Common Position (EC) No 20/2006 of 24 July 2006 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting Directive of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development of the Community's railways and Directive 2001/14/EC of the European Parliament and of the Council on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure
Date: 2006-07-24
Institutions: Council of the European Union
Subjects: carriage of passengers, charges for use of infrastructure, common transport policy, international transport, rail transport, single market, transport capacity, transport infrastructure

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COMMON POSITION (EC) No 20/2006

adopted by the Council on 24 July 2006

with a view to adopting Directive 2006/…/EC of the European Parliament and of the Council of …
amending Council Directive 91/440/EEC on the development of the Community's railways and
Directive 2001/14/EC of the European Parliament and of the Council on the allocation of railway
infrastructure capacity and the levying of charges for the use of railway infrastructure

(2006/C 289 E/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 71 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee (1),

(5)

Having regard to the opinion of
Regions (2),

the Committee of

the

Acting in accordance with the procedure referred to in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

(3)

(4)

Council Directive 91/440/EEC of 29 July 1991 on the
railways (4) was
development of
the Community's
designed to facilitate the adaptation of the Community's
railways to the requirements of the single market and to
improve their efficiency.

capacity and the

Directive 2001/14/EC of the European Parliament and of
the Council of 26 February 2001 on the allocation of
railway infrastructure
levying of
charges for the use of railway infrastructure (5) concerns
the principles and procedures to be applied with regard
to the setting and charging of railway infrastructure
charges and the allocation of railway infrastructure capa-
city.

In its White Paper European transport policy for 2010:
time to decide, the Commission announced its intention
to continue building the internal market in rail services
by proposing to open up the market in international
passenger services.

(6)

The aim of this Directive is to address the opening of
the market
services
within the Community, and it should therefore not
concern services between a Member State and a third

rail passenger

international

for

(1) OJ C 221, 8.9.2005, p. 56.
(2) OJ C 71, 22.3.2005, p. 26.
(3) Opinion of the European Parliament of 28 September 2005 (not yet
published in the Official Journal), Council Common Position of 24
July 2006 and Position of the European Parliament of … (not yet
published in the Official Journal).

(4) OJ L 237, 24.8.1991, p. 25. Directive as last amended by Directive
2004/51/EC of the European Parliament and of the Council (OJ L
164, 30.4.2004, p. 164). Corrected by OJ L 220, 21.6.2004, p. 58.
(5) OJ L 75, 15.3.2001, p. 29. Directive as last amended by Directive
2004/49/EC (OJ L 164, 30.4.2004, p. 44). Corrected by OJ L 220,
21.6.2004, p. 16.

country. In addition, Member States should be able to
exclude from the scope of this Directive services tran-
siting the Community.

rail

International
services currently present a very
contrasting picture. Long-distance services (for instance
night trains) are in difficulty and several of them have
recently been withdrawn by the railway undertakings
operating them in order to limit losses. The market for
international high-speed services, on the other hand, has
seen a sharp increase in traffic and will continue its
vigorous development with the doubling and intercon-
nection of the trans-European high-speed network by
2010. Nevertheless, there is strong competitive pressure
from low-cost airlines in both cases. It is therefore essen-
tial to stimulate new initiatives by promoting competi-
tion between railway undertakings.

2001

It is not possible to open up the market in international
passenger services without detailed provisions on infra-
structure access, substantial progress on interoperability
and a strict framework for rail safety at national and
European level. All of these elements are now in place
following the transposition of Directive 2001/12/EC of
the Council of 26
the European Parliament and of
February
Directive
Council
amending
91/440/EEC (6), Directive 2004/51/EC of the European
Parliament and of
the Council of 29 April 2004
amending Council Directive 91/440/EEC (7), Directive
2001/13/EC of
the
Council of 26 February 2001 amending Council
Directive 95/18/EC (8), Directive 2001/14/EC,
and
Directive 2004/49/EC of the European Parliament and of
the Council of 29 April 2004 on safety on the Commu-
nity's railways (9). It is necessary for this new regulatory
framework to be supported by established, consolidated
practice by the proposed date for opening up the market
for international passenger services. This will require a
certain time. The target date for opening up the market
should therefore be 1 January 2010.

the European Parliament and of

(6) OJ L 75, 15.3.2001, p. 1.
(7) OJ L 164, 30.4.2004, p. 164. Corrected by OJ L 220, 21.6.2004, p.

58.

(8) OJ L 75, 15.3.2001, p. 26.
(9) OJ L 164, 30.4.2004, p. 44. Corrected by OJ L 220, 21.6.2004, p.

16.

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(7)

(8)

(9)

The number of railway services without intermediate
stops is very limited. In the case of journeys with inter-
mediate stops,
it is essential to authorise new market
entrants to pick up and set down passengers along the
route in order to ensure that such operations have a
realistic chance to be economically viable and to avoid
placing potential competitors at a disadvantage to
existing operators, which have the right to pick up and
set down passengers along the route. This right should
be without prejudice to Community and national regula-
tions concerning competition policy.

(11)

(12)

The introduction of new, open-access,
international
services with intermediate stops should not be used to
bring about the opening of the market for domestic
passenger services, but should merely be focused on
stops that are ancillary to the international route. On
that basis, their introduction should concern services
whose principal purpose is to carry passengers travelling
on an international
journey. The determination of
whether that is the service's principal purpose should
take into account criteria such as the proportion of turn-
over, and of volume, derived from transport of domestic
the
international passengers, and the length of
or
service. This determination should be made by the
respective national regulatory body at the request of an
interested party.

Council Regulation (EEC) No 1191/69 of 26 June 1969
on action by Member States concerning the obligations
inherent in the concept of a public service in transport
by rail, road and inland waterway (1) authorises Member
States and local authorities to award public service
contracts. These contracts may contain exclusive rights
to operate certain services. It is therefore necessary to
ensure that the provisions of that Regulation are consis-
tent with the principle of opening up international
passenger services to competition.

(10) Opening up international passenger

for

the organisation and financing of

services, which
include the right to pick up passengers at any station
located on the route of an international service and to
set them down at another, including stations located in
the same Member State, to competition may have impli-
rail
cations
passenger
services provided under a public service
contract. Member States should have the possibility to
limit the right of access to the market where this right
would compromise the economic equilibrium of these
public service contracts and where approval is given by
the relevant regulatory body referred to in Article 30 of
Directive 2001/14/EC on the basis of an objective
economic analysis, following a request from the compe-
tent authorities that awarded the public service contract.

(1) OJ L 156, 28.6.1969, p. 1. Regulation as last amended by Regu-

lation (EEC) No 1893/91 (OJ L 169, 29.6.1991, p. 1).

Some Member States have already moved towards
opening up the market for rail passenger services by
transparent, open competitive tendering for the provi-
sion of certain such services. They should not have to
to international passenger
provide full open access
services, since this competition for the right
to use
certain rail routes has involved a sufficient test of the
market value of running those services.

The assessment of whether the economic equilibrium of
the public service contract could be compromised
should take into account pre-determined criteria such as
the impact on the profitability of any services which are
included in a public service contract, including conse-
quential impacts on the net cost to the competent public
authority that awarded the contract, passenger demand,
ticket pricing,
location and
ticketing arrangements,
number of stops on both sides of the border and timing
and frequency of the proposed new service. Respecting
such an assessment and the decision of the relevant
regulatory body, Member States might authorise, modify
or deny the right of access
the international
passenger service sought,
including the levying of a
charge on the operator of a new international passenger
service, in line with the economic analysis and in accord-
ance with Community law and the principles of equality
and non-discrimination.

for

(13)

In order to ensure the financing of public service obliga-
tions, it is appropriate to allow Member States to raise a
levy on passenger services in their territory in accord-
ance with Community law.

(14)

The regulatory body should function in a way which
avoids any conflict of interests and any possible involve-
ment in the award of the public service contract under
consideration. In particular, if for organisational or legal
purposes it is closely linked to the competent authority
involved in the award of the public service contract
under consideration, its functional independence should
the regulatory body
be ensured. The competence of
should be extended to allow the assessment of
the
purpose of an international service and, where appro-
priate, the potential economic impact on existing public
service contracts.

(15)

This Directive constitutes a further phase of rail market
opening. Some Member States have already opened up
the market for international passenger services on their
territory. In this context, this Directive should not be
understood as creating obligations for those Member
States to grant, before 1 January 2010, access rights to
railway undertakings licensed in a Member State where
similar rights are not granted.

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(16)

The national regulatory bodies should, on the basis of
Article 31 of Directive 2001/14/EC, exchange informa-
tion and, where relevant in individual cases, coordinate
the principles and practice of assessing whether the
economic equilibrium of a public service contract
is
compromised. They should progressively develop guide-
lines based on their experience.

(17)

The application of this Directive should be evaluated on
the basis of a report to be presented by the Commission
two years after the date of opening up the market in
international passenger services.

(18) A Member State which has no railway system, and no
immediate prospect of having one, would be under a
disproportionate and pointless obligation if it had to
transpose and implement Directives 91/440/EEC and
2001/14/EC. Therefore, such a Member State should be
exempted, for as long as it has no railway system, from
the obligation to transpose and implement these Direc-
tives.

(19)

Since the objective of this Directive, namely the develop-
ment of the Community's railways, cannot be sufficiently
achieved by the Member States, given the need to ensure
fair and non-discriminatory conditions of access to infra-
structure and to take account of the obviously interna-
tional dimension of the way in which important parts of
the rail networks operate, as well as the need for coordi-
nated transnational action, and can therefore be better
achieved at Community level,
the Community may
adopt measures in accordance with the principle of
subsidiarity as set out in Article 5 of the Treaty.
In
accordance with the principle of proportionality set out
in that Article, this Directive does not go beyond what is
necessary in order to achieve this objective.

(20)

In accordance with point 34 of the Interinstitutional
agreement on better law-making (1), Member States are
encouraged to draw up, for themselves and in the inter-
ests of the Community, their own tables illustrating, as
far as possible, the correlation between this Directive
and the transposition measures, and make them public.

(21) Directives 91/440/EEC and 2001/14/EC should therefore

be amended accordingly,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

‘4. Member States may exclude from the scope of this
Directive any railway service carried out in transit through
the Community and which begins and ends outside the
Community territory.’;

2) the fourth indent of Article 3 shall be deleted;

3) the following indent shall be inserted in Article 3 after the

fifth indent:

‘– “international passenger service” shall mean a passenger
service where the train crosses at least one border of a
Member State and where the principal purpose of the
service is to carry passengers between stations located
in different Member States; the train may be joined and/
or split, and the different sections may have different
origins and destinations, provided that all carriages
cross at least one border’;

4) the following indent shall be inserted in Article 3 after the

sixth indent:

‘– “transit” shall mean the crossing of the Community
loading or
territory which is carried out without
unloading of goods, and/or without picking up of
passengers nor setting them down in the Community
territory.’;

5) the first indent of Article 5(3) shall be deleted;

6) the phrase ‘and international groupings’ shall be deleted in

Article 8(1);

7) paragraph (1) of Article 10 shall be deleted;

8) the following paragraphs shall be inserted in Article 10:

‘3a.
Railway undertakings within the scope of Article 2
shall, by 1 January 2010, be granted the right of access to
the infrastructure in all Member States for the purpose of
operating an international passenger
service. Railway
undertakings
in the course of an international
passenger service, have the right to pick up passengers at
any station located on the international route and set them
down at another, including stations located in the same
Member State.

shall,

The right of access to the infrastructure of the Member
international carriage of
States for which the share of
the
passengers by train constitutes more than half of
passenger
in that
Member State shall be granted by 1 January 2012.

railway undertakings

turnover of

Directive 91/440/EEC is hereby amended as follows:

1) the following paragraph shall be added to Article 2:

(1) OJ C 321, 31.12.2003, p. 1.

Whether the principal purpose of the service is to carry
passengers between stations located in different Member
States shall be determined by the relevant regulatory body
or bodies
referred to in Article 30 of Directive
2001/14/EC following a request from the relevant compe-
tent authorities and/or interested railway undertakings.

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3b. Member States may limit the right of access defined
in paragraph 3a on services between a place of departure
and a destination which are covered by one or more
public service contracts conforming to the Community
legislation in force. Such limitation may not have the
effect of restricting the right to pick up passengers at any
station located on the route of an international service and
to set them down at another, including stations located in
the same Member State, except where the exercise of this
right would compromise the economic equilibrium of a
public service contract.

Whether the economic equilibrium would be compro-
mised shall be determined by the relevant regulatory body
or bodies referred to in Article 30 of Directive 2001/14/EC
on the basis of an objective economic analysis and based
on pre-determined criteria, following a request from:

— the competent authority or competent authorities that

awarded the public service contract;

— any other interested competent authority with the right

to limit access under this Article;

— the infrastructure manager, or

— the railway undertaking performing the public service

contract.

The competent authorities and the railway undertakings
providing the public services shall provide the relevant
regulatory body or bodies with the information reasonably
required to reach a decision. The regulatory body shall
consider the information provided, consulting all the rele-
vant parties as appropriate, and shall inform the relevant
parties of its reasoned decision within a pre-determined,
reasonable time, and, in any case, within two months of
receipt of all relevant information. The regulatory body
shall give the grounds for its decision and specify the time
period within which, and the conditions under which

— the relevant competent authority or competent autho-

rities;

— the infrastructure manager;

— the railway undertaking performing the public service

contract, or

— the railway undertaking seeking access,

may request a re-consideration of the decision.

3c. Member States may also limit the right to pick up
and set down passengers at stations within the same
Member State on the route of an international passenger
to convey passengers
service where an exclusive right
between those stations has been granted under a conces-
sion contract awarded before… on the basis of a fair
competitive tendering procedure and in accordance with

the relevant principles of Community law. This limitation
may continue for the original duration of the contract, or
15 years, whichever is the shorter.

3d.
The provisions of this Directive shall not require a
Member State to grant, before 1 January 2010, the right of
access referred to in paragraph 3a to railway undertakings
and their directly or
indirectly controlled subsidiaries,
licensed in a Member State where access rights of a similar
nature are not granted.

3e. Member States shall take the necessary measures to
ensure that the decisions referred to in paragraphs 3b, 3c
and 3d are subject to judicial review.

3f. Without prejudice to paragraph 3b, Member States
may, under the conditions laid down in this Article,
authorise relevant authorities to raise a levy on all rail
passenger transport services on their territory in order to
contribute to the financing of public service obligation
compensation in the
services
contracts concluded in accordance with Community law.

framework of public

In conformity with Community law, the compensation
referred to in the first subparagraph may not exceed what
is necessary to cover all or part of the cost incurred in the
discharge of public service obligations taking into account
the relevant receipts and a reasonable profit for dischar-
ging those obligations.

The levy shall be raised in accordance with Community
fairness,
law,
in particular respecting the principles of
transparency, non-discrimination and proportionality,
in
particular between the price of the service and the level of
the levy. The obligation to contribute to the financing of
the public service obligations' compensation shall not
endanger
the international
passenger service.

the economic viability of

The relevant authorities shall keep the information neces-
sary to ensure that the origin of the levies and their use
can be traced. Member States shall provide the Commis-
sion with this information.’;

9) Article 10(8) shall be replaced by the following:

By 1 January 2009, the Commission shall submit to
‘8.
the European Parliament,
the European
Economic and Social Committee and the Committee of the
Regions a report on the implementation of this Directive.

the Council,

This report shall address:

— implementation of this Directive in the Member States
the various bodies

and the effective working of
involved;

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— market development, in particular international traffic
trends, activities and market share of all market actors,
including new entrants.’;

longer than five years shall be justified by the existence of
commercial contracts, specialised investments or risks.

10) the following paragraph shall be added to Article 10:

By 31 December 2012,

‘9.
the Commission shall
submit to the European Parliament, the Council, the Euro-
pean Economic and Social Committee, and the Committee
of the Regions a report on the implementation of the
provisions of paragraph 3.’;

11) the following subparagraph shall be added to Article 15:

‘The obligations for transposition and implementation of
this Directive shall not apply to Cyprus and Malta for as
long as no railway system is established within their terri-
tory.’.

Article 2

Directive 2001/14/EC is hereby amended as follows:

1) the following point shall be added to paragraph (3) of

Article 1:

‘e) transport operations in the form of railway services
through the Com-

in transit

which are carried out
munity.’;

5a.
For services using specialised infrastructure referred
to in Article 24 which requires substantial and long-term
investment, duly justified by the applicant,
framework
agreements may be for a period of 15 years. Any period
longer than 15 years shall be permissible only in excep-
tional cases, in particular where there is large-scale,
long-
term investment, and particularly where such investment is
covered by contractual commitments including a multi-
annual amortisation plan.

capacity

for
The applicant's requirements may in this case call
detailed definition of
characteristics —
the
including the frequency, volume and quality of train paths
— which are to be provided to the applicant for the dura-
tion of
infrastructure
framework agreement. The
manager may reduce reserved capacity which, over a period
of at least one month, has been used less than the threshold
quota provided for in Article 27.

the

As from 1 January 2010, an initial framework agreement
may be drawn up for a period of 5 years, renewable once,
on the basis of the capacity characteristics used by appli-
cants operating services before 1 January 2010, in order to
take account of specialised investments or the existence of
commercial contracts. The regulatory body referred to in
Article 30 shall be responsible for authorising the entry into
force of such an agreement.’;

2) the following point shall be added to Article 2:

5) the following sentence shall be inserted before the final

sentence of Article 30(1):

‘n) “transit” shall mean the crossing of the Community terri-
tory which is carried out without loading or unloading
of goods, and/or without picking up of passengers nor
setting them down in the Community territory.’;

‘It shall furthermore be functionally independent from any
competent authority involved in the award of a public
service contract.’;

3) the following paragraph shall be added to Article 13:

6) the following subparagraph shall be added to Article 38:

‘4. When an applicant intends to request infrastructure
capacity with a view to operating an international passenger
service as defined in Article 3 of Directive 91/440/EEC, it
shall inform the infrastructure managers and the regulatory
bodies concerned. In order to enable the assessment of the
the international service to carry passengers
purpose of
between stations located in different Member States, and the
potential economic impact on existing public service
contracts, regulatory bodies shall ensure that any competent
authority that has awarded a rail passenger service defined
in a public service contract, any other interested competent
authority with a right to limit access under Article 10(3b) of
Directive
undertaking
performing the public service contract on the route of this
international passenger service is informed.’;

91/440/EEC and

railway

any

‘The obligations for transposition and implementation of
this Directive shall not apply to Cyprus and Malta for as
long as no railway system is established within their terri-
tory.’.

Article 3

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive before … (*). They shall forthwith communicate to
the Commission the text of those provisions.

4) Article 17(5) shall be replaced by the following:

Framework agreements shall

in principle cover a
‘5.
period of five years, renewable for periods equal to their
original duration. The infrastructure manager may agree to
a shorter or longer period in specific cases. Any period

When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such
reference at the time of their official publication. The methods
of making such reference shall be laid down by the Member
States.

(*) 18 months after the entry into force of this Directive.

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2. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field covered by this Directive.

Article 5

This Directive is addressed to the Member States.

The provisions of points 2, 5, 6 and 7 of Article 1 shall

3.
apply from 1 January 2010.

Done at Brussels,

Article 4

This Directive shall enter into force on the day following that
of its publication in the Official Journal of the European Union.

For the European Parliament

For the Council

…

The President

The President

…

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

The Commission presented the proposal for a Directive amending Directive 91/440/EEC on the devel-
opment of the Community's railways, the so-called ‘Rail Market Access proposal’, on 3 March 2004 as
one of the four proposals of the Third Railway Package (1).

On 28 September 2005, the European Parliament voted its opinion in 1st reading.

On 24 July 2006, the Council adopted its Common Position in accordance with Article 251 of the
Treaty.

In carrying out its work, the Council took account of the opinions of the European Economic and
Social Committee (2) and of the Committee of the Regions (3).

II. ANALYSIS OF THE COMMON POSITION

1. General

The negotiations on the opening of the market for international rail passenger services took place
in a policy context shaped by the Commission's White Paper on European transport policy for
2010 (4), as well as by the First and the Second railway Package. In the White Paper the Commission
announced its intention to continue building the internal market for rail services by inter alia,
proposing to open up the market for international passenger services. The First and the Second
Railway Package contain detailed provisions on infrastructure access, interoperability and rail safety
at national and European level, thereby providing a framework, which would permit opening the
market for freight services and for international passenger services.

At its meeting of 5 December 2005, the Council was able to reach Political Agreements on three of
the four legislative proposals of the Third Railway Package: the Rail Market Access proposal, which
is the subject of this document, and the proposals on Passengers' rights and obligations and on
Train crews — thereby paving the way for the adoption of three Common Positions.

Central to the Council's discussions on the Rail Market Access proposal was the relation between
this proposal and the revised proposal on public passenger transport services by rail and by road —
the so-called ‘Public Service Obligations proposal’ (5). Consequently, at the Council meeting of 5
December 2005, a Political Agreement on the Rail Market Access proposal could only be reached
by addressing the relation between both proposals and giving guidance to several elements of the
Public Service Obligations proposal in a Statement to the minutes made by the Council and the
Commission (see Annex I).

(1) The other 3 legislative proposals concern:

— a Regulation on rights and obligations for passengers in international rail transport (doc. 7149/04 TRANS 109

CODEC 337);

— a Regulation on quality obligations for rail freight services (doc. 7150/04 TRANS 110 CODEC 338);
— a Directive on the certification of train crews operating locomotives and trains on the Community's rail network

railways (doc. 7148/04 TRANS 108 CODEC 336).

(2) OJ C 221, 9.9.2005, p. 56.
(3) OJ C 71, 22.03.2005, p. 26.
(4) doc. 11932/01 TRANS 131 AVIATION 70 MAR 76.
(5) doc. 11508/05 TRANS 155 CODEC 657.

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2. Key policy issues

2.1. Opening the market for international rail passenger services

Opening the market can — through the introduction of competition — contribute to more
efficient and more attractive European rail services. By agreeing to grant, by 1 January 2010,
to railway undertakings for the purpose of operating international passenger services, the right
of access to the infrastructure of all Member States, the Council follows the compromise
reached with Parliament at the time of the conciliation procedure on the Second Railway
Package (1). Opening the market for international rail passenger services by 2010 would allow
operators to prepare in an appropriate manner. It would also coincide with both a doubling
and further interconnection of trans-European high-speed lines, and with a consolidation of
the framework as established by the First and the Second railway package.

Opening the market for international services including cabotage will have a strong impact on
Member States where international transport forms an important share of total rail passenger
services. With that in mind, Council wants to leave these Member States more time to prepare
for market opening, by allowing them to grant the right of access by 1 January 2012 at the
latest.

Consequently, the Council does not agree with Parliament's view to open international rail
passenger services by 2008, and all other forms of rail passenger services by 2012 (Amend-
ments 2, 8 and 9 as regards the timetable for market opening for rail passenger services;
Amendments 6 and 12 on the preparation of evaluation reports by the Commission on the
opening of the markets for national and international rail passenger services).

2.2. Right to pick up and set down passengers in the same Member State

The Council, like the European Parliament, accepts the Commission's proposal to allow inter-
national rail passengers services to pick up and set down passengers at stations located in the
same Member State. Council is of the opinion that this so-called cabotage transport is neces-
sary to make viable international services possible.

However, the Council wants to avoid that a right of access for international rail passenger
services, which include cabotage,
for domestic rail
passenger services. Therefore, the Common Position allows granting the right of access only to
those international services, which have as a ‘principal purpose’ the carriage of passengers
between stations located in different Member States. In the Common Position, a procedure is
foreseen for determining the purpose of international service for which access is requested.

leads to the opening of

the market

2.3. Safeguarding public transport services

In essence, the Common Position on the Rail Market Access proposal reflects the balance the
Council has found between market opening on the one hand and safeguarding public transport
services on the other hand. In finding this balance, the Council has added three elements to the
Commission proposal: a procedure for determining whether opening the market for interna-
tional rail passenger services compromises a public transport service; a clarification on the
modalities for granting the right of access; and a provision which allows Member States to
charge a levy on international rail passenger services. The balance between market opening
and safeguarding of public services is also expressed in the Statement made by the Council and
the Commission to the minutes of the Council's meeting of 5 December 2005 (see Annex I).

(1) This compromise is incorporated in recital 4 of Directive 2004/51 and reads that ‘With regard to market opening for
international passenger transport services, the date of 2010 proposed by the Commission has to be considered as an
objective allowing all operators to prepare in an appropriate manner.’

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2.3.1. Pr oce du r e

To clarify when the right of access can be limited, the Common Position contains a
procedure for determining if an international rail passenger service would compromise
the economic equilibrium of a public transport service. An important element of this
procedure regards an objective economic analysis undertaken by the regulatory body of
the impact of the international rail passenger service on public transport services. The
Council has taken this idea from Parliament's Amendment 10.

2.3.2. M odu la t i on of th e li mi t a ti on of th e r i g h t of a c c e ss

With a view to bringing more flexibility to the decision to grant access rights, the
Common Position makes it clear that — after the determination that the economic equi-
librium of a public transport service would be compromised — several modalities exist
for limiting the right of access for international rail passenger services. In line with the
principles of equality and non-discrimination, the Council indicates that Member States
can authorise, modify or deny the right of access, including by the levying of a charge
on the operator of a new international passenger service. By having the possibility to
support public transport services with levies charged on international rail passenger
service, Member States have more leeway to open the market while safeguarding public
services.

2.3.3. E q u a li z a ti on

In some Member States, profitable rail passenger services contribute through a levy to
public transport services, which operate at a loss. The Council wants to make clear that
such a levy can also be charged to railway undertakings, which are granted the right of
access. Such an obligation to contribute to public service obligations' compensations is
restricted to the territory of the Member State that charges the levy. Moreover, the levy
should not endanger the economic viability of the international passenger service.
Finally, in the Common Position it is envisaged that if a Member State chooses to levy
such charges, it is obliged to provide the Commission with the necessary information.
With regard to equalization, Portugal made a statement in the TTE Council of December
2005 (Annex II).

2.4. Framework Agreements

The Council, like the Parliament, thinks it is necessary to complement the opening of the
market for international rail passenger services with arrangements for a more stable and
predictable climate for investments in the infrastructure for these services, and in particular for
services using specialised infrastructure. Consequently, taking inspiration from Parliament's
Amendments 5, 7 and 13, Council proposes to modify the provisions with regard to frame-
work agreements in Directive 2001/14/EC (1). Where the Parliament proposes to allow for
services using specialised infrastructure, which require substantial and long-term investment
framework agreements with a duration of 10 years, the Council is of the opinion that a 15
years' duration is more appropriate.

2.5. Reciprocity-clause

Like Parliament, in its Amendments 3 and 11, the Council wants to include in the Rail Market
Access proposal a provision allowing Member States, which have opened their market for
international rail passenger services, to withhold the right of access for undertakings licensed
in a Member State where access rights of a similar nature are not granted.

(1) Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of

railway infrastructure and safety certification
(OJ L 75, 15.3.2001, p. 29).

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2.6. Other significant issues

2.6.1. T r a nsi t

In the Common Position, the Council clarifies that the aim of the Rail Market Access
proposal is to open the market for international rail passenger services within the Com-
munity and that transport services of goods and passengers, which begin and end in
third countries and which transit Community territory, are not included within the
scope of the proposal. Lithuania made a Statement to the minutes on the issue of
transit (see Annex III).

2.6.2. Conc e ssi on b a se d syste m

The Commission proposal is based on the principle of competition on the rails. The
Council follows this principle, but acknowledges that also other principles are possible
regarding the introduction of competition which, moreover, are already applied in prac-
tice. With that in mind, the Council is in favour of allowing Member States for a transi-
tory period, not to provide full open access to international rail passenger services in
cases where the right to use certain rail routes has already involved a sufficient test of
market value through the principle of competition for the rails.

2.6.3. E x e mp ti on fr om i mp le me nta ti on for M a lta / Cy p r u s

Taking into account of the fact that Malta and Cyprus do not have a railway system,
and that the prospects of them having one are very limited, Council exempts these two
Member States from the obligation to implement the Rail Market Access Directive.

3. European Parliament Amendments.

The response of the Council to the Amendments 2, 3, 5, 6, 7 8, 9, 10, 11, 12 and 13 is set out
above in relation to the key issues.

In addition, the Council has accepted Amendment 2 as regards the reference to Directive 2004/49,
Amendment 4 as regards the mentioning of the first Public Service Obligations proposal of the
Commission of July 2000, and Amendment 7 in full.

The Council does not accept Amendment 4 as regards the adoption of a Common Position on the
Public Service Obligations proposal and Amendment 6 as regards the obligation for the Commis-
sion to present an impact assessment on the opening of the networks for national passenger services
by 2005.

III. CONCLUSION

After careful consideration of the Parliament's opinion, the Council has come to a Common Position
reflecting a balance between opening the market for international rail passenger services, on the one
hand, and safeguarding public transport services, on the other hand. In finding this balance, the
Council has drawn on several important Amendments of Parliament. Whilst the Council has not been
able to fully accept the Parliament's approach on the pace of granting rights of access, the Common
Position sets out a timetable, which would enable both operators and authorities to prepare the
opening of the market for rail passenger services in an appropriate manner.

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ANNEX I

STATEMENT OF THE COUNCIL AND THE COMMISSION FOR INCLUSION IN THE MINUTES OF THE
COUNCIL

In reaching a political agreement on a common position on the Directive amending Council Directive 91/440/EEC on
the development of the Community's railways, the Council also agrees the following points.

1. The opening of the railway market in the Community can only be achieved step by step and in conformity with the

demands of a public service.

2. This means that, for passenger transport, the opening of the market through the current legislative proposals only

concerns international rail passenger services, including cabotage, and not domestic passenger services.

3. The future regulation on public passenger transport by rail and road, the main aim of which is to establish the legal
framework for compensation of public service contracts, rather than the opening of the market for railway services,
should permit direct award of public service contracts for railway services; and that such direct award should not
require any further opening of the market rail passenger services beyond what has been agreed in the Directive
amending Directive 91/440.

4. Similarly, maintaining the possibility for public authorities to provide for the operation of integrated rail networks is
an issue of importance for the Council which notes that this may require the PSO Regulation to provide for the
direct award of contracts for such networks.

5. It will be necessary to ensure coherence between the Directive amending Directive 91/440 and the PSO Regulation in

the framework of future discussions on the Regulation, in order to provide greater legal clarity.

6. The issues that will need to be clarified in reaching agreement on the PSO Regulation include, in particular:

— the definition of long distance, urban and regional railway transport, in line with the principle of subsidiarity,

because of the specific circumstances of different competent authorities;

— determining the responsibility for financing international public services contracts;

— the scale of investment in the calculation of the length of public service contracts.

7. The Council commits itself to try to find a political agreement on the PSO Regulation as soon as possible in 2006.
Significant progress needs to be achieved in the coming six months, paying particular attention to the general princi-
ples of transparency, subsidiarity and legal clarity.

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ANNEX II

STATEMENT BY THE PORTUGUESE REPUBLIC

Portugal reiterates its support for the objective of liberalisation of rail transport and is therefore voting in favour of the
Directive of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development
of the Community's railways.

Nevertheless, it regrets the approval of a new Article 1(8)(3f) allowing Member States to impose a new levy on interna-
tional rail passenger services in order to contribute to public service contracts.

This legislative solution will impair the normal development of the European market and will affect access for passengers
from peripheral Member States to Europe's other regions. Furthermore, it is contrary to the promotion of modal shift,
one of the main objectives of Community policy for the sector.

Portugal hopes that during the next stage of the co-decision legislative procedure, this provision can be revised in order
to mitigate the negative effects it could have on the liberalisation of international passenger transport.

ANNEX III

DECLARATION BY LITHUANIA FOR INCLUSION IN THE MINUTES OF THE COUNCIL

Lithuania understands that the provisions provided in the document 14737/05 ADD 1 under Art 1 (0), (2a) and Art. 1a
(0a), (0aa) are fully consistent with Council Regulation No 693/2003 of 14 April 2003 establishing a specific Facilitated
Rail Transit Document.