Opinion of the Economic and Social Committee on the 'Proposal for a Council Directive amending Directive 91/440/EEC on the development of the Community's railways', the 'Proposal for a Council Directive amending Directive 95/18/EC on the licensing of railway undertakings', and the 'Proposal for a Council Directive relating to the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification'
Date: 1999-05-26
Institutions: European Economic and Social Committee
Subjects: charges for use of infrastructure, rail transport, trade licence, transport company, transport infrastructure, transport safety

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The Committee therefore calls on the Council to adopt the
proposal as soon as possible, so that it can enter into force on

1 January 2000 [cf. Article 2(1)] as planned.

Brussels, 26 May 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on:

— the ‘Proposal for a Council Directive amending Directive 91/440/EEC on the development of

the Community’s railways’,

— the ‘Proposal for a Council Directive amending Directive 95/18/EC on the licensing of railway

undertakings’, and

— the ‘Proposal for a Council Directive relating to the allocation of railway infrastructure
capacity and the levying of charges for the use of railway infrastructure and safety
certification’ (1)

(1999/C 209/07)

On 19 October 1998 the Council decided to consult the Economic and Social Committee, under
Article 71 of the Treaty establishing the European Community, on the above-mentioned proposals.

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 19 May 1999. The rapporteur
was Mr Decaillon.

At its 364th plenary session (meeting of 26 May 1999) the Committee adopted the following opinion by
80 votes to 15, with 14 abstentions.

1. Preliminary remarks

These proposals constitute a package of legislative

1.1.
measures and ideas on the use of rail infrastructure.

1.2.

They should be viewed:

— in the wider context, given the special role played by
transport in the matter, of the EU’s approach to growth,
competitiveness and employment, sustainable develop-
ment and the enlargement process.

The proposals represent a step forward and will speed

1.3.
up the restructuring of Europe’s railways.

— in the context of all the different texts and proposals on

rail transport;

The purpose of the proposals is to develop the single

1.4.
market further and provide for greater competition.

— in the context of all the different texts and proposals on

transport policy in general;

2. Summary of the Commission proposals

— in the context of all the different texts and proposals on

services of general interest;

2.1. Amendment of Directive 91/440/EEC

(1) OJ C 321, 20.10.1998, p. 6, 8, 10.

2.1.1.
The proposal requires that the accounts for the
management of infrastructure be kept completely separate

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from the accounts for the operation of railway undertakings
(profit and loss accounts and balance sheets). The keeping of
these accounts must reflect the fact that it is forbidden to
transfer public funds between these two areas of activity.
In addition,
in the
organization of railway undertakings, of functions which could
lead to discrimination with regard to the use of access rights.

the proposal requires the separation,

2.3. Proposal for a directive replacing the provisions of Directive

95/19/EC

2.3.1.
The directive is to apply to ‘main-line railway
infrastructure used for domestic or international rail services.’

2.1.2.
The terms ‘railway undertaking’ and ‘infrastructure
manager’ are defined more precisely. In particular, it is specified
that:

a)

the railway undertaking ‘must ensure traction’;

b)

the infrastructure manager can be any public or private
body or undertaking.

‘Bodies’ or ‘undertakings’ which are independent of
2.1.3.
transport service providers are to be given responsibility for
safety rules.

Infrastructure managers must be independent of the
2.1.4.
state and enjoy managerial freedom; they must draw up their
own ‘business plans’.

2.1.5.
Separate profit and loss accounts and balance sheets
must be kept for passenger and freight transport services.
Public funds paid to either of these activities must be shown
separately and may not be transferred from one activity to the
other.

2.1.6.
sition of the directive into national law.

There is to be a one-year deadline for the transpo-

2.3.2.
definitions and introduces new categories.

It provides a number of conceptual and functional

The directive defines the principles and rules govern-
2.3.3.
ing allocation of capacity and the procedures for fixing and
levying charges for the use of rail infrastructure, and specifies
that the bodies responsible for allocating this capacity must be
separate from integrated railway undertakings.

2.3.4.
These principles, rules and procedures must enable
the infrastructure manager to optimize the use of capacity and
avoid all discrimination.

2.3.5.
passenger accounts.

The directive calls for the separation of freight and

Among the principles of charging,

2.3.6.
the directive
mentions the concept of marginal social costs and the
integration of external costs.

2.3.7.
The directive delimits the role of the state and other
public authorities in defining, consolidating and financing
infrastructure, and in determining the principles of access and
certification, safety rules, compensation systems for external
costs and the scope of public service obligations.

2.3.8.
transport services’ are to comprise.

The annex to the directive stipulates what

‘rail

2.2. Amendment of Directive 95/18/EC

2.3.9.
to be 1 January 2000.

The deadline for implementation of the directive is

2.2.1.
Channel Tunnel shuttle services and the transport of
passengers on local stand-alone networks or by tram or light
rail are to be excluded from the scope of the directive.

3. General remarks on the package as a whole

2.2.2.
Licences for railway undertakings are to be issued by
a state-designated body which itself does not provide rail
transport services and is independent of all bodies providing
such services.

The changes to the three directives (91/440, 95/18 and
3.1.
95/19) represent a coherent package for fostering and speeding
up the restructuring of Europe’s rail system.

The amendments to the directive do not seek to
2.2.3.
create new access or transit rights or alter the scope of
Directive 91/440/EEC.

2.2.4.
sition of the directive into national legislation.

There is to be a one-year deadline for the transpo-

3.2.

Bearing in mind:

— various studies relating to the transposition, application
and effects of the three directives in the fifteen countries of
the European Union (Directive 95/19/EC, for example, has
only been transposed recently and even then not in all
Member States),

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— updated facts and figures about the rail and other transport
sectors in the Member States, in the EU’s partner countries
(especially Norway and Switzerland) and in the countries
seeking to accede to the EU in the near future,

— the specific nature of the transport market, which is
intermodal and can therefore only be dealt with globally;
this supposes the restoration of balance and harmonization
of the terms of competition between modes, especially as
regards economic, social, working and safety conditions;

— the rail networks’ slowness and problems in adapting to

developments in transport,

the Committee calls for a thorough review involving networks,
transport operators, users and the social partners, which will
allow the Member States to make an accurate assessment of:

— the current state of railway undertakings (financial rehabili-
tation, market shares, development potential, agreements,
partnerships, cooperation, social conditions, bottlenecks,
infrastructure projects, progress towards interoperability
and multimodality, etc);

— the link which should be established between the initial
effects of the three directives, the situation in the rail sector
in the various Member States and at Union level and the
new measures proposed by the Commission;

— transport’s blend of market and non-market aspects, in
particular the role played by rail transport in providing
services of general
interest, and the major distinctions
between modes with regard to the generation of external
costs and transport safety;

— the need to develop trans-European networks (2), to pro-
mote infrastructure of Community interest and to increase
rail’s share of combined transport;

— the fact that by being networks the railways form a
highly developed structure, which plays a decisive part in
integration and in strengthening economic and social
cohesion. This is true not only of the European Union but
also of the candidate countries. A detailed analysis should
therefore be made of the relations between enlargement
and the liberalization of the railways.

— the extent to which the guidelines set out in the Com-
mission white paper/green papers have been applied, and
their initial effect in relation to the objective of promoting
a coherent and well-balanced global policy for the sustaina-
ble development of the whole of the transport system.

4.1. The method

4. Specific remarks

3.3.
Using this review as its basis, the Commission should
specify very clearly the objectives, likely results and foreseeable
or estimated effects (in economic, commercial, financial social,
organizational and functional terms) of its new proposals.

The Economic and Social Committee has pointed out
3.4.
on several occasions (1) that the restructuring, modernization
and revival of rail transport, which is vital for its development
and rehabilitation, is conditional on respect for a number of
criteria, in particular:

— the need for gradual liberalization in stages;

The Economic and Social Committee calls for the
4.1.1.
previous directives to be transposed in full by all Member
States. Introducing changes prior to the transportation of these
directives may well create general legal, regulatory, institutional
and organizational uncertainty, which will be detrimental to
the restructuring and revival of the railways and to cooperation
between railway undertakings.

4.1.2.
The extremely detailed, highly complex and often
obscure nature of the very precise and binding provisions of
the third proposal, for a directive on infrastructure charges, on
the one hand, and the numerous questions left unanswered by
the proposal’s very general objectives, scope and concepts, on
the other hand, could be a source of contradiction, ambiguity
and confusion and are likely to result in:

— widely varying interpretations,

(1) See the ESC opinions on railway licensing (OJ C 393, 31.12.1994),
the Community’s railways (OJ C 153,
the development of
28.5.1996, p. 16) and a strategy for revitalizing the Community’s
railways (OJ C 206, 7.7.1997, p. 23).

(2) See the ESC opinion on trans-European rail freight freeways (OJ

C 95, 30.3.1998, p. 21).

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— major difficulties with regard to transposition and appli-
cation, as numerous Committee opinions have pointed
out (1).

4.1.3.
As a result, the new Commission proposals are in
grave danger of conflicting with the principles of progressivity,
coherence and equilibrium between modes - principles which
the ESC has expounded in numerous opinions (1).

4.2.3.
As they stand at present, the Commission proposals
seem to be highly prescriptive and all-embracing and resemble
an attempt at unification (which is more the task of a
Community regulation) rather than an attempt at harmon-
ization or approximation (which is what a directive sets out to
achieve).

4.2.4.
underlined,
difficulties:

As most of

the hearings
the Commission proposals face a number of

the evidence taken at

4.2. Content

a)

their transposition into Member State legislation;

Certain new categories and concepts proposed by
4.2.1.
the Commission should be justified and explained in more
detail so that interpretations do not differ unduly. This is one
of the main points to emerge from the various hearings held
by the Committee. The following are the main issues involved:

— the definition, status and functions of ‘authorized appli-
cants’, a matter which raises numerous questions on the
part of rail operators, workers’ representatives and rail
users’ representatives;

— the definition and scope of ‘rail services’, which by their
very nature and in accordance with the objectives set in
the white paper and green papers are a highly evolutive
concept, both in time and in space, and should not
therefore be defined too narrowly or irreversibly;

— the links between the different organizational, regulatory
and operating bodies in rail transport and their precise
tasks, in particular as regards the definition, implemen-
tation and monitoring of safety standards;

— the definition,

transparency,
responsibility, and monitoring of ‘compensation’ mechan-
isms and justifications;

allocation procedures,

— the more cumbersome instruments, mechanisms, bodies,
tasks and forms of organization which may be imposed by
the Commission’s proposals and which would undermine
the declared objectives by making the railways more
complex, more opaque and more bureaucratic at Member
State level and even more so at Union level.

4.2.2.
The rules governing the allocation of train paths and
the reservation procedures and charging methods proposed by
the Commission should be made clearer and simpler and
should more closely reflect the situation in the different rail
networks and the principle of subsidiarity.

b)

their compatibility with

— the flexibility needed to cope with the segmentation,
complexity and trends in demand, the necessary revival
and adaptation of various rail services,
the twin
commercial and public service demands facing railway
undertakings, and the need to develop cooperation and
partnership at European level,

— the managerial independence of railway undertakings
and infrastructure managers, both of whom have been
given responsibilities of their own;

— the structural differences between rail networks, in the
light of their state and development potential and their
geography (peripheral, strictly continental or transit
countries);

— the scope and content of the various national transport
policies and the authorities determining these policies.

The charging system proposed by the Commission
4.2.5.
poses special problems. Applying marginal cost charging to
the use of rail infrastructure may improve the rail market but
will not in itself lead to the optimization of the transport
market or other markets, especially as the Commission
proposals are aimed at only a part of the infrastructure, that is
the ‘main-line railway infrastructure used for domestic or
international rail services’. However, the rail system is the
sum of all the infrastructure,
just as transport as a whole
encompasses all modes.

However, the imperfections of the proposed system must not
provide a pretext for doing nothing and halt efforts to improve
the allocation of rail
infrastructure as well as road, port,
waterway or even air infrastructure.

(1) See the ESC opinions on fair payment for infrastructure use (OJ C
101, 12.4.1999) and on a strategy for revitalizing the Com-
munity’s railways (OJ C 206, 7.7.1997, p. 23).

4.2.6.
There are also other more practical difficulties which
make the system proposed by the Commission very difficult

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to apply in all Member States:

— marginal cost charging is a short-term instrument, which
is not designed to incorporate the cost of developing
infrastructure in the cost of use or to take account of
investment and its funding;

— rail transport has high fixed costs, but its variable costs rise
relatively slowly in line with the use made of the fixed
installations. The marginal cost for the use of rail infrastruc-
ture is therefore relatively low, especially if there is a large
stock of infrastructure. The breakdown between fixed costs
and the costs involved in using infrastructure therefore
varies considerably from mode to mode and creates major
distortions of competition.

The hearings revealed certain concerns about the
4.2.7.
effects of the new Commission proposals, especially on the
part of railway undertakings and trade unions:

— the risk of the best routes being ‘creamed off’ for the new

authorized applicants;

— ‘distorted competition’ between commercial and public

service requirements;

— the risk of the role and functions of the networks being
cut back to a point where only traction is provided, at a
time when the function of transport organizer is growing
in importance;

— the fear that the separation of passenger (main-line and
local) and freight accounts will automatically lead to a
structural split in activities.

5. Conclusions

5.1.
The Economic and Social Committee, drawing heavily
on its previous opinions, the results of its hearings and other
contributions which it has received, thinks:

Brussels, 26 May 1999.

— that there is an urgent need to modernize, revitalize and
harmonize the activities and management of rail networks
by means of:

•

•

•

•

the better allocation and use of existing infrastructure
and the infrastructure required to build proper trans-
European networks,

the improvement of the railways’ position on the
market and of their commercial and financial situation,

greater cooperation between railway undertakings and
between railway undertakings and other transport
operators (waterway, road, air and sea),

greater flexibility and transparency and a better service
for users and shippers,

• more sustainable development of transport systems
(internalization of the external costs incurred by the
different modes, and consolidation and development
of combined transport),

• more harmonization of the conditions of competition
between modes, especially as regards social, working
and safety conditions,

— and that the Commission should:

• present a prospective step-by-step assessment of the
financial and social

likely economic, commercial,
impact of the new directives,

• provide better definitions of certain proposed concepts,
tasks, structures and responsibilities, and of the inter-
relations between the various players involved in the
railways,

•

•

base all of its proposals more on the objective facts
with regard to the railways as well as the progress
made and the results obtained,

simplify its charging system, its system for allocating
infrastructure capacity, its management, regulatory and
arbitration systems and its system for checking safety
and punishing infringements.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI