The Organi sation and Financing of Local Public Transport in the European Union Public transport in Portugal: Legal and

1. The Organisation and Financing of Local Public Transport in the European Union Public transport in Portugal: Legal and Regulatory Framework Seminar, CCRE – CEMR, Brussels, 17 November 2005 Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

2. Public Transport in Portugal: Legal and Regulatory Framework • Institutional Organisation • Institutional Organisation: the present framework • Subjects that need to be regulated • The conditions of the present revision Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

3. Public Transport in Portugal: Legal and Regulatory Framework • Objectives • How to reform the present Institutional Organisation aiming at: • Promotion of public transport • Planning and managing an efficient transport system • Sustainability of the transport system • Rendering of the present Institutional Organisation compatible with EU legal framework and guidelines Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

4. Public Transport in Portugal: Legal and Regulatory Framework • Institutional Organisation of the Transport Sector • The Portuguese Framework Law for Public Transport (Lei de Bases dos Transportes Terrestres, Law 10/90 - LBTT) is not yet regulated • The Regulation of Automobile Transportation (Regulamento dos Transportes Automóveis, “RTA”, from 1948) is still in force • Decisional and financial levels are centralised by the Government • Urban and Local Transport: planning is within the competencies of the Municipalities • Interurban Public Transport is within the competencies of the General Directorate for Land and Inland Waterway Transport (Direcção-Geral dos Transportes Terrestres e Fluviais, DGTTF) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

5. Public Transport in Portugal: Legal and Regulatory Framework • Municipalities’ competencies (Law 10/90, LBTT): • Concessions for urban and municipal road operators • School lines • Design of road municipal network • Metropolitan Areas and Regions (Law 10/2003 and 11/2003): • Competencies in the Metropolitan Areas and Regions are dependent upon the future Metropolitan Transport Authorities (Autoridades Metropolitanas de Transportes, AMT, created by Decree-Law 268/2003, of 28 October) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

6. Public Transport in Portugal: Legal and Regulatory Framework • Transport Planning • LBTT provides for a “Transport Plan” • LBTT does not provide for a “Mobility Plan” • AMTs legal regime provides several types of plans: land use and regional and urban organisation • Transport Plans are not yet regulated (from a legal standpoint) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

7. Public Transport in Portugal: Legal and Regulatory Framework • Transport Infra-Structures • Road infrastructures: State and Municipalities • Rail Infrastructures (LRT, subway, train): State • Subway infrastructures: lack of a clear legal definition • Interfaces and Parking: State and Municipalities Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

8. Public Transport in Portugal: Legal and Regulatory Framework • Transport Operators • The national railways and the principal urban operators (in Lisbon and Oporto) are included in the State’s entrepreneurial sector (companies are State owned/controlled) • There are no framework-agreements (contratos programa) and the supply policy is within the operators’ responsibility • There is a wide range of legal titles (concessions, licences…) that provide the basis for the activity of these “public operators” Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

9. Public Transport in Portugal: Legal and Regulatory Framework • Public Operators / Diversity of titles • An “exclusive right” is granted by the companies’ By-Laws: CP (rail operator), STCP (bus operator in Oporto) and Transtejo (ferry operator) • Concession: (Oporto LRT and Carris – Lisbon bus and tram operator) • Hybrid regime (after nationalisation): Lisbon Subway • Municipal operators (Barreiro, Braga, Coimbra…) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

10. Public Transport in Portugal: Legal and Regulatory Framework • Private Operators / Diversity of titles • Concession contract (Fertagus and Metro Sul do Tejo) - State • Concession act (Regulation of Automobile Transport, “RTA”, from 1948) - DGTTF • Free initiative (interurban transport) - DGTTF Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

11. Public Transport in Portugal: Legal and Regulatory Framework • Bus Transport • Concession contract with a fixed term (renewable) – suburban and regional networks • Interim concessions • Grandfathers’ rights • The initiative is from the private parties (no “public” initiative) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

12. Public Transport in Portugal: Legal and Regulatory Framework • Operators’ revenues • Transport tariffs/fares and compensation for Public Service Obligations (PSO) - (indemnizações compensatórias, fair compensation payments) • Tariffs / fares are established by the Government or result from contractual arrangements • Fair compensation payments are subject to specific EU legal framework Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

13. Public Transport in Portugal: Legal and Regulatory Framework • Compensation Rules • Regulation 1191/69, as amended by Regulation 1893/91(version presently in force) provides for three possibilities: • Contracts of supply of transport services • Contracts for the provision of services or concession contracts • Compensation (for public service obligations) must be defined in advance • Imposition of a Public Service Obligation (PSO) • In case of derogation of the regime established in Regulation 1191/69, the criteria established in the ECJ’s Altmark case apply • (in case of non-compliance with such criteria, the compensation will be deemed as a possible “state aid”, and thus subject to notification/authorisation to/by the European Commission, pursuant to the Treaty rules) Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

14. Public Transport in Portugal: Legal and Regulatory Framework • Public Service Contracts • Regulation 1191/69 does not provide for specific arrangements in relation to procurement procedures – the general rules apply • In relation to the provision of services (in Portugal): Decree-Law 197/99 applies (public tender of public procurement procedure) • Concession: no specific EU legal regime (the general principles apply) • Internal Operator: the general principles and the revised proposal for a Regulation of the European Parliament and the Council on Public Passenger Transport Services by Rail and by Road under discussion (COM (2005) 319 final) allow the direct award or direct granting of an exclusive right to an Internal Operator Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

15. Public Transport in Portugal: Legal and Regulatory Framework • Portuguese public service contracts / appraisal • Fertagus (rail private operator) and MST (LRT private operator) – contracts compatible with Regulation 1191/69 • Oporto LRT (Metro do Porto) – compensations are calculated pursuant to rules established in framework-agreements (in principle compatible with Regulation 1191/69) • Carris (Lisbon bus and tram operator) – the agreement is not compatible with Regulation 1191/69 • Lisbon Subway (Metro de Lisboa) and CP (national public rail operator) – contracts have expired Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

16. Public Transport in Portugal: Legal and Regulatory Framework • PSO – Fares / Tariff obligation • All Operators have fare / tariff obligations • The Government establishes the following fares/ tariffs: • Rail transport (sub-urban and inter-urban rail transport) – travels less than 50 kms • Inland waterway transport of great intensity • Government establishes the percentages of the increase applicable to the fares/tariffs • In other cases – fares/tariffs are established pursuant to contractual arrangements Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

17. Public Transport in Portugal: Legal and Regulatory Framework • PSO – Compensation • Compensation granted based upon PSO must comply with the criteria established in Regulation 1191/69 • Compensation must be established in advance • The decision granting compensation must provide for the correction mechanisms Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation

18. Public Transport in Portugal: Legal and Regulatory Framework • Conclusions (1) • Present legal framework is not adequate: • The organisation rules do not allow the sustainability of the transport system • Present Compensation for PSO are granted pursuant a regime that it is not entirely clear • The regulatory framework does not contain incentives to an efficient management of the transport system and to the increase of demand for public transport Ana Pereira de Miranda, Cabinet of the Secretary of State for Transport

19. Public Transport in Portugal: Legal and Regulatory Framework • Conclusions (2) Several Challenges to the Public Transport System: • Institutional Organisation Challenge: AMTs in Lisbon, Oporto and other Metropolitan and Community Urban Areas • Legal Challenge: regulation of the LBTT – coordination with other relevant ministries such as Territory, Energy and Environment - and the revised proposal for a Regulation on Public Passenger Transport Services (COM (2005) 319 final) • Contractual Challenge: new contracts for supply of transport services • Financial Challenges: new model(s) for financing transport services Ana Pereira de Miranda, member of Cabinet of the State Secretary for Transportation