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are no longer operated and which offer no transport services. The Federal Network Agency had complained that such stations were not included in the published infrastructure specifications. DB Station & Service thereupon applied to the Federal Railway Authority (EBA) for a reduction of the scope of approval required under railway law for the infrastructure management of 567 stations. In 156 cases, this was rejected and the company was ordered to maintain infrastructure management. DB Station & Service has meanwhile sought relief from the court. If DB Station & Service is obliged to include inactive stations in its infrastructure specifications and maintain safety of operations, it would have to adapt the station charging system to compensate for these higher costs, even though there is no demand whatsoever for the stations. Conditions for opening the operations centres In February 2010, more than three years after the proceedings began, the Federal Network Agency and the Federal Railway Authority inally issued two decisions concerning the opening of DB Netz AG operations centres. The authorities claim that the mere presence of employees of DB Group RUs at the operations centres could constitute discrimination against other RUs and have consequently forced DB Netz AG to offer existing workplaces to any interested RUs as from September 2010 and to provide comprehensive anonymised information about the speed, stops, scheduled The Federal Network Agency makes increasing use of the scope provided by the present regulatory framework. timings and train-path products for all trains. Moreover, all RUs are to be kept permanently informed about disruptions. In April 2009, DB Netz AG had already proposed opening up the operations centres for non-DB RUs of its own accord. The authorities however promptly imposed stricter demands, in particular about the disclosure of information, and have ordered their implementation. These demands lead to high administrative expenses. In contrast to the proposal made by DB Netz AG, which closely reflects market prac tice, the solution ordered and administrated by the authorities will make it more difficult to adapt the concept in line with the experience acquired. The Federal Network Agency makes increasing use of the scope provided by the present regulatoryframework. Unbundling proceedings continue before the Federal Railway Authority Important progress has been made in the “company lawyer” proceedings which have been pending since 2006 concerning the admissibility of the provision of legal consulting services on regulatory law issues for DB Netz AG by the DB Group legal department. In 2007, DB Netz AG appealed to Münster Higher Administrative Court against the rulings of Cologne Administrative Court which had confirmed the Federal Railway Authority’s prohibition of this practice. In May 2009, Münster Higher Administrative Court confirmed that the present practice is legally permissible. The notice issued by the Federal Railway Authority and the subsequent ruling of Cologne Administrative Court were revoked. The court in Münster ruled that the employees of the legal department are not involved in decisions concerning the working timetable, the allocation of occasional train paths and infrastructure charges pursuant to Section a (1) Sentence 2 No. 3 General Railway Act. It is evident from the expressions ‘legal consulting’ and ‘representation in court’ that this does not involve participation in such decisions. The present internal DB rules and regulations ensure that the lawyers are bound by the instructions of DB Netz, whose employees could make the relevant decisions themselves. The Federal Railway Authority has filed an appeal with the Federal Administrative Court against the Münster ruling. In the proceedings on the “transfer of public funds”, in which the Federal Railway Authority demanded information from DB Netz AG in 2008 on the deployment of the funds received including their apportionment within the Group, Cologne Administrative Court has dismissed the appeal against the notice. The court followed the authority’s opinion that no grounds for suspicion are required for a notice demanding information, as this would unduly restrict the authority’s rights of inspection regarding internal corporate procedures. DB Netz AG has appealed against the ruling. Existing railway law permits efficient regulation In retrospect, the increasing regulatory intensity during the preceding year shows that demands for wider powers of intervention are not supported by practice. The ruling of Münster Higher Administrative Court imposed considerable onus of presentation on the rail In numerous proceedings, regulation has to find the right balance between the utilisation, allocation and flexible handling of infrastructure capacities. infrastructure managers, whereas the requirements imposed on the regulatory authority to prove discrimination were restricted. In the light of this decision, there are no grounds whatsoever for the reference to supposedly higher powers of intervention of the Federal Network Agency in other sectors. The powers granted pursuant to the General Railway Act differ from the statutory provisions in the telecommunications, post and energy sectors, but offer infrastructure users an equivalent level of protection. Although the charges and conditions of use are not subject to formal ex-ante approval pursuant to General Railway Act, so that the Federal Network Agency can order amendments only with future effect, the General Railway Act allows the authority – in contrast to other sectors – to make conditions of use and charges which have already been inspected ex-ante subject to an ex-post inspection at any time and without any further prerequisites, such as the existence of new facts. Nor is it bound by any formal time requirements. This system can be explained primarily by the maximum contract term of one year which is usual in the rail sector. Instead of an expensive annual ex-ante inspection, the Federal Network Agency can instigate direct investigations if it suspects any breach of the General Railway Act and order amendments for the next contract term. A reform which harmonised the law of regulatory procedures in all sectors would not be appropriate. Coalition agreement stipulates the transport policy objectives of the new government The new Federal Government presented the rudiments of its transport policy objectives in the coalition agreement. In the rail sector, the focus is on the ongoing development of the regulatory framework and reviewing the structure of the DB Group. As regards the regulatory framework, the coalition refers to the increased powers of the Federal Network Agency, thus confirming that it intends to pursue the path embarked on around five years ago with the recast of the General Railway Act and the transfer of access regulation to the Agency. In some cases, the objectives include items which are already the subject of investigation procedures by the Agency and legal disputes before the courts, such as the introduction of a performance regime, the regulation of access to service facilities, the purchase of traction current, and sales in the passenger transport sector. Some statements in the coalition agreement refer to demands by the Agency and/or the Monopolies’ Commission. Their implementation would again substantially expand the regulatory framework in Germany, which is already far more comprehensive than in almost all Member States of the EU. In the coalition agreement, the Federal Government further states that it intends to campaign for competitively-neutral implementation of EU law in general, full opening of the railway markets in all Member States and fair competitive conditions in that sector. It remains to be seen where it will focus its attention. This is especially important as the EU Commission is also planning radical changes to rail regulatory legislation as part of the recast, so that coordination of these processes in terms of timeframe and contents appears crucial from the viewpoint of the market players. Drastic changes are also imminent not only as regards the regulatory framework. The coalition agreement also outlines other projects, such as the admission of nationwide scheduled long-distance coach services, changes to the load dimensions for trucks and abolishing the rail bonus, which will substantially impact competition in the transport markets. Regulatory Policies 44 45 Photo: www.stefanbock.de
France: the long hard road to an open transport market French rail transport benefits from ambitious sustainability objectives. Massive investments are planned to remedy infrastructure defects. As regards market liberalisation, however, France lags behind. President Sarkozy convened an environmental summit entitled “Grenelle de l’environnement” shortly after his election in 2007, at which he stated that transport would play a major role in achieving the country’s ambitious sustainability objectives and consequently announced massive investments in that sector. The plans envisage the construction of 2,000 kilometres of new high-speed lines for rail transport alone, includ ing a link between Paris and the port of Le Havre. Revitalisation of the freight terminals at the French seaports is another component of the new sustainability-driven transport policy. Further targets include shifting a transport volume of approx. two million trucks to the more environment-friendly rail mode by the year 2020 and construction of the corresponding new rail freight lines. On 16 September 2009, the French government presented a national freight transport plan for implementation of the Grenelle objectives (“Engagement national pour le fret”), which involves funding of EUR 7.2 billion over a period of ten years and which is to be supplemented with a further billion from SNCF. The plan defines nine priority measures: upgrading “rolling roads”, doubling the volume of combined transport, improving the quality of block trains, upgrading rail freight connections to the seaports, launching highspeed freight traffic services between airports, founding regional service providers for the post-rail distribution of single wagonload traffic, establishing special rail freight corridors, eliminating infrastructure bottlenecks – especially around the cities of Lyon, Nîmes and Montpellier – and improving the customer-friendliness of the French rail infrastructure manager Réseau Ferré de France (RFF). In order to commit RFF to various quality improvements, for example regarding infrastructure and the financing model, the French government signed a performance agreement with RFF on 3 November 2009. Progress will be monitored on the basis of specifically defined indicators. The agreement is aimed particularly at preparing the French rail market for the opening process. Rail suffers from inefficiencies in infrastructure management The politicians and market players state different causes for the defects in French rail transport. On the one hand, the institutional separation of SNCF and RFF has been criticised as inefficient, especially after the report published by the French state audit office. RFF has been responsible for the management of rail infrastructure since 1997, but has largely delegated that task to SNCF, which manages transports, technical facilities, safety installations and maintenance in accordance with the instructions of RFF. A law enacted in December 2009 now provides for the formation of a separate department at SNCF, the “Direction de la Circulation Ferroviaire” (DCF), which is to handle infrastructure management independently of the transport operations of SNCF. The head of the new department will be appointed by the Prime Minister on the recommendation of the Minister of Transport. However, it remains dubious as to whether DCF will be able to work independently if it is not organised as a separate legal division. Following the decision of the French parliament in 2009 to grant greater independence to passenger stations, SNCF also set up a new division, “Gares & Connexions”, which has separate accounting. It is responsible for operating passenger stations and serves as a contact for third parties. The French competition authority subsequently launched an ex officio investigation into this decision. In a notice of 4 November 2009 The government is planning to expand the French high-speed rail network by 2,000 kilometres. concerning the operation of stations by SNCF, the authority criticised the SNCF corporate structure (no legal and operational separation) and the risk that SNCF could abuse its dominant market position. It also speaks out in favour of tenders as the contract award procedure for station fittings and fixtures. However, the notice is not binding upon SNCF. Another central issue is infrastructure maintenance. A study commissioned by RFF in 2005 and conducted by EPFL Federal University of Applied Sciences in Lausanne warned against a steady deterioration of rail infrastructure in France and recommended renewal and maintenance programmes, rather than the new investments which had been mainly conducted until then. At the time, the total programme was estimated at approx. EUR 13 billion over a period of 20 years, which would have meant additional finan- cial requirements of up to EUR six billion. In May 2007, RFF and SNCF signed an operating agreement which obliges SNCF to raise its maintenance and productivity targets by three per cent per annum until 2010. Up to 2008, however, RFF’s income was consistently lower than the costs of maintenance charged by SNCF. RFF is faced with huge debts of approx. EUR 27 billion and infrastructure charges are its only source of income apart from state subsidies for infrastructure renewal, debt clearance and equalisation pay ments for infrastructure costs in regional transport. RFF has never been granted one-off full debt relief, contrary to DB Netz AG, which was declared debt-free as part of the rail reform. In 2007, the French Ministry of Finance therefore recommended that the infrastructure charging system be restructured so that the charges would provide better coverage of the infrastructure costs. Following approval by the French parliament, RFF amended the system in 2008 and resolved to increase infrastructure charges by EUR 60 million per annum up to 2012. In 2009 it announced a further increase in infrastructure charges for high-speed lines up to 2013. According to SNCF, the RFF plans would mean an increase of 140 per cent for high-speed train paths compared with 2008. Such a substantial increase in the cost of highspeed traffic would be a serious economic barrier for the operation of international services in France. Moreover, RFF has stated that the level of the increase is not yet final, as it will also have to take into account the costs of infrastructure maintenance, which SNCF charges to RFF on the basis of an agency agreement between the parties. As the present agreement expires in 2010, RFF does not yet know how these costs will develop after 2011. RFF is therefore urgently request ing SNCF to provide it with more planning certainty and transparency as regards maintenance costs, which are an important component in designing an adequate infrastructure charging system. According to RFF, by 2009 competitors had increased their market share to 14 per cent of total traffic performance since the rail freight market was first opened in April 2006. However, this is attributable less to the good performance of the newcomers than to the chronic problems of SNCF Fret, the SNCF freight transport division. For the last ten years, the company has made losses, latterly amounting to EUR 600 million. 46 47 Photo: Bartlomiej Banaszak/DB AG Regulatory Policies According to SNCF, the RFF plans to raise infrastructure charges for high-speed traffic by 140 per cent.
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