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Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council concerning a European rail network for competitive freight’

On 19 January 2009, the Council decided to consult the European Economic and Social Committee, under Article 95 of the Treaty establishing the European Community, on the

Proposal for a Regulation of the European Parliament and of the Council concerning a European rail network for competitive freight

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2009. The rapporteur was Mr Fornea.

At its 455th plenary session, held on 15 and 16 July 2009 (meeting of 15 July 2009), the European Economic and Social Committee adopted the following opinion by 164 votes to2 with 1 abstention.

1.1 The EESC welcomes the Commission’s Proposal for a Regulation as a step forward for supporting the setting up of international corridors for rail freight carriage and for the development of this mode of transport in Europe.

1.2 In order to mobilise energies around rail freight corridor development, concrete political action is required at corridor level, independently of any legislative process. Regulation alone is not sufficient to promote rail freight corridors. Securing public and private investments to increase the overall quality, efficiency and capacity of the infrastructure should be among the first priorities, as well as the full implementation of the 1st and 2nd railway package all over the EU.

1.3 Efficient high-level coordination is necessary on each relevant corridor for progress in rail infrastructure improvements, making it most essential to get all transport ministers along a certain corridor together. After intergovernmental discussions, terms and commitments from the Member States should be set up. The Transport Commissioner himself should play a more active role in mobilising ministers along individual corridors, in the framework of a coordinated EU level policy action.

1.4 The EESC agrees that advanced capacity reserves should not be mandatory but defined by the infrastructure managers, if such reserves are considered necessary. Forcing infrastructure managers to reserve capacity in advance may result in a waste of capacity rather than optimisation. Infrastructure managers should however retain the possibility to reserve capacity.

The EESC considers that flexibility should be given to infrastructure managers to apply rules of priority in a pragmatic way. Here it is important to ‘minimise overall network delay’, rather than giving priority to one type of traffic over the other. In fact what is needed is that, whatever rules apply, operators get transparency over the rules applied to delayed trains from infrastructure managers.

1.5 All concerned parties should be compulsorily consulted or be part of the governance body of the rail freight corridors: infrastructure managers, railway undertakings, representatives of the Member States, relevant trade unions, customers and environmental organisations. Rail operators should be fully represented in the governance of corridors, because they are closer to the market and as they likely to have to implement improvement decisions or be affected by them.

1.6 The use of the one-stop-shops should not be mandatory for railway undertakings, to allow competitions between various infrastructure entities. The traditional way of requesting a train path via each national infrastructure manager or via one lead-Infrastructure Manager should be kept at least as a fall-back solution in case the one-stop-shop fails.

1.7 Authorised applicants should not be allowed on the whole corridor, if one country on the corridor does not allow them nationally. The Commission needs to study in detail the issues related to the authorised applicants in order to provide the public with a full understanding of the economic and social consequences resulting from this provision. The EESC is not necessarily against the concept of non-discriminatory access to infrastructure, but considers that, in this particular case that more research and consultations with Member States governments, European and national social partners, rail service customers as other concerned civil society organisations are needed.

1.8 Belonging to the TEN-T Network should not be an exclusive criterion for the choice of freight corridors. The corridors should not be defined from the outside, only based on political and geographical criteria: a flexible and market-driven corridors choice should be guaranteed. The selection of corridors should be based on market objectives, covering important existing or potential freight flows. Market and cost/benefits should be the drivers.

1.9 The possibility to extend the selection beyond the TEN-T network should be inserted in the regulation. For example, if a non-TEN-T section is important for rail freight dynamism, possibility should be given to include it from the start in the corridor and later in TEN-T.

1.10 The concept of strategic terminals is anti-competitive. This concept may lead to a reinforcement of the strong position of the so-called strategic terminals to the detriment of the ones considered as ‘non-strategic’. Reference to strategic terminals should be eliminated from the Regulation proposal in order to give a chance to the non-strategic terminals of today to develop and maybe become strategic in the future.

1.11 Any person working on these freight corridors should not be put in a position where the free movement of goods clashes with the exercise of their fundamental rights.

2.1 The European Commission has committed itself to speeding up the creation and organisation of a European rail network for competitive freight that is based on the international rail freight corridors. In order to achieve this goal, the Commission decided to introduce the present proposed Regulation, after an extended process of public consultation and options evaluation through an Impact Assessment (IA) study. The IA showed that a legislative approach would provide the best economic results, as compared to a voluntary approach, that involves a greater risk of not achieving the proposed targets.

2.2 In the Regulation, the provisions are mainly addressed to the relevant economic actors, the infrastructure managers and the railways undertakings, and relate in particular to:

3.1 The optimum development of all means of transport within the Member States by having respect to environmental protection, safety, competition and energy efficiency, is the direction targeted by the European Transport Policy, as specified in COM (2006) 314, the Mid-term review of the European Commission's 2001 Transport White Paper.

3.2 The European Union is strongly committed to reducing greenhouse gas emissions by 20 % by 2020. It will not be possible to achieve this aim if the emissions from the transport sector are not drastically reduced. For this reason it is important to give high priority to the most energy efficient and ‘green’ transport modes, and here, everybody agrees on the fact that rail transport is environmentally friendly in terms of energy consumption and emissions (2).

3.3 The European Economic and Social Committee has already expressed its position regarding the concept of a railway network giving priority to freight (3). In the present opinion, we will not reiterate the general comments which apply also to the Proposal for a Regulation concerning a European rail network for competitive freight.

3.4 The current situation of the freight transport in the European Union requires efficient European and National legislative instruments and political mobilisation for identifying the necessary funds for investments in the rail infrastructure. In this context, the EESC welcomes the Commission’s Proposal for a regulation as a step forward for supporting the setting up of international corridors for rail freight carriage and for the development of this mode of transport in Europe (4).

4.1 Investments in rail freight corridors infrastructure, the terminals and their equipment

4.1.1 In the last decade, progress has been made through European policies towards market opening, but in the Member states limited results have been achieved with regards to the fair competition between transport modes and effective investments in modern interoperable infrastructure.

4.1.2 The financial capacity of the Member States appears to be insufficient compared to the Commission’s ambitious targets. For this reason, the European institutions will have an important role to play in facilitating the deployment of the EU assistance instruments for the development of a European rail network for competitive freight by co-financing the creation of the rail freight corridors through the budget for the Trans-European Transport Networks (TEN-Ts), the European Regional Development Fund and the Cohesion Fund, as well as the EIB loans.

4.1.3 The EESC considers that investment needs (and their financing) should be more clearly underlined in the regulation (5). Between 1970 and 2004, the length of the motorways network in the EU 15 increased by 350 % whereas the length of the railway network decreased by 14 %. When roads are congested, decisions to upgrade or build new road infrastructure are rapidly implemented. The EESC is of the opinion that greater volumes cannot be absorbed by rail if the same investment policy applied to road over the last four decades is not applied also to rail.

4.1.4 In this respect the necessity to finance rail connections of industrial sites to the main rail network should not be neglected. Road connections of industrial zones to the main road network are usually financed out of public budgets. However, in most EU countries, rail connections of industrial sites to the main rail network are usually not treated in the same way. They are generally paid by the company operating the industrial site together with a rail freight operator contracting business with the company. Both European and national investment solutions are needed in order to facilitate rail freight transport (e.g. through instruments such as public funding schemes, as it is already the case in Germany, Austria and Switzerland).

4.1.5 One of the objectives of the Commission is to enforce all the technical and legislative instruments for security of supply with raw materials for the European industries. The railway corridors will bring a strong contribution to achieving this strategic goal, and freight traffic between the European Union and the Eastern Partners is of great importance in this context. To this purpose, it is very important for the EU to invest in order to upgrade the West-East rail infrastructure and the related transhipment facilities. Additionally, the revision of the TEN – Ts will also contribute towards achieving this objective.

4.1.6 Special attention should be given to the Customs Services in order to simplify the procedures inside the EU (6), so as to ensure a rapid cross-border transit of rail freight. European financial support is necessary for anticipating an EDI (7) -based customs obligations system, and for securing the investments in the railways which today do not have automated systems to meet customs obligations.

4.1.7 The EESC considers important having clear state aid guidelines in order to make it easier to showcase which public financial support to the rail sector would be considered favourably by the Commission's services. At the same time, the Committee emphasises that the use of multi-annual contracts could contribute to a sustainable financing of the European rail network.

4.1.8 The concept of ‘strategic terminals’ as presented in Art. 9 of the proposed Regulation, the EESC draws attention that this may lead to a reinforcement of the strong position of the so-called strategic terminals to the detriment of the ones considered as ‘non-strategic’.

4.1.9 Any person working on these freight corridors should not be put in a position where the free movement of goods clashes with the exercise of their fundamental rights.

4.2.1 The revision of the TEN-T policy offers a chance for the rail sector to highlight the importance of further developing flexible long-distance rail freight corridors as a backbone of the EU transport network.

4.2.2 The EESC underlines that corridors should not be exclusively limited to TEN-Ts (as is stipulated in Chapter II, Art. 3, 1.a.) or to today’s ERTMS corridors, as such an approach could exclude lines which are, or may become, important for freight but are not yet in the TEN-T or ERTMS corridors. On the contrary, the TEN-Ts should be adapted when new rail freight corridors are created.

4.2.3 All concerned parties should be compulsorily consulted or be part of the governance body including relevant trade unions, customers and environmental organisations. Railway undertakings should be part of the governance body at the same level as infrastructure managers, as they are the users of corridors, deal with the clients and are the closest to the market. They will be affected by the decisions taken by the governance body and they may also have to carry out some of these decisions. Therefore, it is fair that they be represented in the governance body itself.

4.2.4 Adequate representation of the railway undertakings using the corridor is possible without overloading the governance structure, e.g. as individual companies, as ‘groups of companies’ or as a mixture of both. However, to really be able to contribute to corridor improvement, only those undertakings ‘using the corridor’ are really relevant.

4.3.1 The EESC considers that it is a difficult and sensitive aspect to discuss rules of priority (train path location, capacity booking, priority in case of delays) generally for all freight corridors (Chapter IV, Articles 11, 12, 14). The rules should be formulated in such a way that pragmatic implementation can be taken at the level of each corridor, and that the allocation of paths is realised in the most fair and transparent way by infrastructure managers.

4.3.2 Reserving capacity should not be mandatory but defined by the infrastructure managers, if such reserves are deemed necessary. Forcing infrastructure managers to reserve capacity in advance may result in a waste rather than optimisation of capacity, especially when the certainty of trains running is not established several months in advance.

4.3.3 In the same way, changing priority rules may not be needed and in no way increases capacity. Changing rules of priority will simply transfer frustration from one category of users to another. The overriding rule should anyway be to minimise overall network delay and eliminate congestion in the fastest possible way.

4.3.4 Regarding the provisions from Chapter IV, Art. 10 about the use of the ‘one-stop-shop’, the EESC's opinion is that this should be the choice of each corridor structure, taking into consideration the market requirements, or of those of the railway companies operating on the corridors.

4.3.5 Railway undertakings should retain the freedom to order paths as they wish (through a one-stop-shop or in the traditional way). The optional use of the one-stop-shop gives railway undertakings the opportunity to put different infrastructure entities (i.e. the one-stop-shop and the individual infrastructure managers along the corridor) in competition, giving them incentives to improve.

4.3.6 A compulsory use of the one-stop-shops might lead to the creation of a large infrastructure monopoly on the corridor, without any guarantee that the one-stop-shop will actually deliver better services than individual infrastructure managers. In addition, the ‘one-stop-shop’ traditional way is dysfunctional.

4.3.7 Allowing authorised applicants (e.g. shippers, forwarders, intermodal operators) to buy paths may deter railways companies (especially ‘new entrant ones’) from investing in drivers and locomotives, due to the high risk incurred on path availability. This could distort competition on domestic markets to the detriment of railway undertakings and the quality of jobs provided by these companies. Prices could increase, the capacities available would remain limited and speculation could develop.

4.3.8 However, in the European Union of today, it is a fact that companies other than railways undertakings (i.e. logistics services, traders, manufacturers) have a strong interest in increasing their use of rail (8). Some European railway undertakings have already bought logistic services companies in their attempt to attract onto rail freight which up to now was transported by road. In these conditions, it is possible that in the near future, through a socially responsible and innovative approach, the authorised applicants will play a significant role in the development of rail freight corridors.

Brussels, 15 July 2009.

The President of the European Economic and Social Committee

Mario SEPI

(2) Approximately 80 % of the railway traffic in Europe travels over electrified lines.

(4) The need for efficient legislative instruments, political mobilisation and investments has been once again emphasized at the Hearing on ‘A European rail network for competitive freight’ organised by the EESC on 28.4.2009, in Brno, Czech Republic, under the Czech Presidency of the European Union.

(5) According to a Community of European railways (CER) study on the rail freight corridors carried out by the consultancy firm McKinsey investments of EUR 145 billion by 2020 could increase the capacity of rail transport by 72 % on 6 major ERTMS –based rail freight corridors, representing 34 % of the volumes transported in Europe.

(6) In this way it is important to have at EU level, an effective implementation of Commission Regulation (EC) No 1875/2006 establishing the Community Customs Code.