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Commission vs Czech Republic and Slovenia on railway

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The Czech Republic and Slovenia have failed to fulfil their obligations under EU law in the field of rail transport. The Court, however, rejects the European Commission’s action against Luxembourg.

These cases form part of a series of actions for failure to fulfil obligations1 brought by the Commission against several member states for failure to comply with their obligations under directives governingRails the functioning of the railway sector. In the present cases the Court of Justice was required to examine the actions brought against the Czech Republic, Slovenia and Luxembourg.

The case of the Commission versus Czech Republic:

The Court has pointed out, in the first place, that in order to attain the objective of management independence of the infrastructure manager within the charging framework established by the member states, the manager must be given a certain latitude in determining the amount of the charges so as to enable it to use that flexibility as a management tool.

However, the setting, by an annual decision of the Ministry of Finance, of a maximum charge for the use of railway infrastructure has the effect of restricting the infrastructure manager’s freedom of action to an extent incompatible with the objectives of Directive 2001/14. In accordance with what is laid down in that directive, the infrastructure manager must be in a position to set or to continue to set higher charges on the basis of the long-term costs of certain investment projects. The Court concludes from that that the Commission’s first complaint is well founded.

Secondly, concerning the Commission’s complaint that there are no measures encouraging managers to reduce the costs for the provision of infrastructure and the level of access charges, the Court examined the State funding of the infrastructure manager, relied on by the Czech Republic.

Although capable of reducing the costs of the provision of infrastructure and the level of access charges, that funding does not in itself have an incentive effect on that manager in that the funding does not entail any commitment on the part of the manager. The Court therefore finds that the second complaint also is well founded.

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Thirdly, the Court examined the Commission’s complaint that the charges collected for all minimum services and for access to infrastructure services by the network are not equal to the costs directly attributable to the operation of the railway service. The Court finds that the Commission has not provided any specific examples showing that access charges have been set by the Czech authorities in disregard of the requirements under the directive. Consequently, the Court declares that complaint to be unfounded.

Fourthly, the Commission claims that by failing to establish a performance scheme such as to encourage railway undertakings and the infrastructure manager to minimise disruption and improve the performance of the railway network, the Czech Republic has failed to fulfil its obligations under EU law. As the Court finds that the legislative and contractual provisions relied on by the Czech Republic cannot be regarded as constituting a coherent and transparent whole which may be described as a ‘performance scheme’, it has declared that complaint to be well founded.

Fifthly, the Commission claims that under Czech law decisions of the Office for Railways are to be challenged before the Ministry of Transport. However, such a prior administrative appeal is contrary to Directive 2001/14. In that regard, the Court has found that it is clear from that directive that the administrative decisions adopted by the regulatory body can be subject only to judicial review, and therefore the Czech legislation infringes EU law.

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