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Public passenger transport service by rail and road

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Public passenger transport service by rail and road

This Regulation defines the conditions in which the competent authorities can intervene in the area of public passenger transport (rail and road transport) to guarantee the provision of services of general interest.

ACT

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, and repealing Council Regulations (EEC) No 1191/69 and (EEC) No 1107/70.

SUMMARY

Public service compensation may be necessary to ensure the provision of services of general economic interest (SGEI) and guarantee safe, efficient, attractive and high quality passenger transport.

This Regulation applies to regular and non-discriminatory access, national and international public passenger transport services by rail and other track-based modes and by road.

Public service contracts and general rules

The competent authority, meaning the public authority or authorities with the power to intervene in public passenger transport within a given geographical area, is obliged to conclude a public service contract with the operator to which it grants an exclusive right and/or compensation in exchange for discharging public service obligations (PSO). Obligations which aim to establish maximum tariffs for all or certain categories of passengers may also be subject to general rules.

The competent authority grants compensation for the net financial impact occasioned by compliance with the contractually defined public service obligations or pricing obligations established in the general rules.

The public service contracts and general rules define:

  • the PSO to be fulfilled by the operator and the geographical areas concerned;
  • the parameters based on which compensation must be calculated and the nature and scope of all exclusive rights granted to avoid any overcompensation;
  • the means of distributing the costs linked to service supply (staff costs, energy, infrastructure, maintenance, etc.);
  • the means of distributing income from the sale of transport tickets between the operator and the competent authority.

The duration of public service contracts is limited and must not exceed ten years for bus and coach services, and fifteen years for passenger transport services by rail or other track-based modes. This period may be extended by up to 50 % under certain conditions.

Awarding of public service contracts

Public service contracts are awarded according to the rules laid down in this Regulation. However, for awarding certain passenger transport services by bus or tram, the procedures of Directives 2014/25/EC and 2014/24/EC apply.

Subject to certain reservations detailed in Article 5 of the Regulation, competent local authorities may provide public transport services themselves or assign them to an internal operator over which they have control comparable to that over their own services.

Any competent authority who uses a third party other than an internal operator must award public service contracts by means of transparent and non-discriminatory competitive procedures which may be subject to negotiation.

The obligation to instigate competitive procedures does not apply to:

  • low level contracts, the average annual value of which is estimated at less than EUR 1 million or which supply less than 300 000 kilometres of public passenger transport services;
  • where emergency measures are taken or contracts are imposed in response to actual or potential service interruptions;
  • rail transport.

Information and transparency obligations

The Member States have three months to, upon request, provide the Commission with all the information necessary to determine whether the compensation allocated is compatible with this Regulation.

Each competent authority shall publish a global annual report on the public service obligations relevant to their jurisdiction, the public service operators used and the resultant compensation and exclusive rights received by them.

One year prior to any competitive procedure or direct awarding, the competent authority must ensure that the following information is published in the Official Journal of the European Union: name and contact details of the competent authority, type of allocation proposed and services and territories likely to be affected.

Progressive application of Article 5 of the Regulation

The Member States must gradually come into line with the Regulation with regard to awarding public service contracts, in order to avoid structural problems particularly in terms of transport capacity, with the end of the transition period fixed at 2 December 2019.

Background

This Regulation repeals Regulation (EEC) No 1191/69 and Regulation (EEC) No 1107/70. It forms part of the objectives in the Commission's white paper of 12 September 2001, which is itself replaced by the new white paper on transport policy adopted in 2011 (see Related Acts).

REFERENCE

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 1370/2007

3.12.2009

-

OJ L 315 of 3.12.2007

RELATED ACTS

White paper: Roadmap to a Single European Transport Area - Towards a competitive and resource efficient transport system [ COM(2011) 144 final - Not published in the Official Journal].

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1370/2007 concerning the opening of the market for domestic passenger transport services by rail [ COM(2013) 28 final - Not published in the Official Journal].

The overall objective of this Proposal, which forms part of the fourth rail package, is to improve the quality and efficiency of passenger transport services by rail. It proposes common rules regarding the awarding of public service contracts for passenger transport by rail, and also accompanying measures designed to facilitate the implementation of competition procedures.

Communication from the Commission on interpretative guidelines concerning Regulation (EC) No 1370/2007 on public passenger transport services by rail and by road (2014/C 92/01) [Official Journal C 92 of 29.3.2014].

In this Communication, the Commission sets out its interpretation of a number of Regulation provisions, in the light of existing best practices, in order to assist the Member States in taking full advantage of the internal market.

Last updated: 11.07.2014

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