COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 19.07.1995 
COM(95) 337 final 
95/0205 (SYN) 
COMMUNICATION FROM THE COMMISSION 
ON THE DEVELOPMENT OF THE COMMUNITYS RAILWAYS 
APPLICATION OF DIRECTIVE 91/440/EEC 
FUTURE MEASURES TO DEVELOP THE RAILWAYS 
Proposal for a 
COUNCIL DIRECTIVE 
amending Directive 91/440/EEC on the development of the Community's railways 
(presented by the Commission) 

COMMUNICATION ON THE DEVELOPMENT OF THE COMMUNITYS RAILWAYS 
APPLICATION OF DIRECTIVE 91/440/EEC 
FUTURE MEASURES TO DEVELOP THE RAILWAYS 
Proposal for a 
COUNCIL DIRECTIVE 
amending Directive 91/440/EEC on the development of the Community's railways 
INTRODUCTION 
1. Since the approval of Directive 91/440/EEC on the development of the Community's 
railways(I), a number of changes have occurred in the structure and organization of the 
railways in the European Community. In the light of these changes and the requirement 
in the directive to report on its application, the Commission has prepared a general paper 
on the railways covering the following issues: 
PART 1 Report on the application of Directive 91/440/EEC on the development of the 
Community's railways; 
PART 2 Future measures to develop the railways; 
PART 3 Proposal for a Council Directive amending Council Directive 91/440/EEC on 
the development of the Community's railways. 
2. The Commission's recent White Paper on the development of the Common Transport 
Policy(2) identified a number of areas where the Community is already active and others 
where action is planned. Among the subjects on which the Commission has already 
issued proposals are: 
the creation of a Community licence for railways and the establishment of 
principles for the allocation of infrastructure capacity and charging of 
infrastructure fees(3); 
trans-European networks, notably in relation to the Edinburgh growth initiative(4); 
inter-operability of high-speed trains(5); 
(1) Directive 91/440/EEC on the development of the Community's railways. OJ No L 237, 
24.8.1991, p. 25. 
(2) The Future Development of the Community Transport Policy. COM(92) 494 final. 
(3) Council Directive 95/18/EC of 19 June 1995 on the licensing of railway undertakings. 
Council Directive 95/19/EC of 19 June 1995 on the allocation of railway infrastructure 
capacity and the charging of infrastructure fees. OJNo L 143, 27.6.1995, pp. 70 and 75. 
Proposal for a European Parliament and Council Decision on Community guidelines for 
the development of the trans-European transport network. COM(94)106 of 7 April 1994. 
Proposal for a Council Directive on the interoperability of the European high-speed train 
network. COM(94) 107 of 15 April 1994. (4) 
(5) 
research in the field of railways, notably in relation to control contmand systems, 
infrastructure costing and evaluation and transfer equipment for combined transport 
(Fourth Framework Programme). 
In addition the Commission is engaged in a general review of the fundamental issue of 
external costs in transport This question, which is of considerable importance for the 
future competitivity of the railways ,will be the subject of a green paper. In view of the 
potential role of the railways in ensuring sustainable mobility in the Community and of 
the need better to integrate transport services, the Commission is also working on the 
preparation of a paper oh the Citizens Network, intended to address the problems of 
maintaining adequate and efficient public passenger services throughout the Community. 
This comprehensive package is likely to be of considerable importance in realizing the 
potential of the railways,and the proposal that is included in this communication should 
be seen in this wider framework. 
PARTI 
THE APPLICATION OF DIRECTIVE 91/440/EEC 
ON THE DEVELOPMENT OF THE COMMUNITY'S RAILWAYS 
1. The principal measures contained in Directive 91/440/EEC were: 
the management independence of the railways; 
the separation between infrastructure management and transport operations; 
the improvement of the national railways' financial situation; 
access to railway infrastructure. 
These will be discussed below, but it is first worth looking briefly at recent trends in 
railway traffic. Some key statistics are presented in Annex A; these show that in general 
the decline in the railways' share of the market has continued. Despite some bright spots 
- notably traffic on high-speed lines - the overall picture is one of static or reduced 
traffic, declining market shares and increasing financial deficits. The railways have 
continued to lose traffic to roads and the importance of this latter mode of transport has 
grown considerably. It is notable that in those countries where the railways formerly held 
a large (over 25%) share of the freight market in 1970, that this had fallen by some 50% 
by 1993. In the case of France, Germany and Belgium this was in part due to the decline 
of basic industries but this factor should not conceal the reality of the situation: road 
hauliers succeeded in reducing their real costs whilst improving their quality.This was 
due to a combination of factors, notably the success of the Common Transport Policy 
in introducing liberalized rules and dismantling restrictive national barriers in the sector. 
If the railways are to benefit from similar changes, further action is clearly needed. 
2. To date, Denmark, Germany, the Netherlands and the United Kingdom (except for the 
Channel Tunnel) have fully transposed the Directive and France has recently adopted 
legislation. Six other Member States have partially transposed the directive. 
Generally speaking, Member States have made considerable progress in giving the 
railways legal independence, although sometimes this does not mean real management 
autonomy, and in separating infrastructure management from transport operations. The 
provisions regarding access rights to infrastructure have created the most problems, 
although the directive on the allocation of infrastructure recently adopted by the Council 
should resolve many questions about access and charging. Hence full transposai should 
follow rapidly in all Member States (fuller details are given in Annex B). 
3. As regards management independence of the railways, a key aim of the Directive was 
to ensure that railway management was given sufficient independence to function 
efficiently. To this end, Articles 4 and 5 of the Directive set out a number of areas 
where the railways were to be given management independence. The results vary. 
Some Member States have made considerable progress in allowing management to 
operate autonomously. In other Member States less progress has been made. 
For instance, the management of the railways is still subject to close political control and 
has little real freedom to organize the enterprise effectively. This is particularly the case 
in the passenger transport sector, as railways are required to meet a range of non­
commercial objectives. The Commission is conscious of the problems that are involved 
in creating an autonomous enterprise. It accepts that it is difficult to draw the line 
between interference in management and the legitimate requirement of the state to 
supervise a national utility that provides important public services. However, the failure 
to make satisfactory progress is likely to have important repercussions on the future of 
the railways. The increasing integration of the Community means that major transport 
firms have to be capable of responding quickly and efficiently across the whole market, 
not only within their national frontiers. Railways that lack the autonomy-necessary to 
do so are unlikely to play an effective role in the market, particularly that for 
international traffic. 
4. Is it useful, then, to clarify further the role of the state vis-a-vis the railways? 
This question may best be addressed by looking at the objectives of the state in relation 
to any transport undertaking. In the first place, it has the duty of ensuring safety. The 
railways have a reputation for safety that other modes of land .transport should emulate 
and that the Member States are justified in preserving. A second issue is the provision 
of essential public services. The railways play an important role in the life of many 
urban and rural communities, and in most cases the services they provide require 
financial assistance. Such support is vital for many passenger services provided in the 
public interest, so the authorities concerned have a clear interest in their efficient 
operation, though not in their day-to-day management. Third, there is the involvement 
of the state in providing infrastructure. While there are good arguments for a greater 
presence of the private sector in the financing and construction of new infrastructure, 
there is a continuing need for the state to supervise the planning of networks in the 
general public interest. Finally, Member States have general economic policies, such as 
those on prices and competition, that affect the railways but this should not be in a 
different way from other utilities. Some ideas to clarify the situation are given in Part 2. 
5. As regards the separation of infrastructure management and transport operations. 
Directive 91/440/EEC requires that at least this be done in the accounts. This has been 
implemented in most Member States although in different ways. For example, 
Denmar and France are maintaining a vertically integrated system, independent from the 
state, Spain is creating separate business units within its railways, Germany and the 
Netherlands are progressively establishing distinct organizations for infrastructure and 
transport operations, while the UK intends to privatise, starting with Railtrack, the 
infrastructure manager. The Commission is analysing how the separation works in 
practice. It should be noted that the position of Swedish railways, almost alone in 
Europe, has significantly improved since infrastructure and operations were separated 
(1988) and an equitable infrastructure charging system introduced(6). 
6. The financial situation of the railways has not generally improved since 1991, although 
certain Member States have made good progress in reorganizing their capital accounts. 
Many railways appear to have experienced a cycle of new development programmes, 
increased loans, higher financial charges to service the loans and, in due course, greater 
deficits. The question is to what extent the increased deficits are due to the failure of 
investments to produce the expected returns or to a shortfall in the compensation 
provided by the public authorities for public services etc. 
As the reform of support for public services, introduced by Regulation 1893/91(7), has 
now been in place for two years, the Commission intends to examine its operation and 
to make proposals, if needed. It therefore plans to launch a general study of the current 
financial situation of the railways and their receipts from public sources. 
(6) Railways in Sweden were organized into two units in 1988. Since that date an 
infrastructure charging system similar to that applied to road transport has been applied. 
Partly due to this and increased management efficiency the position of the railway 
operating company (Statens Jâmvagar SJ) has constantly improved and it is now in an 
overall surplus. 
Council Regulation (EEC) No 1893/91 of 20 June 1991 amending Regulation (EEC) 
No 1191/69 on action by Member States concerning the obligations inherent in the 
concept of a public service in transport by rail, road and inland waterway. OJ No L 169, 
29.6.1991 p. 1. (7) 
Access rights to railway infrastructure have aroused interest and controversy. Certain 
Member States have not implemented these provisions. For this and other reasons, some 
potential entrants have experienced problems in launching operations: for instance they 
have had difficulty in obtaining timely information on the availability and cost of train 
paths and traction facilities. Few new operators have yet commenced business, although 
the existing national companies have been active in creating new groupings. However, 
there is interest in entering the freight market, and not only the combined transport 
sector. 
PART 2 
FUTURE MEASURES TO DEVELOP THE RAILWAYS 
The Commission has already made proposals on issues important to the future of rail 
transport,such as trans-European networks,interoperability and research. It is preparing papers 
on the external costs of transport and the Citizens Network (adequate and efficient public 
passenger services). The subjects discussed below should therefore be seen in this wider 
context. 
1. ACCESS RIGHTS TO INFRASTRUCTURE. Directive 91/440/EEC created rights of 
access for international services limited to international groupings of railway 
undertakings and to undertakings providing international combined transport services. 
The possibility that new entrants could provide rail services and that several operators 
could use the same infrastructure led the Commission to propose directives laying down 
the conditions of access to the network. These proposals were adopted in June 1995. 
The main options for the future, so far as access rights are concerned, are these: 
to maintain the status quo, that is to limit freedom to offer services to undertakings 
that meet the requirements of Directive 91/440/EEC:; 
to liberalize access to infrastructure completely, for domestic and international 
traffic in both the passenger and freight sectors; 
intermediate solutions, such as open access for international passenger services and 
for all freight services. 
2. Maintaining the status quo would mean that further progress would be postponed. 
However, the railways are continuing to lose traffic and there is an urgent need to 
revitalise their services, particularly in the international field. The sector would benefit 
from the entry of new capital and enterprises and from the consequent incentive to 
existing companies to provide more competitive services. The progress made in the 
combined transport sector since 1991 shows that the possibility of new entrants 
stimulates existing companies to improve their services, In any case, maintaining the 
status quo would be inconsistent with the obligations of the Treaty to develop a common 
transport policy based on the principle of freedom to provide services. At the other 
extreme would be full liberalization of access to railway infrastructure. This would of 
course represent an immediate and complete introduction of freedom to provide services. 
However, so rapid a move could create difficulties in a very complex industry, that has 
been regulated for many years. 
3. On balance an intermediate solution, to open access for all freight operations and for 
internationalpassenger services, appears justified. In the freight sector, the entry of new 
undertakings and the stimulus this would give existing operators, would help solve the 
problems of quality and of under-investment that hinder the development of more 
competitive rail services. The liberalization of access for both international and domestic 
i>c'gh is rtcessarv lo allow oncr^.tcrs to ofTsrcTii^cV* ,T/ r^w- à h *\., '.O^Î-T 
"M;TK«", ne urtificial .»ej.art on 'jftiV ^St/ii .^-iV î * 1;1, ^ïr^y * it* w'u st] ti I 
z rroiG^cihtic do**! s*«c i^* A jr>i er crs iS£^ ..^ < a u. ' a «J n^k * s ri. 
!es£ officier» an*' <*o,ic». ' 1 «"•pwi.^-e Zi •* >~^V ** s \~i \r U" nice 
«îei'ïgr'atu.rt in *98J »hows coryi:>dn£/y that a ^ / * *vp orch '_ fre^hi nt ?sj. ^ b.. *-,d 
on market principles can pay dividends. After a long period during which traffic ZMÛ 
modal share declined consistently, the free market created by "the'. 1981 'Staggers Act1 
allowed the railways to develop new services, often in partnership with other transport 
operators. The result was a reversal of the chronic cycle of traffic losses, bankruptcies 
(8) 
(9) and staff lay offs. The railways in the USA are now experiencing record levels of traffic 
and have returned to profitability. 
They are engaging new staff and buying equipment in a way that has been unknown for 
many years. It would be overly simplistic to ascribe all these changes simply to 
deregulation. But it would also be naive to ignore the similarities that exist between the 
situation in Europe today and that in the USA during the 1970's. If all other sectors of 
the Community's economy have benefited from the efficiency generated by the 
abandonment of bureaucratic controls, there is no evident reason to believe that the 
railways would not do likewise. 
International passenger services are potentially a promising sector of the railways' 
activities. However, the growth of traffic has been hampered by the failure to coordinate 
and market international trains. Creating the possibility to operate new forms of 
international passenger services would facilitate the development of Community links 
and better serve passengers. It should be emphasised that international services are not, 
except in rare cases, concerned by public service obligations imposed by the state. 
Moreover, access rights for international services could generally be granted without 
coming up against the problems of losing network benefits and of "cherry picking" on 
domestic passenger services. A general point should be be noted here: the average 
passenger journey by rail is short, which indicates that the bulk of the railways passenger 
business would be unaffected by any move to liberalize international transport, which is 
essentially long distance. 
PASSENGER SERVICES IN THE PUBLIC INTEREST. The provision of public 
passenger services normally involves State aid. State aid for the provision of services 
provided in the public interest represents an important element of the total revenue of 
railways. The white paper on the Common Transport Policy stated: 
"it is necessary to develop guidelines concerning the conditions under which they 
(State aids) are to be considered acceptable under Community law". 
In the case of the railways, guidelines for maintaining services through the provision of 
State aid already exist. However, the radical changes in the management and operation 
of the railways that have occurred since the adoption of Directive 91/440/EEC: now 
require them to be reexamined. In particular, it is necessary to see whether the rules 
should be modified to take account of new types of railway company and whether the 
information requirements should be simplified and modified to be more effective for 
monitoring State aids. 
The Commission would welcome the views of interested parties. 
The essential purpose of the rules on State aids is to meet the requirements of the Treaty, 
in particular Articles 77, 92 and 93. These rules have been in force for many years and 
major changes have taken place in the organization of the railways. The Commission 
therefore intends to launch a study of the application of Regulations (EEC) Nos 1191/69, 
1893/91, 1192/69(8) and 1107/70% to assess their effectiveness in preventing distortions 
of competition between Member States. It will then consider whether it is necessary to 
adapt these Regulations to the current situation of the railways. 
Regulation (EEC) No 1192/69 of 26 June 1969 on common rules for the normalization 
of the accounts of railway undertakings. OJ No L 156, 28.6.1969, p. 8. 
Regulation (EEC) 1107/70 of 4 June 1970 on the granting of aids for transport by rail, 
road and inland waterway. OJ No L 130, 15.6.1970, p. 1. 
8 
7. The general question of how best to provide adequate rail services in the public interest 
will be taken up in the context of the Commission's initiative on the "Citizens Network". 
This is designed to provide a framework for passenger services by all modes throughout 
the Community. It is hoped to be able to present a communication on this subject later 
this year. 
8. COMBINED TRANSPORT. The success of combined transport is vital for the 
development of the railways and for the provision of efficient inland freight services. 
As the Community is now steadily emerging from a period of low economic growth, 
demand for freight transport is beginning to increase once again. There is clearly a 
relationship between the rate of economic growth and the demand for transport: as the 
rate of economic growth increases, so does demand for transport. Although that 
relationship may be weaker than in the past, due to congestion and increases in real 
transport costs, demand will still grow, particularly in markets benefiting from the 
removal of barriers (e.g. the Iberian Peninsula and Central and Eastern Europe). The 
Commission considers that increasing use of capacity available in modes other than road 
transport will be necessary, if a satisfactory compromise between the protection of the 
environment and the needs of industry is to be achieved. 
9. The possibility of making better use of inland waterways and railways has to be 
examined and an intermodal approach developed. This would associate various modes 
of transport in such a way as to make best use of each. There are now signs that action 
already taken by the Community is starting to bring results, as the increase in traffic by 
combined transport in 1994 shows. However, three problems still hinder the development 
of combined transport: 
in the introductory period, the volume of business is often insufficient to fill a 
complete train, and hence costs per unit carried are high. 
in comparison to the USA or Canada, railways in the Community are heavily 
involved in passenger traffic. This increases the cost of freight operations, due to 
added safety provisions, and can make it difficult to find space for freight 
transport. 
until Community legislation regarding the coverage of infrastructure costs is fully 
developed, rail freight operators will frequently be handicapped by higher costs 
than they should be paying. 
10. The separation of railway accounts into infrastructure and operations under 
Directive 91/440/EEC: has pointed up the question of infrastructure costs. Certain 
Member States have taken measures, for example the United Kingdom with the 
Track Access Grant. This scheme provides aid for rail operators and clients that face 
higher charges for rail than for road. Aid is based on the infrastructure component of the 
rail charge, up to the limit of the external benefits of the transfer from road to rail. 
The Commission has allowed this particular scheme under competition rules and is 
considering a general exemption for such measures; this wilt form part of a general 
review of Community rules on State aid for combined transport. In the meantime, the 
Commission has proposed the extension for two years of the existing regime. 
11. In 1992, to encourage the development of new combined transport services, the 
Commission launched a specific programme, the PACT (Pilot Actions for Combined 
Transport)(10). This has assisted the development of new services such as that from 
Germany, through Italy, to Greece and those to the Iberian Peninsula; other actions have 
concerned Northern Europe, the UK and Ireland. The programme has been assessed in 
(10) Commission's Decision of 22 December 1992 concerning the granting of financial 
support for pilot schemes to promote combined transport. OJ No L 16, 25.1.1993. 
the light of experience and the Commission will soon propose that it be modified and 
transformed into a Community action. The aim would be to further growth of an efficient 
and self-supporting combined transport sector, offering good services on those axes 
where combined transport can be competitive. The new PACT would concentrate upon: 
the development of international links, including those to central Europe and new 
Member States, along routes identified in the TENs network. 
helping new entrants and other companies that could demonstrate, through a 
Community license, that they would provide safe and efficient services. 
ensuring good cooperation between different modes and operators. 
A proposal to establish a new programme is in preparation with a view to submission 
in the course of 1995. 
12. Combined transport is a chain and the overall quality of service is determined by the 
weakest link. Often this is the transhipment terminal, and a substantial part of total costs 
are generated by terminal operations. A number of terminal types can be identified that 
vary from the simple point where loading units are transhipped, to comprehensive 
logistic centres. The range of facilities available is such that the user is confronted with 
problems of information, and a balance between supply and demand is difficult to 
achieve. Another important point is the possibility of access. Certain terminals have 
access restricted to their owner companies. However, such restrictions are not acceptable 
when a terminal receives public support. As the efficiency of terminals is a key factor 
in combined transport, the Commission intends to examine the value of new measures 
to improve their efficiency. 
13. INTEROPERABILITY. The Treaty sets the goal of promoting the interoperability of 
national transport systems in its Articles on trans-European networks. The Commission 
has launched two major initiatives relevant to this aim. First, it has proposed guidelines 
for the development of the trans-European transport networks. These guidelines would 
define networks for the different modes of transport, including high-speed and 
conventional rail, types of Community measure and priorities in realizing the networks. 
Second, it has proposed a directive on the interoperability of the high-speed train 
network. The Directive would create a framework for establishing essential requirements, 
technical specifications and standards for different sub-systems that would allow 
interoperability. It would also establish procedures for defining and adopting such 
mandatory specifications and standards. 
14. The Commission considers that now a strategy should be developed for advancing the 
interoperability of conventional railways on the trans-European network, their capacity 
to allow international movements that, in safety and with greater continuity, meet the 
levels of performance specified. The problem is that conventional railways have 
developed against different backgrounds over a long period of time, so that there is a 
large diversity of infrastructure, rolling stock and equipment and different operational 
rules and procedures apply. These can make international services slower and more 
expensive than they need be. However, compared to high-speed lines, most conventional 
routes depend less on international traffic and the large stock of capital, although often 
requiring radical improvement, can only be changed progressively. 
15. Promoting interoperability would improve the competitiveness of conventional rail in two 
ways. First, it would improve the quality and lower the costs of international services, 
by tackling the differences in norms for infrastructure, rolling stock and other equipment 
and the divergences between regulations and operational procedures that increase the 
costs and complexity of movements across frontiers. Second, it would lower costs, by 
allowing greater economies of scale in the production and maintenance of equipment. 
The railways have developed different standards for equipment and have tended to issue 
10 
detailed specifications rather than performance requirements. A move to performance 
requirements defined at Community level would encourage economies of scale and a 
unified competitive market, by furthering the application of Community rules on public 
procurement. 
16. Various constraints, however, should be kept in mind. One is the scale and nature of 
demand for services requiring interoperability. This may only be significant in certain 
markets for rail transport, although the improvement of networks and services can create 
additional demand. Demand for interoperability is one of the first questions to study. 
A second constraint is financial. The cost of eliminating barriers to interoperability have 
to be identified (the additional financial burden may come from moving investments 
forward in time as well as from higher total costs) and questions such as return on 
capital and pay-back period addressed. This does not mean, of course, that costs and 
benefits in a wider sense and over the whole life of a project should be overlooked. 
17. Another question is that of the relationships, so far as technical specifications are 
concerned, between interoperable high-speed and conventional networks and between 
conventional and local services on the same tracks. These will require study in some 
depth as work on interoperability progresses. 
18. The Commission has started a study programme, as the basis for developing a general 
strategy and working out priorities. One study would collect basic data, and analyse the 
strategic changes in different markets, indicate the performance required to define criteria 
for interoperability, and assess their impact on infrastructures and rolling stock as well 
as the expected economies of scale. Another would look at specific routes to assess the 
benefits of interoperable services and the costs of different solutions (as well as 
alternative ways of achieving similar results). The next steps would involve more 
detailed examination of specific issues, the assessment of different policies and the 
presentation of proposals, as soon as possible in 1996. 
19. INFRASTRUCTURE COSTS AND CHARGING. Some progress is being made on the 
development of infrastructure charging regimes. In the UK and Germany, operational 
systems have been developed, although the approaches followed sometimes diverge. The 
Commission intends to study developments in the Member States so as to answer the 
following questions: 
the problems that might arise and their solution, if Member States use different 
methods of costing, 
the costs to be attributed to freight services, and the impact of different attributions 
on passenger services, 
whether measures of external benefits can be agreed and used to help set 
guidelines for State aids for rail freight. 
The Commission proposes to report to the Council as soon as possible, making any 
proposals needed to encourage the more efficient use of the network. 
20. MANAGERIAL AUTONOMY AND THE ROLE OF THE STATE Ensuring that 
railways play an effective role in Community transport requires further action on a 
number of issues. This report has presented some of the subjects that the Commission 
has examined and others that it intends to study. A key question that has been identified, 
but not resolved, concerns the grey area between the management autonomy of the 
railways and the responsibilities of public authorities (see Part 1). To make progress it 
is essential to define more precisely the specific responsibilities of Member States. The 
Community has already introduced a certain clarification through its provisions on public 
service obligations, State aids, infrastructure development and so on. These could be 
brought together to create clear guidelines for the future. 
11 
21. The guidelines could cover three issues in particular. First, the provision of passenger 
services in the public interest(11). The Member States can always ask companies to 
provide public interest services in accordance with the provision of Article 5(1) of 
Council Directive 91/440/EEC. Member States can specify the services to be provided 
and monitor performance, but must take responsibility for the financial burden on 
transport operators. They can also maintain or create companies to provide services in 
the public interest and grant concessions and specific rights in accordance with 
Community rules. However services in the public interest are usually short or medium 
distance; for long distance services the guiding principle should be management 
autonomy and fair competition. The same applies to the freight sector, in which services 
should be organized on commercial principles, although there may be temporary 
State aid until a harmonized Community system of infrastructure charges, covering all 
modes and both direct and indirect costs, is adopted. 
22. Second, the protection of safety. The public authorities should be capable of instituting 
and monitoring, in a non-discriminatory manner, provisions designed to ensure an 
appropriate level of safety in railway operations. This requires some specific control and 
supervisory mechanisms to ensure standards are maintained. Third, the planning and 
financing of infrastructure. This should be supervised by the state in a manner consistent 
with overall policy, and with Community principles. However the objective of attracting 
private capital into the sector may require the reconsideration of existing rules. 
After consulting interested parties about the value of such guidelines, the Commission 
will decide about a proposal. 
23. CONCLUSIONS. Further action is now called for, at both Community and national 
level, to ensure that the railways exploit their environmental and technical advantages 
and play the role set out in the white paper on the Common Transport Policy. The 
Commission now intends to consult interested parties on future options and priorities for 
action. This communication identifies a number of issues to be pursued actively. Other 
key questions have to be tackled, for instance external costs and public transport for 
passengers, on which the Commission is to report. The Commission believes that the 
development of the railways is a key element of the Common Transport Policy and will 
give priority to improving their situation and increasing their competitiveness. 
(ID The question will also be covered in work on the Citizen's Network. 
12 
TABLE 1 
Freight TRANSPORT BY RAH, IN EUROPEAN UNION (15) ANNEXA 
1970 1980 1990 1993 
Ton-kilometres (billion) 282 286 257 208 
Market share (%) 31.7 24.9 19.1 15.4 
Passengers 
1970 1980 1990 1993 
Passenger-kilometres 
(billion) 213 248 272 264 
Market share (%) 10.4 8.7 7.3 66 
MARKET SHARE BY MODE 
Freight 
Mode<12) 1970 1980 1990 1993 
Rail 31.7 24.9 19.1 15.4 
Road 48.6 57.3 67.3 70.8 
Inland waterways 12.3 9.8 8.4 7.8 
Pipelines 7.4 8.0 5.3 6.0 
Passengers 
Mode 1970 1980 1990 1993 
Rail 10.4 8.7 7.3 6.6 
Buses and coaches 12.7 11.5 9.0 8.5 
Private cars 74.8 76.5 78.6 79.5 
Air 2.1 3.3 5.2 5.5 
Source: Eurostat and Commission 
(12) Freight transport by air is negligible. 
13 
TABLE 2 
TRANSPORT BY RAIL IN EUROPEAN UNION (15) 
Freight: market share by Member State (%) 
Belgium 
Denmark 
Germany 
west lander 
east lander 
Spain 
France 
Greece 
Italy 
Ireland 
Luxembourg 
Netherlands 
Portugal 
UK 
Austria 
Finland 
Sweden 
EU (15) 1970 
28.2 
19.2 
33.2 
71.2 
16.4 
38.9 
9.0 
21.0 
12.0 
63.4 
7.3 
10.4 
21.8 
55.9 
27.2 
49.3 
31.7 1980 
23.6 
17.2 
25.2 
66.7 
10.9 
31.5 
8.2 
12.2 
11.1 
52.2 
5.7 
7.8 
15.0 
39.9 
26.1 
48.8 
24.9 1990 
17.8 
15.6 
20.4 
69.2 
6.9 
26.5 
5.1 
10.2 
10.3 
54.9 
4.2 
12.7 
9.3 
47.6 
22.1 
42.5 
19.1 1993 
15.8 
17.0 
17.0 
29.1 
4.6 
24.0 
4.2 
9.6 
10.1 
40.6 
4.0 
14.6 
8.7 
45.8 
25.2 
41.9 
15.4 
Source: Eurostat and Commission 
14 
TABLE 3 
TRANSPORT BY RAIL IN EUROPEAN UNION (15) 
Passengers: market share by Member State (%) 
Belgium 
Denmark 
Germany 
west lander 
east lander 
Spain 
France 
Greece 
Italy 
Ireland 
Luxembourg 
Netherlands 
Portugal 
UK 
Austria 
Finland 
Sweden 
EU (15) 1970 
11.4 
8.1 
8.8 
28.9 
15.0 
11.0 
17.2 
11.7 
5.0 
8.0 
9.4 
14.0 
8.0 
14.3 
6.6 
7.0 
10.4 1980 
8.6 
8.7 
7.0 
21.5 
8.5 
10.0 
9.0 
9.4 
3.7 
7.3 
6.9 
11.1 
6.3 
11.6 
7.1 
8.6 
8.7 1990 ! 
6.7 
7.2 
6.4 
14.4 
7.4 
9.2 
8.2 
7.0 
3.5 
5.0 
6.9 
7.0 
5.2 
11.1 
5.7 
6.1 
7.3 1993 
6.4 
6.3 
6.5 
7.4 
6.6 
8.0 
6.3 
6.3 
3.3 
5.9 
9.0 
58 
4.6 
12.3 
4.9 
5.6 
6.6 
Source: Eurostat and Commission 
15 
ANNEX B 
STATE OF PLAY OF THE TRANSPOSAL OF DIRECTIVE 91/440 EEC 
ON THE DEVELOPMENT OF THE COMMUNITY'S RAILWAYS 
General 
According to Article 15 of Directive 91/440/EEC, the then twelve Member States should have 
taken implementation measures by 1 January 1993. Transposai is now progressing: all 
Member States but one have notified legal texts to the Commission. Five have implemented 
the Directive completely, the others in part. Generally speaking, considerable progress has 
been made in establishing legal independence and in separating, at least in the accounts, 
infrastructure management from transport operations. Establishing access rights has proved 
more difficult although the adoption by the Council of a directive on the allocation of railway 
infrastructure and on the charging of infrastructure fees should resolve outstanding questions 
and so facilitate transposai. 
The Commission is currently assessing implementation by the three new Member States. 
Belgium 
On 27 August 1993, Belgium notified texts on managerial independence and the separation 
of accounts. It has not notified the transposai of access rights. 
Denmark 
On 10 March 1994, Denmark notified a legal text that transposes the Directive. 
Federal Republic of Germany 
On 12 January 1994, Germany notified a new law on the structural reform of the federal 
railways that transposes the Directive. 
France 
On 19 October 1993, France notified texts transposing managerial independence and the 
separation of accounts. On 14 June 1995, it notified texts concerning access rights. 
Greece 
On 6 October 1993, Greece informed the Commission of its intention to transpose the 
Directive but has not made any notification. 
Ireland 
On 13 August 1993, Ireland notified texts that largely transposed the Directive, but left 
questions concerning access rights unresolved. 
16 
Italy 
On 23 August 1993 and on 27 April 1994, Italy notified texts establishing managerial 
independence and the separation of infrastructure management and transport operation. It has 
not notified transposai of access rights. 
Luxembourg 
On 13 September 1993, 24 June 1994 and 5 June 1995, Luxembourg notified transposai text 
but not transposai of access rights. 
The Netherlands 
On 25 January and 24 August 1993, the Netherlands notified texts that transpose the 
Directive. 
Portugal 
On 24 January 1994, Portugal presented texts but these do not transpose the Directive. 
Spain 
On 15 November 1993, Spain notified legal texts establishing managerial independence, and 
on 26 May 1994 texts establishing the separation of accounts. Spain has not notified 
transposai of access rights. 
United Kingdom 
On 6 May 1994, the United Kingdom notified texts that transpose the Directive. 
Channel Tunnel 
France and the United Kingdom are preparing measures to implement access rights to the 
Channel Tunnel (not notified). 
17 
PART 3 
Proposal for a 
COUNCIL DIRECTIVE 
amending Directive 91/440/EEC on the development of the Community's railways 
18 
EXPLANATORY MEMORANDUM 
Explanation of proposal 
1. The completion of an integrated market for transport services remains a major aim of the 
Community's transport policy. It is as important for the railways, a vital part of the 
sector, as for other forms of transport. Freedom to provide rail transport services should 
lead to a more efficient and competitive industry, that is closer to the market. It should 
attract new capital and enterprises, and stimulate the development of new services. This 
is necessary if the continuing decline in the railways' share of the transport market is to 
be arrested and their financial situation to improve. 
2. In the case of rail transport, the application of the principle of freedom to provide 
services implies rights of access to rail infrastructure for railway undertakings established 
in the Community. A first step was the introduction of access rights by Council 
Directive 91/440/EEC of 29 July 1991. The Directive established rights of access for 
international groupings of railway undertakings to run services between the 
Membe States where they are established and for railway undertakings to operate 
international combined transport. In June 1995, the Council adopted two directives 
intended to ensure the full, efficient and non-discriminatory implementation of these 
rights: a directive on the licensing of railway undertakings and another on the allocation 
f railway infrastructure capacity and the charging of infrastructure fees. 
3. While the Community has taken this step towards an integrated market for rail services, 
the process is clearly less advanced than with other forms of transport, particularly road 
and air transport with which the railways are to a certain extent in competition. 
However, the Community has recognized, the need to take account of their special 
features and so create an integrated market by stages. 
4. It is now time for the Community to take another step in establishing freedom to provide 
rail services. One reason is the obligation to apply the basic principles of the Treaty to 
the transport sector, including the railways. While this process may be progressive, it 
must continue to advance. The other reason is the continuing deterioration of the 
railways' market share and finances; their performance has declined sharply in recent 
years. There is an urgent need to stimulate competitiveness and attract fresh capital and 
new enterprises 
5. The next step in creating an integrated market should therefore increase the 
competitiveness of the railways, and develop their role in transport at Community level 
The Commission believes the best solution would be to open access for all freight 
operations and for international passenger services. In the freight area, the entry of new 
undertakings and the stimulus that this would give existing operators would help solve 
the problems of quality and of underinvestment that hinder the development of more 
competitive services. The liberalization of access for both international and domestic 
services is necessary to allow operators to offer comprehensive services with full logistic 
support. The artificial splitting of the market into a liberalized international and a 
restricted domestic sector would discourage the development of new services. 
6. It should be emphasized that access rights for operating international services would not 
affect passenger services in the public interest, because, except in rare cases, they are 
national by nature (and indeed generally short distance). Nor would it create significant 
problems of loss of network benefits or of "cherry picking". 
7. The Commission therefore proposes modifying Article 10 of Directive 91/440/EEC to 
create rights of access to railway infrastructure, for railway undertakings established in 
19 
the Community, for the operation of freight transport, the combined transport of goods 
and the international transport of passengers. This should significantly raise the 
competitiveness of rail transport and improve rail communications between the 
Member States. 
Subsidiarity 
8. The objectives of the proposal in relation to the Community's obligations 
The Community has the obligation to apply the principle of freedom to provide services 
to transport, including to the rail sector. At the same time it recognizes the need to take 
account of the special features of the railways and so progressively to open access to 
railway infrastructure. 
The proposal therefore involves the extension of the access rights created by 
Directive 91/440/EEC without going as far as the full liberalization of passenger services. 
9. Does the proposal fall under the exclusive competence of the Community or is there 
shared competence with the Member States? 
The proposal is put forward on the basis of Article 75 of the Treaty and is therefore the 
exclusive competence of the Community. 
10. What means of action are available to the Community? 
The Community has to create a legislative framework for the establishment of access 
rights. A Community directive would ensure that Member States grant such rights and 
that disparate national measures are avoided. 
11. Is a uniform regulation necessary or would a directive suffice? 
A directive would allow the right balance between harmonized Community rules and the 
need to recognize differences between Member States in the organization of the railways 
and in the relations between the authorities and the railways. 
20 
Proposal for a 
COUNCIL DIRECTIVE 95/0205 (SYN) 
amending Directive 91/440/EEC on the development of the Community's railways 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Article 75 thereof, 
Having regard to the proposal from the Commission(1), 
In cooperation with the European Parliament*2*, 
Having regard to the opinion of the Economic and Social Committee(3), 
Whereas the internal market comprises an area without internal frontiers in which the free 
movement of goods, persons, services and capital is ensured; 
Whereas the greater integration of the Community transport sector is an essential element of 
the internal market; whereas the railways are a vital part of the Community transport sector; 
Whereas the application to the railways sector of the principle of freedom to provide services 
needs to take account of the specific characteristics of the sector and to be applied by stages; 
Whereas Council Directive 91/440/EEC(4) provides that international groupings are to be 
granted access and transit rights in the Member States of establishment of their constituent 
railway undertakings, as well as transit rights in other Member States, for international 
transport services between the Member States where the undertakings constituting the said 
groupings are established; 
Whereas the extension of those access rights, in accordance with the principle of freedom to 
provide services, would improve the efficiency of the railways relative to other modes of 
transport and facilitate transport between Member States, by encouraging competition and 
allowing the entry of new capital and enterprises; 
Whereas freight transport offers considerable opportunities for the creation of new transport 
services and the improvement of existing ones; 
Whereas, to be fully competitive, freight transport increasingly requires the provision of 
comprehensive services, including transport between and within Member States; 
Whereas the international transport of passengers also offers substantial possibilities for the 
improvement of services; 
Whereas, in the process of liberalization, it is necessary to take account of the contribution 
of transport services to the internal cohesion of national economies; 
OJ No L 237, 241.1991, p. 25. 
21 
Whereas, in accordance with the principle of freedom to provide services and in order 
substantially to encourage competition and the entry of new operators, access rights should 
be extended to all railway undertakings established in the Community for the transport of 
goods, for the combined transport of goods and for the international transport of passengers 
throughout the Community; 
Whereas, in pursuance to the principle of proportionality, it is necessary and appropriate to 
set out at Community level the fundamental principle and objective of the freedom to provide 
services in the railway transport sector by the extension of access rights to all railway 
undertakings established in the Community, whilst leaving within the responsibility of the 
Member States the choice of the means to achieve the end result, which should be identical 
for all railway enterprises in the Community; whereas this is in accordance with the 
provisions of the third paragraph of Article 3b of the Treaty; 
Whereas Directive 91/440/EEC should accordingly be amended, 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
Directive 91/440/EEC is hereby amended as follows: 
1. Article 10 is replaced by the following: 
"Article 10 
1. Railway undertakings within the scope of Article 2 shall be granted access and 
transit rights to the infrastructure in their Member State of establishment and in 
other Member States on equitable conditions, for the purpose of operating: 
international and cabotage services for the transport of goods and for the 
combined transport of goods, where "cabotage" means national services 
provided by a railway undertaking within a Member State other than that in 
which it is established; 
international services for the transport of passengers including the right to 
pick up and set down passengers at any intermediate points between those 
of arrival and departure. 
2. Railway undertakings engaged in providing the services referred to in paragraph 1 
. should conclude the necessary administrative, technical and financial agreements 
with the managers of the railway infrastructure used, with a view to 
regulating traffic control and safety issues concerning those transport services. 
Such agreements shall be non-discriminatory." 
2. Article 14 is replaced by the following: 
"Article 14 
Within three years of [the date of adoption of Directive ], the Commission shall 
submit a report to the Council on the implementation of this Directive accompanied, if 
necessary, by suitable proposals on continuing Community action to develop railways." 
22 
Article^ 
Member States shall, after consultation with the Commission, adopt the laws, regulations and 
administrative provisions necessary to comply with this Directive within eighteen months of 
its entry into force. They shall forthwith inform the Commission thereof. 
When Member States adopt these provisions, these shall contain a reference to this Directive 
or shall be accompanied by such reference at the time of their official publication. The 
procedure for such reference shall be adopted by Member States. 
Articled 
This Directive shall enter into force the twentieth day following that of its publication in the 
Official Journal of the European Communities. 
Article 4 
This Directive is addressed to the Member States. 
* Done at Brussels, For the Council 
r The President 
%. 
23 

ISSN 0254-1475 
COM(95) 337 final 
DOCUMENTS 
EN 07 
Catalogue number : CB-C0-95-428-EN-C 
ISBN 92-77-92657'-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
24