Download on the proposals

IRG-Rail Position Paper
on the Council’s general approach
on the proposals for a Fourth Railway Package
- with a strong focus on the role of the
regulatory bodies
Legislative Proposals Working Group
IRG Rail plenary - 11-12 November 2015
Dr. Kristin Hentschel, BNetzA
Table of contents
1. Background and Developments
2. „General Approach“ : Main Elements
– proposal for a directive amending Directive
2012/34/EU - „Governance Proposal“
– proposal amending Regulation 1370/2007 „PSO
proposal“
3. IRG-Rail position
4. Next steps
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Background
19 Feb 2013 – Presentation of COM‘s proposal by Siim Kallas
• technical pillar (safety/interoperability/ERA) – early agreement
• political pillar (liberalisation/structural reform) proposal modification of
Directive 2012/34/EU („Governance Proposal“) and of Regulation 1370/2007
(„PSO proposal“, incl. rolling stock) – on-going negotiations
26 Feb 2014 : EP Plenary First Reading
2014- 2015: Various Council Proposals under Latvian and LUX presidency
12 Oct 2015: Council reaches „General approach“ on the proposals;
Trilogue envisaged 29/10, 12/11, 15/12/2015
IRG-Rail has provided position papers for all relevant steps of the
negotiations
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Developments
• Extensive watering down of proposals in the course of
the negotiations
Governance: concerning independence of the infrastructure manager (IM), narrowed
scope, deletion/weakening of independence requirements/chinese walls,
deletion/weakening of requirements for financial transparency, further exemptions
PSO: extended timescales for implementation/postponing competitive tendering;
introducing additional exemptions for direct award; no action on rolling stock
• Deletion and weakening of requirements = limited basis
for regulatory bodies to „do their job“ :
• Limited scope for regulatory action.
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Main elements “General approach”
– Governance I.
• Independence of Infrastructure Manager: Fewer
requirements to ensure independence of the infrastructure manager
(IM) in the exercise of ist functions
• Scope limited to „essential functions“ (e.g. maintenance and
traffic management not covered)
• Significant number of independence requirements
removed or substantially weakened (e.g. prohibition of double
mandates (IM- other legal entities) limited to very few cases; no
cooling on/cooling off periods; no longer obligation to keep separate
premises and information services)
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Main elements – Governance II.
Financial Transparency
• Few requirements to ensure financial transparency within vertically
integrated structures compared to original proposal
• Clear financial separation no longer ensured (new wording only
refers to „separate accounting and transparent financial circuits“;
possibility for holding to manage loans of IM; wording leaves room
for loopholes; very difficult for regulators to check)
• Proposal no longer refers to „market“ prices and „efficient“ costs of
production but now refers to either market prices or „cost of
production plus a reasonable margin of profit“ with regard to services
offered in a vertically integrated undertaking to the IM.
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Main elements - Governance III.
Exemptions, binational infrastructure, terminology
• Additional exemptions narrowing overall scope of the framework
(exemptions for dedicated infrastructure such as regional low traffic,
private infrastructure managers) – also exclusion of Public Private
Partnership structures
• New provision regarding the regulation of bi-national infrastructure
which allows MS to require regulatory bodies to coordinate their
decisions and align the impact of these decisions
• Question marks concerning terminology (e.g. financial benefits and
bonuses principally related to the financial performance of particular
railway undertakings)
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Main elements - Governance IV.
Regulatory oversight
• Regulatory bodies responsible for monitoring of compliance, this
includes monitoring the financial flows, loans and debts
• Reference to “monitoring powers” rather than additional powers and
more detailed provisions allowing regulatory bodies to check
accounting separation and financial circuits, to ask for the necessary
information from all parties and, where necessary, to apply remedies
to enforce their decisions
• Overall - weakened role of regulatory bodies due to fewer
requirements and conditions compared to the original proposal(s)
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Main elements – Market opening, PSOs
• Market opening Concerning market opening of domestic
passenger services: extended timescales for implementation
• Principle of competitive tendering of PSOs introduced as a
general rule, however,
– Extended timescales/postponing competitive tendering obligations
– extended exemptions for direct award; broad range of options for direct award
at the discretion of competent authorities leaving room for abuse (e.g.„new
temporary derogation in exeptional circumstances“)
– Removal of an independent body’s regulatory oversight and validation of the
competent authorities’ decisions to grant direct awards.
• Rolling stock: Initiative to facilitate access to rolling stock
disappeared
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IRG-Rail Position - General
IRG- Rail points out that market opening can only be
successful and regulatory bodies can only successfully
contribute to the overall objectives if key framework
conditions are in place, notably
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ensuring independence of IM
appropriate Chinese Walls
a high level of transparency, including financial transparency
competitive tendering
requirements concerning rolling stock
appropriate tasks, resources and competences of RBs.
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IRG-Rail Position - Governance
IRG- Rail
• stresses once more that regulatory oversight is crucial for
compliance
• welcomes RBs powers of oversight which have been extended in the
general approach compared to previous compromise proposals
• reiterates that, instead of “monitoring powers”, additional powers
and more detailed provisions should be in place: allowing RBs to
check accounting separation and financial circuits, ask for the
necessary information from all parties and, where necessary, apply
remedies to enforce their decisions.
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IRG-Rail Position - PSO proposal
IRG-Rail fully supports full market opening and mandatory
competitive tendering as a general rule for the award of public service
contracts, and regrets the addition of further derogations and
provisions allowing direct award of such contracts. IRG Rail stresses:
• appropriate supervision by an independent body is key in order to prevent
protectionist behaviours, to avoid limiting effective competition and delaying
market opening. A competent, powerful, independent supervisory authority with
appropriate resources and regulatory instruments needs to be involved in any
direct award procedure to ensure a transparent and non-discriminatory
procedure.
• legislation should include clearly defined options allowing the independent body
to challenge any decisions and to apply corrective mechanisms and sanctions
(e.g. fine; obligation to stop the direct award and enter into competitive tendering)
• rolling stock – action required.
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Next Steps
IRG-Rail will continue to give its input to the on-going
negotiation process, notably with regard to the Trilogue
Close co-operation with the European Parliament is a
crucial next step at this point in time.
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Thank you for your attention!
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