1. 102 October 2013CER The Voice of European Railways Railway Policy in the EU 02 October 2013, Budapest Dr. Libor Lochman CER Executive Director

2. 202 October 2013CER The Voice of European Railways CER – Representing European railways in Brussels CER stands for… The Community of European Railway and Infrastructure Companies brings together railway undertakings and infrastructure companies from the European Union, Norway and Switzerland, the EU candidate countries as well as from the Western Balkan countries CER is based in Brussels and represents the interests of its members to the European Parliament, Commission and Council of Ministers as well as other policymakers and transport actors CER’s main focus is to to support an improved business and regulatory environment for European railway and railway infrastructure companies.

3. 302 October 2013CER The Voice of European Railways What CER represents… CER represents 80 member companies (23% privately owned), incumbents and new entrants, passenger and freight operators, integrated and separated infrastructure managers. CER does not only represent the incumbent and system operators’ perspective but the largest membership of rail industry actors throughout Europe including service providers and a large number of independent infrastructure managers. Break- down of integrated and non- integrated CER companies Break-down of non- integrated CER companies

4. 402 October 2013CER The Voice of European Railways Council European Parliament European Commission European Railway Agency TEN-T Agency ERTMS corridors CER interlocutors ERRACSocial Dialogue … e.g. AAR, CIT, EIM, OSJD, OTIF, RNE, RŽD, UIC, UNIFE, X-Rail, et al. World Bank, EIB, UNECE et al.

5. 502 October 2013CER The Voice of European Railways The EU rail acquis

6. 602 October 2013CER The Voice of European Railways The EU rail acquis (1) 1 st Railway Package Inter- operability directives 2 nd Railway Package 3 rd Railway Package The Trans- European Network Public Service Transport State Aid Guidelines Working conditions of cross- border mobile workers Public procure- ment Environ- mental legislation Safety directive (revision) International freight market opening Accounts separation Establishment of RB Compulsory NSs MACs International freight market opening Accounts separation Establishment of RB Compulsory NSs MACs Opening int’l and domestic freight mkt Establishment of ERA Opening int’l and domestic freight mkt Establishment of ERA Opening int’l passenger market Rail passenger rights Certification of train drivers Opening int’l passenger market Rail passenger rights Certification of train drivers Environmental noise Diesel emissions Environmental liability Environmental noise Diesel emissions Environmental liability

7. 702 October 2013CER The Voice of European Railways Rail freight corridor regulation Euro- vignette Passenger rights on all modes Recast of the 1 st railway package New TEN-T and CEF State Aid Guidelines The EU rail acquis (2) Reinforced accounts separation Independence of IM’s essential functions Longer and stronger MACs New principles for TACs NDTACs and ETCS TACs Access to Rail Related Services Reinforced accounts separation Independence of IM’s essential functions Longer and stronger MACs New principles for TACs NDTACs and ETCS TACs Access to Rail Related Services 4 th Railway Package Governance of the rail companies Domestic rail market opening New ERA regulation Interoperability Safety Governance of the rail companies Domestic rail market opening New ERA regulation Interoperability Safety

8. 802 October 2013CER The Voice of European Railways Setting the conditions right: the rail system as it should be as a result of the Recast of the First Railway Package

9. 902 October 2013CER The Voice of European Railways Road Access Charges Road system Access to infrastructure Track Access Charges Public sphere Priva te sphere PUBLIC AUTHORITY CUSTOMERS Rail RB Infrastructure Manager Operators The rail system: input, output and regulatory monitoring MACs Operators Infrastructure Manager Infrastructure PSCs Rail RB Rail RB € € € € € € € Railway system 1 2.2 2.1 3 4

10. 1002 October 2013CER The Voice of European Railways Establishing the right public bodies and ensuring investments 1 For the satisfaction of the customers - passenger or freight forwarders - States must guarantee an efficient functioning of the system Establishing a Rail Regulatory Body Establishing a Safety Authority Ensuring good quality for both the rail network and the rolling stock of SOEs Bearing in ming that the rail network (as the road network) relies on the availability of public money!

11. 1102 October 2013CER The Voice of European Railways Source: ITF/OECD Public Service Contracts: undercompensation in CEE & SEE 2.1 Public Service Contracts must be stipulated on a commercial basis and remunerated according to the agreed terms!

12. 1202 October 2013CER The Voice of European Railways Multi Annual Contracts 2.2 States must stipulate Multi Annual Contracts (at least 5-year long) with the infrastructure managers To guarantee solid financial basis for maintenance and operations To guarantee a medium-term horizon to plan new investments To guarantee that profit and loss accounts balance incomes with expenditure

13. 1302 October 2013CER The Voice of European Railways Fair intramodal competition 3 States must make sure to put in place an institutional framework which preserve a fair intramodal competition Adequately staffing the Rail Regulatory Body Guaranteeing the independence of the essential function of the infrastructure managers: path allocation and infrastructure charging

14. 1402 October 2013CER The Voice of European Railways Fair intermodal competition 4 States must make sure to put in place an institutional and legal framework which preserve a fair intermodal competition Putting enough resources at disposal, and in a fair way Establishing a fair policy of charging for the access to respective networks Making sure each modes‘ costs reflect all negative externalities

15. 1502 October 2013CER The Voice of European Railways The Fourth Railway Package

16. 1602 October 2013CER The Voice of European Railways 3 2 1 4RP – The three main components of the intramodal competition Railways’ organisational structures Universal imposition of separation Transitional period where Annex V type of criteria shall be respected Separate board members for holding and daughter companies Long cooling-off periods for board members entrusted with the management of essential functions New conditions for appointment of management board of essential functions Consultative body of infrastructure users to be established Network of infrastructure managers to be established IMs to be reinforced, always covering the functions of infra development, maintenance, operations, marketing and charging Opening the domestic rail passenger market will define minimum scope of open access and maximum scope for PSO will propose compulsory tendering of PSO with only limited exceptions Additional competences for ERA on authorisation for putting rolling stock in place on safety certification for railway undertakings

17. 1702 October 2013CER The Voice of European Railways Interactions between open access services and Public Service Obligations: a careful balance Open access should apply on the entire network in every EU Member State, provided that PSO economic equilibrium is preserved Where open access and a PSO overlap on the network, States may take measures to safeguard the economic equilibrium of the PSO Conversely, open access operators should also be protected – e.g. where a new PSO is created or the scope of an existing PSO is extended Bundling of viable and non-viable services into single PSO/franchise contracts must remain possible for efficiency reasons Ensuring that national Regulatory Bodies have all means to fulfil their responsibilities, also by a better coordination at EU level  Financial architecture of national rail sectors must improve  Social conditions must be addressed  Deepening technical alignment between national rail sectors And:

18. 1802 October 2013CER The Voice of European Railways CER view: the structural models Can be achieved with a well-financed and independent regulatory body Allow efficient structural models to support competitiveness agains other modes Both integrated and separated models can perform  confirmed by the recent EVES-Rail study results Efficient, non-discriminatory access to infrastructure – a major enabler of competition in the rail sector New legislation only if seen necessary for the development of the European railway market after a thorough analysis Each Member State should be empowered to reconsider its existing rail sector model have sufficient flexibility to reform the given model switch between models, if national conditions so require !

19. 1902 October 2013CER The Voice of European Railways Structural organisation and market entry source: EVES-Rail study Many factors affect the % of new entrants – vertical separation is NOT one of them

20. 2002 October 2013CER The Voice of European Railways Recent pieces of legislation: TEN-T and CEF

21. 2102 October 2013CER The Voice of European Railways Final results on the “technical standards” Technical standards on the Comprehensive Network: — Compliant with INF TSI — Full electrification — ERTMS Technical standards on the Core Network: — Same standards as comprehensive network plus: — 22.5t axle load, 100km/h line speed, — 740m freight train length, nominal track gauge of 1435mm — Isolated networks excluded from the above requirements — Additional exemptions possible in duly justified cases

22. 2202 October 2013CER The Voice of European Railways Comprehensive Network: Member States „shall make all possible efforts“ to complete the comprehensive network by 2050 Core Network: Member States „shall take the appropriate measures“ to complete the core network by 31 December 2030 (legally binding) Council was successful in introducing more flexibility depending on the financial situation of each Member State Final results on the “deadlines”

23. 2302 October 2013CER The Voice of European Railways TEN-T map of Hungarian corridors

24. 2402 October 2013CER The Voice of European Railways Modal distribution of rail vs road infra investments in Hungary Source: ITF 2013

25. 2502 October 2013CER The Voice of European Railways Something to take of: The intermodal level playing field

26. 2602 October 2013CER The Voice of European Railways Intermodal level playing field? Cross-modal regulation needed! Improve law-making to ensure a fair intermodal legislative framework Set up cross-modal legislative principles – Common principle for infrastructure charging – Common principle for internalization of negative externalities – Common principle for taxation – Common principle for passenger rights – Common social standards – …

27. 2702 October 2013CER The Voice of European Railways Infrastructure charges: all modes should be put on a level-playing field Rail transport is energy-efficient & a low generator of CO2 emissions but infrastructure charges for rail are much higher than road infrastructure charges (which are sometimes inexistant) Measures to lower rail infrastructure charges or introduce road tolls have had a positive effect on rail freight traffic Positive examples: UK, Denmark, Netherlands, Sweden, Germany, Austria, Czech Republic, Switzerland Recommendation: ensure alignment between road & rail infrastructure charges for freight

28. 2802 October 2013CER The Voice of European Railways External costs: importance of assessing the true cost of transport Current transport prices do not reflect the true cost of transport Competition between modes is distorted Consequences on modal preferences are dramatic, since price is the most important parameter for freight customer Recommendation: fully internalise the external costs of transport by applying the ‘polluter pays’ principle, covering costs generated by accidents, CO2 emissions and congestion.

29. 2902 October 2013CER The Voice of European Railways All three key elements of the sustainable rail development must always be promoted! Infrastructure Intermodal level playing field Intramodal competition

30. 3002 October 2013CER The Voice of European Railways Thank you for your attention! For further information, visit our website: www.cer.bewww.cer.be  Dr. Libor Lochman CER Executive Director Tel: +32 2 213 08 71 Email: libor.lochman@cer.be 