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EU public service obligations guidance fails to create level playing field
EU | Brussels

EU public service obligations guidance fails to create level playing field

26 Jun 2023 · People

The EU’s guidelines on public service obligations does not live up to its expectations of creating a level playing field between rail and road transport.

IRU, the voice of private bus, coach and taxi operators, welcomes the EU’s interpretative guidelines on public passenger transport services by rail and road.

The guidelines calls for a more open, fair and transparent competitive environment, allowing all private operators, including large and small enterprises, to have equal market opportunities and compete on a level playing field with public sector internal operators.

However, the guidelines fail to create a level playing field between sustainable modes of transport, which is critical to supporting an effective transition to cleaner and greener transport in the EU. 

Long-distance and intercity coaches are one of the most sustainable and affordable means of collective passenger transport and offer an excellent green alternative to private cars. 

In addition, long-distance buses have been ranked the best-performing of all modes of travel in terms of CO2 emissions and general environmental impact per passenger-kilometre under a well-to-wheel approach, as reported by the German Environment Agency

IRU Director of EU Advocacy Raluca Marian said, “Unfortunately, the EU’s public service obligation vision for the mobility sector does not incorporate the promotion of long-distance bus and coach as complementary to rail in the mobility mix.”

“To decarbonise the mobility sector, we must see genuine modal cooperation with all sustainable modes of transport being treated equally and fairly. Without this, we are putting Europe’s green transport transition at risk,” she added.

Subcontracting conditions

The interpretative guidelines emphasise that a public sector internal operator should remain an exception to the rule of fair competition in tendering and awarding public service contracts. 

The guidelines state that public service contracts must also stipulate whether subcontracting is possible, and if so, to what extent. 

In reality, the growing trend is to reduce subcontracting to commercial operators, whereby the business sector is limited to the mere provision of driving personnel or restricted to less financially interesting routes or services. Thus, the economic activity of private companies is reduced to a minimum, which is not a model that is sustainable in the long term.

“Although the practice of internal public sector operators executing one-third of transport services in terms of value or vehicle kilometres appears as an opportunity, this forces authorities and internal public sector operators to invest heavily to fulfil the conditions, which limits the scope and market share of private operators”, said Raluca Marian. 


Authorities and operators should not be expected to engage in contract-by-contract accounting, with the possible return of payments made under the contract. This is due to the fact that one or a few bids for a contract are offered under an open, transparent and non-discriminatory tendering procedure. The European Commission should have clearly stated in the interpretative guidelines that if a tender procedure is run adequately, it should exclude state aid, otherwise it leads to legal uncertainty. 

“Adopting the practice of ex-post accounting creates an administrative burden for authorities and a one-way bet against operators, which may have the unintended consequence of reducing the number of competitive bids”, highlighted Raluca Marian.

IRU will monitor the effect of this guidance at the level of Member States over the coming months and will explore improvements with the European Commission.