COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the documents

Proposal for a Regulation of the European Parliament and of the Council on the European Union Agency for Railways and repealing Regulation (EC) No 881/2004 Proposal for a Directive of the European Parliament and of the Council on the interoperability of the rail system within the European Union (Recast) Proposal for a Directive of the European Parliament and of the Council on railway safety (Recast)

TABLE OF CONTENTS

1 Introduction. 3

2 Procedural issues and consultation of interested parties. 4

2.1.... Organisation and timing. 4

2.2.... Consultation and expertise. 4

2.3.... Consultation of the Impact Assessment Board (IAB) 5

3 Problem definition. 6

3.1.... Description of the current framework. 6

3.2.... Description of the problem.. 8

3.3.... The problem drivers. 12

3.4.... The Most affected stakeholders and their views on problem elements. 17

3.5.... Baseline scenario. 18

3.6.... Subsidiarity. 19

4 Objectives. 20

4.1.... General objective. 20

4.2.... Specific objectives. 20

4.3.... Operational objectives. 20

5 Policy options. 22

5.1.... Identification of possible policy measures. 22

5.2.... Description of the policy options. 22

5.3.... Interaction with legal acts and stakeholders' views. 27

6 Assessment of impacts. 28

6.1.... Introduction and general methodological approach. 28

6.2.... Approach to the calculation of costs and benefits 28

6.3.... Identification of the magnitude of the main impacts. 29

6.4.... Direct impacts on railway undertakings. 30

6.5.... Direct impacts on public authorities. 37

6.6.... Assessment of indirect impacts. 44

6.7.... Assessment of impacts on micro, small and medium sized enterprises. 45

7 Comparison of Options. 45

7.1.... Comparison in terms of direct impacts. 45

7.2.... Comparison in terms of efficiency and effectiveness. 47

8 Monitoring and Evaluation. 48

LIST OF ANNEXES:

ANNEX I ......... THE FOURTH RAILWAY PACKAGE – THE 'BIG PICTURE' 50

ANNEX II ........ FUNCTIONING OF THE RAILWAY MARKET. 59

ANNEX III ...... FUNCTIONNING OF NATIONAL INSTITUTIONS. 62

ANNEX IV ...... NATIONAL RAILWAY RULES. 70

ANNEX V ....... CONSULTATION of STAKEHOLDERS. 75

ANNEX VI ...... SCREENING OF INDIVIDUAL MEASURES. 82

ANNEX VII ..... ASSESSMENT OF IMPACTS – METHODOLOGICAL ELEMENTS. 87

ANNEX VIII .... IMPLEMENTATION OF THE PREFERRED OPTION.. 114

ANNEX IX ...... LIST OF ABBREVIATIONS. 118

1 Introduction

In its 2011 White Paper on transport policy adopted on 28 March 2011 (hereinafter the 2011 White Paper), the Commission announced its vision to establish a Single European Railway Area and clarified that this objective implies creating an internal railway market where European railway undertakings can provide services without unnecessary technical and administrative barriers. [1]

Additionally, the European Council conclusions of January 2012 highlight the importance of unleashing the growth-creating potential of a fully integrated Single Market, including measures with regard to network industries.[2] Furthermore, the Commission Communication on Action for Stability, Growth and Jobs adopted on 30 May 2012 stresses the importance of further reducing the regulatory burden and barriers to entry in the rail sector, making country-specific recommendations to that aim.[3] In the same manner, on 6th June 2012 the Commission adopted the Communication on strengthening the governance of the single market, which also stresses the importance of the transport sector.[4]

The EU railway market has seen massive changes in the recent decade. They were gradually introduced by three legislative "railway packages" (with some accompanying acts) intended to open up national markets and make railways more competitive and interoperable at the EU level, while maintaining a high level of safety. The most recent development is the adoption (passed 2nd reading in Parliament in July, to be adopted by the Council in December 2012) of the recast of the 1st Railway Package, which, in addition to legislative simplification and consolidation, clarifies certain provisions on competition issues, regulatory oversight and financial architecture of railway operations[5].

Despite the considerable development of the 'EU acquis' establishing an internal market for rail transport services, the modal share of rail in intra-EU transport has remained modest. Therefore the Commission has planned to put forward with the 4th Railway Package (cf. Annex I for further details) in order to enhance the quality and efficiency of rail services by removing the remaining obstacles of different natures, and fostering thereby the performance and competitiveness of the railway sector. As announced by the 2011 White Paper, these issues will be addressed by different initiatives:

· removing remaining administrative and technical barriers, in particular by establishing a common approach to safety and interoperability rules to increase economies of scale for railway undertakings active across the EU, decreasing administrative costs and accelerating administrative procedures, as well as to avoiding disguised discrimination;

· opening the domestic rail passenger market, providing open access to lines, including those under public service obligations (PSOs)[6] to competition (completing the process of market opening);

· optimising the governance of infrastructure management, in particular by ensuring that the infrastructure manager performs a consistent set of functions that optimises the use of infrastructure capacity and guarantees non-discriminatory access to the infrastructure and rail related services.

This impact assessment focuses on the first point. However at the same time expected synergies from other elements of the 4th Railway Package would reinforce the overall outcome, for example the initiative on infrastructure governance will help to reduce discrimination in relation to access to infrastructure, thus the access barriers for new entrants would be lowered.

2 Procedural issues and consultation of interested parties

This impact assessment (IA) has been prepared by DG MOVE to support legislative proposals on improving efficiency and competitiveness of the Single European Railway Area in the field of interoperability and safety, namely revision of the Railway Safety Directive 2004/49/EC[7], Interoperability Directive 2008/57/EC[8] and ERA regulation (EC) No 881/2004[9] (Agenda Planning numbers 2011/MOVE/011, 2012/MOVE/031, 2012/MOVE/033). The impact assessment road map has been published at the website of the Commission[10].

2.1 Organisation and timing

An Impact Assessment Steering Group (IASG) was created in June 2011. All DGs were invited to participate, however the main interested services are DGs ENTR, EMPL, SG, SJ, HR, RTD, BUDG, REGIO, ENER and ELARG.

The IASG met six times.[11] Last IASG meeting was held on 13 July 2012 and the IASG members were given the opportunity to make final comments until 20 July.

2.2 Consultation and expertise

The Commission services have discussed the developments of the Single European Railway Area with sector representatives on an on-going basis. In 2010-2011 it conducted also an ex post evaluation of Regulation 881/2004 establishing the Agency and its functioning[12]. In order to support the Commission in the IA process, an external consultant was tasked to prepare an IA support study[13] and to undertake a targeted consultation of stakeholders.

The targeted consultation of interested parties started on 18 November 2011 with an internet survey which finished on 30 December 2011. It was followed by interviews with the most significant stakeholders[14] and a stakeholder workshop in February 2012.

Given the technical nature of the initiative, no open public consultation was carried out. However, the Commission has taken care that all interested parties and Member States have been consulted in due time and that discussions have covered all the key elements of the initiative. Therefore the minimum consultation standards of the Commission have been met.

Summary of main conclusions

In general stakeholders agreed with the initial set of problems as proposed by the Commission[15]. The results of the consultation show that there is partial consensus on the objectives and possible new roles of the Agency. It seems evident that currently there is no support for ERA's involvement in the market access sphere, thus transfer of competences from the Regulatory Bodies to the Agency is excluded at this stage and will not be analysed in this impact assessment. On the other hand, there is support for higher involvement of ERA in the functioning of the NSAs and, to lesser extent, also of the Notified Bodies. In particular, the engagement of the Agency in the processes of granting of safety certificates and vehicle authorisations – currently performed by the NSAs – was supported.

All the top-up measures complementing the options on the institutional role of ERA (such as dissemination of railway-related information and training, support in implementing the EU legislation and migrating from national systems to the system of EU rules) were evaluated positively by the stakeholders.

Annex V provides more information on stakeholder consultation.

2.3 Consultation of the Impact Assessment Board (IAB)

This impact assessment was reviewed by the Commission IAB on 5 September 2012. Based on the Board's recommendations, the impact assessment has been revised according to the following lines:

- more concrete evidence and statistical data supporting the argument that the existing system works in a sub-optimal manner were added or moved from the Annexes into the body of the text (e.g. costs and timescales of procedures in different Member States, comparative statistics per MS relating to penetration by new entrants, number of persons working in different national institutions, number of national rules, limited monitoring responsibilities of ERA);

- expected synergies from other elements of the 4th Railway Package were added and indirect impacts clarified;

- the core measures common to options 2-5 were described in more detail and clarified regarding their differentiation; option 6, its individual measures and the link with other options were better explained;

- likely implementation problems of the preferred option were assessed and added (in Annex VIII);

- the methodology regarding the assessment of impacts was clarified and better explained; its logic was reinforced by better cross-referencing;

- calculation regarding staffing needs for the institutions concerned under different options was explained;

- better distinction between administrative costs for economic actors (railway operators) and the cost of public administration (national authorities, ERA and the Commission) was made;

- the summary and overview tables in section 7 were explained and cross-references with previous sections added;

- the relevant monitoring indicators were added by linking them with existing targets for operational objectives (number of national rules, cost and duration of certification and authorisation procedures);

- indication that the founding ERA Regulation will be revised to include an obligation to undertake regular evaluations of the functioning and delivery of the Agency by the Commission was added;

- information on stakeholders' consultation was improved by adding specific views of different stakeholder groups, including national authorities.

3 Problem definition

3.1 Description of the current framework

The legal framework

Over the years national rail networks have developed different technical specifications for infrastructure and rolling stock[16] making it more difficult and more costly to run a train from one country to another. Also different national rules – often overly complicated and not transparent – act as a major hindrance for new railway companies looking to establish themselves on the market, or indeed for any company wanting to use rail infrastructure in different countries.

The creation of an integrated European railway area, which intensified with the adoption of the second railway package in 2004, called for harmonised safety rules and improved "interoperability”[17] – or technical compatibility – of infrastructure, rolling stock, signalling and other part of the rail system, as well as less complex procedures for approving rolling stock for use across the European rail network. Specific EU legislation exists to promote consistent approach to interoperability and safety and overcome national differences.

The main legislative act in force in the field of safety is the railway Safety Directive and in the field of interoperability - a recast of the Interoperability Directive.

The Safety Directive applies to the railway system of Member States and covers safety requirements for the system as a whole, including infrastructure and traffic management, and the interaction between railway undertakings and infrastructure managers. In this respect, the Directive focuses on four major aspects:

· setting up, in each Member State, of an authority responsible for supervising safety;

· safety certificates delivered in Member States that are necessary for railway undertakings to be granted access to railway infrastructure;

· establishment of common safety indicators (CSIs) in order to assess that the system complies with the common safety targets (CSTs) and facilitate the monitoring of railway safety performance;

· definition of common rules for safety investigations.

The Interoperability Directive aims at accelerating integration of the EU rail network through increased technical harmonisation, guaranteeing a high level of safety. It establishes conditions to be fulfilled to achieve interoperability within the EU rail system at the design, construction, placing into service, upgrading, renewal, operation and maintenance stages. The gradual implementation of interoperability of the rail system is pursued through the harmonisation of technical standards. Thus this directive covers:

· essential requirements with regard to safety, reliability, human health, environmental protection and technical compatibility of the system;

· the technical specifications for interoperability (TSIs) adopted for each subsystem or part of subsystem pursuant to this directive;

· the corresponding European specifications.

The institutional framework

In order to ensure a safe and interoperable EU railway sector, the second railway package has created a decentralised system of railway authorities covering a number of railway institutions with different roles and responsibilities. It includes today:[18]

· the National Safety Authorities (NSAs), responsible, inter alia, for granting safety certificates for railway undertakings and safety authorisations for infrastructure managers, and authorising the placing in service of railway vehicles and subsystems[19];

· the Notified Bodies (NoBos), responsible mainly for conformity assessment of rail vehicles and subsystems, after having verified their compliance with the relevant Technical Specifications for Interoperability (TSIs);

· the Designated Bodies (DeBos), responsible for conformity assessment in the case of national rules which are still applicable (TSI open points, specific cases, derogations);

· the National Investigation Bodies (NIB), responsible for investigating serious railway accidents;

· the Regulatory Bodies, responsible for ensuring a fair and non-discriminatory access to the rail network and services.

In addition, the ERA Regulation has established the European Railway Agency ('ERA' or the 'Agency'), which plays a central role in promoting interoperability and safety and harmonising technical specifications, a process in which cooperation between the above-mentioned institutions of EU Member States and rail stakeholders is essential. To this end, the activities performed by ERA aim at:

– developing, promoting and monitoring a common EU approach to safety management and governance across the Agency stakeholders.

– improving the interoperability of the European rail system by developing the conditions for the free and uninterrupted movement of trains through technical and operational harmonisation, including conditions for mutual acceptance of railway vehicles. To this end, ERA develops common technical specifications for interoperability (TSIs) and common safety methods and targets (CSMs and CSTs), working closely with stakeholders from the rail sector, national authorities, the EU institutions and other interested parties;

organising and facilitating the exchange of information within the railway sector by networking with national bodies, providing registers and databases, issuing reports and giving guidance on the implementation of the regulatory framework.

Notwithstanding its important role in creation of the European railway interoperability and safety legislation, it is, however, evident that currently ERA does not have any major control and oversight powers with regard to national railway authorities, infrastructure managers or market players. Its monitoring responsibilities are practically limited to monitoring of safety performance (through collecting and publishing common safety indicators and facilitating cooperation between the NSAs and NIBs) and of interoperability (through publication of regular reports on progress with interoperability in the EU).

3.2 Description of the problem

It must be stressed that, following the introduction of the respective railway packages, the level of railway safety (measured by indicators like number of accidents and fatalities) has gradually increased. Therefore, safety levels, as such, are not addressed by this IA.

However, the Commission has received frequent complaints that the system of railway authorities described above, while intended to cater for the still remaining technical differences between national railway systems, incorporates barriers of different natures that contribute, among other reasons, to the low degree of efficiency and competitiveness of rail sector as illustrated by the problem tree of the 4th Railway Package. While in some Member States the national authorities function in general efficiently, in others the procedures which they manage are long and costly; this is partly linked with their inadequate resources. At the same time, the interoperability and safety requirements, which in principle should have been aligned by common EU rules, still diverge significantly at the national level. The latter obstacles hamper in particular the processes leading to the delivery by NSAs of the safety certificates and the vehicle authorisations (see in this respect Annex III).

During evaluation of ERA and its founding Regulation (2010-2011), stakeholders expressed, in general, their support in relation to extension of competences of the Agency at the expense of existing national institutions[20]; this stemmed largely from their perception of ineffective functioning of the current model of the EU internal railway market.

Therefore, it can be claimed that the existing system works in a sub-optimal manner, and there is a room for improvement in particular regarding the operating conditions and administrative costs for railway undertakings; more evidence will be provided in the sections below.

The above is especially relevant for the freight transport. The rail freight market has been opened for a number of years[21], and therefore the continuous relatively low level of competition, higher prices and market distortions could stem (together with other factors targeted by other 4th Package initiatives) also from technical and administrative barriers. Additionally, the new entrants are relatively more vulnerable to complexity and delays in procedures, since their human and financial resources are often limited.

As indicated in section 1 above, the present IA report will focus on optimising administrative procedures and tackling various barriers, while ensuring that existing safety levels will not be altered.

3.2.1 Long and costly procedures

As illustrated in the box below, the stakeholders complained that the procedures foreseen under the current institutional set up, especially to obtain authorisation for a railway vehicle and safety certificate for railway undertaking, are costly and long. This constitutes an important factor hindering the development of the EU railway market and its efficient functioning.

Besides being complicated and slow, these procedures do not guarantee sufficient level of mutual recognition of safety certificates and vehicle authorisations. This negatively affects particularly new companies wishing to enter into the market, thus contributing to a low level of competition and lasting market distortions. Additionally, the range of fees differs significantly among Member States and can be very costly:

- a cost of a safety certificate may be from 0€ up to 70 000€[22];

- total costs for an additional vehicle authorisation can vary between 900 000€ up to 2 €M per locomotive type[23].

EXAMPLES:

The procedure to receive an authorisation for a railway vehicle can last up to 2 years and cost up to €6 million (in case of new locomotive authorisation in its first country). One stakeholder provided figures regarding the second authorisation of a locomotive equipped with ETCS (European Train Control System): procedural authorisation costs are equal to about 10% of costs of the locomotive per country; in the case where a locomotive is to be used in three Member States, the overall costs would increase by about 30% (without taking into account the costs of different ETCS systems to be installed). [source: IA support study of SDG, 2012]

The Safety Directive requires railway undertakings from January 1st 2011 to hold a safety certificate in order to be granted access to the railway infrastructure; the NSAs are responsible for issuing them. In one EU Member State, on December 1st 2010, an NSA handled only 114 out of 348 outstanding requests. Due to this delay a transitional arrangement had to be introduced that allows railway undertakings (RUs) to continue their operations if they had requested the new safety certificate before January 1st 2011. Additionally, RUs are required to pay the NSA for the cost of the approval process. Some RUs had to invest 2 man-years and to pay up to €70,000 for administrative and advisory costs. Representatives of RUs reported that these costs created a high market entry barrier in particular for small RUs. Stakeholders have also mentioned problems of the approach adopted by this NSA (very judicial in nature and not sufficiently focused on understanding whether technical details can be overcome in a simple manner) which is common in relation to vehicle authorisation process. In addition, many stakeholders have mentioned that they have not launched an appeal against the decisions of the NSSA for fear of problems in future with other authorisations/certificates. [source: Case studies, IA support study of SDG, 2012]

An operator from one EU Member State has stated that it would have cost them approximately €30 million to get its high speed trains approved in another Member State, and so decided to abandon the authorisation process (one can assume, however, that this amount would probably include retrofitting of locomotives not compliant with the present TSIs). [source: Case studies, IA support study of SDG, 2012]

3.2.2 Access barriers, especially for new entrants

Besides the issue of inefficient administrative procedures, stakeholders complained that national railway authorities may use technical arguments and a legacy of diverging and not always transparent national rules as an access barrier for companies wishing to enter the railway market (new entrants). In this broad "new entrants" category the most potential can be unleashed from expected new cross-border operations, i.e. starting new railway operating in another Member State by a company already established elsewhere in the EU. Currently (2010), in case of rail freight the level of penetration by new entrants varies in Member States from 0 to 55%[24].

According to the results of the targeted consultation, new entrants may inter alia face discrimination from NSAs when applying for safety certificate or during vehicle authorisation processes.[25] Stakeholders reported more specifically that the processes leading to the delivery of safety certificate and vehicle authorisation are not sufficiently harmonised and transparent to prevent arbitrary and discriminative decisions by NSAs.

This situation poses a significant problem for those who would like to start offering railway services, either as a newly established company or as an existing company wishing to start its operation in another Member State.

EXAMPLES:

The bureaucracy involved in the market entry process in one EU Member State was identified by a study of the Finnish Rail Administration (2009) as the main barrier for entry for new railway undertakings; this is also often the case in other Member States. The network statement[26] proves not helpful for new entrants, and the process for acquiring the necessary licences and permits requires a great deal of effort. It was reported that legally set periods for issuing certificates and authorisations are systematically circumvented by the NSA of this Member State through requests for additional documentations and tests. This can be at least partly attributed to budget constraints and understaffing of the NSA. In order to perform its duties more effectively, the NSA considers that it would need twice as many staff as is currently employed. [source: Case studies, IA support study of SDG, 2012]

Moreover, poor quality of national law and unclear system of rules act as barriers for new entrants. In one Member State, both the NSA and the railway undertaking indicated this was an issue, as the translation of EU legislation is generally poor and leaves substantial gaps. The railway undertaking also stated that there are diverging interpretations of the same rule from different institutions, and that they incur loss of time and money, due to the lack of clarity and consistency of rules and interpretations generated by the lack of clarity and gaps left in domestic legislation. [source: Case studies, IA support study of SDG, 2012]

In 2010-2011 a well-known case arose concerning authorisation of rolling stock of a new entrant in one Member State. A new company wanted to enter the market using spare Class 66 locomotives from their operations elsewhere. The NSA of the Member State in question refused to accept the locomotives on the basis of a safety rule which required the driver's seat to be on the right side of the cab (the UK 66s have the driver's seat on the left). The railway undertaking resorted to a complaint to the European Commission. The NSA abandoned its position after the European Commission, following a technical opinion from ERA, issued a decision refusing the draft safety rule and instructing the NSA to accept the locomotives. The Commission pointed out that, since the class 66 locomotive was already approved for use in the UK and in France, then, per Directive 2008/57/EC on Interoperability, there should be no reason to decline approval for its use in another Member State. [source: Case studies, IA support study of SDG, 2012; minutes of the Railway Safety and Interoperability Committee ]

3.3 The problem drivers

The problem tree below shows the root causes of problems described above.

Figure 3‑1: Problems and drivers

3.3.1 Ineffective functioning of national railway institutions

This concerns predominantly the NSAs and NoBos.

As described in the ERA Interoperability Report[27], differences in size of NSAs may reflect their different responsibilities, and the size of the respective railways. Number of staff involved in interoperability issues varies from 1 person in case of some smaller Member States up to 162 in Germany (data from 2010). However, the sheer size of the railway market in a given country cannot alone explain these huge differences; in some cases the NSAs seem not to effectively perform their tasks due to insufficient staffing.

Other issues of concern for NSAs are the independence of decision making staff and their level of technical capability. Sometimes large part of technical staff is on secondment from incumbent operator and some stakeholders have questioned whether this can compromise their independence. Similar observations can be found in a study commissioned by the European Railway Agency[28]: different NSAs have different approaches regarding two crucial processes, the issuing of safety certificates and vehicle authorisations. This is determined either by: divergent interpretation of EU legislation or by different operating approaches, technical capabilities and the amount of resources dedicated to these activities.

The IA support study has found that some of the authorities described in section 3.1, and the NSAs in particular, may not be properly equipped to face the growing tasks. This includes insufficient human and financial resources and, occasionally, lack of enforcement powers.

The NoBos are the first level of checking technical compliance of interoperability constituents and railway sub-systems, especially crucial in the European Rail Traffic Management System (ERTMS)[29] field. NoBos are not present in all Member States and competition between them is on a regional rather than a European scale. Even if Directive 2008/57 defines minimum criteria for Members States when notifying the NoBos, their operation and functioning differ due to diverging national backgrounds and a lack of detailed accreditation criteria.

Given that the quality of work of some NoBos has been questioned by NSAs, the validity of their certificates is not recognised; this is especially problematic in relation to ERTMS. As a consequence the NSAs require the verifications to be repeated, contrary to Articles 11 and 16 of Directive 2008/57/EC.

During stakeholder consultation, 23% respondents indicated that NSAs operate 'very or rather ineffectively' and around 40% rated them as ‘neither efficient nor inefficient’. Furthermore, 63% agreed that that there is a lack of sufficient financial or human resources in case of NSAs, and 34% in case of NoBos. In addition, 43% agreed that the NSAs are insufficiently independent of infrastructure managers, the incumbent railway undertaking, the ministry and/or other actors, which can have a negative impact on the efficiency and impartiality of these authorities.

Sub-optimal operation of the national authorities has a direct negative impact on the smooth functioning of the integrated EU railway system resulting in:

· longer times to obtain vehicle authorisations and safety certificates, which drives up the costs for the sector, including the lost opportunity costs;

· access barriers.

EXAMPLES:

Capital costs immobilised due to long authorisation processes are very significant for the railway industry. One of the leading European train manufacturers estimates that these costs amount to more than €100 million per year for the concerned company. This can be attributed largely to ineffective functioning of national institutions, namely the NSAs. [source: information provided at UNIFE General Assembly in Copenhagen, 14 June 2012[30]]

The NSA and Regulatory Body (one institution) of one EU Member State is heavily under-resourced financially, making it unable to attract sufficient staff with the right qualifications. This has a negative impact on its performance. As of 23/01/2012, its website showed 36 job adverts (out of a total of 180 Full Time Equivalent posts - 20% of the current workforce). Moreover, the poor situation of the NSA is even more apparent when figures on staff numbers and budget are compared with those of other regulatory bodies in this Member State. They show that, despite other regulatory bodies having similar remits in terms of scope (they are either market regulators or safety authorities, or both), their budgets are much higher than the one of the NSA. The most meaningful comparison can be made with the aviation market and safety regulator: its 2011 budget was almost 80% higher than the NSA's, with the aviation regulator employing 2.3 times as many employees as its railway counterpart in 2009. It must be noted that railway transport has a higher modal share than air transport in this Member State. [source: Case studies, IA support study of SDG, 2012]

3.3.2 Discrimination against new entrants by national institutions

This problem driver predominantly concerns the NSAs. The current approach to safety certification and vehicle authorisation should in principle allow the free provision of rail services and circulation of trains across the EU. It is based on the principle of mutual acceptance of the Part A certificate[31] regarding the safety management system, granted by individual NSAs to railway undertakings, and requires that NSAs work at similar level of performance. The effectiveness of this approach has recently been questioned by many stakeholders (especially new entrants) given the de facto reluctance of NSAs to accept Part A certificates granted by other NSAs. This leads to additional checks and increases time and cost burdens for rail operators.

The problem of possible discrimination can have both a national and cross border dimension when NSAs are sometimes more reluctant to grant the safety certificates and vehicle authorisations to new national or foreign entrants in comparison with granting them to a national incumbent railway company.

In addition, stakeholders claim that some NSAs adopt and impose on all operators the technical standards (rules) used by the incumbent and fail to consult all railway undertakings when making key decisions. They are also reported to lack independence. The latter is particularly the case for NSAs that are part of wider transport or railway authorities, which also include the Regulatory Body. In these circumstances, launching appeals against perceived misconducts and discriminations can be difficult and ineffective.

50% of the association representatives questioned during the stakeholder consultation responded that there is discrimination by NSAs, suggesting that this is an issue of concern.

A similar, but not such a common, situation may occur in relation to NoBos discriminating against some actors when it comes to the conformity assessment. Such discrimination can take a form of prolonging the procedure and/or refusing to issue the certificate without legitimate grounds.

EXAMPLES:

A new entrant on the market of an EU Member State has been seeking authorisation for passenger rolling stock for services that will commence in 2012. Following initial testing, the new entrant asked the NSA to be able to start carrying out authorisation testing for its new rolling stock. The NSA instructed the national infrastructure manager (IM) to provide the new entrant with appropriate paths to be able to carry out its testing programme. After a number of attempts at arranging these paths the IM formally refused to allow testing on its network. Subsequently the new entrant asked the Ministry of Transport to intervene, which lead to the Ministry directing the IM to allow the new entrant to reserve and use paths on its network. It should be noted that many staff members of the NSA in this country are seconded and paid by the IM. [source: Case studies, IA support study of SDG, 2012]

In the NSA of an EU Member State about 50% of their technical staff (40 persons) are (in the 1st half of 2012) on secondment from the incumbent rail operator. This might give rise to concern about staff loyalties and impartiality. It should be also added that, according to a national law from 1997, the principal state railway undertaking has the role of a "delegated infrastructure manager" in relation to most functions of infrastructure management and maintenance. [source: Case studies, IA support study of SDG, 2012]

The European Rail Freight Association (ERFA), in an open letter to the UK Parliament concerning the consultation process that preceded the Recast of the First Railway Directive raised the issue of possible discrimination against new entrants. It reported that “in some Member States, safety certification is abused as an instrument to foreclose the national market” (quoting the Poland Class 66 example) and that often “there is no appeal body to prevent Member States and their public authorities to abuse safety for anti-competitive purposes”. According to ERFA “in some Member States, the national flag carrier is even tolerated to operate without a valid safety certificate (e.g. Hungary) whilst new entrants are forced to go through lengthy and unclear safety certification processes”. Another issue claimed by this organisation is “the restriction of the safety certification for RUs to single or a restricted number of lines of the network (as it is the case with Belgium and France)”. [source: letter from ERFA to the House of Lords, 2009[32]]

3.3.3 Patchwork of national regulatory regimes and rules

Railway undertakings operating in EU still face a patchwork of divergent national regulations and rules. On the one hand this stems from the legacy of historical national laws and rules, but on the other hand from divergent interpretation and transposition of the EU railway acquis.

Legacy of divergent national rail systems

Various national rail networks have grown and evolved heterogeneously over the past century and relevant national technical and safety rules were put in place when no relevant EU rules existed. Recital 21 of Directive 2008/57/EC states that “steps should be taken to avoid a situation where Member States adopt new national rules or undertake projects that increase the diversity of the present system.” However, experience demonstrates that national rules still represent an obstacle to interoperability within the Single European Railway Area as well as a complication for new entrants, especially from other Member States. In that sense, some of those rules can be regarded as discriminatory practice, leading to distortion of competition. As already mentioned it also happens that national authorities (predominantly NSAs) take decisions and introduce new technical and safety rules without proper consultation with all interested parties, especially without the participation of new entrants. According to the calculations of ERA, there are currently over 11 000 national rules in the EU[33].

In addition, as far as the vehicle authorisations issued by the NSAs are concerned, in a large majority of cases national legislations require additional authorisations.[34] In result, as the ERA “Report on Railway Vehicle Authorisation” (2011)[35] indicates, the total additional authorisation costs amount to around €1.6 million per vehicle.[36]

The Commission has been alerted many times by stakeholders, especially by recently established private companies, that action at EU level is needed in that regard[37]. This is confirmed by the results of stakeholder consultation, where the majority of respondents agreed that "national technical and safety rules sometimes pose transparency and/or discrimination problems to new entrants".

EXAMPLES:

Following a major rail accident in 2009, the NSA of the country involved took a decision to introduce tougher inspections for the transport of dangerous goods; in particular, the decision required extraordinary checks on wagons fitted with wheel sets having the same characteristics of the ones involved in the accident, before allowing them to run on the network of the Member State in question. A railway undertaking from another Member State applied against this decision to a regional administrative court, being the imposition of an unplanned and unjust national rule, but the appeal was rejected. The NSA insisted that these norms were urgent and temporary, that they were not National Safety Rules and therefore there was no obligation of notification and consultation according to Directive 2004/49. [source: Case studies, IA support study of SDG, 2012]

A joint working group, including representatives from industry, operators and authorities, was created in a Member State to address problems with train authorisation and, as a result, a “Manual on Rolling Stock” was produced. However, this manual covers neither the entire national legal framework of the rolling stock authorisation process nor the entire framework of the European directive on interoperability on this issue (2008/57/EC) and hence is not compliant with it. For example, according to the manual, 16 different actors are involved in the authorisation process, although the interoperability directive envisages only 5 actors. Another difference is the project-based approach described in the manual, which involves the RU as a main actor in the authorisation process. In contrast, the Interoperability Directive describes a product–based approach, in which the manufacturer may place on the market already authorised design types. Even though the transparency of the whole process has increased with the manual, it is evident that different rules and regulatory regimes still overlap. [source: Case studies, IA support study of SDG, 2012]

Divergent interpretation of EU railway legislation by national authorities

The directives leave Member States with a room of manoeuvre to adapt EU laws to national circumstances. However, sometimes transposition and implementation deviates too much from what has been provided by EU law, and thus become counterproductive to the objectives of the common legislation. There are also cases where EU legislation has been applied erroneously. This makes the regulatory system of EU railways unnecessarily complex leading to negative market consequences, such as higher costs for manufacturers of equipment and railway undertakings, and fragmentation of markets.

According to the majority of stakeholders (62% of those expressing a view on this point) the divergent interpretation of EU railway directives hinders their proper implementation. The main victims of this situation are usually new entrants, both national and foreign, who can be confronted with unknown situations in each of the Member States where they wish to operate.

Moreover, the current level of monitoring and control of implementation of the interoperability and safety legislation by Member States is not sufficient. This is due to unwillingness of railway undertakings, especially new entrants, to lodge formal complaints against national authorities for fear of possible future retaliatory actions. This in turn leads to the Commission lacking a sufficient formal basis and/or evidence, and combined with the limited resources available, results in a sub-optimal level of European control.

Finally, the Member States themselves admit that there are sometimes problems with the implementation of the EU railway legislation, and have called the Commission to provide more assistance and support. Those problems of implementation may stem from lack of sufficient resources, defence of vested national interests by some companies and institutions, or the highly complex nature of some EU rules.

EXAMPLES:

Stakeholders have indicated (in a survey from late 2011 – beginning 2012) that railway laws in one Member State have been known to favour the incumbent undertakings. They have also indicated that their point of view is not taken into account during the consultation phase of the drafting of new legislation. Moreover, the NSA has indicated that the Ministry of Transport does not often take into account its opinions, as the procedure for drafting new laws does not require it to do so. This is despite the fact that the NSA is at the same time the regulatory body responsible for upholding and executing the law drafted by the Ministry. On top of this, the NSA is aware of many examples where the EU law was incorrectly transposed into national law or the national laws passed had unnecessarily strict regulations; it is, however, unable to revert this situation which is in hands of the competent Ministry. [source: Case studies, IA support study of SDG, 2012]

The Safety Directive of 2004 was transposed to national law of an EU Member State by a legal measure of 2007. This national legal measure excludes railway undertakings that are exclusively operating on regional networks from the obligation to obtain a safety certificate and de facto derogates regional lines from the scope of the Directive. Such interpretation is in contradiction with the letter and the spirit of the Directive; it might have arisen, though, due to erroneous translation of the Directive into national language. [source: Case studies, IA support study of SDG, 2012]

In a Member State, one railway undertaking signalled (during a survey from late 2011 – beginning 2012) major delays in gaining approval of a new locomotive class. Following contact between two of these locomotives and station platforms, the NSA refused to permit further test runs. However, the undertaking informed that survey work ascertained that the platforms did not comply with TSIs, despite the route being declared to be TSI-compliant. Furthermore, 90% of such platforms were allegedly found to be non-compliant. The issue of platform gauging was also reported to have been raised in an international forum by the locomotive manufacturer as being its biggest issue in getting approvals in this Member State. [source: Case studies, IA support study of SDG, 2012]

3.4 The Most affected stakeholders and their views on problem elements

This initiative affects the ERA, the Commission, national authorities (NSAs and NoBos) and railway stakeholders (predominantly railway undertakings, but also infrastructure managers and railway manufacturers). It indirectly impacts rail users, i.e. passengers and clients of freight services.

In general, the stakeholder consultation confirmed the elements of the problem drivers described above, as illustrated in the figure below.

Figure 3‑2: Stakeholder views on different problem elements.

3.5 Baseline scenario

The baseline developments could affect the problem drivers identified above in following ways:

Inefficient functioning of national authorities and discrimination of new entrants

· the recent adoption of the recast of the 1st Rail Package will have a direct (although not immediate) positive effect on the independence and powers of Regulatory Bodies and should also decrease some barriers to access to rail related services for operators.

· improved staff resources in the NSAs, as at least 2 NSAs are currently addressing this issue through more vigorous recruitment. Other NSAs are likely to take similar measures in the coming years; this should have an impact on the time to market of operators as a result of relieving the bottlenecks at NSAs relating to staffing.

Patchwork of national legislative regimes

· the possibility of extension of the scope of the technical specification of interoperability (TSI) to the lines beyond the TEN-T network (but with no retroactive clauses) would lead to further harmonisation of technical rules applying to networks and rail equipment; this in turn would mean that manufacturers will have less opportunity to customise their equipment, and costs for rail undertakings and local authorities can be assumed to decrease.

· an improved understanding of railway directives and regulations through the publication of Commission recommendations and guidelines e.g. the Commission Recommendation 2011/217/EU on the authorisation for the placing in service of structural subsystems and vehicles and its follow-up (which is currently being prepared by the Agency). These documents cover in greater detail the manner in which Member States should implement legislation.

· improved coherence of EU rail market as a result of continuing implementation of the Railway Directives. Some Member States have so far failed to properly implement the Safety and Interoperability Directives. For example, Germany has not yet transposed the Interoperability Directive of 2008, and is thus subject to an infringement proceeding. As part of this baseline scenario, the impact assessment calculations have assumed that all Member States will have implemented these Directives by 2015.

· the on-going process of reducing existing national rules should provide limited progress, especially in relation to vehicle authorisation rules. The Agency, based on the input from Member States, is identifying and classifying these rules with a view to their reduction within the EU-wide cross-acceptance process. A similar process, albeit at an early stage of development and of a non-binding character, is taking place in relation to national safety rules[38].

The above developments should provide some overall positive results. It is estimated that by 2025 the measures in place will close the gap between average authorisation costs and presumed minimum achievable authorisation costs[39] by over 30%[40]. However the Commission is ready to consider further action to achieve even quicker and more profound progress, following the request of the stakeholders and the needs of railway sector.

3.6 Subsidiarity

3.6.1 Legal basis

Articles 58, 90 and 100 of the Treaty extend to railways the objectives of a genuine internal market in the context of a Common EU Transport Policy.

3.6.2 Necessity and EU added value

Actions by Member States alone cannot ensure the coherence of EU railway market and address the divergent interpretation of the legislation. The continuing application of national rules and sub-optimal functioning of national institutions, acting as barriers to the internal market, is in fact at the centre of the problem.

Action at EU level aims to ensure consistent implementation of the EU rail acquis, which should lead to creation of the Single European Railway Area with no unnecessary administrative and technical barriers. The aim is to enable railway undertakings to benefit from a single consolidated legislative framework and to face predictable business conditions throughout the EU.

4 Objectives

4.1 General objective

Eliminate existing administrative and technical barriers thereby enhancing the competitiveness of rail sector vis-à-vis other modes and developing further the Single European Rail Area.

The 2011 White Paper foresees progressive modal shift from the air and road sectors, so that by 2050 the majority of medium-distance passenger transport would be carried by rail. Similar goals are set for rail freight. This modal shift will contribute to the 20% reduction of GHG emissions foreseen in the Europe 2020 Agenda for smart, sustainable and innovative growth, and to the objective of reducing transport CO2 emissions by 60% (compared to 1990 baseline) by 2050.

Together with the other initiatives of the 4th rail package, the present impact assessment shall identify the most suitable policy option(s) needed to reach the above-described general objective. To this aim, the general objective has been split down into specific and operational objectives.

4.2 Specific objectives

SO1: Facilitate entrance of new operators into market

SO2: Reduce administrative costs of railway undertakings

4.3 Operational objectives

OO1: Increase the efficiency of the safety certification and vehicle authorisation processes

OO2: Ensure non-discrimination in the granting and recognition of safety certificates and interoperability authorisations across the EU

OO3: Increase the coherence of the national legal frameworks, notably related to the safety and interoperability aspects of the internal market for railways

The operational objectives seek to tackle the problems created by the barriers in three areas:

· economically - by increasing efficiency of the processes;

· institutionally - by ensuring non-discrimination; and

· legally - by ensuring that the framework is correct.

The specific objectives have been confirmed by the views of the stakeholders:

· OO1: 84% agreed that it is relevant;

· OO2: 88% agreed that it is relevant;

· OO3: 83% agreed that it is relevant.

The specific and operational objectives are linked to the identified problems and drivers as follows:

Figure 4-1: Links between the problems and objectives

The following targets have been set for the operational objectives:

· (a) to achieve, by 2025, the removal of all unnecessary national rules (cf. OO3)

· (b) to achieve, by 2025, a 20% reduction in the time to market for new railway undertakings above the baseline situation in 2025 (cf. OO1 and OO2)

· (c) to achieve, by 2025, a 20% reduction in the cost and duration of the authorisation of rolling stock above the baseline situation in 2025 (cf. OO1 and OO2)

The chosen target date of 2025 would be challenging but potentially achievable. Based on experiences with the recast of the first Railway Package, a target date of 2020 was discarded. The legislative process would take several years. The new provisions could enter into force in 2015 at the earliest, which if the 2020 target was used would effectively leave only 5 years for the provisions to be applied and to start having an effect on the market. As a result, a timeframe of 10 years from the entry into law date (2015 to 2025) seems more appropriate.

The targets to the operational objectives have been subject to consultation with the stakeholders[41]:

· 58% agreed that target (b) is relevant and 54% that it is achievable;

· 71% agreed that target (c) is relevant and 59% that it is achievable.

Stakeholders were originally also consulted on target "To achieve, by 2025, a 25% market share by new entrants in the rail freight market", but this target was removed due to inconclusive support and its indirect link to the core problems. It was subsequently replaced by the current target (a) which became apparent during the interviews with stakeholders and is of high relevance to the problems identified.

5 Policy options

5.1 Identification of possible policy measures

The analysis of the Commission, the external consultants and the stakeholder consultation has enabled the identification of a broad set of measures having the potential to address the problem drivers described above. As the first step, stakeholders have assessed the individual policy measures. Subsequently, the measures underwent a qualitative review and assessment. In effect, a number of individual measures were discarded because:

- either they have received a decisively negative response from stakeholders,

- they are not implementable, or

- they can be/are being covered by other EU legislation.

The discarded measures include, inter alia, any extension of competences of ERA in the field of market oversight (task of Regulatory Bodies) and taking over the competences of the notified bodies.

At the end, any additional measures that were not foreseen in the survey, but that have been identified as result of stakeholder feedback, were added, and the measures that would be more appropriately considered collectively were combined.

The full list of measures and the details of the screening process are provided in Annex VI.

5.2 Description of the policy options

5.2.1 Construction and content of the policy options

Based on the screening of individual measures, the Commission has identified five policy packages (options 2-6), besides the baseline scenario. By construction, options 2-5 primarily concern the level of interaction between ERA and national authorities, and are all capable of tackling the three operational objectives set out in section 4. Option 6 is a set of horizontal measures, which are mostly independent of the interactions between ERA and national authorities, and can be applied on top of any of the options 2-5, with expected reinforcement of the overall final impact.

Impacts of the policy options are expected to be further reinforced by synergies with the other initiatives in the 4th Rail Package.

The policy options identified are the following:

Option 1: Baseline scenario (do nothing) – continuing on the path that is currently set out for the sector, including developments described in section 3.5

Option 2: Greater coordination role for the Agency in ensuring a consistent approach to certification of railway undertakings and vehicle authorisation

Option 3: ERA as a one-stop-shop, where the final decision on certification and authorisation remains with the NSAs, but ERA performs entry and exit checks of applications and of the decisions taken.

Option 4: ERA & NSAs share competencies, where the final decision on certification and authorisation is taken by the Agency.

Option 5: ERA takes over activities of NSAs in relation to certification of railway undertakings and vehicle authorisation.

Option 6: Horizontal measures, which includes other legislative and soft measures (beyond sharing the responsibilities between national authorities and ERA) that could be implemented in the domain of interoperability and safety to improve the competitiveness of the rail sector.

A table showing all the policy options together with individual policy measures is given below.

Table 5-1: Summary of policy options

Option 1 || Option 2: Further ERA “Coordination” over NSAs || Option 3: ERA as One-Stop-Shop || Option 4: ERA & NSAs share competencies || Option 5: ERA takes over activities of NSAs

Baseline || Enhanced “coordination” and supervision role of ERA with respect to NSAs regarding granting of vehicle authorisations & safety certificates including ensuring their mutual recognition by national authorities. || ERA shares the competences with the NSAs regarding granting of safety certificates to the railway undertakings and vehicle authorisations ("one stop shop" concept): the decision is taken by NSA, ERA performs "entry and exit" checks of the application. || ERA shares the competences with the NSAs regarding granting of safety certificates & vehicle authorisations: a "one stop shop" concept with the NSAs (acting as regional offices of ERA) contributing but the final decision rests with ERA. || ERA takes over the competences of the NSAs regarding granting of certificates to the railway undertakings and vehicle authorisations.

ERA as an appeal body for some decisions of NSAs

Migration to a single (common) safety certificate and single vehicle authorisation (setting up European "passport" for vehicles): national authorities issue single safety certificates & single vehicle authorisations (mutually recognised by definition) || Migration to a single (common) safety certificate and single vehicle authorisation (setting up European "passport" for vehicles): ERA issues single safety certificates and single vehicle authorisations (Appeals to ERA decisions are sent to a separate appeal body)

Control by ERA over the functioning of NSAs (e.g. developing guidelines & auditing adherence to them).

Enhanced “coordination” and supervision role of ERA with respect to NoBos regarding: type approval; rail vehicles certification; ERTMS certification and accreditation of NoBos.

Option 6: horizontal measures (independent of the level of interaction ERA/national authorities) || Strengthened action by the Commission outside infringement procedure, notably on non-discrimination in the railway market

Amendment of the interoperability and safety directives to enable the adoption of implementing acts setting out common principles & practices for national authorities

Enhanced role of ERA in monitoring and control of implementation of national safety and interoperability legislation

Migrating from national technical & safety rules to a system of EU rules (requirement for national authorities to remove unnecessary rules and limiting their possibility of adopting new rules).

Enhanced role of ERA in dissemination of railway-related information and training.

Enhanced role of ERA in providing advice & support for Member States & other stakeholders in implementing legislation on safety & interoperability

Communication from the Commission regarding guidelines on the interpretation of specific EU laws & decisions (including TSIs)

Enhanced role of ERA in identifying potential spare parts to be standardised and coordination of industry activities in this area

5.2.2 Core measures for options 2-5

Options 2-5 contain a number of core measures which concern similar issues, although with a differentiation according to magnitude of involvement of ERA. These measures address the challenges which were identified in the impact assessment process as crucial for the internal railway market and for the stakeholders, and at the same time have the biggest potential for cost savings. The core measures are:

· An enhanced role of ERA in the safety certification process, varying from ensuring mutual recognition of safety certificates by national authorities (option 2) up to issuing single safety certificates entirely by ERA (option 5); the overall aim is to ensure that a railway undertaking is certified, it is allowed to operate in all Member States without additional administrative hurdles.

· An enhanced role of ERA in the vehicle authorisation process, varying from ensuring mutual recognition of vehicle authorisations by national authorities (option 2) up to issuing single vehicle authorisations (European passports for vehicles) entirely by ERA (option 5); the overall aim is to ensure that once authorised, a railway vehicle does not need further authorisations to be placed in service in other Member States and can circulate freely in the EU (provided that technical compatibility is assured).

· Control by ERA over the functioning of NSAs (e.g. developing guidelines & auditing their adherence to them); this could also include the verification of whether sufficient resources are assigned to interoperability and safety tasks at NSAs; common to options 2-5, however at a different level of magnitude as the level of control will have to be greater in option 2 and lower in option 5, due to taking over of part of the NSAs' responsibilities by ERA.

· An enhanced “coordination” and supervision role of ERA (including the right to audit) with respect to NoBos, regarding type approval, rail vehicle and ERTMS certification, and accreditation of NoBos (this measure is especially relevant to the ERTMS deployment); common to options 2-5.

The importance of these four measures was confirmed by the stakeholders and, following further analysis, they have been incorporated to each of the policy packages 2-5.[42] They are of major importance to tackle three crucial challenges in the EU Railway Area: migration to both single safety certificate and single vehicle authorisation (European passport for vehicles), and improving the inefficient functioning of national authorities (NSAs and NoBos).

5.2.3 Short description of options

Option 1: Baseline scenario (Do nothing)

This option sets out the baseline scenario for the analysis going forward. All other options will be measured against this option; its elements are described in section 3.5.

Option 2: Greater coordination role for the Agency

This first incremental option looks at a more enhanced role for the Agency which foresees the Agency getting more involved in the activities of the national authorities, but without affecting their decision making process. This option assumes that all aspects of option 1 are taking place and adds the measures relating to enhanced coordination of ERA over NSAs regarding granting of vehicle authorisations & safety certificates, including ensuring their mutual recognition by national authorities. At the same time, the functioning of NSAs and NoBos will be subject to supervision of the Agency, with the possibility to audit them and to set the accreditation conditions for NoBos. This option also assumes mutual recognition of both vehicle authorisations and safety certificates.

Option 3: ERA as a one-stop-shop

This intermediate option builds on option 1 and incorporates some elements of option 2 (measures relating to coordination of national authorities activities by ERA), but assigns more power to the Agency in relation to the manner in which NSAs undertake their activities. In particular this option assumes that ERA acts as a "one stop shop" for safety certificates and vehicle authorisation (with NSAs still responsible for issuing the decisions and the Agency checking the applications and decisions), at the same time being an appeal body for some decisions of national authorities. This option also assumes migration to a single (common) safety certificate and single common vehicle authorisation (setting up European "passport" for vehicles), with the decision-making powers staying at national level.

Option 4: ERA and NSAs share competencies

The basis of this option is that the Agency would be the central body receiving and processing any requests for safety certification and vehicle/ERTMS subsystems authorisation. It would not hold the majority of the required competencies in ERA, but would continue to rely on NSA staff to carry out the relevant activities within Member States where the part of the NSA's staff would be subordinate to the decisions and direction of the Agency. In this case, this staff would report to an EU body, the Agency, rather than to national authorities.

The NSAs would still be tasked with issuing the authorisations for placing into service fixed installations and vehicle authorisations (vehicle passports) for domestic services. The existence of national rules would decrease at a greater rate than the approach adopted in the previous options, since the Agency would have an additional overarching goal of monitoring, and eventually requesting the removal of national rules. The following elements would be key to this option:

· ERA granting safety certificates to railway undertakings and vehicle authorisations (passports) to applicants (a "one stop shop" for safety certificates and vehicle authorisation), on the basis of competences shared with the NSAs;

· Migration to a single safety certificate and single vehicle authorisation (passport), with the formal decision-making powers transferred to ERA.

Option 5: ERA takes over all activities of the NSAs

This option is the most ambitious in terms of extending the future role of the Agency. It assumes that the Agency would take over all safety certification and authorisation tasks currently undertaken by the NSAs. This would involve the Agency expanding its facilities and establishing local offices in each Member State (or at least in the larger Member States or regional hubs). All staff involved in these activities would be employed by the Agency. It is assumed that the Agency would continue to be subject to the same European Commission administration and employment procedures for all of its activities. The key measures in this option are:

· ERA completely takes over the competences of the NSAs regarding granting certificates to railway undertakings and authorisations for placing into service;

· Migration to a single common safety certificate and single vehicle authorisation, with the formal decision-making powers transferred to ERA.

Option 6: Horizontal measures

This option is made up of a number of measures that have a wide reaching impact on the administrative procedures of NSAs, ERA and industry as a whole, but do not relate directly to the role of the Agency vis-á vis NSAs or NoBos.

This includes, inter alia:

· amending the railway directives to enable the adoption by the Commission of implementing/delegated acts setting out common principles and practices for the national authorities;

· enhancing the role of ERA in the dissemination of railway-related information and training;

· migrating from national technical and safety rules to a system of EU rules (through the identification of unnecessary rules by ERA and NSAs and then the requirement for national authorities to remove those rules, as well as strictly limiting the possibility of adopting new rules).

It is a self-standing option, as it would, in principle, lead on its own to certain improvements in all problem areas. It is therefore, and for the sake of transparency and due to positive outcome of stakeholders' consultation and early start of likely effects (2015), assessed separately.

However, at the same time option 6 has amplificatory effect on other options, hence it was deemed useful and appropriate to combine the measures in option 6 with options 2-5 to produce the most optimal approach in terms of changes to the sector, leading to improved competitiveness. Therefore option 6 is also assessed in combination with options 2-5; it should be noted that the impact of individual measures of option 6 was differentiated in relation to each of options 2-5, as shown in Table VII-15 in Annex VII.

5.3 Interaction with legal acts and stakeholders' views

All options apply in principle to the three legislative acts in question (the Interoperability and Safety Directives and ERA Regulation); implementation of each option would require amendments to each legislative act.

Stakeholders, in general, largely supported the measures in all options relating to enhanced coordination and control of NSAs by ERA (including audit), as well as ERA acting as an appeal body to some decisions of national authorities. The measures on developing a single safety certificate and setting up a European passport for vehicles (single vehicle authorisation) were also supported. Respondents were divided on sharing competences between ERA and NSAs and rather unfavourable to a complete take-over of all functions of NSAs by ERA. The enhanced role of ERA in relation to NoBos (increased coordination and supervision) was also supported decisively. All individual measures from option 6 received high support from stakeholders and were perceived as beneficial for railways; this was one of the reasons why option 6 was finally combined with the preferred option.

The level of support was differentiated according to the group of respondents. Not surprisingly, the respondents representing the NSAs were in general against ERA sharing/taking over their responsibilities (measures from options 3-5: "ERA shares/takes over the competences of the NSAs regarding granting of certificates to the railway undertakings and vehicle authorisations"), while the opinion of other respondents was more balanced. A similar pattern could be observed in relation to the Notified Bodies.

To sum up, all final options (i.e. options 2-5 combined with option 6) were supported by stakeholders, with option 2 and 3 having the highest level of support and option 5 the lowest.

6 Assessment of impacts

6.1 Introduction and general methodological approach

This section details the impact assessment of different options[43]. Given the strong focus on operational efficiency, the core impacts of this initiative are economic, while social and environmental impacts are mostly indirect and sometimes negligible. Direct impacts are quantified, while indirect impacts are assessed in qualitative terms.

The section is comprised of the following sections:

i) identification of the magnitude of the main impacts;

ii) quantitative assessment of direct impacts on:

· railway undertakings (vehicle authorisation timescales and costs, certification timescales and costs and opportunity cost savings resulting from a reduced time to market for railway vehicles)

· Cost of administration of ERA and NSAs;

iii) qualitative assessment of indirect impacts.

6.2 Approach to the calculation of costs and benefits

The report assesses the costs and benefits related to the different institutional setup as foreseen in options 1-5 and horizontal measures included in option 6. In principle, assessment consists of three major blocks:

· calculation of savings in costs and timescales of certification and authorisation processes (including savings of administrative costs for operators);

· calculation of opportunity cost savings for operators resulting from a reduced time to market for railway vehicles and

· calculation of the changes in the cost of administration of ERA and national authorities.

Results of these calculations are presented in separate sections below. Each section starts with a short overview of the methodology applied.

Furthermore, the impacts of different policy options were considered to differ according to the current industry context in any given country. In these terms the impacts were differentiated according to following country groups:

· Average – encompasses the majority of countries.

· Challenging – Germany and France since these countries have both been identified as having specific issues. Measures that enforce greater conformity with EU law are likely to have the greatest impact in these countries .

· Low resource – a number of countries having very small numbers of NSA staff available to deal with authorisation and certification, with the result that some measures are likely to particularly impact on authorisation and certification in these countries. The countries included in this category are: Italy, Poland, Czech Republic, Slovakia, Estonia, Greece, Luxembourg, Portugal and Slovenia.

For all categories, indicator values have been produced for a ten year future period (2015 to 2025). Impacts of different measures are phased to be commensurate with their anticipated time of implementation – i.e. soft measures have earlier impacts (as from 2015), while legislative measures are considered to have effect not earlier than 2017. Where the metric is a monetary value, it is presented in net present value (NPV) terms using a discount factor of 4%, with values discounted to 2012.

Annex VII provides more information on the impact assessment methodology, including baseline and forecasted values and reasoning supporting the assumptions. Interim results at detailed level can be found in Appendix D of the IA support study[44].

6.3 Identification of the magnitude of the main impacts

The table below provides a summary of an initial qualitative assessment of key characteristics and phasing in of impact of measures included in each option. 'Impact magnitude' relates to the potential of each option to reduce the authorisation costs and timescales, which constitute core elements of expected impacts[45]. This initial assessment provided a framework for further detailed calculations as well as reference point for a 'sense check' of the results.

Table 6-1: Preliminary assessment of main impacts of options 1 to 6

Measure || Key impact characteristics (as prompted by question list || Impact magnitude (low/ medium/high) || Likely phasing of main impact

Baseline || The Baseline encompasses a wide range of impacts, a number of which (e.g. work on national rules) are likely to have a significant effect on authorisation costs and timescales. || Medium || 2011-2025

Option 2 Greater coordination role for the Agency || The impact of this option is relatively low with additional powers of the Agency limited. Main impact is on additional authorisations. || Low* || 2017-2022

Option 3 ERA as a one stop shop || Whilst ERA has more powers in this option primarily through entry and exit checks of applications, it is likely that additional benefits over option 2 will be limited with division of labour between NSAs and the Agency being an issue. || Low/Medium* || 2017-2022

Option 4 ERA and NSAs share competences || Provided ERA has sufficient powers to act as a strong central office this option is likely to have a significant impact on authorisation and certification costs and timescales. || Medium/High* || 2017-2023

Option 5 ERA takes over activities of NSAs regarding authorisation and certification || This option would have a high impact on authorisation costs and timescales and would also enable additional efficiencies over the current arrangements through economies of scale. || High* || 2017-2023

Option 6 Horizontal measures || This option contains some measures that can be implemented relatively quickly and as such has an earlier benefit than any other option. However, most of the measures have a medium or low impact and therefore the overall impact is similar to options 2 and 3. || Medium* || 2015-2025

6.4 Direct impacts on railway undertakings

6.4.1 Benefits of reduced time and costs of authorisation and certification processes.

Method of assessment

The three key input data sets for calculations are as follows:

· current costs, timescales and levels of authorisation and certification by country

· future trends in levels of authorisation and certification by authorisation/certification category (where significant change anticipated)

· expected effect of individual measures on the costs and timescales of authorisation and certification of the different options.

The input data for Current costs, timescales and levels of authorisation and certification include:

· Agency Report on railway vehicle authorisation[46]

· Agency Report on migration towards the single safety certificate[47]

· Data from the presentations given at the vehicle authorisation Task Force[48]

· Data from interviews with industry stakeholders

· Some (minimal) data provided within the stakeholder survey

Inputs are differentiated by 20 different authorisation categories (see Table VII-1, Annex 7) and 4 certification categories (Table VII-2, Annex 7).

Future trends in levels of authorisation and certification are calculated on the basis of following assumptions:

· number of authorisations in 2008 (i.e. before the dramatic impacts of the economic downturn) is used as a baseline, but (very conservatively compared to what would be needed to achieve the expected higher modal share for rail) it is assumed that there would be no growth compared to 2008 level until 2025;

· the UNIFE estimate of savings from Cross-Acceptance assumes additional authorisations for each new locomotive and multiple unit type in ten countries, it has been assumed that this ratio holds true for all new authorisations;

· the number of authorisations related to ERTMS is considered being proportional to the share of the network covered by ERTMS[49].

· it is anticipated that market consolidation and changes induced by the TSIs will reduce the number of vehicle types, in these terms estimates quoted in the Cross-Acceptance report have been used[50].

The impacts of the different options are expressed in terms of potential reductions in costs and timescales of authorisation and certification achieved by different options. To this end each measure was individually assessed and attributed an 'impact value' expressed as a percentage reduction of the gap between (a) the current costs and timescales (in each country type) and (b) the minimum (or ‘ideal’) achievable cost and timescale. The minimum possible authorisation costs and timescales are set out in Tables VII-5 to VII-8 in Annex VII. Once each measure was assessed an overall assessment at option level was carried out to translate reductions in costs and timescales into monetary values. This amalgamated the impacts at an option level, applying adjustments to avoid double-counting of impacts when measures were added together.

Results of individual options 1 to 6

The summary of expected savings in authorisation costs in 2015-2025 (incremental on the baseline) of options 2-6 is given below:

Figure 6-1: Total authorisation cost savings 2015-2025 of options 2-6

Real, undiscounted || Discounted savings over 2015-2025 (€ m NPV)

45

62

130

212

156

Consistent with the qualitative analysis in section 6.3, option 5 is significantly more effective than other options, with efficiencies that can only be achieved through complete centralisation. Option 6 has an earlier impact than the other options, again consistent with the qualitative analysis, and reflecting measures that can be put in place relatively quickly. The significantly larger impact of option 6 compared with options 2 and 3 can be explained be the following reasons:

· Early start of measures (in option 6, a majority of the measures can be implemented by 2015)

· Large number of measures (six) in option 6 with medium impact (see Table VII-9 in Annex VII)

· Limited ‘power’ of option 2 and 3 measures resulting in low impacts of many measures (see Tables VII-10 and VII-11 in Annex VII).

The certification savings, as indicated in Figure 6-2, are much smaller reflecting both a lower volume and lower costs of safety certifications compared with authorisation. There are also fewer differentials between options 3 and 4. Also the benefits of the horizontal measures (option 6) are significantly smaller than those for options 3-5.

Figure 6-2: Total certification cost savings 2015-2025 of options 2-6

Real, undiscounted || Discounted savings over 2015-2025 (€ m NPV)

0.9

1.3

1.7

2.0

1.1

Results of options 2 to 5 in combination with option 6

In addition to the analysis of the individual policy options, a further set of policy options was created by combining the impacts of the horizontal measures (Option 6) with the impacts of the other policy options. It should be noted that assessment has not meant simple addition of the impacts, since the horizontal measures have different combined impacts with options 2 to 5. The matrix providing detailed information on the extent of assumed overlap is provided in Table VII-15 in Annex VII.

The figure below shows the impacts of each option 2-5 in combination with option 6.

Figure 6-3: Total authorisation costs 2012-2025 of options 2-5 in combination with option 6

Real, undiscounted || Discounted savings over 2015-2025 (€ m NPV)

201

217

235

276

It appears that the combined options have significantly higher impacts on the cost of authorisation, with options 4 and 5 when applied along with the horizontal measures reaching at least a 20% improvement over their individual impact.

Figure 6-4: Total certification cost savings 2015-2025 of options 2-5 in combination with option 6

Real, undiscounted || Discounted savings over 2015-2025 (€ m NPV)

1.8

2.3

2.3

2.6

The difference between options 4 and 5 for certification costs narrows less than for authorisation costs, partly due to the dominating influence of bringing forward the impacts of the single safety certificate both in options 4 and 5. However, options 3 and 4 now have a virtually identical level of benefit.

6.4.2 Opportunity cost savings

Method of assessment

More effective authorisation procedures[51] would, in addition to cost savings, also result in quicker time to market. Savings in time are assessed in similar manner as the savings in authorisation costs, as described above. Results are shown in the figure below, with options 5 and 4 being the most effective resulting in saving of time of about 25%.

Figure 6-5: Average reduction in authorisation timescales by combined options

There will be a number of savings arising directly from shorter rolling stock authorisation timescales. These include:

· reduction in operating costs accrued as a result of needing to cover delayed stock with alternative stock;

· reduction in loss of revenue, where the introduction of new services is delayed/existing services are cut back when rolling stock is not available to cover for delayed stock;

· reduced storage costs.

The key assumptions regarding the estimates are:

· Cost of alternative rolling stock is assumed to be cost of leasing additional rolling stock. For locomotives a value of approx. €30k per month has been used and for multiple unit vehicles, €15k. Both these values are approximately 1% of typical average new vehicle values.

· Using UIC (International Union of Railways) data, average revenue per locomotive and passenger vehicle was calculated as a percentage of new vehicle value. For locomotives this is 3.8% on a monthly basis and for passenger vehicles 1.9% on a monthly basis.

As exact quantification is challenging, three scenarios were developed to construct an assessment of the possible range of opportunity cost savings. The scenarios are:

· All affected services are covered by alternative rolling stock (lower bound);

· Half of affected freight services and half of affected passenger services are not able to run with resultant revenue loss (central case);

· None of the affected services are able to run (upper bound).

Results of options 2 to 5 in combination with option 6

The table below shows the discounted opportunity cost savings that could be achieved over the period 2015 – 2025, with option 2 being the least and option 5 the most effective.

Table 6-2: Discounted opportunity cost savings 2015-2025 (discounted, € m NPV) of options 2-5 in combination with option 6

Option || Central Case || Lower bound || Upper bound

Option 2+6: Further ERA “Coordination”+ horizontal measures || 237 || 71 || 402

Option 3+6: ERA as One-Stop-Shop + horizontal measures || 255 || 77 || 433

Option 4+6: ERA and NSAs share competences + horizontal measures || 265 || 81 || 450

Option 5+6: ERA takes over activities of NSAs regarding authorisation and certification + horizontal measures || 295 || 90 || 499

The figure below illustrating savings by year for the central case further shows that savings per option are between €30 million and €40 million per year by the end of the evaluation period.

Figure 6-6: Total opportunity cost savings 2015-2025 of options 2-5 in combination with option 6 (€m, central case, real, undiscounted)

6.4.3 Total cost savings for rail undertakings

Combining the above mentioned authorisation, certification and opportunity cost (central case) savings demonstrates substantial benefits over the evaluation period with benefits of over €0.5 bn for options 3-5 even in discounted terms. Summary of quantified benefits for rail undertakings by each combined option are presented in the table below. These include also savings of administrative costs, which are an intrinsic part of certification and authorisations costs.

Table 6-3: Total quantified benefits for rail undertakings 2015-2025 of options 2-5 in combination with option 6 (discounted, € m NPV)

Option || Authorisation cost savings (Figure 6-3) || Certification cost savings (Figure 6-4) || Opportunity cost savings (central case) (Table 6-2) || Total benefits ||

Option 2+6: Further ERA “Coordination” + horizontal measures || 201 || 2 || 237 || 440 ||

Option 3+6: ERA as One-Stop-Shop+ horizontal measures || 217 || 2 || 255 || 474 ||

Option 4+6: ERA & NSAs share competencies+ horizontal measures || 235 || 2 || 265 || 502 ||

Option 5+6: ERA takes over activities of NSAs regarding authorisation & certification+ horizontal measures || 276 || 3 || 295 || 574 ||

6.5 Direct impacts on public authorities

Some of proposed measures entail a variation in the staff needed by ERA to perform additional tasks, and, in some cases, reductions of staff at NSAs, due to competences transferred at the central level. These changes will affect respectively cost of administration at EU and national level.

Method of assessment

For each policy option, the impacts have been disaggregated in order to identify variations in costs of each:

i) the Agency (and the Commission, particularly in relation to option 6); and

ii) national institutions (in particular NSAs).

For the purpose of this analysis, all costs are indexed to a base year of 2012 and are computed in real terms over the period 2012-2025 using the Net Present Value (NPV) at 4% discount rate.

For the different options the net costs of administration are estimated by computing:

· the variation in gross costs of administration for ERA and the Commission (namely variation in ERA costs and in the “separate appeal body” to be created in options 4 and 5), and for national administrations (variation in NSAs costs);

· the variation of potential revenues collected by levying charges for the activities carried out by the NSAs and ERA for safety certificates and vehicle authorisations.

The difference between the EU15 and EU12 Member States has been taken into account in terms of average salaries, average fees charged by NSAs, and average cost of NSAs’ staff in order to correctly identify the magnitude of impact of any potential changes. More detailed description of calculations of cost of administration are provided in section 9 of Annex VII.

6.5.1 Direct impacts on the ERA

Method of assessment

For each of the selected policy options, the number of additional staff needed by ERA has been estimated on the basis of the assessment of the individual measures included in each option. The starting point for this analysis was the preliminary impact assessment work already undertaken to date by the Agency in relation to its future role, though applying a more conservative approach. Subsequently, the following steps were taken:

· As a first step, the measures evaluated in the original ERA preliminary impact assessment were compared with the measures included in the options.

· Then, the analogies between the original and the new set of measures were identified. This way it was possible to associate to each of the new measures assessed a number of extra staff consistent with the considerations made by the ERA in their preliminary impact assessment.

· Finally, when considering the policy options, the potential synergies between the different measures included in each option were identified. This way, the number of extra staff required by ERA for each policy option was estimated.

· In addition, further considerations were made when merging option 6 with each of the other options, taking into account further synergies between measures and economies of scale.

The estimated total variation in staff members were distributed across years to take into account the fact that the recruitment process needs a number of years to be finalised (it was estimated that by 2020 all staff member variations would have occurred).

The following were also included in the figures of ERA staff variation:

· two additional human resources needed in option 4 and 5 to set up the “separate appeal body” at the European level (though this is clearly a cost that is not attributable to the Agency, but will be borne by the sector at the European level).

· two additional human resources needed at the European Commission to take forward horizontal measures envisaged in option 6.

Based on the current salary levels and the number of staff, the Agency estimates roughly €100k gross cost for each additional staff member. Lower average staff costs were assumed where larger numbers of staff are required, as more junior staff will be required when numbers increase.

Overhead costs were assumed to amount to 25% of direct staff costs. Further costs for other activities related to the individual measures, such as the costs of carrying out tests in laboratories for single components or travel costs for the training options, have also been taken into account, as well as costs related to ERA being able to obtain revenue. The starting point was the Agency calculations but, as for the staff costs, efficiencies were identified, where possible, in the grouped options. No additional costs were identified as a result of the baseline activities. Full set of assumptions is provided in Figure VII-7 in Annex VII.

Results of individual options 1 to 6

The table below sets out the results, and the consequential impacts, on the Agency of the individual options, with option 5 clearly standing out as the most costly.

Table 6-4: Additional cost of administration on the ERA of options 2-6 (€m)

|| Total ERA staff (2011) || Yearly values by 2020 (when all staff changes have been phased in) || Total costs, NPV (2015-2025)

Option || Total additional staff by 2020 || Total additional staff cost || Overhead || Other costs || Total gross cost increase || % of current ERA budget

Option 1: Baseline || 154 || - || No impacts on cost of administration ||

Option 2: Further ERA “Coordination” || 20 || (1.9)[52] || (0.5) || (0.5) || (3) || 14% || (20)

Option 3: ERA as One-Stop-Shop || 25 || (2.4) || (0. 6) || (0.5) || (4) || 17% || (23)

Option 4: ERA & NSAs share competencies || 37 || (3.4) || (0.9) || (0.3) || (5) || 23% || (30)

Option 5: ERA takes over activities of NSAs regarding authorisation & certification || 302 || (23.2) || (5.8) || (2.0) || (31) || 154% || (221)

Option 6: Horizontal measures || 27 || (2.5) || (0.6) || (0.9) || (4) || 20% || (28)

Note: These options also contain the potential impact on the Commission that arises particularly in option 6. Options 4 and 5 contain the effects of the creation of the separate appeal body.

Results of options 2 to 5 in combination with option 6

Four of the measures included in option 6 entail specific tasks for ERA, which may require additional staff involved and other extra costs, therefore implementing these horizontal measures on their own would imply 27 extra staff (as indicated in Table 6-4 above). However, when merged with other options, the impact on ERA in terms of cost of administration is likely to be rather small. It is estimated that about 18 of additional staff members would be needed by ERA to implement Option 6 in combination with option 2, 3 and 4 respectively. As regards option 5, given the large number of additional staff required, the impact of merging it with option 6 would be negligible. The estimate of the cost of administration for ERA after this merging is given in the table below, with again option 5 being by far the most costly.

Table 6-5: Additional cost of administration on the ERA of options 2-5 in combination with option 6 (€m)

|| Yearly values by 2020 (when all staff changes have been phased in) || Total costs, NPV (2015-2025)

Option || Total additional staff || Total additional staff cost || Overhead || Other costs || Total gross cost increase || % of current ERA budget

Option 2+6: Further ERA “Coordination"+ horizontal measures || 38 || (3.5) || (0.9) || (0.5) || (4.9) || 24% || (37)

Option 3+6: ERA as One-Stop-Shop+ horizontal measures || 42 || (3.9) || (1.0) || (0.5) || (5.4) || 27% || (39)

Option 4+6: ERA & NSAs share competencies+ horizontal measures || 55 || (5.0) || (1.3) || (0.3) || (6.6) || 33% || (44)

Option 5+6: ERA takes over activities of NSAs regarding authorisation & certification+ horizontal measures || 302 || (23.2) || (5.8) || (2.0) || (31) || 154% || (221)

It can be seen from the table that the impact on the costs of the Agency for combined options 2 to 6 lead to a change in the yearly costs for the Agency of between €5 m and €31 m. Option 5 has the largest impact in terms of benefits for the industry, but also has the largest cost for the Agency, with the other four options having significantly lower additional costs.

6.5.2 Impacts on national institutions

Method of assessment

In order to estimate the variations in costs determined by a reduction of staff at NSAs, the average cost of one staff member in EU12 NSAs and EU15 NSAs was calculated on the basis of 5 case study countries (Germany, France, Italy, Poland and Hungary). This was then compared with the average cost of labour in the two groups of countries. It was assumed that a reduction of 10 staff from an NSA would lead on average to a cost saving of €600k in a ‘generic’ NSA[53].

It has been difficult to estimate the impact in terms of cost of administration on NSAs of the application of the horizontal measures (option 6). On the one hand, NSAs could face increased costs due to the need to implement the EU rules, requiring tougher standards and the supervision. On the other hand, the enhanced role of ERA in disseminating common rules and advising on their implementation could help to smooth the workload of NSAs. In addition a clearer legislative framework (e.g. migration from national technical and safety rules to a system of EU rules) should reduce burden on NSAs. By estimating the effects of the single measures within this option, the second effect was considered to have a higher impact than the first, leading to a net reduction in staff members per NSA.

Results of individual options 1 to 6

The table below reports the impacts on the cost of administration sustained by NSAs of each policy option.

Table 6-6: Savings of the cost of administration in NSAs of options 2-6 (€m)

Option || Total NSA staff* (estimate 2011) || Yearly values by 2020 (when all staff changes have been phased in), per NSA || Total NPV in the EU (2015-2025)

Total staff variation || Total staff costs saving || Overhead || Total gross cost saving

Option 1: Baseline || 500 || || No impacts on cost of administration ||

Option 2: Further ERA “Coordination” || || Marginal impacts on cost of administration || 0

Option 3: ERA as One-Stop-Shop || -2 || EU12 || 0.08 || 0.02 || 0.1 || 26

EU15 || 0.17 || 0.04 || 0.2

Option 4: ERA & NSAs share competencies || -3 || EU12 || 0.11 || 0.03 || 0.1 || 42

EU15 || 0.26 || 0.07 || 0.3

Option 5: ERA takes over activities of NSAs regarding authorisation & certification || -10 || EU12 || 0.38 || 0.09 || 0.5 || 151

EU15 || 0.87 || 0.22 || 1.

Option 6: Horizontal measures || -2 || EU12 || 0.08 || 0.02 || 0. || 37

EU15 || 0.17 || 0.04 || 0.2

* Only those working on certification & authorisation. An estimated value based on the Interoperability and Safety Reports of the Agency. Assuming that EBA (German NSA) staff in regional offices is not counted as certification and authorisation staff, but is being an inspection and auditing staff.

The impact on the costs of the Agency for incremental options 3 to 6 leads to a change in the yearly costs for the single NSAs of between € 0.1 m and €0.4 m in EU12 countries, and between €0.2 m and €1.1 m in EU15 countries. Clearly, option 5 has the largest benefit to the national public purse in terms of the impact on the NSAs, with the other four options leading to lower cost savings.

Results of options 2 to 5 in combination with option 6

The cost of administration on NSAs arising from combined options is presented in the table below, with option 5 having again the highest potential impact on reducing the costs.

Table 6-7: Savings of the cost of administration in NSAs of options 2-5 in combination with option 6 (€m)

Option || Total NSA staff* (estimate 2011) || Yearly values by 2020 (when all staff changes have been phased in), per NSA || Total NPV in the EU (2015-2025)

Total staff variation || Total staff costs saving || Overhead || Total gross cost saving

Option 2+6: Further ERA “Coordination” + horizontal measures || 500 || -2 || EU12 || 0.08 || 0.02 || 0.1 || 37

EU15 || 0.17 || 0.04 || 0.2

Option 3+6: ERA as One-Stop-Shop + horizontal measures || -4 || EU12 || 0.09 || 0.02 || 0.1 || 55

EU15 || 0.35 || 0.09 || 0.4

Option 4+6: ERA & NSAs share competencies + horizontal measures || -5 || EU12 || 0.11 || 0.03 || 0.1 || 68

EU15 || 0.44 || 0.11 || 0.6

Option 5+6: ERA takes over activities of NSAs regarding authorisation & certification + horizontal measures || -11 || EU12 || 0.24 || 0.06 || 0.3 || 152

EU15 || 0.96 || 0.24 || 1.2

* Only those working on certification & authorisation. An estimated value based on the Interoperability and Safety Reports of the Agency. Assuming that EBA (German NSA) staff in regional offices is not counted as certification and authorisation staff, but is being an inspection and auditing staff

Impact on employment level and working conditions in natio