CELEX: 51980PC0906
Language: en
Date: 1981-01-20
Title: Proposal for a COUNCIL REGULATION (EEC) setting the time limit and conditions for the achievement of financial balance by railway undertakings#Proposal for a COUNCIL REGULATION (EEC) amending the Decision 73/327/EEC on the improvement of the situation of railway undertakings and the harmonization of rules governing financial relations between such undertakings and States (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (80) 906
Vol. 1980/0283
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                     COM(80)906 final
                                                     Brussels , 20 January 1981
                                Proposal for a
                         COUNCIL REGULATION ( EEC )
  setting the time limit and conditions for the achievement of financial
                     balance by railway undertakings
                                Proposal for a
                         COUNCIL REGULATION ( EEC )
  amending the Decision    73 / 327/ EEC on the improvement of the situation
  of railway undertakings and the harmonization of rules governing financial
             relations between such undertakings and States
              ( submitted to the Council by the Commission )
C0M(80 ) 906 final
 ---pagebreak---                               EXPLANATORY MEMORANDUM
. GENERAL PROVISIONS "      ,  • ,
  1.    Under Article 15(1 ) of the Council Decision of 20 May 1975 on the
  improvement of the situation of railway undertakings and the harmonization
                                                                                 1
 of rules governing financial relations between such undertakings and States ,
  " Before 1.1.1980 , the Commission taking account of the particular conditions
 affecting the role and importance of the railways in each State , shall submit
 to the Council such proposals as it deems necessary to fix the time limit and
 conditions for achieving the financial balance of railway undertakings".
  Under Article 15(2 ) of the Decision, the Commission is required to submit
 proposals by the same date to take account , within the framework of the
  Links which exist between transport and other economic and social sectors ,
 of the obligations inherent , in the concept of a public service ." The two
 proposals are to be presented simultaneously .
 2.     In the light of the economic and financial situation of the railways , as
                                        2
 described in the two-year       reports , and consultations with government and
 rail experts and representatives of the trade unions , the Commission has pro­
 posed a multi-stage programme for the achievement of financial balance . In
 setting the time-limit , the Commission has opted to give the Member States
 a fairly lengthy period sothat their measures can achieve their full 'effect .
 The Commission feels that it has thus displayed a realistic attitude land also
 shown its desire to reach a solution in this area .
 3.     In order to carry out this programme , a number of steps will have to be
 taken in the . various stages leading up to the achievement of financial balance
 ( a ) clarification and harmonization of the financial relations between railways
       and States in order to pave the way towards a common approach to achieving
       balance between the railways' expenses and receipts ;
 1
     0J L 152 of 12 June 1975, p. 3
 2 C0M(77)295 final
     C0M(79)447 final
 ---pagebreak---   ( b ) preparation, on this basis , of business and financial programmes which
        would be multiannual and follow common guidelines ;
 ( c ) submission by the Commission of opinions on these programmes taking into i
        account , among other things , the particular conditions of each railway ;
                 i          ■ i
 ( d ) setting of a common time-limit for the achievement of financial balance ;
        after this date , arrangements for covering any losses would be submitted
        to the Commission in accordance with the general rules on aid .
 4.       In order to carry out this programme , the Commission is proposing a
 Regulation setting the time-limit and the conditions for achieving financial
 balance in respect of the railways . The Regulation consists of a number of
 sections describing the steps to be taken during the various stages leading
 up to the achievement of financial balance , in particular the clarification
  and harmonization of the financial relations between railways and States
 and the setting of a time-limit for the achievement of financial balance .
  In addition, in order to carry out some of these measures it will be necessary
 to make some changes to the Council Decision of 20 May 1975 ; these changes
  Should be adopted at the same time as the proposal for a Regulation . They
  relate in particular :
                                                                                *
  ( a ) to the structure of , and procedure for , preparing business and financial
        programmes ,
  ( b ) to the conditions for the granting of deficit subsidies , and
  ( c ) to the contents of the two-yearly report on the- implementation of the
         Decision .
  5.      In general , the Commission takes the view that it is essential that
  the Member States and the railways should take initiatives concerning the
  business and investment programmes in order to attain the objective set by
  this Regulation , particularly in the light of the present situation . In
• helping the railways to regain their financial balance , these steps might
  help to improve their competitiveness on the market . As can be seen from
  other existing measures and the Commission 's proposals and communications ,
   action by the Community and the Member States concerning inland transport is
  not confined to the railways . Progress is also needed concerning the proper
   implementation of the social provisions in force and the infrastructure policy
 ---pagebreak---                                              - 3 -
n * PROVISIONS CONCERNING THE PROPOSAL FOR A REGULATION SETTING THE TIME-LIMIT
       AND CONDITIONS FOR THE ACHIEVEMENT OF THE FINANCIAL BALANCE OF RAILWAY
       UNDERTAKINGS
       6.    The clarification and harmonization of financial relations consists of
                      I
      defining financial balance as balance between expenses and revenue in the
      profit and loss account . Terminology for this is provided by Council Regulation
      ( EEC ) No 2830/ 77 on the measures necessary to achieve comparability between
                                                                        ....      1
      the accounting systems and annual accounts of railway undertakings . It also
      entails enumerating the various types of expenses and revenue to be included
      in respect of financial balance .
      The various rules and techniques applied in respect of capital movements may
  - lead to profit and loss account situations which are not entirely comparable,
      in particular as regards depreciation and financial charges . Progress towards
      greater comparability should be achieved via the Advisory Committee set up under
      the abovementioned Regulation .                                                     „       . ■
      7.     The Regulation specifies the railways' various sources . of income : these
      are , in the first place , traffic revenue, financial and other revenue , exceptional
      profits and the contra of costs booked to other accounts and secondly , compen­
      sation paid in accordance with Council Regulation ( EEC ) No 1191 / 69, on action by
      Member States concerning the obligations inherent in the concept of a public
               2
      service ■ and Council Regulation No 1192/ 69 on common rules for the normalization
     of the accounts of railway undertakings .                                       1
     8.      The Regulation also provides that States may , where appropriate , grant other
     monies to railways :                                                              1
    I
             8.1 . Where
                    l
                         a State obliges a railway to charge a general level of tariffs
                   which differs from the general pricing policy measures and would be
                   contrary to the commercial interests of the undertaking          Article 9(2 )
                   of the abovementioned Council Decision provides for the harmonization
                   of the methods of compensating such tariff obligations .
                   The Commission proposal aiming at this objective could
                   therefore be withdrawn 4 if the present proposal is adopted .
      1                                            ^
         0J L 334 of 29 December 1977, P. 13 :       0J L 156 of 28 June 1969, p. 8
      2 0J L 156 of 28 June 1969, pj 1           I 4 Doc . R/ 1 174/ 79 ( TRANS 89)
 ---pagebreak---                                             - L -
         8.2 . Where the situation as regards the charging of infrastructure costs
               results in extra expenses for the railway compared with the competing
               modes of transport . This eventuality is at present covered by Council
               Regulation ( EEC ) No 1107 / 70 on the granting pf aids for transport by
                                                  1
               rail , road and inland waterway ; this proposal supplements that
               Regulation by stressing that comparison with the other competing
               modes of transport is the decisive factor as regards the granting of
               aid , and by setting out , in an Annex , the guidelines for calculating .
               such aid .
                                                                            /
 9.      To ensure that total normalization of both obligatory and optional State
 financial intervention and to determine the actual deficit , the State would not
 be able to intervene financially to cover a deficit until it has exhausted all
 the other abovementioned possibilities , where such situations arise .
10 .     The proposed Regulation provides that , where appropriate , and without
 constituting a precondition for financial intervention to cover a deficit , the
 State may grant aid to facilitate research into and development of transport
 systems and technologies more economic for the community in general . Such aid
 is to be regarded as a source of income .
                                                    \
11 .      The Commission considers that by 31 December 1982      the Member States will
 be able to implement the first part of this Regulation , thus producing a clearer'
 and more comparable situation at Community leveU
12 .      The proposed Regulation provides that the railways should have achieved
 financial balance by 1 January 1990 at the . latest . The Commission recognizes
 that after this date , States , in their capacity as owners or majority share­
 holders , will retain a degree of freedom in their rail investment policy . However ,
 the Commission considers that it will be necessary to submit proposals before
  1 January 1990 laying down allocation criteria . On the other hand , it will no
  longer be possible to award deficit subsidies , and State financial intervention
  arrangements to cover any deficit wilt have to be submitted to the Commission
  in accordance with the general rules of the Treaty . The Commission is therefore
  proposing that Article 4(1 ) of Regulation ( EEC ) No 1107/ 70 amended by Regulation
  ( EEC ) No 1473/ 752 should be amended .
     0J L 130 of 15 June 1970, p.1
  2 0J L 152 of 12 June 1975, p.1
 ---pagebreak---   PROVISIONS RELATING TO THE PROPOSED AMENDMENT TO THE COUNCIL DECISION OF
 20 MAY 1975 ON THE IMPROVEMENT OF THE SITUATION OF RAILWAY UNDERTAKINGS AND
 THE HARMONIZATION OF RULES GOVERNING FINANCIAL RELATIONS BETWEEN SUCH UNDER­
 TAKINGS AND STATES ( 75 / 327 / EEC )
 13 .       The railways' business and financial programmes are regarded in the
 Decision itself as essential means of enabling the railways to plan the
 measures designed to achieve financial balance . For this reason , and in
order that the structure of and procedure for preparing these programmes
 can be better coordinated at Community level / it is proposed ;            s
                  j ■ ■                                 _              '         *
 ( a ) that the programmes should be multiannual , since the measures envisaged     •
       and their implications for the achievement of financial balance can
       only be ^ assessed in a multiannual perspective ;
 ( b ) that the Commission should be enabled to make a better assessment of
       the . measures taken by each Member State taking account - as provided
       for in Article . 15(1 ) of the 1975 Decision , of the particular conditions'
       in each iMember State . In addition , it is proposed that the Commission
       should be informed of these programmes before they are adopted in order
                !                                             '             f
       to advise the Member States on the means of achieving financial balance ;
( c ) that a common outline for the structure of these programmes , should be
                I                                     \
       adopted by setting out , in an Annex to the Decision , the guidelines
       for drawing up business and     financing programmes .
14 .      In view of the connection between the business and financial programmes
and the Regulation setting the time-limit and conditions for achieving finan­
cial balance , it is proposed that the two-yearly report on the operation of
the 1975 Decision should also cover the application of this Regulation .
 ---pagebreak---           .. PROPOSAL FOR A COUNCIL
REGULATION SETTING THE TIME LIMIT AND CONDITIONS
FOR THE ACHIEVEMENT OF FINANCIAL BALANCE BY RAIL­
              , WAY UNDERTAKINGS
 ---pagebreak---     THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
    Having regard to the Treaty establishing the European Economic Community ,
    and in particular Articles' 75 and 94 thereof ,
    Having regard to 'the Proposal from the Commission ,                             *
    Having regard "to the Opinion of the European Parliament /                    t <J
    Having regard to the Opinion of the Economic and Social Committee ,
   Whereas , Article 15(1 ) of Council Decision 75 / 327/ EEC of 20 May 1975
   on the improvement of the situation of railway undertakings and the harmo­
   nization of rules governing financial relations between such undertakings and
          1                                                -
   States , provides that the Commission will submit proposals designed to set
   the time limits and conditions for the achievement of financial balance by
   railway undertakings , which represents a primary objective for these
   undertakings ,      - • . •
   Whe'reas this concept must be precisely defined and applied to all the -
   activities of railway undertakings ,
                                •'                                       /   !.
   Whereas , this concept may be defined using the terminological basis of
   Council Regulation ( EEC ) No 2830/ 77 of 12 December 1977 on the measures
   necessary to achieve comparabi lity between the accounting systems and              •
                                               2
   annual accounts of railway undertakings ;                                       •"
   Whereas the expenses of an undertaking must be defined in this context ,              '
   and its revenue must be specified by grouping together " traffic and other
                     *                                           .
   revenue and the receipts from the various types of State intervention under
   Council Regulation ( EEC ) No 1191 / 69 of 26 June '1969 on action by Member
   States concerning the obligations inherent in the concept of a public service
   in transport by rail , road and inland waterway , as last amended by          '
                             and Council Regulation ( EEC ) No 1192 / 69 of 26 June 1969
 i on common rules for the normalization of the accounts of railway undertakings
   as last amended by                                ;
     0J No L 152, 12.6.1975, p . 3.               40J No L
   20X No L 334, 24.12.1977, p . 13.             - 0J No L 156, 28.6.1969, p . 8 .
, 30J No L 156, 28.6.1969, p . 1 . •              60J No L              * ' ' '
 ---pagebreak---   Whereas the actual deficit should be determined       and aid to compensate for
  tariff obligations entailing the' application of a general level of tariffs
  which would be contrary to the commercial interests of these undertakings
  should , where appropriate and in the event of a deficit , precede State
  financial intervention to cover the deficit ;
     ''   '     i                        "         '
  Whereas the same applies to aid in respect of extra expenses in connection
  with infrastructure costs ; whereas there should be a uniform method for the
  calculation thereof ;                                             .            ,
  Whereas aid for facilitating research and development should , where appropriate ,
  be regarded as revenue ;
  Whereas , pending adoption by the Council . of the proposals to be made by
  the Commission . before 1 January 1990 for determining the criteria for intei–
  vention under Article 5(1 ) of Decision 75 / 327 / EEC , such intervention may
  continue to be freely effected,; whereas , provision should therefore be made
  for amending Council Regulation ( EEC ) No 1107 / 70 of 4 June 1970 on the
                                       -                                1
  granting of aids for transport by rail , road and inland waterway         as amended
  by Regulation ( EEC ) No 1473/ 75 ^;
                   1                                                      9
  Whereas financial balance should be achieved by 1 January 1990 at the
   latest , and after that date deficit subsidies should be abolished        and,
   in the event of a deficit , State financial intervention arrangements to
  cover this deficit are to be communicated to the Commission in accordance
  with Article 93 of the Treaty ,              *
                      . • •   . i
'  HAS ADOPTED THIS REGULATION                                                 '
     0J No L 130, 15.6.1970, p. 1 .
   2 0J No l 152, 12.6.1975, p. 1 .
 ---pagebreak---    Article 1
   This Regulation shall apply to the railway undertakings listed in Article 1
  of Decision 75 / 327/ CEE .
                κ
  Article 2
  Within the meaning of this Regulation / financial balance in respect of railway
  undertakings shall be assessed by reference to their profit and loss accounts .
  It shall correspond to a situation in which / taking account of all its activities
  the expenses of a railway undertaking are covered by its revenue each year .
. Article 3
  1 . Expenses within the meaning of Article 2 shall correspond to the expenses
  listed in Annex III to Council Regulation ( EEC ) No 2830/ 77/ exceptional .losses
  and corporation tax .
  2 . Revenue within the meaning of Article 2 shall consist of :
      ( a ) ~ traffic revenue/ financial revenue / other revenue and except ional
               profits and the contra of costs booked to other accounts within the
               meaning of the said Annex III ;
            - compensation pursuant to Council Regulation ( EEC ) No 1191 / 69;
            - compensation pursuant to Council Regulation ( EEC ) No 1192 / 69 .
      ( b ) Where appropriate/ aid to compensate under Article 3(2 ) of Regulation
            ( EEC ) No 1107/ 70 /for tariff obligations imposed on a railway undertaking
            which do not arise from general pricing policy measures applying to
                                                                                 <
            all economic activities / and entail the application of a general level
            of tariffs which would be contrary to its commercial interests .
                      !
                     ,!
      ( c ) Where appropriate , the aid provided for in Article 3(1)(b ) of Regulation
            ( EEC ) No 1107/ 70 .
  3 . Aid to facilitate research into the development of transport systems and
 technologies more economic for the community in general under Article 3(1)(c )
 of Regulation ( EEC ) No 1107/ 70 shall also be regarded as income within the
  meaning of Article 2 , where appropriate .
 ---pagebreak---                                          - 10 -
 Article U
   1 . The intervention mentioned in Article 3(1)(b ) shall
  be calculated . according to the method set^out in Article 11(1 ) of
   Regulation ( EEC ) No 1191 / 69 .
   2 . The aid mentioned in Article 3(1)(c ) shall be
   calculated according to the guidelines set out in the Annex .
   Article 5
   With effect from 1 January 1983 , if financial balance within the meaning of
   Article 2 has not been achieved and subject to Article 6 , State
   financial intervention to cover the deficit shall be authorized only if
   types of intervention referred to in Article 3(2 ) are inapplicable .
   Article 6
                                                             /
   Member States and railway undertakings shall take steps to ensure that
   financial balance is achieved by 1 January 1990 at the latest .
   Article 7
   Regulation ( EEC ) No 1107 / 70 is hereby amended as follows :
   1.   Article 4(1 ) is replaced by the following :
'1 . Pending adoption by the Council of proposals to be made by the Commission
    before 1 January 1990 for determining the criteria for financial intervention
    in respect of railway undertakings in the context of their business plans in
    accordance with Article 5(1 ) of Decision 75 / 327/ EEC , and without prejudice to
    Regulations ( EEC ) No 1191 / 69 and ( EEC ) No 1192/ 69, Article 3 shall not apply
                                           /              .                         ■ I
    to such intervention .
 ---pagebreak---                 I                     - 11 -
 Until 1 January 1990, and without prejudice to Regulations ( EEC ) No 1191 / 69
 and ( EEC ) No 1192/ 69, Article 3 shall not apply to the deficit subsidies
granted to railway undertakings in accordance with Article 13 of the above-
 mentioned Decision ."
2.   Article 5(2 ) is replaced by the following :     '
"2.   The aid referred to in Article 4 shall be exempt from the procedure
provided for in Article 93(3 ) of the Treaty until 1 January 1990 .    Such
aid shall be communicated to the Commission in the form of estimates at
the beginning of each year and subsequently , in the form of a report , after
the end of the financial year ."
Article 8
              I
This Regulation shall enter into force
This Regulation shall be binding in its entirety and directly applicable in all
Member States .                                  .
Done at Brussels ,                            For the Council
                                                                        I
 ---pagebreak---                                         - 12 -                        ANNEX I
               Guiding principles to be complied with in determining
               the aid granted to railway undertakings pursuant to
               Article            of Council Regulation No 1107 / 70 of
                                      4 June 1970
The aid to be granted to railway undertakings if they cover all or part of
their infrastructure expenditure while the competing transport undertakings
do not bear such expensed or bear them only to a lesser extent will depend
on the following two elements :
              •! ■       .    <              .■     . .
                I           '                     •                 •
- the proportion of revenue from rail traffic competing with each of the
    other two ; modes of transport ; this propostion will be calculated from the
    total for 1 passenger and freight services ;
- the extent to which infrastructure expenditure attributable to the.acti-
                 ι
    vities of ( these modes of transport competing with the railways is covered .
            /
Compensation will be the sum of the following two. elements :
            D'         P
 , fXir W
                   I          and -
        R2 D 'F        PN
 D F X TT (ÔT F
                     - DN >
                                                ■       ,                .
    ...                         \
 ---pagebreak---                                         - 13 -
   where  :
   Dp    = the total infrastructure expenditure of the railway undertaking
   D'p   = the infrastructure expenditure actually borne by the railway
            undertaking
, PR     = the ' infrastructure expenditure attributable to road transport
            competing with the railways ,
  D. ,   = the infrastructure expenditure attributable to inland waterway
    N
            transport competing with the railways
  F      = total receipts from rail traffic , including compensation for
            public service obligations
         = receipts from rail traffic faced with competition from road transport
  •*2    = receipts from rail traffic faced with competition from inland water­
            way transport
  PR     = proceeds from specific taxation on road transport competing with the
            rai Iways
         = proceeds from specific taxation on inland waterway transport compet­
            ing with the railways .   '
                                                  i
  The infrastructure expenditure to be taken into consideration for each
  mode of transport is that recorded in the uniform accounting system for
  expenditure on transport infrastructure introduced by Council Regulation
  No 1108 / 70 of 4 June 1970 , introducing an accounting system for expenditure
  on infrastructure in respect of transport by rail , road and inland waterway .
  These principles will be reviewed when charging for the use of infrastruc­
  tures is gradually introduced for the three modes of transport .
 ---pagebreak---                           - 14 -
             PROPOSAL FOR A COUNCIL DECISION
          AMENDING DECISION 75 / 327 / EEC ON THE
IMPROVEMENT OF THE SITUATION OF RAILWAY UNDERTAKINGS
 AND THE HARMONIZATION OF RULES GOVERNING FINANCIAL
   RELATIONS BETWEEN SUCH UNDERTAKINGS AND STATES
 ---pagebreak---    THE COUNCIL OF THE . EUROPEAN COMMUNITIES ,
   Having regard to the Treaty establishing the European Economic Community ,
   and in particular Article 75 thereof ,
                 i
                 i
                 i
   Having regard to the Proposal from the Commission ,
   Having regard to the Opinion of the European Parliament ,
                I
                I                  .             λ           '                 >
  Having regard to the Opinion of the Economic and Social Committee ,
                I                                                    .
                    v :  .  i              ..  .   .   .               1
   Whereas , under Article 15(1 ) of Council Decision 75 / 327/ EEC , the
   Commission is to make such proposals as it deems necessary in the          ;
   context of the achievement of the financial balance of railway under­
   takings ;
  Whereas the business and financial programmes provided for in the 1975
   Decision are among the essential means of achieving such a balance , and
  whereas it has therefore become necessary to improve their structure and
  the procédure for drawing them up ;
                                       «
  Whereas , for the purpose of achieving financial balance , it is necessary
  that these programmes should be multiannual , that they should take into
  account the provisions of Council Regulation ( EEC ) No                of        ,
  setting the time limit and the conditions for the achievement of financial
                                     2
  balance by railway undertakings , and that they should be drawn up on the
  basis of common' guidelines ;                      /                           ■  /
'             i                                                  '                    '
  Whereas the Commission should de.liver opinions taking account of the
  particular conditions of each undertaking before such programmes are
  implemented ;
  Whereas financial balance should be achieved by 1 January 1990 , and deficit
  subsidies can therefore be no more than temporary ,              v
                                                               «
  1
  2 OJ No L 152, 12.6.1975, p . 3                                           )
    ~ OJ No                    D.
 ---pagebreak---                             - 16
HAS ADOPTED THIS DECISION :
 ---pagebreak---                                         - 17 -
 Article 1
 Decision 327/ 75 / EEC is hereby amended as follows :
1 . The text of the first indent of Article 3 is replaced by the
     following :
          submit its multiannual business programmes , including its investment
          and financing plans , within the framework of the overall policy
          guidelines laid down by the State and taking account of national
          transport planning , particularly with regard to infrastructure ",
2 . .The text of Article 4(1 ) is replaced by the following :
     "1      The business programme submitted by a railway undertaking in
             accordance with Article 3 shall be adopted in the context of a
             procedure determined by the State and based on consultation between
             the State and the undertaking . The State shall forward this programme
             to the Commission , before it is adopted , and the Commission will
             advise the State of any comments it might have taking into account
             the particular conditions of each railway undertaking ; the opinion
             given by the Commission shall be taken into account in the imple­
             mentation of the programme .
             This programme   must   be designed to achieve and subsequently main­
             tain the financial balance of the undertaking and attain other
             technical , commercial and financial management objectives possibly
             by means     of several programmes . It shall take account of the
        '    guidelines set out in the Annex .   From 1 January 1983 it must be
             drawn up on the basis of the conditions set put in Regulation
             ( EEC ) No            *
             This programme shall also provide for the means of attaining the
             objectives mentioned in the second subparagraph .
   OJ No
                i
 ---pagebreak---                                             - 18 -
           The State shall keep the performance of this programme under review .
           Should the development of economic conditions jeopardize implementation
           of this programme or some unforeseen event occur or a government
           decision be made affecting a basic element thereof , the State and the
           railway undertaking shall , by the same process , review their objectives
           and the means of attaining them ."
3 . The first and second subparagraphs of Article 13 are replaced by the
     fol lowing . :
     " In conjunction with the railway undertaking , and in the context of the
                      #
     procedure- for drawing up the business programme referred to in Article
     4(1 ), the State shall draw up a multiannual financial programme aimed at               '
     the achievement of financial balance by the undertaking .
     Under this programme the Member State may until 1 January 199Q, and taking
     account of the conditions laid down in Regulation ( EEC ) No                          ,
     grant the railway undertaking deficit subsidies which must be distinct ."
4 ., The text of the first subparagraph o-f Article 14(1 ) is replaced
     by the following :
     " 1 . Every two years the Commission shall submit to the Council a report
                                                       A
           on the implementation by Member States of this Decision and of
           Regulations ( EEC ) No 1191 / 69 , ( EEC ). No 1192 / 69 , ( EEC ) No 1107 / 70
           and ( EEC) No
                        *                                                                    (
Art i c le 2
This Decision shall apply with effect from 1 January 1982 .
Article 3
This Decision is addressed to the Member States .
 Done at Brussels ,                                  For the Council
 ---pagebreak---                                          .   _ 19 _              ANNEX II ,
                         Quidelines for drawing up the business
                   and financial programmes of rai Iway undertakings '
                      ■   I                                            ■
1 . The programmes are to be drawn up for periods of 3 to 5 years as part of
    an overall economic forecast taking into account the other modes of v
    transport and interactions between modes .
2 . The programmes should indicate the main lines of action at railway mana­
    gement level for achieving financial balance .
3 . With this in mind , programmes will contain :
    ( a ) an analysis , by sector , Of existing and potential markets ;
    ( b ) an analysis of the means of production in question ( investment , staff ,
          organization ).
4 . In accordance with these factors and the objective pursued , the programmes
    are to lay down the commercial policy to be followed and the pricing policy ,
  : both of which are to be determined in relation to market conditions . The -
    programme should mention the criteria for , changes in the general level
 - of tariffs .                        ,   _                   \                  < •
5 . As regards State intervention , the programmes are to indicate :
    < a ) the sources of revenue with in the meaning of Article 13 . Intervention ,
          in respect of public service obligations ( Regulation No 1191 / 69 ) in
          respect of other Regulations (( EEC ) No 1107 / 70 and ( EEC ) No 1192 / 69 )
          is to be subdivided , as far as possible , by Regulation and by end-use ;
    ( b ) capital movements in the meaning of Article 5(1 ) and ( 2 ). In this
                                              /
          connection , it should be stated that the programmes will mention ,
          as far as possible , the scope for existing and future aids for :
          ( i )- the restructuring of capital ( Article 5(1 ))
          ( ii ) the financing of new investment within the meaning of Article 5(1 ).