Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development of the Community's railways (COM(2004) 139 final — 2004/0047 (COD))
Date: 2005-02-09
Institutions: European Economic and Social Committee
Subjects: carriage of passengers, competition law, international transport, liberalisation of the market, rail network, rail transport

C 221/56

EN

Official Journal of the European Union

8.9.2005

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the
European Parliament and of the Council amending Council Directive 91/440/EEC on the develop-
ment of the Community's railways

(COM(2004) 139 final — 2004/0047 (COD))

(2005/C 221/13)

On 28 April 2004 the Council decided to consult the European Economic and Social Committee, under
Article 71 of the Treaty establishing the European Community, on the abovementioned proposal.

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 17 January 2005. The rapporteur
was Mr Chagas.

At its 414th plenary session (meeting of 9 February 2005), the European Economic and Social Committee
adopted the following opinion by 122 votes to 53 with 12 abstentions.

1. Introduction

1.2
The first railway package (also called the infrastructure
package) came into force on 15 March 2001 and had to be
It
transposed into national
comprises the following components:

legislation by 15 March 2003.

The present proposal forms part of the third railway
1.1
package, which was adopted by the European Commission on
3 March 2004. The other components are:

— Proposal for a Directive on the certification of train crews

(COM(2004) 142 final);

— Amendment of Directive 91/440/EEC,

including free
market access for international rail freight on the trans-
European rail freight network by 15 March 2003 and liber-
freight by 15 March
alisation of all
2008 (1);

international

rail

— Proposal for a Regulation of the European Parliament and
of the Council on international rail-passengers' rights and
obligations (COM(2004) 143 final);

— Extension of the scope of the Directive on a European
licence for railway undertakings (amendment of Directive
95/18/EC) (2);

— Proposal for a Regulation on compensation and quality
freight services (COM(2004) 144

rail

requirements for
final);

— Harmonisation of the provisions governing the allocation
of railway infrastructure capacity and the levying of charges
for the use of railway infrastructure and safety certification
(replaces Directive 95/19/EC) (3).

and

— Commission Communication on further integration of the

European rail system (COM(2004) 140 final);

— Commission staff working paper on gradually opening up
for international passenger services by rail

the market
(SEC(2004) 236).

1.3
In October 2003 the European Commission took nine
Member States to the European Court of Justice for failing to
notify the transposition of
railway package into
national law. By May 2004 five countries' notification had still
not been received and two Member States had transposed only
some of the provisions into national law.

the first

(1) Directive 2001/12/EC – OJ L 75, 15.3.2001, p. 1 – EESC opinion –

OJ C 209, 22.7.1999, p. 22

(2) Directive 2001/13/EC – OJ L 75, 15.3.2001, p. 26 – EESC opinion

– OJ C 209, 22.7.1999, p. 22

(3) Directive 2001/14/EC – OJ L 75, 15.3.2001, p. 29 – EESC opinion

– OJ C 209, 22.7.1999, p. 22

8.9.2005

EN

Official Journal of the European Union

C 221/57

1.4
The second railway package was published in the Offi-
cial Journal of the European Community on 30 April 2004 and
has to be transposed into national law by 30 April 2006. It
comprises the following components:

1.8
As part of the third railway package, the Commission is
proposing a directive on the certification of train crews, which
would come into force in 2010 or 2015.

— Amendment of Directive 91/440/EC: bringing forward free
market access for international rail freight to 1 January
2006 and liberalisation of national rail freight,
including
cabotage, from 1 January 2007 (4);

— Directive on railway safety in the Community (5);

— Regulation establishing a European Railway Agency (6);

In submitting a

to Directive
further
1.9
91/440/ECC, the Commission continues to pursue its aim of a
gradual deregulation of the railway sector.

amendment

— Amendment of the Directives on the interoperability of the
high-speed rail system (96/48/EC) and the conventional rail
system (2001/16/EC) (7).

2. The European Commission Proposal

The first and second railway packages provided the legal
1.5
basis for establishing a single rail freight market. The measures
encompass market access, the licensing and safety certification
of railway undertakings, access to infrastructure and the calcu-
lation of charges for its use, the creation of a legal framework
for rail safety, and measures for ensuring the technical intero-
perability of the rail system.

The Commission proposes to deregulate market access
2.1
for international passenger services from 1 January 2010
onwards. The proposal also covers cabotage, that is to say the
picking up and setting down of passengers at railway stations
along the entire route. At the same time the provision on free
access to the market for international groupings is to be abol-
ished.

1.6
As the EESC has already pointed out in its Opinion on
the second railway package (8), this new legal framework makes
it necessary to completely reorganise the sector and establish
new authorities and competences.

In the same opinion the EESC also pointed to the need
1.7
for European social rules. European social partners in the
railway sector, the Community of European Railways and the
European Transport Workers' Federation signed two European
agreements on 17 January 2004 concerning:

1) The introduction of a European train driver's licence for

train drivers on international services.

2) Agreements on certain aspects of the conditions of employ-

ment for train crews on international services.

(4) Directive 2004/51/EC – OJ L 164, 30.4.2004, p. 164 – EESC

opinion – OJ C 61, 14.3.2003, p. 131

(5) Directive 2004/49/EC – OJ L 164, 30.4.2004, p. 44 – EESC

opinion – OJ C 61, 14.3.2003, p. 131

(6) Regulation (EC) No. 881/2004 – OJ L 164, 30.4.2004, p. 1 – EESC

opinion – OJ C 61, 14.3.2003, p. 131

(7) Directive 2004/50/EC – OJ L 164, 30.4.2004, p. 114 – EESC

opinion – OJ C 61, 14.3.2003, p. 131

(8) OJ C 61, 14.3.2003, p. 131

2.2
Each year 6 billion passengers travel by train in the EU
25, with local and regional services taking the lion's share.
International passenger services account for only about 10 % of
rail travel, based on tickets sold. This includes regional cross-
border services,
long-distance cross-border services and high-
speed (cross-border) services.

The Commission recognises that opening up interna-
2.3
tional passenger services,
including cabotage, to competition
could perhaps have a negative impact on the economic balance
of public service passenger transport.
It proposes to grant
exemptions from free market access on routes where public
service contracts are already in force under Directive (EEC) No.
1191/69, and where a deregulation of international services
could upset the balance. This exemption will only be granted in
cases where this is absolutely critical to maintaining the provi-
sion of public service transport, and where it has been sanc-
tioned by the regulatory authority under Article 30 of Directive
2001/14/EC. Judicial review of the decision to grant exemption
must also be possible.

The Commission is required to present a report on the

2.4
implementation of the provision by 31 December 2012.

C 221/58

EN

Official Journal of the European Union

8.9.2005

3. Evaluation of the Proposal

safety a priority. This would include introducing European
social legislation on the railway industry.

3.1 Prerequisites for revitalising the railway industry

The proposal

to deregulate international passenger
3.1.1
services is based on the assumption that competition in inter-
national services will
lead to one or more of the following
consequences: higher passenger numbers, a transfer from other
transport modes (in particular air transport) to rail, improved
quality for customers and lower fares.

In its Opinion on the 2nd railway package (9)

3.1.2
the
EESC already pointed out the basic prerequisites for revitalising
the railway system:

— funding the extension and consolidation of

the railway

infrastructure;

— introducing technical
funds this requires;

interoperability and providing the

3.2 Ex-post analysis of the deregulation of rail freight services

The decisions concerning the deregulation of

3.2.1
rail
freight services have already been made; however the effects
these decisions will have are as yet unknown.

3.2.2
The European Commission is required to submit a
report by 1 January 2006, which covers the following areas (10):

— implementation of Directive 91/440/EC in the Member
States and examination of the way in which the various
bodies involved actually operate;

— market developments, in particular international trends in
transport, operations and market shares of all market
players (including new operators);

— effect on the entire transport industry, and in particular any

— creating an environment

for

fair competition between

shift to alternative transport carriers;

modes of transport, and in particular:

— ensuring that social
sector is adhered to;

legislation in the road transport

— providing a fair infrastructure charging policy for all

modes of transport.

3.1.3
To date the proposal for a fair infrastructure charging
policy for all modes of transport, as announced in the White
Paper on European Transport Policy for 2010, has not materia-
lised.

— effects on safety levels in individual Member States;

— the working conditions

in the industry in individual

Member States.

3.2.3
The EESC believes it is appropriate to wait for the
report to be published and an understanding of the effects
measures implemented so far has been gained, before any
further steps towards opening the market are taken and asks
the Commission to deliver the report in time.

3.1.4
lation in road transport still remains a serious problem.

The monitoring and proper application of social legis-

3.3 Ex-ante analysis of
passenger services

the deregulation of

international

rail-

3.1.5
Furthermore, a solution to the debt problems of many
rail companies needs to be found. Especially in the new
Member States, railway companies will be unable to compete
without finding a solution for their high debts.

Prior

to announcing the 3rd

3.3.1
railway package the
Commission ordered a study on the deregulation of passenger
services. The declared purpose of the study was to examine
various options for deregulation and to recommend one of
them. These options were:

3.1.6
The EESC also pointed out that the introduction of
new authorities, as required by the first and second railway
packages (regulatory body, charging body, allocation body,
notified body, safety authority, accident
investigation body)
would entail a realignment of the railway industry's organisa-
tional structures at short notice, and would require a number
of years of practical experience before it could operate
smoothly. The EESC has declared itself in favour of making rail

(9) See footnote 8.

— deregulation of international services without cabotage;

— deregulation of international services with cabotage;

— deregulation of both national

and international

rail-

passenger services.

(10) Article 2(d) of Directive 2004/51/EC of the European Parliament
and of the Council amending Council Directive 91/440/EEC on the
development of the Community's railways.

8.9.2005

EN

Official Journal of the European Union

C 221/59

3.3.2
passenger services with cabotage (11).

The study recommended deregulation of international

network. In such circumstances it will be difficult to furnish
evidence of a threat to the balance of public service transport.

3.3.3
used to examine important
issues relate to the effect of deregulation of passenger services:

The EESC regrets that a study of this kind was not
issues comprehensively. These

The possibility of exemptions, as proposed by the
3.4.5
Commission, will
involve complicated procedures in proving
the validity of exemptions and could well lead to legal disputes.

— regional rail services as services of general

interest, espe-

cially in small and medium-sized Member States;

— quality of service for customers;

— employment and working conditions

in rail-passenger

transport;

— rail operators in the new Central and Eastern European

Member States.

3.3.4
The study includes observations on individual areas
that it touched upon (such as the importance of fares and route
prices). These observations were made on the basis of four case
studies (Sweden, Germany, Spain, Hungary) and a simulation
exercise for two routes. It also advises against deregulation of
national rail-passenger services. However, the stated aim of the
study was to recommend one of the three options.

3.4 Effects of deregulation on regional and public services

Through cabotage, the proposal for deregulation of
3.4.1
international passenger services requires that markets in certain
national passenger services are to some extent opened up.

3.4.2
National passenger transport is often a network trans-
port where profits made on routes with large passenger
volumes compensate for losses on lower-volume routes, thus
making it possible to provide a fuller service. This is not only
true of public service routes, with exclusive rights and/or subsi-
dies, for which the Commission proposal allows exceptions,
under strict conditions.

In July 2000,

the European Commission proposed
3.4.6
COM(2000) 7 final, to replace Regulation (EEC) No. 1191/69
on the obligations inherent in the concept of a public service
in transport, which provides the rules for exclusive rights and
compensation for public passenger transport, by a new Regu-
lation.

The proposal to amend Regulation (EEC) No. 1191/69
3.4.7
has been blocked in the Transport Council for several years.
Fundamental differences between the Commission proposal
and the European Parliament's position remain, and these could
have considerable implications for the impact of the proposal
services. The
in terms of deregulation of
Commission is planning to submit a new proposal before the
end of the year.

rail-passenger

3.4.8
This is another argument in favour of waiting until
this piece of legislation has been adopted, before making any
proposals to protect the balance of public service rail-passenger
services in connection with deregulation.

3.5 Effects on quality of service for customers

3.5.1
In view of the high costs and traditionally low ticket
prices, the study concludes that it is unlikely that deregulation
lead to further price
of international passenger services will
reductions for customers.

In small and medium-sized Member States in particu-
3.4.3
lar,
this could lead to serious disruption to rail-passenger
services, which are not contractually covered by exclusive
rights.

3.5.2
Increased choice resulting from competition between
rail operators on the same route, could at the same time mean
that standards that have prevailed so far — one timetable, one
ticket, information from one source — can no longer be guar-
anteed. Greater barriers to information will be created.

3.4.4
In some Member States contracts on public services
obligations cover not just individual routes, but the whole

(11) EU Rail Passenger Liberalisation: Extended impact assessment,

February 2004 by Steer Davies Gleave, London.

The Commission's response to this is to propose legis-
3.5.3
lation, which obliges competing companies to cooperate in
order to maintain the standards of information that have been
guaranteed so far.

C 221/60

EN

Official Journal of the European Union

8.9.2005

The EESC will examine this proposal

in a separate
3.5.4
it would like to point out that obliging
opinion. However,
competing companies
the purpose of
for
to cooperate
customer information is only necessary once the passenger
service market has been opened.

security system. Social support measures are urgently required
here. The EESC is opposed to any measures, which lead to
further job cuts and to a deterioration in the quality of jobs in
an industry which is already under strain.

3.7 Effects on rail operators in the new Member States

3.6 Effect on Employment

3.6.1
The Commission assumes that deregulation of interna-
tional passenger services will lead to reductions in personnel in
the short term, but that in the medium term employment will
rise as a result of an increase in passenger numbers. It does
not, for instance, take into consideration, the possible negative
effects on employment resulting from the deregulation's impact
on regional and public service routes. In respect of Article 1.7
of this proposed directive the effects would depend on the deci-
sion of each Member State to finance regional passenger trans-
port.

that

the poor condition of

The Steer Davies Gleave study, quoted above, points
3.7.1
out
infrastructure in the new
Member States, the poor financial situation of rail operators
and ticket prices which are usually below the long-term level of
costs, represent additional obstacles to greater competition.

3.7.2 Moreover, rail operators do not have the high-quality
rolling stock required to withstand competition.

Regional rail services play an even greater role in the
3.7.3
new Member States than in the EU-15. If deregulation of inter-
national passenger services has a negative effect on the provi-
sion of regional services, this effect will be even stronger in the
new Member States. It would hasten the decline in the railways
still relatively large share of passenger transport.

3.6.2
The number of employees in the railway industry has
halved over the past decade. Rail operators in the new Member
States and Western Europe rail have announced further large
staff cuts. If deregulation of international passenger services
leads to rail operators in small and medium-sized EU States
being displaced in national long distance services as well, posi-
tive effects on employment are not to be expected.

4. Conclusion

Passenger rail travel has traditionally been a mode of
3.6.3
transport open to all sections of society. Air transport has
developed from a luxury to a mode of mass transport. The
positive employment effects associated with this development
cannot be reproduced to that extent
in international rail-
passenger transport.

3.6.4 Meanwhile, high quality jobs in the former state
owned airlines have been replaced by lower quality jobs in
other segments of the civil aviation industry.

In its previous opinions the EESC has always been in
industry in Europe, and has

4.1
favour of revitalising the rail
pointed to essential prerequisites to achieving this:

— expanding infrastructure and removing of bottlenecks;

— establishing interoperability between railway systems;

— creating fair competition between transport modes;

— guaranteeing social provisions and rail safety.

The EESC calls on the Commission and the Member
4.2
States to help ensure that these conditions are met as fast as
possible.

The EESC views the sharp cuts in employment in the
3.6.5
rail industry with great concern. Job cuts such as these lead to
considerable social problems in the new Member States, which
suffer from high unemployment and an underdeveloped social

4.3
The EESC underlines the importance of rail-passenger
transport in meeting people's need for mobility and its impor-
tance as a provider of general interest services.

8.9.2005

EN

Official Journal of the European Union

C 221/61

4.4
The EESC acknowledges the importance of a network
service provider and of integrating this with other modes of
public transport in the interests of public mobility. This service
must not be put at risk.

Council. The detailed shape of this Directive could have an
impact on the rules on the protection of public-service routes
within the framework of the deregulation of international rail-
passenger services.

4.5
The EESC believes that any decision on the deregulation
of international passenger services shall be based on extensive
and clear knowledge regarding the overall effects on rail-
passenger transport and the impact of the measures decided on
within the 1st and 2nd Railway Package.

4.6
It therefore calls on the Commission to carry out an
adequate ex-ante analysis of the advantages and disadvantages
which deregulating passenger services. The analysis should
address the effects of deregulation on:

— regional and general

interest rail transport, especially in

small and medium-sized Member States;

— quality of service for customers;

— employment and working conditions

in rail-passenger

transport;

— rail operators in the new Member States of Central and

Eastern Europe.

4.7
The EESC calls on the Commission initially to present
the report on the implementation of market opening for rail
freight
required by Directive 91/440/EEC (as
amended by Directive 2004/51/EC).

services, as

4.8
The EESC points out that the proposal for a Regulation
of the European Parliament and of the Council on action by
Member States concerning public service requirements and the
award of public service contracts in passenger transport by rail,
road and inland waterway [COM(2000) 7 final and amended
Proposal COM(2002) 107 final] are still pending in the

Brussels, 9 February 2005.

4.9
Improvements to the quality of service on passenger
routes enhances the attractiveness of this mode of transport,
which in turn furthers the European transport policy aim of a
sustainable transport system. The main responsibility here lies
with the rail operators. However,
the EESC is critical of
measures which could lower the current standards of service
quality. It would give high consideration to measures aiming to
improve the quality of services.

The EESC is of

4.10
the opinion that promoting better
cooperation between railway companies will be the right way
to improve service quality for passengers in international rail-
international
passenger
passenger transport.

in regional

transport,

especially

4.11
The EESC would very much welcome it if the Commis-
sion entered into a dialogue with European social partners on
the impact of deregulation on rail transport, and on the quan-
tity and quality of employment in particular.

The

transport

share of

4.12
in overall
rail-passenger
passenger transport is considerably greater in the new Member
States than in the EU 15. Therefore, the EESC considers it
imperative that particular attention be paid to developments in
rail-passenger transport in the new Member States and to the
impact of opening up the market in these countries. It is in the
interest of the entire Community and in line with the aims of
the White Paper on Transport Policy that this large share be
maintained.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

C 221/62

EN

Official Journal of the European Union

8.9.2005

APPENDIX

to the Opinion of the European Economic and Social Committee (in accordance with Rule 54(3) of the Rules
of Procedure)

The following proposals for amendments, which won more than a quarter of the votes cast, were rejected in the course
of the discussions.

Point 3.1.4

Delete.

Reason

This point does not have anything to do with the deregulation of the railways. Two sectors are being mixed up in an
opinion that deals with the development of the Community's railways. It cannot be said that the monitoring of social
legislation in road transport is a serious problem, given the existence of various laws on driving and rest times and the
working hours of drivers. All this legislation is monitored by macrograph. Moreover, August 2005 will see the introduc-
tion of a new monitoring system, the digital tachograph, which will allow for more accurate monitoring of drivers'
working hours.

Results of voting

For: 58

Against: 80

Abstention: 7

Point 3.1.6

Delete the last sentence:

‘This would include introducing European social legislation on the railway industry.’

Reason

Rail safety in the EU has been regulated by Directive 2004/49 EC.

Results of voting

For: 52

Against: 93

Abstention: 5

Point 3.2.3

Replace with the following:

‘In the EESC's view, it would be advisable to analyse the content of this report upon publication in order to ascertain
whether the proposal for a directive ought to be amended or modified.’

Reason

In effect, the current wording calls for a halt to the legislative process, which fosters a kind of legal uncertainty that is
detrimental to all involved — businesses, employees and customers.

It would seem that a more positive and constructive approach would be to show a clear willingness to take the conclu-
sions on board in order to amend or modify the proposal if necessary.

Thus, a dynamic and open process is maintained throughout.

8.9.2005

EN

Official Journal of the European Union

C 221/63

Results of voting

For: 54

Against: 92

Abstention: 9

Points 3.4.7 and 3.4.8

Replace with the following and number the new point as 3.4.7:

‘When the new proposal to amend Regulation (EEC) No. 1191/69 is submitted to the Council of Ministers and the
European Parliament, the implications of the text in terms of the deregulation of rail passenger services and main-
taining the balance of public service transport should be discussed.’

Reason

The current wording refers to a situation that is no longer relevant. A new text has been drawn up by the Commission
and may be submitted to the Transport Council in June. It is not possible to predict what sort of reception it will be
given by either the Council of Ministers or the European Parliament.

The suggested wording is in line with a more constructive approach.

Results of voting

For: 68

Against: 90

Abstention: 8

Point 3.6

Delete.

Reason

It cannot be said that the deregulation of rail transport will lead to job losses and that the new jobs created will be of
poorer quality, when the deregulation of all other modes of transport has resulted in an increase in jobs. It must be
stressed that rail transport is the only mode that has not been deregulated.

Results of voting

For: 66

Against: 102

Abstention: 6.