Written evidence from the Department for Transport (EU20)

HUNGARIAN PRESIDENCY 2011 – FORWARD LOOK

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I thought that your Committee might find it helpful to have a general update on the EU transport proposals that are likely to be taken forward during the next six months, including Hungary’s plans for their Presidency. 

Main events

The broad transport themes of the Presidency are sustainability, safety and integration.  There will be two formal Transport Councils during the Hungarian Presidency. The first one will be in Brussels on 31 March and the second will be in Luxembourg on 16 June.

An Informal meeting of transport ministers will be held outside Budapest on 7-8 February with a focus on the review of the Trans European Network for Transport (TEN-T) and the associated legislative proposal expected in the summer.   I attach a copy of the UK response to the recent Commission Consultation on the future Trans-European Network (TEN-T) Policy, which may be of interest to your Committee.

Other dates:

· The Hungarian Transport Minister will appear before the European Parliament on 25 January and 12 July.

· A high level conference will take place in Budapest in March or April on NAIADES – the Navigation and Inland Waterway Action and Development in Europe multi-annual action programme. Discussion will focus on the future of the programme and the promotion of inland waterways.

· A high level conference on Air Traffic Management, held in Budapest on 3-4 March, which will cover the implementation of SES II and establishment of Functional Airspace Blocks.

The work programme

Aviation

The Hungarians are not expecting a significant amount of work on Aviation, with elements of the Airports Package (possible revisions to the slots regulation and ground handling directive) expected to appear later during the Polish and Danish Presidencies.  Nevertheless, we expect to see a communication preparing the deployment strategy for SESAR (Single European Sky ATM Research) which will be accompanied by Council Conclusions, and a proposal under Comitology on Security Scanners.  There appears to be no interest in resuming negotiations on the proposed Aviation Security Charges Directive and we do not expect to see anything on the revision of Regulation 261 (Air Passenger Rights) until 2012.  There may be further work on reviewing cargo security requirements after the October incidents, with a possibility of a Commission report at the June Transport Council.

On external aviation relations we can expect discussions on Brazil, Moldova, Israel, Lebanon, Ukraine, cabotage issues with Switzerland and SESAR/NEXTGEN interoperability. 

Volcanic activity on Iceland has the potential to demand considerable focus and engagement at short notice.

Horizontal

On Galileo, the focus of work will be the proposed Decision on the use of the Public Regulated Service (PRS) and the forthcoming Mid Term Review (MTR).  While progress was made under the Belgian Presidency on the PRS decision (EM 14701/10), the proposal does not deal adequately with questions of funding, nor does it sufficiently describe the role to be performed by Member States’ Competent PRS Authorities.  The European Parliament is currently scheduled to hold its first reading of the proposal in June.  The Commission has just published its Mid Term Review of the Galileo programme; an Explanatory Memorandum on the Mid-Term review will be provided to the Scrutiny Committees and deposited in the House library shortly.

The Presidency is not expecting the Transport White Paper to be published until February or March 2011 at the earliest. We expect a political debate on it at the June Council, perhaps followed by Conclusions.  Ministers will be asked for written contributions ahead of the debate. 

Land Transport

The Hungarians plan to work vigorously on the proposed Recast of the 1st Rail Package (EM 13789/10), which aims to address the fact that the First Railway Package has not achieved its declared objective of market opening.  They have indicated that on average they will devote at least one Working Group per week to this dossier for the duration of their Presidency.  They are hopeful that a General Approach can be reached at the June Council but are mindful that positions are diverse and discussions thus far have been somewhat protracted.  Nevertheless, they plan to continue work along the three thematic strands established by the Belgian Presidency - financing and charging of railway infrastructure, improvement of market access and monitoring and supervision of legal framework.  The European Parliament’s first reading is currently scheduled for June 2011.

We agree with the Commission that the Package has not achieved its declared objective of market opening, and support the Commission's overall aim of clarifying and strengthening the regulatory framework for market access. In particular, we endorse the need to ensure adequately resourced and properly independent regulatory bodies in order to facilitate market entry and competition. We believe that the Commission should focus on ensuring that Member States implement exiting legislation correctly before it proposes new measures. However, we do note that it is pursuing infringement action against those Member States that have not correctly implemented the First Railway Package. 

The Presidency plans to send the Council’s common position on the proposed Eurovignette Directive on charging of heavy goods vehicles (EM 11857/08) to the European Parliament in February 2011, with a view to reaching a second reading deal by June. The Presidency have already started informal discussions with the rapporteur and have highlighted the EP’s main issues, which include support for "earmarking" (hypothecation) of revenues from any charges that member states may introduce and the requirement that vehicles under 12 tonnes should always be included in any charging schemes. Our top priority will be to protect the gains made during the Council’s first reading.  This means making the case against hypothecation, as it goes against subsidiarity, and resisting charging vehicles below 12 tonnes because very few such vehicles are engaged in international trade, meaning there is no international competition issue and charging such vehicles in the UK would introduce unnecessary cost for no gain.  This is in the context of our own emerging plans for lorry road user charging.

The Presidency are aware of the UK’s opt-in rights engaged by the proposed Cross Border Enforcement Directive in the field of road safety (EM 7984/08 and 2010 Unnumbered EM) which aims to increase enforcement of certain road traffic offences between different Member States (MS), by facilitating the exchange of vehicle keeper information.  The Presidency will not agree the Council’s first reading position until the March Council to enable appropriate UK Parliamentary scrutiny to take place.  They will hold some working groups early in the Presidency to look at issues such as the EUCHARIS system, as well as studying some of the EP amendments. They hope for a second reading deal in the second half of their Presidency.  A debate has been arranged on this proposal in European Standing Committee A on 25 January; Mike Penning will speak for the Government.

The Presidency may pick up work on the Interbus Agreement on the international occasional carriage of passengers by coach and bus in January following the publication of the Commission proposal to extend the scope to regular transport with third countries. As this is not a priority for Hungary they will see if there is enthusiasm among Member States before deciding whether to take it forward.

Although proposals are expected in 2011 from the Commission on the Digital Tachograph and Roadworthiness Testing, the Presidency do not expect to start discussions on these dossiers during their tenure.

Shipping and Inland Waterways

The Hungarians will ask Belgian officials to chair the Shipping working group (including IMO experts) and the Friends of the Presidency meetings. Hungary will chair working groups on Inland Waterways.

There will be weekly working group meetings to continue discussions on the proposal to amend the Regulation establishing a European Maritime Safety Agency (EMSA) to clarify the existing tasks and roles of the Agency and extend those tasks to new areas (EM 15717/10).  The Presidency hopes that it will be possible to reach a General Approach or Political Agreement at the March Council. This seems optimistic given the slow pace of discussions to date and strong views that many Member States, including the UK, expressed at the December Transport Council on issues such as budgetary implications.  The European Parliament first reading is currently scheduled for July.

The Presidency will hold some discussions in January on the proposed Decision on EU accession to the 2002 Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 (EM 17511/10), which introduces compulsory insurance to cover passengers on ships and raises the limits of liability . They hope that agreement on the Decision can be reached at the March Council.

Following the high level conference on the NAIADES programme in Bucharest in Spring 2011, the Presidency will prepare Council Conclusions for adoption at the June Council on a forthcoming Commission progress report.

Other work will include: IMO preparation and the proposal to financially underpin the Programme to support the further development of an Integrated Maritime Policy (EM 14284/10), both of which will continue to be chaired by Belgium. The Presidency are keen to pick up work on the revision of the Marine Equipment Directive and the proposal on Boatmasters’ Certificates, both of which are expected to be published in the Spring.

Work in other Council formations:

Technical Harmonisation

Vehicle standards and related work is handled under the Competitiveness Council.  There are three live dossiers at the moment.   

The Hungarian Presidency will continue work started under the Belgian Presidency on Tractors, the proposed Regulation on the approval of agricultural or forestry vehicles (EM 12604/10).  This will continue to be discussed in detail in the Council’s Technical Harmonisation Working Group. It is possible that the Council will be able to reach a General Approach under the Hungarian Presidency, or that the Parliament, currently scheduled to complete its first reading in September 2011, will signal that it is willing to work on a first reading deal and negotiations will start towards that end. Also on Tractors, the flexibility scheme proposal (EM 15935/10) will continue its progress but is likely to move more slowly and be less controversial than the main Tractors Regulation. The third technical harmonisation dossier concerns Motorcycles (EM 14622/10) ‘Regulation on the approval and market surveillance of two- or three-wheel vehicles and quadricycles’).  Negotiations will continue on this proposal, but a General Approach or negotiations with the Parliament are less likely to take place under the Hungarian Presidency. 

Environment Council dossiers

A first reading agreement on the proposed Regulation to reduce CO2 emissions from new vans (EM 15317/09) is expected to be confirmed by the European Parliament plenary in February. Linked to the proposal on the flexibility scheme for tractors, is a similar proposal to extend the flexibility scheme for non-road mobile machinery (EM 12171/10).  In recognition of the current economic difficulties facing manufacturers, this proposal is intended to ease the burden upon them that will result from the stricter "Stage IIIB" emissions stage, contained in Directive 2004/26/EC, which comes into effect from 2011.  This is of interest to the UK, in particular given the proposed extension of the scheme to the rail sector. This has been briefly discussed under the Belgian Presidency and, now that the European Parliament has appointed a rapporteur, speedy progress may be made towards finding a first reading agreement.  The question of biofuels also remains. The Commission consultation on indirect land use change has recently closed and we are awaiting the Commission’s next steps. And the focus on energy at the February European Council may mean a renewed political interest in the EU’s biofuels policy.

I hope that this general summary of our expectations is useful and I look forward to discussing some of these dossiers with your Committee on 1 February. 

Appendix

United Kingdom Government response to the European Commission Consultation on the future Trans-European Network (TEN-T) Policy

Summary of Views

The UK welcomes the opportunity to contribute to the European Commission’s consultation on the future of the Trans-European Network –Transport (TEN-T) Policy.

We support the move towards a methodological approach to network planning and design that is based on passenger and freight traffic demand. The dual layer approach seems a sensible one. We think that the comprehensive network should be closely linked to the strategic networks of Member States; this should make the delivery of the network a more realistic proposition. The core network should link the key international nodes and gateways directly and support the development of low carbon infrastructure and services. It should deliver a more efficient, reliable network which uses intelligent transport systems to provide a better choice of transport options for businesses and people.

It is important that the network is developed in a sustainable way. Decarbonising the transport sector is one of the biggest challenges in the coming decades. The Programme should encourage technical innovation to accommodate new types of vehicle and enable infrastructure advances relating to the use of energy in transport.

We must recognise that both domestic and EU budgets will be under pressure for the foreseeable future. With that in mind the programme should focus resources effectively to bring value for money, supporting more efficient use of the existing infrastructure and requiring a clear evidence base to justify the inclusion of any new routes. We would welcome greater co-ordination between TEN-T, Cohesion and other Structural Funds along with a greater role for the European Investment Bank. A streamlined funding programme should reduce administrative costs and burdens on applicants and encourage greater involvement of private sector funding.

We look forward to working with the European Commission and Member States in developing this important policy which can support growth and sustainability.

The methodology for TEN-T planning

1. Are the principles and criteria for designing the core network, as set out above, adequate and practicable? What are their strengths and weaknesses, and what else could be taken into account?

The principles and criteria seem sound and are similar to the criteria used to define the strategic transport corridors. More clarity is needed on the definitions of major hubs and the criteria for establishing which ports and airports would be considered intercontinental hubs within the "core" network. We recommend that a proportionate view is taken which recognises the different regional needs and allows for flexibility to meet future transport demands whilst balancing the need to keep the core network tightly focussed. In determining the "relevant technical parameters" the Commission should look at functional and capacity needs rather than engineering standards for the infrastructure.

The Commission should consider defining European Added Value in the context of the programme.

2. To what extent do the supplementary infrastructure measures contribute to the objectives of a future-oriented transport system, and are there ways to strengthen their contribution?

The programme should encourage improving the efficiency of existing technologies across all modes of transport and help to develop a broad range of cost effective low carbon technologies.

The UK supports in principle the continuation of measures to promote inland waterways, rail and short sea shipping within the TEN-T network where this makes good sense as an alternative to road, in order to reduce the environmental impact of freight transport overall. Progress on the Motorways of the Seas funding programme under the TEN-T has been slow although it does appear to be improving now. If such targeted funding is to continue, in order to better exploit the potential of rail and water freight networks within the TEN-T, we would prefer to see a strategic assessment to identify EU locations, in each Member State, where infrastructure upgrade of ports, transport hubs and rail, inland waterway and shipping facilities etc could provide maximum benefits in relation to costs. Providing the results were agreed with Member States, the outcome of the review could be used by the Commission to prioritise the allocation of funds to rail and water freight projects over the Financial Perspective, in order to better integrate these modes into the TEN-T and maximise the potential benefits of limited funds.

Safe and secure parking areas for road haulage and passenger vehicles and passenger should be an integral part of the road network; this can improve safety and reduce congestion.

We think that developing intelligent transport systems (ITS) that use collaborative decision making to increase the use of multi-modal transport systems will help us capitalise on the opportunities offered by technological advance. Providing improved travel and traffic information will help reduce congestion and give business and the travelling public the ability to make better transport choices. While standardisation of ITS has the potential to improve interoperability, this should not be used to prevent local innovations that deliver network benefits. The Commission should ensure that where ITS standards are appropriate on the TEN-T they should reflect those developed under the ITS directive and that there is no competing or overlapping activity between these programmes.

What specific role could TEN-T planning in general play in boosting the transport sector's contribution to the "Europe 2020" strategic objectives?

It is important that the focus of the policy should be to support competitiveness, enabling growth and job creation, balanced with the need to make transport more sustainable.

Decarbonising the transport sector is one of the biggest challenges in the coming decade. The Programme should encourage technical innovation to accommodate new types of vehicle and enable infrastructure advances relating to the use of energy in transport. Common standards across Europe will be an important part of this, but with these new technologies at such an early stage of development the Commission should not rush to impose standards or we risk stifling innovation. The focus at the European level should be agreeing the minimum number of base standards necessary to ensure interoperability.

Investing in Intelligent Transport Systems such as traffic management and enforcement and safety systems can deliver environmental gains and optimise network usage. Projects should demonstrate their fit with the 2020 strategic objectives to receive funding.

TEN-T implementation

3. In which way can the different sources of EU expenditure be better coordinated and/or combined in order to accelerate the delivery of TEN-T projects and policy objectives?

Coordinated funding is important; but care should be taken that amalgamation of different funding streams with different strategic objectives doesn’t reduce the value of EU funding. There may be scope for better co-ordination between the Cohesion Fund and TEN-T projects, especially as both budgets are likely to be under pressure in the next programming period.

Funding alone cannot accelerate projects; if the network is closely aligned to national strategic priorities it is more likely to be completed. Objective

analysis of bottlenecks and problems on the network should enable a better prioritisation of funding to deliver better results. The UK agrees that oversight and coordination may be needed in complicated cross-border projects but Member States should retain competence in developing and delivering transport projects on their national networks; the programme should work as a partnership to mobilise different sources of funding effectively to deliver projects that have demonstrable value for the network.

How can an EU funding strategy coordinate and/or combine the different sources of EU and national funding and public and private financing?

The proposed co-ordination between the European funding framework and the European Investment Bank (EIB) transport projects portfolio is welcomed as a means leveraging EU project support and EIB know-how to secure synergies between the two institutions. However, it is important to recognise that financial sector volatility has led to intense competition for EIB funds and that this will limit the Bank’s ability to mobilise private sources of PPP funds towards transport sector projects.

Similarly, the proposed development of the Commission’s funding practice into a form that supports EU PPP practice is welcomed. However, EU rules only envisage supporting projects over a seven year period. This can be helpful in relation to the early stages of projects (for example, with the design phase or feasibility studies), but it does not address longer term PPP delivery issues. The most common form of UK PPP delivery is the Private Finance Initiative (PFI); such projects typically require longer term commitments (25-30 years) from Government. The Commission should consider ways of supporting such long term projects that are not limited to the period of the Financial Perspective.

Would the setting up of a European funding framework adequately address the implementation gap in the completion of TEN-T projects and policy objectives?

The UK government considers that this has merit. Properly designed it could provide transparency in managing the funding programme and a more efficient, cost effective delivery. However competence on deciding and promoting projects and investment on the network should remain with individual Member States. The implementation gap is not necessarily a funding issue. Having a clearer idea of what constitutes European added value, an objective assessment of which parts of the network are most in need of extra capacity and ensuring potential projects have a sound cost benefit analysis (which includes an assessment of the network benefits) will ensure that funding is given to projects which will improve the way the network functions.

The legal and institutional framework of the TEN-T policy review.

In which way can the TEN-T policy benefit from the new legal instruments and provisions as set out above?

In deciding the new legislative framework for the Programme it is important to consider the better regulation agenda. New legal instruments should actually deliver programme benefits and not just simplify the existing legislative framework.

Genuine efficiencies should be sought from the review with an emphasis on removing bureaucracy and saving money in managing the programme. It should be recognised that guidelines can be a more flexible way of managing a programme. Simplification is not just about removing or reducing regulation; it should focus on doing things in the most practical and cost effective way.

A clearer definition of the nature and extent of delegated powers in the commitology arrangements is needed. Competence over the delivery of transport infrastructure should remain with Member States.

January 2011

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