 18 647.1

Source: DG REGIO. Figure 13 shows the distribution of Cohesion Fund and ERDF funding among the Member States. Figure 13: Distribution of Cohesion Fund and ERDF funding by Member State, 2014-2020 Source: INEA and DG REGIO. Poland is the largest beneficiary of CF and ERDF funding, receiving 36.4% of total EU funding. No other Member State received more than 10%. Figure 14 shows that Poland is also largest beneficiary of CEF funding, with 40.1%, followed by the Czech Republic with 14.1%. No other Member State received more than 10%. Figure 14: Distribution of CEF funding by Member State, 2014-2016 Source: INEA and DG REGIO. Figure 15 shows the rate of Cohesion Fund (CF) and ERDF funding per line-kilometre allocated to each Member State. This data indicates that Poland was allocated more funding per line-kilometre than any other Member State. Figure 15: Allocation of CF and ERDF funding per line-kilometre in the 2014-2020 funding cycle Source: INEA, DG REGIO and Statistical pocketbook, 2017, operational programmes adopted at 23 June 2016 . Box 4: EFSI for rail The European Fund for Strategic Investment (EFSI) was established in July 2015 as one of the three pillars of the Investment Plan for Europe, to help overcome the current investment gap in the EU. Jointly launched by the European Commission and the European Investment Bank (EIB) Group, the EFSI aims to mobilise private investment in projects which are strategically important for the EU. Backed by a budget guarantee from the European Union and own resources from the EIB Group, operations approved until July 2018 are expected to trigger EUR 335 billion in investment across the 28 EU Member States. This is more than the original goal of EUR 315 billion set in 2015. In December 2017, the EFSI 2.0 extended the lifetime of the EFSI until end-2020, covering the period of the current Multiannual Financial Framework. It also increases its target to mobilise at least EUR 500 billion of investments by end-2020 versus the original goal of EUR 315 billion by July 2018. EIB finance makes an important contribution to rail investment in Europe with an average of over EUR 4 billion per year (from 2015-17 inclusive) in loans: EIB annual lending (signed projects) for the rail transport sector Source: EIB; 2018 data to 5 July 2018. The support given to rail projects under the EFSI has helped to mobilise significant additional public or private funds. The figure below shows for all rail projects approved and signed under the EFSI between 2015 and 2017 both the specific EFSI financing and the total investment they are expected to attract. Source: EIB – projects mainly related to rolling stock. The EFSI financing is the tranche of an operation that benefits from the support of the European Fund for Strategic Investments. This amount will sometimes differ from the total EIB financing amount of the same operation. The total investment related to EFSI refers to the total financing amount expected to be attracted for any particular EFSI project. This amount might come from public or private sources, and it includes EFSI financing provided by the EIB. Source: EIB, 2018. 8.The evolution of rail services The traffic volume indicators in this section are mainly based on RMMS data, available as from 2007. RMMS data provide breakdowns of volumes in terms of market segments (passenger/freight, domestic/international, PSO/non-PSO). Eurostat data are used to assess the modal split, which require combining the data of different modes. Passenger-kilometres and tonne-kilometres as reported in Eurostat could however show slight differences with those reported in the RMMS due to variations in the scope of reporting, potential double counting of transit volumes and adjustments performed in the RMMS (estimates and integration from other sources). Finally, for train-kilometres the data of Eurostat, UIC and IRG-Rail have been combined to acquire a dataset as complete as possible. The European rail transports some 1.6 billion tonnes of freight and 9 billion passengers every year. Rail transport is critical to the EU strategy for a more sustainable transport sector, economic and social cohesion and connecting EU citizens, within and between Member States.

Rail has the potential to play a significant role in accelerating the reduction of transport’s emissions. It only accounts for 2% of total EU energy consumption in transport, while in 2016 it carried 11.2% of freight and 6.6% of passengers of all transport modes (land, air and waterways). It is also the only mode having almost continuously reduced Green House Gas (GHG) and in particular carbon dioxide (CO2) emissions since 1990, representing in 2016 only 0.5% of total emissions from all transport modes. 9.Traffic volumes Figure 16 summarises trends in passenger and freight volumes over the period 2005 to 2016 and Fig ure 17 shows the average annual rates of change over the period 2011 to 2016. Total train-kilometres, which include both passenger and freight train movements, remained substantially stable between 2009 and 2016, after a significant increase in the pre-crisis period. Rail transport's focus varies between countries. On average, 82.3% of total EU train-km are used for passenger transport. In Denmark, the United Kingdom and Luxembourg more than 90% of train-km are used for passenger transport, whereas Lithuania, Slovenia and Latvia are more freight oriented (around 50% or more train-km). Figure 16: Passenger and freight volumes, 2005-2016 Source: RMMS, 2018. Infill data from various other sources and estimates. Rail passenger traffic continued to grow between 2011 and 2016 with a compound average growth rate of 1.6%, fully recovering from the slight decline experienced in 2009 due to the unfavourable economic climate across most of the EU. Rail freight traffic, in contrast, struggled to recover from the significant drop in volumes experienced in 2009, the low point of the economic crisis, with a peak in 2011 followed by a slow recovery from 2012. Figure 17: Passenger and freight volumes, compound average annual growth 2011-2016 Source: RMMS, 2018. No freight data for LU and NL. Passenger and freight markets are discussed more in detail below. 10.The passenger market 11.Evolution of volumes Evolution of propensity to travel/rail travel per inhabitant Figure 18 shows how propensity to travel by rail, measured as annual passenger-kilometres per inhabitant, varies significantly between States. Figure 18: Propensity to travel by rail 2016 and compound average annual growth 2011-2016

Source: Statistical pocketbook, 2018 and Eurostat. Since 2011, the average propensity to travel in EU has slightly increased from 830 to 882 passenger-kilometres per inhabitant (+1.2% of cumulative annual growth rate). The most rail travel per inhabitant was in Austria, France and Sweden, with over 1 300 passenger-kilometres per inhabitant. The least rail travel per inhabitant was in Lithuania, Greece, Croatia and Bulgaria, all with at most around 200 passenger-kilometres per inhabitant. Passenger land transport modal split by Member State Passenger car dominates total passenger land transport within the EU, with a share of more than 80% throughout the period 2007 to 2016. Figure 19 shows the remaining shares carried by the modes of rail, bus and coach, and tram and metro. Figure 19: Passenger land transport modal split, 2007-2016 Source: Statistical pocketbook, 2018. Over the period 2007 to 2016, rail mode share rose from 7.0% to 7.6%. Tram and metro mode share also rose, from 1.6% to 1.8%, possibly reflecting the continued investment in expansion of urban and suburban tram and metro networks. Bus and coach share fell from 9.9% to 9.3% between 2007 and 2016, whilst car share fell only 0.1% over the same period. Figure 20: Passenger land transport modal split by country, 2016 and change in percentage rail 2011-2016 Source: Eurostat and statistical pocketbook, 2018. 2011 data for EU27. Figure 21 compares the 2016 rail mode share and tram and metro mode share in each State. Figure 21: Passenger rail, tram and metro mode shares by country, 2016 Source: Eurostat and statistical pocketbook, 2018. In most States, total tram and metro mode share was less than 2%, but in Hungary, Romania and Austria was over 3% and for the Czech Republic over 10%. Figure 22 shows the effect of including the mode share of bus and coach, which tends to be larger in smaller States with limited rail, tram or metro networks. Figure 22: Passenger rail, bus, coach, tram and metro modal split by country, 2016

Source: Eurostat and statistical pocketbook, 2018. On the left (blue) are smaller States with rail mode share near or below 6%, including the Baltic States, Greece, Slovenia, Bulgaria, Ireland and Croatia. On the upper right (dark grey), with relatively high non-rail public transport shares, are Member States in central Europe including Austria, Slovakia and, with lower rail mode share, Poland and Romania. Hungary and the Czech Republic (green) have both relatively high non-rail and rail public transport modal share. On the lower right (yellow), with relatively low non-rail public transport share, are larger Member States in western Europe including Germany, France and the United Kingdom, but also the Netherlands, Sweden, Denmark and Belgium. Evolution of rail passenger volumes Figure 23 shows the evolution of rail passenger volumes from 2007 to 2016. Figure 23: Evolution of rail passenger traffic volumes, 2007-2016 Source: RMMS, 2018. Infill data from various other sources and estimates. EU railways transported in 2016 some 9 billion passengers. Rail passenger traffic has been resilient to the financial crisis and has risen from 391 billion passenger kilometres in 2007 to 450 billion passenger kilometres in 2016 on about 6 trillion passenger-kilometres of land transport overall. The proportion of passenger-kilometres reported as being on international journeys was more impacted by the unfavourable economic climate, falling to 5% of the total passenger traffic, but rose thereafter and has since remained around 6%. Figure 24 shows the volumes of domestic and international passenger rail travel, measured in passenger-kilometres, and the proportion of international traffic by State in 2016. Figure 24: Passenger traffic volumes by country, passenger-kilometres, 2016 Source: RMMS, 2018. The figure shows that the largest rail markets are in Germany, France, the United Kingdom and Italy. In three of these Member States, well below 5% of passenger-kilometres are on international journeys. However, the proportion of international travel is 12% in France, which has high-speed rail links into the United Kingdom (Eurostar), Belgium, the Netherlands and Germany (Thalys), and Switzerland, Italy and Spain (TGV). The proportion of international traffic is also high in several smaller States, including Lithuania and Luxembourg (both over 30%), Slovenia, the Czech Republic and Austria (where national operator ÖBB operates both day and night trains to several other States). 12.Evolution of revenues Figure 25 shows the sources of passenger railway undertakings’ revenue in 2016 which have been reported. The figure is structured as follows:

-Above the horizontal axis is the revenue contributed by passengers through fares paid on either PSO or (if reported) commercial services. -Below the horizontal axis is the proportion of revenue contributed by competent authorities in the form of PSO support. Figure 25: Sources of passenger railway undertakings’ revenue, 2016 Source: RMMS, 2018. No data for EL, FR, NL and SI. Information on commercial services confidential for BE, DK and NO. In Member States such as Bulgaria and Hungary, most of the railway undertakings’ revenue is from PSO support. In Bulgaria this amounts to almost four times passenger revenue: passengers only contribute 20% of total railway undertaking revenue while 80% comes from subsidies. In other States, however, the need for support from competent authorities is less. In the extreme case of the United Kingdom, the net requirement for support from competent authorities is negative, although this cannot readily be shown on the chart. This is because, in the United Kingdom, many services which are subject to a PSO can be operated profitably, at least at current levels of access charges and fare (both of which, while regulated, are subject to change). Competitive tenders for many PSOs therefore result in a request for negative subsidy, indicating that the tenderer will pay the competent authority for the right to operate the service. The result is that the PSO operators, in aggregate, currently receive a negative subsidy from the competent authorities. 13.The freight market 14.Evolution of volumes Evolution of rail freight tonnage relative to GDP In 2016, there was a strong disparity among European countries regarding the ratio of rail freight use compared to nominal GDP. The high end of the scale was dominated by eastern European nations with Latvia and Lithuania demonstrating the highest rates of rail freight relative to GDP and the others following closely. Growth in the use of rail freight services was significantly outpaced by that of the GDP between 2011 and 2016, resulting in a negative average annual growth rate across many of member states, suggesting that rail freight is playing less of a role in economic development than in previous years. Only countries to have registered a positive growth were Czech Republic, Hungary, Slovenia, Spain, Italy and Portugal. Figure 26: Rail freight activity per unit of GDP, 2016 and compound average growth rate 2011-2016 Source: Statistical Pocketbook 2018, Eurostat 2018. Freight land transport modal split by Member State Road remains the dominant mode within the EU also in freight transport and continues to handle around three-quarters of net tonne-kilometres. Its weight in the modal mix is however lower than in the passenger transport, remaining around 75%. Figure 27 shows the shares of rail and inland waterways, the principal modes for heavy or bulk goods, compared to road. Figure 27: Freight land transport modal split, 2007-2016

Source: Eurostat. Rail mode share has been broadly constant between 2007 and 2016. However, since the peak reached in 2011 (almost 19%) the share decreased but managed to remain around 17% in 2016, while road’s share increased from 75% to 76%. The overall share of inland waterways has been broadly constant over the period, with some variation but little overall change, and continues to be just over 6% of tonne-kilometres transported. Figure 28 shows the rail, road and inland waterway mode shares in each Member State. Figure 28: Freight land transport modal split by country 2016 and change in percentage rail 2011-2016 Source: Eurostat. Rail has the highest mode share in Latvia and Lithuania, primarily because their rail networks carry large volumes of transit traffic to and from the Russian Federation. Rail’s share is also high for the States of Slovakia, Slovenia and Austria. In contrast, rail has the lowest mode share in the insular or peninsular Member States of Ireland, Greece and Spain, where there is less scope for international or transit traffic. Inland waterways are a major competitor to rail in Member States with access to major rivers including Romania and Bulgaria, which border the Danube, and Belgium, the Netherlands and Germany, with access to the Scheldt, Meuse and Rhine. The evolution of modal share between 2011 and 2016 has been clearly negative for the majority of the countries. Particularly relevant has been the decrease in the Baltic States. The share increased only in Portugal and Italy (more than 3 percentage points), whereas it remained substantially stable in Spain and France. Evolution of rail freight volumes In 2016 around 1.6 billion tonnes of freight was carried on EU railways. Figure 29 shows that output in tonne-kilometres, while still being less than 7% lower than the 2007 peak level, have recovered 15% between 2009 and 2016 reaching according to RMMS data to 419 billion tonne-kilometres out of overall 2.5 trillion in land transport. Figure 29: Evolution of rail freight traffic volumes, 2007-2016 Source: RMMS, 2018. Infill data from various other sources and estimates. Around half of total rail freight, measured by net tonne-kilometres, is cross-border: rail freight is increasingly competitive to road freight at longer distances. International freight peaked during 2014 at 53% of total rail traffic and then came down to 50% in 2016. This significant cross-border element gives to rail freight a stronger European dimension compared to passenger traffic, where the proportion of international journeys remains around 6%. A lack of interoperability and cooperation between national railway networks can hugely affect rail freight transport and its competitiveness with alternative modes. Figure 30 shows the volumes of domestic and international rail freight by State in 2016. Figure 30: Rail freight traffic volumes by country, 2016 Source: RMMS, 2018. IE volumes too small to appear in the graphic (0.1 bn tonne-km).

The largest volumes of rail freight are in Germany, followed by Poland and France. The chart shows that international rail freight represents only a small proportion of the total in the island economies of Ireland and the United Kingdom, and less than half of the total in the large economies of Spain, France, Germany and Italy. In contrast, international rail freight represents a large proportion of the total in smaller States. This illustrates the importance of giving small, and particularly landlocked Member States, efficient links and access to ports. 15.Evolution of revenues Evolution of rail freight revenues Figure 31 shows reported revenues from rail freight by State in 2015 and 2016. As with rail freight volumes in Figure 30 , Germany is by far the largest contributor, followed by Poland. Figure 31: Freight revenue of railway undertakings by country, 2015 and 2016 Source: RMMS, 2018. No data for CZ and NL, IE too small figure to be represented. No 2015 data for BE, EE, ES, LU. No 2016 data for FR. Between 2015 and 2016, rail freight revenues rose in Germany (from EUR 5.1 billion to EUR 5.4 billion), but fell in Poland (from EUR 1.8 billion to EUR 1.6 billion) and the United Kingdom (from EUR 1.3 billion to EUR 1.0 billion). 16.The future of rail freight Transport currently accounts for a quarter of all EU greenhouse gas emissions, 72% of which come from the road sector. A part of the EU's ambitious policy to fight climate change is therefore to promote rail freight. To deliver it, the Commission has a coherent Strategy for Low-Emission Mobility and has set modal shift objectives in its 2011 White Paper: 30% of road freight over 300 kilometres should shift to other modes such as rail or waterborne transport by 2030, and more than 50% by 2050, facilitated by efficient and green freight corridors. In this context, rail freight has a central role to play in the transport model of the future and is considered as a priority by the Commission. However, the overall situation of rail freight remains critical: its modal share is stagnating around 17%. Figure 28 shows that the modal share has increased slightly in Italy and Portugal, but has declined in almost all Member States. To reach the modal shift objectives, far larger volumes of freight need to be carried by rail. Although exogenous factors such as the evolution of the industrial structure and the state of the wider economy and productive situation affect modal choice, the main lever to achieve growth of rail freight is to secure the shippers' trust vis-à-vis rail as a reliable and cost-effective mode to move goods across Europe. In other words, rail freight needs to become more competitive. In particular, the quality, reliability and flexibility of the rail freight services offered need to be increased sharply, which will in turn contribute to address the cost challenge rail freight is facing. In 2016 almost 50% of European rail freight was cross-border, down from 52% in 2014. To achieve EU climate objectives the share of international rail freight traffic should continue to grow. On the one hand, this is driven by further European economic integration, on the other hand, because the competitive advantage of rail freight increases with distance. This strong European dimension means that rail freight is particularly suffering from the lack of a truly Single European Rail Area, in particular from the lack of interoperability between the different networks and of coordination of operations, such as at the borders or in terms of rail capacity and traffic management. To tackle the situation, the Commission is pursuing an agenda of complementary initiatives and actions. The Fourth Railway Package is setting the general regulatory framework: its market pillar will reinforce the framework conditions for an efficient market organisation and its technical pillar will simplify the processes and reduce costs, particularly through an extended role for the European Union Agency for Railways. This will complement, on the one hand, the Commission's long-standing policy to achieve interoperability (including the efficient and coordinated deployment of ERTMS), with a current focus on solving practical cross-border operational issues (see Box 5) and, on the other hand, the Commission's infrastructure development policy through the TEN-T policy, with significant financial support provided under the CEF. A well-developed infrastructure, free of bottlenecks and missing links and with infrastructure parameters targeted to freight is a precondition for rail freight development. These key policies are accompanied by efforts to tackle the issue of rail noise, to better embed rail in the multimodal transport system by deploying digital technologies and to foster innovation, particularly through the activities of the Shift2Rail Joint undertaking. In parallel, the Rail Freight Corridors remain the key element of the Commission's policy to boost rail freight. They are intended to trigger rail freight development in terms of volume, market share, quality and reliability along the main freight axes, through fostering cooperation, coordination and harmonisation at different levels and in different areas (such as rail capacity, traffic management, conditions of use of the infrastructure, processes). As illustrated in the report from the Commission to Council and European Parliament on the application of the Rail Freight Corridor Regulation (Regulation 913/2010) published in April 2018, the Rail Freight Corridors have achieved positive results, but the pace of change needs to be accelerated. The progress accomplished by the Rail Freight Corridors is mainly in the hands of the Member State authorities and infrastructure managers, but the Commission continues to promote their ambitious development. In the coming years the Commission services will launch an evaluation of Regulation 913/2010 to assess whether there is a need to revise it. Finally, rail freight cannot be considered in isolation from other modes: its competitiveness also depends on the framework for intermodal competition. This is why the Commission is striving for equal conditions for intermodal competition, such as through the Mobility Package and the Eurovignette initiative (see https://ec.europa.eu/transport/modes/road/news/2017-05-31-europe-on-the-move_en ). With the legislative framework largely in place and other support actions on track, ambition set out in the White Paper in respect of rail freight can be achieved only if rail freight is high on the agenda of all relevant parties. This includes high-level commitment at national level, as the societal and political acceptance of rail freight should be ensured. This is the reason why the Commission intends to strengthen the coordination of its rail freight policy with those of the Member States and engaged, in this context, in accompanying the Austrian Presidency of the Council in its activities to follow up on the Rotterdam Ministerial Declaration on rail freight in the second half of 2018.

Active progress is also required from the rail sector, as most of the structural changes can only happen within the concerned organisations and processes. The Commission places high expectations on the sector and provides strong political support to the implementation of the Rotterdam Sector Statement. Instrumental actions to be undertaken and delivered by the sector for the rail freight services to gain in reliability and flexibility include: ·making the timetabling process more efficient and flexible (such as through the TTR project); ·improving information exchange, such as through the sharing of a reliable Estimated Time of Arrival between the parties involved in a train run (see ETA); ·developing KPIs to adequately measure rail freight performance; ·accelerating the pace towards solving cross-border interoperability issues, where progress is urgently needed; ·ensuring a better coordination of temporary capacity restrictions; and ·developing and implementing processes for contingency situations, as discussed next. Interoperability of rail networks Following an incident near the city of Rastatt in Germany in autumn 2017, a stretch of line on the rail freight corridor Rhine Alpine was closed for rail traffic for seven weeks. This important north-south corridor is a core connection for rail freight and links the ports of Rotterdam, Hamburg and Antwerp with Switzerland and Italy. A major hurdle was that diversionary routes were limited in capacity and interoperability. The incident led to big financial losses, a drop-in market share and reputational damage for the rail freight industry. DG MOVE reacted to this incident with the organisation of meetings open to European stakeholders. It was important to establish a platform for exchange for finding European solutions and establishing measures that help to remedy the consequences of such incidents much more effectively in future. The output of the meetings is the Handbook for International Contingency Management, put together in cooperation between rail stakeholders. It describes standards that will, in the event of international disruption, allow for the continuation of rail traffic, in addition to assuring transparency of the status of the disruption and its impact on traffic flows for the relevant stakeholders. All measures of the Handbook will be applied from the start of the 2019 timetable in December 2018. Box 5: Cross-border harmonisation of technical and operational rules and issues log Cross-border operational and interoperability issues are one of the biggest and urgent obstacles hindering cross-border traffic, particularly rail freight. The Rastatt incident showed once more how much impact such obstacles have. This is why DG MOVE has sought to use the post-accident momentum to strengthen its joint initiative with the European Union Agency for Railways (ERA), involving the Rail Freight Corridors, the sector associations and the relevant authorities, and aiming at initiating efficient processes to tackle these issues through a so-called Rail Technical Operational Issues Logbook. The logbook will serve as a repository of all the main technical operational issues hampering international rail freight traffic. With this initiative the Commission and ERA intend to prioritise issues with great impact and focus the work, so that quick resolutions are achieved. 17.Rail noise Noise is one of the most widespread public health problems in the European Union, with serious costs to society. Railways, and especially rail freight traffic, are the second most important source of noise in Europe with at least 19 million people estimated to be exposed to levels above 55 dB. A number of initiatives have been already adopted at the EU level in order to reduce noise exposure, including the Environmental Noise Directive 2002/49/EC, Technical Specification for Interoperability (TSI) on noise, financial assistance under the CEF, and modalities for noise-differentiated track access charges. However, despite the efforts of the Commission and Member States, progress in tackling rail noise is rather slow. There is also a risk that excessive levels of railway noise can lead to uncoordinated unilateral actions by Member States, such as applying speed limits and restrictions on operating at night. Box 6: Policy framework for tackling rail noise Given that more than 50 % of rail freight wagons run across borders, any attempt to combat rail noise at source needs a European response. At present the most effective way to mitigate rail noise is by retrofitting the existing freight wagons with composite brake blocks. This technical solution reduces rail noise by up to 10 dB which equals a 50% reduction in audible noise for humans. The Commission now envisages a revision of the TSI Noise following the ‘quieter routes’ approach so that the noise limit values become applicable not only to new wagons but also to the existing fleet. A 'quieter route’ is a part of a network identified on the basis of traffic intensity where only wagons complying with TSI Noise pass-by limit values will be permitted to circulate as of December 2024. It is paramount to provide stakeholders with a stable timeframe, which will allow them to anticipate the necessary investment and to adopt suitable market strategy. The Agency has finalised preparations for the revision of the TSI Noise with a planned adoption by the end of 2018. In 2018 it will launch also the evaluation of the existing Commission Regulation on Noise Differentiated Track Access Charges.

18.The evolution of services supplied to railway undertakings Directive 2012/34/EU defines rules for service facilities and rail related services, aiming at increasing the transparency of access conditions and charges applied to ensure non-discriminatory access. Provisions apply to a broad range of facilities, including passenger stations, freight terminals, marshalling yards and train formation facilities, storage sidings, maintenance facilities, cleaning and washing facilities, maritime and inland port facilities and refuelling facilities. Services provided in these facilities and additional and ancillary services as traction current supply, pre-heating of trains, arrangements for transport of dangerous goods, access to telecommunication networks and ticketing services in stations are also covered by the Directive. A new implementing Regulation on service facilities, adopted in 2017, makes provisions for sharing and accessing information and for developing cooperation between service facility operators and infrastructure managers. Box 7: New implementing Regulation on service facilities Implementing Regulation (EU) 2017/2177 lays down the details of the procedure and criteria to be followed for access to service facilities and to the services supplied in these facilities listed in points 2, 3 and 4 of Annex II to Directive 2012/34/EU. The Implementing Regulation repeats the principle of establishment and publication of a service facility description and provides a detailed list of information that service facility operators shall make publicly available. This can be done either by publishing the information on their own website or on a common web portal and providing the infrastructure managers with a link to be included in the network statement. Another option is providing the infrastructure managers with the relevant ready-to-be-published information to be included in the network statement. The Implementing Regulation requires infrastructure managers to provide a common template for service facility descriptions developed by the railway sector in cooperation with regulatory bodies. RailNetEurope (RNE) has developed such a template, discussed it with the market and published it on their website. In addition, the Implementing Regulation highlights the need for better cooperation between service facility operators and infrastructure managers with the aim of ensuring that the allocation of capacity on infrastructure and in service facilities is consistent where necessary. It also refers to the coordination of conflicting requests and, where the coordination procedure has not enabled the reconciliation of conflicting requests, to the application of predetermined priority criteria. Regarding requests that cannot be accommodated at all following the application of priority criteria, it is mentioned that the concerned service facility operator and the concerned applicant shall jointly assess whether there are viable alternatives allowing operating the relevant freight or passenger service on the same or alternative routes under economically acceptable conditions. Last but not least, it provides for the possibility to exempt certain service facility operators from the application of all or some of the provisions of the Implementing Regulation with the exception of certain provisions concerning the obligation to publish a service facility description. Information on service facilities and rail related services is particularly important for freight services. Expected to be launched in mid-2019, the Rail Facility Portal could provide the sector with a unique entry point for gathering and sharing information between interested parties. Box 8: European Rail Facility Portal The Rail Facility Portal is being currently developed as a single EU user-friendly and market-oriented GIS-based portal, mapping and providing key information on the rail service facilities and last-mile infrastructure in Europe. The portal aims at remedying the lack of easy access to information on rail facilities and last-mile infrastructure and will therefore contribute to the better planning of rail services. It will also provide an efficient tool for the service facility operators to comply with their obligation to publish information on access conditions pursuant to Directive 2012/34/EU and Commission Implementing Regulation (EU) 2017/2177. The portal will therefore be both a market tool and a compliance tool. The pilot portal ‘Rail Freight Locations’ ( railfreightlocations.eu ) is the basis for the new European Rail Facility Portal, which is expected to become gradually operation as from mid-2019. New functionalities will be introduced, such as the indication of available capacity at the facilities or reporting capabilities, and an initial ‘critical mass’ of data will be fed. This will be accompanied by a self-sustainable management concept for the permanent operation phase, as DG MOVE intends to hand over the portal to the sector. Although the portal will also be developed for passenger facilities, the focus will first be put on rail freight. The acceptance of the portal by the wide sector, as the ‘tool of choice’ both for feeding and consulting information on the EU rail service facilities, will be the key success factor. DG MOVE is expecting the sector to support the use of the portal, which is a unique opportunity to avoid a piecemeal publication of information on services facilities, and thus to make such information usable and useful for the benefit of the rail market. RMMS information is largely complete for stations. However, despite the introduction of Regulation 2015/1100, information on other service facilities remains fragmented and not always comparable. Data presented in this section must therefore be interpreted with care. The Commission services have started working with Member States and the Consortium developing the portal on common definitions for reporting purposes to improve the quality of reported data. Charging principles for service facilities, additional and ancillary services Any public or private entity responsible for managing one of more service facilities or supplying one or more services to railway undertakings referred to in points 2 to 4 of Annex II of Directive 2012/34/EU shall be considered as a service operator under Article 3(12) of the same Directive. Different service facility types and rail-related services are enumerated in Annex II points 2 to 4 of Directive 2012/34/EU. Service facilities in principle supply services related to the nature of the facility itself. For example, freight terminals are installations where services of loading, unloading and transhipment of goods from and to freight trains or wagons are supplied. These services are defined as basic. Additional and ancillary services are services supplementary to the basic ones. For instance, in the case of freight terminals additional services may comprise tailor-made contracts for control of transport of dangerous goods and ancillary services may comprise technical inspection of rolling stock. Charging principles for service facilities and rail-related services differ from the ones applied to rail infrastructure. While direct costs and possibly mark-ups (and eventually other charging components) are levied by the infrastructure manager, charges imposed for track access within service facilities and the supply of basic services in such facilities shall not exceed the cost of providing them plus a reasonable profit (direct costs). The charge for additional and ancillary services shall similarly not exceed the cost of providing the single service including a reasonable profit, except when these services are offered by more than one supplier. Applicants must have easy access to information on any service facility and its rail related services. For that reason, it is obligatory that the network statement, which is available free of charge, contains a section on information on access to and charging for gaining access to service facilities as well as for the provision of rail-related services. Alternatively, the information can be published on the website of the service facility or on a common web portal (see Box 8: European rail locations portal). Charging principles ensure transparency and non-discrimination. Any individual negotiation on charges or discounts not based on the above principles would undermine the principle of non-discrimination. 19.Passenger stations

There were more than 31 000 stations in the EU in 2016, of which about 330 were large stations serving more than 25 000 travellers per day. Figure 32 shows the average distance between stations on each national network for which information is available. Figure 32: Average distance between stations by country, 2016 Source: RMMS, 2018 and Statistical Pocketbook, 2018. 2015 data for HU. Slovakia reported 927 stations on the network of which only 695 are active, and the analysis has therefore been based on 695 stations on a network of 3 626 line-kilometres. In 2016 the average distance between stations in EU was about 7 kilometres. The Austrian network has the shortest average distance between stations at 3.5 kilometres (283 stations per 1 000 line-kilometres), followed by the network of the Czech Republic at 3.7 kilometres (271 stations per 1 000 line-kilometres). The largest average distances between stations are in the Scandinavian and Baltic networks of Finland (over 30 kilometres, or 33 stations per 1 000 line-kilometres), Sweden, Lithuania and Latvia, and also Bulgaria. Figure 33 shows the relative numbers of stations with different passenger volumes per day. Figure 34 shows the relative mix of stations with different passenger volumes per day. Figure 33: Number of stations by passengers per day by country, 2016 Source: RMMS, 2018. No data for HR. 2015 data for HU, RO. Figure 34: Stations by passengers per day by country, mix, 2016 Source: RMMS, 2018. No data for HR. 2015 data for HU, RO. Figure 33 shows that Germany has almost 7 000 stations on its network, over one quarter of the EU total. In contrast Luxembourg has only 42 stations, reflecting the size of the country and the largely suburban and regional nature of its network. Figure 34 shows the proportion of stations in each network serving different numbers of passengers per day. Except in the case of the Netherlands, at least half the stations on all networks serve fewer than 1 000 passengers per day, equivalent to 500 round trips. Four networks, in Bulgaria, Greece, Lithuania and Slovenia, have no stations serving more than 10 000 passengers per day, and Romania has only one. 20.Other service facilities The RMMS collected data from Member States on the numbers of other service facilities, whether for the use of freight operators or for the storage and fuelling of trains, as referred to in Annex II of Directive 2012/34/EU. In many cases, however, the current discrepancies in the definition of each type of service facility at national level limit the comparability of figures across Member States and suggest caution in drawing conclusions from the inputs received.

Moreover, the RMMS does not collect data on the use of such facilities, whether there was a realistic need for them in the foreseeable future, or whether they were sufficiently well-maintained to be used at short notice. The mere existence of a facility in fact does not necessary imply that this facility is regularly used (or could be used in future). Freight terminals Based on data reported for the RMMS, there were around 2 358 freight terminals in the EU in 2016. Figure 35 shows the reported number of freight terminals in 2016 by State. Figure 35: Facilities: freight terminals by country, 2016 Source: RMMS, 2018. No 2016 data or suitable proxy for IE (last reported in 2012), BE or LV. 2015 data for ES. The RMMS Regulation defines freight terminals as a facility equipped for the transhipment and storage of intermodal transport units, where at least one of the modes of transport is rail. Romania reported high numbers of such freight terminals, with 1 401 in 2016. Major freight terminals are also defined, as those with a capacity of over 100 000 containers or over 1 million tonnes per year. Marshalling yards and train formation facilities Based on data reported for the RMMS, there were around 452 marshalling yards and train formation facilities in the EU in 2016. Figure 36 shows the reported number of marshalling yards and train formation facilities in 2016 by State. Figure 36: Facilities: marshalling yards by country, 2016 Source: RMMS, 2018. No data or suitable proxy for ES, IE or NO. The RMMS Regulation defines a marshalling yard as a site or a part of a site equipped with several tracks or other equipment used for railway vehicle marshalling operations, including switching, and which use gravity as a means of formation or rearrangement of trains. Maintenance facilities Based on data reported for the RMMS, there were around 1 667 maintenance facilities in the EU in 2016. Figure 37 shows the reported number of maintenance facilities in 2016 by State. Figure 37: Facilities: maintenance facilities by country, 2016 Source: RMMS, 2018. No data or suitable proxy for EE or ES. 2015 data for FR. 2014 data for EE.

Maintenance facilities are facilities where rolling stock is maintained, including both heavy and light maintenance, to keep it in operation. Maritime and port facilities Based on data reported for the RMMS, there were around 702 maritime and port facilities in the EU in 2016. Figure 38 shows the reported number of maritime and port facilities in 2016 by State. Figure 38: Facilities: maritime and port facilities linked to rail activities by country, 2016 Source: RMMS, 2018. 2015 data for FR and HU. 2014 data for ES and LV. No data or suitable proxy for BE, EE, LT, NL. Italy reported the largest number of links to port and maritime facilities, 232, but commented that only 24 of them are directly connected to the network of RFI, the main infrastructure manager. Refuelling facilities Based on data reported for the RMMS, there were around 954 refuelling facilities in the EU in 2016. Figure 39 shows the reported count of facilities refuelling locomotives and multiple units. Figure 39: Facilities: refuelling facilities by country, 2016 Source: RMMS, 2018. No data or suitable proxy for CZ, EE, IE, SE. Germany reported the highest number, 352 such facilities, followed by Italy with 179 and Romania with 71. 21.Complaints related to access to service to facilities Complaints currently being processed and decisions taken Figure 40 shows data in relation to complaints and decisions made in 2016, provided by 23 of the States. Complaints reported relate primarily to: ·access to facilities; ·infrastructure charging; and

·quality of services provided. Figure 40: Complaints being processed and decisions made by country, 2016 Source: RMMS, 2018. No data for ES, FR, RO and UK. No data on complaints being processed for EL. Portugal made the most decisions, with other States reporting limited or no complaints activity. Some complaints also relate to processes for bidding for track access. The RMMS survey also asked States to report whether any complaints relate to the interpretation of the European railway acquis. Decisions are not necessarily in response to complaints raised in the same year, as there can be a considerable time lag between a party making a complaint and the resolution of the complaint. The feedback received from Member States through RMMS suggests that each uses different approaches to complaints management and regulation more broadly, meaning that there is likely to be considerable variation in the categorisation and recording of complaints for the purposes of reporting. 22.The traction market Many passenger services are operated by multiple units, which carry their own source of power (typically electric or diesel, although a small number of hybrid and battery-powered vehicles have been used) and interface with signalling systems. Other passenger services, and almost all freight services, require traction provided by locomotives carrying this equipment. Locomotives may be designed for use with passenger services, freight services, or both. Locomotives must be compatible with the infrastructure over which they are to be operated, with compatibility defined by track gauge, structure gauge, coupling and signalling equipment and, if electrified, electrification system (which may use trackside rails or overhead catenary supplying power at several different voltages). Suitable maintenance facilities and, for diesel locomotives, fuelling points, must also be available on or near the infrastructure over which they are to be operated. For international passenger and freight services, this often means that the locomotive (and crew) must be changed at each border. Technical Specifications for Interoperability (TSIs) are intended to reduce the variety of systems in use, particularly in signalling and control, through the European Railway Traffic Management System (ERTMS). An operator wishing to enter the market or to expand its services may buy new or used traction equipment or lease it from another party such as a rolling stock company. New entry and expansion are easiest when one or more of these options is available and, ideally, there is a competitive supply market. Lack of suitable traction, or an unwillingness of an existing owner to sell or lease it on reasonable terms, can be a major barrier to market entry. Equally, lack of an alternative use, or of an attractive resale value, for existing traction can be a major barrier to market exit. In some Member States there are relatively developed markets for the leasing of traction equipment. In the United Kingdom, three privately-owned rolling stock companies (ROSCOs) were created in 1995. ROSCOs have also been established in other Member States including Germany, the Netherlands and Sweden. On 4 June 2018, Finland’s incumbent railway undertaking, VR Group, agreed with the Ministry of Transport and Communications that a new rolling stock company would be established, although it is not yet clear whether this will supply traction. Useful data on the availability of traction equipment in the Member States are limited. Locomotives may be listed as available but may no longer comply with safety and technical standards, be maintained in operable condition, or meet the technical requirements (track gauge, structure gauge, coupling, signalling system, electrification type) needed to operate any service. The key issue is whether existing and potential operators can obtain suitable equipment on reasonable terms. 23.The evolution of framework conditions in the rail sector 24.Infrastructure charging Infrastructure charges enable infrastructure managers to recover the cost related to provision of infrastructure for train operations. The core principle is that the charges should cover at least the ‘direct’ costs of the train run referring to those costs incurred to the infrastructure manager due to the interaction of train and infrastructure. In addition to direct costs there are other components of charging systems that infrastructure man-agers can apply to enhance the optimal use of their infrastructure or to set incentives: ·the effective use of infrastructure capacity can be incentivised through mechanisms such as a scarcity charge, a reservation charge or discounts to specific traffic flows; ·to improve the environmental performance, charges can reflect noise emissions or the usage of diesel/electric locomotives;

·the costs of specific investment projects can be recovered by charges based on long-term costs); and ·the operational performance can be addressed by a performance scheme involving penal-ties/rewards linked to occurrence/avoidance of service disruption both by railway undertakings and infrastructure managers. In addition, mark-ups can be applied on top of the direct cost charges in market segments being able to pay such higher charges. At the same time, market segments that can at least pay the direct costs shall not be excluded from the use of the rail infrastructure. The overall level of cost recovery through infrastructure charges is interdependent with the level of government contribution and Member States may require different levels of cost recovery. Box 9: Direct cost-based charging The EU rail legislation provides the basis for the calculation of direct costs which are core for setting track access charges. According to Directive 2012/34/EU, the charges for the minimum access package (the essential components of the infrastructure service, such as use of tracks, traction current, train control services) and for access to infrastructure connecting service facilities, shall be set at the cost that is directly incurred as a result of operating the train service. Commission Implementing Regulation 909/2015 specifies the rules on the modalities calculating the underlying direct costs. Direct cost based infrastructure charges intend to ensure optimum effective use of the available infrastructure capacity by ensuring that every market segment that can at least pay the direct costs shall not be excluded from the use of the rail infrastructure, while the infrastructure manager has always the right to charge at least for the cost of each train run. The infrastructure managers shall integrate in their calculation of direct costs those costs that they can objectively and robustly prove to be incurred by the operation of the train service. The rules for calculating direct costs include the prohibition to recoup the wear and tear of infrastructure for which the infrastructure manager had received grants. Effective implementation of the principle of direct costs charging requires that infrastructure managers have a good overview of their assets and understanding of cost causation, so that they can allocate costs to different services or even to different types of vehicles. By doing so, it also allows the infrastructure managers to incentivise the use of less damaging rolling stock. Access charges for different categories of passenger trains As explained above, level and approach to charging may vary both within the charging scheme of one infrastructure manager as well as between Member States. The current RMMS does not allow distinguishing between the various charging elements used by each Member State. Therefore, while comparing the level of charges as reported in the RMMS, the results need to be interpreted with caution. Figure 41 compares estimates of typical access charges (excluding mark-ups), in EUR per train-kilometre, for three different types of passenger train. Figure 41: Access charges (excluding mark-ups): passenger trains by type by country, 2016 Source: RMMS, 2018. DE data including mark-ups. Figure 42 compares track access charges for typical suburban and regional passenger trains in 2013, where available, and 2016. Figure 42: Access charges (excl