REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on delegated acts under Article 60(2) of Directive 2012/34/EU establishing a single European railway area (recast)
Date: 2017-03-27
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: auditing, common transport policy, delegated legislation, powers of the institutions (EU), provision of services, rail transport, transport capacity, transport company, transport infrastructure, transport licence

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   EN 

   EUROPEAN COMMISSION  Brussels, 27.3.2017  COM(2017) 143 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on delegated acts under Article 60(2) of Directive 2012/34/EU establishing a single European railway area (recast)  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on delegated acts under Article 60(2) of Directive 2012/34/EU establishing a single 
European railway area (recast) 

1. 

INTRODUCTION 

On  21 November  2012,  the  European  Parliament  and  the  Council  adopted  Directive 
2012/34/EU establishing a single European railway area (recast) 1. 

Article  60  of  the  Directive  empowers  the  Commission  to  adopt  delegated  acts,  subject  to 
specific conditions, under certain other articles in the Directive. These are: 

  Article 20(5) (Information to be provided by undertakings applying for a licence),  
  Article 35(3) (Performance scheme — delay classes),  
  Article 43(2) (Allocation process) and  
  Article 56(13) (Accounting information to be supplied to the regulatory body).  

The  Commission’s  power  is  limited  to  five  years  from  15 December  2012.  Pursuant  to 
Article 60(2) of the Directive the Commission is required to draw up a report on its use of this 
power no later than nine months before the end of the five-year period, i.e. by 15 March 2017. 
The  delegation  of  power  will  be  tacitly  extended  for  further  five-year  periods  unless  the 
European Parliament or the Council objects no later than three months before the end of each 
period. 

2. 

USE BY THE COMMISSION OF POWER TO ADOPT DELEGATED ACTS 

Powers referred to in Article 20(5) 

Article 20 lays down requirements for financial fitness to be met by undertakings applying for 
a licence to operate rail transport services.  

Article 20(1) requires the undertaking to demonstrate that it will be able to meet its actual and 
potential obligations, established under realistic assumptions, for a period of 12 months.  

Article 20(2) requires the licensing authority to verify financial fitness especially by means of 
a  railway  undertaking’s  annual  accounts,  or  a  balance  sheet  if  undertakings  applying  for  a 
licence are unable to present annual accounts. Each undertaking applying for a licence must 
provide at least the information listed in Annex III to the Directive. This includes information 
on available funds, working capital, relevant costs, taxes and social security contributions. 

Article 20(1) and (2) and Annex III took over provisions in Article 7(1) and in the Annex to 
Council Directive 95/18/EC of 19 June 1995 on the licensing of railway undertakings. 

Article  20(5)  introduced  the  provision  empowering  the  Commission  to  adopt  delegated  acts 
amending  Annex  III  on  the  basis  of  the  experience  gained  by  licensing  authorities  or  the 
evolution of the rail transport market. The Commission is closely monitoring developments in 
the  rail  transport  market;  however,  to  date  it  has  found  no  urgent  need  to  revise  the 
information requirements set out in Annex III.  Therefore, no delegated act in this field has yet 
been adopted. 

However, the empowerment bestowed upon the Commission should remain in place. Indeed, 
there are several areas which might require revision of Annex III in the future. For example 
the  current  wording  of  the  Annex  does  not  explicitly  require  the  information  provided  to 

1 OJ L 343, 14.12.2012, p. 32 

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licensing  authorities  to  specify  whether  the  funds,  capital  and  assets  are  located  inside  or 
outside  the  EU.  .Depending  on  the  experience  of  licensing  authorities  and  the  behaviour  of 
foreign  investors,  it  might  be  necessary  to  require  such  information,  in  which  case  the 
Commission may need to adopt a delegated act in the future.  

Powers referred to in Article 35(3) 

Article  35  lays  down  a  framework  for  setting  up  performance  schemes:  infrastructure 
charging  schemes  must  encourage  railway  undertakings  and  infrastructure  managers  to 
minimise  disruption  and  improve  the  performance  of  the  railway  network  through  a 
performance  scheme.  The  scheme  may  include  penalties  for  actions  which  disrupt  the 
operation  of  the  network,  compensation  for  undertakings  that  suffer  from  disruption  and 
bonuses for better-than-planned performance. The basic principles of the performance scheme 
as set out in point 2 of Annex VI to the Directive apply throughout the network (e.g. the list of 
classes  of  delays,  the  basic  procedural  rules  for  calculating  the  payments  due,  and  the 
obligation to provide a dispute resolution system). 

Under  Article  35(3),  the  Commission  may  adopt  delegated  acts  amending  point  2(c)  of 
Annex VI. Point 2(c) of Annex VI lists the classes and sub-classes to which all delays must be 
assigned.  The  list  may  be  amended  in  the  light  of  the  evolution  of  the  rail  market  and 
experience  gained  by  regulatory  bodies,  infrastructure  managers  and  railway  undertakings. 
The amendments should adapt the classes to best practice in the industry. 

Article 35(1) and (2) took over provisions in Article 11(1) and (2) of Directive 2001/14/EC of 
the European Parliament and of the Council of 26 February 2001 on the allocation of railway 
infrastructure  capacity  and  the  levying  of  charges  for  the  use  of  railway  infrastructure  and 
safety  certification.  However,  the  detailed  provisions  in  Annex  VI  were  set  out  for  the  first 
time in Directive 2012/34/EU. 

Member  States  were  obliged  to  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  the  Directive  by  16 June  2015.  Not  all  Member  States 
complied with this obligation on time. Even in early 2017, the transposition process had not 
yet been completed in certain Member States. 

Under Article 35(3), the Commission may act in the light of the evolution of the rail market 
and  experience  gained  by  regulatory  bodies, 
infrastructure  managers  and  railway 
undertakings. Given the delay in transposition and the fact that the Directive only had to be 
transposed by June 2015, current experience does not justify revising Annex VI. Therefore no 
delegated act in this field has been adopted so far.  

In this context it should be noted that the delay classes of Annex VI are based on a document 
of the International Union of Railways (UIC) entitled "Assessment of the performance of the 
network related to rail traffic operation for the purpose of quality analyses - delay coding and 
delay  cause  attribution  process2"  As  UIC  is  the  worldwide  organisation  for  railway 
cooperation,  this  document  reflects  international  best  practice  in  the  sector.  The  document 
was adopted for the first time in 1990 and has been amended four times since. This suggests 
that the approach of the sector is evolving in this area and as a result the relevant legislation 
should be revised, if appropriate. Hence, the Commission may need to use this power in the 
coming years. 

2 http://www.uic.org/com/IMG/pdf/UIC_Leaflet_450-2.pdf 

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Powers referred to in Article 43(2) 

Article 43 requires infrastructure managers to  adhere to  the schedule for capacity allocation 
set out in Annex VII to the Directive. 

Under Article 43(2), the Commission  may adopt delegated acts amending Annex VII. After 
consulting  all  infrastructure  managers,  the  Commission  may  amend  Annex  VII  to  take  into 
account operational considerations in the allocation process. The amendments must be based 
on  what  is  necessary  in  the  light  of  experience  in  order  to  ensure  an  efficient  allocation 
process and to reflect the operational concerns of the infrastructure managers. 

Article  43  and  Annex  VII  took  over  provisions  in  Article  18  and  in  Annex  III  to 
Directive 2001/14/EC. They are identical, with a few exceptions. 

Until recently, apart from the basic timetabling rules laid down in Directive 2012/34/EU (and 
previously  in  Directive  2001/14/EC),  the  EU  legal  framework  for  allocating  capacity  was 
rather rudimentary and the sector was not able to develop a comprehensive common approach 
on its own. 

RailNetEurope  (RNE),  the  infrastructure  managers’  organisation  dealing  with  questions  of 
capacity allocation, drafted some guidelines and procedures in this domain. For example, in 
2013  RNE  adopted  Guidelines  for  coordination/publication  of  planned  temporary  capacity 
restrictions,  which  was  revised  in  2015.  However,  RNE  has  no  means  of  enforcing  its 
guidelines  and,  as  a  result,  individual  infrastructure  managers  can  delay  or  block  their 
implementation. Moreover, RNE has no power to systematically check on compliance with its 
guidelines, nor does it release information on compliance. 

Since  the  end  of  2015,  all  rail  freight  corridors  (RFC)  have  used  a  common  framework  for 
capacity  allocation.  This  framework,  adopted  by  the  corridor  executive  boards,  applies  to 
freight  trains  which  use  the  capacity  offered  by  the  respective  corridor  one-stop-shop 
(C-OSS). 

In preparing a delegated act from January 2016, the Commission opted for a process by which 
railway undertakings and infrastructure managers could be consulted independently from each 
other. Working closely with the stakeholders, it identified several issues to be addressed in the 
delegated act. 

The Commission consulted railway undertakings, particularly those engaged in international 
transport, on problems with implementation and timetabling that they had encountered. This 
approach  allowed  smaller  undertakings,  too,  to  exchange  views  and  present  existing 
operational constraints. 

At  the  same  time,  the  Commission  consulted  infrastructure  managers  on  the  schedule  for 
capacity  allocation.  This  matter  was  also  discussed  with  Member  States  in  the  first  half  of 
2016, and in bilateral meetings with representative bodies from June to November 2016. 

In July 2016, the Commission published a call for experts with a view to forming a sub-group 
of the group of experts on rail market access (GERM) to consider timetabling. 

From the discussions with stakeholders it appeared that the capacity allocation provisions of 
Annex VII might need  to  be supplemented to  take into  account  some railway undertakings’ 
needs  to  reserve  capacity  more  often  than  by  one  annual  deadline  and  to  provide  for  more 
timely information, consultation and coordination on temporary capacity restrictions. 

In October and November 2016, two meetings of the GERM sub-group were held and a draft 
delegated  act  based  on  input  from  previous  exchanges  with  stakeholders  was  discussed  and 
reworked. Subsequently, the draft was presented to the GERM plenary meeting in December 
2016. The expert group will be consulted again in March 2017. 

The delegated act is expected to be adopted by mid-2017. 

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In  consultations  with  the  sector,  a  number  of  additional  points  were  raised,  some  of  which 
cannot yet be tackled by legal measures at EU level because the points in question are not yet 
mature  enough  to  be  translated  into  legislative  measures.  These  include  for  example 
technological  developments  that  offer  new  solutions  for  addressing  capacity  allocation 
problems. As a result the timetabling rules may have to be amended in the future to take the 
technological aspect into account. 

Powers referred to in Article 56(13) 

Article 56(12) empowers the regulatory body to carry out audits or initiate external audits to 
verify  compliance  with  provisions  on  the  separation  of  accounts  for  railway  transport 
activities, infrastructure management activities and activities concerning operation of service 
facilities (under Articles 6 and 13 of the Directive). It entitles the regulatory body to request 
any  relevant  information,  in  particular  as  regards  the  accounting  information  listed  in 
Annex VIII. Annex VIII details accounting information to be supplied to the regulatory body 
upon  its  request  covering  especially  the  issues  of  account  separation;  monitoring  of  track 
access charges and financial performance. 

Under  Article  56(13),  the  Commission  may  adopt  delegated  acts  amending  Annex  VIII.  It 
may amend Annex VIII to adapt it to changes in accounting and control practices and/or to 
add other points needed to check that accounts are kept separate. 

Article  56(12)  and  (13)  as  well  as  Annex  VIII  to  Directive  2012/34/EU  had  no  direct  legal 
antecedents.  As  certain  Member  States  were  late  in  transposing  the  Directive  and  some 
regulatory  bodies  have  only  recently  been  given  explicit  powers  to  check  compliance  with 
accounting  separation  requirements,  the  experience  gained  to  date  does  not  justify  revising 
Annex VIII. 

However,  the  experience  already  gained  has  shown  that  checking  compliance  with  the 
provisions  on  accounting  separation,  the  charging  rules  and  the  financial  performance  of 
infrastructure managers requires detailed and specific data. The practice of regulatory bodies 
in  applying  Annex  VIII  will  show  whether  the  level  of  detail  required  can  be  reduced  or 
whether the Annex needs to be made more precise by way of a delegated act. 

Therefore, on the basis of this experience to be gained the Commission may need to use this 
power later with a view to adapting Annex VIII to changes in accounting and control practice 
or to supplementing it as needed to verify separation of accounts. 

3. 

CONCLUSIONS 

Article  60  of  Directive  2012/34/EU  empowers  the  Commission  to  adopt  delegated  acts  as 
referred  to  in  Article  20(5),  Article  35(3),  Article  43(2)  and  Article  56(13)  based  on  the 
experience gained in a given area. So far, the experience gained has been sufficient to allow 
the  Commission  to  use  its  empowerment  under  Article  43(2)  only.  Discussions  on  the  draft 
delegated  act  on  capacity  allocation  are  at  an  advanced  stage  mainly  because  the  relevant 
provisions have existed at EU level for more than a decade, under both Directive 2012/34/EU 
and Directive 2001/14/EC.  

It is a reasonable assumption that once Directive 2012/34/EU has been completely transposed 
the experience gained by stakeholders may require the Commission to envisage amendments 
to the other Annexes to the Directive in the years to come. 

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