(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2013)0028),

–  having regard to Article 294(2) and Article 91 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0024/2013),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Seimas of the Republic of Lithuania, the Luxembourg Chamber of Deputies, the Netherlands Senate and the Netherlands House of Representatives, the Austrian Federal Council and the Swedish Parliament, asserting that the draft legislative act does not comply with the principle of subsidiarity,

–  having regard to the opinion of the European Economic and Social Committee(1),

–  having regard to the opinion of the Committee of the Regions(2)

–  having regard to Rule 55 of its Rules of Procedure,

–  having regard to the report of the Committee on Transport and Tourism and the opinions of the Committee on Employment and Social Affairs and the Committee on Regional Development (A7-0034/2014),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

(1) OJ C 327, 12.11.2013, p. 122. (2) OJ C 356, 5.12.2013, p. 92.

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 91 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(1),

Having regard to the opinion of the Committee of the Regions(2),

Acting in accordance with the ordinary legislative procedure(3),

Whereas:

(1)  Over the past decade, the growth of passenger traffic by rail has been insufficient to increase its modal share in comparison to cars and aviation. The 6% modal share of passenger transport for rail in the European Union has remained fairly stable. Rail passenger services have not kept pace with evolving needs the evolution of other modes of transport in terms of availability, price and quality. Bearing that in mind, all relevant lessons need to be learnt from the approach adopted by the Union in the course of the last three railway reforms. [Am. 1]

(1a)  Rail transport plays a major role socially and environmentally, and in terms of mobility planning, and can significantly increase its overall share of European passenger transport. In this regard, investment in research as well as in infrastructure and rolling stock can make a significant contribution to new growth, thereby boosting employment directly in the railway sector and indirectly by increasing the mobility of employees of other sectors. Rail transport has the potential to develop into an important modern branch of Union industry, provided that Member States agree on greater cooperation. [Am. 2]

(2)  The Union market for international passenger transport services by rail has been opened to competition since 2010. In addition, some Member States have opened their domestic passenger services to competition, by introducing open access rights or tendering for public service contracts or both.

(3)  In its White Paper on transport policy of 28 March 2011(4) the Commission announced its intention to complete the internal railway market, allowing railway undertakings of the Union to provide all types of rail transport services without unnecessary technical and administrative barriers. In order to better achieve that objective, the current reform needs to be conceived in the light of the railway models which have proved to be effective in the Union. [Am. 5]

(3a)  The quality of public services for rail passenger transport should be improved and their efficiency increased, whilst existing public passenger transport services that function efficiently are maintained. [Am. 6]

(3b)  The completion of the opening of the Union railway market should be considered to be essential in order for the railway to become a credible alternative to other modes of transport, in terms of price and quality. [Am. 7]

(3c)  It is essential for the competent authorities to play a key role in the organisation of public passenger transport services. Such authorities have responsibility for planning public passenger transport services, including for indentifying the routes to be designated for open access or awarded under public service contracts and for determining the award procedure. Furthermore, they should justify that viability, efficiency and quality targets can only be achieved by using the award procedure that they have chosen, and should publish this justification. [Am. 8]

(4)  When competent authorities organise their public passenger transport services they need to ensure that public service obligations and the geographical scope of public service contracts are appropriate, necessary and proportionate to achieve the objectives of the public passenger transport policy in their territory. This policy should be set out in sustainable public transport plans leaving scope for market based transport solutions. The process of defining public transport plans and public service obligations should be made transparent to relevant stakeholders including potential market entrants.[Am. 9]

(5)  To ensure sound financing to meet the objectives of sustainable public transport plans, competent authorities need to design public service obligations to attain public transport objectives both in a high-quality and in a cost-effective manner taking account of the compensation for the net financial effect of those obligations and they need to ensure long-term financial sustainability of public transport provided under public service contracts. That includes avoiding both over- and under-compensation, caused by the substance of the public service obligations, or the failure of the competent authority to meet its financial commitments. Public service obligations may refer to networks in which some services can be operated with a fair profit without financial compensation; the inclusion of such services within the scope of the public service obligations should not result in compensation payments exceeding the amount necessary for providing the whole range of network services.[Am. 10]

(6)  It is particularly important that competent authorities comply with these criteria for public service obligations and the scope of public service contracts if the market for public passenger transport by rail is to run smoothly, because open access transport operations need to be well coordinated with those under public service contract. For this reason, the independent rail regulatory body should ensure that this process is correctly applied and transparent.

(7)  A maximum annualThe volume of a public service contract for passenger transport by rail which will be awarded on the basis of a competitive tendering procedure needs to be set to facilitatein a way that facilitates competition between small bidders, new entrants and the incumbent operator for such contracts while allowing competent authorities some flexibility to optimise the volume according to economic and operational considerations. [Am. 64]

(8)  To facilitate the preparation of tenders, and hence enhance competition competent authorities need to ensure that, whilst protecting business secrets, all public service operators interested in making such a submission receive certain information on the transport services and infrastructure covered by the public service contract that prevents them from being deemed to have been discriminated against by the contracting authority with regard to other competitors. [Am. 12]

(9)  Certain upper limits for the direct award of public service contracts need to be adapted for rail transport to the specific economic conditions under which tender procedures take place in this sector.

(9a)  The principle of reciprocity should be applied in order to ensure fair competition and to prevent the misuse of compensation. That principle should apply not only to Member States and companies established in the Union but also to companies from third countries that wish to participate in procurement procedures within the Union. [Am. 65]

(10)  The establishment of an Internal Market for passenger transport services by rail requires common rules on competitive tendering for public service contracts in this sector to be applied which are applicable in a harmonised manner in all Member States, whilst taking into account the specific circumstances of each Member States.[Am. 14]

(11)  In With a view of to creating framework conditions for enabling society to fully reap the benefits of effective opening of the market for domestic passenger transport services by rail it is important that Member States ensure an adequate level of social protection for the staff of public service operators. [Am. 16]

(12)  Where the market does not ensure it under suitable economic and non-discriminatory conditions, public service operators' access to rail rolling stock needs to be facilitated by competent authorities through adequate and effective measures.

(13)  Certain key features of upcoming tender procedures for public service contracts need to be fully transparent to enable a better organised market response.

(14)  Consistent with the internal logic of Regulation (EC) No 1370/2007, it should be made clear that the transitional period until 2 December 2019 refers only to the obligation to organise competitive tendering procedures for public service contracts.[Am. 66]

(15)  Preparing railway undertakings for mandatory competitive tendering for public service contracts requires some extra time to allow effective and sustainable internal restructuring of companies to which such contracts were directly awarded in the past. Transitional measures are therefore necessary for contracts directly awarded between the date of entry into force of this Regulation and 3 December 2019.[Am. 67]

(16)  Once opening of the market for domestic passenger transport services by rail is achieved, as competent authorities may need to take measures to ensure a high level of competition by limiting the number of contracts that it awards to one railway undertaking, adequate provisions should be provided for.

(17)  In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council(5).

(18)  In the context of amendments to the Council Regulation (EC) No 994/98 ('Enabling Regulation')(6), the Commission proposed also an amendment to Regulation (EC) No 1370/2007 of the European Parliament and of the Council (COM(2012)0730/3). In order to harmonize the approach to block exemption regulations in the field of State aid and, in accordance with the procedures foreseen in Articles 108(4) and 109 of the Treaty, aid for the coordination of transport or reimbursement for the discharge of certain obligations inherent in the concept of a public service as referred to in Article 93 of the Treaty should be brought under the scope of the Enabling Regulation.

(19)  Regulation (EC) No 1370/2007 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Without prejudice to Directive 2014/25/EU of the European Parliament and of the Council(7) , Regulation (EC) No 1370/2007 is hereby amended as follows: [Am. 17]

1.  Article 2 is hereby amended as follows:

(-a) The following point is inserted:"

"(aa) "public rail passenger transport" means public passenger transport by rail, excluding passenger transport on other track-based modes, such as metros, tramways or, if Member States so decide, tram-train systems;";[Am. 18]

(a)  Point (c) is replaced by the following:"

"(c) "competent local authority" means any competent authority whose geographical area of competence is not national and which covers the transport needs of, inter alia, an urban agglomeration and/or a rural district;"area, or a region, including at cross-border level;";[Am. 19]

(b)  In point (e) the following subparagraph is added:"

"The scope of public service obligations shall exclude all cover public transport services that go beyond of what is are necessaryto reap, inter alia, for the benefits of economic, technical or geographical network effects to be reaped at local, regional or sub-national network effectslevel. Such network effects arise through the integration of transport services, which makes public transport more attractive for passengers and more efficient for the public transport sector. Network effects may be generated both by services which attain break- even and by services which do not, as well as at various geographical-, train schedule- or tariff- levels.". [Am. 20]

2.  The following is inserted:"

"Article 2a

Multimodal and sustainable public transport plans and public service obligations [Am. 21]

1.  Competent authorities shall establish and regularly update multimodal public passenger transport plans covering all relevant transport modes for the territory for which they are responsible. These public transport plans shall define the objectives of public transport policy and the means to implement them covering all relevant transport modes for the territory for which they are responsible, thereby promoting social and territorial cohesion. It shall be possible for those plans to consist of information on public transport plans that already exists in the public domain. Where interregional services already exist, they shall be taken into account. TheyThose plans shall at least include: [Am. 22]

In establishing public transport plans, competent authorities shall have regard in particular to applicable rules regarding passenger rights, social, employment and environmental protection. [Am. 28]

The competent authorities shall adopt the public transport plans after consultation of relevant stakeholders and publish them. For the purpose of this Regulation, relevant stakeholders to be taken into consideration are, including at least transport operators, infrastructure managers if appropriate, and representative passenger and employee organisations, and shall publish those plans. [Am. 29]

2.  The establishment of public service obligations and the award of public service contracts shall be consistent with the applicable public transport plans.

3.  The specifications of public service obligations for public passenger transport and the scope of their application shall be established as follows:

The assessment of appropriateness referred to in point (b) shall take into account whether a public intervention in the provision of passenger transport is a suitable means of achieving the objectives of the public transport plans. [Am. 32]

For public passenger transport by rail the assessment of necessity and proportionality referred to in point (c) shall take into account the transport services provided under Article 10(2) of Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area (recast)(8) and consider all information given to the infrastructure managers and regulatory bodies pursuant to the first sentence of Article 38(4) of that Directive. [Am. 33]

4.  The specifications of public service obligations and the related compensation of the net financial effect of public service obligations shall:(a) achieve the objectives of the public transport plan in the most a cost-effective manner and shall(b) financially sustain the provision of public passenger transport in accordance to the requirements laid down in the public transport plan in the long term. [Am. 34]

5.  When preparing the specifications, the competent authority shall set out the draft specifications of public service obligations and their scope, the basic steps of the assessment of their compliance with the requirements laid down in paragraphs 2, 3 and 4, and the results of the assessment.

The competent authority shall in an appropriate manner consult relevant stakeholders such as a minimum, transport operators, infrastructure managers if appropriate and representative passenger and employee organisations on these specifications and take their positions into consideration. [Am. 35]

6.  For public passenger transport by rail:

__________________

* Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area (OJ L 343, 14.12.2012, p. 32). "

3.  Article 4 is amended as follows:

(a)  In paragraph 1, point (a) is replaced by the following:"

"(a) clearly define the public service obligations laid down in Article 2(e) and Article 2a with which the public service operator is to comply, and the geographical areastransport networks concerned, and require the operator to provide the competent authority with all the information essential for the award of public service contracts, whilst protecting business secrets;";" [Am. 39]

(b)  The last sentence of paragraph 1, point (b) is replaced by the following:"

"In the case of public service contracts not awarded according to Article 5(3), these parameters shall be determined in such a way that no compensation payment may shall neither exceed nor fall below the amount required to cover the net financial effect on costs incurred and revenues generated in discharging the public service obligations, taking account of revenue relating thereto kept by the public service operator and a reasonable profit;"; [Am. 40]

(ba)  Paragraph 5 is replaced by the following:"

"5. Without prejudice to national and Union law, including representative collective agreements between social partners, competent authorities shall require the selected public service operator to grant staff working conditions on the basis of binding national, regional or local social standards and/or to implement the compulsory transfer of staff in case of change of operator. When such transfer occurs, the staff previously taken on by the previous operator to provide services shall be granted the same rights to which they would have been entitled if there had been a transfer within the meaning of Directive 2001/23/EC. Where competent authorities require public service operators to comply with certain social standards, tender documents and public service contracts shall list the staff concerned and give transparently details of their contractual rights and the conditions under which employees are deemed to be linked to the services."; [Am. 41]

(c)  Paragraph 6 is replaced by the following:"

"6. Where In accordance with national law, the competent authorities, in accordance with national law, require public service operators to comply with certain shall set binding quality and social standards or establish, lay down appropriate social and qualitative criteria, these standards and criteria shall be included including the obligation of public service operators to comply with the applicable representative collective agreements and ensure decent employment and working conditions, including them or make reference thereto in the tender documents and in the public service contracts, regardless of the award procedure."; [Am. 42]

(d)  The following paragraph is added:"

"8. Competent authorities shall make available to all interested parties relevant information for the preparation of an offer under a competitive tender procedure, whilst protecting business secrets. This shall include information on passenger demand, fares, costs and revenues related to the public passenger transport covered by the tender and details of the infrastructure specifications relevant for the operation of the required vehicles or rolling stock to enable them to draft well informed business plans. Rail infrastructure managers shall support competent authorities in providing all relevant infrastructure specifications. Non-compliance with the provisions set out above shall be subject to the legal review provided for in Article 5(7).". [Am. 43]

4.  Article 5 is amended as follows:

(-a) The following paragraph is inserted:"

"1a. Any competent authority, whether it is an individual authority or a group of authorities, including from more than one Member State, shall be entitled to award public service contracts in accordance with the rules laid down in this Regulation."; [Am. 44]

(-aa) The following paragraphs are inserted:"

3b.  Member States and, if permitted by national law, competent authorities may exclude from the competitive tendering procedures any operator or undertaking that is directly or indirectly controlled by a legal or natural person or by persons registered in a third country or third countries, save where that country or those countries have taken measures that allow public service contracts to be awarded through competitive tendering to railway undertakings licensed in a Member State."; [Am. 68]

(a)  Paragraph 4 is replaced by the following:"

In the case of a public service contract directly awarded to a small or medium-sized enterprise operating not more than 23 road vehicles, these thresholds may be increased to either an average annual value estimated at less than EUR 2 000 000 or to an annual provision of less than 600 000 kilometres vehicle-km of public passenger transport services."; [Am. 48]

(aa)  Paragraph 5 is replaced by the following:"

"5. In the event of a disruption of services or the immediate risk of such a situation, the competent authority may take an emergency measure. A situation of emergency may include the inability of the competent authority to launch in good time a tender procedure for a public service contract and/or to award that contract in good time to an operator. This emergency measure shall take the form of a direct award or a formal agreement to extend a public service contract or a requirement to provide certain public service obligations. The public service operator shall have the right to appeal against the decision to impose the provision of certain public service obligations. The award or extension of a public service contract by emergency measure or the imposition of such a contract shall not exceed two years."; [Am. 63]

(b)  Paragraph 6 is replaced by the following:"

Where the regulatory body concludes that the requirements set out in point (a) of this paragraph have not been complied with, it shall without delay oblige the competent authority to award any new public service contract in accordance with paragraph 3 of this Article.

The decision of the independent regulatory authority shall be binding and immediately applicable.

By way of derogation to Article 4(3), the duration of such contracts shall not exceed nine years.

The Commission shall adopt delegated acts detailing the requirements set out in point (a) of this paragraph.". [Am. 50]

5.  The following Article is inserted:"

"Article 5a

Rolling stock

1.  Member StatesThe competent authorities shall, in compliance with State aid rules, take the necessary measures to ensure effective and non-discriminatory access conditions to suitable rolling stock for public passenger transport by rail for operators wishing to provide public passenger transport services by rail under public service contract. [Am. 51]

2.  Where rolling stock leasing companies which provide for the leasing of rolling stock referred to in paragraph 1 under non-discriminatory and commercially viable conditions to all of the public rail passenger transport operators concerned do not exist in the relevant market, Member States shall ensure that the residual value risk of the rolling stock is borne by the competent authority in compliance with State aid rules, when operators intending and able to participate in tendering procedures for public service contracts so request in order to be able to participate in tendering procedures.

3.  In the cases referred to in points (b) and (c) of the second subparagraph of paragraph 2, the competent authority shall have the right to require the public service operator to transfer the rolling stock after the expiry of the public service contract to the new operator to whom a contract is awarded. The competent authority may oblige the new public transport operator to take the rolling stock over. The transfer shall be done at market rates. [Am. 55]

3 4. If the rolling stock is transferred to a new public transport operator the competent authority shall make available in the tender documents detailed information about the cost of maintenance of the rolling stock and about its physical condition.". [Am. 56]

4.  By [18 months after the date of entry into force of this Regulation] the Commission shall adopt measures setting out the details of the procedure to be followed for the application of paragraphs 2 and 3 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 9a(2)." [Ams. 57 and 82]

6.  In Article 6, paragraph 1 is replaced by the following:"

"1. All compensation connected with a general rule or a public service contract shall comply with Article 4, irrespective of how the contract was awarded. All compensation of whatever nature connected with a public service contract not awarded according to Article 5(3) or connected with a general rule shall also comply with the provisions laid down in the Annex.".

7.  Article 7 is amended as follows:

(a)  Paragraph 1 is replaced by the following:"

"1. Each competent authority shall make public once a year an aggregated report on the public service obligations for which it is responsible, the starting date and duration of the public service contracts, the selected public service operators and the compensation payments and exclusive rights granted to the said public service operators by way of reimbursement. The report shall assess performance in terms of compliance and specify all transport service indicators, including punctuality, reliability, cleanness, user satisfaction as measured by public opinion polls, and the minimum capacity utilisation rate. The report shall distinguish between bus transport and rail transport, allow the performance, quality and financing of the public transport network to be monitored and assessed and, if appropriate, provide information on the nature and extent of any exclusive rights granted. Member States shall facilitate central access to these reports, for instance through a common web portal. The Commission shall prepare a summary of these reports and submit it, in all working languages, to the European Parliament and the Council."; [Am. 58]

(b)  In paragraph 2, the following point is added:"

"(d) the envisaged starting date and duration of the public service contract.".

8.  Article 8 is amended as follows:

(a)  The first subparagraph of paragraph 2 is replaced by the following:"

"2. Without prejudice to paragraph 3, the award of public service contracts by rail with the exception ofconcerning transport by road and other track-based modes such as metro or tramways or tram-train systems shall comply with Article 5(3) as from 3 December 2019. All public Public service contracts by other track-based modes and by road must have beenconcerning public passenger transport by rail shall be awarded from 3 December 2022 in compliance with Article 5(3) by 3 December 2019 at the latest. By 3 December 2022 the competent authorities responsible for establishing the public transport plans referred to in Article 2a shall be entrusted with all powers necessary for awarding public service contracts in accordance with Article 5. During the transitional period running until 3 December 2019periods, Member States shall take measures to gradually comply with Article 5(3) in order to avoid serious structural problems in particular relating to transport capacity."; [Am. 59]

(aa)  In paragraph 2, the following subparagraph is added:"

"Within six months after the first half of the transitional periods, Member States shall provide the Commission with a progress report, highlighting the implementation of any gradual award of public service contracts that comply with Article 5. On the basis of the Member States’ progress reports, the Commission may propose appropriate measures addressed to Member States."; [Am. 60]

(b)  The following paragraph is inserted:"

"2a. Public service contracts for public passenger transport by rail that do not comply with Article 5, directly awarded between 1 January 2013 and 2before 3 December 20192022, may continue until their expiry date. However they shall, in any event, not continue after 31 December 2022."expire at the latest on ...(9)."; [Am. 61]

(c)  In paragraph 3, the last sentence of the second subparagraph is replaced by the following:"

"The contracts referred to in (d) may continue until they expire, provided they are of limited duration similar to the durations specified in Article 4.".

9.  The following Article is inserted:"

"Article 9a

Committee procedure

1.  The Commission shall be assisted by the Single European Railway Area Committee established by Article 62 of Directive 2012/34/EU. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of the Council*.

2.  Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

--------------------

* Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).".

Article 2

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. It shall be made available in the form of a text consolidated with Regulation (EC) No 1370/2007, which it shall amend within three months of its publication. [Am. 62]

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...,

For the European Parliament For the Council

The President The President

(1) OJ C 327, 12.11.2013, p. 122. (2) OJ C 356, 5.12.2013, p. 92. (3) Position of the European Parliament of 26 February 2014. (4) White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system; COM(2011)0144. (5) Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). (6) Council Regulation (EU) No .../... amending Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid and Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road, COM(2012)0730 of 5.12.2012 (7) Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC (OJ L 94, 28.3.2014, p. 243). (8) OJ L 343, 14.12.2012, p. 32 (9) 10 years after the entry into force of this Regulation (i.e. of the amending act - 2013/0028(COD))