WRITTEN QUESTION E-3894/00

by Robert Goebbels (PSE) to the Commission

(13 December 2000)

Subject: Impact on employment of a proposal for a regulation on public services in the passenger transport sector

The Commission has just reached a further phase in its frenzied deregulation activity proposing that invitations to tender for passenger transport, one of the public services, to be issued every five years.

According to Mrs Loyola de Palacio, member of the Commission, the proposed reform will ensure greater competition between public transport operators, thereby providing a better service for passengers, containing costs and ensuring the highest safety standards.

In fact Mrs de Palacio has simply devised a new triangle of conflicting interests. While competition between public transport operators may keep down costs, this will inevitably be to the detriment of the quality of services provided (closure of unprofitable routes, less frequent services etc.) or at the expense of safety standards (less qualified, underpaid and consequently less motivated personnel).

In many countries, the municipal authorities or associations thereof have for a long time been providing their own public transport services, whose staff in many cases enjoy civil servant, or at least municipal employee status. Competition with private transport undertakings would in general squeeze out municipal services with established personnel and staffing structures while private operators entering the market would be able to recruit (frequently underpaid) employees with no seniority.

By proposing to oblige municipalities and other public bodies to issue invitations to tender every five years, at least for the provision of public transport services (worth over 800 000 annually), does the Commission realise that it would in effect be forcing them to close down their own services and dismiss their employees?

Answer given by Mrs de Palacio on behalf of the Commission

(5 March 2001)

The Commission draws the attention of the Honourable Member to the fact that Article 9(3) of its proposal of 26 July 2000 for a regulation on public services in public transport(1) ensures that authorities will be able to protect existing employees when contracts change hands. In some cases, protection is already provided by Council Directive 77/187 of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses(2). The Commission's proposal allows authorities to insist on this level of protection, even where it is not required by Community law. It certainly does not oblige authorities to make their existing staff redundant.

The Commission's proposal does not require authorities to award contracts to the tenderer making the cheapest offer. Authorities can award contracts on the basis of quality, not just price. The proposal lists numerous quality and safety criteria which must be taken into account in awarding contracts.

In-house operators are still undertakings under Community law. They are subject to Community rules on state aids and exclusive rights. With the emergence of multinational operators, abuses of these rules now have a Community dimension. The Commission does not intend to put an end to in-house operation of public transport, or to other publicly owned operators. The proposal simply says that these operators, like all others, should have to prove from time to time that they are still the best for serving the area and the community in question. This approach is good for passengers, and it promotes legal certainty.

(1) OJ C 365 E, 19.12.2000.

(2) OJ L 61, 5.3.1977 as amended by Directive 98/50/EC of 29.6.1998 (OJ L 201, 17.7.1998).