Brussels, 15th December 2022: Recently, Portugal’s Prime Minister António Costa announced plans for a high-speed line between Lisbon and Porto, stressing the importance of connecting the two cities and generating economic growth.
ALLRAIL welcomes this project but highlights, once again, the importance of opening this sector to the competition among operators, fulfilling with the provisions of the EU Law.
The transport corridor between Lisbon and Porto “is already very popular” – in other words, it is highly likely that trains would be able to be run in a commercially driven manner rather than needing a PSO subsidy. Indeed, with an hourly service, multiple direct flights throughout the day, and even more long-distance buses and car usage, one cannot be blind to the existing demand. The fact that the newcomer passenger rail operator B-Rail is planned to run commercially driven services linking the North and South of Portugal further demonstrates this reality.
In this scenario, the current National Budget in Portugal for the next year foresees a settlement of incumbent CP’s historical loss, in order to provide this state-owned company with enough funds so that it can purchase a whole new fleet. Even if we are in a very preliminary stage, this national measure seems like the factual background for a possible State Aid case, in particular with regard to the allocation of financial means to carry out the long-distance rail services that are liberalised in the European Union.
It is important to bear in mind that this sort of compensations within the public sector is a very delicate field, subjected to very strong rules of transparency and proportionality settled by the European Court of Justice (i.e., the Altmark Case), in order to avoid conferring an economic advantage which may favour the recipient rail operator over competing rail operators.
Therefore, we call on Portuguese Minister for Infrastructure and Housing, Mr Pedro Nuno Santos, to adhere to EU regulations, focusing on innovative and demand-driven services that are not reliant on the taxpayer.
In this regard, we ask two crucial questions:
1. has the Portuguese government independently explored the ability of other operators – and not only CP – to provide commercial services between Faro and Porto?
2. has there been any kind of market analysis to determine whether the market can provide long distance services within Portugal?
The EU must act now to prevent the single rail market from being undermined.
We do not want to face yet another example of breach of the EU law by a Member State acting like it is not part of the single rail market. Market opening needs to move forward, innovation must continue and not be trapped in a state of paralysis, prolonging or generating situations of inefficiency, public spending and barriers to the European market.
“Instead of spending money on improving infrastructure that would enable an increase in services from commercially driven traffic, Portugal risks finding itself on a downward spiral, farther and farther away from reaching our common goal of modal shift.”
ALLRAIL Secretary General Nick Brooks