Proposal for a COUNCIL DIRECTIVE on the lecensing of railway undertakings
Date: 1993-12-15
Institutions: European Commission
Subjects: common transport policy, freedom to provide services, rail transport, trade licence, transport company, transport safety

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(93)  678  f i n al 

-  SYN  488  -  490 

B r u s s e l s,  15  December  1993 

Proposal  for a 

COUNCIL  DIRECTIVE 

on the licensing  of  railway  undertakings. 

SYN  488 

Proposal  for a 

COUNCIL  DIRECTIVE 

on  the allocation of  railway  infrastructure 
capacity  and the charging  of  infrastructure  fees 

SYN 490 

(presented by the Commission) 

~~rKIB 

* > < " ? »• 

Proposal  for a 

COUNCIL  DIRECTIVE 

on  the  licensing  of  railway  undertakings. 

Explanatory  Memorandum 

Introduction 

1.  Community  legislation  setting  out  the  conditions  under  which  undertakings  are  allowed  to 
operate  on  the  market  already  exists  for  the  road  and  the  aviation  sectors0.  The  main  aspects 
covered,  competence,  financial  backing  and  experience are generally  similar  for  all  modes.  For 
the  railways  the  need  for  such  legislation  has  not  arisen  due  to  the  lack  of  access  rights  to  the 
network.  However,  with  the  approval  by  the  Council  of  Directive  91/440^  the  situation  has 
changed.  Directive  91/440  for  the  first  time  gave  the  right  of  access  to  rail  infrastructure  to 
undertakings that provide international  combined transport  services and for groupings of  railway 
enterprises to provide international  services between their  countries of establishment.  In addition 
it  is clear  that  a rethinking  of the  policy  regarding  the access  to  national  rail  networks  has  been 
stimulated  by the Directive and  plans  are underway  in a number  of  Member  States to amend  the 
current  situation  regarding  the  monolithic  structure  of  railway  operations.The Commission  has 
been  requested  by  the  Council  to  examine  ways  to  improve  the  efficiency  of the  railways  and 
to present  any necessary proposals  by the  1  January  1995.this  proposal  represents an  important 
element  in the preparation  for  any  new  Community  action  as  well  as complementing  Directive 
91/440. 

2.  General  points  : Justification  of  the  action. 

2a.  What  are  the  objectives  of  the  proposal  in  relation  to  the  Community's  obligations? 

To ensure the application of  common  conditions  for  entry  into the Community  rail  market, 
particularly  in  the  context  of  the  new  access  rights  granted  under  Directive  91/440,  a 
Community  licence is called  for.  The recent  Communication  on the future of the  Common 
Transport  Policy  lays  stress  upon  the  need  to  make  a  better  use  of  existing  transport 
systems.  As  far  as the  railways  are  concerned  one  of  the  key  elements  to  ensure  that  the 
system  is  used  more  effectively  is  to  admit  new  enterprises  and  facilitate  international 
groupings  between  existing  companies.  . However,  this process  poses certain  problems  in 
relation  to  the  need  to  balance  between  the  requirement  to  maintain  safety  standards  and 
a  satisfactory  working  environment  while  not  creating  barriers  to  new  entrants. 

Council  Regulation  (EEC)  No 2407/92  on the licensing of air  carriers; O.J. L 240 24/8/92 
Council  Directive  74/561  of  12  Nov  1974  on  the  admission  to  the  occupation  of  road 
haulage  operator  in  national  and  international  transport  operations;  O.J.  L 308  19/11/74. 

Council  Directive of 29 July  1991  on the development  of the  Community's  railways.  O.J. 
L237  24/08/91  p 25. 

2  -

If there  is to  be a greater  access  to the  Community  rail  system  this  cannot  be allowed  to 
occur at the expense of sacrificing  the quality of existing rail operations.  It is clear that the 
possibility  of  multiple  operators  on  the  Community  railway  network  requires  that  there 
exists  a  system  of  licensing  operators  in  order  to  ensure  that  they  can  confidently  be 
expected  to  provide  rail  services  that  are  both  safe  and  efficient.  Moreover,  Directive 
91/440,  as the first  step with regard to open  access,  needs to be consolidated,in particular 
in relation to the conditions upon which  access  is granted to infrastructure.  This proposal, 
in  associated  proposal  regarding  infrastructure3',  define  a  common 
together  with 
framework  for licensing and infrastructure  access and as such provide  additional  elements 
to support  the application of  the measures  created  by  Directive  91/440. 

2b  Does the proposal  fall under the exclusive competence of the Community  or is there shared 

competence  with  the  Member  States? 

This  proposal  is  put  forward  on  the  basis  of  Article  75  of  the  Treaty  and  is  therefore  of 
the exclusive  competence  of  the  Community. 

2c.  What means  of  action  are available  to  the  Community? 

In order that new  railway  undertakings  can benefit from the facilities  offered  by the single 
market in the transport sector,  it is necessary  to create in  a legislative  framework  a broad 
Community  system  to  grant  operating  licences.  A  Community  system  would  avoid 
disparate  national  measures.  Such  measures  would  hinder  the  development  of  the 
Community's  railways,  particularly  in  the  field  of  international  traffic. 

2d.  Is a uniform  Regulation  necessary  or  would  a Directive be  sufficient? 

The  Directive  establishes  a  broad  legislative  framework,  with  Member  States  left  to 
implement  the detailed  requirements.  A  Directive  appears to  represent  the  right balance 
between the need to ensure a reasonably harmonised Community  approach to a licence and 
the need to  create  an efficient  decentralised  system  taking  full  account  of  the principle of 
subsidiarity. 

Scope  of  proposal 

3.  As  has  been  noted  the  Community  railways  have  an  excellent  safety  record,  much  better 
in  fact  than  their  competitors  in  the  road  transport  sector.  Experience  in  the  transport 
sector demonstrates  that the economic  stability  and financial  strength  of  undertakings  can have 
an impact on their performance  as regards  compliance  with safety  rules.  In the railway sector, 
the  international  nature  of  business  and  the  need  to  ensure  high  safety  standards  imply  that 
requirements should  be fixed  at Community  level  to judge the competence,  the financial  fitness 
and  the  performance  of  undertakings  that  wish  to  enter  the  market  or  are  already  involved. 
However, all enterprises that meet such requirements are entitled to receive an operating licence. 
The granting  of  such  a licence  will  serve  to  indicate  the capacity  of  an undertaking  to provide 
efficiently  operated  railway  services. 

COM  xxx  93  (in  circulation). 

3  -

4. 

In  addition  to  the  general  requirements  regarding  professional  competence,  etc.  railway 
undertakings  must  also  be  able  to  cover  their  liability  in  the  event  of  accidents  occurring. 
Moreover, in the absence of any specific Community  provisions on safety,  railway undertakings 
should  respect  international  agreements  and  conventions  regarding  passenger  and  freight 
transport. Such agreements,  which cover in ter-alia the movement of dangerous goods, technical 
characteristics of rolling stock  and other equipment,  facilitate cross border activities  in general. 
In addition  to  these  points,  and  in  compliance  with  the  principle  of  subsidiarity,  the  Member 
States should  have the possibility  of  imposing  certain  other  essentially  technical  requirements, 
that are compatible  with  Community  law. 

5.  As  much stress  is laid on the professional  and technical  competence  of  railway  enterprises  it is 
important that access to specialised  training  facilities  should  be made generally  available.  Such 
access,  which  should  be organized  on  a commercial  basis,  is  vital  if barriers to entry  are to be 
avoided,  particularly  at the beginning  of  new  operations. 

6.  The  administrative  arrangements  and practical  implementation,  as  was stressed  earlier,  will  be 

left  to the Member  States. 

Detailed  points : 

REVIEW  OF THE ARTICLES 

ARTICLE 1 

-Indicates  the aims  and scope of  the  Directive. 
-The  possible  exclusion  of  undertakings  whose  operations  are  geographically  limited  follows 
the line of  Directive  91/440.  The  Member  States  may  exclude  certain  types  of  basically  local 
operations,  but  should  not  exclude  services  that  operate  over  infrastructure  where  licensed 
operators run trains,  in order to avoid the problems that could occur if a mixture of licensed and 
unlicensed  operators  were created. 

ARTICLE  2 

-Definitions.  It may be recalled that the requirement to provide traction has been stated (see the 
Council  Minute Statement of the 29/07/91) to imply that arrangements such as leasing or renting 
traction are acceptable. The definition  of  a "business plan" is necessarily  left somewhat open as 
the  content  of  such  a plan  will  relate  to  the  nature  and  type  of  operations  that  the  enterprise 
wishes to operate. 

No comment. 

ARTICLE  3 

ARTICLE  4 

-This article lays down that all railway undertakings have to apply for an operating licence.The 
operating  licence  can  be  delimitated  to  cover  only  operations  of  certain  types  of  services, 
or  it  may  cover  the operation  of  any  service.  The  operating  licence  will  be  a condition  of  an 
application  for  access  to  infrastructure  capacity,  but  as  the  requirements  of  infrastructure 
allocation can only be fulfilled  on the basis of a specific  route analysis, the operating licence as 
such  does  not  imply  an automatic  access to specific  routes.  Such  access  will  require a licence 
holder to hold  a safety  certificate  and make the appropriate  commercial  arrangements  with the 
infrastructure  manager. 

ARTICLE  5 

-The  provision  of  information  should  be  limited  to  that  absolutely  necessary  hence  the 
specification  in  the  Annex  :  all  information  provided  should  be  treated  as  commercially 
confidential. 

ARTICLE  6 

-The provisions of this article draw upon the experience of other sectors and have been shown 
to be acceptable and realistic. 

ARTICLE  7 

-The  time set for the test of  financial  fitness  represents  a compromise  between a long period, 
which could be difficult to meet for new entrants, and a very short period ,which could be easily 
circumvented.  The time period  is  directly  linked to the period  covered by the  "business plan". 
This requirement is not restrictive as all new undertakings have to make a forward plan for their 
own  financial  purposes. 

ARTICLE  8 

-The  requirements  for  professional  competence  are  framed  in  relation  to  the  staff  and  the 
facilities  that the undertaking possess  : this follows  accepted practice in other transport sectors. 
The  equipment,  staff  etc.  should  relate directly  to  the  services  that the undertaking  wishes  to 
provide  i.e.  a  freight  operator  should  have  staff  trained  in  freight  train  operation  but  not 
necessarily  for  passenger  traffic.  As  regards  training  8.2  lays  down that such  facilities  should 
not be used  as a barrier to the  entry  of  new  undertakings. 

-This  refers  to  adequate insurance  cover. 

ARTICLE  9 

ARTICLE  10 

-The review period has been introduced in order to allow the licensing authority to re-examine 
the  situation  after  the  first  year  but  then  the  periodicity  of  the  review  is  limited  to  five  year 
periods. 

-5 

ARTICLE  11 

-The  provisions  of  this  article  allow  for  certain  eventualities  such  as  the  revoking  of  licences 
and  also  the  possibility  that  temporary  licences  may  be  granted  to  allow  services  to  be 
maintained.  Adequate  possibilities  are  provided  to  allow  the  licensing  authorities  to 
undertake their supervisory  functions.  Information  should  be  exchanged  between  the  Member 
Sates  regarding  the status of  licences. 

-No  comments. 

ARTICLE  12 

ARTICLE  13 

-A  number of international  conventions exist and are widely applied for international transport: 
these  arrangements  ,which  facilitate  cross  frontier  operations,  should  be  maintained  until  such 
time  as they  may  be replaced  by  Community  arrangements. 

-No  comments. 

ARTICLE  14 

ARTICLE  15 

-The  time period  of  two  months  is  regarded  as  a reasonable  compromise  between  the need  to 
undertake  a  comprehensive  check  on  the  suitability  of  an  applicant  and  the  commercial 
requirements  to start  an operation. 

—No comments. 

ARTICLES  16 &  17 

Proposal  for a 

COUNCIL  DIRECTIVE 

on the licensing  of  railway undertakings. 

SYN  488 

THE COUNCIL  OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Article  15 
thereof, 

Having  regard to the proposal from the Commission(1), 

In cooperation  with  the European Parliament® 

Having regard to the opinion  of  the Economic  and Social  Committee(3), 

Whereas  the  internal  market  shall  comprise  an  area  without  internal  frontiers  in  which  the  free 
movement  of goods,  persons,  services  and capital  is ensured; 

Whereas the application in the railway sector of the principle of the freedom to provide services needs 
to take into  account the specific  characteristics  of that sector; 

Whereas  Council  Directive  91/440/EEC  of  29  July  1991  on the development  of  the  Community's 
railways(4)  provides  for  certain  access  rights  in  international  rail  transport  for  railway  undertakings 
and international  groupings  of  railway undertakings; 

Whereas  in  order  to  ensure  that  access  rights  to  railway  infrastructure  are  applied  throughout  the 
Community  on  a uniform  and non-discriminatory  basis,  it  is  appropriate  to  introduce  an operating 
licence  for railway undertakings; 

Whereas, having regard to the principle of subsidiarity and in order to ensure the requisite uniformity 
and  transparency,  it  is  appropriate  that the  Community  lays  down  the  broad  principles  of  such  a 
licensing  system,  leaving to Member  States the responsibility  for the granting and the administration 
of  such licences; 

Whereas  in order to  ensure dependable  and  adequate  services  it  is  necessary  to  ensure that  railway 
undertakings  meet  at any time  certain  requirements  in relation  to good  repute, financial fitness and 
professional  competence; 

Whereas for the protection of users and other parties concerned it is important to ensure that railway 
undertakings  are  sufficiently  insured  or  have  made  equivalent  arrangements  in  respect  of  liability 
risks; 

(1)  OJ No C 

(2)  OJ No C 

(3)  OJ No C 

(4)  OJ No L 237,  24.8.1991, p.  25 

Whereas  in  order  to  ensure  the  efficient  operation  of  international  rail  transport  it  is  necessary  that 
railway  undertakings  respect  the agreements  in  force  in  this  field; 

Whereas the procedures for the granting, maintenance  and  amendment of operating licences to railway 
undertakings  shall  be transparent  and  non-discriminatory, 

HAS  ADOPTED  THIS  DIRECTIVE  : 

INTRODUCTION 

ARTICLE  1 

1.  This  Directive  concerns  the provisions  to  be  adopted  by  Member  States  for  the granting, 
maintenance  and  amendment  of operating  licences by Member  States  in relation to railway 
undertakings  established  in the  Community. 

2.  By derogation  from  the above Member  States  may  exclude from the scope of this Directive 
railway  undertakings  whose activity  is  limited  to the provision  of  solely  urban,  suburban 
or regional services,  insofar  as those services  do  not involve the joint  use of  infrastructure 
with  undertakings  subject  to this  Directive. 

ARTICLE  2 

DEFINITIONS  . 

For the purpose  of  this  Directive: 

( 

, 

(a) 

(b) 

(c) 

"railway undertaking" means any private  or  public undertaking  whose main business  is to 
provide  rail  transport  services  for  goods  and/or  passengers  with  a  requirement  that  the 
undertaking  must  ensure traction,  with  traction  equipment  owned,  leased  or  rented; 

"operating  licence"  means an authorization  granted  by  a Member  State to an undertaking, 
by which  its capacity  as a railway undertaking  is recognized.  This  capacity  can be limited 
to the provision  of  specific  types  of  services; 

"business  plan"  means  a  detailed  description  of  the  railway  undertaking's  intended 
commercial  activities  for  the  period  covered, 
in  relation  to  market 
developments  and  investment  to  be  carried  out,  including  the  financial  and  economic 
implications  of  these  activities; 

in  particular 

(d) 

"train  path"  means  the infrastructure  capacity  needed  to run  a train  between  two places  at 
a certain  time; 

(e) 

"licensing  authority"  means the authority  charged  by the  Member  State with the granting 
of  railway  operating  licences. 

ARTICLE  3 

Each  Member  State shall  designate  the authority  responsible  for  granting  of  railway  operating 
licences  and  for  the carrying out of  obligations  under this  Directive. 

OPERATING  LICENCE 

ARTICLE  4 

1.  A railway undertaking established  in the Community  has the right to apply for an operating 

licence. 

2.  Member  States  shall  not  grant  operating  licences  or  maintain  their  validity  where  the 

requirements  of this  Directive  are  not  complied  with. 

3.  A  railway undertaking meeting  the requirements  set  out  in this  Directive shall  be  entitled 

to receive  an operating  licence  and to  apply  for  access  to  railway  infrastructure. 

4.  Notwithstanding  paragraph  3,  the operating  licence  does  not  in itself  confer  any  rights of 
access to specific  train paths.  These rights of access  are granted  according to Community 
and national  legislation  in the  form  of  : 

-  a safety  certificate  which  is  issued  to  a  railway  undertaking  by  the  national  authority 
responsible  for safety  and  which  affirms  that  the  railway  undertaking  has  fulfilled  the 
safety  conditions  laid down  by that  authority; 

-  a  train  path  allocation  under  the  conditions  defined  by  Community  and  national 

legislation. 

5.  A  railway  undertaking  shall  not  be permitted  to  carry  out  rail  transport services  covered 
by the scope of this Directive  unless  it has been granted the appropriate operating  licence 
for the type of  services  to be provided. 

CONDITIONS  FOR  AN  OPERATING  LICENCE 

ARTICLE  5 

1.  Any railway undertaking which is granted an operating licence must be able to demonstrate 
to  the  licensing  authorities  of  the  Member  State  that  it  can  meet  at  any  time  certain 
requirements  in relation to good  repute,  financial  fitness  and professional  competence  set 
out  in Articles  6 to 8. 

2. 

For  the purpose of  paragraph  1, each  applicant  shall  provide  all  relevant  information,  in 
particular that referred  to  in the Annex. 

ARTICLE  6 

Member  States  shall  define  the conditions  under  which  the requirement of  good  repute  is  met 
to  ensure  that  as  regards  the  applicant  railway  undertaking  or  the  persons  in  charge  of 
management,  they 

have  not  been convicted  of  serious  criminal  offenses,  including  offenses  of  a commercial 
nature; 

have  not  been  declared  bankrupt; 

have  not  been  convicted  of  serious  offenses  against  specific  legislation  applicable  to 
transport. 

ARTICLE  7 

The  requirements  in  relation  to  financial  fitness  are  met  when  the  applicant  railway 
undertaking  can  demonstrate  that  it  will  be  able  to  meet  (at  any  time)  its  actual  and 
potential  obligations,  established  under  realistic  assumptions,  for  a  period  of  twelve 
months. 

For the purpose  of  paragraph  1,  each  applicant  shall  provide  all  relevant  information,  in 
particular  a business plan for at least the first year of operation  and the data referred  to  in 
the Annex. 

1.  The  requirements  in relation  to professional  competence  are met  when : 

ARTICLE  8 

(a) 

(b) 

(c) 

(d) 

the applicant railway undertaking has a management  organization which  possesses 
the  experience  necessary  for  exercising  satisfactory  operational  control  and 
supervision  of  the type of  operations  specified  in the operating  licence; 

the  applicant  railway  undertaking  can  demonstrate  that  it  will  be in a position  to 
provide appropriate rolling stock  including traction and maintenance  arrangements 
necessary  to operate the services  according  to the terms  of  its operating  licence; 

its staff,  who are critical  to safety,  notably drivers,  are suitably  qualified  for their 
field  the of  activity; and 

its personnel, equipment and organization can ensure an appropriate level of safety 
of  the operations  to be undertaken. 

2  Member  States  shall  take  all  appropriate  steps  to  ensure  that  adequate  staff  training 
arrangements  are  provided.  Where  certain  essential  training  facilities  are  under  the 
exclusive  control  of  a  single  undertaking,  the  Member  State  where  these  facilities  are 
located  shall  ensure  that  access  is  granted  to  other  railway  undertakings  on  a  non 
discriminatory,  commercial  basis. 

te 

ARTICLE  9 

*• 

A railway undertaking must  be  insured or have made  equivalent arrangements  to cover  liability 
in  case  of  accidents,  in  particular  in  respect  of  passengers,  luggage,  freight,  mail  and  third 
parties. 

VALIDITY  OF THE OPERATING  LICENCE 

ARTICLE  10 

1.  An operating licence shall  be valid as long as the railway undertaking meets the obligations 
of  this Directive.  However,  the  licensing  authority  may  make provision  for  a review  one 
year  after  a new  licence  has  been  issued  and  shall  review  the situation  every  five  years 
thereafter 

2. 

Specific provisions for suspension or revocation of a licence may be reflected  in the licence 
itself. 

ARTICLE  11 

1. 

If there is serious  doubt  that  the requirements  of  this  Directive,  and  in particular  Article 
5  thereof,  are  complied  with  by  a railway  undertaking  licensed  by  them,  the  licensing 
authorities may, at any  time,  assess whether the railway undertaking is in compliance with 
those requirements.  Where the licensing authority  is satisfied that the railway undertaking 
can no longer meet  the  requirements of the Directive,  and in particular Article  5,  it shall 
suspend or revoke the  operating  licence. 

2.  Notwithstanding  paragraph  1,  where  an  operating  licence  is  suspended  or  revoked  by 
reason of non-compliance with the requirements of financial fitness, the licensing  authority 
may  grant  a temporary  licence  pending  the  reorganisation  of  the  railway  undertaking, 
provided that safety  is  not  put  at risk. 

3.  When  a  railway  undertaking  has  ceased  operations  for  six  months  or  has  not  started 
operations for six  months  after the granting of an operating licence, the licensing  authority 
responsible may decide  that  the operating  licence  shall  be resubmitted  for  approval. 

4. 

In relation to a railway  undertaking,  the licensing  authority  may decide that  the operating 
licence shall  be resubmitted  for  approval  in case  of  a change,  affecting  the  legal  situation 
of  the undertaking  and,  in  particular,  in  the  case  of  mergers  or  takeovers.  The  railway 
undertaking in question  may  continue operation,  unless the licensing authority decides that 
safety  is at risk;  in such  a  case,  the reasons  for  such  a decision shall  be given. 

5.  When  a railway  undertaking  intends  significantly  to  change or  extend  its  activities,  the 

operating  licence has  to  be  amended  accordingly. 

- Il 

6.  A railway undertaking,  against which  bankruptcy  or similar proceedings  are commenced, 
shall  not be permitted  by the licensing  authority  to retain its operating  licence if the latter 
is  convinced  that  there  is  no  realistic  prospect  of  a satisfactory  financial  reconstruction 
within a reasonable period of  time. 

7.  When the licensing  authority has suspended,  revoked or amended an operating licence, the 
Member State concerned shall  immediately  inform  the other Member  States notably those 
in which  the  railway  undertaking  concerned  is  operating. 

ARTICLE  12 

In  addition  to  the  requirements  of  this  Directive,  the  railway  undertaking  shall  also  respect 
national  laws  compatible  with  Community 
law,  in  particular  as  regards  specific  technical 
requirements  for  certain  rail  services. 

ARTICLE  13 

Railway undertakings carrying out  international  transport services shall  respect the agreements 
applicable to international  rail  transport  in  force  in the  Member  States  in which  they operate. 

TRANSITIONAL  PROVISIONS 

ARTICLE  14 

Railway undertakings operating rail services  at the date of entry into force of this Directive shall 
be granted a transitional  period of  six  months  to  comply  with the provisions  of this Directive. 
This  transitional  period  shall  not  cover  any  provision  that  might  affect  safety  of  railway 
operations. 

GENERAL  PROVISIONS 

ARTICLE  15 

1.  The procedures for the granting of  operating  licences shall be made public by the Member 

State concerned  and the Commission  shall  be  informed  thereof. 

2.  The licensing  authority shall take  a decision  on an application  as soon as possible,  but not 
later than two months after all relevant  information,  in particular the data referred to in the 
Annex,  has  been  submitted,  taking  into  account  all  the available  evidence.  The  decision 
shall  be communicated  to  the  applicant  railway  undertaking.  A  refusal  shall  indicate  the 
reasons  thereof. 

3.  Member  States shall  take the measures  necessary  to ensure that decisions  of the licensing 

authority  shall  be subject to judicial  review. 

"  \2-

ARTICLE  16 

Member  Slates shall  adopt  the laws,  regulations  and  administrative  provisions necessary 
to comply with this Directive not later than  1 January  1995. They shall forthwith  inform 
the Commission  thereof. 

When  Member  States  adopt  these  provisions,  they  shall  contain  a  reference  to  this 
Directive or be accompanied by such reference on the occasion of their official  publication. 
The methods of making  such  a reference  shall  be  laid down by the Member States. 

This  Directive is addressed  to the Member  States. 

ARTICLE  17 

Done at Brussels. 

For  the  Council 

The  President, 

'3 

Annex 

Information  for  use  in  association  with  Article  4 

A. 

Information  which  a first-time applicant  may  be  require to  present 

1.  Where  available  the most  recent  internal  management  accounts  and  audited  accounts  for 

the previous  financial  year. 

2.  A projected  balance sheet,  including  profit  and loss  account,  for  the following  year. 

3.  The basis for projected expenditure and income figures on such  items as transport volume, 

fares  and  rates, and major cost  elements. 

4.  Details  of  the  start-up  costs  incurred  in  the  period  from  submission  of  application  to 
commencement  of operations  and  an  explanation  of  how  it  is  proposed  to finance these 
costs. 

5.  Details  of  existing  and projected  sources  of  finance. 

6. 

Projected  cash-flow  statements  and  liquidity  plans  for  the first year of operation. 

7.  Arrangements  as regards availability  and  maintenance  of  rolling  stock  notably  as regards 

the safety  standards. 

8.  The  qualifications  of  staff  who  are  critical  to  safety  and  details  of  any  staff  training 

facilities. 

B. 

Information  to  be  provided  for  the  assessment  of  applications  from  existing  licence  holders 
planning  a significant  change in their  structure  or  in their  activities 

1.  The  audited  accounts for the previous  financial  year. 

2. 

Precise details of all proposed changes e.g.  change of type of service,  extension of service, 
proposed  takeover or merger,  etc. 

3.  A  projected  balance sheet,  with  a profit  and  loss  account,  for  the  current  financial  year, 

including  all  significant  proposed  changes  in structure  or  activities. 

4. 

Past and projected expenditure and income figures on such  items as transport volume,  fares 
and  rates,  salaries,  maintenance,  depreciation,  infrastructure  fees,  insurance, etc. 

5.  Cash-flow  statements  and  liquidity  plans  for  the  following  year,  including  all  significant 

proposed  changes  in structure or  activities. 

6.  Details  of  changes,  as  regards  availability  and  maintenance  of  rolling  stock,  in  the 

qualification  of staff  who are critical  to  safety. 

C. 

Information  to be provided  for  the  review  of  existing  licence  holders 

1.  Audited  accounts  not  later  than  six  months  after  the  end  of  the  relevant  period  and,  if 

necessary,  the most  recent  internal  management  balance  sheet. 

2.  A projected  balance sheet,  including  profit  and  loss  account,  for  the forthcoming  year. 

3. 

Past and projected expenditure and income figures on such items as transport volume,  fares 
and  rates,  salaries,  maintenance,  depreciation,  infrastructure  fees,  insurance,  etc. 

4.  Cash-flow  statements  and  liquidity  plans  for  the  following  year. 

5.  Details of any changes proposed.  Arrangements  as regards availability and maintenance of 
rolling  stock  notably  as  regards  safety  standards,  and  the  qualifications  of  staff  who  are 
critical  to  safety. 

Impact  Assessment  Form 

The Impact of  the Proposal  on Business  with  special 
reference to small  and  medium  sized  enterprises. 

Title of the proposal  : Draft  Directive  on  the  licensing  of  railway  undertakings. 

Document  reference  no  : COM  XXX  (No.  not  yet  allocated). 

The proposal  : 

1.  Taking  account of the principle of subsidiarity,  why is Community  legislation  necessary  in this 

area and  what  are  its main aims? 

The  need  for  Community  legislation  with  regard  to the  licensing  of  railway  undertakings  has 
arisen  from  the  Directive  91/440  on  the  development  of  the  Community's  railways1'.  This 
Directive created for the first time rights of access to the national  systems to new entrants to the 
railway  sector.  Since the coming  into  force  of  this  legislation  (1  January  1993)  both  potential 
new  entrants  and  the  existing  undertakings  have  requested  the  Commission  to  clarify  and 
harmonise the conditions that Member  States apply. In the light of the fact that one of the main 
markets  of  interest  to  new  entrants  is  likely  to  be  international  traffic  and  also  that  rail 
undertakings based in one Member State are likely to be interested  in operating in other Member 
States Community  legislation is justified.  The form of a Directive has been adopted to allow  the 
Member  States  a certain flexibility  in application  even  although  a similar  measure  for  aviation 
was  adopted  as  a  Regulation.  The  object  looked  for  is  to  introduce  clarity  and  a  degree  of 
uniformity  in the application  of  Directive 91/440  without  changing  the scope of this  Directive. 

The Impact  on  business. 

2.  Who  will  be  affected  by the proposal? 

Two  main  groups  are concerned  : 

first : the  existing  railway  undertakings; 
second  : potential  new entrants. 

The  size  of  enterprise  concerned  varies  from  the  large,  typically  the  existing  railway 
undertakings,  down  to  the  medium  sized  firm  already  involved  in  say,  shipping.  It  is 
unlikely  that small firms would  have the financial  backing  and knowledge needed to apply 
for  a rail  licence. 

The  whole  Community  is  involved. 

3.  What will  business  have to do to  comply  with the proposal? 

In order  to  obtain  a licence  undertakings  will  have to  submit  a business  plan  and  prove  their 
professional  and technical competence to the licensing authorities. This procedure is akin to what 
is  accepted  in other sectors  of  the transport  industry. 

i) 

Council  Directive 91/440 on the development of the Community's  railways. O.J. L 237/25 
24 08 91. 

Ue 

4.  What  economic  effects  is the proposal  likely  to  have? 

On employment?  None directly,  although  if the railway  sector  can  attract  new business  as  new 
entrants  emerge  this  could  improve  employment  prospects. 

On  investment  and  the creation of  new  business? The object  of the  legislation  is to facilitate  the 
entry  of  new  firms  into the sector  by  clarify  their  rights  and  obligations.  New  business  for  the 
railways  would  obviously  boost  investment. 

On  the  competitive  position  of  business?  If  new  undertakings  enter  the  sector  this  should  lead 
to  more  competition  and  greater  efficiency  all-round. 

5.  Does  the  Proposal  contain  measures  to  take  account  of  the  specific  situation  of  small  and 

medium  sized  firms  (reduced  or  different  requirements). 
The  nature  of  the  proposal  and  the  fact  that  identical  operations  are  involved  does  not  justify 
special  provisions  of  this type. 

Consultation 

6. 

List the organisations  that have been  consulted  about the proposal  and  outline their  main  views. 

A  series  of  meetings  have  been  held  with  parties  that  are  likely  to  be  concerned.  The  bodies 
involved  are  the  existing  railway  undertakings,  the  combined  transport  operators,  employers 
groups  and  the  trade  unions. 

With  regard  to the existing  railways  operators  they  were particularly  concerned  to maintain  the 
safety  standards  in the industry.  As a result of discussions the Directive was modified  to  include 
the  provision  that  a safety  case  had  to  be  established  for  each  application,  which  covered  the 
specific  routes  over  which  services  were  to be operated.  The Trade  Unions  broadly  supported 
this  view,  whilst  maintaining  their  opposition  to  new  entrants  into  the  industry  which  they 
considered  would  lead  to a reduction  in the level of salaries etc.  for  the staff.  The Trade  Union 
arguments  lead  to  the  inclusion  of  specific  provisions  in  Article  7  regarding  the  need  for  new 
operators  to make provision for  staff  training.  The other provisions  in this article follow  closely 
those  that  have  long  been  established  in  the  road  industry,  and  more  recently  adopted  in  the 
aviation  field,  and  were  generally  accepted. 

Contacts  with users and potential  new operators  laid stress upon the need to adopt  administrative 
procedures  that  were as non-bureaucratic  as possible.  Certain  simplifications  were made to  the 
list  of  information  requirements  but,  as  it  has  been  found  that  safety  in  other  sectors  of  the 
transport  industry  is adversely  affected  by  a poor  financial  standing,  there was a majority  body 
of  support  in  favour  of  maintaining  an  effective  financial  test  and  this  requires  information  to 
be provided.  It should  be noted  that  the  final  form  of the licence proposal  creates various  forms 
of  licence,  which  can  vary  from  a  complete  national  licence  to  operate  any  sort  of  service, 
passenger,  freight,  etc.  to  a  much  more  restrictive  licence  for,  say,  heavy  freight  trains  only. 
The  information  and  other  requirements  are  adjusted  to  suit  the  type  of  licence  requested.  As 
in  other  sectors  of  the  transport  industry  there  are  no  specific  rights  of  appeal  provided.  A 
refusal  to  grant  a  licence  has  to  be  justified  and  the  applicant  has  normal  opportunities  for 
appeal. 

IT-

Proposal  for a 

COUNCIL  DIRECTIVE 

on  the  allocation  of railway infrastructure 
capacity  and  the  charging  of  infrastructure  fees 

Explanatory  Memorand y m 

Introduction: 

1 

Council  Directive  91/4401*  on  the  development  of  the  Community  railways  created  new 
possibilities  to  develop  services  by  granting  certain  access  rights  to  railway  infrastructure. 
Notably,  international  groupings  of  companies  are  permitted  to  provide  passenger  and  freight 
services  between  their  countries  of  establishment  and  combined  transport  undertakings  have 
access  rights to perform  international  movements.  These  access  rights should  help to  overcome 
the long lasting segmentation of the European  railways  along  national  boundaries as regards both 
technical  and  commercial  matters.  These  provisions  change  the  traditional  situation  in  the 
railways  sector,  which  had  existed  for  many  decades,  in  two  fundamental  ways  : 

First,  railway  infrastructure  can  be  used  by  trains  which  are  managed  separately  from  the 
undertaking  which  owns  the  infrastructure. 

Second,  there  can  be different  users  of  the  same  railway  infrastructure. 

2.  General  Points  : Justification  of  the  action. 

2a.  What  are  the  objectives  of  the  proposal  in  relation  to  the  Community's  obligations?. 

The  consequences  of  the  developments  noted  in  paragraph  1  for  the  railways  can  be  far 
reaching.  Certain  duties  and  obligations  have to  be  imposed  on  new and  existing  undertakings2' 
to ensure safety  and a regime  has to be created  that ensures  transparency  and  non-discrimination 
in  allocating  infrastructure  capacity.  In  the  absence  of  a  common  system  there  is  a  risk  that 
applicants  for  infrastructure  will  be  subject  to  discriminatory  treatment  by  the  infrastructure 
managers  and  that  international  operations  will  be  handicapped  by  practices  that  vary  between 
the  Member  States. The general  objective  of this proposal,  and  the associated  draft  Directive on 
licensing,  is that  railway  undertakings  and  their  clients  can  fully  benefit  from  the  opportunities 
of  the  internal  market  in  the  railways  sector. 

Directive  91(440)  established 
railway  infrastructure  : 

two  basic  principles  that  should  be  applied  to  the  allocation  of 

OJ  No  L 237,  24/08/91  p 25. 
see the draft  proposal on the licensing of railway  undertakings  COM  XXX  (circulated  with 
this  draft) 

-\g 

First,  that  there should  be a non-discriminatory  system  applied  in a common  fashion  throughout 
the Community.  The absence of  a Community  system  creates the risk  that different  approaches 
be  adopted  by  the  Member  States,  creating  difficulties  for  new  operations  in  particular.  The 
creation  of  a  certain  set  of  common  principles,  whilst  leaving  the  level  of  charges  to  be 
determined  by the actual  circumstances,  will  provide  an adequate  basis for ensuring the  efficient 
operation  of  international  rail  services. 

Second,  that  the  available  capacity  should  be  allocated  on  the  basis  of  economically  efficient 
principles.  However,  the  application  of  economic  principles  should  not  be  taken  to  mean  that 
the highest bidder has always to be given  the first choice of capacity.  Due to various deep seated 
imperfections  in  the  transport  market  the  price  mechanism  cannot  always  be  relied  upon  to 
produce an allocation pattern that  corresponds  to society's  needs.  For this reason there are cases 
where  priority  access  should  be  granted  to  certain  services  that  are  provided  in  the  general 
public  interest  e.g.  commuter  services  around  the  great  conurbations  of  the  Community. 
However,  if  the  market  is  to  be  subject  to  such  interventions  by  the  public  authorities  such 
actions  should  be  transparent,  justified  and  give  rise  to  a  compensatory  payment.  This  point 
being  made  it  is  also  important  to  ensure  that  the  allocation  of  infrastructure  capacity  is  kept 
sufficient  flexible  to  allow  for  the  entry  of  new  undertakings  in  the  sector. 

In  general,  the  need  for  a  Community  Policy  originates  from  the  fact  that  in  the  absence  of 
certain  common  guidelines'each  of  the  Member  States  would  develop  policies  that  could  be 
substantially  different  and  thus  create  problems  for  the  development  of  new  international 
operations.Such  a  situation  would  be  likely  to  put  in  danger  the  success  of  the  Community's 
efforts  to  stimulate  the  development  of  long  distance  rail  transport  where  this  is  sensible  and 
efficient. 

2b.  Does  the  proposal  fall  under  the  exclusive  competence  of  the  Community  or  is  there  shared 

competence  with  the  Member  States?. 

This  proposal  is  put  forward  on  the  basis  of  Article  75  of  the  Treaty  and  is  therefore  of 
exclusive  competence  of  the  Community 

2c  What  means  of  action  are  available  to  the  Community? 

In  order  that  new  railway  undertakings  can  benefit  from  the  single  market  in  the  transport 
sector,  a broad  Community  system  for  the  allocation  of  railway  infrastructure  capacity  and  the 
charging of infrastructure  fees  is called  for.  Legislative  action  is needed,  therefore,  to lay down 
the  key  elements  of  the  system.  However,  the  proposal  is  limited  to  those  aspects  of  the 
allocation  and  pricing  system  that  should  be  set  down  at  the  Community  level  and  leaves  the 
question  of  administration  and  fine  tuning  to  the  competent  authorities  of  the  Member  States. 

2d 

Is  a uniform  Regulation  necessary  or  would  a  Directive  be  sufficient? 

The development of a coherent,non-discriminatory  regime for railway  infrastructure  requires that 
action  be undertaken  to ensure  a  rational  and  harmonious  approach  by  all  the  Member  States. 
However,  such  an  approach  can  be  achieved  by  the  use  of  a  Directive  which  establishes  the 
broad  framework  for  such  a  regime,  leaving  to  the  Member  States  the  responsibility  for  its 
practical  implementation. 

Scope of  the  proposal 

-19 

3. 

The  overall  object  of  the  Commission  proposals  in  the  field  of  infrastructure  charging  is  to 
ensure that  users  pay  in  full  the  real  costs  of  the  facilities  they  require.  In relation  to  railways, 
Directive 91/440  in  creating  a separate  accountancy  system  for  infrastructure  made a  first  step 
towards  achieving a equitable system  of cost  allocation  and  coverage  in the sector.  In the  longer 
term  it  is hoped  that  modal  competition  can  take  place  on  a  fair  basis  with  all  modes  covering 
their  direct  costs  and  an  appropriate  charge  for  external  factors.  In  relating  to the  charges  that 
should  be levied  for  railway  capacity  the application  of  the principles  set out  above  implies  that 
infrastructure  fees  plus  contributions  from  the  public  authorities  should  cover  expenditure  on 
infrastructure  over  a  normal  accounting  period.  The  aim  should  be  to  avoid  that  the 
infrastructure  manager  accumulates debts that  are  written  to  the capital  accounts and thus  make 
them  unrealistic. 

Infrastructure  fees  should  be  non-discriminatory  as  regards  the  charging  for  services  of  an 
equivalent  nature  in  the  same  market.  However,  while  operating  in  compliance  with  this 
principle  the  infrastructure  manager  should  have  sufficient  commercial  independence  in  order 
to  be  in  a position  to  market  efficiently  the  available  capacity.  This  implies  that  the  manager 
should  be free  to vary the  fees  on the  basis  not only  of  costs  but  also of the elasticity  of demand 
for  the  particular  train  path  that  is  requested.  Clearly  charges  should  not  be  allowed  to  drop 
below  the  marginal  cost  level  but  the  overall  principle  should  be  to  cover  the  total  cost  of  the 
system  and  not necessary  to ensure that  every  traffic  flow  makes an equal  contribution.  It should 
be up to the  infrastructure  manager  to  assess  the  situation  on  a case  by case basis and  to fix the 
fees  accordingly. 

Until  such  time  as  the  situation  regarding  infrastructure  cost  coverage  as  a  whole  becomes 
clearer,  the Member  States should  have the right  to  influence  the general  level of  infrastructure 
fees  in the  context  of  the harmonisation  of  intermodal  competition  including  the  consideration 
of  external  effects.  In  the  case  of  conurbations  or  other  areas  where  arrangements  under 
Regulation  1893/913>  have  been  made  to  provide  a  public  service  contract  the  parties  involved 
should  be free  to conclude  a global  agreement  regarding  the  infrastructure  fees  that  can  be part 
of  the  contract. 

REVIEW  OF THE  ARTICLES. 

No  comment. 

ARTICLE  1 

ARTICLE  2 

As  regards  the  definition  of  a  "railway  undertaking''  it  is  recalled  that  the  requirement  to  provide 
traction  has  been  interpreted  in  the  minute  statements  of  the  Council  Meeting  of  29  July  1991  as 
implying  that  arrangements  have  made  to  lease  or  rent  in  addition  to  owning  the equipment 

0.1.  L169  p.l  29/06/91 

-  îo 

ARTICLE  3 

This  sets  out  the  twin  objectives  to be  followed  of  non-discrimination  and  efficiency 

ARTICLE  4 

The  exceptions  to the  rule  of  market  based  allocation  are  given  notably  to  allow  for  social  services 
to  be  provided  and  also  a special  category  where  for  technical  reasons  the  infrastructure  is designed 
for  a particular  class of  train  e.g.  the high  speed  (T.G.V.)  lines  in  France. 

This  article also  lays down  the principle  that  any deviation  from  market  pricing  principles  should  be 
accompanied  by  a compensatory  payment. 

This  establishes  that  operators  in  certain  areas or  providing  certain  types  of  services  can  be  given a 
priority  right  to  access,  however  the  competition  provisions  of  the  Treaty  have  to  be  satisfied 

ARTICLE  5 

In  order  to  facilitate  the  achievement  of  full  coverage  of  infrastructure  costs  this  article  requires that 
the  rail  infrastructure  manager  covers  the  full  cost  of  the  system. 

ARTICLE  6 

ARTICLE  7 

The  final  responsibility  to  establish  the  detailed  principles  for  the  charging  system  is  laid  upon  the 
Member  States.  The  principles  should  be  established  through  a  process  of  coordination  with  the 
infrastructure  manager  who  should  thereafter  be  given  executive  responsibility 

ARTICLE  8 

This  lays  down  the basic  principles  for  infrastructure  charging.  Market  prices  are to be adopted.  No 
abusively  high  fees should  be  imposed.  Prior  notification  of  infrastructure  charges  is  required,  for 
good  business  relations  between  the  infrastructure  manager  and  the  users 

The  facility  of  grouped  payment  for  a set  of  social  services  covered  by  State  aid  is  introduced. 

No  comments. 

ARTICLE  9 

- ai 

ARTICLE  10 

This  article establishes  the procedures  for  allocating  infrastructure  capacity.  Various time periods  are 
laid  down  for  national  and  international  applications.  A  licence  holder  shall  be  granted  an 
authorization  to operate on specific  routes when  the specific  safety  criteria  are  met  (e.g. driver's  route 
knowledge). 

In order  to  facilitate  the achievement  of  full  coverage  of  infrastructure  costs  this  article  requires  that 
the  rail  infrastructure  manager  covers  the  full  cost  of  the  system. 

ARTICLE  11 

This  article  establishes  the  right  of  applicants  for  infrastructure  capacity  to  request  an  appropriate 
review  of  the  decisions  made  by  the  infrastructure  manager  and  the  allocation  body 

ARTICLE  12 

No  comments. 

ARTICLES  13  and  14 

2Z 

Proposal  for a 

COUNCIL  DIRECTIVE 

on the allocation of  railway  infrastructure 
capacity  and the charging of  infrastructure  fees 

SYN  490 

THE COUNCIL  OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Article  75 
thereof, 

Having regard to the proposal from the Commission(1), 

In cooperation  with the European Parliament®, 

Having  regard to the opinion of the Economic  and Social  Committee*3*, 

Whereas greater integration of the Community  transport sector is an essential  element of the internal 
market,  and whereas the railways  are a vital  part of the Community  transport sector; 

Whereas the application in the railway sector of the principle of the freedom to provide services needs 
to take into account the specific  characteristics  of that sector; 

Whereas  Council  Directive  91/440/EEC  of  29  July  1991  on  the development  of  the  Community's 
railways(4) provides  for  certain access  rights  in  international  rail  transport for  railway  undertakings 
and international groupings of railway undertakings; and whereas, in consequence of these new access 
rights, railway infrastructure can be used by railway undertakings which are managed separately  from 
the undertaking owning the  infrastructure; 

Whereas,  it is  important to ensure that new entrants can fully  benefit from the new access rights and 
whereas, to this end, it is appropriate to establish a system for the allocation of railway  infrastructure 
and  the  charging  of  infrastructure  fees  which  is  non-discriminatory  and  uniform  throughout  the 
Community; 

Whereas, having regard to the principle of subsidiarity,  it is further,  appropriate that the Community 
lay down  the broad principles of  such  a system,  leaving  it to  the Member  States to put in place the 
detailed  rules for the practical  implementation  of  the system; 

Whereas  it  is  necessary  to  provide  for  the  possibility  that  certain  priority  rights  are granted  with 
regard to the allocation  of infrastructure  capacity; 

0)  OJ No  C 

®  OJ No C 

w  OJ No C 

(4)  OJ No  L 237,  24.8.1991, p.  25 

Z3 

Whereas  it  is  necessary  that  the  infrastructure  manager  is  compensated  for  any  financial  losses 
incurred  due to the  imposition  of  a certain  infrastructure  capacity  allocation; 

Whereas  it  is necessary  to  provide  for  the  possibility  that  special  or  exclusive  rights  are granted  in 
allocating  infrastructure  capacity  if they  are  indispensable  to ensure adequate  transport  services; 

Whereas  the  Member  States  should  ensure  a  reasonable  flexibility  as  regards  the  allocation  of 
infrastructure  capacity; 

Whereas  the  accounts  of  the  infrastructure  manager  should  be  in  balance  under  normal  business 
conditions over  a reasonable  time  period; 

Whereas  it  is  necessary  to  define  non-discriminatory  rules  as regards  the  charging  of  infrastructure 
fees; 

Whereas,  in  order  to  ensure  an  efficient  use  of  infrastructure  capacity,  the  fees  shall  be  fixed 
according  to the nature  of  the service,  the  time  of  the  service and  the  market  situation; 

Whereas the Member  States should have the possibility  to influence the general  level of  infrastructure 
fees  in  the  context  of  the  harmonisation  of  intermodal  competition  including  the  consideration  of 
external  effects; 

Whereas the procedures  for  the allocation of  infrastructure  capacity and  the charging of  infrastructure 
fees  shall  be transparent  and  non-discriminatory; 

Whereas  it  is  necessary  to  ensure  arbitration  facilities  as  regards  the  allocation  of  infrastructure 
capacity  and the charging  of  infrastructure  fees, 

HAS  ADOPTED  THIS  DIRECTIVE  : 

ARTICLE  1 

This  Directive  concerns  the principles  and  procedures  to be applied  with  regard  to the  allocation  of 
railway  infrastructure  capacity  and  the  charging  of  infrastructure  fees. 

For  the purpose of  this  Directive  : 

ARTICLE  2 

(a) 

(b) 

"railway  undertaking"  means  any  private  or  public undertaking  whose main business  is  to 
provide  rail  transport  services  for  goods  and/or  passengers  with  a  requirement  that  the 
undertaking  must  ensure  traction; 

"infrastructure  manager"  means  an  infrastructure  manager  within  the  meaning  of  Article 
3  of  Council  Directive  91/440/EEC  of  29  July  1991  on  the  development  of 
the 
Community's  railways; 

(c) 

"train  path"  means  the  infrastructure  capacity  needed  to  run  a train  between two places  at 
a certain  time. 

(d) 

"allocation  body"  means the authority  designated  by the  Member  State with  the  allocation 
of  infrastructure  capacity. 

i«ï 

SECTION  I : Allocation  of  railway  infrastructure  capacity 

ARTICLE  3 

Each  Member  State  shall  designate  the  authority  responsible  for  the  allocation  of  infrastructure 
capacity  in  accordance  with  the  requirements  of  this  Directive. 
In  particular,  the  allocation  body 
shall  ensure  : 

that railway  infrastructure  capacity  is allocated  on  a fair  and  non-discriminatory basis,  and 

that  subject  to  articles  4  and  5  the  allocation  procedure  is  efficiently  organized  applying 
market  principles. 

ARTICLE  4 

1.  By derogation from  Article 3 the allocation  body  may  take the necessary measures to ensure that 
in  allocating  railway  infrastructure  capacity  priority  is  given  to the  following  rail  services  : 

(a) 

services provided  in the interest of the public,  as defined  in Regulation  (EEC) No.  1191/69 
of  26 June  1969  on  action  by  Member  States  concerning  the obligations  inherent  in  the 
concept of a public service  in transport  by  rail,  road  and  inland  waterway,  as amended  by 
Council  Regulation  (EEC)  No.  1893/91  of  20  June  1991; 

(b) 

services operated  on  infrastructure  constructed  for  certain specific  services,  in  particular, 
specialized  high  speed  or  freight  lines,  without  prejudice  to Articles  85, 86 and  90 of  the 
Treaty. 

2.  With  regard  to  services  provided  under  paragraph  1 a),  Member  States  shall  compensate  the 
infrastructure  manager  for  any  financial  losses  incurred  due  to  the  imposition  of  a  certain 
infrastructure  capacity  allocation. 

ARTICLE  5 

The  allocation  body  may  grant  special  or  exclusive  rights  as  regards  infrastructure  allocation  on  a 
non-discriminatory  basis  to  operators  of  certain  types  of  services  and/or  in certain  areas  if  they  are 
indispensable  to ensure adequate  public  services,  without  prejudice  to  Articles  85,  86 and  90 of  the 
Treaty. 

SECTION  II  : Charging  of infrastructure  fees 

IS 

ARTICLE  6 

The infrastructure  related accounts of an infrastructure manager shall  balance, under normal  business 
conditions over  a reasonable time period,  income from infrastructure  fees  plus State contributions on 
the one hand  and  infrastructure  expenditure  on  the other. 

ARTICLE  7 

There  shall  be  no  discrimination  between  different  railway  undertakings  and  between  national  and 
international  services  in the charging  for  services  of  an equivalent  nature  in the same market. 

After consulting  the infrastructure  manager,  Member  States shall  lay  down the rules for determining 
the infrastructure  fees. These rules shall provide the infrastructure  manager with the facility to market 
efficiently  the  available  infrastructure  capacity. 

ARTICLE  8 

Member  States shall apply the following  principles in laying down the rules for determining the 
infrastructure  fees,  charged  by the  infrastructure  manager  : 

the fees  shall  be paid directly  to  the  infrastructure  manager; 

the  fees  shall  be fixed according  to  the  nature of  the  service,  the time of  the service,  the 
market  situation and the quality  of  the  infrastructure; 

no  abusively  high fees  shall  be  charged; 

the  infrastructure  manager  shall  inform  railway  undertakings  using  its  infrastructure 
capacity  in  good  time  of  any  changes  in  fees  charged  or  in  quality  or  capacity  of  the 
infrastructure concerned; 

2.  Without prejudice to Articles 77,  92  and 93 of the Treaty,  Member  States may provide  financial 
assistance  to  the  infrastructure  manager  insofar  it  is  necessary  to  achieve  distribution  of 
infrastructure  costs between  modes  and  to  take account  of  external  costs and benefits. 

3.  As  regards  the  procedures  for  the  payment  of  fees,  Member  States  may  provide  for  the 
possibility  that a global  agreement  is set  up with the  infrastructure  manager as regards  services 
provided  in the interest of the public  in accordance with Council  Regulation (EEC) No.  1191/69 
of 26 June  1969, on action by Member  States concerning the obligations inherent in the concept 
of  a public  service  in transport  by  rail,  road  and  inland  waterway  as  amended  by  Regulation 
(EEC)  No.  1893/91  of 20 June  1991. 

2G 

ARTICLE  9 

In order to  ensure that the principles  set  out  in Articles  3,  7  and  8  are  applied,  the  Member  States 
may  require the infrastructure  manager  to provide  all  necessary  information  on the fees  charged. 

SECTION  III  : General  provisions 

ARTICLE  10 

1.  Member  States  shall  lay  down  the  procedures  for  the  allocation  of  railway  infrastructure 
capacity.  These  procedures  shall  be  made  public  by  the  Member  State  concerned  and  the 
Commission  shall  be  informed  thereof. 

2.  An  application  for  infrastructure  capacity  shall  be  submitted  to  the  allocation  body  of  the 
Member  State  of  establishment.The  application  shall  be  accompanied  by  evidence  that  the 
operational staff involved have the required knowledge to provide services safely over the routes 
concerned; this evidence  shall  be submitted  to the authority  responsible  for  safety. 

3. 

If  an  application  for  infrastructure  capacity  concerns  a train  path  outside  the  territory  of  the 
Member  State of establishment of the railway undertaking, the application shall be submitted to 
the allocation body of the Member  State in whose territory the place  of departure or arrival  of 
the rail  service concerned  is situated. 

4.  The allocation body shall take a decision on the application as soon as possible, but no later than 
one month after all relevant information has been submitted. The decision shall be communicated 
to the applicant undertaking.  A refusal  shall  indicate the reason  therefor. 

5. 

If the train path requested concerns more than one allocation body,  the allocation body to which 
an application has been submitted shall immediately inform the other allocation bodies concerned 
with this request. The latter shall take a decision as soon as possible but no later than one month 
after  all relevant  information  has been submitted.  They shall  immediately  inform the allocation 
body to which the request has been submitted. 

The  allocation  body  to  which  an  application  has  been  submitted 
together  with  the  other 
allocation bodies  concerned  shall take a decision on the application  as  soon as possible,  but no 
later than two  months after  all  relevant  information  has been  submitted.  The decision  shall  be 
communicated  to the applicant undertaking.  A  refusal  shall  indicate the reason therefor. 

n 

In  addition to  the  procedure  set  out  under paragraph  5  an applicant  undertaking  may  directly 
contact the other  allocation  bodies  concerned  with  this  request. 

The allocation  body  to  which  the application  has  been  submitted  shall  be  informed. 

The allocation  of  a train path or paths shall  be dependent  upon the  issue of  a safety  certificate 
by the authority responsible for safety.  This certificate shall affirm  that the railway undertaking 
has fulfilled  the safety  conditions  laid  down  by  that  authority. 

The  railway  undertakings  to  which  railway  infrastructure  capacity  has  been  allocated  shall 
conclude the necessary  administrative,  technical  and financial  agreements  with the managers  of 
the railway  infrastructure. 

An  application  which  has  been  refused  on  the  grounds  of  insufficient  capacity  shall  be 
reconsidered  at  the  next  time-table  adjustment  for  the  routes  concerned  if  the  applicant  so 
requests. The dates for such adjustments and other administrative arrangements shall be available 
to  interested parties. 

ARTICLE  11 

Member  States  may  provide  for  the  possibility  that  applications  for  infrastructure  access  are 
accompanied  by  a deposit.  In the event that an agreement  is reached or an application  is refused  the 
deposit  shall  be returned  in  its entirety. 
If  an  applicant  does  not  make  use  of  an  allocated  train  path  an amount  may  be  deducted  from  the 
deposit  which  represents  the  cost  incurred  in processing  the application  and  any  subsequent  loss  of 
earnings  due to the non-  use  of  the  infrastructure  capacity  concerned. 

ARTICLE  12 

Member  States shall  take the measures  necessary  to ensure that decisions  by the  infrastructure 
manager on the charging  of  fees shall  be reviewed  by the allocation  body  when so  requested  in 
writing  by  a  railway  undertaking.  The  allocation  body  shall  take  its  decision  on  the  review 
within two months  from  the submission  of  all  relevant  information. 

Member States shall  take the measures necessary  to ensure that decisions of the allocation body 
regarding  the  allocation  of  infrastructure  capacity  or  regarding  the  review  of  decisions  of  the 
infrastructure  manager  in accordance  with  paragraph  1 shall  be subject  to judicial  review. 

1% 

ARTICLE  13 

1.  Member  States  shall  adopt  the  laws,  regulations  and  administrative  provisions  necessary 
to  comply  with  this Directive  not  later  than  1 July  1994. They  shall  forthwith  inform  the 
Commission  thereof. 

2.  When  Member  States  adopt  these  provisions,  they  shall  contain  a  reference  to  this 
Directive or be accompanied  by such  reference on the occasion of their official  publication. 
The  methods  of  making  such  a  reference  shall  be  laid  down  by  the  Member  States. 

This  Directive  is  addressed  to  the  Member  States. 

ARTICLE  14 

Done  at  Brussels, 

For  the  Council 
The  President, 

^ 
Impact  Assessment  Form 

The  Impact  of  the  Proposal  on  Business  with  special 
reference  to  small  and  medium  sized  enterprises. 

Title  of  the  proposal  :  Draft  Directive  on  the  allocation  of  railway  infrastructure  capacity  and  the 
charging  of  infrastructure  fees. 

Document  reference  no  : COM  XXX  (No.  not  yet  allocated). 

The  proposal  : 

I 

"Faking  account  of the principle  of  subsidiarity,  why  is Community  legislation  necessary  in this 
area  and  what  are  its  main  aims? 

The  need  for  Community  legislation  with  regard  to  the  licensing  of  railway  undertakings  has 
arisen  from  the  Directive  91/440  on  the  development  of  the  Community's  railways11.  This 
Directive  created  for  the  first  time  rights of access  to the  national  systems to new entrants  to the 
railway  sector.  Since  the  coming  into  force  of  this  legislation  (1 January  1993)  both  potential 
new  entrants  and  the  existing  undertakings  have  requested  the  Commission  to  clarify  and 
harmonise  the  conditions  that  Member  States  apply.  In  the  light  of the fact  that  one of  the main 
markets  of  interest  to  new  entrants  is  likely  to  be  international  traffic  and  also  that  rail 
undertakings based in one Member  State are likely to be  interested  in operating  in other  Member 
States Community  legislation  is justified.  The  form  of  a Directive has been adopted  to allow the 
Member  States  a certain  flexibility  in  application  even  although  a similar  measure  for  aviation 
was  adopted  as  a  Regulation.  The  object  looked  for  is  to  introduce  clarity  and  a  degree  of 
uniformity  in the application  of  Directive  91/440  without  changing  the scope  of  this  Directive. 

The  Impact  on  business. 

Who  will  be  affected  by  the  proposal? 

Two  main  groups  are  concerned  : 

first  : the existing  railway  undertakings; 
second  : potential  new  entrants. 

The  size  of  enterprise  concerned  varies  from  the  large,  typically  the  existing  railway 
undertakings,  down  to  the  medium  sized  firm  already  involved  in  say,  shipping.  It  is 
unlikely  that small  firms  would  have the financial  backing  and  know-how  needed  to apply 
for  a rail  licence. 

The  whole^Community  is  involved. 

What  will  business  have  to  do  to  comply  with  the  proposal? 

In  order  to obtain  a train  path  undertakings  will  have  to  submit  an application  to  the  allocation 
authorities.  This  procedure  is akin  to  what  is accepted  in  other  sectors of the transport  industry 
e.g.  airport  "slot"  allocation. 

Council  Directive 91/440 on the development  of the Community's  railways. O.J.  L 237/25 
24  08  91. 

4.  What  economic  effects  is the  proposal  likely  to  have? 

3D 

On  employment?  None directly,  although  if the  railway  sector  can attract  new business  as new 
entrants  emerge  this  could  improve  employment  prospects. 

On  investment  and  the creation  of  new  business?  The  object  of  the  proposal  is to  facilitate  the 
entry  of  new  firms  into  the  sector  by  clarify  their  rights  and  obligations.  New  traffic  for  the 
railways  would  obviously  boost  investment. 

On  the  competitive  position  of  business?  If  new  undertakings  enter  the  sector  this  should  lead 
to  more  competition  and  greater  efficiency  all-round. 

5 

Does  the  Proposal  contain  measures  to  take  account  of  the  specific  situation  of  small  and 
medium  sized  firms  (reduced  or  different  requirements). 
The  nature  of  the  proposal  and  the  fact  that  identical  operations  are  involved  does  not  justify 
special  provisions  of  this  type. 

Consultation 

6. 

List  the organisations that  have been  consulted  about  the  proposal  and outline their  main  views. 

A  series  of  meetings  have  been  held  with  parties  that  are  likely  to  be  concerned.  The  bodies 
involved  are  the  existing  railway  undertakings,  the  combined  transport  operators,  employers 
groups  and  the trade  unions. 

The  various  parties  that  were  consulted  expressed  concerns  of  a  differing  nature.  For  the 
Member  States  and  local  authorities  the  priority  was  to  ensure  that  the existing  social  services, 
provided  under  Community  regulations,  can  continue  and  are  not  driven  out  of  the  market  by 
new operators.  To meet  this  concern  the text  allows  for  the protection  of certain  train  paths  for 
socially  necessary  services.  In  addition  there  are  innovative  ways  of  providing  services  now 
under discussion  (e.g. concessions  and  franchises)  and  provisions  were introduced  to cover  these 
also  (Article 7).  In the light  of the  absence  of  any  agreement  on the appropriate  way  to  allocate 
and  charge  for  infrastructure,  existing  private  operators  and  potential  new  operators  were 
concerned  at the  level  of possible  charges.  For  this  reason  a provision  was  introduced  (Article 
8:)  to  ensure  that  "no  excessively  high  fees  are  charged" 

A  major  concern  expressed  by  potential  new  operators  was  that  there  would  be  little  capacity 
for  them  after  the needs  of  existing  operators  had  been  met.  To  respond  to this,  the  Directive 
requires  that  the  Member  States  and  not  the  operators  of  the  infrastructure  lay  down  the 
allocation  rules,  and  that  procedures  are  provided  to  review  allocation  and  charging  decisions. 
The  allocation  procedures  have  been  discussed  in  some  detail  and,  although  some  doubts  have 
been  expressed  as  to  the  practicality  of  the  timing  suggested  the  commercial  imperatives  of 
business  require  the delays  to  be  as  short  as  possible 

Si 

ISSN 0254-1475 

COM(93) 678 final 

DOCUMENTS 

EN 

07 

Catalogue number : CB-CO-93-732-EN-C 

ISBN 92-77-62950-9 

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