12-06-2006

The regulation will enter into force three years after its adoption and the member states will be granted a 12-year transition period. The text covers public road and rail transport, with Ministers also introducing scope for member states to include waterway transport services.

When authorities contract public transport services out to a third party, the general principle will be tendering, and therefore competition will occur. However, scope is included for exemptions to the basic principle. Firstly, the Council extends scope for directly awarding public service transport to all heavy rail freight services including on suburban lines.

The Commission had only proposed such an exemption for regional and long-distance trains and not for suburban services. Secondly, ceilings below which authorities can award public service contracts at their discretion have been adopted. The general rule is that contracts can be awarded directly for transport services whose contract value is estimated at less than 1 million a year and which extend to less than 300,000 km. For SMEs, these thresholds are raised to 1.7 million and 500,000 km, respectively.

New measures on transparency have also been introduced into the proposal. A series of details must be published (notably a description of parameters for calculating financial compensation, contract quality targets, etc) and public authorities will be required to transmit grounds for decisions on the award of contracts to all interested parties.
The duration of public service contracts should not exceed ten years for bus and coach services and 15 years for rail services. Regarding rail service contracts awarded directly, Ministers agreed on a shorter, ten-year limit.

Finally, the Council has significantly relaxed the reciprocity clause, which limits the scope for a monopoly operator to bid for another contract on external markets. Under the compromise, public authorities will be able during a transition period to bar all operators who do not conduct the majority of their activities in accordance with the Regulation from participating in the tendering process.