i? COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(93) 553 final - SYN 475 
Brussels, 16 November 1993 
Report from the Commission 
on the effect of the structural improvement measures in inland waterway transport, 
as introduced by Council Regulation (EEC) No 1101/89 of 27 April 1989 
Proposal for a 
COUNCIL REGULATION flBCi SYN 475 
K.:-modifying Regulation (EEC) No 1101/89 on structural improvements in 
inland waterway transport 
(presented by the Commission) 
- ~n -
I ,\ 
JftCpOjft frftffl ftft CoJlffljifffffOD 
on me effect of the structural improvement measures in inland waterway transport, 
as introduced by Council Regulation (EEC) No 1101/89 of 27 April 1989 
1. Introduction 
Council Regulation (EEC) No. 1101/89 of 27 April 1989(1), 
introduced a number of measures designed to remove the structural 
overcapacity in inland navigation which has characterized this 
market since the economic recession of the 1980's. The Council 
Regulation created two sets of measures : (a) the granting of 
scrapping premiums to reduce the capacity of the active inland 
waterway fleet and (b) measures to curb investment in extra vessels 
in the course of the coordinated scrapping scheme. (The main 
elements of Council Regulation 1101/89 are described in more detail 
in chapter 2). These latter measures, which are generally known as 
the "old-for-new" system, were introduced for a period of five 
years from the entry into force of the Regulation (28.4.1989) with 
the possibility of an extension for a further period of a maximum 
five years. 
Article 8 paragraph 5° of the Council Regulation No. 1101/89 
states : 
"On the basis of a Commission proposal accompanied by a well-
founded report, the Council may take a decision to extend the 
period referred to in paragraph 1 by a maximum of five years"(2). 
The present report sets out why the Commission considers that such 
an extension is called for. The relevant proposal is attached as 
Annex I. 
Background 
The Council Regulation No. 1101/89 and the related Commission 
Regulation (EEC) No. 1102/89 of 27 April 1989<3), laying down 
certain measures for implementing the Council Regulation, are 
designed to remove the structural imbalance between demand and 
supply in the inland waterway market. The main elements of what is 
called in short the "EC scrapping scheme" can be listed as 
follows : 
a) In a harmonized Community framework, national scrapping funds 
operate in the Member States whose inland waterways are linked 
to those of another Member State and the tonnage of whose 
inland fleet is above 100.000 tonnes. These Member States 
directly concerned are Belgium, Germany, France and the 
Netherlands. 
(1) O.J. L 116 of 28.4.1989, p. 25 last amended by Council Regulation 
(EEC) No. 3572 of 4.12.19:0, see O.J. L 353 ci 17.12.1990, p. 14 
(2) The period referred to in paragraph 1 is the period from 28.4.1989 
till 27.4.1994 during which the old-for-new system applies. 
(3) O.J. L 116 of 28.4.1989, p. 30, last amended by Commission 
Regulation (EEC) No. 3690/92 of 21.12.1992, see O.J. L 347 of 
22.12.1992 p. 22. 
'$'! - 2 -
Vessels registered in other Member States (e.g. Luxemburg) but 
operating on the same network adhere to one of the scrapping 
funds. 
b) The total active fleet of cargo carrying inland waterway 
vessels and push boats operating on the principal network and 
registered in a Member State is subject to the scrapping 
scheme. A limited number of exemptions are specified in the 
Regulation. 
c) The initial target of the Community scrapping action was to 
remove from the market, between 1.1.1990 and 1.12.1990, 10% of 
the capacity of the dry cargo fleet and 15% of the tanker 
fleet. 
d) To disencourage waterway operators from creating new surplus 
capacity, the so-called "old for new" system was created. This 
implies that carriers who wish to bring into service extra 
capacity shall : 
* either scrap tonnage equivalent to the new vessel without, 
however, receiving a scrapping premium; 
* or, if they decide not to scrap tonnage, shall pay a 
special contribution into the scrapping fund, which is 
equivalent to the scrapping premium for the type of vessel 
brought into service. 
e) The total amount required for the granting of scrapping 
premiums was made available to the scrapping funds by the 
governments concerned in the form of repayable interest free 
loans. The loans are being repaid by the inland navigation 
industry over a period of years. For this purpose, vessel 
owners pay to the funds annual contributions based on the 
tonnage and the type of their vessels. 
f) The Swiss authorities have introduced simultaneously identical 
measures for their fleet. The operations of the Swiss fund are 
coordinated with those of the other funds. 
g) A system of financial solidarity applies between the funds in 
order to ensure that the reimbursement period for the interest 
free loans will be the same in all States concerned. 
Since this is a Community system decisions on its operation have to 
be taken at Community level. The Commission is authorized to adopt 
certain decisions on the application of the system. The Commission 
has thus fixed : the level of the scrapping premiums for the 
different types of vessels, the level of the annual contributions 
to be paid to the funds, the detailed rules for the mechanism of 
financial solidarity, etc. 
In addition, the Commission's services organise at regular 
intervals coordination meetings with representatives of the States 
concerned an^ the authorities responsible for the scrapping funds 
in order to ensure a uniform application of the rules. In this 
context the inland waterway profession is also consulted regularly. 
- 3 -
3. Summary of the results of the EC scrapping action 
The Commission presented a first report on the outcome of the 
common scrapping action on 15 July 1992(4). in the following the 
main elements of this report are briefly summarized and completed 
with additional information received from the scrapping funds and 
other sources for the subsequent period. 
Between 1 January 1990 and 1 May 1990 vessel owners could introduce 
applications for scrapping premiums. In the course of 1990 1615 
applications for a scrapping premium were accepted by the funds. A 
summary of the overall results for different categories of vessels 
is presented below. 
Tabel 1 : Scrapping applications accepted by funds of B, D, F, NL, 
and CH 
dry cargo 
tankers 
push boats Scrapping application accepted 
number 
1.318 
260 
37 tonnage or kw 
799.200 
264.398 
30.407 average 
tonnage 
or kw 
606t 
1.017t 
822kw 
In order to make a comparison between the total capacity taken out 
of the market and the remaining capacity of the active fleet, the 
differences in productivity of different vessel types (e.g. : self 
propelled vessels, barges, towed vessels) have to be taken into 
account. To this end Commission Regulation No. 1102/89 defines 
adjustment coefficients, which make it possible to express the 
capacity of the fleet in "equivalent tonnage of motorvessels of 
over 650 tonnes". 
Tabel 2 : Capacity reduction achieved by the joint scrapping action 
dry cargo 
tankers 
push boats Active fleet 1991 
B+D+F+NL+CH 
(a) 
7.819.964 eq.t 
1.710.625 eq.t 
330.171 kw Scrapping application 
accepted 
(b) 
613.357 eq.t 
222.663 eq.t 
30.407 kw % 
(b:a) 
7,84 
13,02 
9,21 
(4) Report from the Commission on the effect of the structural 
improvement measures in inland waterway transport, as introduced by 
Council Regulation (EEC) No. 1101/89 of 27 April 1989. 
Document No. SEC (92)1284 final of 15.7.1992. 
- 4 -
It appears that roughly 8% of the dry cargo and 13% of the tanker 
capacity has been scrapped in the framework of the joint scrapping 
action organised in 1990. 
4. Additional scrapping actions 
Following the German unification on 3 October 1990 an additional 
scrapping action was organised for the inland waterway fleet of the 
ex-DDR. The results of this small scale action have to be added to 
the figures presented above. 
On request of the German government the Commission by Regulation 
(EEC) No. 317/91 (5) laid down the conditions for this additional 
scrapping action. In total 196 applications representing a total 
carrying capacity of 98.589 tonnes, were accepted in the course of 
1991. The volume scrapped represents 14,25% of the initial capacity 
of the ex-DDR fleet. What remains of the ex-DDR fleet is now fully 
integrated in the Community scrapping scheme. 
In addition, the measures taken by the French government on the 
basis of Article 2.3. of Council Regulation No. 1101/89 have to be 
mentioned. This Article allows the Member States to exclude vessels 
with a dead weight of less than 450 tonnes from the scope of the 
Regulation if the economic and social situation in this specific 
sector so requires. In this case an alternative plan has to be 
drawn up by the Member State concerned. France made use of this 
possibility and communicated to the Commission a national 
improvement plan under the state-aid rules. This so-called "Plan 
Economique et Social" is designed to take a considerable proportion 
of the small vessel fleet (20% or more) out of the market over a 
period of years. The plan provides for scrapping premiums and for 
accompanying social measures. Guarantees have been built in to 
avoid distortions of competition. This implies that vessel owners 
subject to the "Plan Economique et Social" do also have to pay 
annual contributions at a rate comparable to the rates applied in 
the Community scheme. 
When the "Plan Economique et Social" entered into force on 
1.1.1990, 2.153 dry cargo vessels with a total loading capacity of 
980.288 tonnes were subject to the scheme. In the period from 
1.1.1990 to 1.1.1993 569 scrapping applications, representing a 
loading capacity with 203.287 tonnes, were accepted. This 
corresponds with 20;7% of the capacity of the initial fleet. The 
French authorities plan to terminate the scheme by the end of 1994. 
5- Total scrapping activity (1990-1992) 
In round figures, the global result of the various scrapping 
actions mentioned above, which were undertaken in the period from 
1.1.1990 to 1.1.1993, is as follows : 
(5) O.J. L 37 of 9.2.1991, p. 27. 
- 5 -
dry cargo : over 2.000 vessels scrapped with a total loading 
capacity of 1.1 million tonnes; 
tankers 
tonnes. 260 vessels scrapped with a capacity of 260.000 
In addition 30.000 kw of push boat capacity has been taken out of 
the market in that period. 
6. Financial implications 
The total expenditure for the granting of scrapping premiums under 
the joint scrapping scheme (including the ex-DDR fleet) in the 
years 1990-1992 is estimated at 104.401.576 ECU of which 66.041.893 
ECU for dry cargo vessels and push boats, and 38.359.683 ECU for 
tankers^"). 
As has been mentioned above, these amounts have been made available 
to the scrapping funds by the governments of the Member States 
directly concerned in the form of interest free loans. The amount 
is now being paid back by the inland waterway operators through 
annual contributions based on the tonnage and the type of their 
vessels (e.g. 1 ECU per tonne p.a. for dry cargo motorvessels over 
650 tonnes). 
The special contributions paid by inland waterway operators who 
bring new vessels into service without scrapping an equivalent old 
tonnage, serve as a second source of income for the funds. 
The total receipts of the 5 funds since the beginning of the joint 
scrapping action can be summarized as follows : 
Table 3 : Receipts per annum (B + D + F + NL + CH) in ECU 
Year Dry cargo Tankers 
(incl. push boats) 
1990 9.620.185 5.801.845 
1991 9.694.580 7.908.491 
1992 9.825.993 15.570.928 
1990 - 1992 29.140.758 29.281.264 
(6) In addition, 15.9 mio ECU has been allocated for the granting of 
scrapping premiums under the French "Plan Economique et Social". 
This amount is financed outside the context of the joint action and 
is not considered further in this chapter. 
- 6 -
In the dry cargo sector 44% of the interest free loans had been 
reimbursed by the end of 1992. Whilst in the tanker sector 76% had 
been reimbursed already. The difference is due to substantial 
amounts of special old-for-new contributions received by the funds 
in relation to the construction of new tankers in 1991 and in 1992. 
For reasons set out in chapters 7 and 8, Commission Regulation 
No. 3690/92 of 21 December 1992 provides that the special 
contribution received for vessels newly brought into service 
without scrapping an equivalent tonnage, shall as from 1.1.1993, no 
longer be used for the reimbursement of the interest free loans but 
shall be used for the granting of scrapping premiums. The receipts 
in the years 1993 and following are to be estimated at roughly 9 
mio ECU in the dry cargo sector and some 5 mio ECU p. a. for 
tankers. As a consequence, the loans in the dry cargo sector are 
likely to be fully reimbursed around the end of 1996, whilst in the 
tanker sector the break even point might be attained in 1994. 
Considering that Council Regulation No. 1101/89 provides in its 
Article 6.4. that the repayment period shall not exceed 10 years 
(starting 1990) it can be concluded that the repayment is certainly 
well on schedule. 
7. The economic impact of the scrapping action 
A major socio-economic effect of the joint 1990 scrapping action 
has been that a considerable number of private owner operators were 
enabled to leave the business on financially acceptable terms. 
Another possibly even more important objective of the operation was 
to create a better revenue situation for those who stayed in 
business. 
In the framework of the Commission's Market Observation System the 
evolution of costs and prices on certain waterway sub-markets is 
monitored on a permanent basis. The Rhine market is the most 
important of these sub-markets and covers more than than half of 
all waterway carriage in the Community. 
Dry cargo 
The following graph presents the evolution of cost and price 
indices for dry cargo carriage on the Rhine since the beginning of 
the scrapping action. The year 1988 has been chosen as the base-
year, because it is the year preceding the coming into force of 
Council Regulation No. 1101/89. Prices and costs as observed at the 
beginning of 1988 are thus set at "100". However, this should not 
be taken as a sign that prices were equal to costs. On the 
contrary, prices in 1988 were extremely low and far from full cost 
coverage levels. 
- 7 -
Rhine market, dry cargo 
cost and price indices (1988=100) 
index 
200 
150 
100 
50 / N 
costs 
o • 
12 3 4 
1988 2 3 4 
1989 2 3 4 
1990 2 3 4 
1991 2 3 4 12 
1992 11993 
quarter / year 
As the graph shows, prices went up more than costs in the 
subsequent years : 1989, 1990, 1991 and the beginning of 1992. (For 
a detailed overview of cost- and price-indices see table 4 on the 
next page). 
This evolution was caused by a combination of reducing the surplus 
capacity and a stable demand. Statistical data derived from the 
Market Observation System show the following picture for the total 
volume carried in dry cargo by inland waterway in EUR-5 (B, D, F, 
L, NL) : 
1988 = 344,6 mio t.; 1989 = 343,9 mio t. 
1991 = 349,2<7) mio t. 1990 = 347,8 mio t. and 
Statistical data for 1992 or 1993 are not yet available. 
Nevertheless, it is commonly held that the general economic climate 
suddenly deteriorated in the course of 1992. Important sectors for 
the waterway industry such as the building sector, the steel- and 
coal industry and the chemical industry reported sharp drops in 
production. This immediately had an impact on prices in the 
waterway market. Where the price index for Rhine dry cargo traffic 
reached a peak-level of 164 in the first quarter of 1992, the index 
dropped to 124 at the end of 1992 and went down further f-o 119 in 
the second quarter of 1993. 
(7) preliminary figure, 
- 8 -
Table 4 : Cost en price indices, Rhine traffic (1988 = 100) 
/ 1988 
1989 
1990 
1991 
1992 
1993 I 
II 
III 
IV 
I 
II 
III 
IV 
I 
II 
III 
IV 
I 
II 
III 
IV 
I 
II 
III 
IV 
I 
II dry cargo 
cost 
100 
100 
100 
100 
101 
103 
HI 
106 
110 
116 
113 
112 
113 
115 
113 
116 
115 
121 
121 prices 
100 
100 
105 
105 
115 
127 
115 
127 
129 
132 
147 
139 
135 
129 
164 
139 
125 
124 
126 
119 liquid cargo 
cost 
100 
100 
100 
100 
100 
102 
110 
106 
108 
114 
113 
112 
112 
114 
113 
115 
114 
119 
119 prices 
100 
100 
85 
85 
81 
132 
197 
153 
167 
204 
184 
281 
254 
185 
239 
165 
132 
128 
125 
116 
Considering that the cost index had also gone up to about this 
level (121 in the same quarter), the conclusion has to be that the 
cost/price ratio in the first half of 1993 was again as low as at 
the beginning of 1988. 
Mi' Cost and price indices for the free Rhine market are a good general 
indicator for the market situation of carriers operating larger 
vessels. However, for the smaller categories of vessels the number 
of waiting days between two transport operations as recorded on the 
skippers bourses can serve as a useful additional indicator. The 
following graph shows the evolution of waiting days for the 
transport relations Netherlands-Belgium and Netherlands-France. 
- 9 
North-South market 
waiting days, moving average 
waiting days 
Netherlands - France 
0'-
12341234123412341234 
1988 ] 1989 | 1990 | 1991 | 1992 
quarter / year 
The long waiting times (10 to 20 days) recorded at the bourses 
clearly indicate that there is substantial overcapacity in this 
market. The relation NL -> F showed a gradual reduction of waiting 
times in the period 1989-1991. This was caused by the scrapping of 
a considerable number of small vessels both in Belgium, France and 
the Netherlands, which had a positive effect on the turnaround 
times of the remaining vessels. 
The said effect is less apparent in the relation NL -> B because 
small vessels play a less important role in this traffic. 
The effect of the gradually decreasing demand on the 
shippersbourses was thus compensated by the scrapping action. 
However, this evolution came to a stop and even reversed in 1992 as 
a result of further decreasing demand. The strikes and 
manifestations of North-South operators in the Netherlands and 
Belgium in the summer of 1993, require no further statistical 
evidence to illustrate that the economic situation of these 
operators has again fallen to a critical level. 
- 10 -
i Liquid cargo 
In 1988 the inland waterway tanker market was even more depressed 
than the dry cargo market. Therefore the target was set to scrap 
15% of the tanker fleet compared to 10% in the dry cargo sector. As 
mentioned above, the outcome has been that 13% of the available 
capacity was taken out of the market. As is illustrated in the 
following graph, prices for the carriage of liquid cargo in Rhine 
traffic started to recover in the course of 1989 and reached a 
peak-level in the first half of 1991. 
Rhine market, liquid cargo 
cost and price indices (1988=100) 
V index 
300; 
250 I 
200 
150 
loo i—-
i 
50 ! 
V 0' 
1 / \ 
I \ J \ 
\ Prlces/V 
^ 
— • costs 
2 3 4 
1988 2 3 4 
1989 2 3 4 
1990 2 3 4 
1991 2 3 4 12 
1992 11993 
quarter / year 
This upswing was caused by a combination of factors such as 
temporary peaks in demand (low water periods, Gulf-crisis) but in 
particular by the significant reduction of the fleet capacity. The 
strong recovery of prices is remarkable since the structural trend 
in demand for liquid cargo was rather down than up as follows from 
the following figures (EUR-5) : 
1988 = 74,7 mio t.; 1989 
1991 = 69,8(8> mio t. = 70,0 mio t.; 1990 = 69,0 mio t. and 
(8) preliminary figure. 
- 11 -
Just as in dry cargo, the tanker market remained bullish until the 
first half of 1992. Then with the change in the general economic 
climate, prices dropped sharply, to such extent that the 
cost/price ratio in mid 1993 is similar to that in 1988. 
General assessment 
From the description given it is apparent that the rehabilitation 
measures taken by the Council in 1989 were effective in ending the 
current crisis. However, from the analysis it also follows that the 
sector remains very vulnerable to fluctuations in demand and is 
presently severely affected by the economic recession. 
8. The old-for-new measure 
The old-for-new measure was designed to counteract the observed 
tendency to over investment. Has this objective been achieved? 
As a first point it should be noted that the old-for-new rule was 
never meant to block all investment in new capacity. Contrary to a 
tonnage stop, an old-for-new regime should not hinder the necessary 
modernization of the fleet. Even if the market as a whole is not 
expanding, there will still be a need for expansion and 
modernization in certain sub-markets. In the reference period this 
has been the case in particular in the sub-markets for the carriage 
of containers and chemical products. It has been observed in 
practice that a sufficient number of such new vessels have been 
brought into service over the last years. In addition, a number of 
new push barges were brought into service. Therefore, as a first 
point it can be concluded that the restraint on investment has not 
been applied too severely. 
In the dry cargo sector 177.431 tonnes of extra capacity were added 
to the fleet during the period from 28.4.1989 to 1.1.1993. This 
represents an average expansion rate of some 50.000 tonnes per 
annum, or 0,5% p. a. of the total fleet capacity (10 mio tonnes). 
This is a relatively low figure. As an example it might be 
mentioned that in the year 1988 alone 210.117 tonnes of new 
capacity were added to the Communities dry cargo inland fleet. 
In addition, the new capacity brought into service was to a large 
extent (67%) compensated by the scrapping of 118.689 tonnes of old 
capacity on behalf of those who had new vessels constructed. For 
the new tonnage not being compensated special contributions were 
paid into the funds to a total of 4.036 mio ECU, this sum served 
for the partial reimbursement of the interest froe loans. V A second question is whether the regime has been, perhaps, too 
loose to be effective? Based on data received from the five 
cooperating scrapping funds, table 5 (see next page) gives an 
overview of all operations having been subject to the old-for-new V 
rule. In analysing these figures a distinction has to be made 
between the dry cargo sector and the tanker market. V: 
Table 5 : Application of the old-for-new role in the period 28.4.1989 - 1.1.1993 
"Old-for-new' role : special contributions and compensation tonnage offered for scrapping 
(Period : 28.04.1989 - 01.01.1993) 
Type of 
the vessel 
Dry cargo 
- self-propelled 
- barges 
- lighters 
Total 
Liquid cargo 
- self-propelled 
- barges 
- lighters 
Total 
Pushbarges* New constructions, etc. 
Number 
10 
49 
9 
68 
41 
1 
42 
1 Tonnage 
22.081 
123.626 
21.952 
167.659 
86.630 
955 
87.625 
3.960 Extensions 
Number 
56 
5 
61 
20 
1 
21 
9 Tonnage 
9.352 
420 
9.772 
54.871 
767 
5.638 
1.803 Special contributions (ECUS) 
Total 
contribution 
due 
1.600.650 
2.408.361 
27.117** 
4.036.128 
14.705.908 
190.804 
14.896.712 
251.925 already 
received by 
the Fund 
802.814 
2.408.361 
27.117 
3.238.292 
13.423.012 
190.804 
13.613.816 
194.345 Compensation tonnage 
Total 
24.058 
94.631 
118.689 
19.734 
4.254 
23.988 
4.784 already 
scrapped 
24.058 
94.631 
118.689 
19.734 
4.254 
23.988 
4.784 I 
*/kw 
••/compensation tonnage in barges in lieu of special contributions 
- 13 -
On the whole it can be concluded that the figures for the dry cargo 
sector show a picture which globally corresponds with the initial 
objectives that is : 
(a) to bring the investments down to a level sufficient to cope 
with legitimate modernization requirements; and 
(b) to persuade boat owners to "compensate" new construction by 
scrapping when possible. 
The figures for the liquid cargo sector, however, show a different 
picture. In the reference period 93.263 tonnes of additional 
capacity were brought into service, corresponding to 25.000 tonnes 
per annum, which represents an average expansion rate of 1,2% per 
annum compared to the size of the total tanker fleet. Only a small 
portion (26%) of the new capacity was compensated by the scrapping 
of old tonnage (23.988 t.). Most operators preferred to pay the 
special contribution in stead of scrapping. 
The reasons for this behaviour are to be found in the market 
situation in 1991 and the first half of 1992. When transport prices 
for liquid cargo continued to rise in 1991 several tanker operators 
decided to have new vessels constructed. The increased prices for 
second hand tankers and the low construction prices offered by 
shipyards in Eastern Europe contributed to the investment 
decisions. Because of the high prices for second hand vessels at 
that particular moment in time it was cheaper to pay the special 
contribution than to scrap, which explains the low compensation 
rate. 
As soon as figures on the above evolution became available the 
Commission undertook to analyse and remedy the situation. In 
concertation with the Member States concerned, the scrapping funds 
and the professional organisations, it was concluded that in the 
market situation - where second hand boats including very old ones, 
are temporarily overpriced - the functioning of the old-for-new 
mechanism could be improved by reserving the special contributions 
received by the funds for granting scrapping premiums at a later 
date. Hence, the special contribution should no longer be used for 
the advanced reimbursement of the interest free loans but should be 
used to take an equivalent tonnage out of the market as soon as 
prices of old vessels come down to the level of the scrapping 
premiums offered. 
On 21 December 1992 the Commission adopted Regulation No. 3690/92 
establishing the modifications as set out above and laying down 
detailed rules for the granting of scrapping premiums under the new 
procedure. The Regulation entered into force on 1.1.1993. As from 
this date boat owners again have the possibility to introduce 
applications for scrapping premiums. However, the financial 
resources available are limited and consist only of the special 
contributions received after the mentioned date. Properly 
documented scrapping applications which cannot be accepted because 
of lack of financial means are inscribed on a waiting list if the 
owner wishes so. 
- 14 -
The first results of the new system are summarized in the following 
table. 
Table 6 : Scrapping applications accepted between 1.1.1993 and 
1.7.1993 
dry cargo 
push boats 
tankers number of 
vessels 
1 
1 
23 capacity 
scrapped 
2.185 ton 
985 kw 
11.877 ton scrapping 
premiums paid 
131.000 ECU 
236.400 ECU 
1.956.356 ECU 
Because of the limited financial resources available only 2 
applications could be accepted in the dry cargo sector (of which 
one push boat). In the tanker sector more substantial amounts 
became available - following the bringing into service of some new 
tankers ordered in the boom period - which allowed the scrapping of 
almost 12.000 tonnes of surplus capacity. 
However, in the first 6 months of 1993 the cooperating scrapping 
funds received many more scrapping applications than could be 
accepted within the budgetary limits. At 1 July 1993 there remained 
220 applications on the waiting list for the dry cargo sector 
including push boats and 27 applications for tankers. 
Conclusions 
As regards the old-for-new measure it can be concluded that the 
modification introduced on 1.1.1993 represents an improvement, 
since it ensures that all capacity newly brought into service will 
be compensated by the scrapping of an equivalent tonnage. 
The large number of scrapping applications included on the waiting 
list clearly indicates that there is a need for the continuation of 
the current rehabilitation measures. With regard to the question as 
whether the old-for-new rule as laid down in Article 8 of Council 
Regulation No. 1101/89 should be reviewed on 28 April 1994, the 
answer has to be positive in the light of the present market 
situation. In line with Article 8 paragraph 6 of the said Council 
Regulation, the Commission herewith presents a proposal to the 
Council on the extension of the old-for-new rule, which is attached 
to this report. 
- AS -
Proposai fora 
COUNCIL REGULATION (EC\ SYN 475 
modifying Regulation (EEC) No 1101/89 on structural improvements in 
inland waterway transport 
(presented by the Commission) 
-ne -
Explanatory memorandum 
•\i 1. The Council, acting on a Commission proposal, adopted on 27 April 
1989 a package of measures designed to reduce structural 
overcapacity in inland navigation. These measures are set out in 
Council Regulation (EEC) No. HOI/89^1). The Regulation provides 
for two sets of measures : 
(a) the granting of scrapping premiums to reduce the capacity of 
I the active inland waterway fleet; and 
Î (b) measures to curb investment in extra vessels in the course of 
T the coordinated scrapping scheme. These latter measures are 
[; generally known as "the old-for-new-rule". The old-for-new 
h provision is of a temporary character and expires on 28.4.1994. u H 
[I, 2. The Regulation No. 1101/89 stipulates in Article 8.S that the 
\ Council on the basis of a Commission proposal accompanied by a 
well-founded report, may take a decision to extend the period for 
which the old-for-new- rule was introduced by a maximum of five 
years. 
The report, which is annexed, shows that the old-for-new mechanism 
effectively contributes to the reduction of overcapacity. However, 
the report also shows that the waterway industry has been seriously 
affected by a recent drop in demand caused by the general economic 
recession which emerged in the course of 1992. 
For these reasons it is considered that a prolongation of the old-
for-new measure is called for to further reduce overcapacity. 
3. During consultations organised by the Commission services, the 
Member States directly concerned and the organisations of inland 
waterway operators expressed the view that the old-for-new measure 
should be temporarily extended for the reasons summarized in point 
2 and said out in more detail in the attached report. 
4. The package of capacity reduction measures as introduced by Council 
Regulation No. 1101/89 is financed by the industry itself. Under 
the scheme Community operators are obliged to pay annual 
contributions to the scrapping fund for a period stretching beyond 
the date of 28.4.1994. The eventual non-extension of the old-for-
new rule would disrupt the balance of the package. 
5. On the grounds set out above the Commission considers that the old-
for-new rule should be extended for another period of five years. 
However, because of the fluctuations in the market situation it 
would be appropriate to reexamine the situation by the end of 1996 
and to present additional proposals to the Council if required. 
These proposals could include a gradual reduction of the conditions 
under the old-for-new rule to allow for a smooth transition. 
(1) O.J. No. L 116 of 28.4.1989, p. 25 last amended by Council 
Regulation (EEC) No. 3572 of 4.12.1990, see O.J. No. L 353 of 
17.12.1990, p. 14. 
-"n-
Proposal for a 
Council Regulation (EC) No. 
of 
modifying Regulation (EEC) No. 1101/89 on structural 
improvements in inland waterway transporte1) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Community, and in 
particular Article 75 thereof, 
Having regard to the proposal from the Commission^) r 
In cooperation with the European Parliament(3), 
Having regard to the opinion of the Economic and Social Committee(^), 
Whereas Council Regulation (EEC) No. 1101/89 introduced a number of 
measures designed to remove the structural overcapacity in the inland 
waterway sector and whereas one of these measures, which is designed to 
temporarily curb investment in extra capacity, was initially foreseen 
for a five year period; 
Whereas these said measures have contributed to the reduction of 
structural overcapacity in the inland waterway sector; whereas, 
however, the recent economic downturn has caused a drop in demand for 
waterway services resulting in renewed overcapacity felt in every 
sector of the inland waterway transport market; whereas it is therefore 
appropriate to maintain the current structural improvement measures, 
for a certain period; 
Whereas given that forecasts indicate that the overcapacity is likely 
to persist for considerable time, it is appropriate to reexamine the 
situation before the end of 1996 in the light of the then existing 
market situation. 
HAS ADOPTED THIS REGULATION : 
(1) O.J. L 116 of 28.4.1989, p. 25 
(2) 
(3) 
(4) 
-If-
I Article 1 
jf'v """' V 
f Regulation (EEC) No. 1101/89 is hereby amended as follows : 
î -, 
?••-' 
I 1. In Article 8 paragraph 1(a) first phrase, the period of "five 
| years" is replaced by "ten years". 
1 . . 
2. The following paragraph 5 is added to Article 10 : 
j 
"5. The Commission shall draw up a report evaluating the overall 
effect of the measures provided for by this Regulation, 
together with proposals if appropriate, and submit it to the 
European Parliament and the Council by 31 December 1996". 
!' ' Article 2 
This Regulation shall enter into force on 28 April 1994. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
I 
V Done at Brussels, For the Council, 
"7 2 
BSN 0254-1475 
COM(93) 553 final 
CUMENTS 
EN 07 
Catalogue number : CB-CO-93-591-EN-C 
ISBN 92-77-60756-4 
Office for Official Publications of the European Communities 
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