EPTO Position Paper

on the proposal by the European Commission for a revision of the Community Guidelines on State aid for railway undertakings

14 March 2022

EPTO welcomes the opportunity to comment on the European Commission’s proposals to revise the guidelines on State aid for railway undertakings.  EPTO has reviewed the Inception Impact Assessment and considered the content of the questionnaire survey.  In consequence, given the detailed legal implications of many of the questions in the latter, and the clear discrepancy between freight and passenger transport issues, this paper sets out the EPTO position and the questionnaire has not been completed.

EPTO is committed to the principles of both fair, transparent and non-discriminatory competition for contracts to operate public transport services, and of liberalised markets with open access and commercial opportunities.  Each of these approaches needs to have clearly defined rules governing its operation.

Whilst welcoming many of the principles set out in the proposals, EPTO has some reservations regarding other areas and at this point is not offering comment on the detailed legal/technical issues.. 

In the Inception Impact Assessment, EPTO notes the principles set out under the definition of the problem that the initiative is to resolve. These are agreed by EPTO, in particular the need to make market opening easier, to ensure that opportunities are not biased towards incumbents through lack of access to essential resources ,and that there must be effective and efficient State aid control within a framework that helps the rail sector increase its competitiveness through fair competition.  EPTO also notes the emphasis on freight rather than passenger transport.

EPTO understands the Commission’s intention to revise the current rules set by the guidelines to adapt them to regulatory and market developments. However, EPTO would welcome clarity on proposals to introduce new rules and the opportunity to comment on concrete proposed changes drafted by the Commission.

Much of the issue at hand is about intermodal transport.  EPTO welcomes assistance for the sector  – financial or through policy imperatives – that strengthen the case for and ease the implementation of interchange facilities, particularly between heavy rail and bus/tram/light rail for continuation of journeys in urban/suburban areas.  This can help with the objectives of modal shift away from private car, thereby strengthening not only the environmental impact but also making transport more open to all in society and improving the overall efficiency of the transport network by maximising the efficient utilisation of limited network capacity.  The practical proposal of a Block Exemption for State aid for coordination of transport in this manner could have significant benefits in the field of passenger transport, not just related to freight.

Turning to the questionnaire, EPTO considers that it is important to draw a clear distinction between freight and passenger transport.  The initial questions and preamble are based on a presumption in favour of rail rather than road transport.  Whilst there is a strong case for this to apply in the rail freight sector, it certainly ought not to apply across all passenger transport markets.  Electric and hydrogen fuelled buses, trams, light rail and bus rapid transit are all clean, green and efficient modes of local public transport even where they are road based and should not be treated any differently than heavy rail. Their external costs are in many cases likely to be lower than for rail and they should certainly not be treated any less favourably.

However, it is important to recognise that in practice to ensure that heavy rail capacity is maintained for passenger transport services in the light of the proposed increased emphasis on its use for freight.  Freight trains can often absorb the capacity required for several passenger services and, particularly in urban areas, this could have unintended adverse consequences unless capacity is increased, or there is a switch in emphasis to clean and efficient road based public transport for passenger use to complement the intensification of freight by rail.

Finally, to comment briefly on some of the other issues raised in the questionnaire, EPTO believes that fair transparent and non-discriminatory criteria must apply to all instances where State aid is available.  Market distortions not only reduce the opportunity for market entry but reduce the overall efficiency of the transport network.  Improved intermodal facilities and rail based facilities for maintenance and fuelling should be made available to all operators in the market; they should also be made available to both freight and passenger service operators so that the overall transport network efficiency can be maximised.  The same should apply to access to rolling stock, as much to passenger as to freight.  Considering compensation provisions EPTO believes that the Member States should remain the arbiter of such measures and no further rules are required, provided that they are applied to all operators on a fair transparent and non-discriminatory manner, including the calculation and payment of reimbursement to operators.