Commission plans tough guidelines to protect vital public transport services

Date: 04/05/2000

By Simon Coss

CRITICS of the European Commission's unrelenting campaign to liberalise EU industry may be surprised to learn that there are some areas where the institution believes unfettered competition is not the answer to the Union's economic woes.

When it comes to public transport, the EU executive firmly believes that a European citizen's right to be able to travel from A to B with relative ease and without having to use a private car outweighs the need for the Union's bus, metro, tram and train companies to make a healthy profit.

So convinced is the Commission of the importance of safe and affordable public transport that it is currently working on plans for new EU rules which would set mandatory guidelines for the sector across the Union.

The planned new regulations aim to improve the quality of public transport by obliging governments to publish clear information about the services they provide and the subsidies they pay to operators. They would also set out clearly the responsibilities of both sides in this purchaser/provider relationship.

"We are convinced of the need to offer all citizens a mode of transport other than the private car that they can use for daily journeys either in their town or region," explained Transport Commissioner Loyola de Palacio recently. She added that such a level of public support could not be guaranteed if transport companies were motivated purely by profit.

The Commission points out that many of Europe's most vital public transport services, such as rural bus routes, will probably never even break even, let alone make a profit, but that the value they bring to the economic and social lives of the communities they serve validates their existence.

In such cases, the Commission argues that it is perfectly acceptable for state or regional governments to be exempted from the Union's strict rules on state aid to industry and permitted to subsidise public transport. "The authorities should fill in the gaps by identifying and financing a level of service that responds to the public service needs of their citizens," argues Palacio.

Some critics maintain that the Commission should not get involved in public transport issues as the money for running these services comes solely from national coffers. But Palacio disagrees. She accepts that when it comes to specific public transport schemes set up by regional or municipal administrations, her institution has no say in the matter. However, on a wider level, she argues that the state of the EU's public transport networks is very much the Commission's problem. "Reducing pollution and easing traffic congestion are objectives that should be pursued at European level," she insists.

She also argues that while the public service role of communal transport should remain sacrosanct, it should nevertheless be possible to introduce more competition into the process of tendering for contracts to run certain transport services.

The Commissioner's planned new regulation would oblige regional authorities to run open tendering competitions when, for example, launching new bus services. But the same obligations would not be imposed on rail operators, given the potential for serious accidents, as seen with recent tragedies in the UK, Norway and Germany.

Article forms part of a survey 'Industrial liberalisation'.