1. Public hearing on the 4 th Package 1 The future role of the European Railway Agency Tuesday, 07 May 2013 Steer Davies Gleave 28-32 Upper Ground London, SE1 9PD +44 (0)20 7910 5000 www.steerdaviesgleave.com

2. Public hearing on the 4 th Package Introduction 2 Ι Steer Davies Gleave was tasked with carrying out the support studies for the impact assessment of the 4 th Package Ι One of these studies related to the future role of the European Railway Agency – the technical pillar of the 4 th Package

3. Public hearing on the 4 th Package Main problem identified 3 Ι The persistence of technical and administrative barriers are creating long and costly procedures for the sector which are ultimately affecting the competitiveness of rail. Ι This problem is driven by: ■ Inefficient functioning of national institutions ■ Discrimination against new entrants by national institutions ■ Divergent implementation of EU legislation ■ Legacy of national rail systems

4. Public hearing on the 4 th Package Functioning of national institutions (1) 4 Ι NSAs vary considerably across Member States in terms of: ■ Resources: staff numbers focusing on interoperability range from 1 to 162 (source: ERA) - economic resources are also limited ■ Cost of safety certificates: vary from €0 to €70,000 (average higher in EU15) ■ Vehicle authorisation : costs vary substantially - ERA estimates about €1.6 mil. per vehicle (but can reach €10 mil.) - the process can be very time consuming - 10 to 90 days for a freight wagon (source: ERA) Ι Stakeholders have mentioned that the costs are too high and the timescales are too long for safety certification and vehicle authorisation processes. These problems are exacerbated when they involve a new entrant.

5. Public hearing on the 4 th Package Functioning of national institutions (2) 5 Ι Some new entrants (national or from other EU Member States) suggest that they have been discriminated against in the processes of certification and vehicle authorisation. These issues lead to the creation of a barrier to entry which is hindering the creation of a Single European Transport Area

6. Public hearing on the 4 th Package Divergent implementation of legislation 6 Ι 62% of stakeholders interviewed stated that this was a problem. In particular some Member States were mentioned repeatedly in relation to this.

7. Public hearing on the 4 th Package Legacy rail system 7 Ι Results from 100 years of diverging standards that is now slowly being addressed. Ι There remain a number of national rules that create barriers to entry. In particular: ■ There is a lack of transparency on national rules ■ The incumbent has a knowledge advantage ■ There are a number of unnecessary national rules

8. Public hearing on the 4 th Package Future role of the Agency: Analysis 8 Ι The majority of stakeholders stated that the best way to reduce the impact of these problems and render the sector more competitive was to increase the role of the Agency. Ι As part of this analysis a number of options were developed ranging from a ‘do nothing’ approach to the Agency doing everything and removing the national authorities altogether.

9. Public hearing on the 4 th Package Future role of the Agency: Total authorisation cost savings 9

10. Public hearing on the 4 th Package Future role of the Agency: Total safety certification cost savings 10

11. Public hearing on the 4 th Package Future role of the Agency: Conclusions 11 Ι The study concluded that the highest net benefits would be achieved with the Agency sharing its competencies with the NSAs – that is the Agency makes the final decisions on certification and authorisation with NSA national expertise used for the technical aspects if necessary. Ι This analysis takes into consideration the wider industry benefits as well as changes in cost and revenue for ERA, NSAs and other national authorities.

12. Public hearing on the 4 th Package 12 Thank you