EU divided over single liberalised railway system

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The European Parliament has moved a step closer towards establishing a single, liberalised European rail network after a round of voting on the proposed competition rules.

The new rules aim to boost the supply of international freight and passenger services and to improve their quality, clarify competition rules for rail transport firms and rail infrastructure managers while establishing independent regulators to oversee the network.

The EU has also proposed price incentives to modernise trains and expand the network and encourage the development of quieter and safer trains, said the Parliament statement accompanying the proposed revisions to the single European railway directive.

“It took us two years of difficult negotiations … to guarantee better competition and lay solid foundations for infrastructure funding,” Debora Serracchiani (Socialists and Democrats group, Italy), an MEP in charge of compiling the report, said in a statement after voting took place in Strasbourg on 3 July.

“I consider that the unbundling of rail operators and undertakings is necessary, but we reached a good compromise on the monitoring of financial flows,” she said.

Siim Kallas, European Commission vice president and commissioner for Transport, said he welcomed the agreement on competition rules, saying he expects them to come into force by the end of the year.

“The new rules tackle three major problems on the market, strengthening the power of national regulators, improving the framework for investment in rail and ensuring fair access to rail infrastructure and rail-related services. They are a direct response to many complaints from operators in recent years,” he said.

Despite the compromise reached on the directive, which the Community of European Railway and Infrastructure Companies (CER) said had had a “complicated run-up,” some parliamentarians are still not happy with the proposed plan.

Latvian MEP Roberts Zīle of the European Conservatives and Reformists (ECR) said in a statement that the new directive was a “big step forward towards a better functioning of the liberalised railway market,” but that the ECR group could not give its full support to the deal reached with the Council.

Zīle expressed doubts that the new rules would ensure a level playing field in all of the EU rail market, with Finland and the Baltic states losing out due to their different rail gauge and the dominance of Russian rail services in their market.

“Several important points concerning the parts of the EU market with a different track gauge have not been properly solved,” he said.

Parliament Vice President Isabelle Durant (Greens/EFA, Belgium) was also critical. In a statement, she called it “an attempt at clarification that had ended in confusion."

Durant applauded the advances made in financial transparency, supervision by independent public regulators and incentives for rail companies to invest in quieter and safer technology, but said the decision was “far from answering its original objectives.”

Not all in accord

“Rather than removing all ambiguity from the central problem of essential functions, the compromise voted this morning creates more,” she said.

The CER said it welcomed a number points from the agreement, including the transparency of accounts and possibilities for monitoring them, multi-annual contracts between the governments and infrastructure managers, optional noise differentiated track access charging and the rejection of proposals to insert new separation requirements between infrastructure managers and rail undertakings.

However, the railway body said it "regrets that adequate financing of infrastructure managers lies under a 'may' clause" and that "ETCS [European Train Control System] differentiated charging has not been properly treated and is likely to penalise the majority of railway undertakings running on non-ETCS-equipped lines. Moreover, the European Parliament did not support a few essential exemptions from the application of the directive (or parts of it), like the case of ... the broad-gauge line connecting Polish territory to the Belarusian border."

Positions: 

Greens/EFA MEP Karim Zéribi said the reforms “missed the target,” since they would “fragment” the already established cooperation between the different elements of the railway system, which he said was “an essential element in circulation security and the quality of offers.”

German MEP Werner Kuhn of the European People’s Party commented, “The single European railway market can only succeed with common standards and smooth coordination.

"We need strong and independent national regulatory authorities for a successful opening of the railway market and a model in which network and railway operators continue to cooperate closely," he said.

Polish MEP Ryszard Czarnecki ​(ECR) called the package, "unfavourable for Poland. Namely, we were unable to defend the so-called Polish exception: i.e. the exclusion of the LHS company [broad gauge railway line] from the harmful scope of this directive. 

"However, the report also contains beneficial solutions, for example the financial rules will force member states to swiftly finance railway projects. This will undoubtedly contribute to the improvement of the railway sector in Poland."

CER Executive Director Libor Lochman​ commented, "All in CER welcomes the agreement. At the same time, we have to say that in many cases the text could have been improved even further if only more attention had been paid to details ... I wish we will be able to find a better way of law-making with the upcoming fourth railway package."

Timeline: 
  • December 2012: Commission to propose separate legislation to begin liberalising passenger transport on EU member states’ domestic networks.
  • ​End of 2012​: Following a request by the Parliament the Commission is to propose an infrastructure model.
  • By 2014: Commission to assess the desirability of establishing a European regulator.
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