Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

It feels like only a moment since I saw some of the members, and it is. It is good to be back at the committee to answer members' questions. I am very pleased to appear before the committee to discuss the outcome of the Transport Council in Luxemburg on 11 June. I attended the meeting and represented our country and our interests at the session. I will go through the main agenda items and mention the items covered at the Council meeting as any other business. As the Chairman stated, the Council was dominated by discussions on air passengers' rights and on the fourth railway package.

The committee has previously discussed air passengers' rights. The proposal aims to promote the interest of air passengers by ensuring air carriers effectively comply with a high level of air passenger protection during travel disruptions. At the same time, the proposal intends to take into account the financial implications for the air transport sector. At the Council, the Presidency introduced a progress report and referred to the significant progress that had been made on clarification of extraordinary circumstances and cabin baggage entitlements. However, agreement was not possible concerning connecting flights and the threshold for compensation.

The thresholds for the payment of financial compensation to passengers for delayed or cancelled flights and how connecting flights will be dealt with are the two sticking points holding up the revision of the EU regulation on air passengers' rights. Few member states intervened in the debate, but all the comments concerned these two areas. As committee members appreciate, the overall challenge is to strike a balance between passenger protection and the interests of the industry.

Ireland considers the proposals for compensation for missed connecting flights as currently drafted are anti-consumer. The focus should be on ensuring adequate care and assistance is given to passengers affected and on encouraging airline behaviour that will ultimately assist passengers in pursuing their original objective, that is, getting to their final destination. Our concern is that focusing on compensation could result in adverse airline behaviour that would not be in the consumers' interest. It is possible that airlines would either increase fares to compensate for the higher risk associated with such flights and-or significantly increase transfer times at hub airports, neither of which, in our view, would be in the passengers' interest.

Ireland along with Italy, the Czech Republic and the United Kingdom spoke about the need for balance between industry and consumers. I said that while Ireland is broadly supportive of the proposal, we continue to support the Commission's original proposal for five, nine and 12 hours as trigger points for compensation thresholds in cases of cancellation or delayed flights. I informed the Council that Ireland does not agree that compensation should be payable after a three-hour delay and feels the shorter time would render it more likely that a carrier will cancel a flight.

As regards compensation for missed connecting flights, I advised that Ireland is against any such compensation and feels the focus should be on ensuring adequate care and assistance is given to passengers affected by missed connecting flights and on encouraging airline behaviour that will ultimately assist the passengers in pursuing their original objective, that is, getting to their final destination. I also set out the Irish position on the question of the use of the term "flights" as opposed to "journey" in the new regulation. Ireland supports a reference to "flights" to have a more balanced approach and make the payment of compensation for cancellation or delay specific to an individual flight and not a series of flights. Austria and Spain spoke about the need to protect consumers' rights. Luxemburg intervened to say it hoped to bring proposals to COREPER during its term of Presidency which commences next month.

The fourth railway package consists of six proposals aimed at removing the remaining barriers to the completion of the single European railway area. They fall into two groups, namely, the technical pillar and the market pillar. The technical pillar reinforces harmonisation of interoperability and safety arrangements and extends the role of the European Railway Agency. The three proposals in the technical pillar have been politically agreed within the Council of Ministers. The Presidency is engaging with the Parliament with a view to reaching a second reading agreement. The technical measures of the fourth railway package do not give rise to difficulties for Ireland.

The essential elements of the Commission’s proposals under the market pillar are the opening of the domestic passenger markets to competition by granting open access right to all EU railway undertakings; the introduction of mandatory tendering for public service contracts; and changing the regulatory framework for the governance of railway infrastructure with a view to legal separation of the infrastructure management and service provision functions. While some member states see these reforms as an opportunity for growth, others, such as Ireland, have fundamental concerns that these reforms would have very negative impacts on the provision of rail services in their countries. We have aligned with seven other like-minded small member states, namely, Luxembourg, Lithuania, Bulgaria, Estonia, Slovakia, Greece and Croatia. This group maintains that member states whose rail markets form less than 1% of the EU rail market should be allowed to continue direct award of public contract services. This is the most efficient way for Ireland, and other small member states, to provide rail services.

At Council, the Presidency introduced a progress report on the political pillar of the fourth railway package. The Commission noted that the key outstanding issue on the public service obligation aspect was around exemptions from compulsory direct award of public service obligation contracts. The Commission disagreed with an exemption based on market size, that is, 1% of passenger kilometres, but voiced support for a Netherlands proposal of a performance-based exemption which would allow all member states to continue direct awards based on the contract being performance based.

The group of small member states, including Ireland, which favour the 1% proposal spoke in support, with the exception of Luxemburg given its status as incoming Presidency. I intervened in the discussions to record that Ireland along with other smaller member states have fundamental concerns that these reforms would have very negative impacts on the provision of rail services in some countries. I pointed out the Irish rail sector is small and geographically isolated with low traffic densities and is operated under a single public service contract.

Given these features, Ireland continues to strongly support the so-called “1% provision” which would allow small rail markets to continue direct award of public contract services. This is the most efficient way for us to provide our rail services and there is no evidence of the scale of benefits that may result from competitive tendering of PSO contracts in small markets. I asked that these specific challenges for small markets be accounted for in any final compromise. Luxembourg noted it will put in all efforts possible to reach agreement by October and I expect a solution will be found which will not pose risks to the rail sectors of member states with small rail markets.

On governance, the key issue is for member states with separated structures not wanting additional burdens for their rail companies. Member states see the governance problem as being restricted to those member states with integrated companies. The Commission stated that ensuring equal footing of vertically separated and fully integrated structures was the challenge. I intervened to say that our viewpoint is that with continued direct award of PSO services, functional separation of the railway undertaking and infrastructure manager, accompanied by strong regulatory oversight are sufficient to ensure fair play and transparency within the Irish market.

The inland waterways item dealt with a proposal for a directive of the European Parliament and of the Council laying down technical requirements for inland waterway vessels and repealing Directive 2006/87/EC of the European Parliament and of the Council. The Council adopted a general approach on the proposal, which is a recasting of a directive currently in force. The proposal was discussed in detail at the Council's shipping working party between January and May this year. The aim of the proposal is to replace a previous directive with one that allows the annexes with technical parts to be referenced separately, so that they can be more easily amended, in order to aid progress towards a single, uniform set of technical standards between the EU and the Central Commission for the Navigation of the Rhine. The proposal will have no implications for Ireland, since Ireland is one of the member states not addressed by the proposed directive and will, therefore, not be required to transpose or implement it. Ireland has deliberately chosen to stay outside the scope of the directive, given that there is no inter-connected commercial inland waterway transport in Ireland, and Irish inland waterways are not navigable for the purposes or scale of the commercial traffic envisaged in the proposed directive. Although Ireland is not included within the scope of the proposed directive, Ireland operates high safety standards on our inland waterways.

Information was given on a number of items under any other business including: the main conclusions of the interim evaluation of the EU road safety policy framework 2011-2020; the transport infrastructure financing, including an update on the first call for proposals under the Connecting Europe Facility, CEF; the outcome of the Asia Europe, ASEM, transport meeting; the Shift2Rail joint undertaking; and the incoming Presidency's work programme in the field of transport. Again, I thank the Chairman for the invitation to discuss the Transport Council and I welcome any questions that members may have.