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The European Commission has stepped up its efforts to revitalise European railways by launching a new set of proposals known as the second railway package on 23 January 2002.
The five measures unveiled in the package are based on the guidelines set out in the White Paper on transport [COM(2001)370] which was published in September 2001 (See European Sources Online's In Focus: White Paper on European transport policy, September 2001). The proposals aim at greater safety, interoperability and opening of the rail freight market.
Background
Over the last thirty years, rail travel across Europe has been in steady decline with the proportion of goods moving around the Union by rail falling from 32% (1970) to 14 (1996) and the share of the passenger market dropping 4% to 6%. Over the same period, road transport has becoming increasingly more popular for transporting both freight and passengers. In 1997 the number of kilometres covered by EU passengers on the road was 14 times more than that covered by rail (4180109 million kilometres by car compared to 282158 million km by rail) and the transport of freight by road covered more than five times more kilometres than freight transported by rail. (Figures taken from the Eurostat Yearbook 2000). Because of the impact these trends have had on both the rail industry sector and on the environment, the European Commission decided in the late 1990s to increase its efforts to improve Europe's rail system and lure both passengers and freight off the roads.
While the Common Transport Policy provides for certain legislative measures for the rail sector, Neil Kinnock, the then European Transport Commissioner, presented a new package of measures in March 1998. These proposed the opening of the EU's rail freight sector by 5% of the market as soon as possible and by 25% over the following decade. However the proposals met with stiff opposition from the French who were against liberalisation and this coupled with a strike in six Member States in November 1998 meant that Kinnock was forced to emphasise that progress would be slow and phased. In the same year the Commission's Rail Freight freeways had less takers than expected with only four cross-border cargo services being opened and only one actually operates.
Despite the negativity surrounding the Commission's aims to revitalise the railways in 1998, they went ahead with the launch of specific measures in a general Communication on transport in July of that year [COM(98)480; OJ C 321 October 20, 1998]. This package comprised three proposals:
- amendment of Directive 91/440/EEC to allow for certain access rights to infrastructure and the separation of infrastructure management and transport operations, at least in accounts;
- amendment of Directive 95/18/EC establishing a common scheme for licenses which would ensure both free circulation of services and fair treatment of undertakings, and their safety and dependability.
- a new Directive which would allocate railway infrastructure capacity, establish the levying of charges for the use of railway infrastructure and set up safety certification.
The proposals were subject to more than two years of debate, culminating in a conciliation procedure between the Council and the Parliament in autumn 2000 and the formal adoption of the railway package in February 2001.
This became known as the 'first railway package' and provided for the following:
- the establishment of a Trans European Rail Freight Network (TERFN) by 2003, including the main European rail freight corridors as well as their link to ports. All licensed rail undertakings will have the right to provide international freight services on the network as long as they meet certain security standards.
- all licensed rail undertakings should be able to gain access to the entire European rail network for international freight services by 2008.
- a legally and organisationally independent authority which will take the decisions on railway undertakings, charging and train path allocation.
- the charging system will be based on the principle of 'social marginal cost pricing' with the possibility of higher charges in cases where considerable investment in rail infrastructure is necessary.
- Directive 2001/ 16/EC was also adopted aimed at fostering the creation and implementation of a an integrated and interoperable trans-European conventional rail system based on compulsory Technical Specifications of Interoperability (TSI) along with harmonised standards.
- European Commission will propose a second package of measures in 2001 with more focus on passenger transport.
However, there were two clear omissions from the package adopted in 2001: the entire separation of infrastructure management and transport operations, and the creation of a European rail observation system. Moreover, the first railway package would not enter into force until 15 March 2003.
Clearly, the European Commission would need to propose further measures if they were to continue on the path of revitalising the railways.
Second Railway Package
These further measures were outlined by the European Commission in a Communication [COM(2002)18] on 23 January 2002, under the heading of the second railway package. This is designed to supplement the existing rules governing Europe's railways without delay and suggests five new measures as well as thoughts on future action.
The five key proposals are:
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A Directive on railway safety
This aims to: |
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clarify responsibilities by establishing national authorities and developing common safety methods |
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strike a balance between the safety regulations and opening the market by granting safety certificates giving access to the networks and the adoption of common safety targets. |
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ensure transparency and the exchange of information with the development of common safety indicators. |
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establish independent bodies to investigate accidents and incidents. |
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Amendments to the Interoperability Directives |
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These amendments would seek to build on the experience from the last four years on the technical specifications for interoperability for high-speed services and extend interoperability to the entire network at the same time as competition in international freight services is extended to the entire network. |
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A Regulation establishing a European Railway Agency |
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A European railway agency would be established, offering an efficient means of making progress on railway safety and interoperability at the European level as well as a public centre of technical expertise. It would provide technical support for decision-making and act as an advisory body to the the European Commission and Member States. The agency would be financed by a budget of approx. €14 million, i.e. less than 0.6% of annual European funding for railway projects and would be in operation by 2004-2005 employing around 100 staff. Discussions at the Laeken European Council suggested that the railway agency may be located in Lille, France. |
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Complete the internal market in rail freight services |
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The European Commission proposes amending Directive 91/440 to open up international and national freight services without delay across the entire network, ideally by 2006. |
In addition to the five proposals for legislation the European Commission has also suggested that the Council should decide on Community accession to the Convention concerning International Carriage by Rail (OTIF). Moreover, it is looking to improve the quality of the rail network for both freight and passengers by opening a debate with all concerned on a series of further steps which would include:
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Freight |
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Ensuring sufficiently high-quality services through voluntary commitment by railway undertakings on quality of service, compensation in case of non-compliance with contractual obligations and the safeguarding of customers' rights. |
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Removing barriers to entry to the market by the deployment of the European Rail Transport Management System and the simplification of customs procedures. |
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Giving higher priority to freight services by establishing dedicated lines for freight and a data exchange network. |
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Improving the environmental performance of rail by setting up noise and emission ceilings. |
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Passengers |
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Opening the market in passenger services by rail through the opening of 'niche markets' such as night trains and car sleepers, and the opening of international services both with and without cabotage. |
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Improving passenger rights by setting up rules on contracts, consumer consultation, complaint handling, dispute settlement, compensation for delays and the availability of information. |
Clearly, the package proposed by the European Commission is comprehensive and ambitious. Loyola de Palacio, the European Commissioner for Transport, emphasised the need for radical reform at the launch of this package, saying,
'The efforts to deploy efficient, competitive railway services throughout the Union will be to no avail as long as we still have fifteen systems, each compartmentalised and closed in a national network. Rail freight customers expect a high-quality, Europe-wide service. These latest proposals will therefore step up the pace in order to create a true internal market in rail freight services'.
[European Commission: Press Release: IP/02/118]
Reaction to the proposals
The European Commission's second railway package has largely been welcomed by the sector's businesses. In December 2001, several rail freight customers joined forces to influence the Commission's efforts, establishing the European Rail Freight Customers' Platform. One of the leading members, UNICE, welcomed the proposals, saying,
'These proposals are a positive step towards completing the internal railway freight market... and an important step in the Lisbon process'
UNICE Press Release 23.01.02
Their support for the proposals was reinforced by the European Shippers' Council (ESC) who welcomed,
'the Commission's overall intentions ...and the recognition by the Commission that performance is ultimately key to the future success of rail freight, especially if it is to be seen as a viable alternative to road freight services.
European Shippers' Council Press Release
However, Sarah Watkins, ESC's rail freight specialist recognised the effort that would be needed by other stakeholders, saying,
'a commitment by all in the industry is going to be crucial if the Commission is to achieve its goals of liberalising European railways, ensuring interoperability between them and providing quality services for the customer. What remains very clear is the enormity of the challenge facing not just the Commission, but all who have a stake in the future success of the rail freight industry'.
Indeed, while the European Commission may have received much needed support for its second railway package from the industry's businesses it is likely to face some opposition from Member States themselves and even other transport sectors. The majority of Member States are cautious about liberalising Europe's railways especially in view of the UK's problems following liberalisation of its national rail services while other transport sectors question how much rail services can offer. Hubert Linssen, head of The International Road Transport Union's Permanent Delegation to the EU in Brussels, commenting on the proposals said,
'Europe needs efficient transport...the massive volume of legislation and investment needed to revitalise Europe's railways are out of proportion to the limited economic, social and environmental benefits that they can deliver. Unfortunately, rail's limited capacity, especially for freight, means that even fully revitalised railways cannot provide more than a modest part of the overall solution.'
IRU Press Release
The European Commission needs to convince the cautious Member States and other stakeholders that these latest proposals will allow for the smooth and successful liberalisation of Europe's rail market , creating a sector which could match the success of its counterpart in the United States where 40% of freight is carried by rail and therefore overcome the political, technical and structural barriers at Member State level.
The proposals [COM(2002)18] will be subject to the co-decision procedure and therefore need the approval of the European Parliament and the Council.
To trace the full progress of the proposal through the policy-making process you can use these services:
- OEIL (Legislative Observatory) (provides a full history of the proposal with summaries of each major stage in the process)
- Pre-Lex (provides a full and concise calendar of the proposal, bibliographical references and some hyperlinks to full text sources)
The European Council, meeting in Barcelona on 15-16 March, will probably be invited to adopted a declaration and will therefore be the drivers that could revitalise Europe's railways in 2002.
Further information within European Sources Online:
European Sources Online: Topic Guide:
- Common Transport Policy
- Trans- European Networks
| European Sources Online: In Focus |
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22.09.01: |
White Paper on European transport policy, September 2001 |
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| European Sources Online: European Voice |
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11.01.96: |
Rail liberalisation on track |
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06.06.96: |
Bid to boost funding for combined transport |
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13.06.96: |
Rail fights for slice of freight cake |
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18.07.96: |
Kinnock rings the alarm bell for rail freight |
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10.10.96: |
Road-to-rail plan under threat |
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31.10.96: |
Railway sector resists liberalisation as freight moves onto the roads |
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14.11.96: |
Rail freight plans gather momentum |
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05.12.96: |
Moves to boycott rail scheme |
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30.01.97: |
Rail reform struggles to keep momentum |
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20.02.97: |
Co-operation key to freeways |
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27.02.97: |
Revolutionise faster, or rail will hit the buffers |
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03.04.97: |
Action stations for rail freight freeway début |
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22.05.97: |
Kinnock makes tracks for new rail freeways |
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04.09.97: |
Freight transport scheme founders in seaports' battle |
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02.10.97: |
Move to push rail liberalisation back onto the fast track |
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11.06.98: |
Slow track approach to rail revival |
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16.07.98: |
Plan to open access to rail network |
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10.09.98: |
Austria puts protection of workers' rights at top of the liberalisation agenda |
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24.09.98: |
Rail industry urges road tolls before track charges |
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24.09.98: |
15-16 September Transport ministers informal |
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29.10.98: |
Rail driven to move with the times |
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29.10.98: |
Monopolies fed free market medicine |
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29.10.98: |
Freight put on the right track in UK |
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19.11.98: |
Kinnock moves to boost rail sector |
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17.12.98: |
Slotting final pieces into liberalisation jigsaw |
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21.01.99: |
Rail's future runs on two separate tracks |
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21.01.99: |
No smooth ride for transport sector |
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21.01.99: |
Europe is unlikely to take the freeway just yet |
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04.02.99: |
Railing against Europe's chaotic train links |
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29.04.99: |
French run to catch freight train |
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10.06.99: |
Bonn's rail deal on wrong track |
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01.07.99: |
Kinnock offers Paris new deal on rail freight |
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09.09.99: |
Finland unveiled a new initiative this week... |
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23.09.99: |
Call for liberalisation of railways sparks 'stalling' claims |
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14.10.99: |
Rail freight deal remains unlikely this year |
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14.10.99: |
6 October: Transport Council |
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18.11.99: |
De Palacio seeks to put rail liberalisation on rail fast track |
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02.12.99: |
Ministers to back rail freight liberalisation |
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16.12.99: |
9-10 December: Transport Council |
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04.05.00: |
Rail firms struggle to get freight back on track |
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04.05.00: |
EU's least enthusiastic liberaliser to take charge of market-opening drive |
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29.06.00: |
Parliament to push for swift action on rail liberalisation |
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21.09.00: |
Union platform for change fails to halt the flight of rail freight |
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19.10.00: |
Row over pace of change risks derailing liberalisation package |
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30.11.00: |
EU Governments and the European Parliament have thrashed out a compromise agreement on opening the Union's rail freight system to cross-border competition |
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22.02.01: |
Rail freight's last-chance bid to save sector |
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17.05.01: |
Striking the right balance between EU's roads, trains boats and planes |
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17.05.01: |
Future of transport at crossroads |
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14.06.01: |
Open up operators rail access, members told |
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| European Sources Online: Financial Times |
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30.11.01: |
'Newtrack' board plans could breach EU law |
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29.12.01: |
Commons to probe cost of EU rules on railways |
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17.01.02: |
National interests put a damper on Brussels' rail plans |
Further information can be seen in these external links:
(long-term access cannot be guaranteed)
EU Institutions
National Organisations
Miscellaneous Organisations
Further and subsequent information on the subject of this In Focus can be found by an 'Advanced Search' in European Sources Online by inserting 'rail' or 'rail liberalisation' in the keyword field.
Helen Bower
Compiled: 2 February 2002
Background and reporting on the week's main stories in the European Union and the wider Europe.
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