I thank Deputy Durkan and the other committee members for their detailed consideration of the proposed EU legis lation in relation to the railways and combined transport.
Transport has in recent years assumed an enormous significance across the EU member states. In Ireland, as in the other states, we are in the process of urgently addressing the problems that are clearly evident to everyone. In particular, we must ease the chronic traffic congestion that afflicts all our major cities and towns and is spreading to many smaller towns and villages. The reason for this congestion is the over-reliance on road transport by both commuters and businesses due a perceived lack of acceptable alternatives. The Government is seeking to put in place those acceptable alternatives.
In this context, the vital role of the railways in our transport policy has now been recognised and programmes are in place to address the deficiencies which exist. The national development plan provides for unprecedented levels of investment in transport infrastructure. For the rail sector this will, on the one hand, improve the safety of the rail network and, on the other hand, increase its reach and capacity.
At EU level, it is accepted that a renewed railway sector is vital for the future of Europe's transport system and current EU policy is designed to reverse the railways' long-term decline in market share, particularly in relation to freight. The proposed directives we are discussing today are part of a broader package of proposals for the rail sector. Other issues currently under discussion relate to interoperability of conventional rail systems and safety regulation and standards of the European railways.
The proposed directives which were addressed by the committee are first, three draft directives which form part of what is termed the "railway package" and comprise directives amending Directive 91/440/EC and Directive 95/18/EC, and a new directive, replacing Directive 95/19/EC, on establishing the allocation of railway infrastructure capacity and the levying of charges for the use of the railway infrastructure and safety certification and, second, the committee considered a proposed directive on combined transport which was to amend Directives 92/106/EEC and 96/53/EC. The latter proposal was designed, inter alia, to increase the use of combined transport as an alternative to road transport, and also to bring down the minimum distance in which combined transport is competitive.
The combined transport directive was discussed at a Transport Council meeting in March 1999. A number of the provisions of the draft directive were problematic for some member states, including Ireland, and, unfortunately, agreement could not be reached. The proposed directive has not been raised at the Council since. In relation to the "railway package", substantial progress has been made on the draft directives and these are expected to be adopted during this year.
The current proposals have their origins in Directive 91/440/EEC. This directive is regarded as the first step in the revitalisation of the European railways. It opened up access to European railways for international services, where such services were provided by a grouping of at least two railway companies, and enabled access for individual railway companies providing international combined transport freight services. The directive also provided that the management of the railways be independent of the state and included provisions to allow greater commercial freedom and the separation of accounts for infrastructure from rail transport operations.
Many of the provisions of this directive were at that time already enshrined in Irish law, for example, the statutory independence and commercial nature of larnród Éireann. The only obligation on Ireland arising from the directive was that concerning access rights, and this obligation was met by Statutory Instrument No. 204 of 1996, which allows suitably qualified operators to exercise the right of access to the Irish rail network for international transport operations.
Subsequent to Directive 91/440/EEC, two further complementary directives were adopted in 1995. Directive 95/18/EC sets down rules for licensing rail operators and Directive 95/19/EC provides for the allocation of infrastructure capacity and the charging of infrastructure fees. Both directives were transposed into Irish law in 1999.
Notwithstanding these initiatives, the railways have continued to lose market share to road transport and it was recognised that the broad frameworks created by these directives needed to be expanded in order to make liberalisation practical and thereby improve the competitive position of the railways.
The objectives of the current proposals are twofold – first, to ensure that all railway undertakings are treated in a fair and equitable manner and, second, to provide for the efficient and competitive use of infrastructure. It may be useful to summarise the provisions of these three draft directives and to outline Ireland's position on them and the likely impact they will have on the Irish rail sector.
The draft directive amending Directive 91/440/EEC provides for a more extensive compulsory separation of the accounts of the infrastructure manager and the provider of the transport services. Licensed undertakings will be entitled to access for the purposes of operating international freight services to what is termed the trans-European rail freight network. This is an extensive network of railway lines in all member states, and on the island of Ireland comprises the rail line from Derry through Belfast and Dublin to Cork.
There are also a number of administrative changes. The most significant from an Irish perspective is the requirement to ensure that the functions of determining equitable and non-discriminatory access to the infrastructure and of levying charges for the use of such infrastructure are entrusted to bodies independent from the rail undertakings. Ireland has sought and received a derogation from this requirement of establishing separate bodies.
The main objective of the draft directive amending Directive 95/18/EC is to extend the licensing system to all rail undertakings in the Community rather than limiting it to those which provide international services as is currently the case. The draft directive to replace Directive 95/19/EC is a more extensive piece of legislation with a large volume of regulatory detail. Its main purpose is to oblige member states to treat applicants for access to railway infrastructure in a non-discriminatory manner by establishing procedures and charging systems for access to, and use of, infrastructure.
The question arises, therefore, as to what impact these directives will have on the rail sector in Ireland. Deputies will be aware that the Irish rail network is in many respects unique within the EU. A number of factors must be taken into account by Ireland in considering and developing proposals at EU level. In particular, the fact that the rail network on the island of Ireland is isolated from the rest of the Community, the unique gauge of our rail network, the low population base and the uneconomic nature of train services are significant barriers to the development of real competition.
The Minister's main concern, therefore, in the discussions on the development of these proposals was to ensure that any directives adopted would not impose significant bureaucratic costs, with little or no associated benefits. The uniqueness of the Irish position is acknowledged by counterparts in the other member states. The Council has agreed with the Minister on the need for derogations for Ireland, Northern Ireland and Greece to the more onerous administrative requirements in the draft directives. These derogations relate to the establishment of an independent body for allocating access to infrastructure and determining infrastructure charges, and also for dealing with appeals in relation to these matters. The derogations also cover a range of related measures in the proposed directive.
These derogations are not without conditions and are for a five year period but can be renewed. More importantly, they are conditional on no railway undertaking from outside the island of Ireland applying to operate competing services and no railway undertaking operating in Ireland applying to operate services in another member state.
The fact that the Minister has sought these derogations should not be viewed in any way as an attempt to hinder the possible advent of competition in the rail sector. Rather it is an indication of the reality of the unique characteristics of the sector in Ireland. The Minister's record on introducing competition in other sectors is well known and it is something which she is also considering in the rail sector.
In recent weeks the Minister has put forward a number of proposals to the Cabinet sub-committee on infrastructure setting out options for the future of the public transport sector. These proposals are wide-ranging and include a number of measures impacting on the rail sector, in particular, the establishment of an independent public transport regulatory body; possible separation of Iarnród Éireann into two independent companies – one responsible for the infrastructure and the other for the operation of train services and in the longer term, the possible transfer of the rail operating company to the private sector or of franchising the operation of some or all railway services.
These proposals are currently under consideration. Depending on the outcome of these deliberations, the requirements for the derogation provisions in the draft directives will need to be reviewed.
I again thank the House for the opportunity to discuss these matters today. It is recognised by the Government that the rail sector has a vital role to play in the development of a sustainable transport policy. It is an exciting time for the rail industry. For the first time in many years its future is assured and the necessary finance is available to enhance the quality and quantity of the services it offers. The main concern is to ensure that the necessary framework is in place to enable it to reach its full potential, and the nature of this framework, both at national and EU level, is an issue which is now being addressed.