TRANSPORT - SPECIAL FEATURES

1
TRANSPORT - SPECIAL FEATURES

•  Variety of modes involved
•  Importance of social and environmental
  considerations
•  Major implications for industrial costs
•  Considerable infrastructural requirements
•  Large state involvement
•  Policy stance varies from country to country
•  Difficulties in accurately assessing importance

2
TRANSPORT - SIGNIFICANCE

•  Key role in facilitating free movement of goods
  and services
•  Size and scale of industry - linkages with other
  sectors
•  Importance in terms of environment
• - responsible for 7 of community GNP (5
  agriculture) - employs 6ml workers (1ml on
  railways) - involves 40 of public capital
  expenditure (11 private) - community owns 25
  of world's fleet Ireland has an even
• greater dependence on transport
  (peripheral location)
• with heavier reliance on sea and air
• - 14 total household expenditure over 60,000
  directly
• employed (perhaps 150,000 in all)  

3
TRANSPORT POLICY

• Art 3(e) provides for inauguration of common
  transport policy  
•  Art 84 - provisions should apply to transport by
  rail, road and inland waterway - council to
  decide in due course if and how provisions should
  apply to air and sea
•  Requires common rules for all cross-border
  traffic (Article 75)
•  Forbids discrimination in transport charges
  (Article 79)
•  Calls for reductions in the costs of crossing
  frontiers (Article 81)
•  Permits state subsidies for the coordination of
  transport or for public service obligations
  (Article 77) or as part of regional assistance
• Any measures concerning transport rates and
  conditions "shall take account of the economic
  circumstances of the carriers" (Article 80)
•  

4
SCHAUS MEMORANDUM

• A policy focusing on competitionThe
  establishment of a common market in
  transportThe pursuit of an active
  interventionist approach Council of Ministers
  failed to reach any consensus upon Memorandum or
  action Programme
• Commission prepared proposals in four areas1.
  The control of road and inland waterway transport
  capacity with the establishment of common rules
  of entry into industry - community quotas2. The
  adoption of a "forked tariff"3. To harmonise
  member states' technical, tax and subsidy
  regimes4. To co-ordinate investment in
  transport infrastructure and that each mode
  contributes fairly to the infrastructure cost it
  imposes
• Little progress made with proposals

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CRISIS IN TRANSPORT

• Little progress made in 60's and 70's
• - in Oct.'80, Commission proposed a list of 35
  proposals to be implemented
• over next three years
• - failure to respond led European Parliament to
  instigate action against the
• Council under Article 175. In May '85,
  the ECJ issued a ruling agreeing with
• Parliament
• - this ruling and gathering momentum towards
  completion of SEM gave added
• urgency to the need for progress
• - subsequently in articles 129b-129d of Treaty
  on European Union, mention made of the
• trans-European transport networks. To
  achieve this objective requirtement to harmonise
• technical standards and contribute loan
  guarantees and interest rate subsidies to
  national
• programmes of common interest. Transport
  infrastructural projects are also eligible for
• support from Cohesion Fund that the
  Treaty established
• - Nouvelles Frontieres case very important in
  sparking a desire for change

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OTHER ISSUES

• Infrastructure
• - fixed capital of any transport system and
  includes the provision of ports, airports, roads
  and railway lines
• - attempt to identify state aids and subject
  them to community control e.g. standard
  establishing a standard accounting system for
  expenditure on infrastructure
• - Commission argued that prices should reflect
  marginal social cost (taking into account
  congestion, accidents, noise and pollution)
  Significant difficulties arising from such
  proposals which would have greatly increased
  costs e.g. roaf freight    
•  Finance and Investment
• Commission identified projects with important
  Community benefit for which finance would be made
  available (e.g. EIB and ERDF)
• - projects within a member state designed to
  eliminate bottlenecks in EU traffic -
  cross-frontier projects - projects fulfilling
  broad Community objectives - projects which
  standardise the EU transport network  

7
ROAD FREIGHT MEASURES

• Technical Measures - maximum weights and
  standards, safety measures  
• Social Legislation - mutual recognition of
  driving periods etc.
• Taxation - attempts to bring taxation more in
  line with each other
• Community quota - increased by 40 each year from
  '87 - '92
• Abolition of remaining quota 1st Jan. 1993 - also
  abolition of frontier checks on goods crossing
  from one state to another
• Cabotage introduced since Dec. '89 - still some
  limits apply
• Easing of restrictions for international coach
  and bus passenger services

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RAILWAYS

• Have advantages in terms of energy saving, low
  use of space, safety and environment
• Drop from 1/3 to 1/6 of total freight
  transportation since 1965
• Proposals for development of high speed rail
  network - TGV (French) and AVE (Spain) - ETR
  (Italy)
• Global plan for railways - commercial operations,
  administrative procedures, improvement of
  finances, rail safety etc.
• Development of combined road-rail transport
• Facilitating activities outside national borders

9
SEA

• 1/3 of internal trade and 90 of external trade
  carried by sea - tonnage halved between 1980 and
  1988 due to competition
• consultation procedures in shipping relationships
  with 3rd countries since 1977
• 1986 - proposals for gradual implementation of
  free movement of services and abolition of
  national preferences  
•  countervailing charges against unfair practices
• 1989 - proposals to improve competitiveness
• - creation of community flag with advantages for
  those registering (i.e.
• cabotage rights)
• Exceptions on shipping services to islands till
  '99 and Greece till 2004  

10
INLAND WATERWAYS

• Though declining in importance still significant
  in Central European countries with Rhine carrying
  57 of freight
• Overcapacity in sector due to fall off in heavy
  industry
• National scrapping fund in each stae to reduce
  capacity of fleets
• Ban on state aids for new vessels
• Proposal on access to national markets by
  non-member states
• Since january 200 the industry has been fully
  deregulated

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AVIATION

• Chicago Convention '44
• - identified five main freedoms
• 1. The right to overfly states' territories
• 2. The right to land for technical reasons e.g.
  refuelling
• 3. The right to land to disembark passengers and
  cargo travelling from the country of the
  airline's registration
• 4. The right to pick up passengers and cargo for
  journeys to the country of an airline's
  registration
• 5. The right to transport goods and passengers
  between two countries other than the country of
  registration
• Signatories of the Convention granted the first
  two rights to all other signatories, but the
  remaining rights were determined by bilateral
  agreements (e.g. the 1946 Bermuda Agreement
  between the UK and the US)  

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AVIATION (con)

• IATA formed in 1945
• In 1989 of the 750 non-stop short haul flights in
  Europe, 71 had only one carrier and a further
  24 only two
• - fares 45-75 above those in the US  
•  1979 - first clear commitment to competition
• - importance of charter airlines - growing
  liberalisation in US - regional initiatives -
  Nouvelles Frontieres case 1985  

13
AVIATION (con)

• 1st Aviation Package - 1987
• - block exemptions for categories of agreements
  - measures to reduce capacity to fix fares
  (discounting allowed) - greater access in stages
  for new airlines (bi-lateral sharing
• additional airlines on routes on bilateral
  basis, fifth freedom rights)    
•  2nd Aviation Package - 1991
• - extended block exemptions - commitment to end
  capacity sharing agreements  
•  3nd Aviation Package - 1993
• - uniform criteria for air transport operators
  licence - EU opened to all licensed operators -
  Limited cabotage till 1997 (after which full
  cabotage) - all controls on fare levels removed
  - all controls on non-scheduled services removed
     

14
AVIATION (con)

• Industry Restructuring
• - distortions from state subsidies remains
• - mergers
• - landing slots
• - air traffic control
• - air safety

15
IRELANDS TRANSPORT INFRASRUCTURE

• Problems - distance from major markets
• - isolation by sea - poor quality of
  infrastructure This leads to significantly higher
• transport costs for Irish operators
• Heavy emphasis on transport in development plan
  of 90s
• Nearly 1bl earmarked for roads 1989 -93
• Access transport - airports, seaports, air and
  sea services
• Inland transport Shuttle services
• Implication of channel tunnel

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1992 WHITE PAPER

• The integration of modes of transport so as to
  form a unified system
• The integration of national transport networks
  into a coherent network structure
• - Certain social priorities
• - Transport volumes to rise 30 (1992 - 2000)
• - New links required
• - Channel Tunnel and high speed train services
• - Trans-European Networks