Brussels, 24/07/2000 (Agence Europe) - The European Commission is due on Wednesday to consider a proposal devised by the Transport Commissioner, Loyola de Palacio, in a drive to specify competition rules for the award of public purchasing contracts for public passenger transport services by rail, road and inland waterways. Outlining a third way between full deregulation and tightly closed markets, the new Regulation sets forth a framework for "controlled competition" by requiring public services contracts" that are concluded to be limited to five years when a government grants exclusive rights or financial compensation for public service operations.
The Regulation allows exceptions to the invitation to tender requirement for: a) rail and underground railways when "national or international safety standards cannot be enforced in any other way"; b) contracts with a minimum value of no more than Euro 400,000 or 800,000 when several public services are grouped together or "integrated" (the government then has to provide 12 months notice of its plan so as to allow any competitors to make their observations); c) an operator's proposal for a new service that does not yet exist (the contract shall be renewable only by means of invitations to tender); d) services limited to a single route; e) contracts involving the allocation of exclusive rights but no state aid (in this case, the government is at least required to apply a "quality comparison" procedure).
Exceptions for railway and "integrated services" are designed in particular to cater for France, which was the only Member State to be openly hostile to the plan during the preparatory consultations. As a result of these exemptions, the RATP's monopoly control over the public transport system in Paris should remain intact, as should the sway held over public transport systems in some of the major German cities.
This deregulation process is counterbalanced in the Regulation by setting basic quality criteria for public services: these refer to such items as punctuality, providing services to sparsely populated areas, safety and ensuring coordination between the different services when it comes to such items as information, timetables and connections. This criterion seeks to cater for the concern raised in the wake of the aborted deregulation of public transport in Sweden, when there was no requirement at all for any coordination between operations as regards ticket sales or providing information.
The new Regulation will update 1969 provisions concerning public service requirements for passenger transport systems, whilst taking account of the increasing liberalisation of this market in Europe. Eleven of the 15 Member States have already exposed some of their markets to competition in the case of buses and coach services, and urban rail transport systems. At the start of the year, nine public and private-sector companies were providing public transport services in more than one Member State. At the top of the public sector list is the SNCF, which operates in six Member States via its VIA-GTI offshoot. As a result of this de facto deregulation, there is a call for competition to be balanced by public service obligations so as to ensure the transparency of public procurement, whilst guaranteeing the quality of services.
Better results were secured by "regulated competition" countries - Total deregulation (United Kingdom)
does not guarantee security, closed markets (Belgium, Austria, Greece) have higher costs
A Commission-sponsored survey shows that « controlled competition » in certain sectors in France and the Nordic countries has made it possible to maintain the service production cost at an average of Euro 2.26 per bus/km, against Euro 3.02 for closed markets such as those in Greece, Belgium and Austria. Fully deregulated markets, such as the one for buses in the United Kingdom, are said to be cheaper (Euro 1.44) but do not invariably guarantee a good quality service. As a result, the number of people using the bus in the United Kingdom has declined 6% since deregulation, according to the survey, whereas it rose by 14% between 1990 and 1997 in the six Member States that subjected bus services to controlled competition: Denmark, Finland, France, Portugal, Spain and Sweden.
"The survey does not reveal any huge differences between controlled competition markets and closed markets as far as wages for employees are concerned », according to the Commission's explanatory memorandum. Anticipating accusations of seeking to usher in unfettered free market principles, the proposal for a Regulation offers a safeguard clause for employees, stressing that the « relevant authority has to ask the selected operator to ensure people hired beforehand to provide the services enjoy the rights they would have had if there had been a transfer" within the meaning of the 1977 Directive on maintaining the rights of workers in the event of company transfers.