In accordance with the requirements of Directive 2001/12/EC, the Commission presents a third report on monitoring development of the rail market . The main points are as follows:

Rail freight traffic: the 2009 economic crisis has had a significant impact on rail freight traffic. The crisis resulted in an 18.3% drop in freight transport in tonne-kilometres in the EU-27 in 2009.

The rebound in the sectors which had been most affected, in particular the steel, chemical and car industries, resulted in a marked inverse trend in 2010, as no fewer than 15 Member States recorded increases of more than 10%, though without returning to 2008 levels at this stage. According to figures provided by the CER ( Community of European Railways ), the performance of rail freight in the third quarter of 2011 remained 9.2% lower than that of the third quarter of 2008 across the whole of Europe. The decline has even continued in France and Italy. At EU level, it nevertheless appears that the rail sector's modal share is now comparable with pre-crisis levels. The rail sector's share of overall freight transport had experienced a steep decline over previous decades, yet its market share has remained slightly above 11% for a decade, with 10.2% in 2010as a result of the crisis. The rail sector's share in land freight transport, which had stabilised since 2002 at 17.1 %, (in 1995 it still had a 20.2 % share), fell in 2010 to 16.2%.

Passenger transport: passenger transport was relatively unaffected by the crisis.

The decrease in traffic levels in passenger-kilometres was 1.4% for the EU-27 in 2009, where the increase of 3.6% in the EU-15 was not sufficient to offset the decrease of 8.3% in the EU-12 countries. Developments in 2010 were mixed, with a less favourable situation again in the EU- 12 (-11.3% in Romania) than in the EU-15, with the highest increase in the United Kingd om (+5.8%). The Commission notes that the decline, which started in the 1990s in the EU-12 countries, has nevertheless continued in 2010. In this context, there is a clear correlation between the recent development of traffic observed in each of the Member States and passenger satisfaction levels as expressed in the survey carried out for the Commission, as borne out, for example, by the positive results in the United Kingdom and Lithuania. The rail sector's share of the passenger transport market in the EU-27 has increased slightly over recent years, rising from 5.9% in 2004 to 6.3% in 2010. However, considerable differences remain between the Member States with railway networks, as this share accounted for some 10% or more in Hungary and in Austria, but scarcely 2% in Estonia and a little more than 1% in Greece. Opening up of the freight market : the opening-up of the market gathered pace in the rail freight sector during the crisis, albeit at a varying speed from one Member State to the next. At EU level, the number of licences has increased by nearly 16% for the freight sector in two years. It should be noted that this figures does not include national licences, significant numbers of which are still issued by some Member States (undertakings which provide exclusively regional rail freight services may hold national licences only). In terms of tonne-kilometre, undertakings other than the largest operator hold the largest market shares in Romania (55%), the United Kingdom (51%) and Estonia (43%). Over two years during the crisis, the market share of non-incumbent operators increased significantly in several Member States (from 10% to 23% in Latvia, from 14 to 27% in Belgium and from 10 to 20% in France), while it remained zero or close to zero in Finland, Ireland, Lithuania and Luxembourg. In addition, some incumbent operators now have significant market shares in other European countries as a result of subsidiary undertakings operating locally. The crisis has not generally slowed down the progress of new entrants on different national markets. It is important to note in this context that increasing the number of competitor operators has not had a detrimental impact on the high level of safety of this transport mode.

Opening up of the passenger market : the effective opening up to competition of the passenger market is taking place gradually, but now involves a majority of Member States.

New entrants have particularly high market shares in the United Kingdom (90%), Estonia (50%) and Poland (48%), while countries where the incumbent operator still controls the whole of the market are now in a minority (Belgium, Greece, Spain, Finland, Ireland, Lithuania, Slovenia and Slovakia). However, in some Member States such as Poland, new operators are the result of the partial break-up of the incumbent operator and hold de facto monopolies in their respective regions. This situation is largely due to the fact that the opening up of the domestic rail passenger transport market occurred at a more or less early stage in the different Member States: from 1992 in Sweden, in 1994 in Germany, in 1995 in the United Kingdom, then in Denmark and in Italy, and subsequently in a further ten EU countries.

As regards international passenger transport , which was opened up to competition by European legislation on 1 January 2010, alliances between incumbent operators remains the most common operating mode. However, services are gradually appearing on several routes that are in competition with the services provided by the incumbent operator of one of the countries served.

Conclusion: the Commission indicates that the market monitoring process will be complemented in the short term by the publication of a Eurobarometer study on the opening-up of the domestic rail passenger market, currently being undertaken. The results of the study will be taken into account in the preparation of the future legislative proposal on the opening-up of the domestic rail passenger market.

In this connection, the Commission recalls its White Paper 'Roadmap to a Single European Transport Area -Towards a competitive and resource efficient transport system ', stating that it intends to propose a 'fourth railway package' with the objective of opening up domestic passenger transport to competition, improving access to infrastructure and associated services, as well as extending the European Railway Agency's tasks in the area of certification.

Lastly, the recast of the directives of the first railway package has enabled developments in the areas of regulatory supervision, infrastructure financing and charging and market access conditions. A formal network of regulatory bodies will be created for coordination and exchange of best practice, together with a clause stipulating a review in 2014.

COM(2012)0459
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EUR-Lex
SWD(2012)0246

The Commission presents its second report on monitoring development of the rail market. The report sets out the main trends observed during recent years across the EU rail market, particularly during 2008. In addition to the consequences of the current economic crisis – which are as yet unclear – it has nevertheless been confirmed that the development of a European rail area and the gradual opening up of the market to competition have allowed the share of the railways in the transport sector to stabilise . The document also provides an overview of the initial tangible effects of the crisis which has affected the sector since mid-2008. Its impact has been more evident in the rail freight sector than in the passenger transport sector. The crisis is also affecting the rolling stock segment to a greater extent than infrastructure, which is expected to benefit most from the economic recovery measures planned by Member States.

The recovery plans announced are expected to benefit the rail network to the tune of up to EUR 20 billion , primarily in EU-15 countries. However, doubts have been raised regarding whether certain countries are financially capable of providing all of the investments that were provided for in spite of budgetary difficulties and the increase in debt which are expected. For its part, the EU has mobilised available funds in order to participate in these recovery efforts and in order to speed up the development of trans-European networks, inter alia by bringing forward the allocation of EUR 500 million under the TEN-T budget. On the other hand, in the context of the current crisis, an acceleration of consolidation in the rail freight sector can be seen, marked by the expansion abroad of groups like DB Schenker.

The main points of the report are as follows:

Operation of the EU rail transport market : with regard to freight transport, the report notes that after several years of a constant decrease which was particularly marked in new Member States, rail freight transport has grown at a not insignificant rate between 2000 and 2007. This is particularly the case in certain countries where non-incumbent rail undertakings have acquired significant market shares. In 2007, EU-27 countries saw a rise in rail freight transport of 2.8 %, as opposed to 1.1 % in EU-12 countries and 3.7 % in EU-15 countries. In 2008, trends in rail freight transport varied enormously across the EU-27 group of countries. Transport in this sector fell by 29.2 % in Estonia and 21.5 % in Ireland, whilst in Denmark and Latvia it increased by 9.7 % and 6.9 % respectively. Since mid-2008, the economic crisis has had a major impact on the transport of goods by rail, affecting, inter alia, the economic sectors that traditionally used rail freight services, such as the mining and steel, chemical and automobile industries. Provisional data would put this reduction at approximately 28 % across the EU as a whole between the second quarter of 2008 and the second quarter of 2009.

With regard to passenger transport, provisional CER figures indicate that between the second quarter of 2008 and the second quarter of 2009, passenger transport fell by 5 % in EU-15 countries, and by 0.7 % in EU-12 countries. This would appear to be more pronounced for business travel, where it potentially exceeded 10 %.

Opening up of the rail market : there are over 600 rail operating licences in the freight sector, including 315 in Germany and 67 in Poland. The number of licences in the passenger sector now exceeds 450, including 302 in Germany and 45 in the United Kingdom. With regard to passenger transport, non-incumbent undertakings have particularly large market shares in Estonia (58 %), in Sweden, and also in the United Kingdom, where several undertakings created in the wake of the previous monopoly have been integrated into a variety of holdings. As far as freight is concerned, the Estonian, UK and Romanian markets are the most open. De facto monopolies still exist in several Member States.

Performance of railway undertakings : the report notes that on financial health , there is also another significant disparity between rail undertakings’ performance in EU-15 and those in EU-12 countries. The poor financial health of EU-12 railway undertakings is mostly due to insufficient payment in respect of the provision of public services, undertakings’ continued debts to the State and the poor investments made by certain operators in recent years. The current crisis is affecting all EU-27 countries, hence a general worsening in undertakings’ health.

Trends in infrastructure investment : the EU-12 group of countries can be characterised by the poor level of investment provided for rail transport. 2006 figures provided by the CER indicate that average investment per kilometre for the maintenance of railway lines was five times higher in EU-15 countries than in EU-12 countries. It should also be noted that there has been stagnation in rail investment co-financed under the cohesion policy, compared to figures for the period 2000-2006. This finding is striking, despite a very favourable situation marked by a 69 % increase in the budget allocated to transport under regional policy. Within EU-12 countries, the ‘rail’ proportion of total national investment in the transport sector is largest in Slovenia, Lithuania, the Czech Republic and Slovakia and lowest in Poland. Investment in road infrastructure is therefore far higher than investment in rail, in both western Europe and especially in EU-12 countries.

Particularly since 2008, the Commission has received several complaints on the operation of the market, particularly in relation to the conduct of market players, for example as regards the management of terminals and access to services. It is in the light of these comments that the Commission is considering clarifying or amending certain provisions contained in the first rail package by means of a recasting exercise. It is in the light of these comments that the Commission is considering clarifying or amending certain provisions contained in the first rail package by means of a recasting exercise.

COM(2009)0676
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EUR-Lex
SEC(2009)1687

This Communication sets out the measures that Member States and infrastructure managers should take to combine financial equilibrium with an appropriate level of rail infrastructure services. In particular, it covers multi-annual contracts for rail infrastructure quality.

EU legislation requires setting incentives to reduce the cost of infrastructure provision and of consequent infrastructure charges. Whereas the Community has established detailed requirements for safety management and accident (data) reporting, there are no such obligations as yet at Community level for monitoring infrastructure service. Member States may choose to meet this obligation by way of regulatory measures and/or contractual agreements, known as multi-annual contracts. These agreements represent a long-term financing arrangement for infrastructure maintenance. Such agreements are concluded for at least three years, i.e. longer than the traditional annual budgeting. Contract terms and the structure of payments have to be decided in advance for the entire contract duration.

The state of play regarding the use of multi-annual contracts varies considerably across Member States. About half neither use nor plan to make use of them. Some Member States provide no finance for rail infrastructure maintenance in the first place, some are in the process of negotiating contracts for the first time, and others are preparing to extend them for a new multi-annual period.

Maintenance of infrastructure does not always get the attention and finance that railway operators expect in order to compete with other modes of transport. Almost one third of infrastructure managers state that the finance available is not sufficient to maintain their network. There are huge differences in expenditure on maintenance per track km in the various Member States, sometimes up to 30 times. This discrepancy suggests that some networks may be building up maintenance backlogs, which the infrastructure manager is not able to finance. This large discrepancy may imply that in some cases maintenance may not be sustainable, whereas in other cases infrastructure managers may not have exploited cost reduction potentials in the same way all over Europe.

Infrastructure managers in some European countries have gained valuable experience in using multi-annual contracts. The Commission thinks it would be useful if this approach were applied more widely on the basis of existing best practices. In order to promote best practice in the use of multi-annual contracts, the need for further action is considered at three levels: Member States, infrastructure managers and regulatory bodies:

Best practice requires that Member States should conclude multi-annual contracts with their infrastructure managers. However, where no such contracts exist, Member States should at least provide for the infrastructure manager to commit resources, including in-house provision or contracting, for periods of more than three years; Member States and their infrastructure managers have to ensure that multi-annual contracts are consistent with the national strategic transport plans and the infrastructure manager's business plan. The same holds true for infrastructure franchises and for any framework contracts between railway undertakings and infrastructure managers; The state should consult stakeholders on any proposal for multi-annual contracts before letting a new contract or renegotiating existing provisions. It then negotiates the size and the quality of the network; Member States should step up their efforts and reduce costs and charges for infrastructure provision and use. To this end, Member States should agree, monitor and enforce quantified cost reduction targets over periods of at least three years; Infrastructure managers should measure track condition at least once a year on all their lines, and more frequently on their main lines; Based on these measurements, infrastructure managers have to define and publish indicators making it possible to assess and predict infrastructure quality and performance on an annual basis for the duration of the multi-annual contract; Discretionary intervention by the state in infrastructure management should be limited to cases provided for in the contract, while the infrastructure manager pursues the agreed objectives with a broad measure of management independence. Otherwise the agreement or contract needs renegotiating; Infrastructure managers should report in the network statement when lines are not appropriately maintained and infrastructure quality is deemed to be in decline; otherwise infrastructure will be taken out of service. This information should be timely enough to enable it to act as an early warning system for users; An independent body should be tasked with monitoring compliance with a multi-annual contract and with mediating between the parties to the multi-annual contract in the event of any dispute. This presupposes having the appropriate staff and expertise to carry out this type of assessment.

Lastly, multi-annual contracts can be a precursor for making better use of competitive tendering for infrastructure services. It will be difficult to put an entire national network out to tender at once. To minimise any possible negative effects, safeguard measures need to be taken to ensure simple and non-discriminatory access rules, ensuring respect of the rules on competition.

At this stage, the Commission will consider including a number of the previous recommendations in its proposal for recasting the first rail package, planned for 2008.

COM(2008)0054
EUR-Lex

This Commission Staff Working Paper, which accompanies a Communication on multi-annual contracts for rail infrastructure quality, offers an overview of statistics and figures. They include:

Annex 1: Financial contributions provided by Member States for infrastructure operation, maintenance, renewals and construction (in EUR million for 2006): Annex 2: Investments in maintenance, renewals and new construction of rail infrastructure, including Investment in EUR per km of lines. Annex 3: The third Annex sets out the main elements that need to be agreed in a multi-annual contract such as its scope, targets, the designation of an independent body, the financial plan and minimum reporting requirements. By creating a stable and predictable longer-term framework for infrastructure development, multi-annual contracts have a number of advantages including: independent managers, financial stability, transparency, cost-efficiency, predictability in terms of charges, service quality, greater responsiveness to customer needs as well as social benefits. Annex 4: This Annex sets out in figures implementation of the multi-annual contracts for rail infrastructure quality. Annex 5: Annex 5 assesses firstly, links between costs and infrastructure quality and secondly, measures infrastructure quality. Annex 6: The paper concludes by offering two case studies on multi-annual contracts. The first concerns Poland and the second England.

SEC(2008)0131
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SEC(2008)0132
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SEC(2008)0133
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Adoption of the railway packages is based on the fact that, in spite of efforts to promote the use of rail transport across the EU, efforts are failing. Two railway packages have already been agreed and a third is in the process of being negotiated. This Report focuses exclusively on the “first railway package”, adopted in 2001. The first package consists of three Directives: Directive 2001/12/EC, 2001/13/EC and 2001/14/EC. Although separate they are closely inter-linked and share the common objective of opening up the EU’s internal market to the railway sector. Focusing exclusively on international freight transport, the first railway package enables any railway undertaking, licensed in accordance with Community criteria, to have access to the internal market’s railway infrastructure on fair, non-discriminatory terms as well as allowing them to offer their services across the EU.

Transposition of the Directives was due to have taken place by 15 March 2003 for the EU-15 and by 1 May 2004 for eight of the ten new EU Member States who operate a railway infrastructure. By 1 January 2006, 24 out of the 25 Member States had formally transposed the Directives of the first railway package into their national legislation, with Luxembourg committing itself to implementing the package in the first half of 2006.

Given that failure to implement the Directives has serious repercussions, the Commission has not hesitated in starting infringement proceedings against those countries who are in breach of their obligations vis-à-vis the first railway package. Implementation, the Commission stresses, must be done uniformly and to the letter, if the Directive’s objectives are to be realised.

This Report offers a global evaluation of the Directive’s transposition. The details are set out in Annex to the Report. In summary, the Commission finds that:

- On the separation of accounts, the reform process is not yet complete. In many cases the accounts fail to comply with the Directive’s specifications. The Commission urges that the 2005 and 2006 accounts be published according to the Directive’s requirements.

- On the separation between essential functions, work still remains to be done in this area in many of the Member States.

- On the creation of an independent regulatory body, the Commission stresses the importance of monitoring the railway market independently and the need to have an independent arbitrator on disputes between the infrastructure operator and the railway undertakings. The Report finds that this body does not, in all cases, have the human, financial and administrative resources needed for it to fulfil this function.

- On the granting of infrastructure access rights, the Commission encourages the gradual introduction of standard contracts between the infrastructure manager and the railway undertaking(s).

- On the introduction of a charging system, the Report stresses the importance of not promoting cross-funding between freight trains and passenger trains through the infrastructure charging system.

Since the adoption of the first railway package in 2001 figures indicate that railways’ share of the freight market has been stabilising in the EU-25. It is not insignificant that the best performing Member States, in terms of rail freight use, are those who first reformed their railway industries.

To conclude, the Report notes that the railway industry, which has been in permanent decline since 1970, has managed to stabilise the volumes transported. In some Member States, freight rail has even managed to take away market share from the roads. Similarly, the fall in employment has also been halted. The Commission believes that implementation of the first railway package by the Member States is well underway but that more needs to be done for it to be complete. It calls on the Member States to do more towards:

- completing their restructuring programmes and to ensure the separation of accounts and essential tasks;

- establishing rail infrastructure charging;

- creating the necessary independent administrative infrastructure needed to implement the first railway packages’ provisions;

- clarifying national regional transport authorities’ financial ties with the railway undertakings;

- prohibiting cross-subsidisation between freight and passenger transport operations; and

- creating transparent requirements for accessing training centres and the awarding of safety certificates.

The Commission calls on infrastructure managers to:

- improve the content and visibility of their network statements;

- set charges based on real costs; and

- co-operate at a European level on the granting of international paths and to establish harmonised conditions for infrastructure access based on standard contracts.

In the meantime, the Commission will observe the market situation closely and will take action in cases of breaches by starting infringement procedures and/or proposing amendments to the existing Directives in cases of persistent short-comings.

COM(2006)0189
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Directive 2001/12
OJ L 075 15.03.2001, p. 0001

T5-0046/2001
OJ C 267 21.09.2001, p. 0019-0046

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OJ C 121 24.04.2001, p. 0034-0106

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OJ C 121 24.04.2001, p. 0010

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SEC(2000)0635

05386/1/2000
OJ C 288 11.10.2000, p. 0001

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COM(1999)0616

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OJ C 057 29.02.2000, p. 0040

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T5-0015/1999
OJ C 054 25.02.2000, p. 0056-0079

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A5-0005/1999
OJ C 054 25.02.2000, p. 0010

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2169

OJ C 175 21.06.1999, p. 0098-0118
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OJ C 153 01.06.1999, p. 0003

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