CHAPTER 3: the governance of the channel
The Channel Tunnel in the EU
41. The Channel Tunnel, as a major cross-border
transport corridor between two Member States, is subject not only
to English and French law but also to bi-national regulations
adopted by the IGC, and EU law.
As discussed in the previous chapter, under the terms of the Railway
Packages Member States must ensure adequate separation between
infrastructure managers and railway undertakings, as well as establishing
independent regulators. These requirements apply to the governance
of the Channel Tunnel, as do the various Directives concerning
safety, interoperability and infrastructure access. The governance
arrangements for the Channel Tunnel, as stipulated in the Treaty
of Canterbury, are delineated in Figure 1 and also summarised
in Box 4.
42. Witnesses disagreed as to whether the Channel
Tunnel constituted a bottleneck in the future development of the
European rail market.
As the Channel Tunnel was conceived before the development of
EU legislation and regulation, we sought to examine whether its
governance arrangements adhered to the EU framework, or whether
they were instead a barrier to growth of the European rail market.
Channel Tunnel Governance Structure
Channel Tunnel Governance Arrangements
|Intergovernmental Commission (IGC)
The Intergovernmental Commission (IGC) was established under Article 10 of the Treaty to manage all aspects of the operation of the Channel Tunnel on behalf of the UK and French governments. This includes drawing up and enforcing regulations applicable to the Channel Tunnel, including transposing any relevant EU measures, and liaising with the two governments and Concessionaires as necessary.
The IGC also has a role in economic regulation, as the designated regulatory body responsible under Article 30 of Directive 2001/14/EC for allocating infrastructure capacity and charging for its use. In this role it is assisted by a Joint Economic Committee composed of experts from both countries. As each government retains sovereign competence for their territorial security, a Joint Security Committee brings together relevant officials from each country to advise the IGC on such matters.
Channel Tunnel Safety Authority (CTSA)
While the IGC is also designated as the requisite safety authority under Article 16 of Directive 2004/49/EC, it is the Channel Tunnel Safety Authority (CTSA), as established under Article 11 of the Treaty, which is responsible for all safety matters. This includes making safety proposals to the IGC, drawing up, monitoring and enforcing safety regulations, and investigating and reporting on any safety incidents.
UK and French delegations
The UK and French governments each appoint half the members of the IGC. It must include at least two representatives of the CTSA, which is also composed equally of British and French government representatives. Three members of the UK delegation to the IGC (the respective heads of the delegations to the IGC and CTSA and an economic delegate) are nominated by the Secretary of State for Transport on the advice of the ORR, which acts as the secretariat to the UK's IGC and CTSA delegations but has no decision-making role in either body. The head of the UK delegation to the CTSA is automatically a member of the UK delegation to the IGC. The chairmanship of the IGC and CTSA alternates annually between the head of each national delegation but neither can chair both bodies at the same time.
The French arrangements are different, with their delegations to both bodies being drawn directly from their ministry of transport. There is no formal role for the newly established independent regulator, the Autorité des activités ferroviaires (ARAF) or the safety authority, the Établissement public de sécurité ferroviaire (EPSF). Decision-making by the two national delegations must be unanimous, otherwise inter-governmental consultations must begin under Article 18.
Revision of the Treaty of Canterbury
43. Some of our witnesses were cautious about
revising the Treaty. The ORR warned that, "if you put all
your effort into changing the structure rather than making it
work, you lose some time and you have to be quite careful on that".
Eurostar also urged caution, stating that the existence of a unified
regulator had proved effective for their purposes.
The Government and Eurotunnel went further and argued that the
governance structure of the Channel Tunnel had been sufficiently
flexible to accommodate subsequent British, French and EU developments
over time. The Minister
stressed that there would have to be a "very compelling case
for saying that all the hassle, all the resources, all the energy
needed to unpick the Treaty of Canterbury is really worth doing".
Eurotunnel suggested that any governance problems emanated from
the approach of the IGC and national regulators rather than defective
provisions in the Treaty.
44. Others suggested that governance structures
were out of step with EU requirements and should be reformed,
necessitating revision of the Treaty. Professor Vickerman
was clear that the current structure was "no longer fit for
purpose" and considered the IGC to be a redundant layer of
bureaucracy in light of the subsequent EU measures adopted since
the signing of the Treaty. He stated that the managing organisations
for the Channel Tunnel should be "nested within the structure
of the new arrangements rather than entirely separate from them".
DB Schenker Rail and the Rail Freight Group also argued that the
current arrangements were inadequate. The latter, however, conceded
that renegotiating the Treaty would be difficult. It advocated
a gradual approach, with the economic and safety regulation of
the Channel Tunnel being transferred to the UK and French national
regulators in the short term, with the IGC being "abolished
completely" in the long term.
Deutsche Bahn agreed, noting that the existence of the IGC had
"not proved to be particularly helpful". It also suggested
the nomination of an independent figure to mediate between the
two sides should the need arise.
45. While the terms of the Treaty of Canterbury
may have been adequate at the time the Channel Tunnel was first
conceived, the Treaty has been overtaken by events including the
growth of EU legislation and the liberalisation of the market.
The 25th anniversary of the Treaty provides an opportunity for
the UK and French governments to review the terms of the Treaty,
with reference to the EU legislative and regulatory framework.
Achieving better bi-national
46. Network Rail told us that the IGC operated
too slowly. Deutsche
Bahn agreed and argued that this was caused by the need to coordinate
its decisions with two Member States and their national regulators.
While Eurotunnel told us that they had a positive relationship
with the IGC and CTSA, with whom they meet every two months, they
also stated that the IGC's processes in authorising new services
could be quicker.
47. Brian Kogan, the UK economic delegate to
the IGC, recognised that there was room for improvement in the
way that it functioned and stated that making the existing regulatory
framework work better was its priority. It noted some areas of
progress: the IGC now published its decision-making procedures,
including complaints and appeals about their decisions, as required
under the First Railway Package.
He also highlighted the IGC's work with Eurotunnel to prompt the
development of a performance regime, another legal requirement,
as well as its efforts to incentivise improved performance from
Eurotunnel and other operators.
High Speed 1 praised these recent improvements
but called for greater transparency regarding the Channel Tunnel's
regulatory and contractual arrangements, as well as their alignment
with EU rail measures.
THE FRENCH REGULATORY APPROACH
48. Brian Kogan stressed that the bi-national
nature of the IGC sometimes generated problems when each country
approached regulatory issues differently, but argued that some
degree of bi-national oversight would always be necessary.
He did not, though, consider that the French regulatory approach
undermined the effective management of the Channel Tunnel and
pointed to the recent establishment of an independent regulator
as a positive development.
Roy Griffins, head of the UK Delegation to the IGC, contrasted
the UK's pragmatic approach to the regulatory framework with France's
less flexible approach. In light of this, he concluded that any
changes would have to be "evolutionary rather than revolutionary".
49. In the short-term, the UK delegation to
the Intergovernmental Commission should seek to ensure that decision-making
methods are quicker and more transparent and that it complies
with the Railway Packages in full. The delegation should also
seek to ensure fair and open access through the Channel Tunnel.
50. In the long-term, we support direct governance
of the Channel Tunnel by the UK and French national regulators.
This should be considered as part of any review of the Treaty
of Canterbury. Such arrangements would be less cumbersome, would
minimise delays in the provision of new services, and would be
in line with the management of other cross-border rail infrastructure
within the EU.
Conflict of interests
51. Brian Kogan flagged up the potential conflict
of interest between Eurotunnel and the operation of its freight
subsidiary, Europorte, because of its responsibility for granting
access and allocating capacity to other freight operators,
but stated that progress was being made in this area by the IGC.
Eurotunnel assured us that its corporate structure ensures that
the undertakings are kept completely separate in terms of legal
and management structures, decision-making and accounting. It
emphasised that, as Europorte only represented 10% of rail freight
traffic through the Channel Tunnel, discriminatory practices would
be counter-productive. Furthermore, it noted that operators could
appeal to the IGC if they felt unfairly treated.
52. The Commission are not convinced by this
explanation, as reflected in the terms of the recent infringement
proceedings. The UK and French governments' direct involvement
in the IGC as the economic regulator is also under scrutiny in
this respect, with another conflict alleged to arise due to their
majority interest in Eurostar as a railway undertaking.
We do not seek to suggest that either arrangement stands in the
way of authorisation being granted to competitor freight and passenger
services in the Channel Tunnel, but there is an arguable perception
of unfairness. We understand that the UK Government and LCR are
open, in principle, to selling their share of Eurostar, which
would presumably resolve this particular conflict of interest.
53. The alleged conflicts of interest concerning
the UK and French governments and Eurotunnel raise sensitive commercial
and legal matters. These fall within the scope of the infringement
proceedings, which we will monitor with interest.
54. There have been three fires in the Channel
Tunnelin 1996, 2006 and 2008all of which involved
heavy goods vehicles on board Eurotunnel shuttles. Since the last
fire on 11 September 2008, Eurotunnel has invested in a "new
and revolutionary fire-fighting system", to suppress fires
on shuttles. It was confident that this should significantly reduce
the risk of infrastructure damage in future, facilitate passenger
evacuations and allow better access for the emergency services.
55. In the past, inclement weather has resulted
in trains becoming stuck in the Channel Tunnel, including an incident
in December 2009 which resulted in some passengers being stranded
in the Channel Tunnel overnight in unpleasant conditions. An independent
review subsequently recommended that Eurostar improve its communications
and emergency procedures to avoid future incidents of this nature.
These incidents serve to emphasise the importance of maintaining
high safety standards in the Channel Tunnel.
COMPETING SAFETY STANDARDS
56. The safety standards applied to the Channel
Tunnel by the IGC are distinct from those outlined by the ERA,
as contained in the Safety in Railway Tunnels Technical Specifications
for Interoperability (TSI).
Box 5 contains more information on TSIs. Some witnesses considered
that these differing standards could present a barrier to greater
saw no reason why the existing safety rules should not apply to
the Channel Tunnel in full.
The Rail Freight Group was especially critical of this arrangement,
and endorsed a letter from the ERA to the IGC which challenged
this situation, disagreeing with the IGC's position that the Channel
Tunnel was a 'special case'.
Technical Specifications for Interoperability
|TSIs are the standards set for specific items of rail infrastructure or equipment in order to ensure interoperability across the European rail network. TSI-compliant equipment, such as trains, are automatically authorised to run on infrastructure that applies the relevant TSI. They are made, on request of the Commission, by the ERA after consultation with national regulators and should normally prevail over national rules that apply to Trans-European rail networks such as the Channel Tunnel.
57. Many witnesses, in contrast, argued that
the Channel Tunnel was indeed unique and therefore required specific
safety standards. For Alstom, the extensive undersea portion made
it unique; a point with which the Minister agreed.
Eurostar agreed that specific standards for the Channel Tunnel
may be necessary and pointed out that the Safety in Railway Tunnels
TSI permitted specific safety rules for tunnels more than 20 kilometres
in length, which included the Channel Tunnel at more than 50 kilometres.
Deutsche Bahn stated that while some of the Alpine tunnels were
longer than the Channel Tunnel they were nevertheless still TSI-compliant.
The ORR did not consider the Alpine tunnels and the Channel Tunnel
to be necessarily comparable.
58. Some contributors disagreed strongly with
the justification. The Rail Freight Group considered the special
case pleaded for the Channel Tunnel to be disingenuous.
Professor Vickerman stressed that length was the key consideration;
for him, "being several hundred metres underneath the top
of a mountain and being several hundred metres under the bed of
the sea does not make a huge difference".
59. Despite the operation of distinct rules,
there is regular cooperation between Eurotunnel and other infrastructure
managers, which is welcome. This was particularly the case regarding
the construction of the Lyon-Turin high-speed rail line, which
will include a 57km base tunnel under the Alps, and we heard that
some Eurotunnel staff had recently been seconded to the project's
IGC SAFETY REVIEW AND THE ERA'S
60. During 2009, the IGC consulted on proposed
changes to the Channel Tunnel-specific passenger train safety
rules. After these
were notified to the Commission in December 2010, the IGC requested
a technical opinion from the ERA regarding their compliance with
the Safety in Rail Tunnels TSI and other EU measures. The ERA
stated, in their 21 March 2011 opinion, that there was no justification
for the IGC to exclude trains from the Channel Tunnel which conformed
to EU safety and interoperability standardsincluding the
Safety in Rail Tunnels TSIand they made a number of suggested
changes to the regulations on this basis.
Most of these recommendations have not yet been put in place,
except for that permitting the use of trains using distributed
power, which was implemented in June 2011.
This would include Deutsche Bahn's ICE trains, which it intends
to run through the Channel Tunnel from 2013. However, though the
ERA stated that Deutsche Bahn's proposed use of shorter rolling
stock should not be prohibited due to prescriptive IGC rules,
this matter remains outstanding.
61. Caroline Wake, head of the UK delegation
to the CTSA, explained that both delegations to the CTSA were
committed to working with the ERA to address some of their concerns.
However, the ERA said that it was still waiting for any economic
and safety justifications for why distinct rules should apply
to the Channel Tunnel, so that these could be reflected in any
changes to the Safety in Railway Tunnels TSI. The ERA suggested
that, as the IGC was small in comparison to national safety authorities,
it had found it more difficult to engage in their working parties.
62. EU-wide Technical Standards for Interoperability
(TSIs) set out comprehensive safety standards. We have not been
convinced that the Channel Tunnel is a unique safety case requiring
its own safety standards, and so the TSIs should be applied in
full. The Intergovernmental Commission should respond fully to
the matters raised in the European Railway Agency's technical
opinion as a matter of urgency. Unduly burdensome safety requirements
must not deter new entrants to the market.
63. To achieve a fully liberalised and interoperable
rail network, common standards must be applied consistently, with
minimum derogations only when absolutely essential. The Intergovernmental
Commission and Channel Tunnel Safety Authority should work with
other long tunnel managers to exchange best practice and to ensure
consistency across the whole network.
The authorisation of new international
passenger services through the Channel Tunnel
64. There are reportedly high levels of interest
from operators, including Deutsche Bahn, to take advantage of
liberalisation and provide new services through the Channel Tunnel.
High Speed 1 cited economic factors and existing entry conditions
as hindrances to the introduction of new services,
and the ORR warned that "these nascent developments will
be smothered" if these barriers are not removed.
THE CURRENT STATE OF THE MARKET
65. There are few examples of competition on
international rail routes.
Nevertheless, Eurostar is enthusiastic about the opportunities
provided by market liberalisation and increased competition. It
intends to provide more services to other Member States as well
as increasing its market share of other routes.
Deutsche Bahn also wants to expand its long-distance network,
in light of research suggesting that there was substantial untapped
demand on the routes it planned to develop between Amsterdam and
Frankfurt to London.
66. Eurotunnel was hopeful of further developments;
as a private operator, it stated expansion was "very much
in our interest", which it was "very, very keen to see
happen as soon as possible and in as continuous a manner as possible".
It also suggested that it had been ready and willing to accept
international passenger services since 2006, when it had made
its contractual, safety and tariff conditions public.
However, Roy Griffins gave a different perspective, stating that
the IGC was applying pressure on Eurotunnel to become more transparent
in terms of economic regulation, and to provide more information
to operators. He also considered that Eurotunnel had been slow
to take liberalisation seriously until pressed to do so by the
IGC, despite the "new dawn" for international passenger
liberalisation which began in January 2010.
THE AUTHORISATION PROCESS
67. Before new international passenger services
can run through the Channel Tunnel under the open access rules,
potential operators must enter negotiations with the relevant
regulatory bodies and infrastructure managers in order to obtain
the requisite licenses, safety certificates and authorisations.
In addition, they must also satisfy a number of security requirements
and demonstrate how they will comply with UK immigration and customs
law. This is a complicated process and the Government have produced
a guide to assist potential new operators in this regard.
Despite this assistance, some of our witnesses considered that
the authorisation process was too long-winded.
68. As we have already heard, Deutsche Bahn is
engaged in this authorisation process to run its ICE trains through
the Channel Tunnel. It said it had "good working relations"
with the IGC and CTSA and was optimistic that the authorisation
would be in place so that it could commence the new service by
the end of 2013.
69. The Minister was very supportive of new international
services, and was not aware of any significant problems that might
delay the schedule to which Deutsche Bahn was working.
Eurotunnel told us that it had played a "central role"
in this process since January 2010, and had been working closely
with Deutsche Bahn on the company's bid. This included work with
Deutsche Bahn on its application to the IGC for a safety certificate
on 11 July 2010 and assistance with test runs through the Channel
Tunnel, including a full evacuation.
70. We were disappointed to hear from Eurotunnel
that the anticipated schedule might not be adhered to. Eurotunnel
explained that Deutsche Bahn had not yet received its safety certificate
from the IGC and that there was no "certainty" as to
when it would be received. It explained that if the safety requirements
for the Channel Tunnel were based on the Safety in Rail Tunnels
TSI, this part of the process would have been significantly more
streamlined. It thought that this protracted safety approval process
may discourage other, smaller, operators from coming forward with
applications for authorisation, as only major operators such as
Deutsche Bahn had "the time, patience and courage" to
persist with such an undertaking.
71. We welcome the interest from new providers
of international rail services, including Deutsche Bahn's proposed
services from Amsterdam and Frankfurt to London. Authorisation
should be granted without delay. All parties should work together
to ensure that the prospective new international passenger services
are introduced on schedule.
67 Q 334 Back
Professor Vickerman, RFG, DB Schenker Rail (UK) Ltd and Deutsche
Bahn thought it did, while Alstom, Eurotunnel, Eurostar (Q 53)
and the Government did not. Back
Q 185 Back
Q 75 and Eurostar Back
Government, Q 347 and Eurotunnel Back
Q 283 Back
Q 348 Back
Q 32 Back
DB Schenker and Q 309 Back
Deutsche Bahn Back
Network Rail Back
Deutsche Bahn Back
Q 347 and Eurotunnel Back
Q 166 Back
Under Article 11 of Directive 2001/14/EC Back
Q 174 and ORR Back
Q 156 Back
Q 158 and HS1 Back
Q 164 and Q 185 Back
Q 172 Back
Q 284 Back
Eurotunnel's Shuttle service is not classified as a railway undertaking
under Article 1(4), Directive 2001/14/EC Back
Q 174 Back
QQ 359-360 Back
Commission memo summarising the infringement proceedings:
QQ 351-353 Back
Commission Decision of 20 December 2007 concerning the technical
specification of interoperability relating to 'safety in railway
tunnels' in the trans-European conventional and high-speed rail
IARO and DB Schenker Back
ERA, Eurotunnel, Interfleet and the IRJ Back
RFG. A copy of the letter, dated 30 May 2011, is available on
their website at: http://www.rfg.org.uk/. The ERA also submitted
a copy with their evidence. Back
Alstom and Q 297 Back
Q 56 Back
Q 101 Back
Q 182 Back
Q 309 Back
Q 13 Back
Q 362 Back
The IGC issued a subsequent consultation on the safety rules specific
to freight trains transiting the Channel Tunnel on 30 March 2011. Back
Q 179. ERA Technical opinion regarding the safety related aspects
of the IGC's conclusions, ERA/OPI/2011-05:
This was also a contentious issue during Eurostar's procurement
exercise to acquire new rolling stock in 2010. Siemens, a German
company, was eventually named as the successful bidder but the
use of distributed power on their trains caused safety concerns
in some quarters. Alstom, a French company who provided the original
rolling stock to Eurostar, but lost this bid later took legal
action against Eurostar, partly citing safety grounds. The French
transport minister at the time also issued a press release raising
safety concerns about the decision. Back
Q 284 Back
Deutsche Bahn. Trenitalia are also reputedly interested as per
an article in the Railway Gazette International, 5 August 2010:
Q 90 and Deutsche Bahn. Deutsche Bahn and Thalys run services,
which commenced before the liberalisation of international passenger
services, between Brussels and Cologne, while the trans-Alpine
rail passenger service from Munich to Verona, Bologna, Milan and
Venice, began after liberalisation. This service is operated by
a consortium of Deutsche Bahn, the OBB (Austrian Federal Railways)
and Le Nord (a non-incumbent northern Italian passenger rail service)
and competes with Ferrovie dello Stato, the Italian incumbent. Back
Q 44 and Q 51 Back
Q 124 and Q 127 Back
Q 341 Back
Q 291 and Q 294 Back
Department for Transport, 2010 Rail Liberalisation of International
Passenger Services-Contact Guide for Potential New Operators:
HS1 and Q 202 Back
Q 88 Back
Q 254 and Q 257 Back
Q 343. This process included an ICE train pulling into St Pancras
International on 19 October 2010. Back
Q 344 Back