Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport
Date: 1995-05-23
Institutions: European Commission
Subjects: development plan, fund (EU), industrial restructuring, inland waterway fleet, inland waterway shipping, vessel

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  23.05.1995 
COM(95)  199  final 

95/0121  (SYN) 
95/0122  (SYN) 
95/0123  (SYN) 

COMMUNICATION 

on  a  common  policy  on the  organization  of the  inland  waterway  transport  market 
and  supporting  measures 

Proposal  for  a 
COUNCIL  DIRECTIVE 

on  the  systems  of  chartering  and  pricing  in  national  and  international 
inland  waterway  transport  in  the  Community 

Proposal  for  a 
COUNCIL  REGULATION  (EO 

amending  Regulation  (EEC) No  1101/89 on  structural  improvements 
in  inland  waterway  transport 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 

amending  Regulation  (EEC) No  1107/70  on the granting  of  aids  for  transport 
by  rail,  road  and  inland  waterway 

(presented  by  the  Commission) 

COMMUNICATION 

on  a  common  policy  on the  organization  of  the  inland  waterway  transport  market 
and  supporting  measures 

I. 

INTRODUCTION 

1.  When the Council  adopted Regulation  (EEC) No 3921/91,  of  16 December  1991 laying 
down the conditions under which non-resident carriers may transport goods or passengers 
by  inland  waterway  within  a Member  State  (cabotage)(1),  it  requested  the  Commission 
to  study  the  position,  from  the  point  of  view  of  Community  law,  of  the  systems  of 
rotation  and compulsory  tariffs  fixed  by the state which  are in force  in Belgium,  France 
and  the Netherlands  and  to  submit  a  report  to the  Council  on  this  subject.  In  making 
this analysis, the  Commission  took  account  of the judgments  of the Court  of Justice on 
17 November  1993 on the compulsory-tariff  arrangements in road haulage in Germany(2). 

2. 

In the light of the judgments of the Court of Justice, the Commission,  in its report to the 
Council  on  "the  organization  of  the  inland  waterway  transport  market  systems  of 
chartering  by  rotation"(3),  confirmed  the  incompatibility  of  those  systems  of  chartering 
by  rotation  which  are  organized  by  the  profession  with  the  rules  on  competition. 
However,  with  regard  to  rotation  systems  regulated  by  Member  States,  national 
authorities  may,  subject  to  certain  conditions,  impose  compulsory  tariffs  and  operating 
conditions  in the  context  of  market  regulation. 

3.  However,  the  question  of  rotation  systems not only  has to be considered  from  the  point 
of  view  of  competition  law,  but  also  from  the  overall  point  of  view  of  the  inland 
waterway  transport  market.  As a first  step towards the completion  of the  Single Market 
in  inland  waterway  transport,  the carriers  of the European  Union  now  have  free  access 
to  the  entire  market  (general  cabotage  from  01.01.1995)  but  with  the  obligation  to 
comply with the national  regulations in force, including systems of rotation.  As a second 
step,  a more  complete  harmonization  will  be  necessary.  Indeed,  in  the  long  term,  there 
can  be  no justification  for  the  fact  that  certain  shippers,  depending  on  their  place  of 
establishment,  are  obliged  to  conclude  contracts  according  to  a  rotation  system  whilst 
others  can  benefit  from  a free  market  as regards  tariffs  and  chartering,  as is  in  fact  the 
case  in  by  the  far  the  greatest  part  of  the  market. 

4.  The  report  referred  to  above  recommends  a  global  solution  by  introducing  a  common 
regime  for  the  entire  inland  waterway  transport  market,  with  progressive  liberalization 
of  rotation  systems  in  order  to improve  the  operation  of the  market,  accompanied  by  a 
parallel  programme  of  measures  aimed  at  reducing  the  structural  weaknesses  of  the 
sector.  Moreover,  this  liberalization  should  make  inland  waterway  transport  more 
attractive  in  relation  to other modes  of transport  and thus  increase the volume  of  goods 
transported  via water.  It  should  be  emphasised  here that  all  Member  States involved  in 
exporting  or  importing  through  North-western  Europe  have  an  interest  in  this  sector. 

(i) 

(2) 

(3) 

O J N oL  373, 31.12.91,  p. 29. 
EC J  cases  Ohra,  Meng  and  Reiff. 
SEC(94)  921  final  of  9 June  1994. 

Indeed,  a large part of the European  mainland  is connected  to the seaports of the Union 
by  inland  waterway,  a  fact  which  is  particulary  important  in  the  market  for  container 
transport  on  the  Rhine  and  other  North-South  axes.  In  this  context,  it  contributes  to 
reducing  road  congestion  in  the  centre  of Europe,  which  is  in  the  interests  of  all.  It  is 
worth  recalling  that  more  than  one-third  (36%)  of  intra-Community  transport,  i.e. 
transport  between  Member  States,  is  carried  via  water. 

5.  However, the inland waterway transport sector is currently confronted  with rather serious 
socio-economic problems.  Structural  overcapacity  and the consequences  of the abolition 
of compulsory  tariffs  in Germany  on  1 January  1994 have resulted  in a fall  in transport 
prices. Consequently, the Commission  proposes in its report a common overall  approach 
consisting  of: 

progressive  liberalization  of  that  part  of  the  inland  waterway  market  covered  by 
rotation  systems. 

accompanying  measures  which  aim: 

to  reduce  structural  overcapacity  through  a  new  Community  scrapping 
programme,  to  be  undertaken  for  three  years  (1996-1998),  the  co-financing 
methods  of  which  are  to  be  determined  and  the  legal  bases  of  which  are 
established  by Regulation  (EEC) Nol 101/89  of the Council,  as last  amended 
(4); 
by  Council  Regulation  (EC)  No 

to  encourage  investment  in  inland  waterway  terminals; 

6. 

In  its resolution  of 24 October  1994 the Council  gave its support in general  terms to the 
measures  recommended  by  the  Commission(5).  The  Council  considered  that  it  was 
important  to  institute  a  substantial  structural  reform  and  requested  the  Commission  to 
submit an overall  proposal  on inland waterway  transport,  in particular  with regard to the 
future  organization  of  the  market  and  scrapping  programmes. 

II.  THE  PROGRESSIVE  LIBERALIZATION  OF  THE  MARKET 

7.  Currently,  rotation  systems are in operation  in Belgium, France and the Netherlands and 
also  for  traffic  between  these  countries  (so-called  "North-South"  traffic)  for  the 
transportation  for  hire  or  reward  of  dry  cargos  by  inland  waterway  (the  transport  of 
liquid  cargo  is  not  subject  to  the  rotation  sytem).  The  term  "rotation  system"  refers  to 
a  number  of  regulatory  measures  in  the  market  whereby  compulsory  freight  tariffs  are 
centrally  established  (generally  by  a public  authority),  and  where the  cargo  available  is 
distributed  between the interested  carriers according to the principle that the carrier who 
has  been  waiting  longest  for  a  cargo  must  be  the  first  to  be  offered  cargos  as  they 
become  available. 

(4) 

(5)  O J N oC  309,  5.11.1994,  p.  5. 

The  rotation  systems  referred 
Commission  Report  to the  Council  of  9 June  1994, referred  to  in  paragraph  2  above. 

to  above  are  described 

in  more  detail 

in 

the 

8.  This  report  demonstrates  the  general  reasons  why  a  progressive  abolition  of  these 
systems  is  required.  Moreover,  on  12 July  1994 France  adopted  a law  which  provides 
for  the  abolition  of  the  national  rotation  system  by  the  year  2000.  Similarly,  on 
15 July  1994, the authorities of the Netherlands submitted to the Commission a draft  law 
on the rotation  system  in North-South  traffic,  which  also envisages the  abolition  of the 
system  by  1 January  2000.  The  Netherlands  draft  law  and  the  French  law  comprise 
measures  which,  initially,  introduce  greater  flexibility  into  the  rotation  systems  and, 
subsequently,  prepare  the  carriers  concerned  for  the  demands  of  operating  in  an  open 
market. 

9.  The  Commission  is  of  the  opinion  that  the  date  referred  to  above  of  1 January  2000 
the  process  of 
allows  for  a  suitably  adequate  transition  period 
liberalization.  However,  in  order  to  improve  the  operation  of  the  internal  market,  it  is 
necessary  for  liberalization  measures  to  be  adopted  on  a  harmonized  basis  and  in  a 
synchronized  manner.  A  proposal  for  a  Council  Directive  to  achieve  this  objective  is 
therefore appended to this communication. Having regard to the principle of subsidiarity, 
and  in  order  to  guarantee  uniformity  while  taking  account  as  much  as  possible  of  the 
specific  national  characteristics of the markets concerned,  a directive would  seem  to be 
the  appropriate  legislative  instrument. 

to  implement 

10.  In  order  to  ensure  the  success  of  the  liberalization  process,  those  transport  operations 
currently  exempt  from  the  obligations  of  rotation  systems  should  remain  so,  as  should 
those  transport  operations  which  cannot  be  carried  out  efficiently  or  effectively  under 
rotation  systems.  With  regard  to  traditional  traffic,  which  will  remain  subject  to 
compulsory  tariffs  and  cargo distribution  until  1 January  2000, it is advisable to  seek an 
operating  mode which  meets  the  logistic  needs  of  shippers. 

11.  In  order  for  the  liberalization  process to  progress  sufficiently  in  all  the Member  States 
concerned  during the transition  period,  it will be necessary  to draw up a first  assessment 
two years after  the entry  into force  of the directive.  From this date, it must be  possible 
not only to charter  ships for  single or multiple voyages (where tariffs  and conditions are 
laid  down  by  the public  authority)  but  also to conclude  other  forms  of  contract  such  as 
chartering  "over  time"  or  "by  tonnage".  The  conditions  of  the  latter  form  of  contract 
must  be  freely  negotiated  between  carriers  and  shippers. 

12.  A crisis mechanism  will be necessary  to ensure that,  in the event  of  a serious  disruption 
of  the  market  (for  example,  an  imbalance  in  the  relationship  between  supply  and 
demand), it will be possible to intervene.  Consequently,  a system  of market  observation 
is envisaged which will enable any potential problems to be detected in good time. Given 
that  it  is  difficult  to  influence  demand  in  the  transport  market,  then,  in  the  event  of 
serious  overcapacity,  efforts  must  be  concentrated  on  limiting  the  supply  of  carrying 
capacity.  The measures  already  taken  by  the  Council  in Regulation  (EEC)  No  1101/89 
of 27 April  1989 relating to structural  improvements in inland waterway  transport  could 
then be either continued  or widened  (see paragraphs  13 to 22). Accompanying  measures 
in  the  social  field,  enacted  at  Member  State  level,  may  also  prove  necessary  in  such 
cases. 

m.  MEASURES  TO  COMBAT  STRUCTURAL  OVERCAPACITY 

13.  During the past decade, the supply  of carrying capacity  has, on several occasions and for 
long  periods,  outstripped  demand.  The  first  interventions  aimed  at  re-structuring  were 
carried  out  on the basis  of  national  scrapping  programmes.  In  April  1989, the  Council 
decided  on  a  Community  approach  based  on Regulation  (EEC)  No  1101/89  and  since 
then  efforts  to  combat  overcapacity  through  national  scrapping  funds  have  taken  place 
within  a Community  framework.  In essence, the  system  works by  paying a premium  to 
owners who  scrap one of  their vessels. The introduction  of new capacity  is  conditional 
on a given quantity  of old tonnage being scrapped (no premium being paid in this case). 
To finance this programme, all vessel  owners pay, according to the size and type of their 
vessels,  an  annual  contribution  to  their  national  scrapping  fund.  More  recently,  public 
financial  resources (coming from  the national  budgets of the Member  States  concerned) 
were  also  placed  at  the  disposal  of  the  scrapping  funds  (see  paragraph  16)  as  a  source 
of  additional  financing.  Switzerland  adopted  similar  measures  in  1989  for  that  part  of 
its fleet  which  is active  in  the  Community  market  on  the Rhine. 

14.  During  the  period  between  1  January  1990  and  1  July  1994,  1 457  667  tonnes  of 
capacity  were  scrapped  through  this  method.  486  911  tonnes  of  new  capacity  were 
brought  into  use,  with  the  result  that  the  total  loading  capacity  of  the  fleet  has  fallen 
from  13  188  343 tonnes to  12 217 587 tonnes, i.e. a reduction  of 8%. The  Commission, 
which  is  charged  with  managing  and  coordinating  the  programme  referred  to  above, 
draws up  a report  every  six months which is intended  for  the Member  States  concerned 
and  for  the  international  professional  organizations.  Further  details  on  the  scrapping 
programme  can  be found  in  this report,  and  also  in the  SEC  report  (92)  1284 from  the 
Commission  to the Council  and  the European  Parliament  concerning  "the  effects  of the 
structural  reform  measures  in  inland  waterway  transport",  of  15 July  1992.  The  latter 
report  notes  that  the  total  amount  of  goods  transported  by  the  inland  waterway  fleet 
remained  essentially  constant  during  the  period  1990-1995  (approximately  420  million 
tonnes  per  year).  This  clearly  illustrates  an  improvement  in  productivity,  since  the 
demand  for  transport  is being  met by  a constantly  decreasing  number  of vessels. 

15.  It  can be  expected that the trend  referred  to above will  continue for  some time.  Indeed, 
increases  in  economies  of  scale  and  improvements  in  productivity  are  taking  place 
throughout  the  inland  waterway  sector.  Specialized  new  vessels  are  needed  to  cope 
effectively  with  new  trade  patterns,  such  as,  for  example,  container  and  chemicals 
transport.  In  the  traditional  bulk  cargo  sector  (coal,  steel,  agricultural  products,  sand, 
gravels,  petroleum  products),  however,  there  is  no  question  of  structural  growth.  The 
constant  improvement  of productivity  in a stagnant market,  therefore,  must be offset  by 
the  removal  from  service  of  a  large  number  of  older  vessels,  generally  those  of  lower 
tonnage.  The  liberalization  of  the  market  will  also  accelerate  this  process. 

16.  The Community  programme of restructuring provided  for by  Council Regulation  (EEC) 
No  1101/89 was based on the principle of self-financing  by the profession,  with interest-
free  advance  financing  provided  by  the Member  States  concerned  (ECU  105  million), 
which was to be completely  refunded  by the profession.  Commission  Regulation  (EEC) 
No  3690/92  of  21 December  1992(6) allowed  for  new  scrapping  actions.  The  extent  to 
which these can be carried  out is dependent on the available finance:  this finance  comes 
from  special  contributions  which  have  been  paid  to  the  national  scrapping  funds  since 
1  January  1993  ("old  for  new").  By  1994,  mostly  as  a  result  of  the  recession  of  the 
1990's,  substantial  overcapacity  had  reappeared.  Consequently,  a  waiting  list  of 
applications  for  scrapping  premiums  grew up  -  consisting  of  several  hundred  vessels  -
without the scrapping funds having the necessary financial  resources to meet the demand. 
The  sector  itself  was  no  longer  able  to  provide  sufficient  means,  particularly  since  the 
original  1990  loan  had  not  yet  been  repaid.  In  the  second  half  of  1994,  therefore,  the 
Member  States concerned  informed  the Commission that they were prepared  to  provide 
sufficient  funds  from  their  national  budgets  to  finance  all  the  scrapping  requests 
(approximately  350) which  were  on  the waiting  list  on  30 June  1994. 

The  procedures  for  implementing  this  action  were  adopted  by  the  Commission  in 
Regulation  (EC)  No  3039/94  of  14  December  1994  (OJ  No  L  322,  p.  11,  of 
15 December  1994). The total budget amounts to ECU 26 716 000. The action began on 
1  January  1995  and will  be  completed  before  the  end  of  the  year. 

17.  However,  notwithstanding  these  actions,  the  restructuring  process  is  not  finished,  and 
even  after  30 June  1994, requests  to  the  scrapping  funds  for  scrapping  premiums  have 
continued.  In  the  second  half  of  1994,  156  requests  for  scrapping  were  thus  recorded, 
including  136  for  dry  cargo  vessels  and  20  for  tankers.  The  sum  of  the  scrapping 
premiums  involved  for  these vessels  amounts  to  approximately  ECU  15  million. 

18.  In  this  general  context,  at  the  initiative  of  the  European  Parliament,  an  amount  of 
ECU  5 million  has  been  set  aside  in  the  1995  budget  for  structural  improvements  in 
inland  waterway  transport.  However,  during the budget  discussions  - as in its report to 
the Council  on 9 June  1994, mentioned  above - the Commission  continually  stressed the 
need  for  a  substantial  multiannual  structural  improvement  programme,  including  in 
particular  measures  to  accompany  the  ongoing  liberalization  process.  In  its  Resolution 
of  24  October  1994, the  Council  supported  this  position. 

19.  The  Commission  recently  forwarded  to  the  Council  a  draft  amendment  of  Regulation 
(EEC) No  1101/89,  which  aims  primarily  to  create  a clear  legal  basis  for  spending  the 
ECU  5  million  referred  to  above.  This  proposal  also  opens  up,  in  principal,  the 
possibility  of  a  multiannual  contribution  by  the  Community  to  co-finance  a  scrapping 
programme  covering  the  period  1996-1998.  In  the  view  of  the  Commission,  this 
co-financing goes together with the proposed liberalization of the market. For this reason, 
a  separate  proposal  based  on  this  principle  is  attached  to the  present  report. 

(6)  OJ No  L  374,  22.12.1992,  p. 22. 

20.  The  professional  organizations  of  inland  waterway  carriers  at  the  Community  level 
currently  estimate  structural  overcapacity  in the  dry  cargo  sector  to be  15%.  It  can  be 
assumed  that  economic recovery  will  lead to an increase in demand  in this sector in the 
coming years.  However, this will be absorbed - at least in part - by the constant increase 
in  productivity,  itself  accentuated  by  the  liberalization  process.  The  abolition  of  the 
rotation system will also lead to those vessels which are incapable of competing in a free 
market  being  excluded  from  this  sector. 

In  the  liquid  cargo  sector,  the  professional  organizations  estimated  overcapacity  to  be 
approximately  20%.  However  this figure  appears too high.  Indeed,  even  if the level  of 
freight  charges  remained  very  low  at  the beginning  of  1995, it  is  nonetheless  true  that 
the utilization rate of the tanker fleet was rather high. But, insofar  as the tanker fleet will 
not  be  affected  by  liberalization  measures  (the  tanker  fleet  already  operates  in  a 
completely  free  market,  outside  rotation  sytems), there  is no reason  to  suppose that  the 
need  for  scrapping  in  this  sector  should  be  proportionally  higher  than  in  the  dry  cargo 
sector. 

In  summary,  one  can  say  that,  in  both  sectors,  overcapacity  will  probably  remain  at  a 
level  of  approximately  15%  if  no  restructuring  measures  are  applied.  Since  the  fleet 
includes  approximately  10 million  tonnes  of  dry  cargo vessels  and  2  million  tonnes  of 
tanker  ships,  the  need  for  scrapping  would  amount  respectively  to  1.5  and  0.3  million 
tonnes. 

21.  On  this  basis,  it  is  possible  to  calculate  the  necessary  financing  for  the  1996-1998 
programme. In  addition,  one must bear in mind that the scrapping  premiums,  since they 
were  fixed  in  1989, require  some corrections  (on  average  an  increase  of  approximately 
15%),  in particular because of monetary  depreciation  and the devaluation  of the ECU in 
relation to the currencies of those countries with  a significant  inland  waterway  transport 
sector.  In  1990,  a  sum  of ECU  66.04  million  was  paid  for  the  scrapping  of  8%  of  the 
dry  cargo fleet  and ECU 38.36 million  for  scrapping  13% of the tanker fleet.  Scrapping 
15%  of  the  fleet  during  1996-1998  would  therefore  require  ECU  142  million  and 
ECU  50 million  respectively,  i.e.  a total  of ECU  192  million. 

22.  Given  the  levels  and  importance  of the finance  required,  a joint  effort  of  all  the  parties 
concerned  (inland  waterway  transport  operators, Member  States and the  Community)  is 
necessary. 

With  regard  to  financing  the  restructuring  actions  in  inland  waterway  transport,  the 
Council, in its Regulation No  1101/89, followed  the principle that responsibility  for  this 
financing  rested  initially  with  the  operators  of  the  sector  under  consideration.  The 
Commission  considers  that  it  is  important  to  maintain  this  principle  as  far  as possible. 
The annual  contributions of the Community  to the  1996-1998 programme must  therefore 
be  in  relation  to  the  financial  contributions  of  the  profession. 

The  annual  contributions  paid  by  the  profession  (Switzerland  not  included)  up  to 
31 December  1994 amounted to approximately ECU  13 370 000. For the years to come, 
these  contributions will  be  of  the  order  of ECU  14 million  a year,  i.e. ECU  42  million 
for  the  period  1996-1998.  However,  approximately  ECU  12 million  must  be  deducted 
from  this  amount,  since  this  must  be  used  to  repay  the  amount  of  advance  finance 
provided  by  the  Member  States  for  the  1990  action.  Consequently,  there  remains 
ECU  30  million  available for  the new action. If the Community  and the Member  States 
concerned  can  each  place  at  the  disposal  of  the  scrapping  funds  half  of  the  remaining 
amount,  i.e.  ECU  81  million  each,  to  be  spread  out  over  3  years  (ECU  27  million  a 
year),  the  financing  of the programme  will  be  assured. 

Taking account of the budgetary  funds  currently  available, the Community  is already  in 
a  position  to  be  able  to  contribute  up  to  ECU  40  million  over  three  years 
(ECU  20 million  inl996  and  ECU  10 million  in  1997  and  1998).  The  remaining  part 
of the finance  needed  for  the scrapping  scheme - at least ECU  81 million  (half the total 
contribution  of  the  Community  and  the Member  States)  and  at  most  ECU  122  million 
-  would be raised from  the budgets of the Member  States concerned, the amount of each 
contribution  being  based  on  respective  fleet  sizes. 

Whatever the case, the annual contribution paid by the Community will not be more than 
double  that  of  the  industry. 

23.  The  scrapping  action  of  1996  to  1998  will  have  to  be  evaluated  annually  by  the 
Commission,  in order for it to carry  out any modifications  necessitated  by market trends 
and 
the  liberalization  measures  which  will  be  implemented.  The  Commission  will 
determine,  at  the  beginning  of  each  year  and  according  to  the  available  funds,  the 
practical  means  by  which  the  scrapping  action  of  the  current  year  will  be  carried  out. 

IV.  THE  PROMOTION  OF  INLAND  WATERWAY  TRANSPORT 

24.  Inland  waterway  transport  offers  several  advantages  to  society  as  a  whole:  it  is 
environmentally-friendly,  it  is  particularly  safe,  it  is  energy-efficient  and  it  contributes 
to  reducing  congestion  on  the  overloaded  road  network  of  North-western  Europe.  But 
these  general  advantages  do  not  play  a  major  role  in  influencing  a  shipper's  choice  of 
transport mode. In fact,  it is above all considerations of an economic and financial nature 
which  influence  the  decisions  of  transport  users. 

25.  In recent years, organizations for  promoting inland  waterway  transport  have emerged  in 
several  Member  States. These aim to inform  both  shippers and the general  public of the 
opportunities  and  advantages  offered  by  waterway  transport.  They  have  met  with  a 
certain  success,  but  it  has  proved  difficult  to  persuade  transport  users  to  convert  to 
waterways,  especially  when  they  have  no  experience  of using this  mode.  Certainly,  the 
tonne/km  cost  of  transport  by  inland  waterway  is  lower,  but  this  advantage  is likely  to 
be outweighed  by  higher transshipment  costs. Moreover,  the often  considerable  amount 
of  investment  needed  in  infrastructure  and  equipment  by  the  loading  company  (quays, 
loading  and  unloading  equipment)  constitutes  an  obstacle. 

26.  In  order to  ensure that  investments which  are desirable  from  a  social  point  of view  are 
made  in  the  development  of  the  inland  waterway  transport  system,  it  would  seem 
necessary  to  introduce  a temporary  support  scheme  for  investment  in  inland  waterway 
ports.  Such  a  scheme  is  contained  in  the proposal  for  a Regulation  appended.  It has a 
clear  parallel  with  the  aid  scheme  for  investment  in  combined  transport  terminals, 
introduced  earlier  by  the  Council  (see  Article  3,  paragraph  1.  of  Council  Regulation 
(EEC)  No  1107/70  relating  to  the  granting  of  aids  in  the  field  of  transport,  as  last 
amended  by  Regulation  (EEC) No  3578/92  of  7 December  1992). 

27.  The proposed  scheme takes a comprehensive  approach  and  is aimed  at both  public  and 
private  waterway  terminals.  In  all  cases,  a  request  for  investment  aid  must  be 
accompanied  by  an  assessment  of  the  volume  of  cargo  that  the  waterway  will  handle 
following  investment.  In  order  to  encourage  responsible  investment,  if  the  new  or 
additional  tonnage envisaged  on the waterway  is not achieved,  then recipients will  have 
to  repay  the  aid.  For  the  same  reason,  the  amount  of  aid  can  under  no  circumstances 
exceed  50% of total  investment.  Priority  has therefore  to be given  to those  investments 
which  will  attract  the  highest  possible  tonnages  onto the  waterway. 

Member  States  will  be  required  to  report  periodically  to  the  Commission  on  the 
application  and impact of this arrangement in order that new initiatives can be developed 
accordingly. 

V.  SUBSIDIARITY 

28.  The Community  action under consideration  in the proposal  for  a Directive on  chartering 
systems and  fixed  prices in the field of national  and  international  transport  of  goods by 
inland  waterway  in  the  Community  can  be  analysed  in  terms  of  subsidiarity  by 
answering  five  fundamental  questions: 

(a)  What  are the  objectives  of the proposed  action  in relation  to the  obligations  of  the 

Community? 

This  action  is  being  proposed  as  a  result  of  the  disparities  which  exist  between 
Member  States'  legislation  concerning  the  commercial  use  of  inland  waterway 
transport, disparities which hinder the proper functioning  of the single market in this 
sector.  It  is therefore  appropriate  to  include  in  the  Community  proposal  common 
provisions  for  the  inland  waterway  transport  market  as  a  whole,  so  that  the 
companies  concerned  may  enjoy  the  full  benefit  of  the  internal  market.  The 
completion  of  the  single  market,  whereby  the  free  movement  of  goods,  persons, 
services  and  capital  is  guaranteed,  requires  that,  where  the  transport  of  goods  by 
inland  waterway  is  concerned,  the  organization  of  the  systems  of  chartering  by 
rotation  should  be  adapted  to  allow  greater  commercial  flexibility,  in  order  to 
establish  a regime  which  allows  completely  free  transactions  by  1 January  2000. 

(b)  Does  the  proposal  for  a  Directive  fall  within  the  exclusive  competence  of  the 

Community  or  is  competence  shared  with  the  Member  States? 

The  proposal  is  submitted  on  the  basis  of  Article  75  of  the  Treaty  and  therefore 
falls  within  the  exclusive  competence  of  the  Community. 

(c)  What is the Community  dimension  of the problem? 

The  Member  States  directly  concerned  with  the  liberalization  of  the  market are: 
France,  Belgium  and the Netherlands.  Other  countries  with  an  inland  waterway 
transport  sector have established  open markets. 

(d)  What methods of  action  are at the disposal  of the Community? 

The Commission is proposing to liberalise that part of the inland waterway transport 
market which  is  still  regulated,  by means of  a legislative  proposal. 

(e)  Is a uniform  regulation necessary  or would  a directive be  sufficient? 

The adoption of a single and non-discriminatory arrangement requires that measures 
are taken to guarantee a harmonized  approach in all the Member States. However, 
a directive, which establishes the general framework  and the various stages needed 
to  arrive  at  a  completely  free  market,  whilst  leaving  to  the  Member  States  the 
choice of the means, would appear to be the most suitable instrument for achieving 
the  desired  objective. 

10 

Proposal  for a 
COUNCIL DIRECTIVE 

95/0121  (SYN) 

on the  systems  of  chartering  and pricing  in national  and international 
inland waterway  transport in the Community 

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  the  growing  problems  of  road  and  rail  saturation,  transport  safety,  environment, 
energy saving and quality of life call, in the public interest, for greater development and better 
use  of  the  transport  potential  offered  by  inland  waterway,  in  particular  by  improving  its 
competitiveness; 

Whereas the difference  in national  laws on the systems for the commercial  operation  of inland 
waterway  transport  does  not  make  for  the  smooth  functioning  of  the  internal  market  in  this 
sector;  whereas, therefore,  common  provisions  should be introduced  at Community  level  for 
the whole of the inland  waterways market,  as was  suggested  in the Commission  report to the 
Council  of  9 June  1994  on  the  organization  of  the  inland  waterways  transport  market  and 
systems  of chartering  by  rotation,  of which  the approach  was  approved  by  the Council  in its 
resolution  of  24  October  1994(4); 

Whereas  the  completion  of  the  internal  market,  in  which  the  free  movement  of  goods, 
persons,  services  and  capital  is  guaranteed,  calls  for  an  adjustment  in  inland  waterways 
transport  to  the  organization  of  chartering  by  rotation,  so  as  to  move  towards  greater 
commercial  flexibility  and  a  system  of  open  transactions; 

Whereas in view of the socio-economic characteristics of the sector, provision  should be made 
for  a transitional  period,  the scope of the rotation  system  being gradually  limited  prior  to the 
attainment  of  freedom  of  chartering  and  pricing; 

Whereas  that  period  is  needed  for  carriers  to  adapt  to  the  conditions  of  a  free  market  and, 
where  appropriate,  to  set up trade  groupings  better  suited  to the  logistical  needs  of shippers; 

a) 
(2) 

(3) 

(4)  OJNo  C309,  5.11.1994,  p. 5. 

11 

Whereas  in  view  of the  abovementioned  objectives,  it  is both  necessary  and  adequate  to  set 
a timetable at Community level for the gradual liberalization of the market, while leaving with 
the Member  States the responsibility  for  putting  such  liberalization  into  effect;  whereas  this 
is in  accordance  with  the third  paragraph  of  Article  3b  of the  Treaty; 

Whereas  provisions  must  be  adopted  to  allow  action  to be  taken  on  the transport  market  in 
question  in  the  case  of  a  serious  disturbance;  whereas,  to this  end,  the  Commission  should 
be  given  the  power,  through  an  advisory  committee,  to take  appropriate  measures, 

HAS  ADOPTED  THIS  DIRECTIVE: 

Article 1 

For  the  purposes  of this Directive  the  following  meanings  shall  apply: 

(a)  "chartering  by  rotation":  a  system  which  consists  of  allocating  in  a  charter  exchange 
requests for transport operations, at fixed prices and under the conditions published,  from 
customers  on  the basis  of  the  order  in which  vessels  become  available  after  unloading. 
Carriers are asked,  in the order  of their registration  on the rota,  to choose in turn  a load 
from  those  on  offer.  Those who  make  no  choice  nonetheless  keep  their  position  in  the 
order; 

(b)  "carrier": 

-  owner  of  one  or  several  (up  to  a maximum  of  three)  inland  waterway  vessels; 
-  owner  or  more than  three  inland  waterway  vessels; 
-  group  or  cooperative  of  owner-operators  of  inland  waterway  vessels; 

(c)  "competent  authority":  the  authority  appointed  to  manage  and  organize  the  system  of 

chartering  by  rotation; 

(d)  "serious  market  disturbance":  the  emergence  in  the  sector  in  question  of  problems 
specific  to  that  market  likely  to  cause  a  serious  and  potentially  persistent  excess  of 
supply over demand, thereby posing a serious threat to the financial  stability and survival 
of  a  large  number  of  inland  waterway  carriers,  unless  the  short  and  medium-term 
forecasts  for  the  market  in  question  indicate  substantial  and  lasting  improvements. 

Article  2 

In  the  field  of  national  and  international  inland  waterway  transport  in  the  Community, 
contracts shall be freely  concluded between the parties concerned  and prices freely  negotiated, 
where  appropriate,  within  charter  exchanges. 

Article 3 

Nnotwithstanding  Article  2 Member  States  may,  for  a limited  period  up  to  1 January  2000, 
maintain  a  system  of  minimum  compulsory  tariffs  and  systems  of  chartering  by  rotation, 
provided  that: 

there  is  compliance  with  the  conditions  set  out  in  Articles  4 to  7;  and 

12 

the rotation and pricing systems imposed are freely  accessible under the same  conditions 
to  all Member  States'  carriers. 

Article  4 

During  the transitional  period  referred  to in Article  3 the  scope  of the  systems  of  chartering 
by  rotation  shall  be  limited  to general  cargo. 

The  following  shall  not  be  subject  to  these  systems:  oil  and  gas,  liquid  cargo  and  dry  bulk 
freight,  special  cargoes  such  as  heavy  and  indivisible  loads,  container  transport,  transport 
within  port  areas,  any  kind  of  own-account  transport  and  any  type  of  transport  operation 
outside the  rotation  system. 

Article 5 

Loads  shall  not  be  subject  to  chartering  by  rotation  if  they  cannot  be  effectively  dealt  with 
by  such  systems;  in  particular: 

transport  requiring  handling  equipment; 

combined  transport,  namely,  intermodal  transport  where  the  routes  are  principally  by 
inland waterway  and the initial  and/or terminal  legs (as short as possible)  are by  road or 
rail; 

new types of transport not covered by Article  4 or by the first and second indents, where 
shippers, for  a preliminary  test period  of up to 24 months, will  have the option  of using 
or  not  using  the  rotation  system. 

Article  6 

During the transitional  period  referred  to in Article  3 Member  States shall  take the  necessary 
steps  to  maximize  flexibility  in  the  systems  of  chartering  by  rotation,  in  particular: 

by providing shippers with the opportunity  of concluding contracts for multiple trips, that 
is to  say,  a  series  of  successive  trips  using  one  and  the  same  vessel; 

by providing that single or multiple trips offered  twice under the rotation  system  without 
finding  any  takers  shall  be  taken  out  of the  rotation  system  and  be  freely  negotiated. 

Article  7 

Within  a period  of two years from  the entry  into force  of this Directive,  Member  States shall 
take  the  necessary  measures  to  enable  shippers  to have  a free  choice  between  three  types of 
contract: 

contracts  on  a  time  basis,  including  leasing  contracts  where  the  carrier  makes  one  or 
more vessels  and  crew  exclusively  available  to  a customer  for  a  specific  period  for  the 
transport  of goods for  that  customer  against  payment  of a given  sum  of money  per  day. 
The  contract  is freely  concluded  between  the  parties; 

13 

tonnage contracts where the carrier undertakes to transport, for  a period laid down in the 
contract,  a given  tonnage  against  payment  of  cargo  rates  by the  tonne.  The  contract  is 
freely  concluded  between  the parties  and  must  involve  large  consignments; 

contracts  for  single  or multiple  trips to be undertaken  through  the  system  of  chartering 
by  rotation. 

Article  8 

1. 

In  the  event  of  a  serious  disturbance  in  the  inland  waterways  market  the  Commission 
may,  on  its  own  initiative  or  at the  request  of  a Member  State,  take  suitable  measures, 
and in particular measures designed to prevent any new increase in the transport capacity 
on offer  on the market  in question.  The decision  shall  be taken  in  conformity  with  the 
procedure  laid  down  in  Article  9(2). 

2. 

In  the  event  of  a  request  from  a Member  State  for  measures  a  decision  shall  be  taken 
within  a period  of three  months  from  receipt  of the  request. 

3.  The  request  from  a  Member  State  for  suitable  measures  to  be  taken  must  be 
accompanied by  all the information  needed to assess the economic situation  in the sector 
in  question,  in  particular: 

indication  of  the  average  costs  and  prices  for  the  different  types  of  transport; 

the  rate  of  utilization  of  the  hold; 

forecast  demand. 

This  information  may  only  be used  for  statistical  purposes.  It  may  not  be used  for  tax 
purposes  or  communicated  to third  parties. 

4.  Decisions  taken  pursuant 

to  this  Article  shall  be  notified 

immediately 

to  the 

Member  States. 

Article  9 

1.  The  Commission  shall  be  assisted  by  the  committee  established  by  Council  Directive 

(EEC)  91/672(5). 

2.  The  Commission  representative  shall  submit  to  the  Committee  a draft  of  the  measures 
to  be taken.  The  Committee  shall  deliver  its opinion  on  this  draft,  where  necessary  by 
vote,  within  a time  limit  set by  the  Chairman  according  to the  urgency  of  the  matter. 

The  opinion  shall  be  recorded  in  the  minutes;  in  addition,  each  Member  State  has  the 
right  to  request  that  its  position  be  recorded  in  the  minutes. 

The Commission  shall take full  account of the opinion  of the Committee.  It shall  inform 
the  Committee  of  the  manner  in  which  it  has taken  account  of  its  opinion. 

(5)  O J N oL  373,  31.12.1991, p. 29. 

14 

Article  10 

1.  Member  States shall bring into force  the laws, regulations and administrative  provisions 
necessary  to  comply  with  this  Directive  before  1 January  199.  They  shall  forthwith 
inform  the  Commission  thereof. 

When  Member  States  adopt  these  provisions,  these  shall  contain  a  reference  to  this 
Directive  or  shall  be  accompanied  by  such  reference  at  the  time  of  their  official 
publication.  The  procedure  for  such  reference  shall  be  adopted  by Member  States. 

2  Member  States  shall  forthwith  communicate  to  the  Commission  the  text  of  the  main 
provisions  of  national  law  which  they  adopt  in the  field  covered  by  this Directive. 

Article  11 

This  Directive  shall  enter  into force  on  the third  day  following  that  of  its  publication  in  the 
Official  Journal  of  the European  Communities. 

This Directive  is  addressed  to the Member  States. 

Article  12 

Done  at Brussels, 

For  the  Council 
The  President 

15 

Proposal  for  a 
COUNCIL  REGULATION  fEO 

95/0122  (SYN) 

amending  Regulation  (EEC) No  1101/89 on  structural  improvements 
in  inland  waterway  transport^ 

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  Council  Regulation  (EEC)  No  1101/89(4),  as  last  amended  by  Regulation  (EC) 
No  ..../95(5),  introduces  measures  for  structural  improvements  in the  inland  waterway  sector; 
whereas  that  Regulation  sets  out  to  reduce  structural  overcapacity  in  inland  waterway 
transport  by  providing  for  vessel-scrapping  schemes  coordinated  at  Community  level; 

Whereas Regulation  (EEC) No  1101/89 provides for  the possibility  of Community  financing 
for  1995 to  1998;  whereas the procedure for  1996,  1997 and  1998 has still to be  determined; 

Whereas  the  system  of  structural  improvements  currently  in  force  is  in  principle  to  be 
financed  primarily  by  the  operators  in  the  sector;  whereas  the  latter  must  provide  this 
financing  through  annual  contributions; 

Whereas  public  contributions  must  be  granted  annually,  in  line  with  the  contributions  made 
by the trade;  whereas measures are scheduled  for  a period  of three years from  1996 to  1998; 
whereas  they  must  be  assessed  annually; 

(*) 

(i) 

(2) 

(3) 

(4) 

(5) 

This  proposal 
Regulation  (EEC)  No  1101/89  submited  by  the  Commission  on  ...  (Doc. ...). 

light  of  the  proposal  for  an  amendment 

is  drafted 

in  the 

to 

O J N oL  116, 28.4.1989,  p. 25. 

16 

HAS  ADOPTED  THIS  REGULATION: 

Article  1 

The  following  paragraphs  are  added  to Article  4(a)  of Regulation  (EEC) No  1101/89: 

"4.  Financial  contributions from  the Community  for  1996,  1997 and  1998  shall not be 

more than  double  the  contributions  from  the trade. 

5.  The Member  States in question shall jointly make available from  their funds  similar 
amounts to those from  the Community for the years mentioned in paragraph 4.  The 
proportionate  share of each Member  State concerned  shall be calculated  against the 
size  of  its  active  fleet  as  compared  with  the Member  States.  These  amounts  shall 
be determined by the Commission  in conjunction  with the authorities of the various 
scrapping  funds. 

6.  At the beginning  of each year during the scrapping  operations for  1996 to  1998 the 
Commission  shall lay down, as part of this Regulation, the procedures for  scrapping 
for  the  year  in  progress  as  a  function  of  available  finances,  market  developments 
and  liberalization  measures  taken." 

Article  2 

This  Regulation  shall  enter  into  force  on  the twentieth  day  following  that  of  its  publication 
in  the  Official  Journal  of  the European  Communities. 

This Regulation  shall  be binding  in  its entirety  and  directly  applicable  in  all  Member  States. 

Done  at Brussels, 

For  the  Council 
The  President 

17 

Proposal  for  a 
COUNCIL  REGULATION  (EQ 

95/0123  (SYN) 

amending  Regulation  (EEC) No  1107/70 on  the granting  of  aids  for  transport 
by  rail,  road  and  inland  waterway 

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  Regulation  (EEC)  No  1107/70(4),  as  last  amended  by  Regulation  (EC)  No  ...(5), 
provides  in  Article  3(1)  that  the  Member  States  may  grant  aid  designed  to  facilitate  the 
development  of  more  economic  transport  systems  and  technologies  for  the  community  in 
general,  and  the  development  of  combined  transport; 

Whereas  the  growing  problems  of  road  and  rail  saturation,  transport  safety,  environment, 
energy saving and quality of life call, in the public interest, for greater development and better 
use  of  the  transport  potential  offered  by  inland  waterway,  in  particular  by  improving  its 
competitiveness; 

Whereas  the  costs  of  loading  and  unloading  form  a  significant  part  of  the  total  cost  of 
transport  by  inland  waterway;  whereas it is essential  to the development  of  inland  waterway 
transport for major  investments to be made to render loading and unloading installations more 
efficient  and  better  suited  to the  current  logistical  requirements  and  thereby  help  to  develop 
inland  waterway  transport; 

Whereas,  to  this  end,  support  should  be  given  to  investments  in  equipment,  infrastructure 
and/or  machinery  for  inland  waterway  terminals  which  help  to  create  or  increase  traffic  by 
inland waterway; whereas, consequently, it is important that aid granted by the Member  States 
or through  State  resources  can  be  made  available  to  the undertakings  concerned; 

Whereas  harmonized  conditions  should  be  laid  down  for  the  granting  of  this  aid  for  the 
development  of  inland  waterway  transport;  whereas  the  impact  of  the  aid  must  be  assessed 
at  regular  intervals; 

0) 

(2) 

(3) 

(4)  O J N oL  130,  15.6.1970,  p.  1. 

(5) 

18 

Whereas  this  aid  must  be  granted  for  a  sufficiently  long  period  for  the  said  investment  in 
equipment to have the time to win over the market and bring new traffic  to inland waterways; 
whereas those aid arrangements should remain in force until  31 December  1999; whereas the 
Council  should decide, under the conditions set out in the Treaty, on subsequent  arrangements 
or, where  appropriate,  on the conditions under which those arrangements will  be  terminated; 

Whereas  it  is  necessary  to  adjust  Community  provisions  on  aid;  whereas,  as  a  result, 
Regulation  (EEC)  No  1107/70  should  be  amended, 

HAS  ADOPTED  THIS REGULATION  : 

Article 1 

The  following  letter  is  added  to Article  3(1)  of  Regulation  (EEC)  No  1107/70 : 

"(f)  up to  31 December  1999, where  aid  is granted  on  a temporary  basis  and  is designed  to 

facilitate  the  development  of  inland  waterway  transport,  such  aid  having  to be  either: 

investments  in  the  infrastructure  of  inland  waterway  terminals; 

or: 

investments  in the  fixed  and  mobile  equipment  needed  for  loading  and  unloading. 

The  aid  granted  may  not  exceed  50% of the total  amount  of  investment. 

The  beneficiaries  of  this  aid  shall  undertake  to  provide  new  or  additional  transport 
tonnage  on the inland  waterway,  to be determined  with  the competent  authorities  of the 
Member  States,  for  a  period  of  five  years.  In  the  event  of  failure  to  honour  this 
undertaking  the  aid  shall  be  recovered  by  the  competent  authority. 

Every  two  years  the  Commission  shall  submit  to  the  European  Parliament  and  the 
Council  a  progress  report  on  the  implementation  of  the  measures,  stating  in  particular 
the  purpose  of  the  aid,  the  amount  and  its  impact  on  inland  waterway  transport. 
The Member  States  shall  provide  the  Commission  with  the  information  needed  to 
establish  this  report. 

No later than 31 July  1999 the Council  shall decide, on a proposal  from  the Commission 
and  under  the  conditions  set  out  in  the  Treaty,  on  subsequent  arrangements  or,  where 
appropriate,  on  the  conditions  for  terminating  those  arrangements." 

19 

Article  2 

This Regulation  shall  enter  into force  on  the  twentieth  day  following  that  of  its  publication 
in the  Official  Journal  of the European  Communities. 

This Regulation  shall be binding in its entirety  and  directly  applicable  in all  Member  States. 

Done  at Brussels, 

For  the  Council 
The  President 

20 

FINANCIAL  STATEMENT 

Budget Line B2-708:  Scrapping  actions in inland waterway  transport. 

1.  TITLE  OF  OPERATION 

Structural  reform  actions in inland waterway transport. 

2.  BUDGET HEADING  INVOLVED 

B2-708  line. 

3.  LEGAL  BASIS 

Article  75  of the EEC  Treaty. 
Council Regulation (EEC) No  1101/89 of 27 April  1989 relating to  structural  improvements 
in inland waterway transport  (OJ EEC  of 28  April  1989), last  amended  by Regulation  (EC) 
No  844/94  (OJ No L  98  of  16.4.1994,  p.  1). 
Amendment  of  Council  Regulation  No  1101/89 by  Council  Regulation  (EC) No 

/  95. 

4.  DESCRIPTION  OF  OPERATION: 

4.1  General  Objective: 

Temporary  and  additional  financial  contribution  by  the  Community  to  the  scrapping 
programme  in  order  to  significantly  reduce  structural  carrying  overcapacity,  estimated 
at  approximately  15% in  both  sectors  (dry  cargo  and tankers),  and  thus to improve  the 
structure of inland waterway  transport.  This intervention  is justified  in the first instance 
by particularly  severe economic circumstances, which  mean that it is no longer  possible 
to  increase  the  level  of  contributions  made  by  the  profession  -  which  is  currently 
financing  its  own  structural  reform  programme.  However,  this  proposal  is essentially  a 
supporting  measure  in  the  Community  programme  of  progressive  liberalization  of  the 
inland  waterway  market  which  is  planned  for  the  next  few  years.  These  wide-ranging 
measures,  which  were  requested  by  the  Council,  aim  to  guarantee  the  sustainable 
competitivity  of the  sector.  For  this purpose,  additional  financial  resources  are  needed, 
funded  simultaneously  from  the  Community  budget,  by  the  Member  States  concerned 
and  by  the  profession. 

4.2  Period  covered  and  arrangements  for  renewal. 

3  years:  1996-1997-1998.  Any  extension  of  the  action  after  1998  will  have  to  be 
financed  entirely  by  the  profession  itself. 

21 

5.  CLASSIFICATION  OF EXPENDITURE  or REVENUE 

5.1  Non-compulsory expenditure 

5.2  Differentiated  appropriations 

5.3  Type of revenue involved: none. 

6.  TYPE OF EXPENDITURE or REVENUE 

subsidy for joint financing with  other sources in the public  and private  sector. 

Should the operation prove  an economic success, is there provision for  all  or part 
of the  Community contribution to be reimbursed? NO. 

Will the proposed  operation cause any change in the level  of revenue ? NO. 

7.  FINANCIAL  IMPACT 

7.1  The annual amount needed for the structural  reform  of carrying capacity (15% of overall 
overcapacity, being  1 500 000 tonnes for the dry cargo fleet  and 300 000 tonnes for  the 
tanker  fleet)  is estimated  at ECU  64 million/year  over three  years, from  1996 to  1998, 
or  ECU  192  million  composed  of  ECU  142  million  for  the  dry  cargo  fleet  and 
ECU  50 million  for  the tanker  fleet. 

In  making  this  calculation,  one  must  take  into  account  the  effects  of  the  liberalization 
process  on  the  inland  waterway  market,  which  will  at  the  same  time  expel  numerous 
boats  which  are  incapable  of  surviving  in  an  open  market  from  the  rotation  systems. 
One  must  also take  account  of  the  accession  of  Austria  and  the  integration  of  its  fleet 
into  the  Community  programme,  as well  as the  fact  that  the  scrapping  premiums  have 
not been modified  since  1990 (an overall  increase of  15%, with  variations  according  to 
the  category  of  boat,  is judged  necessary). 

The  level  of  annual  contributions  by  the profession  for  the  3 years  1996-1997-1998  is 
set  at  approximately  ECU  14 million  a year,  i.e. ECU  42  million  for  the period  under 
consideration. 

However,  ECU  12 million  of this  amount  must  be used  for  repaying  the  amounts  pre-
financed  by the Member  States for  the  1990, which  leaves only ECU 30 million  for  the 
new  action. 

It  is  therefore  proposed  that  the  difference,  i.e.  192-30=ECU  162 million,  be  financed 
from  the  Community  budget  and  by  the  Member  States  concerned,  distributed  over 
3  years (1996-1997 and  1998). In view of the current and projected budgetary  resources, 
the  community  is  already  in  a  position  to  be  able  to  intervene  to  the  tune  of 
ECU  40  million over 3 years (ECU 20 million in  1996 and ECU  10 million  in  1997 and 
1998).  The  Commission  will  nevertheless  will  keep  open  the  option  of  mobilising 
supplementary  resources  depending  on  the  future  budgetary  situation. 

22 

The  outstanding  part  of  the  funding  for  the  scrapping  action,  i.e.  at  least  half 
(ECU 81  million) and at most ECU 122 million, will come from the national budgets of 
the Member  States concerned, the actual  amount being  set in proportion to the  size  of 
their  respective  fleet.  For  example,  Germany,  whose  fleet  accounts  for  30%  of  the 
Community  fleet,  should  therefore  part-finance  at  most  (depending  on  the  resources 
allocated  by  the  community  in  1997  and  in  1998)  an  amount  of  ECU  36,6  million 
(122x30:100),  i.e. ECU  12.2 million/year or approximately  22 million DM/year.  As far 
as  this  particular  example  is  concerned,  these  resources  partly  exist  already  in  the 
German  budget,  which  allocated  DM  60  million  to  be  distributed  over  3  years  for  a 
scrapping programme of this type. 

7.2  Itemized breakdown  of cost 

Budget 

Allocation 
95 

PDB  96 

97 

98 

CONTRIBUTION  TO 
THE  SCRAPPING  ACTION 

TOTAL 

5.0 

5.0 

20.0 

20.0 

10.0 

10.0 

10.0 

10.0 

EC in MEcus 

7.3  Schedule for multiannual  operations. 

The budget  of ECU 40  million  is for the period  1996  -  1998 

EC in MEcus 

Indicative  plan 

Accumu 
lated 
position 
end  1994 
(1) 

1995 
budget 

PDB 
1996 

1997 

1998 

1999 

0 

5.0 

20,0 

10.0 

10.0 

2000 
and 
subs. 
yrs. 

TOTAL 

45.0 

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

Management  will  be  carried  out  in  accordance  with  Council  Regulations  (EEC) 
No  1101/89,  Commission Regulation  No  1102/89  and on the basis of Regulation  (EC) 
No  ....  amending Regulation No  1101/89.  The management  of  each national  scrapping 
fund  is the responsibility  of the competent  authorities  of the Member  State concerned. 
At the beginning  of each year, the Commission,  in collaboration  with the authorities of 
the  national  scrapping  funds,  shall  balance  the  accounts  and  shall  ensure  financial 
coordination  between  the various national  scrapping funds. 

23 

9.  ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 

9:1  Specific  and quantifiable  objectives; target population 

Specific  objectives.Considering  the  structural  weakness  of  the  inland  waterway 
transport sector and the interest that exists in exploiting the advantages of this mode 
of transport, the aim of this action is to bring about structural improvements in the 
inland  waterway  market  in  parallel  with  its  progressive  liberalization,  while 
endeavouring to reduce the structural  overcapacity  of the fleet  which is currently 
estimated at approximately 15%. 

Target population: Inland waterway operators. 

9.2  Grounds for the operation 

The need for  Community financial aid is justified  by the need for  measures aimed 
at  restructuring  the  sector  which  must  accompany  the  process  of  the  inland 
waterway market.  This restucturing will be achieved by a reduction of the size of 
the fleet brought about by the temporary additional co-financing by the Community. 
In  addition,  the  Council,  in  its  resolution  of  24.10.1994  (published  in  the 
OJ No C309/5 of 5.11.94) stated that to guarantee the long-term competitiveness of 
the  sector,  it  was important  to  proceed  to  a substantial  new  structural  reform.  If 
additional  measures proved  necessary  after  1998, these would be a matter for  the 
profession  alone. 

Choice of  ways and means 

* 

Scrapping premiums 

Operation  of  the  measures  for  structural  improvement  in  inland  waterway 
transport  laid  down  in  Commission  Regulations  (EEC)  No  1102/89  and 
No 690/92.  The  management  of  the  scrapping  funds  is the  responsibility  of 
each Member  State concerned.  The Commission  is instructed,  on the basis of 
Article  6  of  Regulation  (EEC)  No  1101/89,  in  particular  paragraph  5,  to 
determine the conditions for  allocating these scrapping premiums. 

9.3  Monitoring and evaluation  of the action 

Performance  indicators 

*  Level  of requests for  scrapping premiums accepted. 

The  scrapping  premium  must  be  paid  by  the  authorities  of  the  national 
scrapping funds within a month of the date on which the owner provided proof 
of scrapping. The authorities of the national  scrapping funds  must forward to 
the Commission each month a list of payments of scrapping premiums in order 
for  it to check the state of progress of the action. 

*  Tonnage and carrying capacity  subject to contribution  in the various Member 

States concerned  which is actually scrapped. 

24 

Details  and frequency  of planned evaluation: 

Six-monthly reports and final Report at the end of  1998, carried out by Commission 
services,  intended for  the Member  States  as well  as for the European  professional 
organizations. 

Paragraph 2 of  Article  10 of  Council Regulation  (EEC) No  1101/89 of  27  April 
1989  stipulates  that  Member  States  must  forward  all  relevant  information  on  the 
development  of  the  current  scrapping  action  to  the  Commission  every  6  months. 
This  information  relates  in  particular  to  the  financial  position  of  the  funds,  the 
number  of  requests  for  scrapping  premiums  submitted,  and  tonnage  actually 
scrapped. 

Since then,  Commission  departments  have  drawn  up  a  six-monthly  report.  The  tenth  report 
(for  the  period  from  01.07.1994  to  31.12.1994)  was  distributed  to the  profession  and  to  the 
Member States concerned on 15 March  1995.  In addition, Article 6 paragraph 6 of Regulation 
(EEC) No  3690/92 provides for Member  States, at the  end of  each quarter,  to forward  to the 
Commission  a  list  of  requests  for  scrapping  premiums  as  well  as  a  complete  table  of  the 
financial  resources  available,  in  order  for  a quarterly  meeting  to be  held  in Brussels,. 

10.  ADMINISTRATIVE  EXPENDITURE  (PART A  OF  THE  BUDGET) 

The  efficient  use  of  the  administrative  resources  which  are  called  for  will  depend  on  the 
annual  decision  of  the  Commission  regarding  its  own  resources;  this  in  turn  will  depend 
largely  on the increased  staff  and  additional  money  provided  by  the budgetary  authorities. 

10.1 The action requires the recruitment  of an additional  A category official  to implement the 
package  of  measures  for  liberalizing  the  inland  waterway  transport  market  (already 
allocated  in the  resource  framework  for  1995). 

10.2 The  other  operational  and  personnel  costs engendered  by  the  action  are  covered  by  the 
normal  allocation  to  the DG  and  are  not  likely  to  result  in  significant  increases,  given 
that  the  work  involved  is  part  of  actions  which  are  mainly  external,  (for  example,  the 
coordination  of the  national  scrapping  funds). 

25 

IMPACT EVALUATION  FORM 

IMPACT  OF  THE PROPOSALS  ON FIRMS  AND IN PARTICULAR  ON  SMALL 
AND MEDIUM-SIZED  ENTREPRISES 

Title  of  the  proposals  : 

Proposal  for  a  Council  Directive  (EC)  of  ...  1995 
on  the  systems  of 
chartering  and  pricing  in  national  and  international  inland  waterway  transport  in  the 
Community. 
Proposal  for  a Council  Directive  (EC)  of  ...  1995 amending  Council  Regulation  (EEC) 
No  1101/89 on  structural  improvements  in  inland  waterway  transport. 
Proposal for a Council Directive (EC) of...  1995amending Regulation (EEC) No 1107/70 
oh the  granting  of  aids for  transport  by  rail,  road  and  inland  waterway  transport. 

The  proposals 

1.  With  regard  to the principle  of  subsidiarity  (see chapter  V  of the communication  to  the 
Council),  why  is  community  legislation  necessary  in  this  field  and  what  are  its  main 
goals ? 

The disparities  in  national  laws on  commercial  waterway  operations  do not  contribute to the 
proper  functioning  of  the  single  market  in  this  sector.  The  completion  of  the  single  market 
calls for  a further  harmonisation  of the different  rules presently  applying to  different  market 
segments  of the Union's waterways  market.  Indeed,  it is  difficult  to understand,  in  particular 
from  a shippers point  of view,  why  certain  shippers, because  of their  place of  establishment, 
are  obliged  to  work  via  the  so-called  "tour-de-role"  system  (sharing  of  cargoes  to  be 
transported,  at fixed tariffs  and uniform  conditions, between waiting vessels according to their 
position in the queue after  being unloaded), whilst other shippers can operate in a free  market. 

To  promote transport  by  waterways,  it is  desirable  gradually  to  replace  existing  regulations, 
likely to hinder its development, by a system of free chartering and free pricing (1st proposal). 

In  order  to  ensure  the  necessary  uniformity  and  transparency,  a  timetable  should  be  set  at 
Community  level  for  this  progressive  liberalization  of  the  market,  so  enabling  the  Member 
States  concerned  to  act  in  a  synchronised  manner.  Because  of the  socio-economic  problems 
in  the  waterway  sector  and  the  structural  changes  required  as  a  result  of  its  progressive 
liberalization,  an  accompanying  measure  is  called  for,  that  is  a  new  scrapping  action  of  a 
considerable  size (see Council Resolution  of  26  October  1994) in  order to  ensure  enduringly 
the  competitiveness  of the  sector  (2nd  proposal). 

Lastly,  the  3rd  proposal  allows  the  possibility  of  state  aids  for  investments  in  terminal 
infrastructure  an/or equipment in order to stimulate waterway traffic.  This measure is inspired 
by  the  existing  rules for  aid  for  combined  transport. 

26 

In  the  market  concerned,  for  instance  in  North-South  traffic  between  the  Netherlands  and 
Belgium,  the number of single-trip contracts ("assignments",  see below)  is going down since 
many years (see page 41 of the  report of NEA of 24/02/1995 on market observation in inland 
navigation).  One of the reasons is that shippers object the tour-de-rôle  system  (too rigid, no 
free  choice  of  carrier,  etc.) and turn to alternatives. 

In  order  to  make  waterway  carriage  more  attractive,  measures  are  called  for  such  as 
progressive deregulation  with  accompanying measures. 

Average  waiting  time and assignments  in  Tour-de-Rôle traffic from Netherlands  to Belgium 

waiting  days 

/  assignments 

20 

assignments  (x 50) 

i 

i 
1 2 2 4 1 2 3 4 12 

i 

i 

i 

i  r~i 

i

i 

ii 
i
3  4 1 23 

i 
41 

i 

i  m — i —i 
i 
2 3 4 1 2 34 

1999 

| 

1990 

| 

1991 

| 

1992 

| 

1 9 *3 

( 

1994 

Quartor/yoar 

Source: NEA 

27 

Impact on the companies 

1':'  Who will be affected  by the proposals ? 

(a)  Direct impact (possibilities of new activities). 

shippers in B, F and NL. 
private owner operators 
ship owner companies (companies with more than 3 vessels) 
groupings or cooperatives of private owner operator 
other operators (terminal  operators, inland ports ...) 

Positive impact : the liberalization of the market will make waterway transport more attractive 
to the users and will make these services more competitive compared to other transport modes. 

(b)  Indirect impact (provision  of transport services). 

all enterprises needing transport (shippers). 

Positive impact  : will dispose of improved  services; allieviation  of road congestion. 

3.  What measure will companies have to take to conform  to the proposal ? 

The private owner operators, that participate in the rota systems progressively have to give up 
this freight  distribution  system. They will have to reorganize;  so as to  adapt to free  market 
conditions, either by creating commercial groupings or by putting the accent on marketing and 
logistics. Those who want to leave the business will benefit  from  scrapping premiums. 

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

Positive impact on the waterway  market. The research  institutes NEA and PLANCO made, 
on behalf of the Commission, an estimate of the additional freight volume for waterways that 
would follow the liberalization of the market. According to these institutes the increase should 
be in  the order  of  6 to 7 million tonnes  per  annum,  which  is  more than  10 %  of the total 
freight  currently  handled by the various rota systems. However,  the psychological  effect  on 
shippers of such measure, in combination  with the stimulation  measures contained  in annex 
III,  could lead to a substantial  higher outcome. 

Negative impact on owner-operators with low levels of performance, who may have to leave 
a more competitive market, but who can nevertheless receive an aid in the form of a scrapping 
premium  for their vessels. 

5.  Do the proposals contain measures intended to take account of the specific  situation of 

small and medium-sized  enterprises (SME's) ? 

Precisely  because  of the  specific  socio-economic  structure  of the  sector  (atomisation  of the 
waterway industry with a strong majority  of single owner operators) the proposals provide for 
a™1tieasures to accompany the liberalisation in order to reduce the structural weaknesses of the 
sector and to promote waterway  carriage. In  addition,  the Commission  is authorized  to lay 
down the rate of the  scrapping premium  for  different  vessel  types  and tonnage-classes and 
hence has the possibility  of ensuring that the smallest  SME's will  not be disadvantaged. 

28 

Consultation 

6.  List  of  the  organizations  which  were  consulted  on  the  proposals  and  statement  of  the 

essential  elements  of their  position 

O.E.B./E.S.O. 
U.I.N.F/LBU. 
U.N.I.C.E. 
F.E.P.I. 
C.S.T. 
CX.E.C.A.T. 

European  Organization  of Barge  owner  operators 
International  Union  of  inland  waterway  operators 
International  Union  of Industries in the  Community 
European  Federation  of Inland  Ports 
Committee  of trade unions in  transport 
Freight  forwarders 

• 

General  agreement  on the need  for  a transitional  period  before total  liberalisation  of the 
market, except for O.E.B. which fears that the liberalisation proposal of annex I will only 
have an impact on transport prices and considers that prior to liberalisation the waterway 
sector has to be rehabilitated. However, the organization welcomes the proposals set out 
in  annex  II  and  III. 

All  organizations  consider  it  useful  to  improve  the  market  observation  system.  O.E.B. 
considers  this  even  a  condition  for  liberalisation. 

It  is  commonly  felt  that  the  quantified  objective  for  a  new  action  to  take  structural 
overcapacity  out of the market in the period  1996-1997-1998  is around  15 %.  However, 
to  take  into  account  the  effects  of  a  likely  improvement  of  the  general  economic 
situation,  it  seems  necessary  to  spread  this  over  3  years  (5  %  p.a.  x  3)  with  the 
possibility  of  reviewing  the  situation  at the  end  of  each  year. 

The measures to promote inland waterway traffic  were endorsed by all organizations and 
in  particular  by  those  in  favour  of  a  specific  waterway  terminal  policy.  This  type  of 
policy  was vividly  supported  by U.N.I.C.E.  and  CX.E.C.A.T.  in  particular. 

29 

ISSN 0254-1475 

COM(95) 199 final 

EN 

07 

Catalogue number  : CB-CO-95-229-EN-C 

ISBN 92-77-89143-2 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

30