Draft EU regulation on public service requirements - what are the consequences for local public transport?

Document Type

Conference Paper

Publication Date


Subject Area

organisation - regulation


The EU Commission released in July 2005 its third proposal for a “regulation on action by Member States concerning public service requirements and the award of public service contracts in passenger transport by rail, road and inland waterway”. Prior to present the new proposal and to analyse the consequences on authorities and operators, the paper will first describe the current legal framework ruling public transport in Europe with a specific focus on financial compensations and granting of exclusive rights for operators. The paper will then describe how several legal disputes have raised in the public transport sector and led to a strong expectation for a new regulation. This new draft regulation is based on three main principles: 1. The generalisation of contracts between competent authorities and operators in order to clarify their roles and responsibilities and to define clearly the public service obligations and their compensations. 2. The flexibility given to transport authorities in the decision to provide public transport services in-house (i.e. themselves or via an internal operator) or to have recourse to a third party. Public service contracts have to be awarded via an invitation to tender, except to internal operators for which direct award is possible. 3. The subsidiarity in the definition of services excluded from the scope of this regulation such as regional and long distance rail services The text also sets a precise framework for contract awarding, publicity and monitoring. The duration of the contracts and the calculation of compensations are strictly defined. The mandatory content of the contracts has been however lightened compared to the previous versions. Possible impacts on public transport provision EMTA, association of European Metropolitan Transport Authorities bringing together 32 authorities responsible for public transport, has analysed possible consequences of this regulation on the awarding of public service contracts in Europe with a focus on its member cities. The level of change expected by this draft regulation depends mainly on the institutional framework and on the status of operating companies. However, rules applying for the award of public service contracts can have substantial impacts on all public transport authorities. Impacts of the draft regulation can be evaluated through three items: the organisational impacts, the consistence of public transport networks and the provision of services. - Organisational impacts will be analysed taking in account different kinds of frameworks existing in Europe: Deregulated markets – ex: UK outside London; Regulated networks partially or totally tendered – ex: Lyons, Stockholm; Networks for which operations are directly awarded – ex : London Underground, Paris, Rail services in Helsinki. - Impact on networks consistence will be addressed regarding the geographical coverage on the one hand and the coherence between transport modes on the other hand. - Lastly, the paper will describe the consequences of the draft regulation on service provision i.e.: contracts definition and implementation, performance monitoring, and public funding of operations. The potential impacts are important to bear in mind as this text is expected to pass the second reading at the European Parliament during Autumn 2006.


Permission to publish abstract given by AET.