The so-called PSO Regulation (Public Service Obligations) regulates procurement and funding of public transport EU-wide. It was amended in 2016 and its associated transition periods are soon expiring. However, current Commission drafts of these guidelines would turn direct awards into rare exceptions.

The AK has therefore commissioned a legal opinion, which was presented as part of the webinar by the opinion’s author Rudolf Lessiak (Lessiak & Partner Lawyers and University of Vienna). The opinion reaches the conclusion that the PSO Regulation is still granting Member States and authorities the right to choose equally between direct awards and competitive tendering. As a result the guidelines do not correspond to the former nature of the regulation text.

Jan Scherp representing the European Commission, was not really convinced and pointed out that these guidelines only wanted to specify exceptions, according to which direct awards shall be possible in future. The Commission’s impact assesment had revealed that tenders could save up to 21 bis 29 billion Euro. However, this figure had not been explained in detail.

The chair of vida, Roman Hebenstreit, pointed out that from the trade unions’ point of view the public procurement law had a direct impact on employees’ working conditions. The steps towards liberalization over the past 15 years clearly show that the wage and security level as well as the quality of education and training are hugely suffering under the saving pressure. Hence, competition does not result in quality improvements but only in a race to the bottom as we know it from aviation. Concrete examples of private operators going bankrupt in countries with more competition clearly show that direct awards is by far the better choice.

Karima Delli, French Green MEP and chair of the TRAN Committee called to mind that the negotiations on the PSO Regulation from 2013 were already very precarious. She believed back then and still today that more competition would not result in improving rail transport. That is why it had now to be ensured that the Commission does not curtail the then hard fought for political compromise between EU Parliament and Council and that the Regulation text will be bypassed through the backdoor.

The SPÖ MEP, Andreas Schieder, said that the current flagship rail countries are those that directly award their services. It is regrettable that the Commission is trying to bypass the former achieved compromise. Fewer direct awards would mean less flexibility for countries with regard to responding to the various challenges such as climate change, good labour rights as well as the satisfaction of their rail customers. Competitive tendering is not the suitable instrument to bring about the necessary changes in the railway system.

Livia Spera, General Secretary of ETF, described, based on examples from the United Kingdom and Germany, the negative effects liberalisation had on working conditions and customer satisfaction. Countries have to step in if private transport companies fail; this has many times resulted in great expenditures for the public purse.