Opinion on:

- the communication on a common policy on the organization of the inland waterway transport market and supporting measures;

- the proposal for a Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community;

- the proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport; and

- the proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway

(96/C 39/18)

On 20 October 1995 the Council decided to consult the Economic and Social Committee, under Article 75 of the Treaty establishing the European Community, on the above-mentioned communication and proposals.

The Section for Transport and Communications, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 8 November 1995. The Rapporteur was Mr Pompen.

At its 330th Plenary Session (meeting of 23 November 1995), the Economic and Social Committee adopted the following Opinion by a majority with six votes against and one abstention.

1. Introduction

1.1. The Commission has submitted for consideration a package of measures concerning inland waterways. They concern the liberalization of chartering and pricing, where these have not yet been freed, structural reforms to remove overcapacity and support for the establishment of terminals.

1.2. The proposals are closely interconnected and amount to a policy for improved organization of inland waterway transport. The aim is to enable the inland waterway transport sector, operating under its own steam in a free market, to maintain and, where possible, increase its share of the overall European transport market and to fulfil an important pivotal role in (intermodal) transport.

1.3. The prospects for such an approach are good. In 1993 inland waterways already carried 36 % of intra-Community transport and there is still unused capacity. Inland waterway transport also offers a number of other advantages which can make an effective contribution towards solving a number of major transport problems in Europe, such as increasing congestion, energy consumption, pressure on the environment (toxic emissions and noise), safety problems and encroachment on land use planning (the growing road network). The proposed approach is in the interests of both the sector and transport in general in the EU.

2. Gist of the draft measures

a)

(Draft) Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community (95/0121 SYN)

Article 2 of this Directive states that national and international inland waterway transport in the Community shall be freely concluded between the parties concerned and prices freely negotiated, where appropriate, within charter exchanges. The purpose of the Directive is to liberalize inland waterway transport by harmonizing the laws of the Member States concerned. Liberalization will be phased. By 1 January 2000 the systems of rotation and compulsory tariffs for certain forms of transport within and between the Netherlands, Belgium and France (the north-south line) must be abolished.

The deadline of 1 January 2000 is coordinated with the legislative process in the Netherlands, Belgium and France, inter alia, where the existing rotation and compulsory tariff systems are to be dismantled by 2000.

The Directive also provides for a crisis mechanism in the event of serious market disturbance. The Commission may then, on its own initiative or at the request of a Member State, take suitable measures, in particular measures designed to prevent any new increase in transport capacity. In implementing the Directive the Commission is to be assisted by an Advisory Committee.

An interim evaluation of the proposals will be carried out at the end of 1997 and, if appropriate, adjustments will be made with a view to achieving the desired objective, i.e. liberalization.

b)

(Draft) Regulation amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport (95/0122 SYN)

The Regulation establishes a basis for harmonization of national laws aimed at limiting overcapacity in inland waterway transport. The draft makes provision for Community co-financing of scrapping premiums in 1996, 1997 and 1998. Between 1 January 1990 and 1 July 1994 scrapping premiums were paid by the inland waterway transport sector itself, in some cases with an advance from the Member State. Scrapping premiums for ships which as of 1 July 1994 were on the waiting list for scrapping were paid by the Member States.

In 1995 overcapacity is estimated at 15 %, and the amount required to eliminate this overcapacity at ECU 192 million.

The Community's contribution, in respect of which the Commission has already earmarked MECU 5 in 1995, is not allowed to exceed 200 % of the industry's contribution. Total contributions from the Member States are equal to that of the Community and are determined pro rata to the size of the Member State's active fleet. The sector provides 20 % of financing, the Member States 40 %, and the EU 40 %.

c)

(Draft) Regulation amending Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway (95/0123 SYN)

This Regulation allows the Member States, until 31 December 1999, to grant subsidies for the construction of inland waterway terminals and/or loading and unloading equipment, not to exceed 50 % of the total amount of investment. No absolute figures are given for subsidies. Every second year the Commission will report on application of this Regulation and its effects.

3. General comments

3.1. The Committee endorses the tenor of the Commission proposals.

The Committee also approves the Commission's approach, which is aimed not only at reducing overcapacity, but also at improving infrastructure and ensuring liberalization. This will make for more open market conditions, improved competitiveness - not only between inland waterway transport operators themselves but also between inland waterways and other modes of transport - and improved intermodal transport. The Committee would refer in this regard to its unanimously approved Own-initiative Opinion of 14 September 1994 (CES 1006/94), which calls for:

- recognition of the importance of inland waterways for transport in Europe and exploitation of the advantages of this mode of transport from the points of view of the environment, energy consumption, land-use planning, safety and congestion;

- a new scrapping programme to eliminate overcapacity; and

- liberalization of the market inter alia by abolition of the systems of compulsory minimum tariffs and loading by rotation (rotation system) where they still exist.

The Committee sees the draft Directive and Regulation outlined in points 2a and 2b above as a consequence of this Opinion.

The Committee has also more than once strongly endorsed the concept of inter-modal transport. It sees the (draft) Regulation described in 2c) as a contribution to intermodal transport, and in particular to the involvement of inland waterway transport.

3.2. The Committee would, however, make a number of comments.

3.2.1. It must be made clear to all the parties concerned that this broad approach to the restructuring of inland waterway transport will be completed on 1 January 2000. A situation must be avoided where a 'permanent latent crisis' is assumed to exist necessitating periodic financial support from the Member States and the EU.

3.2.2. Once these measures have been implemented, the proper operation of a free, modern and profitable inland waterway transport sector will be primarily a matter for the industry itself and its carriers.

It should not be assumed, however, that application of the Commission proposals will on its own bring about lasting balance. Accompanying measures are needed.

3.2.2.1. The Committee notes that inland waterway transport possesses a number of special features, such as a fleet capacity which is fixed in the short and medium-term (vessels can remain in use for more than 70 years), highly variable water levels, where capacity demand may temporarily double, and a high percentage of small entrepreneurs. These features may delay a direct adjustment of capacity to changing supply-demand relationships or lead to sudden changes in freight rates.

In order to ensure that any imbalances in inland waterway transport after 2000 can be promptly and effectively tackled, the Committee feels that the following rules should remain in force:

a)

further development of the Commission's intended market observation system;

b)

the formation of a reserve fund for emergency measures, financed by the sector;

c)

the application of the existing scrapping arrangements and old-for-new rules in unforeseen crisis situations; and

d)

the possibility of strengthening the position of (small) operators by means of trade groups.

3.2.2.2. Ways need to be explored of developing programmes for the maintenance and modernization of the sector via collaboration between the sector, the Member States and the Community. Programmes could be considered in the following areas:

a)

research and development;

b)

education and training;

c)

quality improvement and information;

d)

market observation and the use of telematics.

3.2.2.3. The allocation of infrastructure and external costs to the various modes of transport is of great relevance to the competitive position of inland waterway transport. The Committee urges that an impetus be given to policy development in this area.

3.2.3. There should be proper coordination between the proposed measures and the inland waterway transport policy being developed for Central and Eastern Europe. The Committee thinks that steps should be taken, on the one hand, to prevent the proposed measures being substantially frustrated by the unconditional opening-up of borders. But at the same time the development in the medium term of open market conditions with respect to EU/Central and Eastern Europe relations, not least in the field of inland waterway transport, should not be hindered.

3.2.4. As Switzerland does not belong to the EU, steps must be taken to ensure that the proposed measures are coordinated with the Central Rhine Navigation Board and that arrangements on the same lines come into being between the EU and Switzerland.

3.2.5. Thought needs to be given to the extent to which the Member States may adopt special measures for training and retraining, housing and tax arrangements for employees and the self-employed on the closure of companies.

4. Specific comments

4.1. (Draft) Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community (95/0121 SYN)

4.1.1. The fifth recital states that carriers may set up trade groupings. This is not further developed in the articles of the Directive. The aims of these trade groupings should be more closely defined so as to improve the market position of small entrepreneurs within the meaning of Article 78 of the Treaty and prevent any conflict with Article 85.

4.1.2. The Committee questions the clarity of the definitions in Article 5 of loads which cannot be effectively dealt with under the systems of chartering by rotation. Given the sensitivity of the issue, clear demarcation would be desirable. Moreover, a convincing reason for such exceptions would be desirable.

4.1.3. Article 7 defines three forms of contract. In respect of the first two it is stated that they can be freely concluded between the parties two years after the entry into force of the Directive. The Committee assumes that these contracts fall outside the rotation system, and recommends that this be clarified.

4.1.4. Article 8 deals with measures which the Commission may take in the event of a serious disturbance of the inland waterways market. The Committee recommends that these measures be clearly defined and that safeguard provisions of the kind recommended in point 3.2.2.1 of this Opinion be incorporated into the Directive.

4.1.5. The Committee asks the Commission to see that the national measures which are to remain in force until 1 January 2000 do not disturb the terms of competition between the Netherlands, Belgium and France.

4.2. (Draft) Regulation amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport (95/0122 SYN)

4.2.1. The Commission proposal aims to improve inland waterway transport so as to make it one of the full trans-European transport networks and enable it to become an effective part of combined/intermodal transport.

This objective is a key feature of the transport policy financed by the EU and applied to the whole of the Community.

As carriers are not in a position to finance this policy fully on their own, the Committee approves co-financing by the EU, providing it remains within the budget set for the period up to 1999.

The Committee also endorses the other principles of solidarity which underlie the proposal. With regard to financing, solidarity is expressed in the contributions by the Member States and carriers pro rata to carrying capacity per Member State and carrier. And with regard to expenditure, solidarity comes into play in that finally the benefits will be going to those who are contributing to the reduction of capacity, regardless of their nationality. The justification for this, the Committee feels, is that the whole sector, independently of nationality, benefits from scrapping.

4.2.2. If the measures are to be a success, financing in 1996/1997/1998 has to be assured. There is no indication of this in the Introduction to the draft Regulation. So the planned sector contribution (ECU 42 million) remains less than 20 % of the total amount if the ECU 12 million advance financing provided by the Member States in 1990 is deducted. In point 22 of the Introduction it is stated that if the EU does not have sufficient resources, the Member States must contribute up to a maximum of ECU 122 million. Such a contribution exceeds the 40 % of the total amount specified in Article 1 of the (draft) Regulation. Attention must also be paid, in the allocation of the contribution by the sector, to the fact that some inland waterway transport, namely tankers, have already paid back the advance financing.

4.2.3. Regulation 1102/89, which covers the implementing provisions, was not referred to the Committee. The Committee recommends that the Regulation be reviewed in the light of both experiences in the period 1990-1994 and the starting points of the proposed package for 1996/1997/1998. The Committee would also refer here to its Opinion of 14 September 1994.

4.3. (Draft) Regulation amending Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway (95/0123 SYN)

4.3.1. The Committee accepts the need for sufficient terminals and loading and unloading equipment to enable inland waterway transport and an inter-modal transport system to function properly. Clearly, the transfer of goods to and from roads and railways still entails substantial costs for inland waterway transport and must be organized much more efficiently and effectively.

4.3.2. The Committee interprets the Regulation to mean that the increasing of storage capacity in the terminal also falls within the scope of the Regulation.

4.3.3. The Committee assumes that the provision of subsidies for the construction and equipping of terminals and loading and unloading equipment (also referred to as suprastructure) will not absolve the authorities of the Member States from all further responsibility for providing sufficient public infrastructure connections with road and rail or for renovating and maintaining public navigable waterways, banks and ports. In view of the importance of inland waterway transport for transport in Europe, steps must be taken to ensure that the general level of infrastructure provision in inland waterway transport does not fall below that of road or rail transport.

4.3.4. The Committee asks that, where necessary, the improvement of terminals which handle transshipments between coastal and inland waterway traffic should also be considered for subsidies under the draft Regulation.

4.3.5. The Committee fully endorses the requirement that only projects with real prospects of providing new or additional transport tonnage be eligible for support. The criterion for repayment of the subsidy in point 27 (volume of cargo) is worded differently from that set out in Article 1 of the draft Regulation (transport tonnage). The Committee recommends that any drafting ambiguities be eliminated.

Furthermore, the Committee points out that repayment of the subsidy is not justified if the failure to achieve expected yields is completely beyond the control of the applicants.

Done at Brussels, 23 November 1995.

The President

of the Economic and Social Committee

Carlos FERRER