COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council repealing Regulation (EEC) No 1192/69 of the Council on common rules for the normalisation of the accounts of railway undertakings
Date: 2016-10-24
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: State aid, distribution business, rail transport, social-security benefit, standardised accounting system, transport company

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   EUROPEAN COMMISSION  Brussels, 24.10.2016  COM(2016) 688 final 2013/0013 (COD)   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT  pursuant to Article 294(6) of the Treaty on the Functioning of the European Union  concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council repealing Regulation (EEC) No 1192/69 of the Council on common rules for the normalisation of the accounts of railway undertakings (Text with EEA relevance)  
 
 
2013/0013 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council on the adoption of a Regulation of the European Parliament and 
of the Council repealing Regulation (EEC) No 1192/69 of the Council on common rules 
for the normalisation of the accounts of railway undertakings 

(Text with EEA relevance) 

1. 

BACKGROUND 

On  30  January  2013,  the  Commission  adopted  a  comprehensive  package  of  six  legislative 
proposals to deliver better quality and more choice in rail services in Europe. 

Improvements  in  service  quality  and  efficiency  are  needed  to  make  rail  a  more  attractive 
choice for passengers and to encourage modal shift. Better value for money and sustainability 
can be achieved for scarce public funds. 

The package also aims to encourage innovation in EU railways to meet user expectations. It 
does this in three different and interrelated ways by: 

(1) 

(2) 

(3) 

opening domestic passenger markets to competition and making tendering for public 
service contracts compulsory; 

strengthening the independence of infrastructure managers so that they control all the 
core functions of the rail network and ensuring fair access for all to the railway; 

strengthening the role of the EU Agency for Railways by making it a ‘one stop shop’ 
for issuing EU-wide vehicle authorisations for placing them on the market and EU-
wide safety certificates for operators. 

Date the proposal was sent to the European Parliament and to the 
Council 
(document COM(2013) 26 final — 2013/0013 COD): 

31 January 2013 

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

11 July 2013 

Date of the opinion of the Committee of Regions:  

8 October 2013 

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

26 February 2014 

Date of adoption of the position of the Council: 

17 October 2016 

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2. 

OBJECTIVE OF THE COMMISSION PROPOSAL 

The general objective of the Commission proposal for repealing Regulation (EEC) No 1192/69 
of the Council on common rules for the normalisation of the accounts of railway undertakings 
is  to  eliminate  inconsistencies  in  the  EU  legal  order  and,  in  line  with  the  Commission’s 
REFIT  objectives,  to  contribute  to  simplification  by  repealing  a  legal  act  that  has  become 
obsolete. 

Regulation  (EEC)  No 1192/69  (‘the  Regulation’)  is  inconsistent  and  incompatible  with 
legislative provisions currently in force for a number of reasons: 

 

 

 

 

Since  railway  undertakings  must  be  managed  according  to  principles  that  apply  to 
commercial  companies,  no  State  compensation  for  insurance,  pensions,  or  other 
operating  expenditures  is  permissible  (except  in  the  case  of  compensation  for  the 
provision  of  public  services).  Not  only  is  this  principle  established  broadly  under 
Treaty State aid rules, but it is more specifically set out in the Guidelines on State aid 
for railway undertakings (2008/C 184/07). 

The list of railway undertakings eligible for compensation under the Regulation and 
the classification of types of compensation that can be paid to railway undertakings 
presuppose an integration of infrastructure management into the activities of railway 
undertakings  which  is  inconsistent  with  the  principles  of  separation  of  essential 
functions and separation of accounts. 

The Regulation enumerates only 40 railway undertakings eligible for compensation. 
At  the  time  of  its  adoption,  this  did  not  seem  problematic  since  incumbent  railway 
undertakings competed exclusively with other modes of transport and not with other 
railway undertakings. However, in the context of a liberalised market, where railway 
undertakings  compete  directly  with  the  traditional  monopolies,  the  attribution  of 
financial compensation to certain railway undertakings only is no longer justified. If 
financial  conditions  differ  for  railway  undertakings  (as  a  consequence  of  the 
Regulation) new entrants are not ensured non-discriminatory access conditions. For 
example,  new  entrants  may  have  difficulties  to  attract  personnel  from  incumbent 
railway  undertakings  since  the  latter  may  be  able  to  offer  more  favourable  pension 
conditions through subsidies received under the Regulation. 

Only the compensation payments under Class IV of the Regulation (the costs of level 
crossing facilities) are compatible with existing legislation. These payments are costs 
associated  with  the  functions  of  an  infrastructure  manager  who,  under  Article  8  of 
Directive 2012/34/EU, may benefit from State financing. Therefore the provisions of 
the Regulation related to Class IV payments are also redundant. 

 3. 

COMMENTS ON THE COUNCIL POSITION 

The  position  adopted  by  the  Council  at  first  reading  on  17 October  2016  endorses  the  main 
objectives of the Commission proposal even if the Council agreed to postpone the repeal of 
the provisions of the Regulation applicable to the normalisation of accounts concerning Class 
IV,  as  laid down  in  the  Annex  IV  to  that  Regulation.  Therefore  they  will continue to  apply 
until 31 December 2017. 

4. 

CONCLUSION 

The  Commission  accepts  the  position  adopted  by  the  Council  thus  allowing  the  European 
Parliament  to  adopt  the final  text in  second reading.  Indeed,  the  Commission  considers  that 

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adopting  both  the  market  and  technical  pillars  would  maximise  the  benefits  in  terms  of  the 
quality of service, efficiency and the competitiveness of the rail transport industry. 

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