1 / LiveLink number Passenger Land Transport in Portugal: Improving Competition by Legislative Reform José Luís Moreira de Silva Ana Pereira de Miranda Ana Sofia Firmino 9th International Conference on Competition and Ownership in Land Passenger Transport 7 September 2005

2 / LiveLink number 1 : The European Model 2 : Challenges for a Portuguese Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

3 / LiveLink number Passenger Land Transport in Portugal: Improving Competition by Legislative Reform 1 - The European Model

4 / LiveLink number i)Rules ii)Public Service iii)State Aids iv)Public Procurement European Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

5 / LiveLink number - Articles 16, 73, 86 and 87 of the EC Treaty -Regulation (EEC) No. 1191/69,amended by Regulation (EEC) No. 1893/91 - Regulation (EEC) No /70 (subsidiary) -Regulation (EEC) No, 1.192/69 European Model Rules Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

6 / LiveLink number - Altmark Decision from the ECJ, 24 July Danske Decision from the CFI, 16 March 2004 European Model Case Law ECJ and CFI Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

7 / LiveLink number - MS shall terminate obligations inherent in the concept of public service (however such obligations may be maintained / imposed as mean of guaranteeing the supply of sufficient transport services, justified by public interest - Applies to transport undertakings providing services in transport by rail, by road and by inland waterway (urban, sub-urban and regional services) - In order to provide guaranty of provision of sufficient transport services, MS may enter into public service contracts with transport undertakings European Model Public Service Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

8 / LiveLink number - MS States may establish / maintain public service obligations to urban, sub-urban and regional passenger transport services and grant compensation to the respective operators - “Public Service Obligations”: obligations assumed by transport undertakings, that, if considering its own commercial interests would not have assumed or would not have assumed in the same extent and conditions - Public service obligations include the obligation to exploit, the obligation of transporting and the tariff related obligation - Decisions relating to the maintenance of public service obligation (or a part thereof) or to extinguish such obligation after a certain period, must include the granting of a compensation to the financial burden resulting thereof - The decision to terminate a public service obligation in transport services must be accompanied by the introduction of alternative services European Model Public Service Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

9 / LiveLink number - Compensations received by transport undertakings by their public service obligations are not considered as not compatible with the Common Market and must not be notified - For a compensation not to be considered as a State Aid: i) The recipient undertaking must actually have a public service obligation; ii) The parameters on the basis of which the compensation was calculated must be established in advance in an objective and transparent manner; iii) The compensation cannot exceed what is necessary to cover all or part of the costs incurred with the discharge of public service obligations; and iv) When the undertaking was not chosen pursuant a public procurement procedure, the level of compensation needed must be determined taking into account an average undertaking (…) European Model State Aids Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

10 / LiveLink number Directive 93/38/EEC, of 14 June 1993 (transposed by DL n.º 223/2201, 9-8) - Applicable to transport services - Contracts to value over € Public tender - Transposition with certain problems of compatibility, under appreciation by the ECJ European Model Public Procurement Rules Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

11 / LiveLink number Directive 2004/17 (EC), 31 March 2004 (Special Sectors – Transports) - Concerning transports the Directive shall apply to “activities relating to the provision or operation of networks providing a service to the public in the field of transport by railway, automated systems, tramway, trolley bus, bus or cable” - The provision of bus transport service to the public shall not be considered an activity embraced by this Directive where other entities are free to provide those services European Model Public Procurement Rules Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

12 / LiveLink number Passenger Land Transport in Portugal: Improving Competition by Legislative Reform 2 – CHALLENGES FOR A PORTUGUESE MODEL

13 / LiveLink number - Overlapping of two frameworks with different strategies - LBTT was not transposed into practice - Main obstacles to changes: lack of definition of competencies within different levels of direct and indirect Administration, regulating entities and Municipalities - RTA guidelines: compensation for the provision of transport services which are not viable - LBTT guidelines: compensation for specific obligations relating to quality, quantity and price Present Model RTA/LBTT Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

14 / LiveLink number Metropolitan Areas -AML/AMP -Road Transport / Rail Transport / Subway / Elevators / Inland Waterways -Public service -Concession and Provision of services -Municipalities / Municipal Undertakings/ Private Undertakings Present Model LBTT Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

15 / LiveLink number i) Central Administration : -MOPTC - CSOPT - DGTTF ii) Indirect Administration: -AMTs -INTF/IPTM -Public Undertakings iii) Local Administration: - Municipalities -Metropolitan Areas -Intermunicipal Communities Present Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

16 / LiveLink number Council of Ministers Resolution no. 150/2004 (DR ) - Regulation of the LBTT - Compliance with EC law - AMTs regime Future Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

17 / LiveLink number - Principle of competition - Licences granted by public authorities - Controlled competition with public service obligations - Public service contracts (public tender) - Imposition of public service obligations (payment of compensation) Future Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

18 / LiveLink number - AMT - Areas of AML and AMP - Municipalities - Road Transport in the respective territory - Other entities – Rest of the country Future Model Passenger Land Transport in Portugal: Improving Competition by Legislative Reform

19 / LiveLink number -Institutional Challenge - AMTs in Lisbon and Oporto -Legal Challenge -The new public service obligations -Contractual Challenges -The new contracts of supply of transport services -Financial Challenges -The new models of financing of transport services Passenger Land Transport in Portugal: Improving Competition by Legislative Reform Principal Challenges

20 / LiveLink number The European Model and Challenges for Portugal