No C 18/30 Official Journal of the European Communities 23.1. 78 
2.7. Article 7 2.8. Article 8 
No comment. 
2.7.1. It seems to the Committee that Article 7 (2) 
enables decisions which have been made to be set 
aside by subsequent events. In the Committee's 
view, it is necessary to re-define such events more 
clearly, since it would obviously be unsatisfactory 
if the changes result other than from additional 
information. 
Done at Brussels, 26 October 1977. 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 75 thereof, 
Having regard to the letter of 1 July 1977 in which 
the Council asked the Economic and Social 
Committee to deliver an opinion on the afore­
mentioned proposal, 
Having regard to the Council Decision of 20 May 
1975 on the improvement of the situation of railway 
undertakings and the harmonization of rules 
governing the financial relations between such 
undertakings and States (1), and in particular 
Article 8 (2) thereof, 
Having regard to its opinion of 29 June 1972 (2) on 
the above matter, 2.9. Article 9 
2.9.1. The Committee is of the view that the 
time limits permitted by Article 9 (1) are unrealistic 
since under certain circumstances the administrations 
will be given barely a year to introduce the 
necessary laws and regulations. 
The Chairman 
of the Economic and Social Committee 
Basil de FERRANTI 
Having regard to its opinion on the proposal for a 
Council Regulation on the necessary measures to 
achieve comparability between the accounting 
systems and annual accounts of railway 
undertakings (3), 
Having regard to the decision taken by its chairman 
on 11 July 1977 instructing the Section for Transport 
and Communications to draft an opinion and a 
report on the matter (Articles 46 and 47 of the 
Rules of Procedure), 
Having regard to the opinion adopted by the Section 
for Transport and Communications at its 114th 
meeting held on 14 September 1977, 
Having regard to the oral report made by the 
rapporteur, Mr Fredersdorf (Article 29 of the Rules 
of Procedure), Opinion on the proposal for a Council Regulation laying down uniform costing 
principles for railway undertakings 
The text referred to the Committee has been published in Official Journal of the 
European Communities No C 155 of 2 July 1977, page 10. 
A. LEGAL BASIS FOR THE OPINION 
On 1 July 1977 the Council referred the abovementioned proposal to the Economic 
and Social Committee in accordance with Article 75 of the Treaty establishing the 
European Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
152nd plenary session held in Brussels on 26 and 27 October 1977. 
The full text of the opinion is as follows: 
(1) OJ No L 152, 12. 6. 1975, p. 3. 
(2) OJ No C 89, 29. 8. 1972, p. 1. (») OJ No C 180, 28. 7. 1977, p. 34. 
23.1. 78 Official Journal of the European Communities No C 18/31 
Having regard to the discussions at its 152nd 
plenary session held on 26 and 27 October 1977 
(meeting of 26 October), 
Whereas cooperation between railway undertakings 
in the Community can be conducive to an 
improvement in their financial situation; 
Whereas continuous monitoring of the financial 
results of the railway undertakings operations 
assumes a certain significance in this connection; 
Whereas the Commission proposal is calculated to 
make a useful contribution to all future forms of 
integration in the railway sector, 
HAS ADOPTED THE FOLLOWING OPINION 
by 42 votes to 11 with seven abstentions: 
1. General comments 
1.1. The Committee recognizes the significance of 
the objectives outlined in the recitals, particularly in 
view of the present economic plight of railway 
undertakings in the Community. Nevertheless the 
Committee warns against entertaining exaggerated 
hopes of its impact. 
The Committee would point out in particular that 
the financial imbalances of railway undertakings do 
not necessarily stem from faulty or varying costing 
systems but may be a direct consequence of the 
constraints inherent in the 'public service' nature of 
the railways. 
1.2. Railways in the Community are independent 
undertakings and as regards their economic 
performance accountable solely to their owners and 
supervisory authorities. Each railway undertaking 
has therefore to decide whether, and under what 
financial conditions, participation in an international 
transport operation makes economic sense. Each case 
has to be decided on its merits. The 'particular costs' 
to be determined under the proposal are merely one 
factor in the decision. 
1.3. There is also a second aspect. Of necessity 
the proposal permits the continued existence of the 
diverging costing methods used by national railways. 
The differences in national compensatory payments 
to railways and in the various legal arrangements 
between Member States and railways, are also to 
remain. These differences result in non-comparable 
'particular costs', whose application in international 
rail traffic pricing can precipitate continuous disputes 
between railways. 1.4. The Council is working to achieve a certain 
degree of integration between railway undertakings 
in the Community. The concrete form which such 
integration will take has still to be worked out 
(Article 11 of Council Decision 75/327/EEC of 
20 May 1975). This integration will require greater 
comparability between railway costing systems. The 
Committee sees the present proposal as the first step 
in the right direction, which will be followed up by 
the work of the Committee provided for in Article 10. 
1.5. In Section III the Commission lays down 
principles for (a) the supervision of the results of the 
individual categories of railway operations and (b) 
comparison of economic performance of railway 
undertakings. 
It is questionable whether it will be possible to 
proceed so far given the stage reached in the 
standardization of costing methods. Even after the 
principles set out in Section I and II have been put 
into practice, there will be considerable differences, 
which could mean that comparisons are misleading. 
Therefore, Section III should not be included in the 
present Regulation. Instead it should be examined 
afresh as further progress is made towards the 
standardization of costing methods. It also follows 
that the same must be said of Article 6. 
2. Comments on individual Articles 
2.1. Article 3 
2.1.1. The Commission has introduced the new 
concept of 'particular costs' to replace other differ-
ingly interpreted concepts of costs. The 'particular 
costs' are adequately defined in Article 3 and can be 
used for the costing procedures applied by the various 
railways. In the German version 'Gemeinkosten' 
should nevertheless be replaced by 'gemeinsame 
Kosten' (common costs, i.e. those costs arising from 
joint use of means of production) in line with the 
other language versions. 
2.1.2. The Commission has quite correctly not 
established any link between 'particular costs' and 
the joint pricing practised by several railways in 
international goods transport. Each railway under­
taking is quite correctly left to work out, on the basis 
of the particular costs, the commercially appropriate 
rate for its part of the journey. 
2.1.3. The concept of particular costs is not 
applied uniformly. In the case of new traffic it means 
the entire costs attributable to such traffic but in the 
case of existing traffic it means the costs which 
would no longer be incurred if such traffic were 
discontinued. The Committee takes the view however 
No C 18/32 Official Journal of the European Communities 23.1.78 
traffic in full train loads'. This is logical in the 
initial stages, since the costing of such traffic is less 
complex than that for other types of transport. 
2.3. Articles 6, 7, 8 and 9 
These Articles should be deleted for the moment, 
for the reasons given under 1.5 in the general 
comments. 
The Chairman 
of the Economic and Social Committee 
Basil de FERRANTI 
ANNEX 
to the opinion of the Economic and Social Committee 
The following amendments were rejected by the Committee: 
Add after paragraph 1.4: 
'In the interests of a coordinated, integrated Community transport policy, it would be a 
good idea if alignment of costing were extended to other modes of transport, and not 
confined to railways.' 
Voting 
For: 13, against: 31, abstentions: 17. 
Substitute the following text for paragraph 1.5: 
'In Section III the Commission lays down provisions for analyzing the costs of the various 
categories of railway operations. This breakdown should be seen against the background 
of the proposal on railways' annual accounts, which provides for a similar breakdown of 
revenue. The two proposals seek to compare revenue and costs for each category of 
operation on the various rail networks. The Section holds the view that during this 
initial stage (which is concerned with the principles and not the methods for calculating 
costs), such an objective cannot be achieved in full and the results should be treated with 
caution.' 
Delete point 2.3. 
Reason 
(a) 100 % instant success should not be expected in a new field; what is important is to have 
a working basis which can be improved with the help of the Consultative Committee. 
(b) There is no evidence that a slightly higher degree of 'transparency' in some key categories 
of railway operations would check or hamper the commercial management. Some railway 
undertakings (SNCF, for example) already publish such an analysis and the proposal 
merely asks the others to follow suit. 
(c) In a field where the Commission is required by the outline decision of 1975 to propose 
Community rules for analysis, it would be a shame to reject a limited proposal which, 
while limited, would nonetheless provide a basis for further proposals capable ol 
implementing the 'transparency' objective. This would be a significant step towards putting 
the railways on a healthy financial footing. 
Voting 
For: 21, against: 33, abstentions: 12. that in both cases a commercially correct decision as 
to the rate required by the market situation must be 
based on the entire costs, and the costs which would 
no longer be incurred if a given traffic were 
discontinued. 
2.2. Article 4 
Article 4 states that 'railway undertakings shall apply 
the principle of particular costing to specific goods 
Done at Brussels, 26 October 1977.