Opinion of the Committee of the Regions on 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: 1999-11-18
Institutions: European Committee of the Regions
Subjects: charges for use of infrastructure, rail transport, transport company, transport infrastructure

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Opinion of the Committee of the Regions 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’,

— 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’ and

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

the Community’s railways’

(2000/C 57/06)

THE COMMITTEE OF THE REGIONS,

having regard to the list of Commission proposals pending at 1 May 1999 for which the entry into force
of the Treaty of Amsterdam entails a change of legal basis and/or procedure (SEC(1999) 581 final);

having regard to the Proposal for a Council Directive amending Directive 91/440/EEC on the development
of the Community’s railways and 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 [COM(1998) 480 final — 98/0265 — 98/0266 — 98/0267 (SYN)];

having regard to the Proposal for a Council Directive amending Directive 91/440/EEC on the development
of the Community’s railways [COM(95) 337 final — 95-0205 COD ex(SYN)];

having regard to the decision taken by the Council, announced in its letter of 3 May 1999, to consult the
Committee of the Regions on this matter under Article 265, first paragraph, and Article 71 of the Treaty
establishing the European Community;

having regard to the Bureau decision of 15 July 1999 to issue an opinion on this subject, and to ask
Commission 3 — Trans-European Networks, Transport, Information Society — to prepare it;

having regard to the Draft Opinion (CdR 58/99 rev. 2) adopted by Commission 3 on 15 July 1999
(rapporteur: Mr Tabakı´dis, GR, PSE);

having regard to the decision of the Plenary Assembly on 16 September 1999 to refer the matter back to
Commission 3;

having regard to the decision of Commission 3, at its meeting on 24 September 1999, to ask the
rapporteur to include several amendments from Mr Bellet,

adopted the following opinion at its 31st plenary session on 17 and 18 November 1999 (meeting of
18 November).

1.

Introduction

Each mode of transport has its own particular role to
1.1.
play in meeting transport needs in the Community. Sometimes
the various means of transport complement one another and
sometimes they compete. It would be of great benefit to
society if there were more coordination and means of transport
were more complementary, providing a transport system
worthy of the name. If a transport system is to be effective,

every constituent part of it, i.e. every mode of transport, must
be used to the best possible effect and developed in accordance
with its own particular characteristics, especially its comparati-
ve advantages. Such an objective is in keeping with the
unanimous concern to establish a better balance between road
and rail transport for ecological and social reasons.

1.2.
Discussions on the various means of transport should
be based on common rules, both within the Member States

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and between the various sectors. Such common rules are the
principles on which pricing is based, such as the principles of
non-discrimination, transparency etc.

1.3.
The aim of the European Union is to achieve balanced
development of a system based on the real needs and actual
characteristics of European society, such as geographical,
economic and political conditions. Railways play a particularly
important role in this framework, and it is a role which should
be increased. The continued development of rail transport is
important socially (large number of jobs), economically (ex-
ports, trade) and environmentally, as it can make a substantial
contribution to environmental policy in the transport sector.

1.4.
European citizens generally are becoming increasingly
aware of the need to support and promote a policy of
environmental protection without at the same time impeding
economic integration and progress. Priority must be given to
the railways as a way of promoting sustainable development.
In this sense, any political project should be aimed at
transferring transport activities (passengers and freight) from
road to rail.

In addition, one of the more important advantages of
1.5.
rail transport is the better level of safety compared with other
modes of
transport. Safety must be part of a European
transport policy.

1.6.
For all these reasons the railways need to win back the
market share which they have lost in recent years. Between
1990 and 1995, taking all 15 EU Member States together, rail
transport dropped from 18,8 % to 14,4 % in terms of freight
tonne kilometres and from 6,8 % to 6 % in terms of passenger
kilometres. Should divergent trends be noted in some Member
States, the reasons for such differences in performance will
have to be evaluated.

journeys.

Rail transport should be made more attractive, especial-
1.7.
ly for long-haul
Its competitiveness should be
enhanced through a package of measures covering all aspects
of the rail market, i.e. the quantity and quality of infrastructure,
pricing for infrastructure use, reliability of service, ensuring
continuity of the rail network, agreements on customs formali-
ties where non-EU countries are involved etc.

1.8.
An important factor in the further development of the
railways is their position in relation to road transport, their
main competitor. Liberalisation has enabled road transport
(like air transport) to become more competitive, making those
markets distinctly flexible. The rail sector should likewise

gradually cease to be a protected market and should operate
in a framework which is more closely tailored to modern needs.
However, the necessary improvement in the performance of
the rail sector must be done while maintaining at least the
high level of safety now achieved, and with no worsening in
working conditions. Safety must be the priority of the new
legal framework for railways, with an obligation to achieve
certain safety standards; each Member State would be free to
choose the means for doing so. As in the case of sea and air
transport, such liberalisation should be achieved in stages, in
conjunction with the necessary accompanying measures, but
without
the step-by-step approach being used to justify
unwarranted, or even detrimental delays. Each stage of liberali-
sation of the rail sector should be followed by an assessment
of the impact of the various measures on rail companies and
on society in general. The COR considers it essential, with the
for impact
adoption of the three Commission directives,
studies to be drawn up in each Member State and region and
for their findings to be assessed, as well as the impact of the
directives in force. Particular attention should be paid to the
issues of segmentation, designing a European transport area
based on north-south routes that would be liable to further
marginalise isolated and peripheral regions, and pressure on
the environment, etc. in a more general context of enlargement
involving the progressive entry of the CEECs into the European
Union.

2. General comments

2.1.
The European Union has already adopted three directi-
ves on reform of the rail transport market: 91/440/EEC on the
development of the Community’ s railways, 95/18/EC on the
licensing of railway undertakings, and 95/19/EC on the
allocation of railway infrastructure capacity and the charging
of infrastructure fees. These directives followed on from the
White and Green Papers on the Community’s railways.

2.2.
The aim of all these measures is to open up the market
to new railway undertakings, which will be able to use the
existing infrastructure. With this in mind, the first step, taken
with Directive 91/440/EEC, was to separate the accounts for
infrastructure management from those relating to the provi-
sion of rail services. This makes the cost of using the railways
more transparent, thus creating the conditions for fair and
objective charging for infrastructure use. In other words, the
user will be called on to pay the actual cost of transport, so
that railways can operate on healthier terms for society as a
whole. In practice, countries have found different ways of

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separating accounts. Some Member States (France, the UK,
Sweden, Denmark, Finland, Portugal and the Netherlands)
have set up two different bodies, one responsible for infrastruc-
ture and the other for transport, while others have one
‘integrated’ body. Under this arrangement, the same legal
person is responsible for infrastructure and transport, and
accounts are separated either by assigning the two functions
to two different departments (as in Austria, Germany, Italy,
Spain and Belgium) or simply by publishing separate accounts
(as in Luxembourg, Greece and Ireland). It should be noted
that when separate accounts are drawn up by a single
body only the profit and loss accounts are separated; the
Commission, however, proposes requiring separate balance
sheets to be drawn up as well. The Commission also proposes
that separate accounts be kept for passenger transport (where
the Member States can impose public service obligations) and
freight transport (which has a more commercial character).

2.3.
Railways are therefore beginning to take a commercial
approach, something which was previously lacking in their
method of operation. Another important step in this direction
is ensuring free access to the infrastructure. The basic terms
for such access are specified in Directive 95/18/EC, which lays
down the conditions for railway undertakings’ access to
the market. Lastly, Directive 95/19/EC lays down the basic
principles which are to apply uniformly to all undertakings in
the sector, not only in relation to pricing, but also in relation
to the allocation of capacity, which is often limited or else
saturated. The COR asks the Council and the European
Parliament to assess the impact of implementing the Directives
on sustainable development in Europe’s regions, especially due
to the payment of infrastructure user charges, deterioration of
regional public services, domination of trans-European freight,
which will take priority over all other users, possible closure
of rail links to certain less-developed regions, and concentra-
tion of economic activities in what are now the wealthiest
regions.

3. Proposals

3.1. Amendment of Directive 91/440/EEC on the development of

the Community’s railways

3.1.1.
The basic idea behind the proposed amendment is
the full and obligatory separation of the body managing the
infrastructure from any railway undertaking. The provision of
transport services thus becomes a purely commercial activity
and follows market rules, except in the case of transport
services that have a public service function. Member States and
regions always play a central role: laying down norms and
monitoring observance of the rules. They manage the infra-
structure and hence control its development, the necessary
investment, future planning, the observance of safety require-
ments and the smooth operation of the rail market generally.

3.1.2.
It is also proposed to separate passenger transport
from freight transport, at least for accounting purposes. This
separation is important, as it enables different criteria to be
applied to each case, i.e. freight transport will have a clearer
and stronger commercial slant, while passenger transport will
in some areas be strongly competitive and in others fulfil a
public service function. This separation would give the finan-
cial aspect of the different types of transport the necessary
transparency.

3.1.3.
The development of national railway infrastructures
and the corresponding national markets is thus governed not
only by economic cost/benefit
factors but also by more
general considerations to do with national and social interests,
economic cohesion and regional development. These factors
should be taken into account in applying any measures.

3.1.4.
Some Community countries with special geographi-
cal or geopolitical features should be treated differently when
it comes to the development of their rail transport markets.
Each region of the Community should be examined in the
light of its particular circumstances, without this jeopardising
or having a negative effect on Community plans to reform the
rail transport market.

The European Commission’s philosophy is that,

2.4.
in
order to reorganise the railways and increase their share of the
passenger and freight market, the aim should in practice be
one of close cooperation with all railways, especially in the
international freight sector, the international passenger sector
and the national freight sector. The European Commission’s
proposals for new Directives (amending 91/440/EEC, amen-
ding 95/18/EC and replacing 95/19/EC) are moves in this
direction.

3.2. Proposal amending Directive 95/18/EC on the licensing of

railway undertakings

Under the proposed Directive, railway undertakings
3.2.1.
providing the services referred to in Article 10 of the existing
Directive 91/440/EEC are obliged to obtain a licence from the

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Member State in which they are established. That licence is
valid throughout the Community. Issue of the licence is subject
to certain conditions: professional competence, financial fit-
ness and good repute.

The basic idea behind the proposed directive is to
3.2.2.
ensure transparent and equal treatment for railway underta-
kings and to see to it that in an open market all safety
requirements are met for the smooth operation of the rail
system, to the benefit of users and society as a whole.

3.2.3.
An innovation in the proposal is to include underta-
kings operating urban, suburban or regional rail services in
obligatory licensing. It is left up to each Member State, or to
each region with responsibility for railways and with its own
network, to decide whether to require licensing of undertakings
carrying out such activities on its territory. In a market moving
towards increasing liberalisation, Member States and regions
could use this provision to some advantage.

3.3. Proposal replacing Directive 95/19/EC on the allocation of
railway infrastructure capacity and the charging of infrastructu-
re fees

3.3.1. When choosing a means of transport, users base
their decisions on a number of factors. Quality and reliability
of service are of major importance, but price is a deciding
factor. In the rail sector, the charges to be paid for use of
infrastructure have a significant impact on the final price of
the transport (passing on the cost). This is a means of creating
incentives for transferring transport business from road to rail.

3.3.2.
The aim of the proposal is to clarify the framework
for allocating infrastructure capacity and charging for infra-
structure use. Infrastructure costs account for a significant part
of the price users have to pay. Under the proposed directive,
part of the cost also relates to the scarcity of infrastructure
capacity. This might create certain problems when applying
the directive if the infrastructure manager does not have any
latitude with regard to decision-making or the corrective
measures that he can take to remedy, as far as possible, any
malfunctioning of the system.

authorities and businesses, its policies and operation must still
be monitored by a different higher authority. The infrastructure
manager should likewise be able to apply pricing policies based
on commercial decisions and not on rigid and predetermined
criteria. Transparency and equal treatment are necessary with
regard to all undertakings entitled to access to the rail transport
market. However, this does not mean that the infrastructure
manager should not have some decision-making latitude,
depending on the particular circumstances of the infrastructure
network he manages.

3.3.4.
The charges levied for the use of rail infrastructure
should be determined in similar ways to those for other
competing modes of transport, particularly road transport. It
is not fair to internalise, and hence charge for, the external
cost of rail transport when a similar pricing principle does not
apply in the road sector. The methodological and political
problems of such a move are well known. What is more, rail
transport has much lower external costs than road transport.
We could however consider a form of pricing within the rail
sector which takes environmental impact into account; for
example, more environmentally-friendly lines could be charged
lower fees, at the expense of those which, by virtue of the
technology they use, have a more detrimental impact on the
environment (by analogy with the road transport sector, where
different prices are charged under the Eurovignette system, in
accordance with the decision taken by the Transport Council
on 1 December 1998). Furthermore, charging based on margi-
nal costs should not lead to rural areas being deprived of
railway services.

Finally, it is necessary to clarify fully the meaning
3.3.5.
and role of the newly-coined term ‘authorised applicant’. This
new category should be brought into the rail transport market
without jeopardising the smooth operation of the system.
Under the proposal for a directive, ’a person or legal entity
with a commercial or public service interest in procuring
infrastructure capacity for the operation of a railway service,
who has complied with the necessary requirements to enable
him to seek to book capacity’ may acquire railway infrastructu-
re capacity. Thus ‘authorised applicants’ could be not just
railway undertakings, but also any operator able to provide a
service, e.g.
travel organisation, shipping
company, etc. The COR is very concerned about the fact that
this right is also extended to shippers, because the result would
be to create a market like the road transport market with
significant distortion of competition.

local authority,

4. Proposed accompanying measures

3.3.3.
Infrastructure capacity must be allocated to railway
undertakings by a body that is independent of enterprises and
organisations involved in railway operations (to avoid any
conflict of interest in such situations). Even if for reasons of
transparency the body in question will have to respect
the objectives and rules of European national and regional

4.1.
To achieve complete restructuring of the rail sector, to
the benefit of society as a whole, the proposed arrangements
should be accompanied by appropriate supporting measures
such as:

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— social policy measures at national and Community level

for rail employees;

ber of European industrial centres will it be possible to curb
road transport, with attendant economic and environmental
advantages.

— technical and institutional measures for railways, such
as ensuring technical compatibility and where possible
interoperability of networks, and encouraging freight free-
ways;

Directive 91/440/EEC on the development of

5.4.
the
Community’s railways took a first step towards revitalisation.

— definition of the terms and conditions for derogating from
these arrangements (state aid etc.), especially with regard
to the public service obligation;

6. Directive 91/440/EEC

— clear definition of the role of the State in order to ensure
the smooth running of the rail system both as regards the
necessary competitiveness and as regards the public service
which railways represent.

Proposal for a Council Directive amending Directive
91/440/EEC on the development of the Community’s
railways (1)

5.

Introduction

5.1.
Since the early 90s the European Union has recognised
the need for specific measures to revitalise the Community’s
railways. Its intention has been to achieve balanced develop-
ment of all modes of transport while at the same time curbing
the steadily dwindling rail market share.

5.2.
However, for a combination of structural, economic
and historical reasons, the various modes of transport have
developed differently from one Member State to another — a
factor which is often regarded as being at the roots of the
substantial distortion of competition between them. Balanced
development of a transport system framed to respond to the
actual needs and intrinsic characteristics of European society
(geographical, economic and political conditions) is one of the
key political aims of the common transport policy.

5.3.
On the other hand, the European citizen is increasingly
concerned by the vital need to protect the environment while
at the same time guaranteeing sustainable, long-term economic
development along the path to European integration. Trans-
port safety is another major consideration. All these concerns
can be met by developing railways but improving the balance
between the various modes of transport.

At the same time, from the inevitably long-term viewpoint of
economic benefits, a policy needs to be framed to boost all rail
links, including minor ones (contrary to the current policy of
closing down ‘non-profitable lines’ in many countries). Only
by guaranteeing rail communications for the maximum num-

(1) COM(95) 337 final — 95-0205 COD ex (SYN).

6.1.
The main purpose of Directive 91/440 is to establish
basic structures to underpin the Community’s railways so that
the sector can operate with greater transparency and be more
closely tailored to market requirements. The separate accounts
required for infrastructure management and for the provision
of services must be seen in this light.

6.2.
Again with a view to opening up the traditionally
protected railway market, Article 10 of the Directive provides
for some measure of liberalisation of access into the transit
services market. Liberalisation is not unlimited, since it is
restricted to international groups of railway undertakings
operating international transport services as well as to underta-
kings operating combined transport services.

7. Proposed amendment to Directive 91/440/EEC

7.1.
Four years after the entry into force of the above
directive, the European Commission has drafted a proposal to
amend Article 10 of the existing directive with a view to
opening up access to rail infrastructure to all undertakings
operating services for the transport of goods, combined
transport services or international services for the transport of
passengers.

7.2.
There is currently a lack of consensus among the
Member States on this next stage towards liberalisation of the
rail market.

7.3.
Obviously such liberalisation can only proceed step by
step. It is also clear that the extent to which the Member States’
national rail markets are liberalised differs considerably in the
absence of a common policy some years ago.

7.4.
The proposed amendment to Article 10 of Directive
91/440/EEC is undeniably a move towards more advanced
liberalisation — an entirely valid policy for the purpose of
revitalising the railways. However, the implications of the
proposed political measures for some Member States whose
situation differs from that of the others still remain to be seen.
For instance, the social role played by the railways in many
countries, in terms of jobs and public services, must not be
overlooked.

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Strategies therefore need to be set in motion to protect, along
with economic interests, the railways’ social role.

8. Conclusions

7.5.
Here the best timing for such political measures is at
issue. This point is a suitable focus for a political debate aimed
at achieving consensus. Before irreversible political measures
are taken, all possible scenarios should be studied, with
particular emphasis on a practical, acceptable timetable. Furt-
her, any future political measure must seek the best possible
integration of all EU regions as a guarantee of the socio-
economic cohesion of the Union as a whole.

Brussels, 18 November 1999.

To create a solid basis of political compromise, a
8.1.
common denominator between the Member States needs to
be sought. In the case of railways, convinced as we are that we
are on the right road, we must nonetheless work out the
proper timetable for implementation, while not ruling out
accompanying measures such as technical accounting by
traditional railway undertakings of national and Community
policies for job protection in the rail sector, promotion of
freight freeways, determination of conditions under which
derogations may be applicable, such as state aids, especially
for the purposes of fulfilling public service obligations, etc.

The President

of the Committee of the Regions

Manfred DAMMEYER