Brussels, 28/02/2014 (Agence Europe) - Saïd El Khadraoui MEP (S&D, Belgium) has been assessing the results of the vote on the 4th railway package adopted by the European Parliament in a first reading on Wednesday 26 February (see EUROPE 11027). This substantial package aims to reform the European rail sector and open up the domestic passenger market to competition. This is the last remaining market subject to monopoly controls. The “El Khadraoui” Report focuses on railway governance and liberalisation and was the most controversial of the six texts put to the vote. It goes against what the transport committee had advocated and MEPs chose to water down some of the provisions on what railway model to follow. (Interview by MD)
Agence Europe: What's your interpretation of the plenary vote on your report and its watering down of railway governance?
Saïd El Khadraoui: I honestly think that the Commission made a mistake by launching the package so late into the mandate of this European Parliament. During the first three years, Mr Kallas, the Commissioner for Transport did not take a lot of action. He should have included the recasting of the 1st railway package in the 4th package and proposed it a year earlier. We would have avoided finding ourselves in the turbulent period of the elections, when emotions sometimes prevail over reason. Holding a vote so close to the elections meant that a lot of members could have found themselves under pressure from their respective national authorities or railway company. The national approach was a priority, particularly with regard to the rules that should help promote the markets in which operators can compete with one another on a level playing field. Lobbying was very strong, this was clearly the case with the Community of European Railways (the CER is an organisation that brings together the respective national railway companies - Ed.) and particularly so with a number of major integrated companies such as Deutsche Bahn and, to a lesser extent, with Italian and French firms.
How do you think the power of these railway holding companies should be tackled?
I agree that different integrated or separate models should be able to coexist but that there is also a need for minimum rules on the relationship between infrastructure manager and other operators, particularly in cases involving integrated systems and incumbent operators. This is because it is necessary to manage the way in which the financial flows are organised. No one has a problem with these flows for infrastructure because we want to invest in it. The problem is the reverse, when flows emanate from infrastructure managers to operators via the holding.
What are the risks that still persist in the version of the text adopted by the European Parliament?
We have, all the same, made some progress with this package and the definition of the infrastructure manager. On the question of financial flows, there have been a number of clarifications: dividends cannot be paid to the holding but to the state, which can reinvest them in infrastructure. Obviously, however, there are other ways of indirectly financing the incumbent operators. We are not being very clear on access to financial markets, particularly with regard to the question of who takes the decisions. Some of the infrastructure managers' autonomy has been reduced. I would have preferred more clarity about expanding all the basic and essential tasks undertaken by infrastructure managers (network development and maintenance, Ed).
Will this situation lead to a 5th railway package, as some people are already insinuating?
It is too early to reach this kind of conclusion. Nonetheless, it is obvious that the railway sector is a difficult one and adapts slowly to change. Yet perhaps we will have too re-evaluate things and go a little further here and there by taking into account the experiences obtained and the problems that emerge.
Conversely, what are the elements in your report that constitute a step forward in railway reform? Public services still have a key role to play.
Everything was well managed with regard to opening up the markets without weakening public service contracts or undermining them. We want to avoid them privatising the profits and socialising losses, or public service contracts and services provided to citizens being broken up or declining. It will be possible to conduct an impact study on economic balance in public service contracts in the event of new operators entering the market. If an impact is perceived, a company could be prevented from entering the market. This would avoid any “cherry picking” or profitable railway lines being developed to the disadvantage of small railway lines.
There also needs to be some sort of reciprocity. Up until 2020, countries that block access to their territory for operators from other countries will not be able to send their operators to other countries.
We will have stronger national regulators that will be able to intervene more easily when a given market is not operating correctly. These regulators will be part of a network in which they will be able to discuss how similar problems are interpreted in the same way at a European level. The following stage should involve the setting up of the European regulator. I think that, ultimately, we need to have an integrated and interoperable information and ticketing system. This will allow passengers to travel throughout Europe with one ticket when different operators are used.
How will negotiations pan out once the Council has established its position? Will you remain rapporteur on the question of opening up markets and governance?
There is no guarantee that I will be the rapporteur but let's say that there is a 75% chance that I will be back. Everything will depend on the result I obtain in Flanders and Belgium, where I am the second candidate on my party's European list.
We will have to wait until the end of the year for the Council's position on the political pillar. Afterwards, we will begin after the discussions and I think that we have a raft of texts that provide a good basis. I suppose that during the course of 2015, we will be able to try and obtain a compromise between the European institutions.
If the Council can complete its work in the next few months, I think we will perhaps be able to begin negotiations. Parliament would like to conclude the technical pillar as soon as possible. Unless something unexpected happens, it is already too late to finish everything over the next two months, but after the elections we would be able to start again.