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DOCUMENTS "COM"
COM(80)752
Vol.1980/0235

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COMMISSION OFTHE EUROPEAN COMMUNITIES
COM(80)752 final
Brussels ,12december 1980
COMMUNITY RAILWAY POLICY :^W ; ■ 'X..
REVIEW AND OUTLOOK FOR THE 1980's
.
(Communication fromtheCommission totheCouncil )
V '-W^
>!m
C0K(80 )752final

RAILWAYS POLICY PAPER
INTRODUCTION
1.Theproblem ofrailways inEurope isamong themost pressing ,
complex and .challenging issues intransport . .
2.Thefinancial position oftherailways hasdeteriorated .,
apart from afewisolated and .temporary exceptions ,forthe
last twenty years ,despite action atnational andCommunity
level .Recent forecasts indicate that with present policies ,
I
the share oftotal traffic carried bytherailways will probably .
continue tofall ,even ifthere isanincrease inthevolume of
traffic carried byrail . ■
3.TheCommission isconvinced oftheneed forasoundly based ',
European Railway system ,inorder toprovide foradequate and .
competitive transport alternatives ;tosecure ,asfaras
economically justified ,transport modes utilizing indigeneous
energy sources and sothat railways can ,incompetition ,reap
thefull advantages ofthewider market available .
.Μ '■ -
4.TheCommunity policy forrailways hasnotbeen reviewed in
the light ofchanged economic andenergy conditions since 1973»
1)
Itiscurrently based onthe 1965 harmonization Decision which
was restated inthe ;Commission memorandum onthe Common Transport
Policy inOctober 1973 .Since then tneither theobjectives nor
theemphasis ofpolicy have been altered ,despite theconsiderable
changes ineconomic circumstances .Even the Council Decision of
19753Aaditsorigins inaCommission proposal of1971^Therefore
itistimely toreview theCommunity policy forthis sector .

–2–
M
5.The existing policy has not succeeded indeveloping acoherent
railway service for the Community .Many political and legal
obstacles must still "beovercome ifrailways operations are to
take full advantage ofthe Community dimension .
6.The Commission has examined thesituation ofrailway undertakings
and inthis paper presents its conclusions for aCommunity railway
policy .The approach recommended "builds onthepositive elements
ofexisting policy .The objective now should "betomake the
raili-irays more efficient than they have "been ,and therefore more
attractive tpusers and topotential users .
7.Chapter Ibriefly describes the recent experience ofrailways
inthe Community ,concentrating oncommon trends rather than on
particular national variations .Italso examines the future
outlook for railways inthe transport market .Chapter IIcontains
acritical review ofCommunity Railway Policy .Finally ,Chapter
III presents aCommission work programme onarange ofspecific
actions ,with particular emphasis onthe Community dimension of
Railway Policy .

->
*
CHAPTER I.
Economic evolution and railway performance ;Review and Outlook .
Review -
1.Daring thetwodecades from i960 to1980 ,theeconomy
oftheNine prospered andwith itthetransport sector .
Thenewprosperity wasnot ,however ,uniformly experienced .
This imbalance ofeffect wasparticularly marked inthefield
I
oftransport .While thetransport market asawhole grew
substantially ,therailways experienced difficulty inretaining
even theprevious volume oftraffic carried ,andeverywhere
•*
suffered asharp drop intheir market share .Neither did
therailways profit from the .really spectacular growth in
intra-Community trade during this period andthey suffered
from thedecline oftraditional industries e.g. coal ,ores and
steel .
2.Competition from theother modes isconventionally
given asthemain explanation ofthe decline inboth absolute
tonnage andmarket share .However ,general economic factors
also contributed ._Growing economic prosperity ,forexample ,
ledtoincreased ownership ofprivate pars ,tothedetriment
ofpublic transport .Neither have railways adapted ,as
quickly asother transport modes tothe changing composition
andlocation ofindustrial production .
3.Inadeclining market productivity isvital .Therailways
currently employ over onemillion people .They remain relatively
labour intensive ,andstaff costs account forabout 7'0%
oftheir operating expenses .Productivity has increased over
theyears –particularly inrelation topassenger traffic –
butnot sufficiently tooffset thedifficulties which the
industry has encountered .

-4-
4.Railways have attempted toget togrips with changing patterns
ofdemand ,and have achieved some improvements intheir services
especially ininter-city traffic ,urban passenger traffic ,
train-load goods traffic onlong distances andtypes of
combined transport .These improvements have ledrecently to
agrowing demand "bytheusers .Inother fields ofrailway
activity ,however !especially inregional passenger services ,inlong distance mternat ional passenger traffic ,
innational anaparticularly ininternational wagon load
traffic ,the services donotyetmeet modern user needs ,and
areonly partially competitive with other modes oftransport .
5.Asisshown bythe evolution ofthemarket andthefinancial
results ,railways have not succeeded ,sofar ,inadapting
their supply structure sufficiently tochanging patterns
ofdemand .
The reasons for this may besummarized asfollows :
– The structural rigidity oftherailways' organization
andtechnique ,andthe cost structure involved ,present
obstacles totheprovision ofcommercial services .
Proposed actions toremedy orreplace unremunerat ive
services (particularly regarding regional railway services )
have however toalarge extent been prevented bypolitical
intervention ofgovernments ,local authorities and interest
groups .
– For some types ofservices with ahigher degree ofmarket
potential (i.e. train /wagon load ,combined transport )
improvement incompetitiveness could only beachieved by
higher investment ,thecapital forwhich hasnotbeen
available from railways' ownresources orbecause –given
the large operational grants already provided bythe states –
there isnotsufficient capital togotowards new investment ,
as higher public service grants andother aids compete
with investment needs .
•••/#••

– Railways did not take full advantage ofthe Community dimension
particularly "because "they did not adopt afully
commercial approach and have not cooperated sufficiently
with one another .' '
– Inspite ofthefact that railways have enjoyed the
advantage ofstate ownerships and substantial deficit
'coverage bythestate ,certain conditions of;competition ,
especially inthefield ofsocial conditions and infrastructure
costs ,have worked tothe disadvantage railways .
– Theefforts bythe railways tobecome more competitive ,
have toacertain degree been overtaken by .the development
inthefield ofstate and private financed infrastructure
investment ,especially for roads andpipelines .'Whereas
road infrastructure ,following demand ,has during the
last two decades been adapted tonew traffic flows and
'*hasbeen modernized ,theshape oftherailway network ,
apart from the construction ofsome new urban litres ,.
remains largely the same asinthelast century .>It
isonly recently that major new railway lipks are being
constructed insome Member States .
– While frontier delays arise from anumber ofcauses ,
some external tothe railways ,there remains great scope
forbetter organization between the railways themselves .
Outlook -
6.The economic outlook for the Community 4-sone ofslower
growth rates and continuing structural change inindustrial ,
output .The outlook .isalso for acontinuing high level of
inflation and unemployment and forfurther increases inthe
cost ofenergy .Governments will bepreoccupied with the .
 - I'
balance ofpayments position andwith the general level of
public expenditure .
7.Asmall growth inpopulation isforecast but uptothe
middle ofthe 1980 *spotential labour supply will grow ata
faster rate .Carownership in1985 Ja"t92million vehicles ,
isexpected tobe21%higher than in1977 *

-6-
8.Thechanging structure inthecomposition ofgross domestic
product ,itsrelatively lower future growth rate ,thelower rate
ofgrowth inpersonal income ,andthe changing composition of
foreign "trade has important consequences for the transport sector
Outlook for Railways
9.There exists potential increased demand forrailway transport
"both infreight andpassengers .Freight transport between Member
States isexpected togrow faster than thedomestic market .
(Railways share oftheinternational trade declined from 25%
to18%between 1967 and1977 )•Railways remain vulnerable in
the changing structure ofthefreight transport market .To
reduce this vulnerability greater emphasis isrequired onnew
markets andnewtechniques ,e.g. combined transport ,physical
distribution .Passenger transport ,ontheother hand ,has shown ,
forallmodes ,agreater buoyancy than that offreight tonnage .
Theincreasing cost occasioned byoilprice rises ,thepressure
ofdisposable •income andthegreater elasticity forrailway
passenger transport ,suggest that there could beanincrease in
passenger carryings .
10. Even where therailways canbenefit from this latent
increase indemand ,anincrease involume initself will not
solve themajor problem ofimproving thepresent financial
situation .
11. Inflation ishaving anadverse effect onproduction costs .
Ifthepresent network andpattern ofoperat ionscont inue ,then
given theexpected rate ofinflation ,aneven stronger increase
instate financial intervention will berequired than has been
*
the case during the 1970' s.-Between theperiod 1973 –1977 j
state financial intervention hasincreased bymore than 60%.

-7-
12. The railways therefore may look forward toagrowing
market ,"buttheir potential torealize agreater market share
isafunction ofinternal management decisions andgovernment /
railway decisions ,regarding investment and restructuring .
The -basic objective must beefficiency ,both inthe production
ofhigh quality social and commercial services forusers ,and
inmarketing these services .
13. Aconsideration ofthe technical characteristics of
'i
railways -(aguided' system oftransport witli potential for
automation )andtheir economic structures (high fixed costs
and lowvariable costs intheshort/medium term )suggests
'»rr.that themarkets towhich they arelikely tobebe^tj ^suited
inthe future are : ;?
Passender
- medium distance fast passenger traffic between major
centres of -population ,i.e. inter-city ,
– short distance passenger traffic inareas ofhigh '
density population ,i.e. suburban services ,'
. t– long haul passenger night services ,
–"car passenger -services .
Goods . *
–train load and wagon group goods traffic mainly from •
private siding toprivate siding ,
– container traffics infull train loads between distribution
points ,
– piggy-back traffics combining therelative advantages
(long haul/flexibility )ofboth rail androad techniques .
' t.
14. The conditions inwhich these markets can beexploited by
railways tothe advantage ofsociety ingeneral should bethe
focus ofrailway policy makers .
r - . ■
<' • /•••/•••

-8-
Enerr -yand Railways
15. Ithasbeen argued that thenew energy situation will work
totheadvantage oftherailways .Certainly energy costs ,
irrespective ofbasic source ,areexpected toincrease inreal
terms forrailways aswell asother modes .However ,although
railways used inrelation tohigh density routes andgood
loading factors arefairly efficient energy users ,this does
nothave amajor impact oncosts .Energy fortraction accounts
only forabout 2.36oftotal railway costs .
Itfollows that anypotential advantage forrailways inaperiod
ofhigh energy costs isdependent onthesize oftheload factors ,
1
which inturn will finally bedetermined bythedecision of
customers touseaparticular mode onthebasis ofthequality ,
price andefficiency ofservices offered .
16. Themain energy advantage ofrailways isthat they areat
present just about theonly transport mode which isnotnecessarily
dependent onoil .Already toavery large extent railways are ^
using electricity andthere isstill scope forfurther electrification
incertain countries .With increasing oilprices such electrf ication
isbecoming strategically important .Prom thepoint ofview of
reduction inoilconsumption ,rail transport therefore could play
avery important role ,notonly through electrification ,butalso
byabsorbing traffic from other more oil intensive modes of
transport .
Social aspects oftransport
17. Social transport services arise where theconsumers *need
fortransport isnotmetonthebasis ofcommercial criteria (as
with lowdensity rural transport requirements ),orwhere the
external costs andbenefits are such that anindividual 'stransport
needs canbemet atlower costs byencouraging aform oftransport
operating oncriteria other than that ofcommercial profit (for
example ,relief ofurban congestion ).Essentially ,thesocial role

-9-
oftransport is,therefore defined bythe presence ofa
motivation other than the simple transport ofpersons ,or
inparticular^cases ,ofgoods ,onacommercial "basis .Such
Imotivations include:' !1the provision of "basic transport .
facilities for thoae who donot have acaravailable ,the
relief ofroad congestion ,the encouragement ofregional
^development ,theprotection ofthe environment ,notably '
through thfe prudent handling ofdangerous goods ,and the
safeguarding ofemployment . '
18. The decision toprovide asocial service isdistinct
from the choice ofthe particular transport' mode .This choice
should "bebased oncriteria ofefficiency ,in.terms both of
ι
the operating costs ,the wider social costs andbenefits ,and
the competitive provision ofservices tomeet users needs on .
the market iFurthermore ,the decision to .request asocial or
public service obligation implies aresponsibility for the
economic costs ,current andcapital ,arising from this service ,
tobeborne bytherequesting authority .
t

-10-
CHAPTER II-COMMUNITY RAILWAY POLICY
<
19. Prom the beginning the Common Transport Policy has aimed
atintegrating railways into acommunity system ofland ,–based
transport inwhich each mode oftransport should enjoy equal
treatment and gradually benefit from the wider European dimension .
20. Differences instructural patterns between modes oftransport
(many private-owned small companies inroad .andinland waterways
incontrast tothelarge state –owned national railway undertakings )
had tobetaken into account when formulating policy instruments .
Inorder touse resources efficiently the Commission has made
proposals for atransport market government bythe rules of
fair competition between the different modes and undertakings .
Insuch asystem the'role ofpublic authorities islimited to
laying down aframework forfair competition and coordinating
infrastructure development .Railways with their long history
ofstate intervention could not readily participate onan
equal footing insuch asystem unless distortions stemming from
prior state intervention were removed orfinancially neutralized .
Itwas tothis endthat railway policy was developed under the
1965 Council Decision and subsequent measures ,inparticular the
1975 Council Decision .
21. Community railway policy has two basic objectives :
– elimination ofdistortions inthe inland transport market
– improvement ofthe railway service performance and
financial situation .

-11-
Thebasic principles upon which Community legislation hasbeen
built toattain these objectives are :
–reduction ofpublic service obligations ,
–compulsory normalization ofaccounts (financial neutralization
ofinherent burdens ),
– reduction ofaids ,
– greater transparency ofstate interventions andrailway
accounts ,
– autonomy ofrailway undertakings and clear delimitation of
state responsibilities ,
– commercial management ofrailway undertakings ,
– improved business andfinancial planning ,
– closer cooperation onpossible forms ofintegration of
railway activities ,
–harmonization ofinfrastructure costing ,
– approximation ofsocial conditions .
22. Community instruments toimplement these principles were
often adopted insuch amanner astoreduce the effect originally
intended .This subsequently permitted Member States wide scope
intheir interpretation andapplication resulting in,forexample ,
maintenance andcompensation ofpublic service obligations ^
optional normalization ofaccounts ,continuance ofaidsmabsence
ofCommunity legislation forharmonized infrastructure costing ,
economic management (cost coverage )rather than commercial
management (profit ),limited autonomy rather than full autonomy ,
business andfinancial programmes without specifying their nature
and laying down time limits forpreparation .
,*
23. Inpractice ,Member States have chosen toavail ofthe
exceptions allowed rather than beguided bythemain purpose
and spirit ,intheir application ofthe legislation tothe
railways .
*••/••

-12-
The "basic principles have been applied only partially and
inlimited areas .Inpractice fewpublic service obligations
have "been terminated ;none ofthe causes offinancial "burdens
requiring normalization ofaccount has "been removed ;aid
payments have increased ;railways structures remain largely
unchanged;nan-oarmercial pricing isstill widespread ;little
progress has "been achieved oncooperation ;noprogress atall
has "been made towards integration ,while financial balance is,
formost railway undertakings ,still adistant objective .
Some progress canhowever beclaimed for'improved transparency
ofstate interventions andrailway accounts .
24. Member States ,bypursuing theless rigorous line ,
have substantially maintained their railways sige and structure
butonly byincreased state support fortheir operations .
Investment monies ,required forrestructuring andadaptation
ofrailway services tocurrent market and socio-economic
requirements ,have consequently notbeen readily available .
25. To -date the full impact ofthe 1975 Decision has not
been realized .The Commission believes that there are two main "
factors which have sofar impeded the full attainment ofits
objectives and impact :
– the status quohasbeen strongly defended bythe interest
groups concerned ,
– there hasbeen inadequate collaboration between Member
States ,railway undertakings andCommunity bodies .

-13-
CHAPTER III - COMMISSION WORK PROGRAMME
26. Toescape from thevicious cycle ofslow growth in
revenue ,faster growth inrate ofexpenditure ,andever
faster growth instate intervention without preventing further
decline inrailway transport activities ,amore coherent and
integrated policy isnecessary . .
27. The Commission work programme envisages action on
two "broad fronts ;
– development andfull application ofexisting Community
legislation ,particularly theCouncil Decision ,of20May ,
1975 ;
– aseries ofnewmeasures toimprove therailways situation
going beyond existing provisions . ' '
28. Therealization ofsuch apolicy will require acoordinated
approach atCommunity level anddetermination toimplement the
necessary actions .The largest share oftheresponsibility will -
undoubtedly fall totheMember States andtherailways themselves ,
and theCommunity does not dispose ofmiracle solutions .
Nevertheless ,theCommunity institutions have animportant part
toplay ,particularly indevising ageneral framework and in
those policy areas which transcend national networks .•
29. TheCommission believes that current legislative measures ,
while providing ause|\il framework tobuild on,areinsufficient
inthemselves tosolve all the railways' problems .The Commission
calls ,nevertheless ,forafuller application ofthese principles .
'For this purpose the Council should enact -theproposals which are "
before it and the Commission will make proposals tocure the
defects oftheexisting legislation andfurther develop the '
principles underlying it.

\ -14-
State /Railway relationships
30. The first key area inwhich greater precision istohe
sought israilway /government relationships .Policy pursued
todate ,particularly the1975 Council Decision ,hasgone some
way toclarifying therespective roles ofundertakings and
governments ,"butmuch remains tohedone .New initiatives
andactions should hetaken todistinguish clearly between the
State *sfunctions aspublic authority ,andowner of .#
therailways with aview toensuring that railway managements
are left themaximum autonomy possible toexecute their
functions . 1
I
31. Aparticular aspect ofthis distinction relates to
the agreement oftargets between railways andgovernments as
instruments tosecure 'clear mandates and well defined
responsibilities .Such targets should include limits on
state financial intervention ,agreed ratios ofself generated
revenue toexpenditure inthedifferent activity sectors ,clear '
investment goals and improved financial control .
32. The attainment ofrailway restructuring andmanagement
bycommercial norms andpractices would also begreatly
assisted byimproved business ,financial and investment planning .
Provision for improved planning ismade inthe 1975 Council
Decision but itlacks precision and clarity .Theneed isfor
multi –annual activity plans ,with complementary financial and
investment programmes (toensure continuity ofaction .These
plans should commit resources toadapt railway structures
(financial andlevel ofactivities )tocurrent needs >with clear ,
precise and definitive targets tobeattained .
Ofnecessity ,given thedependence ofrailway undertakings on
C-overnment funds ,thefull benefits ofimproved planning canand
will berealized only through joint acceptance oftheplans and
mutual respect for their different competences .
h
•••/•••

-15-
33. In "this connection and .incompliance with Article 15(l)
oftheCouncil Decision of1975 »"theCommission will make a
proposal totheCouncil foraregulation setting atime limit
and the conditions for the achievement offinancial "balance of
railway undertakings ,through "better "business andfinancial
planning .
Public Service Role
34. Railway operations arecharacterized "byalarge public
service sector heavily dependent onGovernment finance and
declining commercial viability oftheremaining services .A
more precise definition ofthe public service role and the
commercial sector ofrailway activities isaprerequisite
toimprove "both performance and thefinancial situation
oftherailways .Theexact nature ofthis role ,ar*dthe
suitability ofrailways tofulfil it,should be'critically
. *■
evaluated .Thequantitative andqualitative criteria should
bemore rigorously assessed toascertain thetrue yalue and
cost effectiveness of'railways asadesirable instrument to
meet socio-economic needs .Equally ,insofar asthey fulfil
asocial role ,therailways must meet genuine and assignee ^
social needs andmust notuse this role tojustify losses
orexemption from normal efficiency requirements inmarketing
orproduction .
35« TheCommission will therefore ,under Article 15(2)
ofthe 1975 Decision ,make aproposal totheCouncil defining
criteria forestablishment ofpublic service obligations
involving least cost tothegeneral public (taxpayer ).
36. Inthemedium term the Commission will make aproposal
torevise theregulation onpublic service obligation .The
objective ofsuch arevision should permit :
– stricter financial management ofthis role ,e.g.
introduction ofceilings ,targets tobeattained ,
andwider use ofcontractual arrangements

-16- '
'i
– greater transparency ofinterventions ;
– full acceptance "bypublic authorities offinancial
responsibility ,including capital costs ,for service
provided ;
– improved financial control ofrailway undertakings .
Capital Structure
37* .Railways should beprovided with capital structures which
reflect their current levels ofactivity andtheir ability to .
generate revenues and service their liabilities .Inherited
burdens ofpast debts and current distortions inmanagement
objectives should befully removed .New railway financial
structures should ensure adequate investment funds tomodernize
thenetworks .equipment androlling stock where economically
justified .These funds should form part ofanagreed investment
andfinancial programme over time andthus avoid thestop/go
experience ofpast years .Thepossibilities tobeexamined
include combined transport with participation ofother modes
orforwarding agents ,from which would flow inputs ofprivate
capital ,thereby easing demands ontheState .
38. Action will beundertaken toprovide for clearer andmore
precise measures andmethods forfinancially restructuring the
railways ;acapital .structure which more truly reflects current
andforeseeable levels ofactivities isaprerequisite for any
financial improvement ofrailway undertakings .
39. There areareas where Community institutions areparticularly
well placed toplay animportant primary andinitiative role .In
this connection the Commission will seek more active progress in
respect of:.
-cooperation between therailway undertakings themselves
and cooperation between Governments inrailway matters ;
- coordination ofinfrastructure planning andfinancing ,
-promotion ofmultimodal transport operations (combined
transport ).
Each ofthese areas foraction isreferred toseparately below .

-iï-
ïnfra structure
40. Therailway network between Member States needs improvement
iffuture qualitative and quantative traffic needs are tobemet .
The Community needs acoherent network for traffics forwhich
»
railway techniques areparticularly suited .Toensure thebest
results ,development of .thenetwork should berealized progressively
within theframework ofalong term plan .
.•K '
Toensure acoherent pattern ofcommunication links between major
centres ofthe Community ,Community bodies have asignificant role
toplay inplanning thenetwork ,identifying andchoosing priority
projects andproviding financial assistance for their development .
1
InitsMemorandum ofNovember 1979 on "therole oftheCommunity
9)indeveloping transport infrastructure ■the Commission elaborated
itsviews onthis matter .The recent report ontransport "Bottleneck
10)andPossible Modes ofFinance " highlights the immediate
investment needs .The Commission believes that improved consultation
could help decide onrailway projects ofCommunity interest .
41. Studies should bemade into thepossibility ofseparating
%
responsibilities for infrastructure –provision andmaintenance
ononehand andoperation ontheother .The Commission acknowledges
the complexities oftheproblem which hasalready been studied
inseveral Me-jber States ,but still believes that practical
solutions could befound ,which could clarify therespective
roles oftheState asmanager oftransport infrastructure and
therailways asanoperator .Further ,such anapproach would
assist development ofacoherent and coordinated transport
infrastructure policy .
42.-Inpursuit ofacoherent infrastructure policy tocreate
equal conditions ofcompetition ,acommon system oftariffs for
the utilization ofinfrastructure should beintroduced .Until
such asystem iscompletely implemented theCommission intends
todevelop compensation criteria for~existing inequalities :
/

-18-
•these will beembraced intheforthcoming proposals for
attainment ofthefinancial balance ofrailways .Building
onthe§e criteria theCommission will ,atalater stage ,
laydown principles forcosting railway infrastructure and ,
ifthenotion ofseparation isrealized ,asystem oftariffs
for use ofinfrastructure .
Cooperation
43. Railway cooperation isanessential element inthe
création ofagenuine European transport system .Exploitation
ofthewider European markets offered bycloser economic
integration oftheCommunity should bepriority objective of
allpolicy makers .Twenty years after thefoundation ofthe
Community ,theextent ofrailway cooperation isstill limited .
44. The Commission isconcerned that the reinforcement of
cooperation should provide for '
– improvement ofthe quality ofpassenger andgoods
0 •
services ,partioularly inrelation tospeed ,regularity ,
comfort ,safe transport ofgoojds ,price ,information ,
customer services ;
– improvement ofexchange ofinformation between railways .
45. Proposals will bemade inthemedium term for theremoval
ofobstacles (political ,legal andtechnical )toimproved
cooperations The Commission believes that current programmes of
commercial ,operational andtechnical cooperation should be
reviewed ,revising targets andtime scales soastoattain
concrete results assoon aspossible .
46. The Commission for itspart will make aproposal fora
framework with specific targets embracing thefollowing key areas

–delays atfrontier crossing points (legal ,administrative
andoperational );
–'commercial practices and norms ,for "both passenger and
freight traffic ,including the setting upofjoint marketing
services ; ♦v
– establishment ofreliable and mutually acceptable costing
principles ^.
– establishment ofstandardized procedures and reciprocal
guarantees for the sharing ofrevenues from traffics and
transports whose short term benefits would not bemutually
advantageous ;
– joint research into development ofnew technologies and
ι
techniques ,especially the use ofcomputer-bas$d systems ;
– coordinated investment and purchasing policies (for equipment
(electrification and computer guided systems )gndrolling stock .
Thefull exploitation ofthe opportunities offered pythe wider
European market will insome cases require thepartial integration
ofrailway activities .
Combined Transport '
47. Inaddition tosuch advantages asreduction ofroad congestion
protection ofthe environment ,andenergy saving ,combined #transport
offers thepossibility ofassuring-a contribution tothe improvement
tothe situation ofthe railways .
Infact ,combined rail/road transport provides theanswer to
certain problems arising from changing demand patterns (reduction
ofbulk transport )andthe need forrailways toconcentrate ,more
than inthepast ,onsemi-finished and high value commodities ,
which are increasingly transported incontainers .

ν
-20-
Combined ,transport also offers thepossibility ofreducing
transhipment costs andguarantees regular long distance
services atcommercially competitive speeds thereby overcoming
thetraditional railway handicap .
*
Finally ,the increase ofpiggyback andcontainer services is
likely torecapture for therailways traffic which hasbeen
lost toroad haulage .Public authorities should take efficient
andeconomically sound measures ioensure that theobstacles
todevelopment ofcombined transport are removed .
48. Under these conditions thepromotion ofcombined transport
services asaspecific transport mode isalso important within
theframework oftheCommon Transport Policy .Toi;his end ,the
Commission will present proposals totheCouncil concerning ,
among other measures ,theprovision ofincentives which will
facilitate anincrease inthe railways share ofthese special
11)
markets . . '

SUMMARY AND CONCLUSION
49. General framework ofrailway policy remains afield
inwhich apositive Community action isneeded .•The 1975
Decision remains a"basis for that framework and the Commission
calls for thefull implementation oftheprinciples underlying
that Decision .Furthermore itintends tomake proposals
inthe short term
–under Article 15(l)and (2)ofthe 1975 -Decision on
setting the time-limit and conditions for the achievement
offinancial balance asWell asthe criteria for
determination ofthe obligations inherent inthe concept
ofapublic service , '
– todevelop combined transport , "
– tofixprinciples for costing railway infrastruqture ,
and 1
inasecond stage . ' l
- general revision' ofcommunity legislation onState
–intervention , ,
– common research programme , <
– elimination ofobstacles tocloser cooperation and integration
' .' I
50. Consideration should begiven toextending theavailability
offinance from existing Community funds and sources .
Although each project would have tobeexamined onits own
merits ,the Commission believes that there are acertain number of
actions where financial help could beenvisaged .This is
particularly soforinfrastructure ,cooperation (orintegration ),
combined transport and research .

-22-
51. There areother measures proposed forwhich Community
legislation would not hetheonly appropriate instrument .
These measures areessentially theresponsibility oftheMember
States ortherailways themselves ,"buttheCommission could
act asaforum for the interchange ofideas andundertake
studies atCommunity lavel tofind common solutions for common
problems .Astudy onthe commercial restructuration ofrailways
isatpresent under way and other studies will beundertaken as
required .The Commission believes that theobjectives tobe 1
followed are :
– concentration ofrailway activities onmarkets which
canbeserved profitably orarepotentially profitable ,
–railways should be"allround "(i.e. notrail bound )
transport enterprise andforwarding agency ,
– greater management autonomy ,
52. Implementation ofthis programme will require collaboration
andpermanent dialogue between Community institutions ,Member
States andrailway undertakings .TheCommission isready for
the challenge and looks forward toworking with all interested
parties inthis sector .

ANNEX
1)OJ58,p.1500 /65of24.5.1965
2)ECBulletin suppl .16/73 " '
3)OJ L152-p.3,of12.6.1975 (Decision EEC/327/75)
t
4)OJ C/06,p.42,of23.10.1971 '
5)0J L156.p..1,of28.6.1969 (EEC Regulation n°1191/69) '
6)" ",p.8," " (EEC Regulat ion n°1192 /69)
7)0J L130,p. 1,of15.6.1970 (EEC Regulation n°1107 /70)
8)-Doc .1128 /80 TRANS 191 of25-11 .1980
(Council decision on-pricing for international goods trafic byrail )
-0J C307,p. 1,of21.12.1977 (prop .to\amend EEC Regulation n°1191 /69)
-Doc.C0M(72)1516 final of7.12.1972 (prop ,toamend EEC Regulation n°1192 /69)
9)ECBulletin Suppl .8/79 .
10)Doc.C0M(80 )323 final of20.6.1980'
11)proposal toamend Regulation EEC n°1107/70inview ,tocomplement thegranting
ofaids inthefield oftransport byrail,road and inland waterways by
provisions for combined transport .