10 Freight transport
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17324/08
+ ADD 6
COM(08) 852
| Draft Regulation concerning a European rail network for competitive freight
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| Legal base | Article 71(1) EC; co-decision; QMV
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| Document originated | 11 December 2008
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| Department | Transport |
| Basis of consideration | SEM of 29 May 2009
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| Previous Committee Report | HC 19-vi (2008-09), chapter 1 (4 February 2009)
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| To be discussed in Council | 11 June 2009
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
10.1 In October 2007 the Commission published a Communication
Towards a rail network giving priority to freight, as part
of a "freight package". The package was debated in European
Committee in February 2008.[34]
10.2 This draft Regulation is concerned with the
selection of trans-European routes to be designated as international
rail freight corridors and their governance. It provides for:
- Member States to select routes
for designation as such corridors;
- all Member States to participate in at least
one, two or three international rail freight corridors (dependant
on the volume of the Member State's annual rail freight tonnage)
at the latest three years after entry into force of the Regulation;
- criteria for the selection of such corridors,
which includes that corridors should be part of the Trans-European
Transport Network;
- infrastructure managers of Member States along
corridors to form themselves into a governance body, with independent
legal status, to have a steering role in relation to the implementation,
investment planning and organisation of the corridor;
- the governance body to set up a "one-stop
shop" to provide a single point at which applicants can request
train paths along its freight corridor;
- the introduction of at least two categories of
freight traffic for each corridor, one of which must be "priority
freight" for goods requiring efficient transport time and
guaranteed punctuality;
- train paths allocated to priority freight not
to be cancelled, reallocated or modified with less than three
months notice without the consent of the path holder, except in
cases of force majeure; and
- the Commission, assisted by a comitology[35]
committee, to decide on Member States' applications for a derogation
from the provisions of the Regulation.
10.3 When we considered the draft Regulation, in
February 2009, we noted that, although enhancing freight transport
by rail might be a laudable objective, the Government's preliminary
comments showed that the proposal might need significant amendment.
So before considering the matter further we awaited a promised
fuller evaluation and impact assessment and the outcome of a proposed
consultation with stakeholders. Meanwhile the document remained
under scrutiny.[36]
The Supplementary Explanatory Memorandum
10.4 The Minister of State, Department for Transport
(Lord Adonis), now tells us about the Government's public consultation
on the proposal, progress of negotiations in the Council Working
Group, the outcome of the European Parliament's First Reading
of the proposal and the Government's impact assessment. The Minister
says that the public consultation was launched on 19 February
2009 and closed on 2 April 2009 — a reduced timescale was
necessary to deliver responses which could be taken into account
in the Working Group negotiations. A summary of the responses
and the Government's views on them is attached to the Minister's
Supplementary Explanatory Memorandum[37]
and is published on the Department for Transport's website.[38]
The Minister comments that:
- responses to the consultation
were mixed;
- while the freight lobby on the whole welcomed
the proposals, passenger representatives were concerned that the
draft Regulation's concept of 'priority freight' as applied to
capacity allocation and traffic management situations would be
detrimental to the interests of passenger services in the UK;
- Network Rail expressed concerns that the absolute
application of 'priority freight' would deprive it of the required
operational flexibility to restore the entire network to normal
operation in cases of disruption;
- the Office of Rail Regulation generally supported
the Commission's aim to improve the quality of rail freight transport,
ensure it has sufficient capacity and promote fair competition
in the provision of all rail services; and
- it had, however, serious concerns about the lack
of clarity in several areas of the proposed Regulation, including
governance, 'priority freight', and traffic management.
10.5 Turning to the Council Working Group discussions
the Minister tells us that these have progressed rapidly since
his earlier Explanatory Memorandum (of 26 January 2009) with eleven
meetings, during which considerable changes have been introduced.
The main changes are, in relation to:
the scope of the proposal
- while the text does not specifically
exclude domestic services, essential provisions, notably on capacity
allocation for the use of freight corridors, are now on the whole
limited to international freight services;
establishing freight corridors
- the original proposal has been
replaced by a two-stage approach;
- a number of specific international corridors,
listed in an Annex to the Regulation, would be established within
three years after entry into force of the Regulation;
- these corridors would be based on the deployment
plan for the European Rail Traffic Management System[39]
or on currently existing corridors used by RailNetEurope, a voluntary
combination of European infrastructure managers; [40]
- a second wave of corridors would then be established
by Member States submitting joint corridor proposals, at the latest
two years after entry into force of the Regulation;
- the Commission would vet these applications against
agreed criteria within nine months, after which the Member States
concerned would have three years to make these corridors fully
operational;
- the total time horizon for this second wave of
corridor establishment is up to five years and nine months after
entry into force of the Regulation.
governance
- the provision for establishing
governance bodies for freight corridors has been removed;
- instead, each freight corridor would establish
an executive board responsible for the general objectives of the
corridor, made up of representatives of the Member States concerned,
and a management board responsible for operating and developing
the corridor, consisting of the infrastructure managers concerned;
- both bodies would take decisions on the basis
of mutual consent, that is unanimity;
- essential decisions by the management board,
such as the implementation plan and the investment plan for the
corridor, would have to be approved by the executive board;
priority freight
- the provision for at least
two categories of freight traffic for each corridor, one of which
to be 'priority freight' for goods requiring efficient transport
time and guaranteed punctuality, has been removed;
capacity allocation
- procedures dealing with capacity
allocation for freight trains now have an express obligation to
take into account the need for capacity of other types of transport
on the corridor, in particular passenger transport; and
traffic management
- the provision for absolute
priority for freight in the event of disturbance to traffic on
the freight corridor has been removed and replaced with provisions
which take both freight and passenger needs into account, by aiming
to minimise the overall network recovery time in the event of
disruption.
10.6 The Minister also tells us about completion
of the European Parliament's First Reading on 23 April 2009 and
summarises the key changes to the original proposal:
establishing freight corridors
- simplification of the corridor
creation process applicable to Member States with fewer than two
direct rail inks with other Member States;
- the number of required freight corridors, up
to three in the Commission's proposal, would no longer be subject
to the Member State's annual rail freight performance, but has
been limited to one per Member State;
governance
- retention of the Commission's
approach to governance by infrastructure managers along the corridor
in the form of a governance body;
- but addition of an option for Member States to
create an executive board with Member State representatives authorising
the governance body's implementation plan and supervising its
execution;
priority freight
- replacement of the concept
of 'priority freight' with 'facilitated freight';
- while this new category of train path is characterised
by an efficient transport time and guaranteed punctuality, the
substitution clearly signals that freight trains on the corridor
would not have an absolute priority over other types of traffic
in the corridor;
capacity allocation
- introduction of a fee for paths
that have been allocated but ultimately not used, to prevent scarce
capacity being wasted; and
traffic management
- instead of a provision that
allocated paths for 'priority freight trains' could only be cancelled
with the holder's consent, paths for 'facilitated freight trains'
would need to be "respected as far as possible" in the
event of disturbance.
10.7 The Minister then comments generally on the
developments in the drafting of the proposed Regulation, saying
that:
- the responses received to the
public consultation helped determine the Government's position
in the negotiations and there have been significant changes to
the proposal which deal satisfactorily with most of the expressed
concerns;
- overall, the Government believes that the negotiated
changes address all the UK's key concerns with the Commission's
original proposal; and
- the Government will continue to work to ensure
that the draft Regulation does deliver the expected improved quality
of international rail freight services, in order for rail freight
to become a more competitive alternative to other freight transport
modes, in particular road.
10.8 The Minister continues with more detailed comment
on various revisions to the text, saying that:
- the Government supports the
Council Working Group's introduction of a two-tier governance
structure which is more transparent and clearer than the Commission's
original proposal — the relationship between management
board (infrastructure managers) and executive board (Member States)
is well defined;
- most importantly, because decision-making in
both bodies is on the basis of unanimity, it allays the Government's
fears that executive powers over national infrastructure could
otherwise have been vested in supranational bodies, an unacceptable
concept;
- the Government considers that the negotiated
changes strike a workable balance between the interests of freight
and passenger services on the freight corridor — because
the concept of 'priority freight' has been removed, the procedures
dealing with allocation of planned and ad hoc capacity
for freight trains must take into account the need for capacity
of other types of transport on the corridor, in particular passenger
transport, and the absolute priority for freight trains in the
case of traffic disturbance on the corridor, which would have
resulted in the recovery time of the entire network being significantly
increased, has been removed and substituted with traffic management
provisions which aim at minimising the overall network recovery
time;
- the Government was concerned that, if the scope
of the Regulation were to cover domestic freight traffic using
the designated corridor, this could lead to significant operational
complexities and confusion by creating three different regimes,
each with differing rules depending on whether the service concerned
was an international freight service remaining on the freight
corridor throughout its journey, a domestic freight service using
the freight corridor only for part of its journey, or a domestic
freight service not making use of the corridor;
- the negotiated changes do not specifically exclude
domestic services from the scope of the draft Regulation —
however, the Government is content that essential provisions of
the draft Regulation, notably on capacity allocation for the use
of freight corridors, are now on the whole limited to international
freight services and therefore do not have the feared negative
impact;
- the Government welcomes that the deadlines for
establishing corridors are now more realistic and manageable —
the UK is likely to participate in the second wave of corridor
creation with such a corridor, the timescale for which would fit
better with the next five-year planning and control period beginning
in 2014; and
- the Government is content that the negotiated
changes to the proposed Regulation are consistent with the Trans-European
Transport Network.
10.9 The Minister also comments on the European Parliament's
amendments, saying that many of them are intended to achieve a
similar effect to the changes introduced by the Council Working
Group; that, however, they have not yet been discussed by the
Council Working Group; and that if any of them were to be included
in the Czech Presidency's proposed political agreement at the
Transport Council of 11 June 2009 the Government will seek to
ensure that they are acceptable for the UK.
10.10 The Minister sends us the Government's impact
assessment, based on the negotiated changes to the draft Regulation.[41]
He comments that:
- the costs of the proposed legislation
are difficult to quantify, but are likely to be relatively small;
- they will be comprised mainly of administration
costs from setting up and running executive and management boards
for the freight corridor(s) and creating and running a one-stop
shop for applicants to request international freight train paths;
- the Commission's impact assessment suggested
annual costs of €0.5 million (£0.45 million) per corridor,
but research carried out for the Government by ITS Leeds concluded
that these would be likely to be less in the UK — some of
what would be required by the proposed legislation already takes
place in the UK, for example through Route Utilisation Strategies;
- some small costs would be involved in consulting
with Community partners and stakeholders such as terminal operators
or managers;
- increased cooperation between infrastructure
managers and the creation of a one-stop shop to request international
freight paths should make it easier for Freight Operating Companies
to obtain good quality freight paths;
- such companies would also benefit from increased
certainty — paths could not be cancelled without their consent
less than one month ahead, except in the case of force majeure
and as far as possible, in the event of disturbance in the corridor,
paths could not be modified. This should result in improved reliability
and reduced cost for rail freight and some modal shift for freight
from road to rail (leading to general environmental, carbon reduction
and road decongestion benefits);
- however, the institutional and operational arrangements
in the UK are already similar to those proposed in the draft legislation
— so the effect of this modal shift is likely to be limited
to international rail freight and its magnitude, potentially of
a material order, will be dependent on the resultant increase
of international rail freight traffic, which is difficult to quantify
at this stage;
- the proposed legislation has annual costs of
less than £0.5 million and offers potential environmental
and road decongestion benefits from potential modal shift of international
freight from road to rail — however, with the available
evidence the benefits cannot be quantified currently and therefore
the value for money of the proposed legislation is uncertain;
and
- the proposed legislation will not directly or
indirectly limit the number of competitors in the rail freight
market, nor will it reduce firms' incentives or ability to compete
vigorously.
Conclusion
10.11 We are grateful for this full account of
where matters stand on this draft Regulation and of the Government's
view of the negotiated text. We note the improvements that have
been secured and, having no further questions to ask, clear the
document.
34 (29039) 14277/07 + ADDs 1-2 (29017) 14165/07 + ADD
3 (29019) 14175/07 ADDs 1-2 (29035) 14266/07 + ADDs 1-2; see HC
16-iv (2007-08), chapters 4,5,6 and 7 (28 November 2007) and Stg
Co Deb, European Committee, 4 February 2008, cols. 3-28. Back
35
Comitology is the system of committees which oversees the exercise
by the Commission of legislative powers delegated to it by the
Council and the European Parliament. Comitology committees are
made up of representatives of the Member States and chaired by
the Commission. There are three types of procedure (advisory,
management and regulatory), an important difference between
which is the degree of involvement and power of Member States'
representatives. So-called "Regulatory with Scrutiny",
introduced in July 2006, gives a scrutiny role to the European
Parliament in most applications of comitology. Back
36
See headnote. Back
37
Explanatory Memoranda can be seen on a Cabinet Office website:
http://europeanmemorandum.cabinetoffice.gov.uk/. Back
38
See http://www.dft.gov.uk/consultations/closed/competitivefreight/consultationresponse1.pdf.
Back
39
See http://www.ertms.com/. Back
40
See http://www.railneteurope.com/cont/index.aspx. Back
41
See http://www.dft.gov.uk/consultations/closed/competitivefreight/impactassessment.pdf.
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