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Volume XI, Number 108

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Brussels Rail Transport Brief: February 2021

ANTITRUST AND COMPETITION

Latvia’s Competition Authority Imposes €5.69 Million Fine on LDZ Cargo for Abusing its Dominance in Rail Freight Transport

On 3 February 2020, Latvia’s Competition Council (CC) fined state-owned LDZ Cargo €5.69 million for abuse of a dominant position concerning rail freight transport in the country. In order to ensure international railway freight transport to and from Russia and Belarus, border stations in Kārsava, Zilupe or Indra, all cities located in Latvia have to be crossed. From 2007, LDZ Cargo provided the service running from the borders to the freight acceptance and transfer stations, meaning the firm was an “inevitable cooperation partner” for freight traveling through Latvia. 

The CC found LDZ Cargo abused its dominant position by applying discounts and other beneficial conditions for customers that used its services for a full route rather than just in the border area. Furthermore, in cases where clients of the operator wished to transfer to a rival provider, LDZ Cargo would terminate the favorable conditions and apply a higher tariff. The CC found that it was economically disadvantageous for customers to choose competitors of LDZ Cargo as service providers, which consequently made it difficult for new service providers to enter the market. 

Dutch Government Provides €370 Million to Cover Public Transport Losses

The Dutch government has announced it will provide €370 million subsidies to allow public transport services to continue operating in the second half of 2021. The government had previously announced it would compensate services until 1 July but warned that service levels could be reduced in the second half of the year.

In 2020, €1.5 billion were allocated to public transport, after passenger numbers dropped during the Covid-19 pandemic. Another €740 million have been allocated for the first half of 2021, covering up to 90 percent of the costs for public transport companies.

GVN’s Appeal of EU State Aid Ruling on German Local-Transport Support Program Published

On 8 February 2021, the European Court of Justice published a summary of the German transport association Gesamtverband Verkehrsgewerbe Niedersachsen eV’s (GVN) legal challenge to a local transport support program, set up under the law of the state of Lower Saxony. 

On 7 September 2021, GVN filed an appeal before the Court of Justice of the EU, seeking the annulment of a lower instance ruling, which said the program involved no state aid. GVN argues that the General Court completely disregarded its submission on a legal question and breached EU laws.

RAIL REGULATORY AND POLICY

European Commission comments on Passenger Rights 

On 3 February the European Commission published a communication, defending the reform of Regulation (EC) No 1371/2007 on passenger rights struck by European Council and Parliament negotiators last year. 

Regulation (EC) No 1371/2007 defines rail passengers’ rights and obligations. In force since December 2009, it establishes fundamental rights with regard to information, availability of tickets, assistance, compensation in case of delay, cancellation or accident, free-of-charge assistance for persons with disabilities or reduced mobility (DPRM) and complaint-handling mechanisms. In September 2017, the European Commission put forward a recast of the regulation, aiming to strike a better balance between the protection of EU rail passengers and the interests of rail operators.

There are still some issues with regards to the requirements for companies to offer long-distance rail trips as a through-ticket, the exemptions, and the 24-month transition period. Several, mostly Greens, MEPs have said the text doesn’t measure up to the Green Deal or European Year of Rail ambitions. However, in the communication, the European Commission concluded the new rules “increase the overall level of rail passengers’ protection while ensuring an appropriate balance with the needs of the rail industry.” 

The European Council approved the deal on 25 January 2021, it must now be adopted formally by the Parliament at second reading.

Consulation Open for Revision of the Trans-European Transport Network (TEN-T) Regulation 

On 10 February 2021, the European Commission launched a consultation for the revision of the TEN-T Regulation. The revision will build on the Strategy on Sustainable and Smart Mobility, driven by the European Green Deal and the transport sector’s contribution to climate neutrality which aims at a 90 percent reduction of CO2 emissions by 2050 and of reducing the overall environmental footprint of transport activities.

The consultation forms part of the impact assessment that will underpin the legislative proposal for a revised TEN-T Regulation. The objective of this consultation is to ensure that, in addition to the organizations directly involved in the TEN-T policy, other stakeholder groups and the general public are provided with the possibility to express their opinion about the topic. Stakeholders can contribute to this consultation by filling in the online questionnaire.

European Commission Publishes Study Results of Mobility Package I

On 19 February 2021, the European Commission published the results of two studies it commissioned to assess the expected impacts of two specific aspects of Mobility Package I, adopted on 15 July 2020; respectively the two requirements (introduced by the European Parliament and the European Council) for: 

  • the compulsory return of the vehicle to the Member State of establishment every eight weeks; and

  • the application of cabotage quotas on international combined transport operations. 

The results suggest that the return obligation for lorries and the quotas imposed on combined transport operations are likely to have negative effects, including an increase of transport emissions. The European Commission is closely assessing the study findings in the context of the European Green Deal, its Sustainable and Smart Mobility Strategy and the functioning of the single market.

European Commission refers Poland to the Court of Justice over failure to tackle noise pollution

The European Commission has decided on 18 February to refer Poland to the European Court of Justice over its failure to comply with its obligations under the Noise Directive (2002/49/EC). 

The Polish national law does not guarantee the establishment of action plans, which are required under the directive. Action plans for 20 major railway sections and for 290 major road sections are still missing, despite the deadline for adopting such action plans having passed.

Furthermore, the national law does not require action plans to include all necessary elements requested in the directive, in particular a record of public consultations, measures to preserve quiet areas and long-term strategy. Through the public consultations over the action plans the public can verify and have their say on whether authorities take adequate measures to reduce noise levels where they may be harmful, or to prevent existing levels from becoming harmful. This is why, not only do action plans need to be adopted, but the national law must require all elements to be included in those action plans.

German Aviation Association Publishes Concept Paper Supporting Shift to Rail

The German Aviation Association has published a concept paper supporting the shift to rail. “The aviation industry sees the potential here to shift up to a fifth of domestic German air traffic to rail,” says the paper. There are also talks with the federal government on linking incoming German flights to trains which are to be concluded before the end of 2021, according to a local newspaper.

“We are very interested in having more routes where the railroads can offer travel times of less than three hours. Then we could shift even more traffic to rail,” said the German aviation association’s chief executive, Matthias von Randow. He also pointed out the need for appropriate conditions such as the “realization of rail investments” and “improved rail connections to airports, especially Munich Airport.” 

European Commission Asks Lithuania to Correct national transposition of Directive Establishing a Single European Railway Area

On February 18, the European Commission sent a letter of formal notice to Lithuania regarding the incorrect transposition and implementation of the articles of Directive 2012/34/EU establishing a single European railway area on priority rules in cases of congestion. 

Priority rules are the rules enabling the infrastructure manager to attribute train paths when the infrastructure is congested. The contested priority rules have been found to go beyond what is allowed under the directive and to be discriminatory in that they favor the incumbent railway undertaking. Lithuania now has two months to reply to the concerns; otherwise the European Commission may decide to send a reasoned opinion. 

PUBLIC PROCUREMENT AND NEW PROJECTS

Spanish High-Speed Network (AVE) Reaches Orihuela

On 1 February 2021, the first high-speed trains (AVE) completed the journey between Madrid and Orhuela, inaugurating the first phase of a new corridor that will link Madrid with Murcia. 

The line links 38,3 km section of the high-speed line between Monforte del Cid and Orihuela. The line, which has an intermediate station at Elche, is double-tracked, electrified, and has a design speed of 350 km/h. 

The opening of the new line will cut down the time needed for rail journeys between Murcia and Madrid by 23 minutes. According to local news, AVE trains will reach the city of Murcia in mid-2022. 

Finland’s Government Approves Funding for Helsinki–Russian Border High-Speed Line 

The Finnish government has approved plans to finance the construction of a €2.65 billion high-speed line to connect Helsinki and the Russian border. The approval of funding for the project follows a meeting between the Finnish foreign trade minister, Ville Skinnari, and the Russian government and Russian Railways RZD officials last month. 

The project is intended to connect Helsinki with Russia’s planned 659km Moscow–St Petersburg high-speed line, currently scheduled for completion in 2026, and would enable six-hour journey times between the Russian and Finnish capitals. 

A new state-owned company will oversee the project, managing the design and financing of the line, which will be majority-owned by the Finnish government but also Russian regional governments that are along the route. 

France to Restore Paris–Nice Night Train in April

Transport minister, Jean-Baptiste Djebbari has recently announced he wants to launch 10 night train lines in the country by 2030. 

“With the pandemic, the recent flight shaming’ movement and pressing environmental issues looking at the night train has become a viable alternative, Austria has 28 lines whereas France currently only has two night train connections, down from eight in 2015.” Djebbari said in an interview with the Paris Dimanche newspaper. 

The minister said his ambition was to see around 10 overnight services running over four main corridors by 2030: Bordeaux–Marseille, Dijon–Marseille, Tours–Lyon via Île-de-France, and Paris–Toulouse.

Djebbari also stated that these plans are based on the recommendations of a parliamentary report, which will be published shortly stating he was counting on funds from the EU’s Green Deal to finance the new services.

Brussels–Vienna Night Train to Return in March

Brussels–Vienna Nightjet, which was paused in November because of the pandemic, will be restarted on 25 March, according to Austrian operator ÖBB. ÖBB will also restart its Vienna–Amsterdam link at the end of March, as well as several other routes between Austria and Germany, Switzerland, and Italy.

Lineas Launches New Train Connection

Lineas has launched a new Xpress train service for intermodal loads between the Port of Moerdijk in the Netherlands, and Antwerp in Belgium. The new connection reinforces Lineas’ port connectivity network and also intensifies its rail services between Rotterdam and Antwerp. 

Through Antwerp, cargo can move throughout Europe via Lineas’ Green Xpress Network. The port of Moerdijk is an important port in the European logistics chain, currently handling around 2,000 ocean-going and 11,500 inland waterway vessels per year.

Czech Republic Announces 2021 Station Modernisation Programme

Správa Železnic (SZ), the railway infrastructure manager of the Czech Republic, has announced that in 2021, 114 station buildings across the country will be renovated. The plans, with a value of €69 million, will cover reconstruction, repairs, and renovation works. 

Of the 114 projects, 60 projects were already launched in 2020 and are ongoing, a vast majority are expected to be completed by the end of 2022. Construction projects will be carried out in Central Bohemia, southern Bohemia, Pilsen, Karlovy Vary, and Liberec regions: 

  • In southern Bohemia, SZ will focus on 14 buildings with extensive reconstruction works to start for the stations in Tábor, Písek or Veselí nad Lužnicí. 

  • In the Pilsen Region, reconstruction of the stations of the cities will begin in spring and should be completed in two and a half years. 

  • In Moravia and Silesia, the modernization of stations (31 buildings), Havířov railway station is the most extensive project which requires € 6 million.

  • In the Zlín region, five stations will be renovated.

  • In the South Moravian Region seven construction projects will start this year with extensive reconstruction works expected to be carried out at three stations.

UK Parliament Approves HS2 Phase 2A

The UK Parliament approved the next phase of the high-speed rail network, by passing a bill approving the building of HS2 Phase 2A from West Midlands to Crewe. HS2 Phase 2 will be delivered in two stages:

  • the first one from West Midlands to Crewe (2A); and 
  • the second one (2B) will link Crewe to Manchester, and the West Midlands to Leeds.

The 58 km long route, now to be constructed earlier than originally planned, is expected to coincide with Phase 1 between London and the West Midlands (announced in September 2020). The project will create around 5,000 jobs. 

Poland and Lithuania Sign Letter of Intent to Jointly Implement Rail Projects

On 18 February 2021, the state-owned railway infrastructure managers PKP PLK and LTG Infra have signed a letter of intent on the establishment of a Polish-Lithuanian Infrastructure Group for the improvement of railway connections and cross-border projects. This will also include the modernization of the Rail Baltica route.

The group will improve the railway transport between the two countries by facilitating the exchange of knowledge and information on the modernization of Rail Baltica, cooperating on the development of cross-border connections, including the implementation of technical and operational solutions and the deployment of the European Rail Traffic Management System. 

The cooperation of the two companies will allow smooth and uninterrupted service between the Polish-Lithuanian border. The border crossing in Trakiszki (in north-eastern Poland) is the only railway border crossing on the Polish-Lithuanian border, and therefore the only one connecting the Lithuanian railway network and the rest of the European Union.

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Copyright 2021 K & L GatesNational Law Review, Volume XI, Number 64
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About this Author

Miguel A. Caramello Alvarez Counsel  Brussels Antitrust, Competition & Trade Regulation
Counsel

Miguel Caramello Alvarez is a counsel at the firm’s Brussels office. He is a member of the antitrust, competition and trade regulation practice group.

He is a regulatory and competition lawyer with extensive experience in the transport sector, in particular on rail. Within his practice, he focuses on all aspects of EU and international rail transport law, competition law and state aid, public procurement, market access and public policy. He provides regulatory and competition representation before the European Commission and other national competition authorities, national rail...

32.2.336.1946
Philip Torbøl, KL Gates, cartel investigations lawyer, merger control attorney
Partner

Philip Torbøl is a founding partner of the firm’s Brussels office. His practice focuses on EU competition law and government strategies.

Mr. Torbøl’s competition experience includes advising clients in matters related to the conduct of dominant companies, cartel investigations, merger control, and state aid.  In addition to defending clients before European institutions, Mr. Torbøl’s practice focuses on helping companies define their distribution strategies within the framework of EU competition law – not only preventively, but also to ensure...

32-0-2-336-1903
Alessandro Di Mario, KL Gates, Antitrust lawyer, Fair Competition attorney
Senior Associate

Alessandro Di Mario is a member of the antitrust, competition and trade regulation group. Mr. Di Mario is an international trade lawyer, specialized in market access issues; in that context, he has developed a broad experience, across a range of legal issues (regulatory; policy; litigation) and different industries.

Mr. Di Mario regularly provides legal assistance and support on competition law, trade law, WTO and internal market issues, UN and EU sanctions and restrictive measures, EU regulatory law, aviation law, food law, energy and telecommunications.

32-0-2-336-1938
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