Brussels, 25/06/2013 (Agence Europe) - The two main European Parliament (EP) rapporteurs on the 4th railway package shed light on the essential points in the European Commission proposal currently being examined by the EP. EUROPE met Saïd El Khadraoui (S&D, Belgium), rapporteur on railway governance and liberalisation of the passenger market and Mathieu Grosch (EPP, Belgium), rapporteur on the award of public service contracts. (Interview by MD/transl.fl)
Agence Europe (AE) - What's your overall verdict on the legislative package?
Saïd El Khadraoui (SEK) - The idea of making an effort to enhance technical interoperability is excellent and I think that, on this point, the EP will fully support the efforts of the Commission. There will, of course, be nuances and details to resolve but generally, we can run with this idea.
The second more controversial and complicated aspect is the liberalisation of national passenger transport and governance of the system. On liberalisation, I'm less in agreement. I'm prepared to examine things more closely but only to create a system that works in all member states. I get the impression, however, that we're creating a kind of “big bang” if the principle of opening up the market to all operators is combined with putting all public service contracts out to competitive tender. We need to be very cautious and very closely examine the impact of the measures on the ground, on the quality of services for travellers and on workers in the railway industry. Proposals on these points need to be recalibrated.
Mathieu Grosch (MG) - I can see that it has enormous potential if it's going to be played in a “European” perspective but if we continue to play the “nation state” game, then we've lost. The Commission aimed for the bull's eye but we need to adjust our sights on certain aspects. Even if the issue is tackled within a European perspective, we will need to take into account a certain degree of subsidiarity, in other words, allowing countries themselves to define what they want to provide as a service to their citizens. I don't think there is a single method, such as the Commission's one-size fits all approach. I would say that there is not just one scale or method that suits to everyone. More flexibility is required, without jeopardising the essential aim: good service and efficiency.
(AE) - In terms of a railway governance model, you often mention the importance of being flexible. How can this actually be achieved?
(SEK) - In some countries, there have always been integrated structures and we have to ensure that this is not done to the disadvantage of other operators. I can go with the Commission when it provides a few more details on the conditions in which an integrated system remains possible, especially with regard to transparency and cross subsidies, which need to be avoided. On the other hand, we should not prescribe modalities that are too harsh and that make a totally integrated undertaking obsolete. In my report and in the discussions I will be coordinating over the next few months, I will attempt to make clear one thing: if we give the regulator more powers, with ex ante authority with regard to calculating the charges, then we could be more flexible on a number of the modalities proposed by the Commission (on the two-year deadline for transferring a senior-level manager from infrastructure management to one of the operators or prohibiting an integrated computer system).
(MG) - We need to avoid a dogmatic debate. We have different traditions in Europe. While I want flexibility that allows different structures, we also have to accept, especially in public service obligations and public subsidies, a minimum level of transparency and a maximum in the integrated structures. This flexibility will therefore be obtained through greater transparency. It is up to the companies to demonstrate that the money they receive for providing a service is not money that they will then be used to compete with others on another market. Reciprocity is also required. There is no room, as I see it, for a key player in a country where the market is closed in another competitive market where it could use the resources it has in its country of origin. I am proposing the same reciprocity for third countries. In the hypothesis of having an open market, Scandinavian countries fear substantial influence being exerted by Russian Railways, which is still a completely closed market.
(AE) - What would you suggest to retain a good level of public services?
(SEK) - We have to ensure that, when we attempt to liberalise the railway market, we do not reduce the quality of public services. The Commission has made several proposals. On the one hand, it says that the national market should be open and that service contracts should be allocated on the basis of a call for tender. It also says that, if a public service contract has been allocated for a specific zone, a potential competitor has to make a request to be able to work in this zone too. The state or the authorities concerned must first of all look more closely at whether the economic balance is not being hindered by the fact that a competitor is going to enter the market. I think that we need a few more details on what this economic balance is because there is a lot of leeway for different interpretations. It must not be used to prevent an operator's access. I am therefore proposing a third option: providing the public authorities concerned with the opportunity in their calls for tender to explicitly say that, for the period of the public service contract concerned, this zone will be exclusively allocated to the undertaking that wins the tender. End of story. This means that no other train can be used and there will be no competition in this zone. There is, of course, one condition, that this is announced in advance and that the contract is allocated after a call for tender.
(MG) - I am giving states the opportunity to choose in a specifically defined context between direct allocation to save a public service and opening up to competition to perhaps make money to reinvest where a non-profitable public service costs money. A balanced approach is required between these two options. Some countries have no experience in operating calls for tender. Starting everywhere in 2022 is therefore impossible. We need a very long transitional phase. I am also proposing something new: making politicians accountable to passengers. The politician will have to demonstrate that the chosen method of awarding the contract and the service proposed are the most efficient for the people living in the region. I am introducing this efficiency criterion and opening up the debate on its appropriateness. The same thing applies when I define the minimum criteria for direct awards. Finally, the specifications are important for transport planning and I will be focusing on very clear objectives relating to the quality of services and also sustainable development and social criteria (working conditions and even wages). I am setting responsibility where it actually lies.
(AE) - Would you be prepared to advocate an abandonment of the package in order to allow the technical pillar to be applied as soon as possible?
(SEK) - It is true that this is urgent. But it would have been more logical for the Commission to have begun 15 years ago with a technical package that emphasised interoperability before launching into the opening up of the market. Well, there you go, we've put the cart before the horse and we now have to work with what we have. The procedure is such that we need time, at least until January (Ed: voting is planned in the Parliamentary committee at the end of November). If it appears that the Council is thinking along the same lines as the European Parliament I would not be against passing the same text in first reading but I suppose that there will be differences. Therefore, it's completely right and proper that the European Parliament plenary reach a formal position before opening in-depth negotiations. It's completely rational and democratic. Even if we would like to get things moving, we need to take into account that European elections are scheduled for next May and that it would be difficult to finish our work and reach an agreement with the Council. I think therefore that it will be the next European Parliament that will finish the work, barring any surprises that may arise.
(MG) - I proposed to my colleagues to have a debate amongst ourselves with the aim of pushing forward the package to an initial vote. After this first vote, we could perhaps look at one or other of the dossiers such as interoperability or the European Railway Agency. Chronologically, it would be logical first to make progress on technical harmonisation before market opening.