CELEX: 51978PC0202
Language: en
Date: 1978-05-23
Title: Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 1191/69 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway and Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 202
Vol. 1978/0067
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 ---pagebreak---   COMMISSION OF THE EUROPEAN COMMUNITIES
                                                          COM(78 ) 202 final
                                                          Brussels , 23 May 1978
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                                   Proposal for a
                                  COUNCIL REGULATION
            amending Regulation ( EEC ) "To 1191/ 69 on action by Member
            States concerning the obligations inherent in the concept
            of a public service in transport by rail , road and inland
            waterway and Regulation ( ESC ) ITO 1107/70 on the granting
            of aids for transport by rail , road and inland waterway
            ( submitted to the Council by the Commission)
CO:.;(78 ) 202 final
 ---pagebreak---                                             - 11 -
     EXPLANATORY MEMORANDUM
1 . The present proposal arises out of the provision of Article 9(2) of the
    Decision of 20 May 1975 1 which states that "pursuant to Article 3(2) of
    Regulation ( EEC ) No 1107/ 70, compensation may be made in respect of tariff
    obligations imposed on railway undertakings as not covered by Regulation
     ( EEC ) No 1191 / 69 . Acting on a proposal from the Commission to be submitted
    not later than 1 January 1978 , the Council shall harmonize the procedures
     for granting such compensation ".
2 . The primary objective of this proposal is therefore to harmonize the
    procedure for granting compensatin in respect of the tariff obligations in
     question ; this would be achieved under the conditions and in the manner
     described in paragraphs 5 to 11 .
               /
3 . The Commission has carefully examined the question whether the proposed
     harmonization of compensation procedures will be sufficient to achieve
     the general objectives of policy for railways within the Community . For
     this measures must form part of a wider action based on the Council
     Decision of 20 May 1975 which aims at improving , among other things , the
     transparency of State interventions and the financial situation of the
      railway undertakings .
      It is why , the Commission considers that a simple formal harmonization will
      not by itself attain this objective and it is essential to deal with the
      basic problem which exists .
 A. Indeed , if compensation for the tariff obligations in question continues
     to be treated as optional aid , the rules determining the " compensation
     procedures " in respect of tariff obligations within the meaning of Article
      3(2 ) of Regulation ( EEC ) No 1107/ 70 might be evaded , either by the granting
      of the amounts in question as part of the balancing subsidy within the
      meaning of Article 4 of this Regulation or by no aid being granted whatsoever .
    0J L 152 of 12 June 1975
  2 OJ L 130 of 15 June 1970
 ---pagebreak---                                           - 12 -
    The maintenance of this optional system would equally jeopardize the transparence
    desired , that is a clear distinction , by mandatory provisions , between the
    compensations granted under precribed rules and the block balancing subsisdies .
    This transparence will progressively permit the " real deficit " of railway
    companies to be isolated , which is in the interest of the railway undertakings
    as well as the government and community bodies .
5 . In addition , the mere fact of regulating the procedure for reimbursing aid
    under the Council 's terms of reference would not impart intelligibility to the
    material content of " tariff obligations not covered by Regulation 1191 / 69".
    Under Article 3(2 ) of Regulation No 1107/ 70 this provision should be no more
 •  than provisional " until adoption of Community provisions " concerning the tariff
    obligations in question .
    The Commission has therefore deemed it necessary to put forward regulations
    which define comprehensively the content of tariff obligations not covered by
    Regulation ( EEC ) No 1191 / 69 and lay' down the procedure for calculating the
    related compensation .
6 . The Commission has considered the question whether this rulemaking should be
    embodied in a separate ■ leg al instrument or be incorporated into existing
    regulations .
    In an attempt to achieve consistency and legal certainty and to simplify the
    content of its proposal , the Commission has opted for the second approach .
    Regulation 1191 / 69 is indeed the most suitable framework for the proposed
    arrangements since it already contains
    ( a ) a partial definition of tariff obligations inherent in the concept of a
    public service ; and
 ---pagebreak---                                           - 13 -
     Cb ) the procedure for calculating the compensation to be granted where such
          obligations are maintained or introduced .
     The provisions of this Regulation may therefore be extended to those tariff
     obligations which had hitherto not been covered , without the need for any
     major revision .
7 . The Commission is aware that , under Article 15(2 ) of the D ecision of 20 May
     1975 , it is required to submit proposals for major amendments to Regulation
     1191 / 69 , before 1 January 1978, and also considered whether these amendments
     could not be incorporated into this proposal . The amendments do , however ,
     raise fairly complex questions requiring further studies and consultations .
     They must also take account of the proposals which the Commission is to submit
     pursuant to Article 15(1 ) regarding the time limit and conditions for achieving
     financial balance which are themselves conditional on the measures and financial
     programmes which the Member States have yet to submit to the Commission .
     Further , the Commission considers that is should move forward in stages .
  8. This proposal is therefore aimed solely at amending Article 2(5 ) of Regulation
     ( EEC ) No 1191 / 69 concerning the definition of tariff obligations . It widens
     this definition by including the obligation to apply a tariff level imposed
     by the authorities which is contrary to an.fent repri se 1 s commercial interest .
                                                                                        1
     This obligation was at the centre of the Commission 's proposal of 24 May 1967 ,
     on which Regulation ( EEC ) No 1191 / 69 was based . It is also mentioned in the
     declaration which the Council adopted at the same time gS the Regulation .
     The Commission , like the railway and the government experts , thinks that the
     constraint of an imposed tariff level which has unfavourable repercussions on
     the entire management of the enterprise which is subjected to it , is the only
     type of tariff obligation which can be added to the other forms of obligation
      contained in the Regulation ( EEC ) No 1191 / 69 .
   1
     Doc . COM ( 67 ) 246 final of 24 May 1967
 ---pagebreak---                                        - 14 -
 9 . With regard to the obligation to respect , in the tariffs , the principles
      of perequation in time and space and equality of treatment for users , an
               which had                              .             , , .  , . . . _
      obligation /figured in the above-mentioned Commission proposal but which has
      not been retained as tariff obligations in this proposal for the following
      reasons  : -
      The principle of perequation in space and time ( even price per kilometre for
      all links and periods of traffic ) which dates from the time of railway
      monopoly , is no longer imposed on transport undertakings by the public
      authorities. The undertakings , faced with competition , can establish tariffs
      and prices taking account of the market situation and their costs . Where
      certain undertakings still apply perequated tariffs ( e.g. passenger traffic )
      this practice responds to their own interests and to the needs for the
      simplification of tariff computation .
     It also appears excluded that this principles will be reintroduced in future .
     Wanting to regulate the ways and means in this proposal would be very
     theoretical and far from useful and would go against the general orientation
     of the common transport policy which aims at the reduction of state interventions
     in price formation .
     As regards the principle of equal treatment , it is a question of applying
      the community rules of non-discrimination , national and international which
      do not constitute a public service obligation .
10. The new definition of tariff obligation does not modify the present provision
      according to which price freezing measures applicable to all economic sectors
      does not raise the notion of tariff obligations in the sense of the present
      regulation .
      On the contrary , it suppresses the second exception concerning " the measures
      taken regarding price and general conditions of transport in view of the
      organization of the market or a part thereof ."
 ---pagebreak---                                            - 15 -
     In fact / the maintenance of this provision / which has never had used in practice /
     would risk giving rise to different interpretations because of its imprecise
     wording and could permit evasion of the new proposed regulation .
1 . Amendment of the definition of tariff obligation does not necessitate the
     amending of other provisions of the Regulation because :
     ( i)    the principle of terminating obligations laid down in Article 1 applies
             in a special way , to tariff obligations involving the imposition of a
             tariff level . The common transport policy aims to eliminate such inter-
                                                                          1
             vention by States particularly in the goods traffic sector ;
     ( ii )  The criterion for the maintenance of a public service obligation referred
             to in Article 3 - namely the guarantee to supply adequate transport
             services - may also be applied to the imposition of a tariff level on the
             grounds that this criterion must be seen essentially in terms of the
             " public interest " and in terms of the " transport rates and conditions
             which can be quoted to users". The Commission also intends to clarify this
             criterion in the proposals it is to submit pursuant to Article 15(2 ) of
             the Council Decision of 20 May 1975;
     ( iii ) The method of calculating compensation for tariff obligations provided
             for in Article 11 of Regulation 1191/ 69 may also be applied to the widened
             concept of tariff obligation ; the Commission proposal of 24 May 1967, too ,
             made no provision for special methods in this context . The provisions of
             Article 11 ensure that the undertaking does not derive more benefit from
             a tariff amendment being turned down than from it being accepted ;
     Civ)    The same is true for the provisions of the Regulation relating to
             procedure ; Article 14 is of particular importance in this respect where
             a tariff level is imposed .
   See proposal of 10 October 1975 / as amended on 13 April 1977/ for a Council
   Regulation ( EEC ) concerning the fixing of rates for international goods transport
   by rail within the Community. ( 0J C 1 of 5.1.1976 and 0J C 185 of 3.8. 1977)
 ---pagebreak---                                          - 16 -
12 . The extension of the concept of tariff obligation applies to all the undei–
     takings referred to in Article 19(1 ) and ( 2) of the Regulation and thus
     guarantees equality of treatment in this respect .
13 . The amendment of the definition of tariff obligation contained in this proposal
     is of a comprehensive nature and thus requires the simultaneous amendment of
     Article 3(2) of Regulation 1107/ 70, the first sub-paragraph of which should be
     deleted .
 ---pagebreak---                                                - 17 -
                                            Proposal for a
                                    " COUNCIL" HEGULATIOir
  amending Regulation ( EEC ) Uo 1191/69 on action by
   Member States concerning the obligations inherent in the concept of a public
   service in transport by rail , road and inland waterway
and
   Regulation ( EEC ) No 1107/ 70 on the granting of                  >
   aids for transport by rail - road and inland waterway.
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 C ommission ,
                  . .  . .  .  .  .      , . .   _       _ . .     1
Having regard to the Opinion of the European Parliament ,
                            ~  .  .      . . .        .                 .   2
Having r.egard to the Opinion of the Economic and Social Committee ,
Whereas the definition of tariff obligation set out"in " Article 2(5 ) of "Council ~
Regulation ( EEC ) Ifo 1191/69             of 26 June 1969 on action by the 'Member States
concerning the obligations inherent in the concept of a public service in transport
by rail , road and inland waterway"^ does not • include all the elements which could
be termed tariff obligations inherent in the concept of a public service ,
Whereas Council Regulation ( EEC ) No 1107/ 70 of 4' June 1970 on" the granting of
aids for "transport "by rail , road and inland waterway^, as amended lay Regulation
(EEC ) Ifo 1473/755,
1
2
   0J I.To " L 155, 28 . 6.1979 ," p.l .
A OJ Ilo C 130; 15.6.1970, p.l .
^OJ No L 152, 12.6.1969 , p.i .
 ---pagebreak---                                       - 18 -
  lays down provisional arrangements pending the adoption
  of Community regulations              ' in respect of tariff obligations not
 covered by Regulation ( EEC ) No 1191/ 69;
 Whereas the adoption of comprehensive and definitive rules regarding tariff
 obligations within the meaning of              Regulation ( EEC ) No 1191/ 69 arises
 in particular from the need to improve the transparency of financial inter­
 vention by States in favour of the railway undertakings within the meaning of
 Council Decision 75/ 327/EEC of 20 May 1975 on the improvement of the situation
 of railway undertakings and the harmonization of rules governing financial
                      . . .                         1
 relations between such undertakings and States ;
Whereas the tariff obligation referred to in Article 2(5 ) of Regulation ( EEC )
 Ho 1191/69 should therefore "be widened to include the obligation for under­
 takings to comply with a general level of tariffs , contrary to their commercial
 interests , fixed or approved by any public authority ;
Whereas, the first indent of Article 3(2) of Regulation ( EEC ) Ho IIO7/7O
 is consequently no longer material ,
HAS ADOPTED THIS REGULATION :
                                    Article 1
Article 2,(5 ) of Regulation ( EEC ) No 1191 / 69 is hereby amended to read as
 follows :
" 5 . For the purposes of this Regulation , tariff obligations' means any obli­
      gation imposed upon transport undertakings to apply rates fixed or approved
      by any public authority which are contrary to the commercial interests of the
      undertaking and which result from the imposition of or refusal to , modify :
   OJ Ho L 152 12.6.1975 » P. 3
 ---pagebreak---                                         - 19 -
( a ) special tariff measures , especially for certain categories of passenger ,
       certain categories of goods on certain routes ;
( b) the general level of tariffs .
The provisions of the . foregoing subparagraph shall not apply to obligations
arising from general measures of price policy applying to the economy as a whole " •
                                      Article 2
Article 3(2) of      Regulation ( EEC ) No 1107/ 70 is here"by amended to read as follows :
" 2. As regards reimbursement for the discharge of obligations inherent in the
       concept of a public service :
      "until the entry into force of relevant Community rules , where payments are
       made to rail , road and inland waterway transport undertakings as compensation
       for public service obligations imposed upon them by the State or '       public
       authorities and covering the transport undertakings or activities to which
       Regulation ( EEC ) ITo 1191/69 does not apply."'   "
This Regulation shall be binding in its entirety and directly applicable in all
Member States .
Done at Brussels ,
                                                     For the Counci l .
                                                     The President .