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 provisions of Directive 2007/58/EC on the opening of the market of international rail passenger transport accompanying the Communication to the Council and the European Parliament on the fourth Railway Package
Date: 2013-01-30
Institutions: European Commission
Subjects: administrative contract, carriage of passengers, contract of carriage, international transport, liberalisation of the market, national implementing measure, provision of services, rail network, transport company, transport infrastructure

EUROPEAN 
COMMISSION 

Brussels, 30.1.2013  
COM(2013) 34 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 provisions of Directive 2007/58/EC on the opening of the 
market of international rail passenger transport 

accompanying the Communication to the Council and the European Parliament on the 
fourth Railway Package 

(Text with EEA relevance) 

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   EN 

 
 
 
 
  
 
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 provisions of Directive 2007/58/EC on the opening of the 
market of international rail passenger transport 

accompanying the Communication to the Council and the European Parliament on the 
fourth Railway Package 

(Text with EEA relevance) 

1. 

INTRODUCTION 

On 23 October 2007, the European Parliament and the Council adopted Directive 2007/58/EC 
amending  Council  Directive  91/440/EEC  on  the  development  of  the  Community's  railways 
and Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying 
of  charges  for  the  use  of  railway  infrastructure1  (hereinafter:  the  Directive).  All  railway 
undertakings having a valid licence and the required safety certificates were given the right to 
operate international rail passenger services, including the possibility of carrying passengers 
on national sub-routes (cabotage) as from 1 January 2010. A deadline of 1 January 2012 was 
set  for  Member  States  for  which  the  share  of  international  carriage  of  passengers  by  train 
constituted more than half of the passenger turnover of railway undertakings in their territory 
(the  only  Member  State  to  meet  that  criterion  was  Luxembourg).  The  obligations  for 
transposition  and  implementation  of  the  Directive  do  not  apply  to  Cyprus  and  Malta  for  as 
long as no railway system is established within their territory. 

In order to protect the interests of railway undertakings carrying out national services covered 
by  a  public  service  contract  (PSC),  the  Directive  provides  for  the  possibility  of  imposing 
certain limitations on opening up the market of international rail passenger transport. Member 
States may limit the rights to introduce new international services  

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where the principal purpose of the new service is not international; 

where  a  new  international  service  would  compromise  the  economic  equilibrium  of 
services provided under PSC; 

as  a  result  of  time-limited  exclusive  rights  granted  before  the  Directive  came  into 
force; 

where the service transits the European Union. 

Furthermore,  the  Directive  allows  for  a  charge  to  be  levied  on  the  operator  of  a  new 
international passenger service to finance public service obligations. However, this levy has to 
be  imposed  in  accordance  with  the  principles  of  fairness,  transparency,  non-discrimination 
and proportionality, without endangering the economic viability of the service on which it is 
imposed. 
The Directive does not concern services between a Member State and a third country2. As a 
certain  number  of  Member  States  (Germany,  Italy,  Sweden  and  the  United  Kingdom)  had 

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OJ L 315 of 3.12.2007. 
Recital (4) of Directive 2007/58/EC. 

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already  taken  steps  to  open  their  rail  passenger  markets  prior  to  the  adoption  of  any  formal 
obligation  at  EU  level,  the  Directive  also  made  clear  that  Member  States  where  market 
opening had already taken place were not obliged to grant before 1 January 2010 the right to 
operate  new  international  passenger  services  to  railway  undertakings  and  their  subsidiaries 
licensed in a Member State where access rights of a similar nature were not granted3. 

According  to  Article  10  (9)  of  the  Directive,  the  Commission  shall  submit  to  the  European 
Parliament, the Council, the European Economic and Social Committee and the Committee of 
the  Regions  a  report  on  the  implementation  of  the  provisions  regarding  the  opening  of  the 
international rail passenger transport market. The Commission hereby submits its report to the 
institutions mentioned in order to fulfil this obligation. 

The Directive also requires the report to assess the development of the market, including the 
state  of  the  preparation  of  further  liberalisation  and  to  analyse  the  different  models  for 
organising  this  market  and  the  impact  of  the  Directive  on  public  service  contracts  and  their 
financing. The present report shows that the implementation of the Directive resulted in very 
few new services launched so far and makes an attempt to analyse the reasons for that. Given 
the  fact  that  there  are  a  minimal  number  of  new  services,  their  impact  on  PSO  financing  is 
negligible. The state of the preparation of a further market opening and the different models 
for  organising  this  market  are  analysed  in  the  impact  assessment  linked  to  the  legislative 
proposal on amending Directive 91/440/EEC. 

In the following sections, first we analyse the legal implementation of the provisions of the 
Directive  that  are  relevant  for  the  opening  of  the  international  rail  passenger  market  by 
Member  States.  After  that,  we  examine  the  practical  impact  the  Directive  had  on  the  rail 
market and the reasons which may explain why several positive effects expected have failed 
to appear so far. 

2. 

LEGAL  IMPLEMENTATION  OF  THE  PROVISIONS  OF  THE DIRECTIVE  RELEVANT  FOR 
THE OPENING OF THE INTERNATIONAL RAIL PASSENGER MARKET 

The  deadline  for  transposing  the  Directive  was  4  June  2009.  By  that  date,  none  of  the 
Member States had notified transposition. While some of them did during the following two 
months,  the  Commission  opened  infringement  procedures  against  19  Member  States  on  31 
July 2009 for failing to notify the measures taken to transpose the Directive. On 3 June 2010, 
the Commission submitted a reasoned opinion to 4 Member States for the same reason. All 
Member States have notified transposition since. 

Late and inadequate transposition of previous railway packages may have a negative impact 
on  the  practical  implementation  of  the  provisions  of  the  Directive  as  well.  At  the  moment, 
there  are  12  infringement  cases  for  inadequate  transposition  of  the  First  Railway  Package 
before the European Court of Justice and the Commission sent reasoned opinions in similar 
cases to 4 other Member States. Those infringement procedures concern, among others: 

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insufficient safeguards to guarantee the independence of the infrastructure  manager 
from  the  railway  holding  and  its  transport  affiliates  in  the  exercise  of  essential 
functions; 

insufficient  incentives  for  the  infrastructure  manager  to  reduce  costs  and  level  of 
access charges; 

Article 10 (3d). 

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access  charges  set  at  higher  levels  than  direct  costs  without  justification  that  the 
market can bear this; 
insufficient  independence  of  the  regulatory  body  from  the  incumbent4  railway 
undertaking,  the  infrastructure  manager  or  the  ministry  that  controls  the  incumbent 
railway undertaking; 

insufficient  powers  of  the  regulatory  body  to  take  and  enforce  the  necessary 
decisions. 

Besides,  in  September  2011,  the  Commission  initiated  infringement  proceedings  against 
France and the United Kingdom for insufficient transposition of the First Railway Package in 
respect of Channel Tunnel traffic. 

The  reasons  for  which  the  Commission  opened  the  infringement  procedures  mentioned  are 
relevant  for  access  to  the  international  rail  passenger  market  as  well.  One  of  the  positive 
consequences  of  infringement  procedures  is,  however,  a  significant  strengthening  of  the 
powers  of  the  regulatory  bodies  that  is  crucial  for  increasing  competition  (only  three  of  the 
sixteen ongoing infringement procedures mentioned still concern regulatory body powers). 

Article  10  (3a)  allows  any  railway  undertaking  established  in  a  Member  State  that  has 
obtained  a  licence  and  the  necessary  safety  certificates  to  access  the  infrastructure  of  all 
Member  States  in  order  to  operate  an  international  passenger  service  within  the  EU.  The 
Directive  authorises  new  market  entrants  to  pick  up  and  set  down  passengers  at  any  station 
located  on  the  international  route,  including  stations  located  in  the  same  Member  State 
(cabotage). Cabotage rights should be "focused on stops that are ancillary to the international 
route"5  and  the  introduction  should  concern  services  whose  principal  purpose  is  to  carry 
passengers  between  stations  located  in  different  Member  States.  Regulatory  bodies  shall 
determine  whether the  principal purpose of a service is to carry passengers travelling on an 
international journey. They should not act on their own initiative but following a request from 
the relevant competent authorities and/or interested railway undertakings. 

Since  the  need  for  guidance  from  the  Commission  on  how  to  implement  this  provision 
emerged from a survey on the implementation of the Directive by Commission services at the 
end of 2009 and subsequent discussions with representatives of Member States and rail sector 
associations,  on  28  December  2010 
interpretative 
communication  on  certain  provisions  of  the  Directive6.  This  communication  confirms  that 
while  determining  the  principal  purpose  of  a  service,  regulatory  bodies  must  act 
independently. This implies that their decision cannot be preconditioned or predetermined by 
instructions  received  from  any  other  public  authorities  under  national  law.  The  regulatory 
bodies should verify the principal purpose of the service case by case. 

the  Commission  published  an 

In  the  framework  of  the  recast  of  the  First  Railway  Package,  EU  co-legislators  decided  to 
charge the Commission with the adoption of implementing acts setting out the details of the 
procedure  and  criteria  to  assess  the  nature  of  a  service  (principal  purpose  test),  within  18 
months after transposition of the Directive establishing a Single European Railway Area (by 
2015).7 

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7 

An  incumbent  is  a  (former)  state  railway  undertaking  which  had  a  dominant  position  on  the  market 
prior to liberalisation. 
Recital (8) of Directive 2007/58/EC. 
OJ C 353 of 28.12.2010, pp. 1-6. 
Article 10 (4) of the Directive establishing a Single European Railway Area, adopted by the European 
Parliament on 3 July 2012 and by the Council on 29 October 2012. 

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Estonia  and  Sweden  apply  no  restrictions  on  commercial  rail  services,  thus,  they  did  not 
introduce any provision in their national legislation on determining the principal purpose of a 
service.  In  all  other  Member  States  but  one  (Finland),  there  are  provisions  in  national 
legislation  to  authorise  the  regulatory  body  to  examine  the  principal  purpose  of  new 
international  services  applied  for.  Some  Member  States  intend  to  use  an  approach  based  on 
purely quantitative thresholds (for the length of the route to be outside of the Member State, 
for the number of passengers making an international journey, for a part of turnover to come 
from  international  passengers)  while  in  several  other  Member  States  the  decision-making 
process  and  the  methodology  to  be  used  have  not  been  published.  Finally,  some  Member 
States seem to have given the right to request a principal purpose test to market players not 
listed  in  the  Directive  (typically,  the  infrastructure  manager).  The  Commission  is  analysing 
these cases for compliance with the Directive. 

Member States may exclude from the scope of this Directive any railway service carried out 
in transit through the Union which begins and ends outside the EU territory8. Four Member 
States (Bulgaria, Greece, Lithuania and Romania) have chosen to use this opportunity which 
seems to be irrelevant for the others for geographical reasons.  

Since  introducing  new  services  with  cabotage  rights  on  a  route  covered  by  PSC  may  have 
implications  for  the  organisation  and  financing  of  public  service  obligations,  in  accordance 
with Article 10 (3b), Member States may limit the right of access on services between a place 
of  departure  and  a  destination  which  are  covered  by  one  or  more  PSC  conforming  to  EU 
legislation9 if the new international services could compromise their economic equilibrium. 
The  interpretative  communication  of  the  Commission  underlines  that  this  limitation  is 
optional. Regulatory bodies cannot act on their own initiative but only following a request by 
the entities listed in the Directive. 

The  Directive  does  not  specify  the  forms  such  limitations  can  take  but  for  instance, 
restrictions on the number or frequency of stops, exclusion of certain stops, reduction of train 
service frequency are possible options beyond the full exclusion of cabotage. 

Assessments  and  decisions  of  regulatory  bodies  should  be  coordinated.  Beyond  exchanging 
information  and,  where  relevant,  coordination  of  principles  and  practice  of  assessment  in 
individual cases, recital (17) invites the regulatory bodies to develop guidelines based on their 
experience. 

The  interpretative  communication  makes  clear  that  the  economic  equilibrium  test  is 
independent  from  the  principal  purpose  test:  they  can  be  run  together  but  one  cannot  be 
considered a prerequisite for the other. It also underlines that the assessment should be limited 
to the points mentioned in the request received. 

For  transparency  and  non-discrimination,  the  methodology  used  to  determine  whether  the 
economic  equilibrium  of  a  PSC  is  compromised  by  a  new  international  service  should  be 
published. 

In response to a questionnaire sent out in 2012 by Commission  services, 11 Member States 
declared that they do not limit cabotage rights. Several Member States having chosen to make 
use of this option have not published the decision-making process and the methodology to be 
used.  In  some  other  Member  States,  rather  strict  criteria  seem  to  be  included  in  national 
legislation. In at least one Member State, the economic equilibrium test has to be preceded by 

8 
9 

Article 2 (4) of Directive 91/440/EEC as amended by Directive 2007/58/EC. 
Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on 
public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 
1191/69 and 1107/70. 

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a  principal  purpose  test,  even  in  the  case  where  there  has  been  no  request  for  that.  The 
Commission is analysing these cases for compliance with the Directive. 

However,  while  Member  States  seem  to  have  difficulties  with  the  transposition  of  the 
provisions  of  Article  10  (3a)  and  (3b),  in  fact  there  is  only  one  practical  example  of  using 
them  to  limit  cabotage  rights.  In  Italy  (one  of  the  few  Member  States  where  the  decision-
making  process  and  the  methodology  to  be  used  have  been  published  on  the  website  of  the 
regulatory  body),  in  the  case  of  an  application  submitted  by  the  Italian  private  operator 
LeNord  S.p.A.  in  cooperation  with  the  German  incumbent  DB  and  the  Austrian  incumbent 
ÖBB for the operation of several routes linking the three Member States, the regulatory body 
decided  to  apply  a  partial  limitation  of  cabotage  rights  on  the  basis  that  they  would 
compromise the economic equilibrium of several regional PSC. The decision was suspended 
by the regulatory  body itself in order to assure the  transport  of passengers  who had already 
bought  their  tickets.  On  the  basis  of  a  reconfiguration  of  international  passenger  services 
requested, the regulatory body lifted all cabotage limitations and the railway undertakings are 
currently  operating  daily  services  from  Munich  through  the  Brenner  to  three  destinations  in 
Italy (Venice, Bologna and Verona). 

In  the  framework  of  the  recast  of  the  First  Railway  Package,  EU  co-legislators  decided  to 
charge the Commission with the adoption of implementing acts setting out the details of the 
procedure and criteria to assess the impact of a new service on PSC, within 18 months after 
transposition of the Directive establishing a Single European Railway Area (by 2015).10 

In accordance with Article 10 (3c), Member States may also limit cabotage rights where an 
exclusive right to transport passengers between the relevant stations has been granted under a 
concession contract awarded before the entry into force of the Directive (4 December 2007) 
on  the  basis  of  a  fair  competitive  tendering  procedure  and  in  accordance  with  the  relevant 
principles of EU law. This limitation may continue for the original duration of the contract, or 
15 years, whichever is the shorter. 

The  only  Member  State  where  such  a  limitation  is  in  use  is  the  Netherlands,  on  the  line 
Amsterdam-Roosendaal  for  a  period  of  15  years.  This  concerns  cabotage  on  the  new  high-
speed line HSL Zuid which has connected Schiphol Airport with Antwerp in Belgium since 
2009  where  domestic  transport  is  reserved  for  the  operator  High  Speed  Alliance  (a  joint 
venture between the incumbent NS and the national airline KLM). 

Article 10 (3e) stipulates that the decisions regarding limitations on the basis of a concession 
contract  or  the  economic  equilibrium  of  PSC  being  compromised  have  to  be  subject  to 
judicial review.  

According to the information available to the Commission, this is provided for in the national 
legislation of all Member States that make use of those possibilities. In most cases, that does 
not  require  specific  legislation  but  is  in  line  with  general  provisions  concerning  judicial 
review  of  decisions  of  authorities.  However,  given  the  fact  that  there  have  been  almost  no 
decisions to be questioned, there has been no practical test of those provisions applied for the 
opening of the international rail passenger market. 

According to Article 10 (3f), Member States may authorise the authority responsible for rail 
passenger transport to impose a levy on railway undertakings providing cabotage services in a 
fair, transparent and non-discriminatory way. 

10 

Article 11 (4) of the Directive establishing a Single European Railway Area. 

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Seven  Member  States  (Bulgaria,  Greece,  Hungary,  Italy,  Romania,  Slovenia  and  Slovakia) 
have decided to include this possibility in their national legislation. However, such a levy has 
never been imposed on any railway undertaking. 

3. 

NEW SERVICES OPERATED ON THE BASIS OF THE DIRECTIVE 

Although the essential legal requirements of the Directive regarding the opening of the market 
for new international services with cabotage have been met, such services are rarely seen at 
the moment in Europe.  

Since December 2010, Italian private operator LeNord together with German incumbent DB 
and Austrian incumbent ÖBB has been providing for services from Germany through Austria 
to  Italy  linking  Munich  –  Brenner  –  Verona  (1  pair  of  trains  a  day),  Munich  –  Brenner  – 
Venice and Munich – Brenner – Bologna (2 pairs of trains a day for both). Since December 
2011, another railway undertaking based in Italy (Società Viaggiatori Italia S.r.l.) controlled 
by French incumbent SNCF has been operating new services linking Paris – Modane – Milan 
(3  pairs  of  trains  a  day),  while  Italian  incumbent  Trenitalia  and  the  French-based  private 
operator  Veolia  Transdev  have  been  running  a  night  train  linking  Venice  to  Paris  via 
Switzerland  under  the  brand  name  thello.  This  is  the  first  service  in  the  long-distance  rail 
passenger market in France which is not operated by or in cooperation with SNCF. 

In  2010,  Swedish  incumbent  SJ  started  to  offer  services  from  Sweden  to  Denmark  with 
cabotage  between  Copenhagen  and  Odense;  however,  the  latter  part  of  the  service  was 
stopped one year later. 

An  atypical  international  service  on  what  seems  to  be  a  niche  market  is  the  Berlin  Night 
Express, a night train service linking Malmö and Berlin three times a week from late March to 
early November, operated by Veolia and GVG Verkehrsorganisation GmbH. 

It is worth mentioning that when DB withdraws from the cooperation for international high-
speed transport with SNCF and Belgian incumbent SNCB as planned, Thalys will become a 
further  competitor  in  the  long-distance  market,  especially  on  the  Aachen-Köln-Essen  route. 
Thalys has extended its trains from Paris to Köln into the Ruhr area since 2011. DB has also 
announced its plans to introduce InterCityExpress services from Frankfurt to London through 
the Channel Tunnel. 

The principal purpose of the services operated by the Austrian private operator WESTbahn (a 
company in which SNCF has a 26% stake) from Vienna to Salzburg and to Freilassing at the 
German side of the border seems to be domestic transport. 

Cross-border regional services covered by PSC such as passenger transport from Enschede in 
the  Netherlands  to  Münster  and  Dortmund  in  Germany  are  to  be  distinguished  from  open 
access international services provided under the Directive. 

4. 

REASONS FOR THE  MINOR IMPACT  THE  IMPLEMENTATION OF THE DIRECTIVE HAS 
HAD ON THE MARKET 

Several  barriers  may  be  identified  that  prevent  new  entrants  (including  incumbent  railway 
undertakings  licensed  in  another  Member  State)  from  offering  international  services  on  the 
basis of the Directive. Late and, in some cases, restrictive implementation of the Directive and 
persistent discriminations in access to infrastructure and to rail-related services which resulted 
in the infringement procedures concerning the implementation of the First Railway Package 
do have a negative impact on the market.  

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There are few international destinations with traffic flows strong enough to enable operators 
to  introduce  economically  viable  new  services.  In  particular,  niche  markets  like  night  train 
services (that are being ousted by faster day services by rail or other modes of transport) offer 
few  opportunities  for  a  profitable  service.  It  is  also  quite  difficult  to  integrate  the  new 
international services in the domestic timetable to provide for appropriate connections. 

The  experience  from  opening  the  rail  freight  market  also  shows  that  new  operators  (even 
subsidiaries  of  incumbent  railway  undertakings  in  other  Member  States)  prefer  domestic 
services  to  international  ones  as  traffic  flows  are  larger  and  domestic  traffic  is  easier  to 
organise (only one infrastructure manager is involved, there are no linguistic issues, etc.). 

Stakeholders interested in international services refer to the following access barriers: 

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administrative  barriers:  difficulties  in  obtaining  a  safety  certificate  or  vehicle 
authorisation (in several cases, extremely long times to produce a decision); 

information  barriers:  difficulties  in  getting  information  and  poor  quality  of 
information relating to administrative issues mentioned above; 

operational  barriers:  need  for  staff  speaking  all  official  languages  along  the  route, 
volatility  of  infrastructure  charges,  access  to  operational  facilities  and  services, 
difficulties  to  align  train  paths  in  domestic  timetables  to  get  suitable  international 
paths, lack of the inter-availability of tickets; 

access to sales channels: difficulties to use existing sales facilities on a fair and non-
discriminatory basis or to rent space in stations to set up their own ticket sales offices 
or even getting their publicity displayed (according to a study, the Czech Republic, 
Portugal, Denmark and the United Kingdom were the only Member States in 2011 in 
which all sales facilities in rail passenger transport were available to external railway 
undertakings with no restrictions11). 

Established forms of cooperation between incumbents (which, contrary to new entrants, enjoy 
network  effects  and  a  dominant  position  on  their  national  markets)  can  also  be  an  obstacle, 
not just for new entrants who have difficulties in finding a profitable market segment to start 
their  own  services  but  also  for  incumbents  considering  changing  strategies  and  entering  the 
market of another Member State on their own. 

Inadequate financing of railway infrastructure in certain Member States leads to the inevitable 
deterioration  of  service  quality  and  to  the  need  to  withdraw  international  services  that  have 
become non-competitive with other modes of transport. 

High-speed rail has been the success story of railway transport and indeed high-speed services 
between major cities offer the greatest traffic flows and, therefore, a real potential to introduce 
new services (DB plans to run  its own InterCityExpress trains from Frankfurt to  London or 
the recently introduced new services between Frankfurt and Marseille in cooperation of SNCF 
and DB can confirm that). However, they need specialised rolling stock and, therefore, high 
investment,  and  may  run  against  special  safety  barriers  in  certain  markets  like  the  Channel 
Tunnel  where  the  special  safety  regulation  based  on  vehicle  standards  different  from  the 
Europe-wide TSI has been an obstacle for DB to use its own ICE train sets. 

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http://www.deutschebahn.com/site/shared/en/file__attachements/position__papers/study__rail

__liberalisation__index__2011__complete__version.pdf, p. 70. 

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Framework conditions for different modes of transport do not provide for a level playing field 
either: in some Member States, international trains are subject to VAT and/or to fuel excise 
duty while aviation is not. 

Finally,  the  negative  overall  economic  climate  since  2008  and  the  low  reaction  of  the  rail 
sector to regulatory changes (linked to high investment needs and the long duration of use of 
railway assets) have to be taken into account. 

Some of the barriers listed in this report have been addressed by the European co-legislators 
during the recast of the First Railway Package that resulted in the adoption of the Directive 
establishing  a  Single  European  Railway  Area  (access  to  facilities  and  services,  improved 
stability  in  infrastructure  financing,  shorter  deadlines  for  administrative  decisions).  With 
harmonisation  of  safety  certificates  and  vehicle  authorisations,  the  Commission  proposes  to 
eliminate other administrate barriers in the framework of the Fourth Railway Package. 

5. 

CONCLUSIONS 

International rail passenger services including cabotage rights have been liberalised in the EU 
by  Directive  2007/58/EC  as  from  1  January  2010  (except  Luxembourg  where  this  deadline 
was  postponed  to  1  January  2012).  Although  all  Member  States  were  delayed  as  regards 
transposition, by now all of them have taken national legislative measures to comply with the 
Directive. 

As for practical implementation, the interpretation of the provisions concerning the principal 
purpose  of  a  rail  service  and  the  economic  equilibrium  of  services  under  PSC  being 
compromised proved to be the most difficult for Member States. In this field, the Commission 
will  adopt  implementing  acts  on  the  basis  of  the  Directive  establishing  a  Single  European 
Railway Area. 

Several  Member  States  decided  not  to  use  any  of  the  options  provided  by  the  Directive  to 
limit  new  international  services  or  cabotage  rights.  Even  where  the  possibility  to  limit 
cabotage  is  granted  by  national  law,  practical  application  of  those  provisions  remains 
minimal. Concession-based limitation seems to be the most efficient of the safeguard clauses 
to protect the interests of operators providing services on a route that may be interesting for 
cabotage; however, it is used in one Member State only. 

Despite  the  establishment  of  the  relevant  national  legal  framework  in  all  Member  States 
concerned, there are few examples of new international services operated on the basis of the 
Directive.  When  trying  to  enter  the  international  rail  passenger  market,  new  operators  are 
often  facing  barriers  linked  to  inadequate  implementation  of  previous  railway  packages  or 
loopholes in previous EU legislation. Infringement procedures, the recast of the First Railway 
Package and the present proposals for the Fourth Railway Package are expected to contribute 
to the solution of these problems. 

However, even in case of elimination of all those barriers we cannot expect a rapid growth of 
new international rail passenger services as most segments of the international rail passenger 
market  are  barely  profitable  and  therefore  unattractive  for  operators.  It  is  much  easier  to 
organise domestic passenger transport and in Member States that have opened their domestic 
passenger market for competition, there are many more new entrants than in the international 
market. The liberalisation of rail freight services has produced a similar picture. It should also 
be  noted  that  in  passenger  transport,  competition  seems  to  be  the  greatest  for  local  and 
regional services under PSC in case of competitive tendering. 

Thus,  the  analysis  of  the  experience  gained  from  the  opening  of  the  international  rail 
passenger  market  since  2010  seems  to  confirm  that  new  international  services  are  likely  to 

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spread from domestic market opening rather than the other way round. For instance, domestic 
market  opening  would  enable  international  service  operators  to  develop  feeder  services  that 
would improve the viability of international services. The Commission's proposals to open up 
domestic rail passenger markets and to expand competitive tendering in the framework of the 
Fourth Railway Package should give a boost to the development of international services.  

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