Fourth Railway Package - France and Spain
The Fourth Railway Package came into effect in 2018. Experts reveal that the timeline between the opening and competition (full implementation) has to end in 2020. The implementation is at different stages for various countries. The transposition of the Fourth Railway Package into Spanish law took effect by the end of 2018. However, France is yet to comply with the set of European directives by modifying its legislation to integrate the rules made in 2018
1. FRANCE: IMPLEMENTATION STATUS OF THE FOURTH RAILWAY PACKAGE
- The Fourth Railway Package "took effect" in 2018. Therefore, the timeline between the opening and competition (full implementation) ends in 2020.
- France needs to comply with the Fourth Railway Package by opening up its domestic public rail services to a compulsory competition across all EU "member states and regions" before December 2019.
- France is yet to comply with the set of European directives. This should be carried out by modifying its legislation to integrate the rules made in 2018.
- The market pillar of the Fourth Railway Package allows the retention of infrastructural and operational functions "within a single vertically-integrated" holding company although variants exist in France and some member countries.
EXPERT OPINION ON NEXT STEPS
- Experts believe that, if the Fourth Railway Package which commenced implementation in 2018 will be ready by the end of 2020, France needs to comply with the set of European directives. France needs to modify its legislation to integrate the rules made in 2018 "and enforce them before 2020."
- An implementation of the fourth railway package within president Macron's five-year term is inevitable (should be conducted). Except the French government desires to engage in an adverse power struggle by ignoring the EU's directives. Experts feel that ignoring the EU's guideline by France is doubtful going by Macron's neoliberal stances.
- If France implements the Fourth Railway Package, it will have a "dedicated high-speed" passenger rail service. This implies that it can segregate not just its passenger and freight services, but also the long-distance and regional trains.
- If implemented, the Fourth Railway Package will benefit France reliability and enable it to offer a "premium product." However, this network would come at a price. The heavily subsidized high-speed "TGV" will receive 15% entire annual rail funding although it will carry only 2% of France's passengers.
- A May 2019 article published by Railway-Technology has expert review French railway system aiming to save Frances rural railways. In the report, Quidort reveals that the best solution (which is the only way forward) is to adopt the Fourth Railway Package. The package seeks to change French rail transport regulations as approved by the European Union which is scheduled to kick off in 2020.
- For France, the Fourth Rail Package remains the "next step towards" the EU's objective to harmonize interoperability and open up railway markets to promote competition and reduce entry barriers to the market.
2. SPAIN: IMPLEMENTATION STATUS OF THE FOURTH RAILWAY PACKAGE
- The transposition of the Fourth Railway Package into Spanish law took place at the end of 2018. The aim is to enable the railway market to open up for domestic passenger services by December 2020 and end "Renfe's monopoly of commercial" and Public Service Obligation (PSO) rail networks.
- After the launch of the Fourth Railway Package, passenger numbers went up by 4% in 2018, reaching 507 million (for the premium time since 2008).
- Ridership via the high-speed train network totaled 38.5 million passengers, including 21.3 million on average long-distance services, a surge of 3.7% when compared with 2017.
- Avant regional high-speed network carried 8.7 million travelers, representing a 6% year-on-year increase.
EXPERT OPINION ON NEXT STEPS
- Experts believe the time is ripe to transition Spain’s national passenger operator Renfe. Following the country’s recovery from its 2008-2014 economic slowdown, passenger numbers and revenue are rising sharply. Adequate steps/measures need to be taken as Renfe is preparing for the long-awaited investments as new stocks are rolling.
- According to insights obtained from the International Railway Journal, an analysis credited to Renfe reveals that about 11 million people journey between Madrid and Barcelona every year.
- Railways convey about 39% of them, followed by light road vehicles at 33%, airplanes at 23% and buses 5%.
- The implication is that about four million people are embarking on the six-hour driving trip. Suárez reveals that a lot of them are still happy to drive there by road because it's cheaper. It is time to address this issue.
- Driving between Madrid and Barcelona costs about €55 for those who do not use toll roads. With the Fourth Railway Package, its time to design a rail product with lower operating expense and deliver prices lower or below €55.
- For Spain, the Fourth Rail Package remains the "next step towards" the EU's objective to harmonize interoperability and open up railway markets to promote competition and reduce entry barriers to the market.
Fourth Railway Package - Germany and Italy
The European Union (EU) Fourth Railway Package is aimed at improving the quality and efficiency of the Single European Railway Area (SERA). Italy adopted the legislation on June, 16, 2019, and Germany will adopt the legislation fully in June 2020.
- The EU published the three texts of the technical pillar of the Fourth Railway Package in May 2016. EU countries had to have the texts incorporated into national law by June, 16, 2019. However, Germany will adopt the legislation in June 2020. This is an option provided for by the EU.
- Germany repealed the rail safety regulation Directive 2004/449/EC and replaced it by Directive 2016/798/EU from the Fourth Railway Package legislation on railroad safety in 2019.
- Germany had already adopted a tendering package by 2016 in which 41% of all public service obligations (PSO) were tendered and continues to improve on this area through 2019.
- The Fourth Railway Package requires that competitive tendering will gradually become the rule, with the direct award of tenders only occurring in extraordinary cases.
- In an example of the adoption to the Fourth Railway Package legislation, Germany’s Federal Competition Authority found the North Rhine-Westphalia government had breached EU competition law by awarding the contract for regional train services to DB Networks.
- Abellio argued that the EU general rules on public contract tenders should apply over and above sector-specific railroad rules and they won the case.
Monopoly and services
- The German Monopolies Commission’s 2019 Railway Sector Report states that the German railroad needs to improve its services and introduce more competition to break down the monopoly DB Networks has on the infrastructure management of the railroad.
- This change would bring Germany more in line with the Fourth Railway Package legislation.
- The commission supports the German government’s proposal to transfer the Fourth Railway Package EU Directive 2016/2370 into national law.
- This will introduce transparency into the DB Network system.
- Italy plus eight other countries were the only countries to have adopted the technical pillar of the Fourth Railway Package by its original due date, June 2019. The other EU countries were Bulgaria, Finland, France, Greece, the Netherlands, Romania, and Slovenia.
- In a 2018 United Nations report, Italy was reported as one of the first EU countries to liberalize its railway system. Italy however only created an independent regulator after the Fourth Railway Package was proposed in 2013.
- The Transport Regulation Authority (ART) become operational in 2014, as per the EU legislation.
Impact of the Fourth Railway Package
- Though the Fourth Railway Package has only been fully adopted by nine countries in 2019, Italy has already seen the benefits in the new high-speed passenger market.
- The high-speed passenger market has seen reduced fares and has drawn passengers away from other transport modes, particularly aviation.
- Italy is one of fifteen countries allowing open access operations. However, Italy is only one of six countries that allow multiple operators compete according to the Fourth Railway Package legislation. The other five EU countries are Austria, Czech Republic, Germany, Sweden, and Great Britain.
From Part 02
- "Only nine of the 26 European Union member states with rail networks are on course to meet the June 16, 2019, deadline for the technical pillar of the Fourth Railway Package to be transposed into domestic legislation. "
- "Member states were given until June 16, 2019, to transpose the directives but could delay by a year if they provided a suitable justification."
- "Association of German Transport Companies and DB AG, as well as DIN Standards (ie, the 27200 series of technical standards). Directive 2016/798/EU on railway safety, which is part of the fourth EU railway package, repeals Directive 2004/449/EC but the transposition period ends on 16 June 2019."
- "IMPROVING the quality and cost-effectiveness of rail transport is a core component of European Union transport policy. Between 2001 and 2016, four legislative packages were adopted with the aim of opening up rail transport services for competition, enhancing interoperability between national networks, and building a framework for the development of the Single European Railway Area (Sera)."
- "The Commission’s 2019 Railway Sector Report calls for higher quality services and more competition but warns the current condition of the poor condition of infrastructure and planned upgrading works mean “the political goal of putting more traffic on the railway is a long way off.”"
- "Germany’s Federal Competition Authority found the NRW government had breached EU competition law by awarding the contract for regional train services to DB."
- "Competitive tendering was used for only 41 % of all PSO services active in 2016, almost exclusively in three Member States that early liberalized (the United Kingdom, Germany, and Sweden). Thanks to the Fourth Railway Package, competitive tendering will gradually become the rule, with direct award only allowed in exceptional cases. "
- "The Fourth Railway Package — which includes a “Technical Pillar” for rail safety and interoperability, and a “Market pillar” for the governance of railways and the opening of the passenger market — was proposed by the European Commission in 2013, and was originally intended to remove all remaining legal, institutional and technical obstacles to create a single European Railway Area."
- "The Italian rail regulator was only made
truly independent from the government through the creation of ART (Transport Regulation Authority) in 2013 (becoming operational in 2014)."