COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the documents Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1370/2007 concerning the opening of the market for domestic passenger transport services by rail Proposal for a Directive of the European Parliament and of the Council amending Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area, as regards the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure
Date: 2013-01-30
Institutions: European Commission
Subjects: award of contract, carriage of passengers, free competition, invitation to tender, liberalisation of the market, means of public conveyance, national transport, provision of services, rail transport, services contract, transport infrastructure

EUROPEAN 
COMMISSION 

Brussels, 30.1.2013  
SWD(2013) 11 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the documents 

Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation (EC) No 1370/2007 concerning the opening of the market for domestic 
passenger transport services by rail 

Proposal for a Directive of the European Parliament and of the Council amending 
Directive 2012/34/EU of the European Parliament and of the Council of 21 November 
2012 establishing a single European railway area, as regards the opening of the market 
for domestic passenger transport services by rail and the governance of the railway 
infrastructure 

{COM(2013) 28 final} 
{COM(2013) 29 final} 
{SWD(2013) 10 final} 
{SWD(2013) 12 final} 
{SWD(2013) 13 final} 

EN 

   EN 

 
 
 
 
 
  
 
 
COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the documents 

Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation (EC) No 1370/2007 concerning the opening of the market for domestic 
passenger transport services by rail 

Proposal for a Directive of the European Parliament and of the Council amending 
Directive 2012/34/EU of the European Parliament and of the Council of 21 November 
2012 establishing a single European railway area, as regards the opening of the market 
for domestic passenger transport services by rail and the governance of the railway 
infrastructure 

Lead DG: MOVE 

1. 

PROBLEM DEFINITION 

The  performance  of  the  railway  sector  in  passenger  transportation  does  not  compare 
favourably  to  other  transport  modes.  The  6%  modal  share  for  rail  in  the  EU  has  remained 
fairly stable since the mid-nineties and contrasts sharply to the share of passenger cars (75%), 
buses  (8%)  and  air  transport  (8%).  Some  countries  have  opened  their  domestic  passenger 
transport market, while markets of other Member states are dominated by incumbents. ,  

There  are  two  main  problems  behind  these  issues.  Firstly,  low  quality  of  rail  passenger 
services  is  observed  widely  across  the  EU.  A  survey  in  2012  revealed  that  only  46%  of 
Europeans  are  satisfied  with  their  national  and  regional  rail  system.  Secondly,  operational 
efficiency  gaps  of  railway  undertakings  are  observed  within  the  wide  range  of  different 
national  models  in  Europe.  Despite  large  subsidies  of  railways,  many  railway  undertakings 
across the EU have been making losses for several years and, in some instances, have had to 
be repeatedly bailed out by taxpayers.  

There is concurring evidence that these problems are driven by lack of competitive pressure 
and  different  market  access  rules  across  the  EU  hindering  the  consolidation  of  Single 
European  Railway  Area.  In  16  out  of  the  25  Member  States  (MS)  with  rail,  incumbent 
operators'  market  share  remains  above  90%.  In  such  conditions,  neither  the  competition  for 
the market (several operators competing for the exclusive right of a specific route – a public 
service contract (PSC)) nor competition in the market (several operators running in the same 
route  –  open  access)  can  be  ensured.  Also,  since  1990  the  efficiency  gap  between  best  and 
worst performers of the EU railways has increased, revealing differing development trends. 

The root causes of these problems can be found in absence of competition for PSCs, market 
distortions  caused  by  restricted  access  to  necessary  resources  (such  as  rolling  stock  and 
integrated  ticketing  systems)  and  national  restrictions  to  the  freedom  to  provide  domestic 
passenger  rail  services.  Today,  42%  of  all  the  EU  domestic  passenger  market  is  operated 
under  PSOs  attributed  through  direct  awards.  In  addition,  at  least  in  9  MS  the  incumbent 
operator  appears  to  still  enjoy  a  domestic  passenger  services  monopoly  laid  down  in  the 
national legislation. 

EN 

2 

   EN 

 
 
These problems and the measures to be proposed to address them will affect a large number 
of  actors  in  the  rail  market  and  beyond.  In  particular,  they  concern  railway  undertakings, 
passengers and the railway manufacturing industry. More fundamentally, these measures will 
also affect the way authorities manage public financing of the railway sector. 

2. 

SUBSIDIARITY 

Articles 58, 90 and 100 of the Treaty extend to railways the objectives of a genuine internal 
market in the context of an EU Common Transport Policy.  

Actions  by  MS  alone  cannot  ensure  the  coherence  of  EU  railway  market  and  address  the 
divergent  interpretation  of  the  legislation,  given  the  persistence  of  national  rules  and  sub-
optimal functioning of national institutions, acting as barriers to the internal market. Action at 
EU level aims to ensure consistent implementation of the EU rail acquis, which should lead to 
the creation of the Single European Railway Area (SERA) with no unnecessary administrative 
and  technical  barriers.  At  the  same  time  compliance  with  subsidiarity  principle  is  carefully 
assessed  for  the  PSC  related  market  opening  measures  which  are  geared  towards  maximum 
flexibility to be left to MS. 

3. 

OBJECTIVES 

General objective:  

Improve the quality of rail passenger services and enhance their operational efficiency thereby 
improving  the  competitiveness  and  attractiveness  of  rail  sector  vis-à-vis  other  modes  and 
developing further the SERA.  

Specific objectives:  

1. 

2. 

Intensify competitive pressure on domestic rail markets 

Create more uniform business conditions 

Operational objectives:  

1. 

2. 

3. 

4. 

5. 

6. 

Facilitate cross-border entry into domestic rail passenger markets 

Abolish legal monopolies 

Open PSC market for competition  

Establish a common approach to control the definition of PSOs and to define public 
service contracts  

Facilitate the level playing field in access to ticketing 

Facilitate the level playing field in access to rolling stock  

EN 

3 

   EN 

 
Mapping drivers, root causes and objectives: 

4. 

POLICY OPTIONS 

Taking into account the stakeholders' consultation and the problem analysis, it is possible to 
identify four broad sets of measures, as detailed in the following table:  

Root causes 

Respective 
category of 
options 

Policy options considered 

Retained?

Restrictions to 
provision domestic 
passenger rail 
services 

A options: Open 
access 

Option A0: Baseline scenario - no open access 
rights to domestic rail market provided under EU law 

Option A1: Open access with possibility to limit 
access when the viability of PSC is compromised 

Option A2: Open access limited to routes being 
commercially viable  

Option A3: Open access limited to routes not covered 
by PSCs 

Option A4: Open access unlimited 

Option B0: Baseline scenario - competent 
authorities can choose between direct award and 
competitive tendering 

Option B1: Mandatory tendering with flexibility, PSC 
scope under the control of national regulatory body  

Option B2: Mandatory tendering with flexibility, PSC 
scope under the control of the Commission 

√ 

√ 

√ 

√ 

√ 

√ 

Absence of 
competition for 
PSCs 

B options: 
Competitive 
tendering of 
PSCs 

Discriminatory 
access to ticketing 
systems  

T options: 
Integration of 
ticketing 

Option T0: Baseline - implementation of the 
Passenger Rights Regulation and the Recast of the 1st 
Railway Package 

EN 

4 

   EN 

 
 
 
 
 
systems 

Option T1: voluntary national integrated ticketing 
systems  

Limited  access  to 
rolling stock 

RS options: 
Access to rolling 
stock 

Option T2: mandatory national integrated ticketing 
systems 

Option T3:Integrated EU ticketing system  

Option RS0: Baseline - no specific EU requirements 

Option RS1: Mandatory creation of ROSCOs 

Option RS2: Mandatory ownership of rolling stock by 
competent authorities 

Option RS3: Mandatory selling or leasing of rolling 
stock by the previous PSC beneficiary  

Option RS4: Obligation for the competent authority to 
take the financial risks 

Option RS5: Guidelines on best practices on rolling 
stock 

√ 

√ 

√ 

√ 

√ 

A and B options are the core measures of the initiative and their combination determines the 
ambition of market opening. The following combined core options are to be assessed:  

Option 0 (A0, B0) 

–  Baseline scenario 

Option 1 (A1, B0) 

–  Market  opening  based  on  'broad  open  access',  no  measures  on 

competitive tendering of PSCs 

Option 2 (A3, B0) 

–  Market  opening  based  on  'limited  open  access',  no  measures  on 

competitive tendering of PSCs 

Option 3 (A0, B1) 

–  Market  opening  based  exclusively  on  competitive  tendering  of 

PSCs  

Option 4 (A1, B1) 

–  Market  opening  based  on  'broad  open  access'  and  competitive 

tendering of PSCs 

Option 5 (A3, B1) 

–  Market  opening  based  on  'limited  open  access'  and  competitive 

tendering of PSCs 

The  essence  of  the  ticketing  and  rolling  stock  option  consideration  is  to  create  framework 
conditions necessary for more effective application of A and B core policy options.  

EN 

5 

   EN 

 
 
 
 
 
 
 
Core options combined with the preferred options T and RS: 

5. 

ASSESSMENT OF IMPACTS 

While  the  EU  rules  would  create  necessary  conditions  for  more  effective  and  uniform  rail 
market  functioning,  the  effectiveness  of  implementation  and  consequent  impacts  depend 
largely  on  the  situation  in  each  MS  and  the  'spirit'  of  transposition  and  enforcement. 
Consequently,  the  analysis  of  impacts  of  different  options  is  mostly  based  on  qualitative 
assessment, with partial quantification, where possible.  

The  direct  economic,  social  and  environmental  impacts  that  have  been  identified  as 
potentially most relevant to the policy measures are detailed in the tables below.  

Assessment of direct economic and social impacts  

Option 0 

Option 1 

Option 2 

Baseline 
scenario 

Broad open 
access only 

limited open 
access only 

Option 3 
Competitive 
tendering 
only 

Option 4 
Broad open 
access and 
competitive 
tendering 

Option 5 
limited open 
access and 
competitive 
tendering 

Direct economic impacts 

Competition 

Transport demand 

Industry revenues and 
costs 

Public funding 

Investment in rail 

Administrative costs 
for operators 
Administrative costs 
for public authorities 

Multinational rail 

0 

0 

0 

0 

0 

0 

0 

0 

EN 

+ 

+ 

+ 

0/+ 

+ 

0/+ 

0 

+ 

+/++ 

+ 

+ 

+ 

+ 

0/+ 

0 

+ 

6 

++ 

+ 

++ 

++ 

+ 

-- 

-- 

++++ 

++ 

+++ 

++ 

++ 

- 

- 

+++ 

++ 

+++ 

+++ 

++ 

-- 

-- 

+++ 

++++ 

++++ 

   EN 

 
 
 
 
activities 

Small and medium 
enterprises 

Direct social impacts 

Passenger fares 

Service quality 

Employment - rail 
undertakings 

Employment – rail-
related sectors 

Working conditions 

Rail safety 

0 

0 

0 

0 

0 

0 

0 

Impact of ticketing options 

Impact of ticketing options 

Economic impacts 

Competition and other competition-driven impacts 

Industry revenues and costs 

Transport demand, multinational rail activities 

Administrative costs for public authorities 

Innovation 

Social impacts 

Passenger fares 

Service quality 

Impact of rolling stock options 

Economic impacts 

Competition and other competition-driven impacts 

Public funding 

Multinational rail activities 

Property rights 

Industry revenues and costs 

Innovation 

Social impacts 

Safety 

0/+ 

0/+ 

+ 

+ 

0 

+ 

- 

0 

0/+ 

0/+ 

0 

+ 

- 

0 

+ 

0 

+ 

-/+ 

+ 

-- 

0 

+ 

+ 

+ 

++ 

-/+ 

++ 

-- 

0 

0/+ 

++ 

-/+ 

++ 

-- 

0 

T0 

T1 

T2 

Baseline 
scenario 

Voluntary 
integration 

Mandatory 
integration 

0 

0 

0 

0 

0 

0 

0 

++ 

0 

0 

0 

+ 

0/+ 

+ 

+ 

- 

0 

- 

0 

0/- 

0/+ 

RS1 

RS3 

Baseline 
scenario 

Mandatory 
transfer 

RS4 

Risk for 
contracting 
entity 

0 

0 

0 

0 

0 

0 

0 

+ 

- 

+ 

- 

0 

++ 

-- 

+ 

0 

+ 

0/- 

0/- 

0 

0 

6. 

COMPARISON OF OPTIONS 

The following table compares the options in terms of effectiveness, efficiency and coherence.  

EN 

7 

   EN 

 
 
 
Comparison of 
market opening 
options 

Option 0 Baseline 
scenario 

Option 1 Broad open 
access only 

Option 2 Limited open 
access only 

Option 3 Competitive 
tendering only 

Effectiveness 1 

Efficiency 

Coherence 

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Motivation 

No new bidders would appear for competitive tenders 
and no improvements in public spending efficiency in 
rail.  Disparity  of  market  structures  throughout  the 
MS remains. 

+/++ 

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0/+ 

0 

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0/+  Positive  impacts  on  competitiveness  of  rail  market. 
However,  the  measure  would  not  result  in  a  major 
restructuring  of  the  rail  sector  and  provide  for  only 
limited efficiency and administrative gains.  

+ 

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Impacts  are  similar  to  that  of  Option  1,  but  even 
more  limited.  PSCs  will  remain  protected  from 
competition  with  open  access  operators,  so  no 
savings in public funds are assumed. 

++ 

+++ 

++ 

0 

-- 

-- 

-/+ 

+ 

++ 

+ 

is  expected 

Option  addresses  only  the  usage  of  PSCs,  and  thus 
only  partially  improves  entry  rights.  Competitive 
tendering 
improved 
efficiency,  especially  felt  by  incumbents.  Customer 
fares  will  remain  the  same;  administrative  burden 
may  increase.  Social  inclusion  and  environmental 
sustainability  are  linked  to  expected  slight  increase 

result 

to 

in 

1 

Effectiveness scores are linked to following categories of economic impacts: competition, use of public funds, demand for rail services/modal share of rail and development 
of multinational rail activities. 

EN 

8 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Comparison of 
market opening 
options 

Effectiveness 1 

Efficiency 

Coherence 

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Option 4 Broad open 
access and competitive 
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Motivation 

in rail service provision.  

The  most  ambitious  option  addressing  both  –  PSCs 
and open access – and the most effective in terms of 
specific  objectives.  It  will  promote  elimination  of 
monopoly  profits  of 
create 
opportunities  for  new  entrants.  Reinvesting  the 
saved  money  in  rail  sector  could  provide  for 
additional  services.  Impacts  on  employment  are 
linked to industry revenue developments.  

incumbents  and 

Option 5 Limited open 
access and competitive 
tendering 

+++ 

++++ 

++/+
++ 

0/+ 

-- 

-- 

-/+ 

++ 

++ 

+/+
+ 

Option  5  is  similar  to  Option  4,  allowing,  however, 
competition  between  open  access  rights  and  PSCs. 
Fewer  benefits  are  expected  in  the  form  of  public 
savings  and  operational  efficiency.  Impacts  on 
employment are largely the same as under Option 3. 

EN 

9 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effectiveness 

Efficiency 

Coherence 

Comparison of 
ticketing options 

T0 Baseline scenario 

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T1 Voluntary integration 

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T2 Mandatory integration 

+ 

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Motivation 

Implementation  of  the  Passenger  Rights  Regulation  and 
the  Recast  of  the  1st  Railway  Package  would  mean 
marginal improvement. 

T1  would  achieve  less  harmonisation  of  approaches,  but 
leave  more  room  for  competition.  A  voluntary  option 
would  maintain  a  more  fragmented  market  and  hinder 
'seamless travel'. 

Mandatory  ticketing  systems  would  provide  means  for  a 
'seamless  travel'  but  could  reduce  margins  for  price 
competition.  May  hamper  the  possibility  of  open  access 
operators  to  develop  their  own  business  strategies. 
Mandatory systems could result in disproportional cost. 

EN 

10 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effectiveness 

Efficiency 

Coherence 

Comparison of 
rolling stock 
options 

RS0 Baseline scenario 

RS3 Mandatory transfer 

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0 

0/- 

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l

b
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0 

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n
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n
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0 

0/- 

y
t
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f
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  S

0 

0 

RS4 Risk for contracting 
entity 

++ 

+ 

0/- 

-- 

0 

0 

0/- 

Motivation 

Access  to  rolling  stock  remains  a  major  barrier  in  many 
countries, hindering competition. 

RS3 and RS4 both provide for equal level playing field as 
regards  access  to  rolling  stock,  increasing  the  potential 
number  of  bidders  and  harmonising  business  conditions. 
Improvement  is  expected  in  the  efficiency  of  public 
funding. Option RS3 adds costs to operators and involves 
the  withdrawal  of  property  of  rolling  stock  from  existing 
incumbents, which may result in possible conflicts.  

This  option  would  ease  access  to  rolling  stock  more 
effectively  than  RS3,  however,  given  that  the  financial 
risks,  there  will  be  more  pressure  on  public  funds.  To 
minimise costs, contracting authorities might prefer using 
old rolling stock and this would hinder innovation. 

EN 

11 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conclusion 

The analysis shows that the following options perform best: 

• 

• 

• 

Option 4 Market opening based on broad 'open access' and competitive tendering of 
PSCs 

T1 Voluntary national integrated ticketing systems 

RS3  Mandatory  transfer  of  rolling  stock  or  RS4  Obligation  for  the  competent 
authority to take the rolling stock related financial risks 

As already explained, there is a certain degree of uncertainty in the assessment of impacts of 
some  options,  as  evidence  is  sometimes  fairly  recent  (e.g.  competition  in  the  market)  or 
ambiguous  (evidence  provided  only  by  specific  stakeholders).  The  choice  to  move  forward 
with the aforementioned combination remains thus a political choice. 

Estimates of the impacts of the preferred policy scenario  

A  scenario  analysis  accompanied  with  sensitivity  tests  has  allowed  estimating  the  potential 
impacts  of  the  preferred  policy  scenario.  Furthermore,  the  delivery  of  the  full  benefits  of 
market  opening  is  also  greatly  helped  by  institutional  separation  and  coordination  of 
infrastructure  management,  as  proposed  by  another  initiative  within  the  4th  Rail  Package, 
resulting in the important following synergies:  

Impacts of market opening and infrastructure governance policies 

All changes are illustrative estimates 

Scenario 1 –Focus on saving 

Vertical separation alone 

Market Opening alone 

Combination of market opening and vertical separation 

Scenario 2 – Reinvestment (50% of savings reinvested into rail) 

Vertical separation alone 

Market Opening alone 

Combination of market opening and vertical separation 

Financial 
benefits (NPV, 
€ bn) 

Increase in 
passenger km 
(bn) 

6.6 

29.4 

43.4 

4.4 

21.0 

33.8 

0.8 

2.0 

3.8 

1.1 

8.4 

16.4 

While scenario 1 focuses only on financial benefits (consisting mostly of public savings), the 
scenario  2  would  allow  to  provide  16  billion  additional  passenger-km  (6%  increase  of 
passenger-km on top of the baseline developments). 

7. 

MONITORING AND EVALUATION 

The  Commission  will  monitor  and  evaluate  the  implementation  and  effectiveness  of  this 
legislation through a set of indicator, which is in most cases aligned with those defined in the 
State Aid Scoreboard, Regulation 1370/2007 and Rail Market Monitoring System2.  

2 

As reviewed by the Recast of the 1st Railway Package 

EN 

12 

   EN 

 
 
 
 
                                                 
Specific objective 

Indicator 

SO1:  Intensify  competitive  pressure  in  domestic  rail 
markets 

SO2: Create more uniform business conditions 

Other parameters 

Working conditions 

•  Market  share  of  new  entrants*  (relates  to 

operational objective OO1, OO3) 
Rail  services  covered  by  PSCs*  (relates  to 
OO3 and OO4) 
Utilisation  of  access  rights*(relates  to  OO1, 
OO2, OO3) 
Barriers to more effective rail* (relates to all 
operational objectives) 

Licensing* (relates to OO1, OO2) 

Rail services covered by PSCs* 
Utilisation of access rights* 

Barriers to more effective rail* 

• 

• 

• 

• 

• 
• 

• 

•  Dynamics  of  employment*  (e.g.  increase  or 

decrease in employment) 

• 

Social conditions* 

* As foreseen in Article 15 of the Recast of the 1st Railway Package 

It is planned that five years after the end of the transition period of its legislative proposals, 
the Commission will evaluate whether the objectives of the initiative have been achieved. 

EN 

13 

   EN