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1.5 Rail Transportation

In its effort to strengthen the position of railways vis-'a-vis other transportation modes, the EC has been very active during the last 25 years in restructuring the rail transportation market, basically through interventions in three areas:

• Opening of the rail transportation market to competition, addressing the structure of state monopolies that characterised European railways until not very long ago.

• Improving the interoperability and safety of national networks, addressing the patchwork of different rail systems that exist (differences range across a wide spectrum, including at least four different rail gauges, at least four different electricity systems, at least a dozen different signalling systems, various clearance profiles, various technical specifications of locomotives and other rolling stock, and many other differences, not the least of which is that trains in some countries run on the left and in some other countries on the right side).

• Developing rail transportation infrastructure, addressing bottlenecks due to insufficient capacity and/or poor quality of existing rail networks.

The latter point is dealt with the new TEN-T policy that offers preferential treatment to railway infrastructure, which features persistently in all TEN-T core network corridors (refer to Sect. 1.3.2). Furthermore, ERTMS, the European approach to handling interoperability problems in the rail transportation, is prescribed as a requirement for all TEN-T core network corridors, which to a large extent supersede the so-called 'ERTMS corridors,' introduced by the relevant deployment plan.[1] That leaves the liberalization of rail transportation as the only topic that needs to be discussed further in this section. Special attention will also be given to the Rail Freight Corridor concept, which was introduced together with the green corridors and paved the way for the TEN-T core network corridors that were adopted later on.

1.5.1 Liberalization of Railway Markets

Community involvement in the sector came in 1991 with a Directive requiring separate accounts to be kept for railway infrastructure management and the provision of railway transportation services. Ten years later, in February 2001, the 'first railway package' was adopted aiming to enable rail operators to have access to the trans-European network on a non-discriminatory basis. The Commission underlined the need to improve the distribution of train paths, establish a tariff structure that reflects relevant costs, reduce delays at borders and introduce quality criteria.

The 'second railway package' of 2004 accelerated the liberalization of rail freight services by fully opening the rail freight market to competition as from 1 January 2007. In addition, the package created the European Railway Agency situated in Valenciennes (France), introduced common procedures for accident investigation and established Safety Authorities in each Member State.

In October 2007, the 'third railway package' was adopted opening up the

international passenger transportation market including cabotage by 2010. Since then, operators may pick up and set down passengers at any station on an international route, including at stations located in the same Member State. Furthermore, the third railway package regulated the rail passenger rights and the certification of train crews.

In 2012, Directive 2012/34/EU (a recast of the first railway package) establishing a single European railway area, reinforced existing provisions on competition, regulatory oversight and the financial architecture of the rail sector (EP&C, 2012a). However, a number of remaining regulatory and market failures have been identified basically related to the full implementation and enforcement of EU legislation by Member States. In many cases infrastructure managers and operators are not fully independent and the effectiveness of the regulatory oversight of market functioning remains problematic.

In view of these problems, the EC adopted in January 2013 the 'fourth railway

package' comprising of legislative proposals in the following four areas: Market access

• Open by 2019 the domestic rail passengers market to competition either by offering competing commercial services (open access) or through bidding for public service contracts (PSCs), which account for some 90 % of EU rail journeys and will now be subject to mandatory tendering.

• Introduce an obligation for competent authorities to take the financial risk of the residual value of rolling stock at the end of a PSC by appropriate means

(i.e. assume ownership of the rolling stock, provide a bank guarantee for the purchase of new, set up a leasing company).

• Establish national integrated ticketing systems on a voluntary basis, subject to non-discrimination requirements.

Market structure

• Separate infrastructure managers from any transportation operator running the trains (albeit vertically integrated 'holding structures,' formed prior to the current legislation's entry into force, may be accepted provided that all safeguards ensuring the legal, financial and operational independence are in place).

• Strengthen infrastructure managers so that they perform all functions related to the development, operation and maintenance of the infrastructure, including traffic management (albeit subcontracting of specific renewal or maintenance works to railway undertakings is still possible).

• Establish a Coordination Committee which will allow all infrastructure users to express their needs and ensure that the difficulties they encounter are properly addressed.

• Create a Network of Infrastructure Managers to ensure that issues of crossborder and pan-European nature are properly addressed in a coordinated manner.

Harmonised standards and approvals

• Reinforce the role of the European Railway Agency (ERA) to become a 'one stop shop,' issuing EU wide vehicle authorizations in the form of “vehicle passports” as well as EU wide safety certificates for operators.

Rail workforce

• Allow Member States to protect rail workers beyond the general EU requirements by requiring new contractors to take them on when PSCs are transferred.

• Oblige pan-European railway undertakings to create European Works Councils and to take part in the Railway Social Sectoral Dialogue Committee.

  • [1] Commission Decision of 22.7.2009 amending Decision 2006/679/EC as regards the implementation of the technical specification for interoperability relating to the control-command and signalling subsystem of the trans-European conventional rail system, C(2009) 5607, Brussels, 22.7.2009
 
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