Communication from the Commission to the European Parliament pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development of the Community’s railways and Council 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 and safety certification
Date: 2006-09-18
Institutions: European Commission
Subjects: carriage of passengers, common transport policy, international competition, international transport, rail transport

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.9.2006 
COM(2006) 516 final 

2004/0047 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive of the European 
Parliament and of the Council amending Council Directive 91/440/EEC on the 
development of the Community’s railways and Council 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 and safety 
certification 

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2004/0047 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive of the European 
Parliament and of the Council amending Council Directive 91/440/EEC on the 
development of the Community’s railways and Council 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 and safety 
certification  

1. 

BACKGROUND 

Date of transmission of the proposal to the EP and the Council 
(document COM(2004) 0139 final – 2004/0047 COD): 

4 March 2004 

Date of the opinion of the European Economic and Social 
Committee: 

9 February 2005 

Date of the opinion of the European Parliament, first reading: 

28 September 2005 

Date of adoption of the common position: 

24 July 2006 

2. 

OBJECTIVE OF THE COMMISSION PROPOSAL 

With this proposal and in line with the White Paper 'European transport policy for 2010: time 
to  decide’,  the  Commission  intends  continuing  the  reform  of  the  rail  sector  by  opening  the 
international transport of passengers within the European Union to competition.  

This is one of the four measures the Commission proposed in the context of the third railway 
package  (the  other  measures  are  intended  to  improve  the  rights  of  passengers  using 
international services, to establish a certification system for train drivers and to improve the 
quality of rail freight services). 

This  particular  proposal  provides  that  as  from  1  January  2010,  railway  undertakings,  which 
have a licence and the required safety certificates, should have access to the infrastructure to 
operate international passenger services in the Community.  

In  order  to  create  realistic  economic  conditions  to  develop  the  services,  it  is  proposed  that 
operators be permitted to pick up and set down passengers at any station on an international 
route, including at stations located in the same Member State. This has been organised in such 
a  way  as  to  safeguard  the  economic  equilibrium  of  public  service  contracts  which  could  be 

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affected by this, while at the same time not placing exaggerated constraints on the operating 
conditions of railway undertakings operating international open access rail passenger services. 

3. 

COMMENTS ON THE COMMON POSITION 

A  central  issue  of  the  Council's  discussions  on  the  Commission’s  market  opening  proposal 
was its relation with the revised proposal on public passenger transport services by rail and by 
road1. 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  passenger  transport 
services proposal in a Statement to the minutes made by the Council and the Commission (see 
Annex I). 

The  Council,  by  qualified  majority  (abstention  by  Hungary),  made  some  general  changes 
relative to the Commission's proposal that are acceptable because they would ensure its aims 
were met. 

The  first  concerns  the  rights  to  openly  access  the  infrastructure  for  rail  passenger 
services.  The  Council  retained  the  opening  date  of  2010  for  international  rail  passenger 
services  as  proposed  by  the  Commission.  The  Common  Position  delays  the  opening  for 
Member States where international transport forms an important share of total rail passenger 
services until 2012. The Council hence refused the proposals of the European Parliament of 
its first reading to anticipate the opening date for international services to 2008 and to open up 
domestic services by 2012. The Council, however, took over the Parliament’s proposal of a 
reciprocity  clause  that  Member  States  could  apply  which  would  open  their  market  before 
2010. The Commission supports this opening schedule as defined in the Common Position as 
it  allows  all  market  actors  to  prepare  for  market  opening.  The  Commission  can  accept  this 
reciprocity clause since it is strictly transitional in nature and formulated in such a way as to 
avoid incompatibility with Community law. The Commission also agrees with the Common 
Position that the right of access should only be granted to those international services, which 
have  as  a  principal  purpose  the  carriage  of  passengers  between  stations  located  in  different 
Member States. In this manner, it is avoided that an access right for international passenger 
services, which includes cabotage, could be abused leading to the opening of the market for 
domestic passenger services. 

Second,  in  its  Common  Position  the  Council  defines  more  clearly  the  mechanisms  and 
procedures  to  safeguard  public  transport  services.  The  Council  retains  the  general 
principle proposed by the Commission that the right of access can only be limited if it would 
compromise  the  economic  equilibrium  of  a  public  transport  service.  The  Council  has  added 
three  elements  to  the  Commission  proposal:  a)  a  transparent  procedure  in  which  an 
independent regulatory bodies plays the key role for determining whether opening the market 
for  international  rail  passenger  services  compromises  a  public  transport  service;  b)  a 
clarification  on  the  modalities  for  granting  or  limiting  the  access  right;  and  c)  a  provision 
which  allows  Member  States  to  charge  a  levy  on  international  rail  passenger  services  in  a 
transparent  and  non-discriminatory  way  to  finance  public  rail  passenger  services.  The 
Commission  agrees  with  these  additional  elements  as  they  either  enhance  the  clarity  of  the 
provisions or state what is possible under Community law anyway. 

1 

The Commission issued a revised proposal on 20 July 2005, see COM(2005)319. 

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The  third  change  takes  up  a  suggestion  of  the  European  Parliament  to  complement  the 
opening  of  the  market  for  international  rail  passenger  services,  and  in  particular  for 
services  using  specialised  infrastructure,  with  arrangements  for  more  stable  and 
predictable  climate  for  investments.  Where  the  Parliament  proposed  to  allow  for  services 
using  specialised  infrastructure,  which  requires  substantial  and  long-term  investment, 
framework  agreements  with  durations  of  10  years,  the  Council  considers  that  a  15  years’ 
duration  would  be  more  appropriate.  The  Commission  supports  the  position  of  the  Council 
which reflects appropriately the generally long amortisation periods for such specialised rail 
infrastructure. 

Finally,  the  Council  Common  Position  introduces  a  number  of  other  significant  changes 
compared to the Commission’s proposal. It clarified that the Directive is to open the market 
for international rail passenger services within the Community 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.  Furthermore,  the  Common 
Position  allows  Member  States  for  a  transitory  period  not  to  provide  full  open  access  to 
international  rail  passenger  services  in  cases  where  the  right  to  use  certain  rail  lines,  for 
instance,  in  the  case  of  a  concession  has  been  attributed  based  on  an  open  and  competitive 
tender procedure. The Council also proposed that Member States which do not have a railway 
system  such  as  Malta  and  Cyprus  would  be  exempt  from  the  obligation  to  implement  the 
Directives  that  are  subject  of  this  amendment.  The  Commission  can  agree  to  all  these 
additional provisions. 

4 

COMMISSION DETAILED COMMENTS 

The Commission accepted wholly or in part four out of the twelve amendments proposed by 
the European Parliament at its first reading. Of these, the Council has included eight, either 
literally or in principle, in its common position. 

4.1 EP amendments accepted by the Commission and incorporated in full or in part in the 
common position 

The references below are to recitals and articles of the common position. 

Amendments  5  and  13.  Taking  up  a  suggestion  from  the  European  Parliament  the  Council 
proposes in Article 2 4) to extend the standard period for a framework agreement in the case 
of  a  specialised  infrastructure  to  15  years  compared  to  10  years  proposed  by  the  European 
Parliament. The Council also lists in an indicative manner the capacity characteristics which 
are to be provided to the applicant for the duration of the framework agreement. 

Amendments 7 Recital 21 recommends to amend both, Directives 91/440/EEC and Directive 
2001/14/EC. 

Amendment 10. Recital 10 and Paragraph 1 8) 3b state that an open access right can only by 
limited  in  the  case  that  the  regulatory  body  would  conclude  based  on  a  thorough  economic 
analysis  and  pre-determined  criteria  that  the  open  access  right  would  compromise  the 
economic equilibrium of the public transport service. The Common Position furthermore lists 
the actors who can request such an economic analysis and indicates procedural aspects of the 
assessment as well as the issuing of the decision. 

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4.2  EP  amendments  rejected  by  the  Commission  and  not  incorporated  in  the  common 
position  

Amendments  2,  8  and  9.  Recital  6  and  paragraph  1  8)  3a  stipulate  the  appropriate  date  of 
opening  the  market  for  international  rail  passenger  services  is  on  1  January  2010.  This  is 
contrary  to  the  position  of  the  European  Parliament  which  proposed  to  open  the  market  for 
international rail passenger services by 2008 and for domestic services by 2012. 

Amendment  4.  The  amendment  establishes  a  link  to  the  reading  by  Council  of  the 
Commission  proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council  on 
public passengers transport services by rail and by road. Establishing such a link is obsolete as 
the Council reached a political agreement on this proposal on 9 June 2006. 

4.3  EP  amendments  rejected  by  the  Commission  and  incorporated  fully  or  partly  in  the 
common position  

Amendments  6  and  12.  Recital  17,  paragraphs  1  9)  and  1  10)  require  the  Commission  to 
report  in  2009  on  the  implementation  of  Directive  91/440/EEC  as  amended  by  Directive 
2001/12/EC as well as two years of the opening date for international rail passenger services 
on  the  implementation  of  this  Directive.  The  Parliament’s  amendments  require  the 
Commission to report twice on the implementation of this Directive, first two years after the 
opening date for international passenger services as proposed by the European Parliament and 
secondly two years after the proposed opening date for domestic passenger services.  

Amendments  3  and  11.  Taking  up  a  similar  proposal  of  the  European  Parliament  recital  11 
and  paragraph  1  8)  3d  do  not  require  Member  States  which  have  opened  their  market  for 
international rail passenger services to grant access rights before the opening date foreseen by 
Community  legislation  to  railway  undertakings  or  their  directly  or  indirectly  controlled 
subsidiaries  licensed  in  a  Member  State  where  access  rights  of  a  similar  nature  are  not 
granted. 

The Commission can accept these modifications which it had rejected in first reading of the 
EP. 

5. 

CONCLUSION 

The Commission considers that the Common Position adopted on 24 July 2006 by qualified 
majority  does  not  undermine  the  essential  objectives  and  the  underlying  approach  of  its 
proposal, and can therefore support it. 

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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. 

2. 

3. 

4. 

5. 

6. 

7. 

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. 

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. 

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. 

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. 

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. 

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 
contracts; 

the  responsibility  for  financing 

international  public  services 

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

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  principles  of 
transparency, subsidiarity and legal clarity. 

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