Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of the first railway package {SEC(2006) 530}
Date: 2006-05-03
Institutions: European Commission
Subjects: EC Directive, charges for use of infrastructure, common transport policy, national implementing measure, rail network, rail transport, report, trade licence, trans-European network, transport safety

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 3.5.2006 
COM(2006) 189 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE 
COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

on the implementation of the first railway package 

{SEC(2006) 530} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

5. 

INTRODUCTION: From the first to the third railway package, the gradual creation 
of a European railway area........................................................................................... 3 

Transposition performed by the Member States but consolidation still needed .......... 4 

The development of the railway market and its place in the transport system ............ 6 

The market for the transportation of goods by rail ...................................................... 6 

The market for the transportation of passengers by rail............................................... 7 

The development of railway safety .............................................................................. 7 

A very favourable situation.......................................................................................... 7 

The question of safety certificates................................................................................ 8 

The development of working conditions and employment in the railway sector ........ 8 

5.1. 

The development of employment................................................................................. 8 

5.2.  Working conditions in the railway sector .................................................................... 9 

6. 

CONCLUSIONS: Further work still needed ............................................................. 10 

Annex:  Commission  staff  working  paper  including  14  information  annexes  on  each  of  the 

main topics tackled in the Communication 

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1. 

INTRODUCTION:  FROM  THE  FIRST  TO  THE  THIRD  RAILWAY  PACKAGE,  THE 
GRADUAL CREATION OF A EUROPEAN RAILWAY AREA 

The railways were the first of the modern modes of transport. Their success during the 19th 
century and the first half of the 20th century was unprecedented, but they fell into decline as 
motor cars and commercial aviation became increasingly popular and successful. In order to 
halt  this  decline  the  European  Community  has  adopted  a  number  of  legislative  measures 
aimed at reviving the railways by gradually creating a “railway area” which is integrated at a 
European  level.  However,  the  slow  rate  at  which  the  Member  States  and  their  national 
undertakings  have  adapted  to  the  European  dimension  means  that  the  railway  sector  has 
declined further in most of the Member States except those which were aware of the need for 
proactive and courageous measures. The first Member States to reform their national railway 
industry are today also the ones which perform best (in terms of traffic in particular) and have 
modernised to a degree which augurs well for the future. 

In 19961, the White Paper on the railways highlighted the need to reform the sector more fully 
to  give  it  a  chance  of  success  in  the  European  internal  market.  The  first  railway  package 
presented by the Commission in 1998 focused on the shortcomings of Directive 91/440/EEC2 
and was  based on the  consensus  reached by the decision-makers  following their analysis of 
the 1996 White Paper. Comprising three Directives, it enables any railway undertaking which 
has  been  licensed  in  accordance  with  Community  criteria  to  have  access  to  railway 
infrastructure on fair, non-discriminatory terms to offer pan-European services, starting with 
international  freight  services  on  the  trans-European  rail  freight  network.  Its  adoption  at  the 
end  of  2000,  following  a  difficult  conciliation  procedure  between  the  European  Parliament 
and the Council, and publication on 15 March 2001 for transposition in the Member States by 
15 March 2003 signalled the desire of both national and European policymakers to overhaul 
the regulatory framework for the industry from top to bottom to ensure its integration into the 
European area and to enable it to face up to the competition from other transport modes on the 
best possible terms. 

The  September  2001  White  Paper  on  European  transport  policy,  which  was  based  on  the 
decisions set out in the first railway package, clearly advocated continuing with the creation 
of a European railway area, which the second railway package proposed by the Commission 
in  January  2002,  and  adopted  in  April  2004,  defined  in  greater  detail  with  more  extensive 
opening  up  of  the  freight  market,  a  Directive  on  railway  safety,  a  Regulation  establishing  a 
European  Railway  Agency  and  other  measures  to  speed  up  interoperability  between  the 
national networks. The adoption of this package, which includes the total opening up of the 
freight market as from 2007 in a European Union by then of 25 or even 27 Member States, 
was  evidence  of  the  same  wish  on  the  part  of  the  decision-makers  to  continue  with  the 
creation of a European railway area. Even more indicative of this desire was the demand of 
the European Parliament to have a third railway package on the table before approving the 
second package, which led the Commission to put forward new proposals in March 2004, this 
time  aimed  at  opening  up  the  international  passenger  transport  market  by  2010,  the 
certification of on-board staff and passenger rights. The European Parliament endorsed these 
proposals  in  September  2005  and  political  agreement  was  reached  in  the  Council  on 

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White Paper - A strategy for revitalising the Community’s railways - COM(96) 421, 30.7.1996. 
The full references for the Community railways legislation are given in Annex 1 (i.e. Annex 1 to the 
working document). 

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5 December 2005, making it likely that agreement, albeit difficult to achieve, will be reached 
on  the  package  during  the  first  few  months  of  2007.  It  will  then  be  possible  to  say  that  the 
European regulatory framework for the railway sector is complete, though this does not rule 
out the possibility of adjustments being made in future to some of the provisions which have 
already been adopted in the light of any difficulties which arise during the transposition in the 
Member States. 

This  report  by  the  Commission  is  concerned  solely  with  the  implementation  of  the  first 
railway package, which applies in full at the present time, and its impact on the stakeholders 
concerned  and  the  market,  bearing  in  mind  that  the  aim  of  creating  a  genuine  European 
railway area over time is because this is the only way of revitalising the sector as part of the 
European  transport  system  and  this  is  a  necessary  contribution  to  the  Lisbon  Strategy. 
Developing today the competitiveness of the sector through market opening means supporting 
future  investment,  and  thereby  ensuring  the  growth  and  employment  which  the  Lisbon 
Strategy aims at. In addition, by contributing to the development of environmentally friendly 
transport, the Community deliberately opts for the development of sustainable transport. 

This report is based on the information available to the Commission, the discussions held with 
the Member States within various specialised committees and working parties and a number 
of  studies  which  can  be  found  on  the  Commission’s  website.  Furthermore,  the  European 
stakeholders  concerned  and  their  representative  organisations  have  expressed  comments  on 
the present situation. These are summarised in Annex 3 to the working document. 

2. 

TRANSPOSITION PERFORMED BY THE MEMBER STATES BUT CONSOLIDATION STILL 
NEEDED 

The  first  railway  package  consists  of  three  Directives  of  the  European  Parliament  and  the 
Council (2001/12/EC, 2001/13/EC and 2001/14/EC), which are closely interlinked and which 
were due to be transposed by the 15 Member States no later than 15 March 2003 and by the 8 
new Member States which have a railway system by 1 May 2004, the date of their accession 
to  the  European  Union.  The  Commission  has  examined  the  main  aspects  of  the  reform  for 
which it provides an overall evaluation of the transposition situation, the details being given 
in the Annex: 

–  The separation of accounts for activities relating to the supply of transport services and 
activities  relating  to  railway  infrastructure  management,  with  an  additional  distinction 
being  made,  inter  alia,  in  the  case  of  the  accounts  for  the  supply  of  transport  services, 
between  those  related  to  passenger  transport  and  those  concerning  the  transportation  of 
goods (Annex 4). Cross-subsidisation between activities must be avoided. A large number 
of  Member  States  have  undertaken  a  thorough  restructuring  of  their  national  railway 
undertakings.  These  reform  processes  have  not  been  completed  in  all  cases  and  the 
accounts  do  not  yet  reflect  the  new  obligations.  The  2005  accounts  published  in  2006 
should correspond to the requirements of the Directives. 

–  Separation  between  essential  functions,  these  being  capacity  allocation,  charging, 
licensing  and  the  monitoring  of  public  service  obligations  as  regards  transport  activities 
(Annexes  5  and  6):  the  Commission  will  examine,  on  the  basis  of  clear  and  transparent 
criteria,  whether  the  infrastructure  manager  acts  neutrally  in  allocating  capacity  and 
charging  for  infrastructure  use,  in  particular  where  the  separation  of  functions  is  not 
guaranteed by means of institutional separation. Access to (rail and services) infrastructure 

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must be transparent and non-discriminatory, and work still remains to be done in this area 
in many of the Member States. 

–  An independent regulatory body is essential to monitor the railway market and to act as 
an  agency  to  settle  disputes  between  the  infrastructure  operator  and  the  railway 
undertaking(s)  (Annex 7).  This  body  must  have  human,  financial  and  administrative 
resources  on  a  sufficient  scale  to  enable  it  to  play  an  active  part  in  the  operation  of  the 
market, which is not the case everywhere. 

–  The  granting  of  infrastructure  access  rights,  including  access  rights  to  the  necessary 
services, on a fair and non-discriminatory basis to all railway undertakings which wish to 
offer  international  freight  services  on  the  trans-European  rail  freight  network  as  from 
15 March 2003 (Annexes 2 and 8). The Commission encourages the gradual introduction 
of  standard  contracts  between  the  infrastructure  manager  and  the  railway  undertaking(s) 
(use  contracts  and  framework  contracts)  to  facilitate  access.  Enabling  authorised 
candidates  (e.g.  freight  forwarders,  and  the  competent  authorities  for  public  transport 
service contracts) to have access to infrastructure is a regulatory option for Member States 
which  see  a  need  to  provide  rail  customers  with  an  additional  way  of  obtaining  a  better 
transport service. 

–  The  introduction  of  a  charging  system  based  on  the  marginal  cost  principle  with 
increases  being  possible  under  certain  circumstances  (Annex  8).  It  is  essential  that 
distortions  of  competition  due  to  differences  in  charging  levels  between  transport  modes 
and  within  the  railway  industry  itself  are  corrected.  To  attain  the  objectives  of  the  first 
railway  package,  it  is  important  to  avoid  cross-funding  between  freight  trains  and 
passenger trains through the infrastructure charging system. 

–  Harmonised  conditions  for  the  granting  of  licences  for  railway  undertakings  which 
are  valid  throughout  the  Community  (Annex 9).  While  the  costs  and  periods  of  time 
involved in obtaining these licences may vary from one Member States to another, greater 
transparency regarding the conditions to be met by railway undertakings to obtain a licence 
is needed. 

On 1 January 2006, 24 out of 25 Member States had formally transposed the Directives of the 
first  railway  package  into  their  national  legislation.  Luxemburg  has  formally  committed  to 
implement it during the first half of this year. Details regarding transposition and the national 
measures are given in Annex 1 to the working document. The delays in transposition which 
prompted  the  Commission  to  launch  infringement  procedures  for  failure  to  transmit  the 
national implementing measures have had repercussions on the ability of the actors to assert 
themselves  on  the  European  stage  due  to  the  resulting  uncertainty  surrounding  the  national 
regulatory  situation.  At  the  moment,  the  Directives  are  still  having  an  unequal  effect  in 
practice from one Member State to another, and have not led to the arrival of new entrants in 
all  the  Member  States.  Where  appropriate,  the  Commission  will  launch  infringement 
procedures if transposition is incomplete or has not been done properly: it is in fact necessary 
to ensure that the implementation is done in the spirit of Community legislation as well as to 
the letter. 

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3. 

THE DEVELOPMENT OF THE RAILWAY MARKET AND ITS PLACE IN THE TRANSPORT 
SYSTEM 

3.1. 

The market for the transportation of goods by rail 

The main focus of the reform going on in the Community has been rail freight, the constant 
decline  of  which  was  considered  to  be  unjustified  given  the  intrinsic  advantages  offered  by 
the Community rail transport area, namely a substantial increase in transport distances and an 
increase  in  the  exchange  of  goods  within  the  European  area,  given  that  road  transport  has 
reached saturation point, in particular in the Alps and the Pyrenees. The first measures taken 
regarding the opening up of the market therefore concerned international freight services, and 
the  success  of  these  measures  largely  depends  on  the  rate  at  which  each  Member  State  has 
opened  up  its  market  to  this  type  of  services.  Some  Member  States  had  opened  up  their 
market  before  15  March  2003,  while  others  did  not  open  their  market  until  2005.  Details 
regarding the opening up of the market in the Member States are given in Annex 2. Despite 
the  differences,  the  rail  freight  market  has  displayed  new-found  dynamism  thanks  in 
particular to the gradual opening up of the market as clearly set out in the first two railway 
packages and the impact of the restructuring of the incumbent undertakings. 

When analysing the development of the EU market, account must be taken of the fact that the 
railways  in  EU-15  saw  a  substantial  decline  in  their  market  share  between  1970  and  2000 
before  the  situation  stabilised,  and  the  new  Member  States  saw  a  very  sharp  drop  as  from 
1990  which  is  only  now  starting  to  bottom  out.  Consolidated  figures  for  EU-25  have  been 
drawn  up  as  from  1995  and  these  show  that  the  volume  transported  (expressed  in  tonne-
kilometres)  increased  by  6%  between  1995  and  2004,  i.e.  about  0.6%  a  year.  However,  the 
volume  transported  in  2002  was  exactly  the  same  as  in  1995  and  the  increase  of  6%  is 
concentrated  over  the  period  2003-2004,  with  2004  showing  an  increase  of  4%  over  2003. 
With  regard  to  market  shares  and  for  EU-25  as  a  whole,  it  is  clear  that  the  performance  in 
terms  of  volume  is  not  brilliant.  Taking  all  transport  modes  together,  including  maritime 
transport, the share of the railways was 10% in 2004 as compared with 12.1% in 1995, while 
the figure for the roads increased during the same period from 42.1% to 44%, and that for the 
maritime  sector  from  38.2%  to  39%.  As  regards  the  shares  per  transport  mode  for  inland 
transport alone, the railways fell from 19.5% in 1995 to 16.4% in 2004, while the figure for 
roads increased from 68.1% to 72.3%, with inland waterways and pipelines falling slightly. 

The  railways’  share  of  the  freight  market  has  been  stabilising  since  2001  in  EU-25  and  the 
best  performance,  disregarding  the  Baltic  States  which  benefit  from  their  very  special 
geographical location and the kind of goods transported, can be seen in Member States which 
were  first  to  start  reforming  their  railway  industry  in  anticipation  of  the  Community 
Directives and the opening up of the market. 

In  terms  of  annual  turnover,  the  rail  freight  market  is  currently  evaluated  at  almost  €  15 
billion,  with  an  estimated  loss  of  €  800  million  in  2004.  The  return  is  clearly  inadequate 
because prices are dictated by competition from the roads, and the railways’ production costs 
are still too high. 

These figures are set out, together with a detailed analysis, in Annexes 10 and 11. 

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3.2. 

The market for the transportation of passengers by rail 

This sector is presently not influenced by the Community measures aimed at opening up the 
market.  Provided  it  is  adopted,  the  third  railway  package  should,  according  to  the 
Commission’s  proposal,  lead  to  the  opening  up  of  the  market  in  international  passenger 
services with cabotage in 2010. The considerable pace of development of high-speed services 
should certainly be noted. These now represent one-quarter of rail passenger traffic in EU-15, 
and  this  share  is  likely  to  grow  further  over  the  next  ten  years  with  the  planned  opening  of 
numerous  high-speed  lines  as  part  of  the  trans-European  transport  network  in  Italy,  Spain, 
France and Germany, and the completion of the Paris-Brussels-Cologne-Amsterdam-London 
network. 

For the evaluation of the first railway package which is the subject of this report, it should be 
stressed  that  the  proper  implementation  of  the  provisions  of  both  the  first  and  the  second 
packages  is  a  sine  qua  non  for  the  successful  opening  up  of  the  market  in  international 
passenger  services.  The  experience  gained  in  managing  the  access  of  a  number  of  different 
operators to the infrastructure will also benefit passenger transport as there will be an increase 
in the range of services provided. In terms of figures, rail passenger transport in EU-25 rose 
from 319 billion passenger-kilometres in 1995 to 350 billion in 2004, an increase of 10%, or 
about  1%  a  year,  as  compared  with  an  annual  increase  of  2%  for  the  roads  and  5%  for 
aviation. The modal share of the railways fell from 6.3% to 5.9% during the same period. This 
drop is in fact due to the much steeper decline in traffic in the new Member States where there 
is a new-found infatuation with private cars and a lack of investment in the railways. These 
figures are set out, together with a detailed analysis, in Annex 12. 

4. 

THE DEVELOPMENT OF RAILWAY SAFETY 

4.1. 

A very favourable situation  

Safety  is  the  hallmark  of  the  railways.  The  public’s  intolerance  of  railway  accidents,  as 
compared with their relative tolerance of road accidents, is a key factor when analysing the 
industry. 

Published statistics on railway accidents are still very patchy pending the full implementation 
of Community provisions on rail statistics and the safety of the railways. The establishment of 
common  safety  indicators,  the  creation  of  national  safety  agencies  coordinated  by  the 
European Railway Agency and the production of regular reports by the Agency on how safety 
develops will in future provide a clearer overview of the situation with regard to the safety of 
the railways in the Community. 

The  figures  available  show  that  the  number  of  passengers  killed  or  injured  in  railway 
accidents is constantly falling while traffic continues to increase. The same trend can be seen 
for accidents at level crossings, which are the most common by far, more often than not due 
to the undisciplined behaviour of road users. 

The  opening  up  of  the  freight  market  has  not  had  any  impact  on  the  safety  of  the  railway 
system and the Member States which are currently most opened up to competition have not 
seen any deterioration in their safety levels. 

The statistics are given, together with a detailed analysis, in Annex 13. 

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4.2. 

The question of safety certificates 

The first railway package requires every railway undertaking to obtain a safety certificate for 
every Member State through which it wishes its trains to pass. The requirements for granting 
this certificate were not defined in any detail in Directives 2001/12/EC and 2001/14/EC, as a 
result  of  which  each  Member  States  has  introduced  its  own  procedures  and  requirements 
which  are  not  particularly  compatible  with  the  harmonised  approach  which  Directive 
2004/49/EC on railway safety intended to establish with the support of the European Railway 
Agency. The present situation is described in a detailed study carried out by IVE3. 

There are two major problems in this respect which should be mentioned: 

–  The  problem  of  the  certification  of  rolling  stock,  mainly  traction  units,  which  is  the 
subject of long, arbitrary and costly procedures which are out of kilter with the requirement 
of creating an internal market in railway equipment. The Commission plans to resolve this 
problem, in particular as regards existing rolling stock which is recognised in one or more 
Member States but not in others. An approach to facilitate the mutual recognition of such 
equipment  is  being  developed  and  will  be  presented  to  the  industry  and  the  safety 
authorities during the course of 2006. 

–  The  problem  of  the  certification  of  staff:  the  Directive  on  the  certification  of  on-board 
staff  is  part  of  the  third  package  which  is  still  being  negotiated  between  the  European 
Parliament  and  the  Council.  Once  it  has  been  adopted  and  transposed,  it  will  regulate 
issues  which  are  currently  in  abeyance.  However,  the  agreement  reached  by  the  social 
partners  (Community  of  European  Railways,  CER,  and  European  Transport  Workers 
Federation, ETF) on 27 January 2004 on a European licence for train drivers working on 
cross-border routes is already making international operations easier. In general terms, fair 
and  non-discriminatory  access  to  training  centres  which  are  open  to  any  applicant  to 
become  a  train  driver  is  still  essential  for  the  proper  functioning  of  the  railway  market 
which is being developed. The European Railway Agency is in particular responsible for 
defining the terms of accreditation of these centres and therefore to facilitate their role as a 
service provider in the European railway area. 

5. 

THE DEVELOPMENT OF WORKING CONDITIONS AND EMPLOYMENT IN THE RAILWAY 
SECTOR 

5.1. 

The development of employment 

The long decline in rail traffic and the restructuring of undertakings which followed have led 
to a sharp reduction in employment in the rail industry, with the number of jobs falling from 
1.8 million in 1970 to about 770 000 in 2000 in EU-15 though the rate of decline has slowed 
down considerably in the last few years (760 000 in 2004). For EU-25, the number of jobs in 
the  railway  industry  (national  undertakings,  new  operators  and  infrastructure  managers) 
therefore accounted for just under 1 200 000 jobs. 

3 

IVE  Safety  Certification  Study:  Acceptance  Criteria  &  Assessment  Methodologies  for  Safety 
Certificates  Delivered 
in  Accordance  with  Directive  2001/14/EC,  Article  32,  June  2005 
(http://europa.eu.int/comm/transport/rail/research/studies_en.htm). 

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One  effect  of  the  ongoing  regulatory  reform  has  also  been  to  distribute  employment  in  a 
different  way  instead  of  being  concentrated  in  a  single  overall  entity  as  it  used  to  be.  The 
current statistics do not readily reflect all the effects of the reform and the dispersion of jobs. 

The productivity of the railways can still be improved substantially in the new Member States 
and in a large number of the EU-15 Member States, but it seems that employment should be 
able to stabilise in the industry over the next few years, especially if traffic stabilises at the 
present level. The situation differs considerably from one Member State to another according 
to  the  degree  of  restructuring  which  has  been  achieved.  The  United  Kingdom,  Germany, 
Sweden,  Italy,  Spain  and  Estonia  have  already  made  enormous  restructuring  efforts.  Other 
Member States, in particular some of the new Member States, still have a great deal of effort 
to make to improve their productivity. 

More details are given in Annex 14. 

5.2.  Working conditions in the railway sector 

Most  employment  in  the  railway  sector  is  currently  still  concentrated  within  the  incumbent 
undertakings,  whether  they  are  still  integrated  or  organised  along  different  lines.  In  general 
terms,  employees  in  incumbents  have  preserved  their  status  and  have  not  seen  any 
deterioration  in  their  conditions  of  employment,  even  though  restructuring  has  introduced 
greater  flexibility.  Most  of  the  employees’  trades  unions  believe  that  it  is  the  process  of 
opening  up  the  market  which  is  leading  to  this  sometimes  painful  restructuring  and  do  not 
accept the need for restructuring simply to ensure the survival of the railways. 

The  application  of  the  agreement  concluded  by  the  CER  and  the  ETF  in  January 2004 
concerning  certain  aspects  regarding  the  deployment  of  mobile  workers  performing 
cross-border  interoperability  services  was  made  compulsory  throughout  the  industry  by 
Council Directive 2005/47/EC of 18 July 2005, in accordance with Article 139 of the Treaty. 
Minimum standards are therefore laid down with regard to working conditions, such as daily 
and weekly rest times, breaks and driving times. The working conditions which apply to the 
incumbents  now  generally  apply  to  the  new,  competing  rail  freight  companies,  which  have 
expressed some discontent with these requirements which, in their view, reduce the flexibility 
of their organisations. When the necessary requirements are met, the new railway companies 
will be able to play a full part in the European social dialogue during which these issues are 
discussed. 

The  sector  is  still  being  restructured,  which  could  mean  that  sometimes  there  are  negative 
consequences  both  for  the  staff  in  place  and  the  attractiveness  of  the  sector.  For  example, 
there seems to be a dangerous shortage of qualified staff. The incumbents have reduced the 
number  of  apprenticeships  in  an  effort  to  reduce  costs,  while  the  qualifications  required  are 
not provided by vocational training. In the light of this, it will be necessary to develop training 
networks  at  European  level  for  employment  in  the  railway  industry  in  order  to  create  a 
genuine employment market for railway companies and infrastructure managers. In this way, 
it  will  be  possible  to  increase  productivity  by  modernising  the  organisation  of  work  and 
investing in training while taking account of the quality of jobs, a key element in the Lisbon 
Strategy. 

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6. 

CONCLUSIONS: FURTHER WORK STILL NEEDED 

The  railway  industry,  which  has  been  in  permanent  decline  since  1970,  has  managed  since 
2001  to  stabilise  the  volumes  transported  and,  in  some  Member  States,  to  recover  market 
shares  from  the  roads.  The  fall  in  employment  has  also  been  halted.  The  aim  of  the  2001 
White Paper was to achieve the 1998 market share by 2010: this objective is still within the 
industry’s  reach  if  it  continues  to  direct  its  efforts  firmly  towards  internationalisation  and 
endeavours continually to meet the needs of the economy and society. The distance we have 
come is already impressive. The changes which have been started must now be completed in 
order  to  put  the  finishing  touches  to  a  European  railway  area  which  will  serve  European 
mobility and competitiveness. The railway industry, which offers more advantages over long 
distances  compared  with  road  transport,  will  benefit  from  the  increase  in  the  size  of  the 
market which will cover the entire continent. 

The Commission believes that the implementation of the first railway package by the Member 
States is well under way but that more needs to be done with regard to several aspects in order 
to  ensure  that  its  effects  are  complete.  The  Commission  will  ensure  this  by  using  all  of  its 
powers. 

It believes that the Member States should direct their efforts towards: 

–  completing the restructuring of the incumbents while ensuring the separation of accounts 

and the separation of essential tasks such as the allocation of capacity and charging; 

–  the  establishment  of  principles  for  rail  infrastructure  charging  which  take  account  of  the 
way  in  which  other  transport  modes  are  priced  and  forms  part  of  a  genuine  transport 
strategy which will boost fair competition between modes and sustainable development; 

–  the creation of the administrative capability which is required for the proper operation of 
the regulatory body and the national safety authority, while ensuring that these bodies are 
genuinely independent; 

–  contractualisation of the State’s financial relations with the infrastructure manager for the 
funding of maintenance and modernisation of the railway infrastructure, in the context of 
the establishment of a performance-based system; 

–  clarification of the financial ties between the national and regional transport authorities and 
the railway undertakings by concluding public service contracts which are duly published; 

–  the prohibition of cross-subsidisation between freight and passenger transport operations to 

maintain the ability of rail freight to be competitive; 

–  the  creation  of  transparent  requirements  for  access  to  training  centres  and  safety 

certificates. 

The Commission recommends that infrastructure managers pay attention to: 

–  improving  the  content  and  visibility  of  the  network  statement  which  must  be  clear  and 

complete and cover all the services required for access to the infrastructure; 

–  setting charges based on the real costs engendered by rail traffic; 

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–  cooperating  at  European  level  on  the  granting  of  international  paths  and  establishing 

harmonised conditions for infrastructure access based on standard contracts. 

The  incumbent  railway  undertakings,  whose  long-term  management  must  be  ensured, 
should continue with their restructuring in order to adapt to the new European context while 
complying with competition rules. 

In conformity with the transport policy which has been followed since the 2001 White Paper 
and  its  current  evaluation,  the  Commission  will  continue  to  place  rail  at  the  centre  of  its 
transport policy. It will closely observe the market situation and will take all action necessary 
to correct undesired situations, starting infringement procedures or proposing amendments to 
existing Directives if they prove to have persistent shortcomings. In line with the commitment 
given  by  the  Commission  in  2005,  guidelines  on  State  aid  in  the  railway  sector  are  being 
prepared in order to increase transparency. 

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