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Coronavirus - Sustainable rail market in view of COVID-19 outbreak - UK

  • United Kingdom
  • Coronavirus - Business resilience
  • Transport

26-10-2020

A regulation that will permit the removal, postponement or lowering of charges for accessing rail infrastructure during the COVID-19 pandemic has been formally adopted by the European Parliament and the European Council.

The Regulation

Under Regulation 2020/1429 (the “Regulation”), the temporary rules apply from 1 March 2020 until 31 December 2020 (the “Reference Period”), with provision for extension if necessary.

The Regulation (by way of derogation from the requirements of Directive 2012/34/EU):

  • enables Member States to authorise infrastructure managers:
  • to reduce, waive or defer the payment of charges for accessing rail infrastructure where appropriate according to market segments identified in their network statements;
  • to reassess where appropriate the ability of market segments to bear mark-ups, for the purpose of a possible reductions in charges; and
  • not to levy reservation charges for capacity allocated and not used; and
  • requires Member States to compensate infrastructure managers for the financial loss suffered as a consequence of applying these relaxations in relation to charges, by 31 December of the year in which the loss is suffered.

Under Directive 2012/34/EU, the profit and loss account of an infrastructure manager must be balanced over a ‘reasonable period’ (which shall be no longer than five years). The Regulation does not amend or remove this obligation.

Member States are able to decide whether or not to implement any of these derogations. The Regulation is clear that:

  • the relaxation applies only for charges which have or would become payable during the Reference Period;
  • the permissions are subject to compliance with State aid rules and require Member States and infrastructure managers to act in a transparent, objective and non-discriminatory way; and
  • infrastructure managers will be required to amend, as appropriate and without delay, their network statements to reflect any changes made under the Regulation.

The Reference Period may be extended if ‘adverse conditions’ persist – an extension will be based on evidence of reduced levels of rail traffic as a result of the COVID-19 pandemic. The Reference Period may only be extended by up to six months at any one time, and cannot be extended beyond 14 April 2022.

EU process

The Regulation was approved by the European Parliament on 17 September and formally adopted by the Council on 2 October. The Regulation reflects both the European Parliament’s position, and that set out in the Council’s own mandate of 9 September. The Regulation was signed by both the European Parliament and the Council on 7 October, and was published in the Official Journal of the EU (“OJEU") on 12 October. The Regulation entered into force on 13 October, the day after its publication. Member States must inform the European Commission of measures taken as a result of the Regulation by 13 January (three months from the Regulation’s entry into force). The Commission will ensure that information on measures taken by Member States will be publicly available.

Comment

The relevant provisions of Directive 2012/34/EU were implemented in Great Britain by amendments to the Railways Infrastructure (Access and Management) Regulations 2005 effected by the Railways Infrastructure (Access, Management and Licensing of Railway Undertakings) Regulations 2016. Further amendments to these regulations have already been made in anticipation of the UK’s exit from the European Union.

The Regulation therefore relates to retained EU law and will be directly applicable in the UK because of the UK’s continuing obligation – until the end of the Withdrawal Agreement Transition Period on 31 December 2020 – to comply with EU law. It will be for the UK Government to decide whether to implement these measures, in addition to the support which has already been provided to the rail industry.[1]

The Regulation is designed to mitigate the impact of the COVID-19 pandemic on the rail sector, which has been significantly negatively affected by reduced passenger and freight demand.


[1]               See Department for Transport Explanatory Memorandum on the Proposal for a Regulation of the European Parliament and of the Council establishing measures for a sustainable rail market in view of the COVID-19 pandemic (2 July 2020)