CER is concerned about the mandatory tendering of PSO as being the only applicable award mechanism

Six law proposals compose the Fourth Railway Package. By initiating these law proposals, the European Commission wants to stimulate competition on railways, to achieve the much-desired interoperability between networks, to separate operation from management, to reinforce the role of the European Railway Agency, all for creating the Single European Railway Area. The Fourth Package has not become effective yet, debates on its proposals are currently being initiated and their evolution or potential amendments are very interested to follow.
Railway Pro has asked for the objective opinion of railway organizations that you can read below.

Railway PRO: What is your opinion regarding the EC’s proposal for bidding the public service rail contracts and regarding the fact that these public service contracts will become subject to mandatory tendering? How would this measure affect the smaller railway undertakings?
Libor Lochman: Let me to introduce the subject from a broader perspective. A further passenger market opening can only produce results if technical preconditions are fulfilled. This is the reason why CER supports the “technical pillar” of the legislative package. The opening up of domestic passenger markets will only materialize if streamlined vehicle authorization and safety certification processes in Europe become reality.
Furthermore I would like to point out that passenger market liberalisation has got two dimensions – open access services and services under public service contracts. They are complementary and should both match the customers’ expectations. CER, being always in favour of competition, does welcome the proposal of the European Commission to allow open access train services in every Member State. We think that entrepreneurial initiatives should not be prevented provided this is not downsized to cherry-picking or is detrimental to  financial equilibriums.

Regarding the specific question of award mechanisms of Public Service Obligation contracts (PSO), we think that it is key to keep the current flexibility allowed by the Public Service Obligation Regulation. We are convinced that competent authorities are able and are used to make the right choices when it comes to defining the transport needs of their citizens and when making the choice of the award mechanism.

This being said, CER is concerned about the mandatory tendering of Public Service Obligation as being the only applicable award mechanism. We do not believe that open tendering will by all circumstances deliver better results than direct award or in-house provision. We call upon Member States to be pragmatic and to allow enough flexibility when it comes to Public Service Obligation. This is particularly needed in the case of smaller Member States where the cost linked to the tendering can overcome the benefits it is deemed to generate.

The compulsory tendering certainly implies new prospects arising. Those who will dare to look ahead and abroad will find new business opportunities and might easily and rapidly become efficient and successful bidders. On the other hand it implies the risk of losing Public Service Obligation contracts and this can create very complicated issues both for staff and at financial level. The right balance should therefore be found and it should be up to competent authorities to make the choice of the appropriate award mechanism. This is what I personally hope for all railway companies and for our customers. As a tax-payer and a citizen, we all deserve the most economic approach.

[ by Elena Ilie ]
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