Opinion of the Economic and Social Committee on the 'Commission White Paper "Fair Payment for Infrastructure Use: A phased approach to a common transport infrastructure charging framework in the EU"'
Date: 1999-02-24
Institutions: European Economic and Social Committee
Subjects: ESC opinion, EU publication, charges for use of infrastructure, transport infrastructure

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4.3.
This would facilitate the widespread use of the regu-
lation, leaving the Commission to focus exclusively on those
cases in which market power is liable to jeopardize compliance
with the rules of competition.

4.4. With regard to the blacklist clauses, the Committee is
greatly concerned about the clause contained in Section V,
point 3 of the Communication, which, as mentioned in point
3.11 above, substantially modifies the previous interpretation
of territorial exclusivity.

4.5.
As mentioned in point 3.12, the Committee stresses
the need for the Commission to bear in mind, when defining
the duration of the agreements, the length of time required for
a return on investment.

Brussels, 24 February 1999.

In the light of

these comments,

4.6.
the Committee
endorses the Commission’s initiative, and calls upon it to take
account of the views expressed in the present opinion in
relation to the definition of the guidelines and the single block
exemption regulation, on which the Committee will be
consulted.

4.7.
The Committee will then have the opportunity to
monitor how the Commission intends to regulate vertical
agreements within a clearly defined legal framework, which
must be hallmarked by its straightforwardness, transparency,
legal certainty and support for SMEs if the expected benefits
are to be fully passed on to consumers.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on the ‘Commission White Paper “Fair Payment
for Infrastructure Use: A phased approach to a common transport infrastructure charging
framework in the EU”’

(1999/C 116/07)

On 31 July 1998 the Council decided to consult the Economic and Social Committee, under Article 198
of the Treaty establishing the European Community, on the White Paper entitled ‘Fair Payment for
Infrastructure Use: A phased approach to a common transport infrastructure charging framework in the
EU’.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 9 February 1999. The rapporteur
was Mr Kielman.

At its 361st plenary session (meeting of 24 February 1999) the Economic and Social Committee adopted
the following opinion by 117 votes to 0, with 2 abstentions.

1.

Introduction

1.1.
The present White Paper is a follow-up to the 1993
White Paper on the future development of the common
transport policy(1) and the 1995 Green Paper entitled ‘Towards
fair and efficient pricing in transport’(2). In the White Paper
the Commission suggests that a harmonized Community
approach, based on the ‘user pays’ principle, be adopted to
transport charges and maintains that this will enhance both
the efficiency and the sustainability of the transport system.

1.1.1.
The great diversity of current infrastructure charging
systems across modes of transport and Member States under-
mines this efficiency and sustainability.

1.1.2.
The variety of problems thrown up by the diversity
of approaches to infrastructure charging cannot be adequately
treated in isolation from each other.

(1) OJ C 352, 30.12.1993, p. 11.
(2) OJ C 56, 24.2.1997, p. 31.

1.2.
The Commission therefore thinks that a gradual and
progressive harmonization of charging systems, based on the
‘user pays’ principle, is necessary throughout the European
Union for all important commercial transport activities.

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The proposed charging system is based on infrastruc-
1.3.
ture users paying for the costs they engender,
including
environmental and other external costs, right from the first
moment that the infrastructure is used.

The White Paper gives no pointers about how to
2.3.
finance transport
infrastructure because the infrastructure
financing schemes that are in force in the EU vary so widely
and also because of the subsidiarity principle.

1.3.1.
At the same time, the system involves allowing
Member States to continue providing aid for public services or
services of general interest.

Finally, the system is not intended to be a central
1.3.2.
charging system. Its aim is just to provide a ‘framework’ within
which Member States will be free to indicate/set charging
levels.

As stated earlier,

1.4.
the Commission is proposing a
step-by-step implementation procedure. In the first phase, up
to and including the year 2000, the aim is to introduce a
charging system for railways and airports. This will comp-
lement the charging system in road haulage, so that a broadly
compatible structure is in place in the main modes of transport.

1.4.1.
During this period an advisory committee of experts
from the Member States will work with the Commission. All
stakeholders will be involved in the activities of this committee.

1.4.2.
In the second phase, up to and including the year
2004, charging systems will be brought into line with the
system set out in the first phase, while new taxation systems
are introduced, coupled with a possible review of existing
charging systems. In the third and last phase, after 2004, the
experience gained in the first and second phase will be
incorporated into the system and further harmonization of the
system undertaken, with marginal social costs being built in.

2.4.
It should also be noted that while the White Paper sets
out the relevant cost components in a table (section 2.1, page
2), it fails to indicate the relative importance of these cost
components for the different modes. The ESC considers that
clarity on this point is essential to any Community blueprint.
It is particularly important for drawing up an implementation
strategy because it could easily cause distortions of compe-
tition.

The relative importance of, for instance, fixed costs,
2.5.
internal variable costs and external costs, such as air and water
pollution and noise, can vary from one mode to another and
depend on local conditions. In view of this lack of information
on the relative importance of the cost components, the ESC
urges the Commission to undertake, in the near future, a large
number of selected individual case studies. These studies
should also consider the measuring problems for external
effects on the environment, etc.

2.5.1.
It should think about conducting 20 to 30 studies
covering the different modes in the different Member States
and aimed especially at providing additional information on
the various cost components, preferably in absolute terms
(though in relative terms if this is not possible). One important
cost component that certainly must be investigated in these
studies is the time factor, as should the consequences for the
social dimension. These studies could be fleshed out with data
on the charges and taxes currently levied on the different
modes so as to determine the present percentage of cost
recovery.

2.5.2.
environmental pollution in the transport sector:

for instance,

There are,

five ways of combating

2. General comments

2.1.
In its own-initiative opinion on infrastructure costs in
the road-freight transport sector as a basis for comparison
with other transport modes(1), the ESC concluded that ‘infra-
structure and external costs should be fully allocated to the
different modes in a fair, uniform manner’.

The present White Paper suggests how this might be
2.2.
done, subject to the express provision that total costs should
not rise.

(1) OJ C 18, 22.1.1996, p. 27.

a) by using technology to combat emissions and noise;

b) by means of local traffic control measures;

c) by using taxes and charges;

d) by improving education and information; and

e)

through planning and the quality of urban and rural
infrastructure.

2.6.
The first two measures are widely applied. The White
Paper focuses on the price mechanism. What is lacking,
however, is an analysis of what has been achieved so far with
the possibilities mentioned under a) and b) and an assessment
of the extent to which additional taxes and charges could lead

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to even greater improvements. The ESC thinks that
the
Commission should also take account of the views contained
in its opinion on the Commission’s Green Paper on sea ports
and maritime infrastructure(1). The comments made in this
opinion are very relevant to the specific problems of a charging
structure for ports. The Commission is after all concerned that
infrastructure users should pay for the costs they engender. It
reiterates this in the White Paper too, under section 5(b), point
8, when it states that ‘harmonized marginal cost based charges
for HGVs and commercial passenger transport should replace
existing charging schemes on the basis of a variety of
instruments including tolls and user charges’. The same
principle must apply for other modes, but the Commission is
not specific about this. The ESC feels that this is a critical issue
because, in its view, income neutrality cannot be guaranteed.

The Commission states in the White Paper that Euro-
2.7.
pean transport
importance for
infrastructure is of great
economic growth, labour mobility, infrastructure users and
the competitiveness of the European Union.

2.8.
The aim is to create the conditions for an optimal
contribution by traffic and transport to the EU’s general
prosperity. Traffic and transport are essential to production
and consumption, and as such contribute to prosperity. An
optimal contribution can be achieved by using the market to
confront individual decision-makers with the actual costs
resulting from their decisions. The White Paper proposes that
the instrument of charges should be used to
above all
apportion social costs.

The social costs of traffic and transport are taken to

2.9.
mean such things as:

a) operational costs (labour, energy, vehicle maintenance);

b)

infrastructure costs (traffic management, maintenance and
wear and tear);

2.11.
The above overview of the social costs of traffic and
transport does not include the costs of congestion, since these
are already partially internalized.
In fact, even the party
responsible suffers disadvantages in the form of loss of time.

2.12.
The ‘price’ to be paid for the above-mentioned costs
is intended to ensure that transport bears the costs for which
it is directly responsible. If the revenue from this price (charges)
is higher than average costs, the use of the infrastructure will
provide the infrastructure manager with virtually maximum
revenue, thereby sending a clear signal that the infrastructure
is becoming inadequate. The infrastructure manager will
have to take the decision about expanding and/or renewing
infrastructure.

2.13.
In Europe traffic and transport policy is decided at
different levels. Naturally, the development of European policy
is at the centre of the present White Paper. In the name of
subsidiarity, many aspects of policy are left up to the Member
States themselves. But there are also many things for which a
Community approach offers advantages, such as:

— maintaining the unity and transparency of the internal

market;

— harmonizing indirect taxes, such as fuel taxes;

— cross-border environmental problems;

— the effective operation of cross-border traffic and transport

systems and networks; and

— sustainable regional development.

2.14.
It therefore seems desirable to take a closer look at
Community policy and the division of authority between the
EU and the Member States regarding the charges to be applied,
especially where the system of a uniform structure may
intersect with nationally-set charges. As long as both the
principles and the level of taxes and charges vary not just
between the different modes of transport but also between
Member States, competition will be affected.

c) damage to nature and the countryside and nuisance from

noise;

2.15.
infrastructure are to be apportioned correctly to users.

European state aid should be reviewed if the costs of

d) direct and indirect costs of traffic accidents.

The costs under a) are internal costs of third parties
2.10.
or firms, those under b) are external costs to the extent that
they are covered from general resources. The costs mentioned
under c) should be established by the government of each
Member State so that they too can be included as external
costs. Traffic accidents etc. as referred to under d) cause direct
and indirect costs. Where they cannot be attributed to a
responsible party, they should be regarded as external costs.

3. Comments on specific modes of transport

3.1. Road transport

In the first phase the Commission wants to design a
3.1.1.
charging system for lorries and commercial passenger trans-
port. Proposals for implementation have already appeared and
have been commented on(2).

(1) OJ C 407/17, 28.12.1998.

(2) COM(96) 331 final — ESC opinion in OJ C 206, 7.7.1997, p. 17;

COM(1998) 427 final, 13.7.1998.

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3.1.2.
For various reasons it seems right to link introduction
to the use of advanced electronic systems. However, for the
moment there are still some problems here. It seems sensible
initially to use current equipment that has proved its worth.

The Commission says in the preamble to the White
3.1.3.
it wants to achieve further harmonization of
Paper that
charging principles in all commercial transport modes. Charges
on private cars are left to the Member States. Although private
car traffic in itself causes no distortion of competition on the
internal market, it may be argued that this type of transport
does compete with public transport and other forms of
commercial passenger transport. It certainly is important in
the ‘modal split’ in passenger transport. In addition, passenger
transport accounts for a large proportion of road infrastructure
use and the associated external costs. If a substantial part of
the external costs are not apportioned, the question is whether
the aim of, for instance, reducing environmental damage can
in fact be achieved. Although the Commission says that the
infrastructure costs to be imposed will not automatically be
reflected in transport prices, because firms will change the way
they use infrastructure, this clearly seems to be inevitable in
phases one and two.

3.4. Aviation

As we know, the Commission has brought out a
3.4.1.
proposal for a directive on airport charges(2). This goes into
the principles on which charges are based: a fair reflection of
costs, transparency and non-discrimination. For the moment,
aviation is still different in some respects from other transport
modes. For instance, aviation fuel is exempted from excise
duty. Tickets for international air travel (including journeys
between EU Member States) are VAT-free. The possibility of
abolishing the tax-free status of aviation fuel and VAT zero
rating of airline tickets should be investigated.

3.4.2.
The possibility of taxing exhaust gases could be
investigated as an alternative to imposing excise duties on
aviation fuel. Such a charge could be collected in the same way
as the costs of air navigation services and could lead to an
improvement in engine technology.

3.4.3.
In the above-mentioned approach, serious consider-
ation must be given to the current international conventions,
e.g. those concluded under the ICAO.

3.2. Railways

3.5. Maritime transport

The EU is currently preparing a draft directive on rail
3.2.1.
infrastructure charges(1). Hopefully,
this proposal will be
adopted by the Council in phase one. In the second phase the
EU wants to take external costs into account. But because
implementation of Directive EC/91/440 on the development of
the Community’s railways is proving difficult, it is questionable
how far the EU’s plan will be successful. The improvement in
the rail-transport market referred to in that directive is,
in European rail
together with corresponding investment
the future
infrastructure, an important precondition for
improved competitiveness of railways in the European goods
transport sector.

3.3.

Inland waterways

3.3.1.
According to the European Commission the present
infrastructure charging system in inland waterways does not
lead to serious distortions of competition because, in its view,
costs are relatively small and the charge relatively low.
Consequently, further reforms have no priority. This works
out well because under the Mannheim Convention no charges
may be levied on the Rhine. If any infrastructure charges are
introduced, this Convention will have to be amended. To
complicate the issue, Switzerland — which is a contracting
party to the Convention — is not a member of the EU. The
Commission must come up with proposals on this in the third
phase.

3.5.1. Maritime transport infrastructure consists in particu-
lar of sea ports.

In the Green Paper on Ports and Maritime Infrastruc-
3.5.2.
ture(3), the framework for port charges is described with the
aim of making equivalent competition possible between EU
ports. A framework for levelling port charges can only be
developed when it is known where and what public funding
of ports is involved and what state aid is given. In addition, the
accounting practices of ports will have to become more
transparent.

3.5.3.
It is interesting that the EU now feels that the costs
of investments in port infrastructure must be borne by the
direct users. As well as port infrastructure there is other
infrastructure in maritime transport, such as world-wide
navigation systems.

Further Commission objectives in the second phase are to
introduce environmental taxes on fuel and lay down minimum
fuel quality standards. It must be borne in mind here that the
minimum quality of maritime fuels is currently governed
by international
ISO standards and that the international
maximum levels for sulphur content in maritime fuels have
been stipulated by the IMO in Appendix VI to the MARPOL
convention. Attempts to charge regional eco taxes on maritime
fuels must bear in mind that such taxes constitute excise duties

(1) COM(1998) 480 final, 22.7.1998.

(2) OJ C 73, 9.3.1998, p. 38.
(3) OJ C 407/17, 28.12.1998.

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and could therefore only be levied on fuel consumed in the
territorial waters of the Member States. However, the vast
majority of international maritime transport — even that
between EU Member States — takes place in international or
foreign waters.

4.3.
One point worth bearing in mind is that calculating
costs in an imperfect market, can never give completely
accurate results. For instance, in the case of the railways the
complete implementation of Directive 91/440/EEC must be
given the highest priority.

3.5.4.
conventions(1).

Both must be considered in the light of international

3.5.5.
The ESC notes that the recent draft Directive concern-
ing port reception facilities for ship generated waste provides
for their compulsory discharge and the payment of fees. In
order to achieve better co-ordination, it is suggested that the
final system for charging fees for the use of port reception
facilities should be based on the general principles of the White
Paper on transport infrastructure charging.

4. Specific comments

4.1.
It is important that representatives of the relevant
co-ordinating organizations take part in the consultations of
the committee that helps the Commission in the activities
involved in the various phases of development.

Although the Commission wants to implement the
4.2.
charging system for the different transport modes in three
phases, it is desirable, from the point of view of equal treatment
of transport modes, to implement the charging principles at
exactly the same time; implementation should as far as possible
be at source. As regards aviation and maritime transport,
account must be taken of the global nature of these modes.

(1) See, among other things, the MARPOL convention.

Brussels, 24 February 1999.

4.4.
As regards imputing infrastructure costs correctly to
users, a thorough review of European policy on state aid in the
transport sector, bearing in mind the objectives of other
European policies and an efficient future society, is desirable.

4.5.
It must be ensured that imputing costs to the user does
not infringe one of the basic principles of the EU, namely free
circulation of persons and goods.

5. Conclusion

5.1.
The Commission’s White Paper deserves support
because of its basic principle that ‘users pay for all the costs
they engender’.

5.2.
In the ESC’s view, this principle can only be implement-
ed if there is a thorough analysis of the relative value of the
different cost components and a level playing field for all
transport modes.

5.3.
The ESC feels that before introducing the ‘user pays’
principle, things must be clear about income neutrality and
the way this is put into practice.

5.4.
Once again, the ESC would specifically point out the
world-wide nature of aviation and maritime transport, where
decisions should be taken in accordance with international
conventions.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

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APPENDIX

to the opinion of the Economic and Social Committee

The following rejected amendments obtained more than a quarter of the votes cast:

Point 3.1.3

Insert the following sentence after the sentence ‘In addition, passenger transport accounts for ... external costs’:

‘In view of the Commission’s objective of changing the modal split to benefit more environmentally-friendly modes
of transport, the removal of private vehicles from the planned imputation of infrastructure costs is inexplicable.’

Reason

This change underlines and strengthens the rapporteur’s statement and defines the central problem somewhat more
clearly.

Result of the vote

For: 27; against: 68; abstentions: 10.

Point 3.1.3

Delete the text of point 3.1.3 from the beginning of the third sentence onwards and replace with the following:

‘European Commission studies prove that the contribution of the road haulage industry to the financing of external
transport costs is far less than the actual costs incurred. Lorry traffic accounts for a large proportion of road transport
infrastructure use and the associated external costs. These costs should therefore be apportioned in line with the
principle of fair pricing and in order to achieve the proposed reduction of damage to the environment.’

Reason

Point 3.1 discusses measures for commercial goods and passenger vehicles, including a charging system for lorries
and commercial passenger transport (point 3.1.1) and advanced electronic toll systems (point 3.1.2).

Point 3.1.3 deals with the damaged caused by, and costs of, private car transport and draws conclusions. This is,
however, unacceptable for two reasons:

a)

b)

the Commission White Paper on fair pricing deals with lorry and commercial passenger transport but not private
cars. Point 3.1.3 of the opinion deals exclusively with cars however;

the whole of point 3.1 is concerned with road transport. Lorry transport and commercial passenger transport
are not mentioned however.

Result of the vote

For: 27; against: 46; abstentions: 7.