Begegnungen
Schriftenreihe des Europa Institutes Budapest, Band 28:181–189.

KATALIN TÁNCZOS

Harmonisation Tasks in Transport in an Enlarging European Union

Introduction

Prior to the 2004 enlargement of the European Union several legal, economic, financial and institutional regulatory tasks were solved that concerned the development and operation of the transport systems of the acceding countries. The primary aim of those measures was to promote the preparation of the acceding countries for integration.

The almost two years of experience of Hungary’s European Union membership have shed light on the fact that the transport systems of the old and new member countries may put significant obstacles in the way of developing and expanding passenger and goods transport contacts and services at European scale despite careful preparations because of the significant differences in the level of supplies and operation that can be found in the development of the transport infrastructures.

The Aim of Enlargement and Conditions of Competitiveness

The gradual enlargement of the EU reflects the realisation of the fact that the economic systems working under integrated market conditions in the globalising world trade ensure more favourable conditions compared to the nation states operating independently of each other. The EU comprising an ever growing population and new geographic areas can, however, only compete successfully with other regions of the world which are already concentrated in various forms of economic integration, if in addition to the building and enlargement of the transport network it also cares for the development and coordinated operation of communication and transport services linked to one another like chains, and at the same time it creates adequate conditions for the growing internal mobility of the newly acceding areas.

The uniformity and harmonisation of the legal system of the economic units (acceding Member States) involved in integration is indispensable to the general assertion of the community achievements of the European Union realising the free movement of persons, goods, services as well as information and capital. The enactment of a uniform law containing the development and operational rules of institutions has to be carried out, and the rules guaranteeing their observance should be elaborated on national level together with the creation of the conditions of application as well as of the necessary set of institutions.

Experience shows that the development of the economic, financial, institutional conditions of operation and their realisation with regard to the actual and practical circumstances usually take up a longer period of time. Central national budget and EU financial resources are available only to a limited extent for the development of transport, and the mobilisation and production of the necessary private capital is also a difficult task.

Strategic Aims of the Common Transport Policy

The future enlargement of the EU may ensure several additional advantages for the citizens of a gradually united European economy besides the possibilities of the southern marine accession resulting from the geographic location. The opening of new markets of absorption, reaching targets offering advanced tourist services and the development of new inland shipment routes are among these advantages. The utilisation of the possible advantages presupposes the inclusion of those strategic aims laid down in the common transport policy of the EU that are relevant for the region into the national development plans for transport.

The following should be stressed from among the strategic aims of the common transport policy of the EU from the angle of the Balkan region:

– Improving the balance among the modes of transport

• by according preference to environment-friendly modes,
• by ensuring the priority of public transport,
• by enhancing the share of combined transport;

– Eliminating bottlenecks

• by developing the suitable junctions,
• by building places of linkage,
• by increasing the number of meeting points for changing modes,
• by establishing terminals;

– Placing the users to the focus

• by expanding services and improving standards,
• by ensuring information supply,
• by enhancing comfort,
• by increasing flexibility,
• by creating a differentiated supply,
• by a careful assessment of the proportion between use value and price;

– Managing transport globalisation

• by observing all the conditions related to the safe transportation of hazardous goods,
• by preventing damages and their proper handling,
• by ensuring ’security’,
• by averting the danger of terrorism.

Such a system development based on uniform principles would be needed also in the Balkans to be able to realise strategic aims, which, instead of projects implemented separately earlier in the different branches of transport would next focus on integrated, inter-operational interferences thus asserting synergic effects, too.

An Integrated, Inter-Operational, Multimodal Development of Transport

In the future, when the set of means for realising the aims of the common transport policy is chosen in the countries wishing to accede to the EU it would be expedient to consider conditions of compatibility. At the development of infrastructure along the transport corridors affecting the region, efforts should be made to satisfy a differentiated demand for passenger and cargo transport which should be at the highest possible level of service (time, speed, transport tariffs, fees for track use, etc.).

The possibility of the different kinds of transport modes should be realised by the inclusion of suitable points of junction (transfer/transhipment), observing the principle of modularity. Efforts should be made to develop transport/supply chains that can be reshaped, gradually expanded and hence become flexibly adjustable to the changing market demand. In the future the development of transport is only possible in an EU-conform way if so-called inter-operational solutions are built into the system capable of routine co-operation as a result of the consistent implementation of the respective European standards which would offer integrated or complex services accompanying mobility.

In order to illustrate the complexity of tasks lying ahead of the Balkans a survey of regulatory issues is given in the following which are related to the institutional development and pricing of the specific (rail- ways) sub-branches as well as the competitiveness of some prominent sub-systems of public transport.

Sub-branch – (railway) specific regulations

Following the structural transformation of the railways, which began in Europe in the 1990s, the liberalisation of the railways has been gaining space in an increasing number of countries. In 1996 the directives on licensing railway enterprise (95/18. EC) and the distribution of railways infrastructure capacity as well as the setting of infrastructure fees (95/19. EC) were introduced for the purpose of formulating the main guiding principles and prescribing the rules valid for all European countries.

As a result of corrections and modifications after the transformations initially causing disturbances of disintegration, which occasionally could be interpreted as operational disorders occurring frequently and causing even grave accidents, the European Parliament and the Commission amended the 91/440 directive of the European Economic Community by the 2001/12. EC directive to promote implementation and with regard to the changes that had taken place in the railway transport sector in February 2001. Besides separating basic functions related to the railway infrastructure and railway safety the creation of a regulatory body in implementation as well as in control was among the additions. Directive 95/18. EC was amended by measures aiming at the development of a common system of licensing (Directive 2001/13. EC) so that reliable and adequate levels of service as well as transparent, fair and non-discriminative procedures may be ensured. It was necessary because rights of access to railway track were expanded in some EU Member States.

Directive 95/19. EC did not contain a clear rule for the distribution of railway infrastructure and for the collection of track-use fees; therefore several variants have emerged for determining the fees of railway track use as well as its extent and the form and duration of the procedures of distributing track capacity. The European Parliament and the Commission replaced the former Directive pertaining to the issue by Directive 2001/14. EC.

In summary the changes of regulations to be implemented in the sub-branch are contained in the so-called railway packages as follows:

– Legal alignment of the first railway package:

• Directive 91/440/EEC (2001/12/EC),
• Directive 95/18/EC (2001/13/EC),
• Directive 2001/14/EC.

– The second railway package:

• Directive 2004/51/EC
• Directive 2004/49/EC.

The elaboration of the third railway package aiming at further efforts towards uniformity in the quality of service is in progress.

The obstacles related to the domestic realisation of the regulatory processes presented above are indicated by the fact that though Hungary became a member in 2004, the transformation of the railway organisation was delayed because the new Act on railways entered into force only on 1 January 2006, when the Railway Office was also set up watching as an independent organisation over the observance of the EU-conform rules of the distribution of service lines. Cargo transport separated from the organisation of the Hungarian State Railways also started its autonomous operation on 1 January 2006. The separation of the track from passenger railway transport has begun, but the conditions of autonomous operation would also be developed in 2006.

Regulations ensuring competitiveness in public transport

Under the influence of market liberalisation accompanying accession to the Union the regulated, monopolistic public transport market has been transformed, its set of operational conditions was changed and competition has become keener. Market-oriented company operation, the assessment of needs, and providing services corresponding and exceeding demands have come to the foreground in public service activities. A precondition of Euro-compatibility is the shaping of the transport infrastructure in accordance with the market demand, which means the development of quality, the improvement of the market and the efficiency of access to the market, the creation of a system equally considering the conditions of the region as well as the Union rules, and mutually supplementary and linked, integrated system of services.

In public railway and coach transport and particularly in the long-distance one conditions of competition already prevail in Hungary, encouraging the service providers separated from the infrastructure to improve quality. These modernisations for a higher standard of service have not only resulted in the renewal of tracks and vehicles, or the acquisition of new means but the modernised solutions of traffic organisation (such as phased timetables) and passenger information have also appeared, and preparations have begun for the introduction of the electronic ticket system and collection of toll in urban as well as distance transport.

It is worth pointing out in relation to the domestic adaptation of the regulation of road toll collection that because of the special economic and social situation after the system change (transitory fall of the per capita GDP, inadequate density of motorways, a significantly lower solvent domestic demand, a significant proportion of tourist and transit traffic, etc.) in the Central Eastern European countries, including Hungary, an economically also effective solution (electronically collected road toll planned to be introduced in the longer run) can only be applied after the acquisition of several negative experiences, with significant delay in the future.

Institutional reforms in transport

The system of the associations of regional railways and transport is wide-spread in several countries of the EU. This solution has made the alteration of the earlier structure of the institutions involved necessary, together with the radical transformation of relations among them and of the operational principles. It has become important to know what the precise price of a service is, for it is only on this basis that a modern commissioner–performer relationship can be evolved between partners in contractual relationship.

Usually the following conditions have to be met to ensure the ability of operation:

– The state/local government has to repay the justified spending not covered by income without fail in the case of the railway as well as service provision as part of a transport association as stipulated by law;

– The companies have to be relieved of past debt (economic rehabilitation);

– The harmonisation of the various forms of community transport has to be ensured by legal norm (perhaps in an Act on passenger transport), which would specify the framework of regulated competition and co-operation;

– Tasks, competencies and responsibility have to be transferred to a lower level on the basis of the principle of subsidiarity together with the related resources of financing (refunding of cost).

The essence of the model evolving new contractual relations is that the local governments set up a ’commissioning’ company, which signs a public service contract with the state and would be the subject of state subsidy. This company would purchase services from the railways and other transport providers on the basis of tenders.

Though efforts for modernising the institutions of transport as indicated above have emerged in the past decade in domestic transport (such as the Budapest Transport Association, and contracts preparing the setting up of regional railway companies), presumably years will have to pass in waiting for the all-round practical realisation of transformation and its widespread practical coverage, primarily because of the continuously postponed reform of the large systems (state budget).

Social Cost-Based Pricing in Transport

The Directorate of Transport of the EU has been engaged for years in the problems of the social cost of transport as well as of the social marginal cost in the interest of evolving fair and efficient transport prices. The aim of these researches is to build directives in the EU for pricing in transport on the basis of these pieces of information in the longer run. Several attempts have been made to determine the various items of cost. The most recent research results enable the definition of a method on the basis of which it will become possible to elaborate the national accounts and marginal costs uniformly, comparing the interests of the various countries and sub-branches. Naturally, the methodology is open in the sense that the degree to which basic data are available does significantly influence the choice between the recommended processes of calculation: in case of good quality basic data it is worth using more complicated methods yielding more reliable results, whereas in the case of deficient or excessively aggregated input data it is expedient to use the simpler ones but ensuring less informative results, but with a detailed description of the limiting conditions.

The social cost-based approach differentiates among the following cost accounts:

– Infrastructural costs;

– Costs of transport service providers;

– Users’ costs;

– Costs of accidents;

– Environmental costs.

With the modern methodology of the transport pricing systems the social cost and income structures of the sub-branches of transport can be produced, the total cost appearing on social level can be identified, and the various average costs can also be deducted from it and from the transport outputs (specific social cost per unit of transport output, i.e. of vehicle km). The latter ones constitute the possible solutions of social-level transport pricing. Several marked scientific trends exist, however, according to which transport pricing based on the average social costs does not, or at least not in every case yield a satisfactory solution. These approaches primarily mark the social marginal costs as pricing factors, though in some cases they do acknowledge the effects of average costs on the definition of prices.

The marginal costs of transport are defined by the entry of a new unit of transport output, usually by an additional vehicle km into the system producing additional cost. It is assumed that the capacity of the infrastructure is constant in the period under survey, but the stock of vehicles may change.

The exploration of the social marginal costs of transport is done along the categories applied at the structure of costs. Here, however, the absolute cost values are insufficient, but the relationship between factors influencing cost (cost drivers) and costs (ideally to be given as functions) should also be studied. This is what may lead to the expression of social cost functions, or at least to their approximation, from which one may reach the marginal costs by differential calculation (or by some substitute method). The introduction of the method is still hindered by several factors. Their main groups are the following:

– Technological and practical factors;

– Regulatory and institutional shortcomings;

– Limiting factors related to acceptance.

The majority of the domestic transport costs and tariffs is currently far from being in line with EU objectives, in other words they do not reflect a solution based on the principle that “the user and the polluter should pay”. Due to the lack of the respective detailed data of costs and the relatively narrow implementation of the modern methods of cost calculation and controlling so far only the related domestic research results can be accounted for, and a longer period of time is still required to their broad practical introduction.

Lessons, Tasks and Conditions of Realisation

It becomes clear from a brief survey of the EU-conform regulation of transport that several useful pieces of advice can be formulated on the basis of domestic experiences for countries wishing to accede.

Without wishing to be comprehensive it seems justified to emphasise the following:

– Steps of lesser significance and promoting market-oriented operation (such as the liberalisation of road goods transport) should be taken as early as possible, and for this aim the state must grant consistent support again under market-conform conditions, but only to the development of suitable size of companies;

– Supporting the operation of the public transport systems (such as urban public transport) or the implementation of reforms related to financing the building of public roads should be timed after the reform of the state budget;

– In order to have the tolls accepted special attention should be paid to making the users get acquainted with the aims, and a “report” should be made about the additional incomes thus accruing;

– It is expedient to ’treat’ resistance related to the significant changes that are planned to be introduced in the transport market with properly evolved, consistent strategy packages, and to encourage their wide-spread dissemination;

– It is expedient to prepare preliminary impact assessments and the possibilities of control and monitoring should be created.

Naturally, regular training and continuous information are indispensable preconditions to the successful implementation of the new methods of transport regulation surveyed and analysed here.

References

Tánczos Katalin–Farkas Gyula: Railway Infrastructure Charging in Hungary – Key Implementation Issues. IMPRINT EUROPE (Implementing Pricing Reform in Transport – Effective Use of Research on Pricing in Europe) Seminar, Leuven, 13–14 May 2003.

Tánczos Lászlóné–Bokor Zoltán: A közlekedés társadalmi költségei és azok általános és közlekedési módtól függő hazai sajátosságai. (Social Costs of Transport and their Domestic Specificities in General and Depending on the Transport Modes.) Közlekedéstudományi Szemle, 2003. 8. 281–291.

Tánczos Lászlóné–Bokor Zoltán: A közlekedési adók és díjak reformja. (Reform of Transport Taxes and Tariffs). Közlekedéstudományi Szemle, 2004. 1. 5–10.

Tánczos Lászlóné–Bokor Zoltán: A korszerű közlekedési árképzési rendszerek hazai bevezetési feltételeinek elemzése. (Analysis of the Conditions of the Introduction of Modern Pricing Systems in Hungarian Transport). Közlekedéstudományi Szemle, 2004. 2. 50–57.

Tánczos Lászlóné–Bokor Zoltán: A társadalmi költségeken alapuló közlekedési árképzési rendszerek gyakorlati adaptációs lehetőségei (The Possibilities of the Practical Adaptation of Pricing Systems in Transport Based on Social Costs). Közlekedéstudományi Szemle, 2004. 5. 185–192.