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One of the 50 areas in the Renamed Constitution where all vetoes are removed and control is effectively handed to EU institutions is in transport matters.

The EU has long desired a single transport policy controlled by eurocrats and not the member states. In 1957 the newly-founded European Commission established a plan for a common transport market run on the basis of "free competition" and the "principles of the market economy" as written into the Treaty of Rome.

On the basis of this plan, on May 13 1965, the Council of Ministers adopted a decision to harmonise and introduce competition in the transport sector. A good example of how 'competition' is being forced on to the transport sector is Council Directive 91/440/EEC introduced on July 29 1991.

This directive "requires member states: to grant the rail companies independence from government and introduce commercial management techniques; and to separate the management of infrastructure from transport management". This infamous directive established a historically unprecedented liberalisation model, instituting a dangerous "vertical split" separating rail infrastructure from the operation of rail services. It stipulates:

  • operational autonomy for railway operators
  • separation of the infrastructure from service operations (as an absolute minimum - although not exclusively - for accounting purposes)
  • open access for international undertakings
  • introduction of track access charges and a sound financial basis for railway operators

This was exactly the basis for John Major's Tory privatisation of British Rail in 1996. The Railways Regulation 1992, which began rail privatisation, was introduced under Section 2(2) of the European Communities Act 1972 to comply with directive 91/440/EEC.

However, this EU-sponsored rail 'liberalisation' model has proved disastrous in Britain. Privatisation of rail infrastructure maintenance directly led to the catastrophic deterioration of track, causing the deaths of many passengers and rail workers. Private train operators' record profits are siphoned directly from public subsidy, there is a perpetual squeeze on rail workers' pay and ticket fares continue to rocket, making Britain's railways the most expensive in Europe.

Despite the introduction of 91/440, the path followed by other European member states has differed radically from the UK government's wholesale adoption of the Commission's privatisation model due, in large measure, to the disastrous experience in the UK. The poor operational safety and financial performance of the UK privatised rail sector arose directly from the "vertical split" model advocated in 91/440.

This EU-sponsored rail 'liberalisation' model has proved disastrous in Britain. The idea that competing train operating companies can compete for slots in track use is clearly limited as train path scheduling on the fixed track infrastructure has limited flexibility. Nevertheless, in 2005 EU transport ministers agreed to 'liberalise' domestic railway networks by 2010. The refusal to recognise these fundamental flaws is a long-term characteristic of European Commission thinking on rail 'liberalisation'.

The financial problem of the EU "vertical split" model is that train operating companies cannot possibly absorb the true cost of the infrastructure. So this model relies on a valuation determined by low track-use charges which can be realistically borne by train operating companies. This means that the extra investment required must come from sources other than those private companies operating the network, i.e. the taxpayer through subsidies and fare- paying passengers through ticket price hikes.

The Commission has delivered a bewildering stream of Directives, white papers and 'rail packages' to open up national railways to market competition. As a result it is on a collision course with elected governments who increasingly see Brussels model of rail privatisation as a recipe for compromising safety and the decline of rail. If the Constitution is imposed, national governments will no longer have the power to veto rail privatisation and other measures regarding transport.