The liberalisation of the domestic passenger transport market in the European Union has been debated for a long period of time. Passengers should benefit from more options, more comfort, improved safety, reduced tariffs. Infrastructure managers should benefit from more customers, more routes, increased revenues, while operators should have more passengers, more routes, the possibility of operating in any European market etc. Also, the industry suppliers should have more demands, multi-annual contracts, varied services etc.
In simpler words, this is what should happen if the domestic railway passenger transport is also liberalised. But for now, the authorities compete to get derogations, operators demand guarantees that it would not affect their market position and, almost across the entire Europe, infrastructure managers want to postpone the process because the improper condition of the infrastructure affects passengers’ safety.
According to new amendments to the law proposal of liberalising the domestic railway passenger transport services, European Union member states will have to take all necessary measures in conformity with the norms on state aids, to make sure that the operators who want to supply public railway passenger transport services within public service obligations have conditions of effective and non-discriminating access to appropriate railway passenger transport rolling stock.
By amending the regulation dealing with public service obligations in public transport by road and by rail, the Commission aims to introduce mandatory tendering of public service contracts as of December 2019. The scope of those contracts and the underlying public service obligations are to be defined in compliance with criteria based on general treaty principles. To avoid excessive geographic scope of contracts being used to foreclose markets, the Commission proposes a flexible definition of maximum contract volume. A minimum threshold below which contracts may be awarded directly will enable competent authorities to avoid organising a tendering procedure, if the expected savings of public funds would not exceed the costs of tender. Contracts directly awarded after the adoption of this legislative package will not be able to continue beyond 31 December 2022.
There are a number of obstacles to improving railway companies’ quality of service and operational efficiency. These relate first of all to access to the market for domestic passenger services and the lack of competitive pressure. In many member states this market is closed to competition, which not only limits growth, but creates disparities between those member states that have opened their markets and those that have not. Different national approaches to opening of the market for domestic passenger transport services by rail prevent the emergence of a genuine internal market for rail passenger services.
However, the overwhelming majority of domestic passenger services is not provided on a commercial basis, and is therefore performed under public service contracts. Given that no common EU rules on the award of such contracts apply, some Member States have introduced competitive tendering for these contracts, while others award them directly. This patchwork of regulatory systems in the EU makes it difficult for railway companies to exploit the full potential of operating in an internal market. Therefore, this legislative package also covers competition for public service contracts, barriers to competition such as the availability of suitable rolling stock for potential bidders for such contracts, and non-discriminatory access to information systems and integrated ticketing systems where they benefit the passenger.
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