ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79)205
V ol.1979/0089

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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(79)205 final
Brussels ,20th April 1979
REPORT BYTHE COMMISSION TOTHE COUNCIL
ONTHE OBJECTIVES TOBEPURSUED INTHE LONG
TERM AND THE MEASURES TO BETAKEN TOPROMOTE
PARTIAL ORTOTAL INTEGRATION OFRAILWAY
UNDERTAKINGS ATCOMMUNITY LEVEL
(Article 11 <2)ofCouncil Decision
75/327/EEC of20May 1975 )
COM (79)205 final

REPORTBYTHECOMMISSION TOTHECOUNCIL
ontheobjectives tobepursuedinthelongtermandthemeasuresto
betakentopromotepartialortotalintegration ofraiIway'undertakings
atCommunitylevel
(Article11<2)ofCouncilDecision75/327/EECof20May1975).

TABLE OFCONïENYï .
Points Pages
1-2■
168-9INTRODUCTION
-Termsofreference
3 .3
–previoustextsonintegration ^ 4
-Procedurefollowedandaimofthereport
INTEGRATION INGENERAL •
I.Acceptedinterpretation ofintegration ^ 5
-Levelofintegration _-j-'5".-definition
II.Assessmentofintegrationinthecontext
oflong-termobjectives 8-106-7-long-termobjectives ^ -11-157-8
commentsontheobjectives
-interplaybetweentheobjectivesandthe^g_
ideaofintegration
III.Possibleavenuesofapproachtointegration
andapproacheschosen 4 •17-18 9-possibleavenuesofapproach 19-20 10-approaches chosen
INTEGRATIO NINPRACTICE
I.Situationas-regardscooperation
-operatingpools
-subsidiaries
II.Thesearchforformsofpartialintegration
III .Practicalpossibilities ,-commercial andoperatingpolicy
-infrastructure planning
-researchanddevelopment
-generalproblems ,
CONCLUSION
-Actionprogramme21-22 11
23 11
24-25 ,11~12
26-29 13
30 14
31-3414-15
35 15-16
36 16
37-4116-17
42-44 18
45-5919-24
ANNEXE

INTRODUCTION
TERMSOFREFERENCE
1.Article11(2)oftheCouncilDecisionof20may1975(hereinafter
referredtoastheDecision)ontheimprovement ofthesituationofrailway
undertakings andtheharmonization ofrulesgoverningfinancialrelations
1betweensuchundertakings andStatesstipulates :"Before1January1979,
theCommissionwillsubmittotheCouncilareportohtheobjectivestobe
pursuedin'thelongtermandthemeasurestobetakentopromotepartial
ortotalintegration ofrailwayundertakings atCommunitylevel."
2.Inaccordance withthesetermsofreference,theCommission hasunder
takeninthisreporttoplacetheintegration ofrailwayundertakings 'inthe
contextofthelong-termgeneralobjectivesofthecommontransportpolicy,
moreparticularly railwaypolicy,andtolinkintegration withmeasuresfor
►; N icooperation betweentheundertakings .
\
PREVIOUS TEXTSONINTEGRATION
t
3.Theideaofpartialortotalintegration oftherailwayundertakings
wasalreadythesubjectofpointI.B.8oftheCouncilResolutionof7Decern-
2ber1970oncooperation .TheGroupofSixRailwaysdevotedconsiderable
attention %oit'initsreporttotheCounciloncooperation,whichwaspre­
sentedin1972andonwhichtheCouncilstateditspositioninitsletter
4of18July1973totheGroupofSix.
TheCommission wouldalsorecallthereportwhichitpresentedtothe
CouncilinDecember1977^ontheprogressmadeinthepreparationofa
programmeofcooperation amongrailwayundertakings .
lojL152,12.6.1975
^OJC5,19.1.1971
^Doc.R/2071/71(TRANS119),*;
j-Doc.R/2568/73(TRANS96)
Doc.COM(77)694final

PROCEDURE FOLLOWED ANDj^OLTHE_REPQRT
A Inaccordance withitsterms ofreference ,theCommission hasconducted
studies andconsulted railway andGovernment experts andtherailway workers -
trade unions ;their main comments aresummed upintheAnnex .
t
Inviewofthecomplexity andscope ofthesubject ,theCommission
thatthisreport cannot claim to"bemorethanrelatively general andintro­
ductory innature .However ,theCommission thought it.worth informin 3the
Council ,atthisstage,ofthepossibilities ofaction open,sothatthe
council could start todiscuss theguideline which theCommission plans to
follow inthefuture course ofthis work.

INTEGRATION INGENERAL
.ACCEPTED INTERPRETATION OFINTEGRATION
Scope2f_2L1î£2£â£22!]
5.Becauseofthecontextinwhichtheproblemofintegration hasbeen
placed,andinordertoclarifythescopeofthemeasurestobetaken,
thisconceptmustbedistinguished fromthevariousformsofcooperation .
Averyboradinterpretation oftheconceptofintegration amongrailway
undertakings wouldincludeeveryformoftechnicalstandardization ,joint
useofequipment andjointcommercial andotheroperations conductedby"
severalCommunitynetworks.Thisbroadinterpretation would,however,lead
toconfusionwiththeideaofcooperation andwouldsuggestthat,inview
ofallthathadbeenachievedinthissector,therewaslittlelefttodo
concentration onthemostsuitablesectorsfornewmeasureswhichsupple­
mentcooperation promptstheCommissiontodefinetheconceptofintegra­
tionmorerestrictively withintheframework andforthepurposesofthis
report. ..
Definition
6.Integration isthereforetakentomeantheestablishment bythe
railwayundertakings ,theMemberStatesortheCommunityinstitutions
ofoneormorejointbodiestocarryoutsomeoralltheactivitiesof
therailwayundertakings ;thesebodies:.
-maybegivenassetsand
-areendowedwithautonomous powersofmanagement andsomedecision-
makingpowerforthepurposeofmeetingacommoninterestoftheunder­
takingsconcerned. ,.

-6-
7.Tolink this definition with the terminology employed bythe Council ,it
should beunderlined that its elements apply both topartial and tototal -
integration ,defined asfollows :
-Total integration : merger ofall thenational railway under­
takings into one company atCommunity level
-Partial integration : establishment ofanintegrated body adminis'
tering certain activities ofthe networks ,
either atCommunity level orinamore
limited geographical area .
Ifpartial integration operations involve only some ofthe Community 's
railway undertakings ,orifundertakings from non-Community countries
take part ,there should besome guarantee that the Community 'sinterests ,
are being protected . ,
*
11.ASSESSMENT OF INTEGRATION IN THE CONTEXT OF LONG-TERM OBJECTIVES
Long-term objectives -_m M Vw MA mmw mm mm«
8. The long-term objectives ofrailway policy can beinferred from the
common transport policy and,more particularly ,from the Council Deci­
sion of20May 1975 . /
. . ©
Community transport system
9. Asthe Commission stated inits Communication tothe Council of
1 .•23October 1973 ,the common transport policy aims attheprogressive
introduction ofcoherent Community transport arrangements .capable of
meeting the requirements ofeconomic union and ofsociety atthe least
cost tothe Community .These :arrangements should lead tothe establishment
ofaCommunity transport system which covers all modes and inwhich the
railways should play their full part .
1Bulletin Supplement 16/73.

.Structural rationalization
•••■••••■••••a
10.Theaimofimprovingthefinancialsituationoftherailwaysis
expresslymentionedintheDecisionwhich,atthesametime,constitutes
themainlegalinstrumentforachievingthisend.
Comments_on_the_ob2ectives ,
11.Thecommonmarketnowbeingformed,whichwillbecomparablewithan
internalmarket,willneedpassenger snrjfreighttransportservicestomeet
currentandfuturerequirements .Thetransportservicesmustservethe
generalintegration oftheCommunity,i.e.provideinternational andinter­
regionallinkscomparablewiththeMemberStates'internallinks.
Atthisstage,itishardtodeterminetherailways'roleinthissystem.
Ingeneral,itwillbelinkedtothespecificadvantagesofferedbyrail
transport :lowerenergyconsumption,lessuseofspace,goodsafety
record,environmental protection andregionaldevelopment .Therailways
arealsoparticularly suitedtomodernautomatedtechniques .This
modeof,transportiscertainlyrequiredtoplayseveralroles,depending .
onthesectorofactivityandthepositionitisgiveninthenational
economy.Inanycase,therailways"inmostEuropeancountriesareirre-
1placeable fromboththeeconomicandthesocio-political pointofview.
12.Inthisconnection,thepublicauthorities willhavetodefinemore'
preciselythevariousfunctionsofpublicinterestandthecommercial
function.Asregardspassengertransport,therailwaysshouldplaythe
roleofapublicservice,especiallyinthelargeconurbations ;inthe
othersectors -ofpassengertransportandinfreighttransport,they
shouldhaveabasicallycommercialrole.Forthepurposesofthisreport,
itiscertainlytheinternational activities whichareprimarilyaffected
bythe'conceptofintegration .Itisalsoinlong-distance trafficthat
railtechnology couldpresentmostadvantages. ';
1........SecondrecitaloftheDecision., .•
^ResolutionoftheECMTof12December1978(Doc.CM(78)30du12.12.1978)

-8-
13. The'first .aim ofrationalization ,one ofthe essential elements for
harmonizing the conditions ofcompetition .,istoachieve "financial .balance ".
The Commission will present proposals onthis subject inlate 1979 .Itis
aware that the achievement ofthis balance should not ,bereduced toamere book'
keeping operation but requires considerable restructuring ofcurrent operations
which therailway undertakings andthe Member States must implement through the
multiannual business plans and financial programmes referred toinArticles 3
and 4ofthe Decision .
14. Investment policy isofparticular importance tothese programmes ,
asitshould enable the railway companies tocontinue and complete their
changeover tomodern forms ofoperation atCommunity level .Thepublic autho­
rities will have togrant the railways thefinancial means needed tocarry
out these plans and programmes (infrastructures ,equipment ,rolling stock )
and must find asolution tothe social problems .Insome cases ,this structu­
ral reform also means that thepublic authorities ,particularly the regional
anlocal authorities ,will have toaccept changes inand even the closedown v
ofthe services which make most losses andtheir replacement byservices
which are less costly tothe Community . \
15. These reforms should give the railway companies sufficient ?indepen­
dence (Article 2ofthe Decision )toexploit their specific advantages in
the high-speed carriage ofpassengers between the major economic centres
and the carriage offreight ,especially infull-train loads orsets ofvagons
(including combined transport ).
/
ïDif£2j;3^_between_t he_objectives_and_t he__idea_of_i ntegrat ion
16. Integration may admirably serve these two objectives

-9-
-joint planning and construction oftherail infrastructures will
«
help establish main traffic axes inthe Community 'sfuture trans­
port system ;
-the integration ofcertain international operations which areor
may become profitable may help toachieve theobjective ofrationa­
lizing the railway undertakings .
III.POSSIBLE A VENUES OF APPROACH TO INTEGRATION AND APPROACHES CHOSEN
£2§s.ib ile_ayenues_of_aB£ roach
17.Article 11(2)ofthe .Decision instructs the Commission todraw up
areport onthe establishment ofthe measures tobe'taken topromote
partial ortotal integration .However ,itisnot certain how extensive
the Council wished tomake these terms ofreference . - .
18.One assumption isthat the Council ,taking into acco.unt the proposed
development ofthe common market into aneconomic and finacial union and
the more distant possibility ofapolitical union ,considered that
national company structures should bereplaced byCommunity structures .
The merger ofspecific national companies into anEuropean company would
therefore bethe result ofapolitical strategy . ^
Theother possibility isthat integration would beassessed primarily
onthe basis ofthe immediate economic advantages itwould bring the
national undertakings .Integration would then becontemplated only
ifexisting cooperation between railway undertakings could gono
further unless bodies with assets and autonomous powers ofmanagement
were set uptoensure more favourable financial results forthepartici --...
pating companies .Inthis system ,limitation toforms ofpartial integration
would notcall inquestion the continued existence ofthenational
companies .

10-
/ ^
Approaches_çhos en
19.The railway ,government and trade unions experts have expressed
serious reservations about thefirst avenue ofapproach which ,they claim ,
could impose integration forpolitical reasons which may becontrary to
the economic objectives ofthe undertakings .They pointed totheobjectives
ofthe Decision ,which are toreduce intervention bythepublic authori­
ties inthe management ofthe railways .However ,the experts agree that
the implications ofthe second possibility should bestudied .Itshould
1also berecalled that,atthe Council meeting of ,12June 1978 ,the
Danish government suggested that thought begiven tqthe establishment of
one company for the international carriage ofgoods *
20.When selecting the measures tobetaken ,the Commission considered
thepolitical option ofaEuropean company .However ,itconsiders that
this isneither' necessary nor possible ,given ,among other things ,the
Community 'sstate ofprogress towards economic and monetary union .
The Commission is,however ,convinced that thepossibilities ofpartial ,
integration should beexamined .The current situation ofthe railways
issuch that they must explore allopportunities ofconsolidating or
improving their position onthe markets .They should beinaposition to
compete with the other modes oftransport ininternational traffic as
asingle carrier vis-a-vis the vcustomer .This can beachieved only
through partial integration and,insome cases ,increased co-operation ,
which offer the following advantages :
-improvement inthequality ofservices asaresult ofjoint
management ;
-amore flexible commercial policy ,which should lead toanincrease
inthe volume oftraffic ;
-reduction insome costs asaresult ofjoint operation . . '
*" I
Some ofthese advantages can beseen inachievements todate ,discussed
inthe following section . .
Doc.R/1394 /78 CTRANS 93).

INTEGRATION IN PRACTICE
SITUATION ASREGARDS COOPERATION . - .
21.This report does not discuss indetail all that has been done inthe
wayofcooperation .The most recent measures eresetout inthe Group of
Nine'swork programme ofSeptember 1977,which has been broadly approved
bythe Council .The Nine also recently sent the Commission aprogramme of
additional medium-term measures (1979-1982 ),parts ofwhich appear inthe '
conclusions tothis report .
22.Thenational companies have embasked ontwotypes ofactivity which ■
differ from traditional cooperation andofwhich the second isalready
close topartial integration :thepooling ofcertain means ofproduction
ortraffic operations andthe creation ofsubsidiary companies with
their own assets and powers ofmanagement .
/
23.Asregards the shared utilization ofrolling stock atEuropean level
-with the exception ofthe British and Irish networks -there are the
pool ofgoods wagons (EUROP )(its headquarters in .Berne run more than 300,000
waoons )and the pool ofsleeping-cars .Compensatory arrangements balance out
the advantages fortheparticipating networks .These operating pools have
proved their efficacity andoperate tothesatisfaction ofthe companies
taking part . , .
ν
24.Inthe commercial and operating sector ,the railways have set up
1... .2the subsidiaries Interfrigo and Inter container ,with their headquarters
atBasle and Brussels ,covering 22networks ,including all thenational %
1 .Carriage ofgoods ,inparticular perishable goods atcontrolled tempe­
rature .
2Container transport . «

-12-
railwayundertakings oftheEuropeanCommunitywiththeexceptionofthe
railwaysofIreland(CIE)andNorthernIreland(NIR).
Tofulfiltheirroleasajointcommercial agencyoftherailways,these N
twocompanieshavewidepowerstoimprovetheirmaterialresources,take
commercial measuresandrefinetheiroperatingmethods.However,theydo
notappeartohavesufficientdecision-making powerstoqualifyasexamples
ofpartialintegration withinthemeaningofthisreport.Thetrafficcarried
bythesesubsidiaries hasgrownsubstantially inrecentyears.However,their
financialreturnshouldbeconsideredinconnection withthatofthe
participating companies,allowingfortheserviceswhichtheyprovideand
therecompense theyexpect.
23.Asregardssupplies,theEurofimasubsidiary withitsheadquarters
inBasleisafinancial bodyservingalltheECMTnetworksexceptthe
BritishandIrishnetworks.Itsmainpurposeistoobtainfundsonthe
capitalmarkettofinancerailwaycompanies 1investments inrollingstock.
Asthissubsidiaryisalso ■requiredtoplacejointorderswithsuppliers
incertaincases,itbacksupworkbytheInternational UnionofRailways
(IUR)tostandardize normsandequipmentofrailundertakings ,thuscon­
tributingtoastandardization whichiseconomically advantageous -to•–V.
theundertakings andhelpstoopenuptenderingforpubliccontractsat
Communitylevel.
Thisjointly-owned companyservingseveralnetworkscouldfulfulits-
1role,theministersmeetingwithintheECMTstressed,providedthat:
-allthemembernetworksregularlyusethecompanyasafinancingand
procuringbodyasmuchaspossible;
-allthegovernments grantthecompany,thesupportprovidedforinthe
preambletotheInternational Convention andinthetextthereof.
CM(78)30du12.12.78

-13-
II.THE SEARCH FOR FORMS OFPARTIAL INTEG RATIO N ♦
26.Thepossibilities ofpartialintegration canbeexploredmoretho­
roughlywhentheobjectives andmotivations ofseveralundertakings con­
vergeinawaywhichismorethanjustthesumofseveralindividual
interestsandwhichmayevenhaveroomforanabsenceofinterestbyone
oftheundertakings .
27.Theramifications ofsuchsituations Rustbestudiedbymeansof
anoverallapproachtotheassessment ofthecommoninterest.Asregards
traffic,alltheexpenditure andrevenueofallthe*companiesconcerned
wouldbeconsidered .AsregardsInfrastructure ,,installations andsupplies,
anoverallcost/benefitanalysiswouldbeneeded.
*
Suchastudymustalsotakeintoaccounttheneedforagreementbetween i
thecompaniesonhowtoorganizeandcompensateforthesacrifices which
ι
willsometimes havetobemade.Itmustfindoutwhereeconomiesofscale
couldbemadeandhowthebestreturnontrafficcanbeobtained.
28.Theinstitutional formstobegiventothepracticalactiontaken
inresponsetosuchsituations canbedetermined onlyonacase-by-case
basisinlinewiththespecialaspectsofeachsituation.Insomecases,
formsofpartialintegration couldbe"adopted,whileinothers,increased
cooperation mightbemoreappropriate ..
29.Theanalysisofthesesituations wasmentionedundertheterm
"communityofinterests"intheGroupofSix'sreportof-1973,andthe
abovementioned medium-term actionprogrammeoftheGroupofNineprovides
forstudiesalongthesamelines.
Thesectorsinwhichsuchsituationsexist.andthemeasurestobetaken
asaresultshouldtherefore beidentified now­

-14-
III.PRACTICAL POSSIBILITIES
30.The nine railways inthe Community are currently studying three
sectors :
-carriage ofgrain ;
-carriage ofgoods inTEEM trains (management and marketing );
-activities ancillary tothe commercial activities for international
consignments (taxation ,processing ofaccounts ,central payments
office ).
The Commission approves these activities and considers that such situa­
tions ofcommon interest could befound inother sectors .Ofthe major
sectors ofactivity ,itismainly incommercial andoperating policy ,
infrastructure planning and research and development that they could be
discovered .Some ofthese situations are listed below .
 . .
Commercial andogerat ing_got icy
31.Inter-city passenger transport .The findings ofthe COST 33project
(study ofthe future ofpassenger transport inEurope ,conducted bythe
OECD incollaboration with the ECMT and the EEC )have underlined the
need for amajor effort toensure that the railways' share ofthe inter­
city carriage ofpassengers does not drop and pointed tothe improvement
inthequality ofservices asamajor objective ..
32.Inthis sector ,the Trans Europ Expres (TEE)group ,onwhich are
represented the railway networks ofthe Community countries and Switzer­
land,aims toprovide fast services between West European cities under
acommon emblem and inmodern ,comfortable trains .

15
32.TheTEEgroupforeshadowsinter-citytrafficintheyear2000.
Passengerswillthenbecarriedatspeedsof140-200km/honheavilyused
Links(around5000kmofroutesinWesternEurope),partlyonnewinfra­
structureallowingspeedsof300km/h.Thenumberofstationsservedby
fastorexpresstrainswillbeconsiderably cutbackandthestations'kept
openwillbecomecentresforroadconnectionswithcoachservicesorpri­
vatecars. -
33.Combinedroad-railtransport.Combinedroad-railtransport,amulti­
modalandlargelyinternational technique,willnotbefullyeffective
untilitisincorporated inthewholetransport .process.Thedevelopment
ofthismodeoftransportrequiresperfectcoordination ofthetechniques
concerned,andofitstechnicalandcommercialoperation,whichmustbe
basedonaconcertedplanmakingconsiderable useo1full-train loadsand
computerized data-processing .
34.Carriageofnewmotorvehicles.Asimilarproblemarises"orthe
international carriageofnewmotorvehiclesbymeansofspecialdouble-
deckerwagons.
Inthesequestionsthespecialwagonsusuallyreturnunladen.Theirtc-n-
. *\roundandtheserviceobtainedfromthemcouldbeimprovediftheywere'\s
pooledforuseinotheroperations .. . \
lDi£iSÏ£y£înrS_9iâDDlD9 -
35.Theestablishment ofaCommunityrailtransport systemdepends
primarilyontheplanningandconstruction ofacoherentrailinfrastruc­
ture.Therailwayshaveacommoninterestatallthestagesofthe
processforremodelling'themajorinternational trafficaxes:traffic

-16-
transport conditions ,the identification of
ofthe cost analyses and financing opportu -
Research and_deyelogment
36.Continued modernizat ion ofstock and equipment isone ofthe main
requirements for improving thefinancial situation ofrailway underta­
kings andsetting upaCommunity system with aview toimproving the
conditions ofcompetition .Apanel onresearch representing the nine
networks and the industries ofthe Community has been set upunder the
Commission 'saegis towork onthis question .The pooling ofresources
would permit economies ofscale andtherationalization ofexpenditure .
The railways could therefore only benefit asregards both knowhow and
research and development potential .Afirst step inthis direction has
been taken with the establishment ,onabroader geographical level ,of
the UIC Office for Research and Experiments (ORE).
37.Listing situations inwhich acommon interest ofrailway undertakings
may beidentified isonething :crystallizing them inoneormore common
bodies isanother matter ,where obstacles ffiay bemet.
38.Atpresent ,itisnotcertain that therailways are always entirely
free todecide ontheir position concerning theestablishing of common in­
terest :their legal status ('laid down byrules atdifferent levels ,some­
times inanational constitution itself )could prevent them from doing so,es
pecially when the common interest established does notnecessarily cor­
respond totheindividual interest ofanundertaking asked toparticipate .forecasting ,information on
bottlenecks and the pooling
nities .

39.Anotherobstacleisthatsincethecommoncommercial interestis
foundinthoseactivities whichtendtobecommercially moresound,it
maybefearedthatthenationalundertakings willbegraduallylimited
touneconomic orevenloss-making activities (providedthatthereis
compensation forpublicserviceobligations),andthiscouldreducemoti­
vationtoachieveabalanceatnationallevel.
40.Again,iftheaimistobeacoherentrailwaysystematCommunity
level,itisimportanttopreventthedivisionofrailwayactivities
amongtoomanybodieswithdifferentfunctions andareasofresponsibi­
litywhichmayoverlap.AstudydonebyaprivateinstituteattheCom­
mission'srequestcametotheconclusionthatitmightbenecessaryto
establish a"Europeanrailwayagency"toensureacertaindegreeofco­
ordination .ThisAgencywouldalsocarryoutstudiesandadminister those
activities acceptedaspertainingtoacommoninterest.
41.However,beforeconsidering theproposalofsuchameasuretothe
Council,theCommissionfeelsmoreshouldbeknownabouttheeconomic,
legalandpoliticalfacts,andtheargumentforsettingupsuchaboiy
mustbesubstantiated bythepreciserequirements oftheEuropean
Communtiy.Inaddition,thegeographical areainwhichtherailways ■
mightfindcommoninterestsneednotcoincidewiththeterritoryofthe
EuropeanCommunity.Thecontinental railwayshavecloseandtraditional
linkswiththerailwaysofnon-member countries,inparticular Swiss
RailwaysandAustrianRailways(OBB)whichareoutsidetheCommunity,
whiletheBritishandIrishrailways,forobviousgeographical reasons,
havefarlesstrafficwiththecontinental networks.Pragmaticsolutions
combiningthegeographical realityofrailtransportwiththepolitical
requirements oftheCommunitywillhavetobefound.

-18-
-CONCLUSION
42.Inthisreport,theCommission examinesintegration fromtheangle
oftwoobjectives whicharetobepursuedinthelongterm-theestablish
mentofaCommunitytransportsysteminwhichtherailwaysshouldplay
theirfullpart,andthestructural improvement ofthesituationofthe
railways.TheCommissionfeelsthatintegration maybeasuitablemethod
forachievingthesetwoobjectives,andisthereforeseekingformsof
partialintegration inspecificsectorslikelytomakeaparticular con­
tribution.Ontheotherhand,theoptionoftotalintegration-asa
goalratherthananinstrument-isnotbeingadoptedinthepresentf
circumstances .-
43.Atamorepracticallevel,theCommissionisrelyingonthepossibi­
litiesofdeveloping whathasalreadybeenachievedthroughcooperation .
Itfeelsthatformsofpartialintegration shouldbesoughtonthebasis
oftheideaofcommoninterestbymeansofanoverallconsideration ofthe
activities inquestionandasystemforequalizing advantages anddis­
advantages betweenseveralnetworks.Thiseffortshouldrevealopportuni­
tiesforeconomiesofscaleandtrafficgrowth. 1.
44.TheCommission notesthattherailwaysarestudyinghowthis
formulamaybeappliedinoneoranotherspecificsector.However,it
considersthatthissortoflimitedmeasurewillnotallowtherail­
waystoadaptsufficiently tobeinapositiontoplaytheirfullpart
onacompetitive marketundergoing profoundchangeatEuropeanlevel,
andproposesthefollowingactionprogramme .

-19-
Action_(3rogramme
45.TheCommissionwillensurethattheCouncilDecisionisimplemented ,,
inparticularthatmultiannual businessplansandfinancialprogrammes
arepreparedwhichwillbringaboutthereorganization planned.Itwill
putforwardproposalsaboutthetimelimitsandconditionsforachieving
financialbalanceandabouttheredefinition ofpublicserviceobligations
ItwillexpandCouncilRegulation (EEC)No2830/77of12December1977
onthemeasuresnecessarytoachievecomparability betweentheaccounting '
1systemsandannualaccountsofrailwayundertakings . ■
46.Inthesamecontext,CouncilRegulation (EEC)No2183/78of19Sep­
tember1978layingdownuniformcostingprinciplesforrailwayunderta-
2kingsstatesthattheundertakings involvedinthesameinternational
transportoperation byfulltrain*loadsshallinformeachotherofthe
costspertainingthereto.Withitsexpectedrepercussions ,thisRegu-
•lationthusrepresents animportantstepwhich*shouldallowmorepro­
gressiveinnovations informsofpartialintegration .Betterknowledge
ofthecostsandrevenuewouldalsomakeiteasiertosolvetheproblem
ofreciprocal compensation amongtheparticipating companies whentheir
individual interestisminimalornon-existent .
\
/
Cooperation measures
47.Thefollowing measuresplannedundertheshortandmedium-term
actionprogrammes comewithinthescopeofthisreport:
-introduction ofadditional typesof-wagonsinthe
Europpool;
-revenuepoolsinconjunction withtheproposedextensionofthrough
international tariffs; ,
-theabovementionedstudiestoestablish commoninterestsin.three
specificsectorsoffreighttransport.
OJNoL334,24December1977
^OJNoL258,21September1978Α

48.Feasibility studies onpartial integration measures inanumber of
sectors .TheCommission proposes toback these studies ,taking into
account thefindings ofthemarket observation system ,the 1985 /2000
forecasting studies ,andthe foreseeable developments .These studies
would concentrate oncommercial andoperating policy ,infrastructure
planning andresearch anddevelopment .
Commercial andoperating policy
••••••••• '•«•••a »
-Inter-city passenger transport
49.Under the Commission 'sauspices :amarket survey anddemarcation
ofthetransport network comprising the current TEE,express and fast
trains ,and astudy onthefeasibility oforganizing services atCommu­
nity level .This study could perhaps include carsleepers andexpress
services for cars .
50.Under the UIC'sauspices :twoprojects toimprove thesupply of
passenger services :
\
(i)Theintroduction ofadistinction between various categories
oftrains .Thedistinction will bebased onthefollowing
aspects :speed ,type ofservice (frequencey ofthetrains ,
numbers ofstops ),the level ofcomfort provided bytheequip-'
ment used and the special services tobeoffered (restaurant
cars ,sleepting berths ).The study will beconducted atUIC
. I
level and the networks ofthe Nine intend tomake use ofits
findings assoon aspossible (1981 ).
(ii)Theproposals forimproving international rail services soon to
beputforward bytheadhocworking party ohthe in'terna'tional
carriage ofpassengers byroad will bestudied in .depth bythe
competent departments in1979 /1980 .

-21-
-Combined road-rail transport
51.Under the Commission 'sauspices :first ,consultation ofthe mixed
national companies forming the International Union ofCombined Road-Rail
Transport (UIRR)'and the UICRailways Group which some time agoset up
ajoint road-rail committee .Atthe second stage ,the Commission plans
touse the information gained from these consultations for anextensive
anddetailed study ofall the prblems arising for combined road-rail
transport ,perhaps including the question oflinks with the Intercontai -
ner company .
52.Under UIC nuspices :promotion ofcombined road-rail transport
ι
through :
Ci) the implementation ofthe agreements already concluded within
thejoint road-rail committee ,inparticular those concerning
tariffs ;
*
(n)the active prosecution ofthe studies bythis Committee ,.
concentrating inparticular ontariffs ,investment strategy •
(wagons ,trsck gauge ,terminals )andtheorganization offreight
forwarding ; . '
(iii)the maintenance ofclose and permanent links with Community
bodies inorder tcimprove existing laws andadministrative
provision 'sand intr\duce new regulations to .promote the develop­
ment ofcombined roac!-rail transport .
*
Aspecial study will also beundertaken to.define the conditions needed
for the establishment ofaninternational road-rail company .

-22-
-Carriage ofnew motor vehicles
53.The Commission plans topromote anoverall study ofthis traffic .
Infrastructure planning
54.Atits meeting of23-24 November 1978 ,the Council asked the Commis­
sion tosubmit by 1January 1980 areport onbottelenecks intransport
infrestructure and onthe various possible intervention procedures ,and
todraw up,incollaboration with the Committee onInfrastructures ,cri­
teria for assessing projects ofCommunity interest .
55.The Commission has conducted anumber ofstudies inaccordance with
this instruction :
-astudy on"linking the findings ofthe Cost 33project with thefreight
forecasting study for 1985 /2000 onacommon technical and economic ba­
sis :some tests ofthe combined model by -means ofdifferent strategies
and scenarios ".This study seeks tomeasure the infrastructure burden
proposed forthe carriage ofpassengers "and goods .
-astudy to"estimate the costs and rates functions inanetwork of ^
combined transport operations (freight Iiner )byrail inthe Community.'
Theresults will besopresented that they may beused directly for
abroader study onthe consequences ofthe development ofsuch asys- .
tem onrdad andrail infrastructure ".The analysis ofthe structure
ofcombined transport operations should reveal the costs ofthis
«method oftransport and allow its competitive potential tobeanalysed .
-astudy entitled "report todetermine theutilization ofexisting capa­
city onthe infrastructure networks .Assessment ofmeasures toovercome
thedifficulties through the implementation ofmeasures toreduce con­
gestion .Identification ofshort-term bottlenecks ."
This study concerns the determination andutilization ofinfrastructure
capacity ..

-The final study wilt consist of 'astudy todetermine themethods
andmeans bywhich theCommunity interest ofmajor infrastructure
projects maybegauged ".There will also beapractical application
toanalyse thevarious alternative projects forcross-Channel links .
Research and development
••••••••••»• '*
56.The Commission hasundertaken thestudy ofcombined transport
techniques inorder todetermine thepotential ofonesingle technique .
General problems
•••«•••••
57. Astudy complementary tothat carried out in1978 (mentioned in '
point 40)will attempt tofind solutions tothefollowing problems :
-•
-legal problems holding uptheestablishment offorms ofintegration
(statutory rules obliging companies toachieve anoptimum return at
a
national level );
-economic problems which could arise from thetransfer ofprofitable
activities tointernational bodies ;
-problems caused bytheproliferation ofbodies which arenotnecessari
lycoordinated ;
-problems ofthepossible participation ofnon-Community networks ;
-problems oftheneed torestrict some forms ofintegration only to/'
certain ofthe Community undertakings .
y
TheCommission also considers that this study should reveal the social -s
impact ofsuch measures ofpartial integration . t

-2U-
58.The four studies which the Commission isconsidering :
-inter-city passenger transport ;
-combined road-rail transport ;
-carriage ofnew motor vehicles ;
-general problems
and which are not included incurrent projects (UIC,.Committee on
Infrastructure ,Research Group )will require relatively large funds .'
The Commission isconsidering aninitial allocation ofBfrs 15-20 million .
For these studies ,tobeconducted byindependent bodies ,the Commission
will also call upon the railway ,government and trade union experts for
social problems ,.
59.Onconclusion ofthese studies ,the Commission proposes toreport
again tothe Council around 1985 inthe light ofthe situation ofthe
railways ,perhaps with proposals onthe following subjects :
ι
-the removal ofbarriers tothe establishment offorms of
partial integration ;
-the establishment of common bodies .

ANNEXE
Main comments bytheexperts ofthe railways /the government and
the trade unions
The following comments are based onaworking paper drawn upfor .these con­
sultations and do not refer directly tothe contents ofthe report inits
present form .
The railway and government experts were very favourable to.the long-term
objectives ofstructural improvement and the establishment ofaCommunity
transport system ,stressing the imporance ofremoving distortions tocompeti­
tion .They considered that integration was not anend initself but apossible
means toachieve these objectives .
The railway experts ,however ,opposed the idea oftotal integration and
called for theidentification offorms ofcooperation which could involve
partial integration inareas which need not,they underlined ,coincide with
Community territory . ..........
However ,they considered studies tobeanindispensable prerequisite :
infrestructure (Community investment "funds )and marketing could bethefirst
subjects .The United Kingdom Government delegation backed this opinion as
regards marketing and added tourism and the technological development ofthe
raiIways .
Onthe whole ,the government experts shored these opinions ,but were very
hesitant about the need for even partial integration and considered that the
benefits which the railways would derive had not been demonstrated .Some of
them even considered that standardization ofthe rules inforce was enough to
aim atatpresent .
ι
The German delegation stressed the value ofthe idea ofcommon interest in
the study offorms ofpartial integration .
The trade unions emphasized the fact that,even iftotal integration could
not take place overnight ,the adoption offorms ofpartial integration could
lead tothe establishment ofmajor profit-making integrated axes tothe
detriment ofthe national networks .
They consider that thesituation ofthe railways could beimproved inthe
context ofanoverall coordinated transport policy .They also stated that
the working paper had ignored the social aspects ofanyintegration .