JUDGMENT OF THE COURT (First Chamber)
18 April 2013 (*)
(Failure of a Member State to fulfil obligations – Transport – Development of the Community’s railways – Directive 91/440/EEC – Article 6(3) and Annex II – Directive 2001/14/EC – Article 14(2) – Lack of legal independence of the railway infrastructure manager – Article 11 – Absence of a performance scheme – Incomplete transposition)
In Case C‑625/10,
ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 29 December 2010,
European Commission, represented by J.-P. Keppenne and H. Støvlbæk, acting as Agents, with an address for service in Luxembourg,
applicant,
v
French Republic, represented by G. de Bergues, M. Perrot and S. Menez, acting as Agents,
defendant,
supported by
Kingdom of Spain, represented by S. Centeno Huerta, acting as Agent,
intervener,
THE COURT (First Chamber),
composed of A. Tizzano, President of the Chamber, A. Borg Barthet (Rapporteur), E. Levits, J.-J. Kasel and M. Berger, Judges,
Advocate General: N. Jääskinen,
Registrar: A. Impellizzeri, Administrator,
having regard to the written procedure and further to the hearing on 20 September 2012,
after hearing the Opinion of the Advocate General at the sitting on 13 December 2012,
gives the following
Judgment
1 By its application, the European Commission seeks a declaration from the Court that:
– by failing to adopt the measures necessary to ensure that the entity entrusted with the exercise of essential functions listed in Article 6(3) of and Annex II to Council Directive 91/440/EEC of 29 July 1991 on the development of the Community’s railways (OJ 1991 L 237, p. 25), as amended by Directive 2001/12/EC of the European Parliament and of the Council of 26 February 2001 (OJ 2001 L 75, p. 1) (‘Directive 91/440’), and in Article 14(2) of Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification (OJ 2001 L 75, p. 29), as amended by Directive 2007/58/EC of the European Parliament and of the Council of 23 October 2007 (OJ 2007 L 315, p. 44) (‘Directive 2001/14’), is independent of the undertaking which provides rail transport services;
– by failing to introduce a performance scheme in accordance with Article 11 of Directive 2001/14, and
– by failing to introduce an incentive scheme as provided for in Article 6(2) to (5) of Directive 2001/14,
the French Republic has failed to fulfil its obligations under those provisions.
Legal context
European Union law
2 Three directives were adopted in 2001 by the European Parliament and the Council of the European Union with a view to revitalising rail transport by gradually opening it up to competition at European level, namely Directive 2001/12, Directive 2001/13/EC of the European Parliament and of the Council of 26 February 2001 amending Council Directive 95/18/EC on the licensing of railway undertakings (OJ 2001 L 75, p. 26) and Directive 2001/14 (together ‘the first railway package’).
Directive 91/440
3 The first subparagraph of Article 6(3) of Directive 91/440 provides as follows:
‘Member States shall take the measures necessary to ensure that the functions determining equitable and non-discriminatory access to infrastructure, listed in Annex II, are entrusted to bodies or firms that do not themselves provide any rail transport services. Regardless of the organisational structures, this objective must be shown to have been achieved.’
4 Annex II to Directive 91/440 gives the list of essential functions referred to in Article 6(3) thereof as follows:
‘– preparation and decision-making related to the licensing of railway undertakings including granting of individual licenses,
– decision-making related to the path allocation including both the definition and the assessment of availability and the allocation of individual train paths,
– decision making related to infrastructure charging,
– monitoring observance of public service obligations required in the provision of certain services.’
Directive 2001/14
5 Recitals 11 and 40 of Directive 2001/14 are worded as follows:
‘(11) The charging and capacity allocation schemes should permit equal and non-discriminatory access for all undertakings and attempt as far as possible to meet the needs of all users and traffic types in a fair and non-discriminatory manner.
…
(40) A railway infrastructure is a natural monopoly. It is therefore necessary to provide infrastructure managers with incentives to reduce costs and manage their infrastructure efficiently.’
6 Article 3(1) of Directive 2001/14 provides as follows:
‘The infrastructure manager shall, after consultation with the interested parties, develop and publish a network statement obtainable against payment of a duty which may not exceed the cost of publishing that statement.’
7 Under Article 6 of Directive 2001/14:
‘1. Member States shall lay down conditions, including where appropriate advance payments, to ensure that, under normal business conditions and over a reasonable time period, the accounts of an infrastructure manager shall at least balance income from infrastructure charges, surpluses from other commercial activities and State funding on the one hand, and infrastructure expenditure on the other.
Without prejudice to the possible long-term aim of user cover of infrastructure costs for all modes of transport on the basis of fair, non‑discriminatory competition between the various modes, where rail transport is able to compete with other modes of transport, within the charging framework of Articles 7 and 8, a Member State may require the infrastructure manager to balance his accounts without State funding.
2. Infrastructure managers shall, with due regard to safety and to maintaining and improving the quality of the infrastructure service, be provided with incentives to reduce the costs of provision of infrastructure and the level of access charges.
3. Member States shall ensure that the provision set out in paragraph 2 is implemented, either through a contractual agreement between the competent authority and infrastructure manager covering a period of not less than three years which provides for State funding or through the establishment of appropriate regulatory measures with adequate powers.
4. Where a contractual agreement exists, the terms of the contract and the structure of the payments agreed to provide funding to the infrastructure manager shall be agreed in advance to cover the whole of the contract period.
5. A method for apportioning costs shall be established. Member States may require prior approval. This method should be updated from time to time to the best international practice.’
8 Article 7(3) of Directive 2001/14 provides as follows:
‘Without prejudice to paragraphs 4 or 5 or to Article 8, the charges for the minimum access package and track access to service facilities shall be set at the cost that is directly incurred as a result of operating the train service.’
9 Article 8(1) of Directive 2001/14 reads as follows:
‘In order to obtain full recovery of the costs incurred by the infrastructure manager a Member State may, if the market can bear this, levy mark-ups on the basis of efficient, transparent and non-discriminatory principles, while guaranteeing optimum competitiveness in particular of international rail freight. The charging system shall respect the productivity increases achieved by railway undertakings.
The level of charges must not, however, exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service, plus a rate of return which the market can bear.’
10 Under the terms of Article 11 of Directive 2001/14:
‘1. Infrastructure charging schemes shall, through a performance scheme, encourage railway undertakings and the infrastructure manager to minimise disruption and improve the performance of the railway network. This may include penalties for actions which disrupt the operation of the network, compensation for undertakings which suffer from disruption and bonuses that reward better than planned performance.
2. The basic principles of the performance scheme shall apply throughout the network.’
11 Article 14(1) and (2) of Directive 2001/14 provide as follows:
‘1. Member States may establish a framework for the allocation of infrastructure capacity while respecting the management independence laid down in Article 4 of Directive 91/440/EEC. Specific capacity allocation rules shall be established. The infrastructure manager shall perform the capacity allocation processes. In particular, the infrastructure manager shall ensure that infrastructure capacity is allocated on a fair and non-discriminatory basis and in accordance with Community law.
2. Where the infrastructure manager, in its legal form, organisation or decision-making functions, is not independent of any railway undertaking, the functions referred to in paragraph 1 and described in this chapter shall be performed by an allocation body that is independent in its legal form, organisation and decision-making from any railway undertaking.’
French law
12 Law No 97‑135 of 13 February 1997 creating the public entity ‘Réseau ferré de France’ with a view to the renewal of rail transport (Journal Officiel de la République Française (JORF) of 15 February 1997, p. 2592), in the version applicable at the material time, as amended most recently by Law No 2009‑1503 of 8 December 2009 on the organisation and regulation of rail transport and introducing various provisions relating to transport (JORF of 9 December 2009, p. 21226, ‘Law No 97-135’), provides that Réseau ferré de France (‘RFF’) is to be the French railway infrastructure manager.
13 The second paragraph of Article 1 of Law No 97‑135 provides as follows:
‘Having regard to the requirements of safety and public service continuity, management of traffic and trains on the national rail network and operation and maintenance of the technical and safety installations for that network shall be carried out by the Société nationale des chemins de fer français (‘the SNCF’) on behalf of and in accordance with the management objectives and principles laid down by [RFF]. It shall provide it with remuneration to that end. ...’
14 The first paragraph of Article 17 of Decree No 2003‑194 of 7 March 2003 on the use of the national rail network (JORF of 8 March 2003, p. 4063) makes provision for the development of the rail network statement referred to in Article 3(1) of Directive 2001/14 (‘the network statement’) in the following terms:
‘[RFF] shall draw up a national rail network statement containing all the information necessary for exercising the rights of access to the national rail network mentioned in Title I. ...’
15 Article 18 of that decree provides as follows:
‘[RFF] shall be responsible for allocating infrastructure capacity for the national rail network in respect of the infrastructure which it manages or for which the infrastructure manager holds a partnership agreement concluded pursuant to Articles 1‑1 and 1‑2 of Law [No 97‑135], in accordance with the detailed rules laid down in Articles 18 to 27 of this decree. ...’
16 Article 21 of that decree was amended by Decree No 2011‑891 of 26 July 2011 (JORF of 28 July 2011, p. 12885). However, given the date of expiry of the time-limit prescribed in the reasoned opinion, it is the version of the decree prior to that amendment which applies to the present case. It was worded as follows:
‘Application for train paths shall be submitted to [RFF] under the conditions and in accordance with the detailed rules laid down by the network statement or, in the case of a framework agreement, by the terms of that agreement.
…
[RFF] shall entrust the technical implementation studies necessary for the scrutiny of applications for train paths to the [SNCF], which is responsible, on its behalf, for management of traffic and trains on the national rail network. Such studies shall entail remuneration, to be borne by the applicant and to be set at the cost directly incurred as a result of conducting them.
The [SNCF] shall take the necessary steps, under the supervision of [RFF], to ensure the functional independence of the unit which produces the technical reports, in order to ensure that there is no discrimination in the performance of that unit’s functions. That unit shall respect the confidential nature of commercial information communicated to it for the purposes of those reports.
…’
17 The national rail network statement for 2011 and 2012, in particular Article 6.4 entitled ‘Performance scheme for railway undertakings’, provides as follows:
‘Within the framework of Article 11 of Directive [2001/14] referred to above, the performance scheme put in place by [RFF] in order to optimise the performance of the railway network and provide a quality service to railway undertakings shall take the form of a specific charge to be levied on the fee for reserving freight paths with a total length greater than 300 km and a speed of not less than 70 km/h, excluding stops allocated at the request of the undertaking reserving the train path.
[RFF] shall endeavour to negotiate a ‘performance plan’ agreement with any railway undertaking wishing to do so, taking into account the common provisions established by European business organisations, the basic principles of which are to be applied to the entire network.’
18 A performance contract covering the period from 2008 to 2012 was concluded between the French State and RFF on 3 November 2008 (‘the performance contract’).
19 Annexed to the network statement are the general terms and conditions applicable to the contract for use of the national rail network infrastructure and the contract for allocating train paths on the national rail network (‘the RFF general terms and conditions’). Those general terms and conditions include Article 18, entitled ‘Liability in the event of accidents or damage’, which establishes the extent of the respective liability of the railway undertaking and RFF in the event of accidents or damage, and Article 20, entitled ‘Consequences in terms of compensation of the withdrawal of train paths by RFF’, which deals with the adverse consequences of withdrawing train path days allocated by RFF to the railway undertakings.
20 Article 24(III) of Law No 82-1153 of 30 December 1982 laying down guidelines for domestic transport (JORF of 31 December 1982, p 4004), as amended by Law No 2009-1503, provided as follows:
‘Within the [SNCF], a specialist unit shall perform, from 1 January 2010, on behalf of and in accordance with the management objectives and principles laid down by [RFF], the tasks related to the management of traffic and trains on the national rail network mentioned in Article 1 of Law No 97‑135 … in a manner which ensures the independence of the essential functions thus performed and guarantee free and fair competition and the absence of any discrimination.
...
The unit responsible for the management of traffic and trains shall have its own budget to be funded by [RFF] as part of an agreement concluded with the [SNCF], and co-signed by the director of the management service. In accordance with Article 1 of Law No 97‑135 […], that agreement shall set out the conditions for carrying out the tasks performed by the unit and the remuneration thereof, in particular as regards the technical implementation studies necessary for the scrutiny of applications for train paths and the operational management of trains.
...’
The pre-litigation procedure and the procedure before the Court
21 By letter of 27 June 2008, the Commission gave the French Republic formal notice to comply with the directives in the first railway package. The French Republic replied to the letter of formal notice by letters of 9 September 2008 and 14 July 2009.
22 By letter of 9 October 2009, the Commission sent the French Republic a reasoned opinion in which it claimed that the measures adopted to transpose Article 6(3) of Directive 91/440 and Annex II thereto, and Articles 4(2) and 14(2) of Directive 2001/14 were insufficient as regards the independence of essential functions. The Commission also alleged in its reasoned opinion that the French Republic had not taken the measures necessary to comply with its obligations relating to charging for access to the railway infrastructures referred to in Articles 4(1), 11 and 6(2) of Directive 2001/14 and Article 10(7) of Directive 91/440. Furthermore, the French Republic had failed to fulfil the obligations imposed on Member States under Article 30(1) and (3) to (5) of Directive 2001/14 concerning the rail regulatory body. The Commission therefore requested the French Republic to take the measures required to comply with the reasoned opinion within two months of its receipt.
23 By letter of 10 December 2009, the French Republic responded to the reasoned opinion by informing the Commission of the adoption and promulgation of Law No 2009‑1503 and further stating that the complaints raised by the Commission were, in its view, unfounded. On 30 July 2010, the French Republic provided additional information to the Commission on the implementation of the first railway package.
24 Since it was not satisfied with the French Republic’s reply, the Commission decided to bring the present action. However, in the light of developments in the national regulatory framework since the reasoned opinion was sent, the Commission has restricted the scope of the present action for failure to fulfil obligations to Article 6(3) of Directive 91/440 and Annex II thereto, and Articles 6(2) to (5), 11 and 14(2) of Directive 2001/14.
25 By order of the President of the Court of 30 June 2011, the Kingdom of Spain was granted leave to intervene in support of the forms of order sought by the French Republic.
The action
The first complaint, relating to the independence of the function of allocating train paths
Arguments of the parties
26 The Commission claims that, under Article 6(3) of Directive 91/440, since the allocation of train paths is an essential function determining equitable and non-discriminatory access to railway infrastructure that is listed in Annex II to that directive and to which the requirement of independence applies an entity providing rail transport services, or an administrative department set up within that entity, may not be given responsibility for essential functions relating to the allocation of train paths. It also argues that, in accordance with Article 14(2) of Directive 2001/14, the allocation of rail infrastructure capacity must fall to an independent allocation body.
27 According to the Commission, whilst RFF, which is responsible for managing that infrastructure, is indeed a body that is independent of the SNCF, which in turn operates the rail services, the SNCF is nonetheless responsible for certain essential functions relating to the allocation of train paths. The Commission considers in this regard that, although those essential functions are entrusted to a specialist unit within the SNCF, namely the Direction des Circulations Ferroviaires (‘the DCF’), the DCF is not independent of the SNCF in its legal form, organisation or decision-making functions.
28 In the view of the Commission, the tasks entrusted to the DCF form part of the performance of the essential functions listed in Annex II to Directive 91/440. The SNCF is thus responsible for significant elements of the process for the allocation of capacity within the meaning of Annex II to that directive, such as technical implementation studies or the last-minute allocation of train paths. The Commission takes the view that, even though RFF is responsible for allocating individual train paths, the studies which are entrusted to the SNCF form part of the essential functions. Those functions are included among those referred to in Article 14(2) of Directive 2001/14 and must therefore be managed by an independent body.
29 The Commission claims that Article 6(3) of Directive 91/440 and Article 14(2) of Directive 2001/14 must be read together and are mutually complementary. The rule that essential functions must be performed, independently laid down in general terms in Article 6(3) of Directive 91/440, is set out with greater precision and in greater detail in Article 14(2) of Directive 2001/14 as regards the allocation of train paths.
30 The Commission takes the view that Directive 2001/14 does not provide that essential functions may be performed by a railway undertaking under the ‘supervision’ of a body that is independent in its legal form, organisation and decision-making, but that the directive requires that those functions be ‘performed’ by such an independent body.
31 The aim of Article 14(2) of Directive 2001/14 is to ensure that railway undertakings do not exercise any powers in relation to the allocation of train paths, in order to guarantee equitable and non-discriminatory treatment between railway undertakings.
32 With regard to the legal independence of the DCF, the Commission takes the view that it is a specialist unit of the SNCF, which is not therefore independent in that respect within the meaning of Article 14(2) of Directive 2001/14, since the DCF forms an integral part of the structure of the SNCF, and does not have separate legal personality from the SNCF.
33 The Commission also maintains that, where the railway infrastructure manager, in this case RFF, delegates essential functions to a separate body, such as the DCF, that body must fulfil the same independence requirements imposed on the manager of that infrastructure. Thus, the independence requirement ‘follows’ the performance of the essential functions; otherwise, the independence requirement would have no practical effect.
34 The Commission states that there is no sufficient guarantee that the DCF is independent in terms of its organisation and decision-making. Compliance with the independence requirements should be monitored by an independent authority, a function which, in this case, could be fulfilled by the Autorité de régulation des activités ferroviaires (railway regulatory authority). Moreover, railway undertakings which compete with the SNCF do not have the opportunity to complain about any breach of the independence requirement, the Autorité de régulation des activités ferroviaires gives its approval, not for the appointment of the DCF director, but only for the director’s removal, the transfer of DCF staff to other departments which the SNCF are not sufficiently monitored and, finally, the guarantee that the DCF is to have its own staff, separate premises and a protected information system has not yet been provided.
35 Lastly, the Commission states in its reply that even if the prospect of the French Republic adopting a new decree – now Decree No 2011‑891 of 26 July 2011 on the service responsible for managing traffic and trains and laying down various railway provisions (JORF of 28 July 2011, p. 12885) – constitutes an improvement compared with the current situation, that new decree does not provide the DCF with sufficient independence in its organisation or decision-making functions, and even less in its legal form.
36 The French Government contends that the DCF’s independence is ensured in that the essential functions entrusted to the DCF are supervised by RFF. The DCF participates in the exercise of essential functions, but does not manage them, since RFF alone is responsible for the allocation of train paths. Thus, RFF defines the methods and the operating procedures for processing applications, which it passes on to the DCF, and lays down the priority rules. As regards last-minute train paths, when granted by the DCF this is justified on the grounds of urgency and is, in any event, determined according to the order in which applications are received. The French Government further contends that the requirement for the DCF to be independent in its legal form does not mean that it must have separate legal personality from the SNCF.
37 The French Government also considers that the situation in France does not fall within the scope of Article 14(2) of Directive 2001/14, as that provision is applicable only where the railway infrastructure manager is not independent. The manager of the railway infrastructure, namely RFF, is independent and, therefore, the above article does not apply to the activities of the DCF.
38 The French Government claims that, although the DCF is part of a legal entity which is itself a rail transport provider, it remains a body that is independent in terms of its functions. There are therefore no grounds for concluding that the DCF, even though it forms an integral part of the SNCF, constitutes a body which provides rail transport services for the purposes of Article 6(3) of Directive 91/440.
39 The French Government also rejects the Commission’s arguments concerning the DCF’s lack of independence in terms of organisation and decision-making functions, in particular in relation to the appointment of its director, the transfer of the director and staff to other SNCF departments and the guarantee that the DCF is to have separate premises, its own legal personality and a protected information system
40 In its rejoinder, the French Government argues that the transposition of Article 6(3) of Directive 91/440 and Annex II thereto was fully completed with the adoption of Decree No 2011-891, pursuant to Law No 2009-1503.
Findings of the Court
41 By its first complaint, the Commission alleges that the French Republic has failed to fulfil its obligations under Article 6(3) of Directive 91/440, read in conjunction with Annex II thereto, and under Article 14(2) of Directive 2001/14 in so far as in France, although the railway infrastructure manager, RFF, is a body that is independent of the SNCF, which, in turn, operates the rail services, the SNCF is nonetheless responsible for certain essential functions relating to the allocation of train paths, in that the conducting of technical implementation studies necessary for the scrutiny of applications for train paths and for the allocation of last minute train paths is entrusted to a specialist service within the SNCF, namely the DCF, which is not independent of the SNCF in its legal form, organisation or decision-making functions.
42 It should first be observed that the French Republic contends that the transposition of Article 6(3) of Directive 91/440 and Annex II thereto was fully achieved with the adoption of Decree No 2011-891.
43 However, according to settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion, and the Court cannot take account of any subsequent changes (see, inter alia, the judgments of 27 September 2007 in Case C‑9/07 Commission v France, paragraph 8, and of 18 November 2010 in Case C‑48/10 Commission v Spain, paragraph 30).
44 Therefore, as Decree No 2011‑891 was adopted after the expiry of the time-limit set by the Commission in its reasoned opinion of 9 October 2009, it cannot be taken into account in the Court’s consideration of the merits of this action for failure to fulfil obligations.
45 As regards the substance, it must be recalled that Directive 91/440 instigated the liberalisation of rail transport by seeking to ensure equitable and non-discriminatory access for railway undertakings to infrastructure. In order to guarantee that access, the first subparagraph of Article 6(3) of Directive 91/440 established that Member States must take the measures necessary to ensure that the functions listed in Annex II to that directive are entrusted to bodies or firms that do not themselves provide any rail transport services, and that this must be shown to have been achieved, regardless of the organisational structures.
46 According to Annex II to Directive 91/440, the following are deemed to be essential functions within the meaning of Article 6(3): preparation and decision-making related to the licensing of railway undertakings, decision-making related to the path allocation including both the definition and the assessment of availability and the allocation of individual train paths, decision making related to infrastructure charging and monitoring observance of public service obligations required in the provision of certain services.
47 It follows from that list that a railway undertaking may not be entrusted with conducting the technical implementation studies necessary for scrutinising applications for train paths carried out before a decision is taken and for the last-minute allocation of train paths, because those studies form part of the definition and assessment of the availability of train paths, and because the last-minute allocation of train paths constitutes an allocation of individual train paths for the purposes of Annex II to Directive 91/440; those functions therefore must be entrusted to an independent body.
48 It must be recalled that Article 14(2) of Directive 2001/14 provides that entities responsible for the functions of allocating train paths must be independent in their legal form, organisation and decision-making functions.
49 In that regard, the Court cannot accept the French Republic’s argument that Article 14(2) of Directive 2001/14 does not apply because there is an independent infrastructure manager, RFF, responsible for the essential function of allocating individual train paths. Contrary to what the French Republic maintains, the independence required of the railway infrastructure manager must demonstrate pursuant to Article 14(2) of Directive 2001/14 must be verified even where that manager is independent of the rail transport undertakings, if essential functions remain allocated to a railway undertaking. Thus, as the Advocate General observes at point 41 of his Opinion, the DCF remains subject to the requirements of Article 6(3) of Directive 91/440 and Article 14(2) of Directive 2001/14, which cannot be dissociated from one another. Otherwise, Member States would be able to evade the provisions of those directives by putting in place an infrastructure manager which, although independent, would delegate essential functions to a railway undertaking, which would be contrary to the objective referred to in recital 11 of Directive 2001/14, namely to ensure for all railway undertakings fair and non-discriminatory terms for access to the infrastructure.
50 In this case, while it is supervised by RFF, an independent infrastructure manager, the DCF, is responsible under Article 24 of Law No 82‑1153, as amended by Law No 2009-1503 and Article 21 of Decree No 2003-194, for essential functions within the meaning of Article 6(3) of Directive 91/440 and forms an integral part of the railway undertaking, namely the SNCF. On that basis, in order to assume allocation functions, the DCF must also be independent of the SNCF in its legal form, organisation and decision-making.
51 Therefore, in legal terms, the DCF must have separate legal personality from the SNCF and, in addition, its own bodies and resources, which are also separate from those of the SNCF.
52 It is however clear that in France the DCF does not have legal personality separate from the SNCF, a fact which is not disputed by the French Republic. Thus, the legal independence required in Article 14(2) of Directive 2001/14 does not exist as between the DCF and the SNCF.
53 Since the criterion of legal independence has not been fulfilled, there is no need to examine the criteria of organisational and decision-making independence as all three criteria must be met, and the failure on the part of the DCF to satisfy one of those criteria is sufficient to establish breach of Article 6(3) of Directive 91/440 and Annex II thereto, and Article 14(2) of Directive 2001/14.
54 It follows from the foregoing that the first complaint relied on by the Commission in support of its action must be upheld.
The second complaint, concerning charges made for access to the railway infrastructure
Arguments of the parties
55 The Commission claims, by the first part of the second complaint, that the French Republic has failed to fulfil its obligations under Article 11 of Directive 2001/14 in so far as French legislation does not currently include a performance scheme as required under that article. The measures mentioned by the Member State do not constitute such a scheme.
56 Article 6.4 of the network statement, which provides for a specific charge to be levied on the reservation fee for freight paths with a total length greater than 300 km and a speed greater than 70 km/h does not constitute a performance scheme within the meaning of Article 11 of Directive 2001/14, since it does not involve, either for the operators or for the manager, constraints and/or incentives aimed at improving performance.
57 Similarly, the two other documents mentioned by the French authorities, namely the general terms and conditions applicable to contracts for the use of infrastructure and the performance contract, do not fulfil the requirements under Article 11 of Directive 2001/14.
58 The Commission also claims in the second part of the second complaint that, by not introducing an incentive scheme as provided for in Article 6(2) to (5) of Directive 2001/14, the French Republic has failed to fulfil its obligations under those provisions.
59 As regards incentives to reduce the costs of provision of infrastructure, the Commission claims that the measures taken by the French authorities do not include an incentive scheme encouraging the railway infrastructure manager to achieve in any significant way the objectives assigned to it.
60 With regard to the reduction of the level of infrastructure access charges, the Commission states that the performance contract does not include any objectives.
61 The French Government contends that the performance contract lays down the objectives of infrastructure modernisation and the detailed rules for the development of a new commercial railway network service, with a view to improving quality, services and safety. Consequently, that contract includes provisions to encourage the infrastructure manager to reduce disruption and improve the performance of the railway network.
62 The French Government also argues that the general conditions applicable to contracts for the use of infrastructure, in so far as they provide for compensation in the event of non-compliance, thus contain provisions to encourage both railway undertakings and the infrastructure manager to reduce disruption and improve the performance of the railway network.
63 With regard to the incentives to reduce the costs of provision of infrastructure, the French authorities contend that they have introduced a staff bonus mechanism directly linked to reducing such costs and have therefore adopted relevant incentives.
64 As far as the objective of reducing the level of railway infrastructure access charges is concerned, the French Government considers that the reduction of charges for the use of railway infrastructure cannot under any circumstances be deemed an absolute objective laid down by Directive 2001/14.
65 The Spanish Government considers that the Directive 2001/14 does not define or impose any criteria with a view to the establishment of a performance scheme and merely refers to the objective of such a scheme.
66 The Commission, it is argued, has therefore failed to prove that the French infrastructure charging system does not provide incentives to minimise disruption or to improve the performance of the railway network. The reference to the provisions in force and the partial reading of certain contracts or certain provisions do not suffice for that purpose, as those provisions must be considered as a whole.
67 As regards measures to reduce the level of the access charges, the Spanish Government submits that the payment of those charges is in line with the creation of a modern competitive European railway network, in accordance with the objective laid down in Directive 2001/14, which, according to the Spanish Government, has yet to be met. It would not therefore be reasonable, without first modernising the railway network, to reduce both the level of access charges and maintenance costs. That situation automatically rules out any infraction of the provisions referred to above.
Findings of the Court
68 By the first part of the second complaint, the Commission essentially criticises the French Republic for failing to put in place in its national legislation a performance scheme as provided for in Article 11 of Directive 2001/14.
69 Article 11(1) of Directive 2001/14 provides that infrastructure charging schemes are to encourage railway undertakings and the infrastructure manager to minimise disruption and improve the performance of the railway network through the creation of a performance scheme. Under that provision, the system may include penalties, compensation and bonuses.
70 It follows from this, first, that the Member States must include in infrastructure charging schemes a performance scheme the purpose of which is to encourage both railway undertakings and the infrastructure manager to improve network performance. Second, as regards the types of incentive which may be introduced by the Member States, the latter remain free to choose the specific measures that are to form part of the scheme, provided such measures constitute a coherent and transparent whole which may be described as a ‘performance scheme’ (see Case C‑483/10 Commission v Spain [2013], paragraph 64).
71 For the purpose of examining whether the first part of the complaint is well founded, it is therefore necessary to determine whether the relevant French legislative measures comply with the requirements of Article 11 of Directive 2001/14.
72 As regards Article 6.4 of the network statement, it is clear that, since that provision establishes only a specific charge to be levied on the fee for reserving freight paths, provided the total length is greater than 300 km and the speed is greater than 70 km/h, that scheme does not form a coherent and transparent whole which can be described as a performance scheme within the meaning of Article 11 of Directive 2001/14. Indeed, as established at paragraph 70 above, Article 11 requires Member States actually to set up a performance scheme as part of the charging scheme.
73 The RFF general terms and conditions contain provisions for compensating the infrastructure manager for non-use of a train path responsibility for which may be attributed to the railway undertaking and for compensating the railway undertaking as a result of the withdrawal of train paths for which the manager is responsible. It must be pointed out that those provisions do not constitute a performance scheme, as Article 18 of those general terms and conditions contains only clauses determining liability in the event of damage, and Article 20 thereof makes provision only for the consequences, in terms of compensation, in the event of the withdrawal of train paths by RFF.
74 Finally, with regard to the introduction, on an experimental basis, of a specific performance scheme mechanism as provided for by the performance contract, it is clear that such a mechanism is solely the responsibility of RFF. Thus, the performance contract does not constitute a performance scheme that encourages not only the infrastructure manager but also the railway undertakings. Moreover, under Article 11(2) of Directive 2001/14, the basic principles of the performance scheme apply to the network. The provisions of the performance contract are, however, limited to the freight network.
75 It follows from the foregoing considerations that the first part of the second complaint raised by the Commission in support of its action must be upheld.
76 By the second part of the second complaint, the Commission in essence criticises the French Republic for failing to make provision for incentives to encourage the infrastructure manager to limit the costs connected with the infrastructure service or to reduce the level of the access charges.
77 In accordance with Article 6(1) of Directive 2001/14 Member States, are to lay down conditions to ensure that, under normal business conditions and over a reasonable time period, the accounts of an infrastructure manager at least balance income from charges, surpluses from other commercial activities and State funding on the one hand, and infrastructure expenditure on the other. In accordance with Article 6(2) of the directive, railway infrastructure managers must be provided with incentives to reduce the costs of provision of that infrastructure and the level of access charges.
78 In that regard, Article 6(3) of Directive 2001/14 provides that the obligation set out in Article 6(2) is to be implemented, either through a multi‑annual contractual agreement providing for State funding between the infrastructure manager and the competent authority or through the establishment of appropriate regulatory measures with adequate powers. It is therefore open to Member States to implement incentive measures through a multi‑annual contractual agreement or through regulatory provisions.
79 In the present case, an incentive agreement was signed on 6 June 2009 between the RFF President and RFF staff representatives as part of the implementation of the performance contract. Such an agreement constitutes an incentive scheme similar to the multi‑annual contractual agreement referred to in Article 6(3) of Directive 2001/14.
80 The incentive agreement introduces a staff bonus likely to encourage the railway infrastructure manager to reduce costs, in that the agreement provides inter alia, by way of criterion for the award of a bonus payment to the entire RFF staff, for a reduction in the unit costs of the full renewal works for one kilometre of track. The monitoring of that cost makes it possible to establish an index that is representative of the development of the unit costs of renewing the railway infrastructure, an index which introduces, as the Advocate General stated in point 66 of his Opinion, a bonus mechanism for staff directly linked to the reduction in the costs of providing infrastructure. Furthermore, the associated bonus under the incentive agreement will be paid only if the costs incurred are consistent with the objectives of the performance contract.
81 Thus, those measures encourage the infrastructure manager to reduce the costs of providing railway infrastructure and, indirectly, to lower the level of infrastructure access charges.
82 As regards the Commission’s argument that Article 6(2) of Directive 2001/14 requires the Member States to provide measures intended to reduce access charges separate from the incentives to lower costs, recital 40 in the preamble to the directive clearly states that a railway infrastructure is a natural monopoly and that it is therefore necessary to provide infrastructure managers with incentives to reduce costs and manage their infrastructure efficiently. That recital does not refer to charges but simply to costs (see Case C‑556/10 Commission v Germany [2013] ECR, paragraph 106).
83 It is true that Article 6(2) of Directive 2001/14 provides that incentives must be given in order to reduce costs and access charges. It does not, however, provide that such incentives must be adopted as separate measures (see Commission v Germany, paragraph 107).
84 If the Commission’s view were accepted, that would amount to recognising that a Member State is under an obligation to provide the infrastructure manager with an incentive to pass on to network users, through a reduction in charges, part of the surpluses obtained as a result of an increase in its efficiency, even though it might not be in a position to recover all the costs of provision of infrastructure. That interpretation would require the Member State, in consideration for passing on that benefit, to fund the infrastructure. It is clear that such an interpretation is at variance with the second subparagraph of Article 6(1) of Directive 2001/14, which provides that a Member State may, within the charging framework of Articles 7 and 8 of the directive, require the infrastructure manager to balance its accounts without State funding (see Commission v Germany, paragraph 108).
85 It must therefore be concluded that the requirement to encourage the infrastructure manager, by means of incentives, to reduce railway infrastructure costs and the level of access charges is, in the present case, satisfied by the measures to reduce the costs of provision of infrastructure, since such measures also have an impact on the reduction of charges, as mentioned at paragraphs 79 to 81 above.
86 Moreover, it should be noted that incentives to reduce the costs of provision of infrastructure can only have the effect of reducing the level of access charges, irrespective of whether those charges are set on the basis of Article 7(3) of Directive 2001/14 or on that of Article 8(1) of the directive.
87 It follows from the foregoing considerations that the second part of the Commission’s second complaint, relating to incentives to reduce costs, must be rejected.
88 It follows from all the foregoing considerations that, by failing to adopt the measures necessary to ensure that the entity entrusted with the exercise of essential functions listed in Annex II to Directive 91/440 is independent of the undertaking which provides rail transport services in accordance with Article 6(3) of that directive and Annex II thereto and Article 14(2) of Directive 2001/14, and by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Articles 11 of Directive 2001/14 within the prescribed time limit, the French Republic has failed to fulfil its obligations under those provisions.
89 The action is dismissed as to the remainder.
Costs
90 Under Article 138(3) of the Rules of Procedure, where the parties succeed on some and fail on other heads, they are to be ordered to bear their own costs. Since the Commission and the French Republic have succeeded on some and failed on other heads, they must be ordered to bear their own costs.
91 In accordance with Article 140(1) of the Rules of Procedure, the Kingdom of Spain is to bear its own costs.
On those grounds, the Court (First Chamber) hereby:
1. Declares that, failing to adopt the measures necessary to ensure that the entity entrusted with the exercise of essential functions listed in Annex II to Council Directive 91/440/EEC of 29 July 1991 on the development of the Community’s railways, as amended by Directive 2001/12/EC of the European Parliament and of the Council of 26 February 2001, is independent of the undertaking which provides railway transport services, in accordance with Article 6(3) of that directive and Annex II thereto and Article 14(2) of Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification, as amended by Directive 2007/58/EC of the European Parliament and of the Council of 23 October 2007, and by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Article 11 of Directive 2001/14 within the prescribed time limit, the French Republic has failed to fulfil its obligations under those provisions;
2. Dismisses the action as to the remainder;
3. Orders the European Commission and the French Republic to bear their own costs;
4. Orders the Kingdom of Spain to bear its own costs.
[Signatures]