The European Commission presented a proposal for a new Public Procurement Regulation last week. The Community of European Railway and Infrastructure Companies (CER) has responded positively to the proposal. For rail freight, the biggest benefits are to be expected in public infrastructure procurement.
Public procurement is currently a time-consuming process in the EU. CER mentions a timeframe of eight years for public companies to acquire rolling stock. Infrastructure projects can take up to 15 years, the association adds. That is a less than ideal situation. Lengthy procedures increase costs, create legal uncertainty and delay modernisations, the rail association says. Consequently, it welcomes the Commission’s new proposal.
Moreover, the Regulation will establish an integrated digital procurement marketplace with interconnected and interoperable online procurement platforms. This should also result in a simplification and facilitation of procurement for public buyers.
For rail freight, the biggest change would likely come in the area of infrastructure procurement. This is because activities in liberalised markets that are exposed to competition (including rail freight) were already eligible for exemption from the rules on the basis of 2014 legislation. This will remain the case going forward. Infrastructure, however, is not a liberalised market and remains within the procurement framework.
Significant and faster benefits
CER expects significant and practical benefits. “Simpler purchasing processes can shorten the time needed to procure new rolling stock and equipment, reduce administrative and transaction costs and limit exposure to price increases during lengthy procedures. A clearer framework should also reduce disputes over the application of procurement rules, avoiding costly legal proceedings that can delay projects for years.”
Moreover, CER believes that the new Regulation will boost investor confidence and bolster rail competitiveness, “with investment translating much sooner into more reliable and comfortable services for passengers, as well as improved solutions for freight customers.”
Exemptions from the rules
Another (minor) change will come in the shape of a general rules exemption of public companies in liberalised markets. This is mostly impactful in the passenger market, but will put public operators on an equal footing with private competitors.
“Under the current framework, public rail operators must run formal procurement procedures for purchases above the EU thresholds. In practice, operators must follow detailed rules on advertising contracts, selecting suppliers and assessing bids, with mandatory waiting periods and the possibility of legal challenges that can further delay purchases”, CER explained to RailFreight.com.
For rail freight, this was already possible under legislation from 2014. Simply said, an application needs to be filed with the European Commission. The Commission will then assess if it meets the conditions for an exemption. Under the new framework, the liberalised rail freight market seems to be exempt as a whole.
CER says that it hopes for a swift adoption and implementation of this “positive reform”. The association calls on the European Parliament and the Council to preserve the proposed exemptions throughout the legislative process.
