Committee Reports > List of Committees > Joint > 1978 > Committee on the Secondary Legislation of the European Communities > Report No. 34 - Public Transport Carriage of Goods, Community Quot[Private] Road / Rail Transport and Infrastructure Expenditure

REPORT

Introduction

1. The Joint Committee has examined the following proposals made by the Commission to the Council in recent months relating to transport, one of which [R/2041/78] is for a Council Directive and the remainder for Council Regulations:—

Action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway and granting of aids for such transport [R/1174/78].

Adjustment of capacity for the carriage of goods for hire or reward between Member States [R/2461/78].

Accounting system for expenditure on infrastructure in respect of transport by rail, road and inland waterway [R/2145/78].

Community quota for the carriage of goods by road between Member States [R/2069/78].

Common rules for certain types of combined road/rail carriage of goods between Member States [R/2041/78].

2. At its meeting on 23/24 November, 1978 the Council of Ministers reached decisions in principle on two of the above mentioned proposals [R/2041/78 and R/2069/78] and the Joint Committee’s comments in this report on the matters contained therein are on decisions already taken by the Council though the instruments incorporating those decisions have yet to be adopted formally. Decisions have yet to be taken by the Council on the remaining proposals.

Public Service Transport and National Aids

3. The draft Regulation seeks to amend two earlier Council Regulations which deal with the compensation of transport operators by. the Member States in respect of operations which they carry out in the public service but which are not commercially justifiable.

4. Regulation No. 1191/69 obliged Member States to terminate obligations inherent in the concept of public interest imposed on transport undertakings but authorised the maintenance of such obligations where essential subject to the payment of compensation by the State. Such public service obligations, as they are called, may arise from an obligation to operate or to carry or from tariff obligations. The latter are defined by the 1969 Regulations as the obligation to apply for certain categories of passengers or goods or on certain routes non-commercial rates fixed by public authorities which arise from the imposition of or refusal to modify special tariffs. Regulation No. 1107/70 extended the scope of compensation to tariff obligations not covered by this definition and to undertakings and activities not covered by the 1969 Regulation. The 1970 Regulation specifically declared that Articles 90 to 92 of the Treaty of Rome apply to the compensation by the State.

5. The payment of compensation under Regulation No. 1191/69 is compulsory and there are defined procedures for the calculation of compensation. The payment of compensation under Regulation No. 1107/70 is, however, optional and there are no defined procedures as in Regulation No. 1191/69.

6. The Commission’s proposal seeks to amend the definition “tariff obligations” in Regulation No. 1191/69 by providing that these may result from the imposition of or refusal to modify special tariff measures or general tariff measures; as a consequential amendment the reference to tariff obligations in Regulation No. 1107/70 is to be deleted. It provides, however, that general measures of price policy applying to the economy as a whole are not comprehended by the obligations.

7. CIE supports the proposal because it sees in it a recognition of the principle that there should be proper compensation for obligations of a public service nature. It considers that the machinery provided by Regulation No. 1191/69 is sufficiently comprehensive and flexible and it welcomes its extension.

8. The Joint Committee is advised, however, that it is not envisaged that the proposed Regulation would have any practical consequences for Ireland. The extended definition of “tariff obligation” under the proposed Regulation would continue to exclude obligations arising from general measures of price policy applying to the economy as a whole, so that control of CIE’s fares and rates under the Prices Acts would not constitute a tariff obligation. The Committee is informed that even if there were to be restrictions on CIE’s charges which could be regarded as coming within the meaning of the new definition, this would not alter the total subvention payable to CIE and would result only in a different classification for part of the subvention. The Committee sees no objection to the adoption of the proposal.

Carriage of Goods by Road for Hire or Reward

9. At present the carriage of goods by road for reward between Member States is regulated partly by Community legislation [Community quotas and the First Council Directive of 23/7/1962, as amended, which exempts specified categories from quota and/or licensing control] and partly by bilateral agreements. The bulk of such transport operations is still apparently governed by bilateral agreements.

10. When the common market in transport is eventually achieved there will no longer be any reason to limit the capacity for the carriage of goods by road between Member States. This has proved to be a long drawn out process and the Commission accepts that transitional arrangements are necessary to move from the present position to an integral common market. In its present proposal the Commission is seeking to incorporate the system of bilateral quotas into a Community framework.

11. The proposed Council Regulation would, if adopted, affect the adjustment of bilateral quotas in the following ways:

(a) Community criteria would be applied to the adjustment of bilateral quotas.

(b) The Commission would participate in a consultative capacity in negotiations for the adjustment of bilateral quotas.

(c) A Community arbitration procedure would apply in the event of a breakdown in negotiations on bilateral quotas.

(d) Where no bilateral quotas now exist, the approval of the Commission would be needed for the imposition of such quotas.

(e) Transit traffic over the territory of Member States in the course of transport between Member States would be freed from quota restrictions.

In addition, the proposed Regulation provides for negotiation by the Community of agreements with third countries for transport between those countries and EEC Member States.

12. Ireland has bilateral road transport agreements with France, Belgium and the Federal Republic of Germany. Each of these agreements contains a quota restriction on the number of operations which may be carried out each year. There is a provision in each agreement for the establishment of a Joint Committee of the competent authorities of the two countries to review the terms of the agreement including, where necessary, the level of the quota. If the proposed Regulation were adopted, the Commission would be involved to the extent indicated in the preceding paragraph. In addition the removal of quota controls from transit operations would give Irish hauliers free transit facilities across other Community countries. Hauliers of other Community countries would have similar facilities for transit across Ireland but because of the geographical position, Irish hauliers would tend to have the greater gain.

13. The Commission’s proposals are seen by it as a step towards the abolition of bilateral licences altogether. CIE which opposes complete liberalisation of road transport in the Community confesses that it would have misgivings about the abolition of the bilateral licensing system. Nevertheless, it accepts that the Commission at present seeks merely to bring about a degree of harmonisation of the criteria on which negotiations would be based so as to ensure that the real needs of transport demands were adequately met.

14. In the Joint Committee’s view the balance of advantage probably lies with supporting the Commission’s proposal.

Accounting System for Infrastructure Expenditure

15. The Commission’s proposal seeks to amend a Council Regulation No. 1108/70 which introduced a permanent accounting system for infrastructure expenditure in respect of rail, road and inland waterway transport. The latter Regulation requires Member States to make returns to the Commission relating to expenditure on and use of the infrastructure. The present proposal is aimed at amending and simplifying the provisions relating to those returns.

16. The Joint Committee’s examination of the proposal does not reveal that the adoption of the proposal would cause any particular difficulty for this country.

Community Quota

17. The Community quota system which was introduced in 1968 was intended as a step towards the final stage of freeing the carriage of goods by road from all quantitative restrictions. Under the scheme an annual quota of authorisations is allocated among the Member States. These authorisations enable the holders to engage in the carriage of goods by road for hire or reward between EEC Member States on a bilateral basis (i.e. between the haulier’s own country and another EEC country) and on a multilateral basis (i.e. between two EEC countries, neither of which is the haulier’s own country).

18. The quota for the Community for 1978 is 2,835 authorisations, of which Ireland’s allocation is 60 authorisations. The authorisations granted to Ireland are allotted to hauliers by the Minister for Tourism and Transport. The EEC Commission’s proposal was for a 20 per cent increase with effect from 1st January, 1979, giving a quota of 3,402 authorisations. The 20 per cent increase in the quota was to be allocated among the Member States in the following way:—

(a) half on a linear basis; and

(b) the other half on the basis of the rate of utilisation of authorisations in 1977.

19. The Council has decided that the quota for 1978 is to be increased by 10 per cent only, half on a linear basis and half based on rate of utilisation. Whereas the Commission’s proposal would have given Ireland 69 authorisations out of a total of 3,402, the Council’s decision probably gives her only 65 out of 3,122. This enables Irish hauliers to use an additional five road vehicles under the scheme as each authorisation may be used for only one vehicle at a time.

20. The Joint Committee wishes to record its disappointment with the allocation of authorisations for Ireland for 1979. Quite apart from the reluctance of the Council to agree to no more than an extremely moderate increase in the overall quota, the system of allocating half the increase on the basis of utilisation operates unfairly in Ireland’s case. Any real international road transport from Ireland entails one or even two sea crossings. These are, of course, made even more difficult and time consuming by the vagaries of our weather and must reflect unfavourably when contrasted with the relatively trouble free use by operators in the contiguous continental Member States. This operating and competitive disadvantage for Irish hauliers is further aggravated by the existence of an extensive, purpose built, high speed road system. If anything, Ireland should be seeking a higher average increase in its basic allocation of licences to compensate for the slower turn around time and usage of licences occasioned by its peripheral island position. The Joint Committee recommends that every effort be made to seek to have this position recognised when the Community quota comes up again for review.

Common Rules for Combined Road/Rail Carriage of Goods

21. Council Directive 75/30 which liberalised certain types of combined road/rail carriage of goods from all quota and authorisation systems is due to expire on 31st December, 1978. The Commission’s proposal was for an amending Directive making permanent, with certain amendments, the common rules laid down by Directive 75/130. The Council’s decision is to retain the present common rules on a permanent basis but to extend them on an experimental basis to combined road/rail container traffic for two years.

22. Since, however, there are no railway facilities in Ireland for combined road/rail carriage and since the possibility of a demand to justify them is not foreseen, the impact of the proposal on road transport in Ireland should be slight. CIE has informed the Joint Committee that the type of operation involved can only be commercially viable where there is a regular heavy flow of suitable traffic over long distances. In principle CIE supports the concept of combined road/rail transport. Whilst geography and volume would be most unlikely to favour its development by CIE, the company believes that the opportunity afforded Irish hauliers to penetrate Community markets makes the amending Directive acceptable.

Bodies Consulted

23. The Joint Committee consulted the following bodies in connection with the matters dealt with in this report:—

CIE

Irish Congress of Trade Unions

Irish Transport and General Workers’ Union

Confederation of Irish Industry

Irish Road Haulage Association

Irish Overseas Haulage Association.

Memoranda supplied proved of invaluable assistance to the Committee in its deliberations and the Committee is extremely grateful to the bodies concerned.

Chairman of the Joint Committee.

13th December, 1978.