European Council agrees a position bringing 4th railway package one step closer

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The European Council today (8 October 2015) agreed on two proposals to liberalise domestic rail passenger services and strengthen the governance of railway infrastructure, which together form part of the so-called market (or political) pillar of the fourth railway package.

The proposals will allow train companies non-discriminatory access to rail networks in all EU countries to run domestic passenger services, either in open access or by bidding for PSO (Public Service Obligation) contracts.

The Council agreed that competitive tendering should be the main rule for awarding public service contracts, although certain exceptions – regarding small markets or to ensure ‘the long-term continuity’ of public rail transport services - will enable PSO contracts to be awarded directly.

The deadlines in the European Council’s position mean that the direct award of PSO contracts without justification will still be possible for 10 years after the regulation enters into force. Existing, directly awarded public service contracts would be allowed to run until they expire.

The European Council also explained that Member States' organisational structures are already ‘largely compatible’ with the objectives of the 4th railway package, although the Council insists that ‘potentially problematic’ issues, such as the risks of conflicts of interests or transfers of funds between infrastructure managers and railway companies, will be looked at.

Flexibility has been introduced in the way in which the infrastructure managers operate, allowing train path allocation and infrastructure charging to be carried out by an independent body or even to outsource certain functions.

Member states would have three years to adapt their national provisions, with key rules, such as those relating to infrastructure managers' independence or financial transparency, would have to be in place by the end of this transition period. Others, including non-discriminatory access to infrastructure, would apply from 2020.

The Council position allows the presidency to start negotiations with the European Parliament and both must now approve the proposals before they can become law.

UITP will continue to monitor this dossier very closely and in the coming weeks will issue its own reaction to the agreement made today in the Council.

Read the European Council’s press release.

On 3 December 2015, UITP will be holding a conference on ‘Public service contracts for rail and road passenger services: where do we stand?’

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