COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.05.1997 
COM(97) 242 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 
TRANS EUROPEAN RAIL FREIGHT FREEWAYS 

CONTENTS 
1. BACKGROUND 3 
1.1 Rail Freight Situation 1 
1.2 Origins 4 
1.3 Summary of existing access rights under European legislation 4 
1.4 Freeways as a step toward liberalisation 5 
1.5 The principal elements 6 
1.6 Relationship to other Community transport policies 7 
2. DISCUSSIONS 8 
2.1 High Level Group 8 
2.2 Industry, Business and Shippers 8 
2.3 Community of European Railways 9 
2.4 Outcome of discussions 9 
3. DEFINITION 9 
3.1 Operation on a Freeway 10 
3.2 One-stop-shop 10 
3.2.1 Tasks 11 
3.2.2 The organisation of the OSS 11 
3.3 Train path allocation 11 
3.3.1 Capacity 12 
3.3.2 Priority 12 
3.3.3 Speed of Decision 13 
3.3.4 Appropriate Paths 13 
3.4 Charging 14 
3.5 Border issues 14 
3.6 Relations between Infrastructure Managers, the OSS and Train Operators 15 
3.7 Performance incentives 15 
3.8 Complaints and Arbitration 16 
3.9 Information about ancillary services 16 
3.10 Cohesion of individual Freeways 16 
4. COMPETITION LAW 16 
4.1 Article 85 16 
4.2 Article 86 17 
4.3 State aid 17 
5. NEXT STEPS 18 
5.1 Location 18 
5.2 Practical work underway 18 
5.2.1 North-South Pilot Action 18 
5.2.2 Freight Leaders and Logistics Club 19 
5.2.3 Other Community Freeways 19 
6. CONCLUSIONS 19 
6.1 Benefits 19 
6.2 Further work 19 
6.2.1 Short Term Action Required to Establish Individual Freeways 19 
6.2.2 Long Term Issues 20 
6.2.3 Research 21 
6.3 Access by third countries and extending Freeways to Central and East 
European countries 21 
6.4 The future role of the Commission and the High Level Group 21 
2 
1. BACKGROUND 
1.1 Rail Freight Situation 
Between 1970 and 1995 freight carried by Europe's railways declined by nearly a 
quarter from 283 to 220 billion tonne kilometres. In itself this would have serious 
consequences, but when it is put in the context of an increase in the overall freight 
market of 70% it means that rail's market share has halved from some 32% to 
15%. The majority of this increase in freight traffic has been carried by road which 
has led over the same period to an increase of 150% in road freight. If this trend 
continues for the next ten years the railway's share of the market will drop from 15 
to 9% while the overall market expands by a further 30%. 
While these are global figures, the trends have very real impacts. If the predictions 
are borne out they suggest serious increases in congestion, pollution and to a lesser 
extent accidents. While it is clear that rail cannot possibly solve all freight needs, 
it can make a real contribution to the Community's need for sustainable freight 
transport, particularly over longer distances. In fact, even though some 85% of 
goods by tonnage transported within the Community are within a range of less than 
150km and most of this is not a market for rail freight, more than 50% of tonne-
kilometres are transported over 150km and this clearly illustrates the relative 
importance of long-distance freight traffic within the EU. The impact which rail 
could have on this long-distance market is compounded by the fact that a great deal 
of this freight is concentrated on high density corridors (particularly but not 
exclusively related to ports). It is this specific market where the Freeway concept 
outlined in this paper could make a valuable contribution to reversing the trend of 
declining market share for rail freight. 
Concern over transport trends, and particularly the failure of the railways to 
respond to the needs of the market, led the Commission to publish a White Paper1 
in 1996 on revitalising Europe's railways; This emphasised that rapid action is 
needed to stop the decline of rail freight because, if present trends continue, it is 
likely that rail freight will disappear from major segments of the market. 
Many of the problems which were identified have arisen because railway manage­
ment has had neither the freedom nor the required incentives to address the 
challenges facing it; in short railways do not operate like businesses. To change 
this the Commission considers that the management of rail organisations have to 
be given the freedom and resources to improve performance in addition to the 
introduction of market forces and the better integration of national systems. 
However, action to achieve this on a Europe wide basis will take time to achieve 
results. 
International journeys are a major cause for concern, as railways frequently fail to 
offer services which are competitive with road freight in terms of price, speed, 
flexibility and reliability. This is particularly important because rail is more 
competitive over longer distances, but to realise transport over these distances in 
Europe generally means crossing national borders. The national focus of railways 
1 A Strategy for revitalising the Community's railways COM(96)421 final 
3 
has left them handicapped when dealing with this traffic although they are 
potentially well suited to carry it. It is in view of the urgent need for action for rail 
freight that the Commission proposed the creation of Trans European Rail Freight 
Freeways in its White Paper. 
1.2 Origins 
In preparation for the Commission's White Paper in 1996, Transport 
Commissioner, Neil Kinnock, asked a group of experts to offer advice on the future 
of the railways in Europe. In their report2 the group first proposed the idea of 
creating a number of "Trans-European Rail Freight Freeways" to tackle the 
specific problems of cross-border rail freight. When the Commission subsequently 
published its railway White Paper it launched the idea as a practical first step to 
revitalising freight transport by rail. The Transport Council discussed the White 
Paper in October 1996 and welcomed the concept of Freight Freeways. 
The Commission advocated the setting up of Freeways on a voluntary basis as a 
step towards revitalising rail freight. The broad definition developed in this 
Communication should, therefore, be considered as a recommendation by the 
Commission on how such Freeways should be set up. This recommendation is 
based on the work of the High Level Group, which was set up in November 1996, 
and discussion with a wide range of interested parties (see § 2). 
Clearly, other forms of improving the organisation of international rail freight can 
be envisaged which could make a contribution to the promotion of rail freight. 
However, the Commission considers that the detailed definition presented in 
Section 3 of this Communication holds out the best prospect of improved 
performance of international rail freight services in the short to medium run. This 
Communication clarifies the requirements stemming from Community law, and in 
particular Competition law, for Freeways developed in accordance with this 
definition. 
1.3 Summary of existing access rights under European legislation 
Directive 91/440/EEC3 set out, for the first time in Community law, rights of access 
to railway infrastructure in the Community. Until its adoption each enterprise had 
benefited from a national monopoly and therefore exclusive utilisation of the 
infrastructure in its country. The first paragraph of Article 10 provides, for 
international groupings of railway undertakings, a right of access in the Member 
States in which they are established, as well as a right of transit in the other 
Member States, but does not permit the loading or unloading of passengers or cargo 
in the transit countries. For railway undertakings operating international combined 
transport the second paragraph of Article 10 provides a total right of access as well 
as the right to load and unload cargo, with the only limitation being that cabotage is 
not included. To facilitate the exploitation of the rights established in directive 
2 The Future of Rail in Europe 
3 Council directive 91/440/EEC of 29th July 1991 on the development of the Community's railways. O.J. 
L 237, 24.8.91. 
91/440/EEC, two further directives 95/18/EC4 and 95/19/EC5 were adopted which 
set out requirements relating to licensing, charging and train path allocation. 
Directive 95/18/EC establishes the framework for the licensing of Community 
railway undertakings. It creates the right for undertakings to apply for a licence 
when they are or will provide services referred to in Article 10 of directive 
91/440/EEC. The directive establishes the broad criteria for issue or refusal of a 
licence and conditions regarding the validity of the licence. 
Directive 95/19/EC established a framework for rail infrastructure charges and 
train path allocation. For charges the rules should enable the infrastructure 
manager to market the available capacity efficiently and the charges must be non­
discriminatory for services of an equivalent nature in the same market. Fixing the 
level of the charges can take account of the nature of the service, the market 
situation and the type and degree of wear and tear of the infrastructure. 
Article 3 of directive 95/19/EC provides two principles for the allocation of train 
paths: first, rail infrastructure capacity must be allocated in a fair and non 
discriminatory manner; second, the allocation procedure must permit efficient and 
optimal use of the infrastructure. Nevertheless, the directive allows certain 
derogations from these principles. Priority can be given in the allocation of paths 
to services provided in the public interest and to services which, without prejudice 
to competition law, are effected on infrastructure specifically constructed or 
managed for that purpose. States can provide special rights if these are 
indispensable to ensure a good level of public service or to permit the financing of 
new infrastructure, but without prejudice to Articles 85, 86 and 90 of the Treaty. 
Both directive 95/18/EC and 95/19/EC must be implemented by Member States by 
27 June 1997. 
1.4 Freeways as a step toward liberalisation 
International rail freight is characterised by national monopoly operators who have 
collaborative agreements with other national operators. These agreements result in 
a lack of clarity about responsibility or liability for cargo and frequently poor 
service as a result. Even companies for whom a rail solution would be ideal are 
often thwarted by the inability of the railways to provide the type of service that 
they require, at a competitive price. The current arrangements mean that to put 
together an offer, in response to a request from a shipper, requires negotiation with 
each national railway to establish the availability of an appropriate path and the 
total charge to be levied. This process is time consuming and does not lend itself to 
easy adjustment if the price or time is un-competitive. The cumulative nature of 
the process means that frequently journey times and cost are excessive. 
The creation of Freeways, as outlined in the Railway White Paper is intended to 
improve the international rail freight product, and can be done quickly and cheaply. 
This concept implies that Member States and infrastructure managers would open 
4 Council directive 95/18/EC of 19th June 1995 on the licensing of railway undertakings. O.J. No. L 143, 
27.6.95. 
5 Council directive 95/19/EC of 19th June 1995 on the allocation of railway infrastructure capacity and the 
charging of infrastructure fees. O.J. No. L 143, 27.6.95. 
access on a voluntary basis, without waiting for changes to Community legislation. 
Existing infrastructure would be used and trains would continue to operate on the 
basis of existing, but where easily possible simplified, procedures and technical 
requirements. Freeways are a short to medium term measure to facilitate the 
development and implementation of the long term policy that the Commission set 
out in its White Paper. 
Existing railway companies are already subject to very effective competition from 
road transport. The purpose of Freeways is to enable rail freight to become a more 
attractive option. This will be achieved in two ways, firstly through the removal of 
artificial obstacles to international rail freight and secondly through the 
improvement of the offer by the creation of competition in the provision of rail 
freight services. The White Paper talked in some detail about the multitude of 
problems which had arisen as a result of the way that rail Had evolved in Europe. 
The Freeway concept aims to overcome the purely organisational issues which 
hamper international freight. 
The Commission believes that the second component, the creation of a competitive 
market with a customer oriented offer, is essential if rail's potential is to be 
released. While it is hoped that existing train operators will have the courage to 
begin to compete with each other where that makes sense, it could in part, and over 
time, also be achieved by new entrants. However, in view of the high start-up costs 
and risks it is not likely that there will initially be many new entrants and these are 
likely to concentrate on specialised areas of the market. These are likely to be new 
markets so new entrants would increase the rail customer base rather than taking 
business away from the incumbents. The increase in the overall rail freight 
business should benefit existing railways in a number of ways such as the 
spreading of fixed costs, traffic feeding on to their networks and increased 
awareness of the potential of rail freight. Fostering this fledgling competition will 
require the Commission and national competition authorities to be acutely 
conscious of the danger of abusive behaviour by operators and to act swiftly and 
decisively if this is detected. 
The Commission takes this opportunity to recall that co-operation which goes 
beyond pure infrastructure co-operation envisaged and also covers areas of train 
operation, in particular if it includes revenue pooling and sharing of train opera­
tions, most probably falls under Article 85. The Commission has given a 3 year 
exemption under competition rules to co-operation agreements between railways6. 
This exemption does not cover commercial agreements between train operators 
except for combined transport. The operation of this exemption is currently 
monitored by the Commission which will analyse its implementation later in 1997. 
If a railway company exploiting the freedom of a Freeway, needs assistance from 
another railway operator (for example for traction, drivers, shunting, wagon 
management) then this should normally be provided on the basis of a service 
contract with non-discriminatory terms and tariffs. 
1.5 The principal elements 
Leading from this analysis the Commission proposal for Trans European Rail 
Freight Freeways as outlined in the White Paper contained the following principal 
elements: 
6 Case IV-35 111, decision of 25.7.95, concerning two fiches of the Union Internationale des Chemins de Fer 
6 
( 1 ) Open access for all operators. 
(both existing railway enterprises wishing to operate beyond their national borders 
and companies new to rail transport). 
(2) The facilitation and simplification of the use of rail infrastructure. 
(for example by establishing one-stop-shops for access to the Freeway; creating 
simple, attractive, transparent charging systems; ensuring that path allocation is 
fast and simple; seeking ways of providing adequate priority to freight; seeking to 
eliminate or reduce border delays.) 
1.6 Relationship to other Community transport policies 
The Commission transport policy aims at achieving sustainable mobility. A major 
aim is to ensure that transport decisions are made that are rational and take account 
of all the consequences of transport decisions, including, their environmental and 
safety impact. These decisions are dependent on a range of factors such as quality, 
reliability, availability and price. If decision making is not to be distorted by in­
correct price signals, it is necessary that the charge for services is aligned with the 
full cost of that transport to society; that is to say it should cover external costs, 
such as congestion, pollution and accidents as well as direct costs. At present these 
costs are largely not paid directly by transport users but by society as a whole, and 
this leads to distortion of transport decisions both within and across modes. (In 
particular transport modes with larger external impacts appear more attractive to 
users than their net social benefit.) These ideas were amplified in the 
Commission's Green Paper "Towards Fair and Efficient Pricing in Transport7". 
The first concrete step to apply these ideas was the Commission's proposal for a 
revision of directive 93/89/EC which sets a framework for road user charges and 
tolls for heavy goods vehicles 8. The Commission proposal seeks to relate charges 
for road use for these vehicles more closely to the costs which they impose, 
principally through greater differentiation of charges relating to road damage, 
emissions and location. At locations where the costs are very high, and where high 
charges would consequently be justified, the Commission believes it is desirable 
that, before the full costs should be charged, an alternative to road transport is 
available with open access to infrastructure thus providing a competitive choice for 
the movement of goods. 
The Alpine area provides a natural barrier between much of Northern and Southern 
Europe. The growth in trade resulting in particular from the single market has 
placed considerable strain on the limited number of routes through this area. A 
strategy is needed to tackle the problems which arise from this Alpine transit. The 
Commission will shortly be producing a Communication on a Framework for the 
solution of environmental problems caused by heavy goods vehicles. While the 
Eurovignette proposal can offer some assistance in this direction through ensuring 
that more sensible modal choices are made through charges more accurately 
reflecting costs, it is also necessary to ensure that the alternatives are sufficiently 
7 Towards Fair and Efficient Pricing in Transport COM(95)691 final 
8 Proposal for a Council Directive on the charging of heavy goods vehicles for the use of certain 
infrastructures COM(96)331 final 
attractive to be used rather than simply leading to higher transport costs. The 
creation of a more attractive rail freight and combined transport offer, facilitated 
through the creation of Freeways does raise the prospect of a significant shift of 
long distance goods traffic from road to rail. 
On 29 May 1997 the Commission adopted a communication on freight 
intermodality9. This identifies the impact of various factors on modal choices, as 
well as identifying a number of obstacles which discourage inter-modal transport. 
The communication seeks to identify actions which can contribute to an 
improvement of the ability for freight users to make use of the optimal transport 
mode at each point of the transport chain. 
2. DISCUSSIONS 
2.1 High Level Group. 
After the discussion of the railway White Paper at the Transport Council in 
October 1996, it was agreed that the Commission should establish a High Level 
Group of personal representatives of the transport Ministers to take the idea for­
ward. This group met five times before May 1997 and has discussed working papers 
produced by the Commission as well as the results of the work carried out by the 
Community of European Railways (CER) who have also been closely involved in the 
exercise. The aim has been to arrive at a common view of the Freeway concept as 
well as a broad definition. The definition should contain general principles on the 
key issues identified, and these include: access to the infrastructure; the single point 
of contact which deals with charging and train path allocation for the Freeway; 
Performance levels; and Border delays. 
The meetings have been positive, with general support for the Commission's aim 
and agreement on the issues which should be tackled. The group has particularly 
emphasised the need to ensure not just open access on the Freeway but also fair 
access to ancillary facilities such as terminals. However, there have been 
differences in approach particularly relating to the degree of access to the Freeway. 
Some Member States have indicated that in their view access to Freeways should 
not go beyond current Community law, that is to say that open access on Freeways 
would not be immediately acceptable to them. 
2.2 Industry, Business and Shippers 
For the Freeways to achieve their objective, it is essential that they meet the needs 
of their users. The immediate users are of course train operators, but equally 
important are the views of the end customers, that is to say the businesses which 
are sending the freight. Increasing competition in the provision of transport 
services are clearly important for business, and will increasingly facilitate SMEs in 
taking advantage of the opportunities provided by the Single Market. In view of 
this the Commission has sought to keep business and in particular shippers and rail 
users well informed of its proposals. Dialogue has taken place in a number of 
ways, through formal meetings, informal contacts and through correspondence 
including a submission from the European Shippers Council. It is apparent that 
there is considerable desire by shippers to make use of rail and its advantages 
9 Intermodality and intermodal freight transport in the European Union, Com(97) 243 final. 
8 
where it makes sense for their businesses. There is a general endorsement of the 
Commission's analysis of the reasons for rail's current unattractiveness and a 
recognition that the implementation of Freight Freeways could be an important 
step toward making the rail freight product more attractive. Business in general 
quite clearly believe that real competitive train operation will lead to railway 
enterprises which are better able to respond to their demands. 
2.3 Community of European Railways 
The Community of European Railways (CER), which represents railway Train 
operating and Infrastructure Management organisations in the European Union and 
Switzerland and Norway, is concerned to ensure that proposals for the creation of 
Freeways are practical and achievable and will result in an improvement in the rail 
freight product. The CER has therefore set up a number of working groups to look 
into practical issues raised by Freeways and has kept the High Level group 
informed of progress with that work. To identify the sort of technical problems to 
be overcome and to develop an understanding of the operation of a Freeway a 
simulation was performed on a number of routes from Benelux to Italy. This 
simulation has identified potential for 17 additional freight train paths per day 
along this route at commercially attractive times and speeds averaging almost 
60kph. 
An independent consultant was employed by the CER to provide external advice 
and input to the practical implementation of the concept. The analysis performed 
has confirmed the feasibility of the concept and has outlined in some detail how the 
Freeway concept can be realised within a relatively short period. The CER 
concludes that the technical barriers can be overcome, and that the product offered 
by the infrastructure managers can, through different means of working and 
improved co-operation, be improved. The CER thus confirms the Freeway 
approach as put forward by the Commission in its White Paper. These conclusions 
are outlined in the CER's report10 on its work which was published in April 1997. 
2.4 Outcome of discussions 
The Commission has found the discussions with the High Level Experts, railways 
and shippers from the Member States extremely useful. This communication 
reflects the outcome of these discussions which have led to a large degree of 
consensus, even though this does not meaft that the parties had a unanimous view 
on all the issues discussed. The following chapter on the Freeway definition is 
based on both the Commission's working papers prepared for and discussed by the 
High Level group, as well as on the more detailed findings of the CER. 
3. DEFINITION 
An overriding factor during the development of the Freeway concept and during 
discussions between the Commission and interested parties has been that all elements of 
the definition of a Freeway and their subsequent implementation by Member State railways 
must respect Community Law. Nevertheless Freeways will, on a voluntary basis, take a 
number of issues further than the requirements of Community law. These issues include 
elements such as the question of access, and the co-ordination of train path allocation and 
10 European Rail Freightways: Proposal to The European Commission 
9 
charging Following discussion in the High Level Group the following definition was 
generally agreeable in most of its elements to all Member States. 
3.1 Operation on a Freeway 
The Commission as well as a large number of Member States see the Freeways as a 
first practical step to overcoming the limitations of Directive 91/440/EEC (see § 
1.3 above). Therefore, access should ideally be open to all licensed Community 
railway undertakings, who comply with the necessary access conditions which are 
established on safety grounds, on a non-discriminatory basis. Directive 95/18/EC 
provides for licensing of railway undertakings to carry out services provided for by 
Article 10 of Directive 91/440/EEC. The scope of a Freeway goes wider than this 
limited definition of access rights so it is proposed that the same generally agreed 
licensing principles should apply to this wider range of operators. While this is 
straightforward for a number of Member States, in particular those who have in the 
meantime entered into discussions on North-South Freeways (see § 5.2.1. below), 
some other Member States (as mentioned in § 2.1. above) prefer a more cautious 
approach. The Commission is interested, in order to make rail freight transport 
more attractive, that the Freeway concept as described in this communication is 
implemented on as many routes as is economically feasible, even if in some 
Member States the whole concept would need to be implemented in several stages 
over a certain time. What is essential, is that railway undertakings may acquire 
business in a Member State other than the one in which they are licensed, and 
operate train services into that second Member State without being obliged to enter 
into a classical co-operation agreement with a railway undertaking from that 
second Member State even if it needs locomotives and drivers to be provided by 
the second railway undertaking. The Commission • believes that, as in other 
economic activities, these should be acquired through service contracts instead of 
risk sharing agreements. It should however be clear that the Freeway agreements 
will eventually lead to open access on the determined Freeways in all Member 
States. 
In summary the Commission concludes that: 
A Freeway should be open for fair, equal and non-discriminatory access to all 
train operators licensed in the Community. 
The criteria for licensing train operators to operate on a Freeway should 
follow the same principles as laid down in directive 95/18/EC. 
The criteria for the allocation of railway infrastructure capacity and the 
charging of infrastructure fees should be in compliance with directive 
95/19/EC 
Freeways should, subject to national regulations, be open to cabotage. 
Freight Terminals on a Freeway will be open for fair, equal and non­
discriminatory access to all train, road haulage and waterway operators as 
appropriate. 
3.2 One-Stop-Shop 
One of the principal elements to improve the rail freight offer is the creation by the 
relevant Infrastructure Bodies of a One-Stop-Shop (OSS) to market the freeway to 
licensed railway undertakings. Clearly the establishment and operation of OSSs 
must comply with Community law. To be effective the OSS will need to be 
10 
3.2.1 Tasks operated by staff with an excellent knowledge of the requirements of operators and 
the constraints of the system. 
Ideally the OSS as "Freeway Manager" will: 
(1) Analyse capacity and market the infrastructure of the Freeway. 
(2) Undertake path allocation discussions with Infrastructure Bodies and 
Forum Rail Europe (which is the body responsible for co-ordinating 
international train paths) on behalf of train operators and allocate paths. 
(3) Monitor and control performance of the Freeway. 
(4) Undertake charging on behalf of the individual Infrastructure Managers. 
This would involve it undertaking a billing and clearing house function. 
3.2.2 The organisation of the OSS 
The role of the OSS can be characterised as that of the "Freeway Manager". It will 
not be a large bureaucratic organisation, and indeed the CER work identifies the 
possibility of its creation as a "virtual office" which will actually only exist on the 
Internet with greatly improved communication between existing Infrastructure 
Managers. 
The main issues to be addressed when establishing the OSS are that it should be 
neutral, non-discriminatory and have the right incentives for success. 
Consideration must be given when establishing and determining its mode of 
operation that the OSS will need to be compatible with existing arrangements and 
priorities already determined. 
To provide assurance that the OSS will act in a non-discriminatory manner, where 
linkages still exist between train operators and infrastructure managers the OSS 
should ideally be a completely independent body. 
It is essential for the success of the Freeway that the OSS is provided with 
appropriate incentives. In principal this means that it must be in the interests of the 
OSS to maximise both international freight traffic and revenues. 
When a Freeway is created by Infrastructure Managers, a code of conduct should 
be established which would define how the OSS could function. This would 
specify 1) each operators rights, 2) criteria for path allocation (these criteria must 
reflect the interests of all users) 3) appropriate mechanisms to ensure that the 
allocation of capacity is carried out on this basis, including providing justification 
for decisions which the OSS takes. 
3.3 Train path allocation 
Some of the most frequently voiced criticisms of international rail freight stem 
from the train path allocation process. Currently this is essentially performed on a 
national basis. Low international rail freight performance is frequently due to the 
gaps between these national timetables. Attempts are then made to marry up the 
resulting paths, but this cannot overcome the fact that the paths are sub-optimal by 
definition. The problem is exacerbated by the low priority given to freight traffic 
when allocating paths. There is plenty of evidence to show that high performance 
11 
international path allocation is possible and the CER simulation illustrated that 
time spent waiting at borders on those routes can be reduced by between 15% and 
80%. 
3.3. J Capacity 
One of the most important results of the work done by the CER was to show that 
even on busy routes there seems to be sufficient spare capacity available to start 
the Freeway exercise. It has already been mentioned that for example on the 1400 
km route from Rotterdam to Milan some 17 daily paths (with competitive arrival 
and departure times and speed) could be made available; on the Brenner route, a 
notorious European bottleneck, there are some 5-6 daily paths free for freight trains 
in both directions. The available capacity appears sufficient to commence the 
setting up of Freeways and to prove that the trend of decreasing rail freight market 
share, can be turned around. 
If however, the Freeway initiative is really successful, the question of additional 
capacity may arise. The. High Level Group discussed the issue of capacity and its 
allocation at its fourth meeting. While it is frequently possible to find means of 
increasing capacity through adjustments to the timetable, a point inevitably arises 
with increased traffic at which the lost benefits justify infrastructure investment. 
Such investment might simply be enhanced command and control systems. The 
European Rail Traffic Management System (ERTMS), developed as part of the 
Community's Research and Development programme, is an instrument which 
could make a decisive contribution to the enhancement of customer service and 
improving the cost-effectiveness of operations by allowing much shorter separation 
between trains operating on the same track. It therefore offers the potential to 
reduce direct operating costs, maximise track capacity and optimise fleet operation. 
Where there is greatly increased demand, investment in actual permanent way 
might be required, possibly for dedicated freight lines. The re-formulation of the 
TEN priorities may play a useful and important role in this respect. 
In its proposal for a revision of the TENS guidelines in 1997, the Commission will 
propose that rail projects which form part of a Freeway should be considered as 
being of common interest thereby making them eligible for support from the TENs 
budget line. In 1999 the Commission will propose a more general revision of the 
TENs guidelines in which full account will be taken of the need to give appropriate 
priority to the further development of Freeways including the possibility of 
adjusting the outline plans. 
3.3.2 Priority 
The Commission does not propose that Freight should be granted an automatic 
priority on a Freeway. However, the objective should be to better reflect the 
differing needs of customers than is currently the case. Where freight has a very 
high value and needs to be moved quickly there seems to be little sense in it being 
granted automatically the lowest priority. In many ways this issue is a political one 
where, for example, local and regional authorities may impose requirements on 
railways for passenger services. It could be desirable to reflect on whether the 
outcome of this is optimal particularly where it can result in rail services becoming 
unattractive to freight and leading to a transfer to road haulage with the consequent 
impact on society. The Commission is convinced that it is possible to better 
exploit the present infrastructure while taking better account of the need to provide 
adequate paths for international freight traffic. In that case it is not a question of 
establishing fixed priority rules for freight or passenger traffic but to ensure greater 
12 
flexibility to guarantee a satisfactory path allocation for both traffic types. Any 
review of allocation priority must, of course, take account of any rights and the 
expectations of existing operators. 
Another important factor is the desirability of looking at the whole corridor rather 
than seeking to apply differing criteria on individual segments. Decisions taken on 
one Infrastructure network can impact on traffic on another network and for 
optimal performance these implications need to be taken into account. Such an 
approach would inevitably result in a better result for international freight. 
3.3.3 Speed of Decision 
The OSS in collaboration with Infrastructure Bodies must work to speed up train 
path allocation decisions. The time taken to reach decisions will depend upon the 
circumstances of the application. A distinction can be drawn between a regular 
service which is planned in advance and which can be allocated a path during 
regular, frequent allocation conferences and urgent requests for single or multiple 
paths. 
For many regular services, the train paths required can be requested in advance, 
and therefore it is likely that the existing procedures as foreseen in Directive 
95/19/EC will adequately meet the needs of train operators. These type of train 
paths could therefore be dealt with during the normal allocation conferences, 
respecting deadlines. Where there is a conflict between a request for a new regular 
service and an alternative service, the OSS will attempt to accommodate both 
services and to resolve any conflict through negotiation. If a negotiated settlement 
is not possible then, subject to the provisions of directive 95/19/EC, the path 
should be allocated to the user who is willing to pay the highest fee for its use. 
Outside the allocation conference requests will have to be accommodated taking 
account of previously agreed and operating services. Efforts should be made to 
ensure that occasional services can be accommodated with minimal disruption to 
those existing services. In recognition that applications for paths which are not 
made during the normal allocation process are generally urgent the OSS will 
respond to such requests rapidly. In some circumstances the response time will be 
affected by factors such as whether the applicant is a new operator on the section 
of the network and would therefore require checks of safety etc. However, when 
the Train Operator is already approved for operation then in general the target 
should be set which require that 
(1) For regular paths, a decision should be made within seven working days. 
(2) For one-off paths, a decision should be made within one working day. 
3.3.4 Appropriate Paths 
The OSS will aim to provide paths which meet as closely as possible the needs of 
customers in particular with regard to the journey times requested. 
The OSS should seek to provide a competitive path speed as requested by the 
operator. For some traffic the speed may be unimportant, for other absolute 
reliability is what counts, and for other traffic high speeds and reliability must be 
achieved. This latter category of traffic has not been as well served in the past by 
rail as by road. If the Freeway is to enable rail to break into this market it must be 
able to offer the potential for average freight train speeds of 50 kph or more. 
Performance improvement will among other things depend on the quality of the 
13 
existing train paths. The CER simulation was able to provide a number of paths 
with increases in average speed of some 20%. The resulting paths were certainly 
competitive being some 6 hours shorter than the journey time for a lorry with a 
single driver. 
While the OSS and Infrastructure Bodies must retain routing flexibility to optimise 
infrastructure use, they should endeavour to provide operators with paths routed as 
requested. 
Where a path cannot be provided to meet the operators requirements and within the 
freeway specification, the OSS should provide the operator with an explanation of 
the reason for this inability and inform the train operator of the best available 
alternative paths. 
3.4 Charging 
Freeway charges must be non-discriminatory, however, it is also desirable that the 
system should be as simple and transparent as possible. As a result the charge that 
would be offered to any operator to use the same section of track should be derived 
using the same principles for each operator. Charges should reflect relevant costs, 
and should therefore not be determined through the use of arbitrary factors. 
Freeway discussions with the Member States have highlighted the wide divergence 
between charging systems. Indeed, on some routes it is conceivable that infra­
structure charges may be so high that services cannot be run competitively with 
road haulage. 
In the short term Freeway charges are likely to be based on the existing 
infrastructure charging systems and this will probably result in a scale of published 
tariffs. The Commission believes that it could be desirable for the OSS to be 
empowered by the relevant Infrastructure Bodies with a certain flexibility in 
charging levels, to ensure that charges can be competitive. This flexibility might be 
limited by for example a price floor which should at least cover the freight specific 
marginal costs. In the short run the success of the Freeway exercise will largely 
depend on the willingness of the Member States (and in particular those which are 
in a central position within the Community) to efficiently exploit the flexibility 
available in their individual charging systems. In the longer run rail infrastructure 
charging principles will be proposed by the Commission which is undertaking a 
study, with the view of bringing the present extremes of the individual rail 
charging systems closer together. To avoid intermodal discrimination it will also 
be necessary to look at ways of bringing charging systems for access to the 
infrastructure of different modes closer together. 
In any case the OSS will be able to provide a train operator on the Freeway with 
one price offer for the whole of their journey. Ideally such a charge could be 
differentiated to take account, for example, of congestion such as peak/off-peak 
usage, or on environmental impacts or wear as discussed in the Green Paper on 
Fair and Efficient Pricing in Transport. Consideration might also be given to the 
appropriate level of charges for empty running and the effect on charges of the size 
and load of trains. 
3.5 Border issues 
The existence of the single European market means that there should be no reason 
for checks at internal physical frontiers. Infrastructure Bodies, train operators and 
Member States should work to eliminate or minimise border procedures and speed 
14 
up any which must remain. The work of the CER points to the sub-optimisation of 
marrying national timetables as a major reason for excessive border crossing times 
within the Community. The creation of end to end international freight paths has 
been shown to be effective in tackling this issue and vastly reducing delay which is 
of course one of the reasons for proposing the establishment of Freeways. 
Member States should give commitments to suppress border checks for customs, 
safety and phytosanitary purposes where they still occur. If they are performed 
they should be carried out to cause minimum hindrance to trains. This might imply 
that they would be performed, as much as possible, at marshalling yards or origins 
and destinations. There should be mutual recognition of checks which have been 
carried out in the originating State. 
Where there are no technical reasons why locomotives cannot be used across 
borders then the Commission sees no reason why this should not be allowed. 
Ideally all rolling stock which is authorised for operation on one national infra­
structure network will be permitted to operate anywhere on the Freeway provided 
it is suitably equipped to interact with the necessary fixed systems of the 
infrastructure. 
In line with EC directives which enable cross border operation by suitably trained 
crew, Members States, Train Operators and Infrastructure Bodies shall facilitate 
such operations. Adequate arrangements must exist for route learning and other 
training required. 
3.6 Relations between Infrastructure Managers, the OSS and Train Operators 
Infrastructure Managers may develop alternative legal models for the 
establishment of the OSS. Ideally through contracts with the relevant 
Infrastructure Managers in different Member States, the OSS should be in a 
position to enter into contracts with train operators wishing to make use of the 
Freeway on behalf of the Infrastructure Managers as well as invoice and collect 
funds from the train operators. This would avoid cumbersome procedures which 
had to be performed by train operators and each individual Infrastructure Manager. 
For simplicity, it would be desirable to have a single contract governing access to 
the Freeway between the OSS and train operators. In view of this it could be 
desirable to carry out further work on the development of such a contract for use 
between an OSS and train operators throughout the Community. The use of such a 
contract is unlikely to be possible in the short run and therefore the OSS might 
initially simply act as a contact point for the provision of all the appropriate 
contracts between train operators and each individual Infrastructure Manager. 
3.7 Performance incentives 
The Commission believes that it is desirable for Freeways to be established 
incorporating quality and reliability criteria. This could lead to the establishment 
of schemes which ensure the payment of rebates or surcharges where performance 
differs form that contractually agreed. Such a scheme would need to ensure that 
both the Infrastructure Managers and the train operators were liable to make 
payments where they were responsible for failure to operate as planned. It is in 
any case also desirable for quality indicators to be developed showing for example 
the percentage of paths provided as requested or percentage meeting specification, 
and for Infrastructure Bodies to make data available showing how effectively these 
standards are met. 
15 
3.8 Complaints and Arbitration 
The One-Stop-Shop would be particularly well placed to look into queries related 
to the quality or operation of the Freeway. Its good links with the Infrastructure 
Managers should facilitate the resolution of minor problems. However, if train 
operators have complaints relating to the allocation of train paths then, in 
accordance with directive 95/19/EC, these must be handled by separate appeal 
bodies. 
It is essential that solutions to possible complaints are found in a relatively short 
time, and that the arbitration body is neutral and independent in its decisions. The 
CER report suggests that the UIC Arbitration body could fulfil a useful function in 
this respect. Apart from this specific arbitration, the normal judicial processes are, 
of course, always open. 
3.9 Information about ancillary services 
In addition to its role of managing the Freeway the OSS may provide information 
to operators which will facilitate their operations on the Freeway. This may 
include information on, for example, the availability of traction and drivers, 
shunting, fuel and maintenance facilities. Such information would need to be 
provided on a non-discriminatory basis. The OSS would however, not be involved 
in actually providing or brokering any such services related to train operation. 
3.10 Cohesion of individual Freeways 
The whole concept of Trans European Rail Freight Freeways is for voluntary 
implementation by Infrastructure Managers and Member States. In view of this it 
is clearly not essential to specify a definitive model to be followed. Nevertheless 
there may be benefit in ensuring compatibility for example in organisation and 
operation so that, for instance where Freeways intersect, inter-running is 
straightforward. In addition to simplify the notification procedure it is desirable to 
ensure that the same broad issues are tackled in a comparable manner. The High 
Level Group established by the Commission and Member States should play an 
important role in safeguarding the cohesion of the different Freeways. 
4. COMPETITION LAW 
4.1 Article 85 
The Freeway concept as described above is essentially a collaborative venture 
between railway infrastructure companies. There may be good reasons to argue 
that pure co-operation between infrastructure managers does not affect 
competition, at least between most, if not all, of the intra-Community freight 
corridors concerned and therefore, would not fall under Art. 85(1). 
The main instrument to implement the Freeway concept is the establishment of an 
OSS. The OSSs' basic functions will include: identification and allocation of 
capacity on the relevant Freeway; monitoring and control of performance of the 
Freeway; and charging on behalf of the individual infrastructure managers. The 
nature and scope of the particular co-operative agreements that the relevant 
infrastructure managers will conclude for the establishment of each Freeway is still 
uncertain and will in any case depend on the flexibility and independence they will 
be willing to grant to the OSS. 
16 
In these circumstances, it is not possible to determine a priori whether the 
agreements required for the establishment of any particular OSS will fall under the 
prohibition of Article 85 (1) of the EC Treaty. Certainly, co-operation which goes 
beyond the above mentioned infrastructure management functions to also cover 
areas of train operation is more likely to fall under Article 85 (1) EC. Railway 
undertakings entering into infrastructure co-operation agreements must decide 
whether these need to be notified to the Commission. The Commission will, 
following a notification, decide in each individual case on the applicability of 
Article 85(1) EC. 
It is to be noted that agreements falling under Article 85 (1) EC may be declared 
permissible by the Commission if they have pro-competitive effects that outweigh 
the anti-competitive effects of the restrictions contained in them. Therefore, even if 
Article 85 (1) EC might be applicable to certain agreements related to the 
establishment and operation of a Freeway, the Commission would in principle see 
no difficulty in declaring them exemptible if they fully satisfy the following 
conditions: 
the Freeway in question improves the distribution of goods and speed up their transport, in 
particular, by means of the creation of a new product, that is an international train path 
offered through a One-Stop-Shop; 
the Freeway in question promotes the economic process by making rail freight transport more 
competitive with road haulage, in line with the Community's general transport policy and 
without distorting competition between train operators in the railway sector; 
consumers (that is the train operators and their customers) benefit from the establishment of 
the Freeway because rail haulage is faster, possibly cheaper, and of better quality; 
the agreements are indispensable to attain the above objectives; and 
the agreements are not capable of eliminating competition in any relevant market. 
The Commission considers that through assuring open access to licensed railway 
undertakings such agreements are not capable of eliminating competition in any 
relevant market. Provided that the notifications contain all necessary information 
and the agreements in question satisfy the above mentioned conditions, the 
Commission will endeavour to handle them speedily and will be prepared to give 
comfort to the notifying parties in appropriate terms. 
4.2 Article 86 
If all train operators are to enjoy access to and operate on the Freeway on fair 
terms, then care must be taken to ensure that the allocation and charging process is 
non-discriminatory. An undertaking should not at the same time be both a 
competitor and the judge determining access to any relevant market. Article 86 or 
90(1) of the Treaty would prevent a railway enterprise in a dominant position from 
determining what other parties are its competitors. The existence of an 
independent appeal mechanism or the absence of apparent discriminatory 
behaviour are not sufficient to rule out infringement of Articles 86 or 90(1) of the 
Treaty. 
4.3 State aid 
In general responsibility for promoting the development of railway infrastructure 
largely remains with the Member States. As outlined in more detail in the Railway 
White Paper, it is the Commission's practice to authorise public investment in 
17 
infrastructure, so long as it is equally accessible under the same non-discriminatory 
conditions and does not distort competition to an extent contrary to the interest of 
the Community. For the time being it is legitimate for States to finance investment 
in railway infrastructure so as to compensate for unpaid external costs in the road 
sector or to meet non-transport objectives, such as regional development, as long as 
these conditions are met. However, it is true that this practice does not necessarily 
resolve all problems of distortion of competition, notably those arising from 
different rules being applied in different Member States to the various modes of 
transport. Moreover, in the long run, the Commission believes that in all modes of 
transport, users should pay the full cost of infrastructure. The Commission will 
carry out a study on charging for railway infrastructure costs, in order to define 
further common principles. 
5. NEXT STEPS 
A broad degree of consensus has been reached on the Freight Freeway concept in the High Level 
group. The work performed by the CER has identified the practicality of implementing the 
concept as well as a broad consensus among existing train operators on the achievability of the 
concept while identifying a number of longer term issues which need to be tackled. It now 
remains for rail Infrastructure Managers to identify suitable routes and make proposals where 
they consider this desirable. So far a number of proposals are under discussion. 
5.1 Location 
The Commission's White Paper included an illustrative map of potential Freeway 
routes. However, the Commission believes that it is principally for rail 
infrastructure managers working together to identify the most attractive routes. 
Clearly there is also a role for Member State governments and the Commission to 
play in facilitating the process. So far there have been a number of possible routes 
identified and the relevant infrastructure managers are working on an analysis of 
the feasibility as Freeways (see § 5.2 below and the map at annex 1). In principle, 
the potential Freeways should meet two basic criteria: they must first be attractive 
from a demand viewpoint, and second, they should have sufficient capacity as 
mentioned above. This implies that Freeways are likely to be concentrated on the 
major international freight corridors which today are largely served within the 
Community by road haulage. The co-ordination of Freeways with the TEN rail and 
combined transport networks could allow, where appropriate, that Freeways would 
benefit from infrastructure improvements in the framework of projects of common 
interest. 
5.2 Practical work underway 
5.2.1 North-South Pilot Action 
At the informal Transport Council in January 1997 the Netherlands proposed to 
Germany, Austria and Italy that they should jointly explore the potential for 
establishing Freeways utilising their rail networks. It was subsequently agreed that 
a sub-group of the High Level Group would be established to carry out this work. 
The group has now met and a programme of work is underway. The group is 
considering a number of routes, these would link: Gioia Tauro to Genoa then north 
via Germany to Rotterdam; Brindisi, via Verona and Brenner to Hamburg; and 
Vienna via Nuremberg to the Ruhr area. It is anticipated that the One-Stop-Shop 
could be created in 17 weeks and that it should be feasible to have these Freeways 
operational by the end of 1997. These discussions also involve Switzerland. 
18 
5.2.2 Freight Leaders and Logistics Club. 
This group representing some of Europe's largest manufacturers and transport 
organisations has enthusiastically embraced the Freight Freeway concept. Three 
working groups have been established to examine the potential for the concept. 
The routes being investigated are Rotterdam (NL) to Milan (I), Wolfsburg (D) to 
Barcelona (E) and London (UK) to Sopron (H). These initiatives which are demand 
driven could possibly be fitted into a Freeway concept including the creation of a 
One-Stop-Shop, by the Infrastructure Managers concerned. 
5.2.3 Other Community Freeways 
As mentioned earlier the Commission would expect that Freeways will sooner or 
later, link all Member States. The Commission hopes that, in view of its position as 
a major transit country, the possibilities for both North-South and East-West 
Freeways involving France will be explored in the near future. 
The annex to this Communication presents an overview of the practical work on Freeways that is 
underway. 
6. CONCLUSIONS 
6.1 Benefits 
The work so far has identified that there are benefits to be reaped from the concept. 
It remains for Member States and Rail Infrastructure Managers to identify potential 
routes and put the concept into practice. The Commission remains willing to 
facilitate such action. 
6.2 Further work 
There remain a number of unresolved issues which clearly will require work at 
different levels. For the purposes of this paper these have been divided in to short 
and long term issues. 
6.2.1 Short Term Action Required to Establish Individual Freeways 
Member States 
• Complete timely transposition of Directives 95/18/EC and 95/19/EC; 
• Finalise licensing conditions for train operators; 
• Address infrastructure charging issues (notably to ensure a competitive level of 
infrastructure access charges for freight); 
• Initiate or participate in debate on priority issues in particular looked at from 
wider transport policy objectives; 
• Resolve remaining border crossing issues not related to railway operations. 
Infrastructure Managers 
• Identify demand and appropriate routes; 
• Designate Staff to lead development and implementation; 
• Reach agreement with other Infrastructure Managers; 
• Ensure compliance with Community law; 
19 
• Set up OSS; 
• Resolve issues related to charges and path allocation (notably priority rules and 
reconciling infrastructure access charges with market prices); 
• Initiate debate on priority issues. 
Train Operators 
• Identify commercial opportunities using proposed Freeways and lobby for 
creation of Freeways where they would benefit business; 
• Develop appropriate services and resources to take advantage of the commercial 
opportunities; 
• Ensure compliance with Community law where co-operation is envisaged with 
other train operators; 
• Establish links with other elements of the total transport offer e.g. hauliers and 
terminal operators. 
European Commission 
• Monitor and give comfort on competition issues in appropriate terms; 
• Address the issue of interfaces with non-EU networks; 
• Facilitate creation of Freeways and development of services (PACT, intermodal 
task force,); 
• Revision of TENs guidelines; 
• Direct appropriate research toward enhancing the Freeway concept; 
• Continue the co-ordinating role of the High Level Group. 
6.2.2 Long Term Issues 
In seeking to improve the commercial environment in which Europe's railways 
function, it is important that care is taken to avoid the sort of fragmentation which 
has arisen in the past. Therefore it is worth reflecting on how individual actions fit 
into a longer term strategy. The CER in its report on the Freeway concept 
identified a number of issues which need to be given further consideration. The 
Commission believes that the following issues are among the most important: 
One Stop Shop 
The potential for expansion of the One-Stop-Shop concept to enable better 
European rail infrastructure Management. The question of how One-Stop-Shops 
on different Freeways can best interact. 
Cabotage 
While, ideally, in the longer run it will be desirable for cabotage to be permitted in 
the railway as in other transport sectors, this is not immediately essential to the 
Freeway concept which addresses international traffic. 
Charging 
Further consideration needs to be given to rail infrastructure charging, both to 
ensure harmonisation of systems across networks but also to reduce charging 
distortions between transport modes. 
20 
Performance incentives and penalties 
It could be desirable to focus attention on performance quality through a system of 
charges and rebates. This would require the establishment of a performance 
monitoring regime. If experience with the Freeways shows that such a system 
could be of use then it would be wise to develop one. 
Priority in train path allocation 
The existence of priority regimes has been identified as one of the reasons for poor 
international rail freight performance. If Member States are serious about 
encouraging a shift from road haulage of goods to more sustainable modes then the 
issue of appropriate levels of priority must be considered. 
6.2.3 Research 
An appropriate research and innovation strategy for rail can play a role in 
delivering enhanced customer service with improved efficiency and cost-
effectiveness. The Community's Framework Programme, through the promotion 
of socio-economic studies and demonstration activities, can assist in the 
implementation of the Freeway concept. 
6.3 Access by third countries and extending Freeways to Central and East European 
countries 
There are likely to be significant opportunities for extending the Freeway concept 
beyond the borders of the Community and, in principle, where demand exists this 
is desirable. Therefore, in particular, candidate countries for accession to the 
Union will be kept informed of this initiative. Indeed the special factors which 
may exist on routes beyond the Community's borders, such as very long journeys 
and the existence of widespread rail networks, may make Freeways even more 
attractive. The extent to which these benefits can be captured will depend on how 
much of the overall concept can be implemented on routes extending beyond the 
Community. The key issue to be resolved is likely to be the extent to which 
different train operators will be able to operate across the borders of the 
Community. This is likely to require further consideration by the Commission and 
the Member States. The Commission has been informed by the Transport 
Ministries of Switzerland, Poland, Hungary and the Czech Republic that they are 
interested in exploring further the potential for Freight Freeways. The Commission 
proposes to take this issue actively forward in the context of the pre-accession 
strategy. The High Level Group will be invited to address the issues arising from 
the extension of the Freeways beyond the current Community borders in the 
second half of 1997. 
6.4 The future role of the Commission and the High Level Group 
The Commission believes that the High Level Group has functioned well in its role 
of shaping the Freeway concept and developing a degree of consensus. With the 
presentation of this report to the Council the work does not come to a halt. Even as 
work gets under way by the relevant infrastructure managers, it is desirable to 
attempt to ensure that incompatible structures are not newly created, while of 
course respecting the fact that the creation of Freeways is voluntary. Such a co­
ordinating role could be played by the High Level group as well as monitoring 
progress and ensuring that any necessary amendments are discussed. 
21 
A second role which might be foreseen is that of acting as an advisory group to 
discuss further measures in the rail sector. The Commission believes that it could 
be useful to discuss proposals for further studies and legislation in the sector (in the 
near future, in particular with regard to railway infrastructure charging and train 
path allocation) with a group of experts and the High Level Group might provide 
such a group. 
22 
TRANS EUROPEAN RAIL FREIGHT FREEWAYS | 
Practical Work Underway 
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COM(97) 242 final 
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