Reports 23 Nov 2010

Public service rail transport in the European Union: an Overview

Public service transport plays a crucial role in passenger transport in the European Union, both from a political and from an economic point of view as it represented in 2007 a financial volume of more than EUR 20 billion. It is estimated that approximately 90% of domestic passenger transport in the EU is currently provided within the context of public service arrangements, which in many cases represents substantial revenues for railway undertakings. Moreover, public service transport is an undeniably important social policy instrument for public authorities.

The operation and organisation of public service transport differs greatly throughout the EU due to the great variety of needs and traditions. That’s why the Community of European Railway and Infrastructure Companies (CER) decided in 2005 to publish a brochure illustrating the different approaches in the European Union. At the time, it was striking to see that the conditions for operating public service contracts were divided into two major groups: the EU15 countries, where public service passenger transport was organised in a straightforward legal framework and where railway operators were considered as commercial companies; and the EU12 countries, where the situation was much more problematic with operators being forced to provide public services while receiving inadequate financial compensation for their operation. In other words, the conditions under which public service transport was provided were complex and it was clear that harmonised rules could not be applied without taking into account the specific political and economic context in each member state.

Six years later, the situation has slightly evolved in two areas: firstly, competition is growing in the EU member states with an increasing number of public service contracts being tendered out. This trend is likely to continue, also taking into account the plans of the European Commission to address the issue more formally by proposing EU legislation in the coming years. Secondly, some progress has been made in some member states with regards to financing of public service requirements. However much more needs to be done to comply with existing legislation.

In this context, CER is publishing the second edition of this brochure which describes the state of the art in the European Union as well as in Norway, Switzerland and Croatia. A general commentary is also included, guiding the reader through the various elements to be taken into account when analysing the provision of public service transport. With this brochure, CER hopes to provide useful guidance to stakeholders in their assessment of the constantly changing legal framework for railway undertakings in Europe.