Brussels, 30/01/2013 (Agence Europe) - On Wednesday 30 January, the European Commission made its position quite clear by advocating support for a more flexible approach to separating the different rail structures. By the end of the decade, no more integrated railway structures will be set up if the 4th Railway Package, as it currently stands, is adopted. Holdings will only be allowed if they meet four very strict criteria on independence, which effectively introduce a “Chinese wall” on the question. Subsequently, the Commission is reaffirming its preference for the separation model, whilst demonstrating a willingness for greater flexibility. This is the key factor in the “governance” chapter in the legislative package. Two other chapters complete the reform: one involves the planning and opening up of the domestic passenger market from 2019 and the other enhances the European Railway Agency (ERA).
European Commissioner for Transport Siim Kallas said that this reform was necessary if they were to avert “an irreversible slide down the slippery slope to a Europe where railways are a luxury toy for a few rich countries and are unaffordable for most in the face of scarce public money”. He asserted that 95% of this package is welcomed by all stakeholders and said that he was satisfied with the result in that, whatever the compromise solutions, they had not betrayed the “fundamental concepts”.
Governance. The principle of railway governance involves the question of separating infrastructure managers from service operators and largely focuses attention around the legislative package. On this point, the commissioner was obliged to introduce greater flexibility into the separation model he preferred (in force in 12 member states). Instead of the intransigence demonstrated in the package's preparatory phase, he ultimately left room for greater flexibility.
The Commission proposal does advocate institutional separation as the best model of governance guaranteeing the independence of railway undertakings and rejecting conflicts of interest. Following the adoption of the package (around 2017), no more integrated structures will be set up. Nonetheless, existing models could continue, as long as they show the Commission proof of the independence of companies included in an integrated structure, with strict “Chinese walls” to ensure the necessary independence and transparency. This wall will consist of four aspects: decision-making bodies will have to be separate; financial flows will also have to be genuinely separate (no more crossed funding through revenues from infrastructure managers to service operators); computer systems will have to be separate and the transfer of staff between companies will be subject to a waiting period.
It should be noted that when there is a total opening up of markets, all member states will be able to block a foreign holding's access to its market, if the Commission has not validated the presence and effectiveness of all the different “Chinese walls”. We can, therefore, see in this complex legislative construction that there is a level of flexibility in the means of guaranteeing independence but not at a level of the results.
Another key point in the field of governance involves the redefinition of the role of infrastructure managers to improve guarantees of their independence. The Commission has given them alone all the key functions of a rail network, namely those involving its development (investment), its use (traffic management) and its maintenance. European infrastructure managers will also have to cooperate in a network, in an effort to improve the way in which cross-border issues are tackled. Finally, the setting up of a coordination committee is expected to provide an efficient interface between infrastructure managers and network users so as to prevent or resolve any problems that occur.
Opening up of the markets. All of these precautions are part of a preliminary measure to ensure the successful opening up of the markets from December 2019. After this date, the final segment of the non-liberalised market (domestic passenger traffic) will be opened up to competition. Nonetheless, even in this area, the Commission is including a number of precautions to ensure that the opening up of the market does, indeed, provide better value for money for users. It is effectively advocating that liberalisation should only be applicable to markets of a certain minimum size calculated on the volume of passengers and trains per kilometre. Regional markets that are too small will, therefore, be excluded and will remain within the exclusive preserve of the public service. Bigger markets will be opened up to competition, on the basis of a normal competitive market, through calls for tender in the context of public transport service contracts (maximum period of 15 years). In this framework, the transfer of staff will also be guaranteed.
Sweden and the United Kingdom have already opened up their markets. Germany, Austria, Italy, the Czech Republic and the Netherlands have partially done so. The remaining member states have yet to do so. The Commission recommends that integrated ticketing system be introduced voluntarily, which is made possible by the amendments to Regulation EC 1370/2007 and Directive 2012/34/EU.
European railway agency. In order to consolidate reform of the railways, the European Commission wants a parallel simplification of the licensing of vehicles in order to encourage the entry of new operators onto the market and cut the costs and delays caused by the licensing procedures. It suggests that ERA should act as a one-stop-shop for these licences (“vehicle passports”) and safety certificates, which would also facilitate deployment of the ERTMS traffic control system. The ERA would supervise national rules and rail authorities. In order to allow this increase in the ERA's role and changes to its governance, amendments will be made to Directives 2004/49/EC and 2008/57/EC and Regulation (EC) 881/2004.
The unveiling of the fourth rail package puts an end to speculation, but has not allayed all concerns about the Commission's ability to resist pressure from national and industrial interests. The debates at the European Parliament and EU Council of Ministers are likely to be lively, going by the reactions that have greeted the publication, which this newsletter will be returning to. (MD/transl.fl)