Chapter 3. Transport

The various types of transport (road, rail and maritime) together generate a turnover of about 5.08% of Romania’s GDP and employs about 133 100 people. Although Romania’s road transport is among the most regulated in the European Union, its rail transport is one of the most liberalised rail transport markets. Road transport is constrained by unnecessary documentation, such as authorisations for vehicle repair, complicated payment of local taxes, display of vehicle plates and copies of transport licences. Rail transport suffers from unclear provisions relating to private and public railway infrastructure and the ambiguous position of Romania’s state-owned rail freight operator in regard to private operators. Inland waterway and maritime transport is constrained by the lack of transparency in tariff calculation, a lack of open competition for pilotage and towage services and undue discretion given to the Romanian Naval Authority (ANR) regarding compliance of market participants with state regulations.

  

3.1. Economic overview of the Romanian freight transport sector

The freight transport sector includes activities related to the following transport modalities: road, rail, inland waterways, maritime and support activities for transport such as warehousing.1 The freight transport sector plays an important role in the country’s economy, generating a turnover of approximately 5.08% of gross domestic product (GDP) in 2014 and employing 133 100 people. Figure 3.1 shows that in 2014 the transport sector (including passengers) generated a gross value added (GVA) of approximately EUR 7.6 billion, representing 5.11% of Romania’s GDP. In 2014, Romania’s gross domestic product reached EUR 148.7 billion.

Figure 3.1. Transport sector, GVA (millions of EUR, % of GDP)
picture

Source: Eurostat, National Accounts aggregates by industry (database), http://bit.ly/1Wn1OhH, GDP and main components (database), http://bit.ly/1dBAzYR (accessed on 26 January 2016).

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Figure 3.2 shows the relationship between the evolution of Romanian transport’s GVA and GDP.

Figure 3.2. Evolution of GVA and GDP in the transport sector, 2006-14 (%)
picture

Source: Eurostat, National Accounts aggregates by industry (database), http://bit.ly/1Wn1OhH, GDP and main components (database), http://bit.ly/1dBAzYR (accessed on 26 January 2016) and Musliu şi Asociaţii calculations.

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According to Romania’s NIS, there were approximately 133 100 people employed in the freight industry in 2014, working for a total of 25 125 firms, of which 24 892 were operating in the road transport sector. Most of the companies are either small or medium-sized. Approximately 91% of these companies have 1 to 10 employees, 8% have 10 to 50 employees while the remaining companies exceed 50 employees. Employment in the freight transport sector has increased by approximately 12% from 2008 to 2014, although this increase relates exclusively to the road transport sector.

Figure 3.3 compares the modal split of Romanian inland freight transport in volume and value. In volume terms, the split was 70.84% for road, 18.83% for rail and 10.33% for inland waterways. In value terms, the split was 89.63% for road, 9.11% for rail and 1.26% for inland waterways.

Figure 3.3. Modal split of inland freight transport in 2014: % of inland freight volume and value
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Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016) and Musliu şi Asociaţii calculations.

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Figure 3.4 shows the overall modal split of freight transported within and outside Romania including maritime and air transport in 2014. In volume terms, this was 60.95% road, 16.2% rail, 13.95% maritime, 8.89% inland waterways and 0.01% for air. In value terms, the split was 88.54% road, 9% rail, 1.25% inland waterways, 0.98% maritime and 0.23% air.

Figure 3.4. Modal split of freight transport in 2014: % of overall freight volume and value
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Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016) and Musliu şi Asociaţii calculations.

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Road freight transport

Definition

The road freight transport sector refers to the transportation of goods between economic enterprises and between enterprises and consumers, including bulk goods and goods requiring special handling, such as refrigerated and dangerous goods.2

Transport can be for own-account (e.g. freight transportation between establishments belonging to the same firm) and for hire or reward. In Romania, road transport is the principal modality of moving freight, representing 70.84% of all inland freight transport volumes.

Infrastructure

The total length of the road network is 85 362 km as shown in Table 3.1. The roads are uniformly distributed along the country, the only exception being the Bucharest-Ilfov region which has a much higher density of public roads and where the majority of business is concentrated. Over the last eight years, the Romanian road network has grown by almost 12 000 km. However, there are still gaps in the highway system and connections between regions are still insufficient. The poor infrastructure is reflected in the length of the country’s road network, notably with respect to motorways and national roads. The network of motorways and national roads represents only 20% of the entire network, as shown in Table 3.1 below. In addition, approximately 90% of the national road network is made up of roads with only one traffic lane for each direction and with very low speed limits (average 66 km/h). This has an impact on both freight delivery time and safety. These roads do not ensure the possibility of overtaking local agrarian vehicles and thus reduce safety for heavy freight transport vehicles, which are the major users of the national road network.3

Table 3.1. Length of the Romanian road network

Road type

Kilometres

Percentage

Motorways

  683

  0.80

European national roads

 6 269

  7.34

Other national roads

10 320

 12.09

County roads

35 505

 41.59

Municipal roads

32 585

 38.17

Total

85 362

  100

Source: NIS, Length of public roads (database), http://bit.ly/1Q5VxDi, (accessed on 26 January 2016).

According to the National Union of Romanian Road Hauliers,4 to reach the European Union (EU) average of road network of motorways, Romania should build another 3 150 km of road.

Nevertheless, Romania has made a significant investment in its road transport infrastructure over the past 4 years, although the trend and size of such investment differs significantly in Central and Eastern European (CEE) countries compared to Western European countries, as shown in Figure 3.5.

Figure 3.5. Road infrastructure investment (millions of EUR)
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Source: OECD, Statistics, Infrastructure investment (Database), http://bit.ly/1ObFyBD (accessed on 26 January 2016).

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Figure 3.6. Investment in road transport infrastructure as a % of GDP
picture

Source: OECD, Statistics, Infrastructure investment (Database), http://bit.ly/1ObFyBD (accessed on 26 January 2016) and Eurostat, GDP and main components (database), http://bit.ly/1dBAzYR (accessed on 26 January 2016).

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International comparison

The Romanian road freight industry sector is dominated by competition in prices and quality of service. Two broad categories of road freight regulation exist in OECD countries:5 i) rules on traffic and vehicles and ii) rules on access to the marketplace. The first category includes the Highway Code, labour issues, carriage of hazardous substances and traffic restrictions. The second category covers mainly market access restrictions and price regulations. The main issues targeted by road freight regulation relate to safety, impact on the environment and use as well as maintenance of the infrastructure.

Figure 3.7 illustrates a comparison between Romania and other EU countries over regulatory constraints in road freight transport. According to the OECD’s Product Market Regulation Indicator (PMRI),6 Romania’s road freight industry is one of the most regulated in the EU.

Figure 3.7. Sector regulation indicator for road freight transport, 2013
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Source: OECD PMRI, http://bit.ly/1VzCOE4.

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Subsector characteristics

According to Romania’s NIS, the overall value of the road freight transport sector in 2014 was about EUR 6.8 billion and accounted for about 4.56% of Romania’s GDP. In the same year, employment reached approximately 117 200 people with 24 892 firms operating in this sector. The industry mainly consists of small companies, with about 91% of companies having 1 to 10 employees, 8% having 10 to 50 employees and only 1% having more than 50 employees. Over the last five years, the number of firms active in road freight has increased by approximately 10%, while employment has grown by 33%.

According to the Ministry of Finance (MoF), the largest players in road freight transport in the year 2014, expressed in turnover’s terms, were as follows:

Table 3.2. Top 10 players in the road freight sector

Company

Turnover 2014 (EUR)

Market share 2014 1

1.

Carrion Expedition

84 470 278

1.29%

2.

Transcondor

71 821 717

1.06%

3.

Duvenbeck Logistik

56 198 953

0.83%

4.

Total NSA

44 060 449

0.65%

5.

International Lazar Company

42 025 159

0.62%

6.

Dunca Expeditii

40 707 529

0.60%

7.

Dumagas Transport

38 351 009

0.56%

8.

Hartl Carrier

30 373 115

0.45%

9.

J.T. Grup Oil

30 351 680

0.45%

10.

Dianthus Company

29 896 260

0.44%

1. Calculated as a percentage of total turnover in the road freight transport sector. References to “market share” or “markets” in general, included in this report, do not reflect the same definitions used for purposes of applying competition law.

Source: Ministry of Finance, http://bit.ly/1QxjYPO and Musliu şi Asociaţii calculations.

Road freight transport in Romania is a very fragmented subsector, characterised by the predominance of small firms.

The most important trade associations in road freight transport are: the National Union of Romanian Road Hauliers (UNTRR),7 Romanian Association of International Road Transport (ARTRI),8 Federation of Romanian Transport Operators (FORT),9 Transport Heritage Association Europe 2002 (APTE2002),10 Transylvania Road Hauliers Association (ATRT),11 Road Hauliers in Construction Association (ATRC),12 Freight Forwarders Association (USER)13 and Romanian-Italian Association of Logistics and Management (ARILOG).14

Figure 3.8 illustrates the evolution of Romanian road freight transport over the last decade (2005-14). This sector exhibits a sharp decrease during the outbreak of the global financial crisis, with a post-crisis gradual increase. The annual growth rate of goods transported by road decreased from +9.2% in 2006 to -0.3% in 2014. In value terms, the Compound Annual Growth Rate (CAGR) has fallen from +27% before the crisis to +12% in the period between 2009 and 2014.

Figure 3.8. Total road freight transport in Romania1
picture

1. The data on volume represents inland traffic whereas that on value also corresponds to freight road transport services provided by Romanian companies abroad. This may explain why over the crisis period, turnover increased whereas volume decreased.

Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016).

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Road freight transport is the second transport modality used for import and export in Romania, following maritime transport. As shown in Figure 3.9, about 13.4% of the volume of goods transported by road in 2014 represented international transport. Transit transport is very low due to the lack of an efficient infrastructure. Indeed, Romania has not yet taken advantage of its status as a transit country for the southern regions of Eastern Europe.

Figure 3.9. Road freight transport in Romania, volume of goods carried by road (thousands of tonnes)
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Source: Eurostat, Summary of annual road freight transport by type of operation and type of transport (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

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According to the NIS, the main categories of goods that were transported by road in 2014 were: metal ores and other mining products (32.16%), non-metallic mineral products (19.8%), food products (8.98%), agriculture products (6.17%), wood and products of wood and cork (5.26%), secondary raw materials and municipal waste (3.24%), basic metals (3.05%) and coke and refined petroleum products (2.31%). Demand is therefore driven mainly by the following industry sectors: extraction, quarry, cement, food, agriculture and forestry.

International road transport

As shown in Figure 3.10, compared to other EU countries, Romania operates small volumes of international traffic, including incoming, outgoing and transit international freight transport. Transit volumes are particularly small even if compared to other CEE countries, namely Hungary, Poland and the Czech Republic.

Figure 3.10. International road freight transport across different markets in Europe, volume of goods carried by road (thousands of tonnes)
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Source: Eurostat, Summary of annual road freight transport by type of operation and type of transport (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

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Relevant government authorities

The Ministry of Transport (MoT) is the central body of the state administration in charge of transport policy. The Ministry is responsible for regulation, economic policy and international agreements in the area of transport.

Other regulatory powers with respect to road transport are as follows:

  • Romanian Automotive Register (RAR) is a technical specialised body designated by the MoT as the competent authority in the field of road vehicles, road safety, environmental protection and quality assurance. The RAR has the following main tasks: granting national approval and certification of conformity for classes as well as individual road vehicles; licensing technical inspection stations and overlooking their activity.15

  • State Inspectorate for Road Transport Control is a permanent technical specialised body under the MoT monitoring compliance with national and international regulations in road transport, mainly regarding: the conditions for carrying out road transport activities; the training required to obtain a driving licence; road safety and environmental protection; technical conditions of road vehicles; tonnage and/or maximum size allowed on public roads.16

  • Inter-ministerial Council for Road Safety is a Government advisory body without a legal personality. Its main tasks consists of developing strategies for national road safety and priority actions for implementing these strategies; assessing the impact of road safety policy and coordinating research and communication related to road safety.17

  • Romanian Road Authority is a technical specialised body of the MoT. Its main activities are: delivering licences for road transport activities and professional certifications of specific transport personnel; evaluating the impact of state policies on road safety, through carrying out road safety audits, safety inspections, training activities, certification and professional training of road safety auditors.18

  • Regional and Municipal Councils control regional roads and may apply taxes in addition to the RO-vignette19 as well as establishing traffic rules and speed limits affecting freight hauliers, given that regional and municipal roads make up approximately 80% of the entire Romanian national road network.

Rail freight transport

Definition of the relevant sectors and ares of investigation

Rail freight refers to freight, cargo or goods transported by railways and does not include parcels or baggage transport services associated with railway passenger services.20

Infrastructure

The Romanian rail network is operated by Compania Naţională de Căi Ferate “CFR” (National Railway Company “CFR”) and covers the majority of urban and economic centres. It is connected to the European rail network by the railway administrations of neighbouring countries, namely Hungary, Serbia, Bulgaria, Moldova and Ukraine.

The network consists of approximately 20 000 km of track, with a railway route length of 10 777 km,21 of which around 37% is electrified (compared with the EU27 average of 52%).22 A significant proportion (72%) of the rail network is single track type; the EU27 average is 59%.

The length of Romania’s railway network has been constant over the last years. Due to the lack of maintenance funds, the technical parameters of the public railway infrastructure suffer continuing damage. This leads to a reduced quality of the services provided, one of them being a reduced speed for commercial freight trains (approximately 28.3 km/h). This affects the delivery time of rail freight transport which in Romania is significantly slower than road freight transport and explains the preference expressed by the business sector for road. The average delivery time of a container by rail normally exceeds that by road, due to the condition of the infrastructure and delays in the transferring/handling of containers from terminals.23

As shown in Figure 3.11, notwithstanding the above problems, Romania has made little investment in upgrading its rail infrastructure from 2010 to 2013.

Figure 3.11. Rail infrastructure investment (millions of EUR)
picture

Source: OECD, Statistics, Infrastructure investment (Database), http://bit.ly/1ObFyBD (accessed on 26 January 2016).

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Figure 3.12. Investment in rail transport infrastructure as a % of GDP
picture

Source: OECD, Statistics, Infrastructure investment (database), http://bit.ly/1ObFyBD (accessed on 26 January 2016) and Eurostat, GDP and main components (database), http://bit.ly/1dBAzYR (accessed on 26 January 2016).

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An important element affecting access to the marketplace is the infrastructure access fee. Calculating and levying this fee is the responsibility of the infrastructure manager, in line with EU legislation. The methodology for calculating this fee is based on the following charges: distance run, gross tonnage, traffic type (freight or passenger), route of movement, class of traffic section and its electrification systems for supplying traction.24

In order to have access to the railway infrastructure, railway transport operators must conclude an infrastructure access contract with the National Railway Company “CFR”. The access contract establishes the rights and obligations of CFR and railway transport operators concerning infrastructure capacity allocation and utilisation.

Figure 3.13 below shows that Romania has one of the highest railway infrastructure access fees among EU countries.

Figure 3.13. Access charges for freight trains for the year 2014 (EUR/tonne-km)
picture

Source: European Commission (2014), Fourth report on monitoring development in the rail market, Report from the Commission to the Council and the European Parliament, 13.06.2014, http://bit.ly/1PMs4OR.

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Liberalisation of the transport sector started in 1998 when the National Company of Romanian Railways, the old state-owned monopoly, was split into five independently-administered companies: CFR SA (dealing with infrastructure), CFR Călători (the operator of passenger trains), CFR Marfă (freight railway transport company), CFR Gevaro (services linked with restaurant cars) and SAAF (dealing with excess rolling stock to be sold, leased or scrapped). Following the introduction of open access to the monopoly infrastructure,25 competition among rail freight operators has increased over time. The market share of CFR Marfă has dropped from 100% in the year 2000 to just under 35% at the end of 2014.26 New entrants are therefore controlling more than half of this market.

In 2013, the MoT tried to privatise the national company CFR Marfă by selling off 51% of its share capital. Grup Feroviar Român, the second largest company operating in this sector, fulfilled all stages of the tender procedure and became the only qualified company to submit a tender for purchasing CFR Marfă in accordance with the conditions established by the MoT. The share purchase agreement between the MoT and Grup Feroviar Român was signed on 2 September 2013.27 The Romanian government set 13 October 2013 as the deadline for completion of privatisation of CFR Marfă, but in the end the transaction has not gone through.

International comparison

Figure 3.14 shows a comparison across EU markets of the degree of regulation in rail transport developed by the OECD.28 According to the OECD’s PMRI, Romania is one of the countries with the most liberalised rail transport in the EU.

Figure 3.14. Sector regulation indicator for rail transport, 2013
picture

Source: OECD PMRI, http://bit.ly/1VzCOE4.

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Subsector characteristics

The freight transport sector is undergoing a severe structural crisis. Since 2008, about 10 000 jobs have been lost in this subsector.29 In 2013, the freight rail transport subsector generated an overall value of approximately EUR 680 million providing employment to approximately 16 400 people.30 In 2014, the same subsector generated an overall value of approximately EUR 603 million providing employment to approximately 13 500 people.31

The major player in this subsector is CFR Marfă, the former monopolist. Since 2001, an important number of private companies have entered the marketplace. According to data published by AFER (Romanian Railway Authority) on 31 December 2015, there are 23 railway freight operators, in addition to the state-owned CFR Marfă.

According to AFER and the MoF, the main rail freight companies in 2014, in terms of revenues, were as follows:

Table 3.3. Top 10 players in the rail freight sector

Company

Turnover 2014 (EUR)

Market share 2014 1

1.

CFR Marfă

204 988 026

33.95%

2.

Grup Feroviar Român

154 700 480

25.62%

3.

Unicom Tranzit

 55 301 189

 9.16%

4.

Transferoviar Grup

 37 967 410

 6.29%

5.

DB Schenker Rail Romania

 35 517 082

 5.88%

6.

Rail Force

 16 807 328

 2.78%

7.

Servtrans Invest

 12 398 216

 2.05%

8.

Cargo Trans Vagon

 11 661 097

 1.93%

9.

Vest Trans Rail

 11 479 457

 1.90%

10.

Trans Expedition Feroviar

 10 519 547

 1.74%

1. Calculated as a percentage of total turnover of rail freight transport sector. References to “market shares” or “markets” in general, included in this report, do not reflect the same definitions used for purposes of applying competition law.

Source: AFER, Ministry of Finance, http://bit.ly/1QxjYPO and Musliu şi Asociaţii calculations.

Competition in the Romanian rail freight subsector has increased over the past 10 years. In the year 2000, CFR Marfă was the only company in this sector whereas in 2009 there were 12 companies operating in the market and in 2015 this number increased to 24 companies. The incumbent company CFR Marfă has constantly lost market share in favour of competing private companies.

The most important trade associations in the rail freight sector are the Association of Romanian Railway Transport Operators32 and the Association of Romanian Railway Industry.33

Figure 3.15 illustrates the evolution of rail freight transport over the last decade in Romania (2005-14), both in volume and in value terms. The rail freight transport recorded significant declines in the last 9 years, with the volume of goods transported by rail dropping from approximately 69 million tonnes in 2005 to approximately 50 million tonnes in 2014, representing a CAGR of -2.9%. In value terms, over the same period, the decline of the CAGR was -2.7%. This decline comes in the context of a constant increase in road freight transport volumes in Romania.

Figure 3.15. Total rail freight transport in Romania
picture

Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016).

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Figure 3.16 illustrates the structure of railway freight transport. National transport represents the biggest share (over 80%) of total freight transport. The poor state of the railway transport infrastructure and the high infrastructure access fees lead to insignificant volumes of international transit. Import and export represents a small part of the total railway freight transport – below 20% since 2008.

Figure 3.16. Rail freight transport in Romania, volume of goods carried by rail (thousands of tonnes)
picture

Source: Eurostat, Railway transport – Goods transported, by type of transport (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

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According to the NIS, the main categories of goods that were transported by rail in 2014 were: coal and lignite, crude petroleum and natural gas (35.71%), coke and refined petroleum products (29.51%), products of agriculture (6.42%), chemicals (5.52%), metal ores and other mining products (5.04%), basic metals (4.95%), non-metallic mineral products (2.74%) and wood and products of wood and cork (2.71%). Therefore, the major demand operators come from the following industry sectors: energy, agriculture and extraction.

International rail transport

International railway transport is negligible in Romania, compared to other European countries, confirming the weak attraction of Romania’s infrastructure for international traffic. This conclusion is in sharp contrast with the fact that Romania is located at the crossroads between three trans-European network corridors going from west to east and from south to north.34

Figure 3.17. International rail freight transport across different markets in Europe, volume of goods carried by rail (thousands of tonnes)
picture

Source: Eurostat, Railway transport – Goods transported, by type of transport (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

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Relevant government authorities

The following regulatory authorities are responsible for developing the rail freight national policy:

  • Railway Supervision Council (CSF) is the national authority monitoring railway service markets which intervenes when discrimination occurs notably with respect to access to infrastructure. The CSF may investigate, either on its own initiative or following a complaint, situations such as refusal of access or tariff discrimination implemented by the infrastructure administrator or railway transport operators. The CSF has authority to issue reasoned decisions and implement appropriate remedies.35

  • Romanian Railway Authority (AFER) is a technical body within the MoT, overseeing safety authorisations and licences related to the railway infrastructure administrator or rail transport operators. It also monitors the respect of the conditions needed for interoperability of the conventional and high speed trans-European railway system.36

  • Romanian Railway Licensing Body (OLFR) is the national authority designated for issuing licences for rail transport operators.37

  • National Centre for Railway Qualification and Training (CENAFER) is a national specialised body under the MoT, designed to ensure the regular professional training and testing of the staff carrying out typical activities in railway transport, in order to ensure safe conditions for circulation, transport security and railway services quality.38

Inland waterway and maritime freight transport

Definition

Water freight transport refers to goods transported on waterways by using various means such as boats, steamers, barges, ships, etc. Goods are carried to different places by these means both within and outside the country. When the goods are transported inside the country on rivers and canals, transport is referred as “inland waterway transport”. “Maritime transport” refers to movement of goods on ships on the sea and is carried out on fixed routes, linking a large number of origin and destination points in separate countries. Maritime transport therefore plays an important role in the development of international trade.

Ports in maritime and inland waterway transport serve as infrastructure to a wide range of customers including freight shippers, ferry operators and private boats. One of the main functions of ports is facilitating domestic and international trade of goods, often on a large scale.

Figure 3.18. Structure of the maritime industry
picture

Source: OECD (2011), Competition in ports and port services, http://bit.ly/1oDSwU2.

Some shipping services as well as shipping related activities taking place in ports are provided by the port administration under monopoly conditions, while others are subject to competition.39 Shipping related activities include safety services such as port pilotage and towing, activities related to ship operation40 and other shipping auxiliary activities.41

Infrastructure

The naval infrastructure in Romania consists of maritime ports, river-maritime ports and river ports. There are three maritime harbours along the Black Sea, namely Consţanta, Mangalia and Midia. These ports are directly linked to the Danube-Black Sea Canal, which ensures connection between the Black Sea and the river Danube, the Poarta Albă-Midia Năvodari Canal and, indirectly, with the “Mihail Kogălniceanu” Airport located 20 km away from Consţanta.

The Port of Consţanta is the main Romanian sea port, playing a significant role as the transit node for the landlocked countries in central and south-eastern Europe. It has connections with all means of transport: railway, road, inland waterways and air. The volume of goods handled here represents more than 95% of the commodities handled in all maritime ports in Romania, with a total volume of 55.64 million tonnes in 2014 (of which 43.05 million tonnes corresponded to maritime transport and 12.58 million tonnes corresponded to river transport).42

The Port of Consţanta has gradually become one of the main distribution centres serving central and eastern Europe, having the fourth largest port surface in the EU, ranked just after Rotterdam, Antwerp and Marseille.43

The Port of Consţanta has also an advantageous geostrategic position, being located at the intersection of the Pan-European Transport Corridor No. IV, which goes from Dresden/Nuremberg to Istanbul (road and railway), with the Pan-European Transport Corridor No. VII, which connects the North Sea to the Black Sea by the Rhine-Main-Danube Canal. This port therefore links two European trade poles, Rotterdam and Consţanta, creating an inland waterway transport route from the North Sea to the Black Sea. In the southern part of the port, Consţanta also has a river area, which makes it a river-maritime port.

The Danube River can be divided into two structurally different sectors: the River Danube and the Maritime Danube. Several ports situated along the Maritime Danube, namely Brăila, Galaţi, Tulcea and Sulina, allow access for both river and maritime vessels, so they serve both international and inland transport. However, the lack of multimodal facilities for these ports represents a major obstacle in terms of alignment of port logistics to international transport, notably with respect to shipment of containers. Moreover, connections to national roads and rail networks are slow and inefficient. All these factors limit the volume of traffic operating in these ports.44

The inland waterway network is composed of the Danube, secondary navigable branches of the Danube and navigable canals. The navigable inland waterways have a total length of about 1 779 km, of which 1 647 are navigable rivers and lakes and 132 are navigable canals. The Danube River has a length in or along the border of Romania of about 1 075 km so is considered an important transport corridor. Romania has 30 inland river ports.45 Most of these ports have a poor infrastructure when compared to modern logistic requirements, with obsolete equipment, which prevents the efficient transport of goods. Also, these ports have inefficient connections with other transport modalities. These issues are reflected in the reduced volumes of cargo in these ports.46

According to the MoT Master Plan for the transport sector, investments are necessary to modernise and upgrade the Romanian inland waterway infrastructure. Indeed, following Bulgaria, Romania has the lowest investment rate on the Danube river infrastructure of all the Danube countries based on the length of its section of this river.47

Subsector characteristics

Maritime freight transport

Maritime transport is the most important modality of international freight transport in Romania. Approximately 60% of the goods imported and exported by Romania in 2014 were transported by sea, followed by road and inland waterways.

According to the NIS, in 2014 maritime freight transport generated overall revenues equal to EUR 75.3 million, with 284 people employed. In addition, in 2014 all shipping-related activities generated an overall value of EUR 366 million, with approximately 240 active firms and about 5 320 people employed.

As shown in the table below, freight shipping operations in Consţanta are mainly run by international shipping companies, whereas Romanian ship owners have gradually disappeared.

Table 3.4. International freight shipping operators

Company

Local Agent

1.

APM-Maersk Danemarca

Maersk Romania

2.

Mediterranean Shipping Company Elvetia

MSC Romania Shipping

3.

CMA CGM Franta

CMA CGM Romania

4.

Hapag-Lloyd Germania

Hub Dacia

5.

Evergreen Line

Bosphorus Shipping Agency Romania

6.

CSCL China Shipping Container Lines Co. Ltd

China Shipping Romania Agency Co. Ltd.

7.

Hanjin Shipping Korea

Arkas Dacia

8.

Hamburg Süd Group, APL

Economu International Shipping Agency

9.

Yang Ming Line China

Team Logistic Specialists

10.

UASC (United Arab Shipping Company)

Formag Romania

11.

K-Line (Kawasaki Kisen Kaisha) Japonia

Kapital Leading Transport Romania

12.

EMES

Romar Shipping Agency

Source: Port of Consţanta website, http://bit.ly/1ojYSYZ.

The maritime freight transport had a sharp decrease during the outbreak of the global financial crisis, reaching a positive evolution in terms of volume in the last five years, with a CAGR of approximately +4%. Figure 3.19 shows the evolution of maritime freight transport during the period between 2005 and 2014.

Figure 3.19. Maritime freight transport in Romania
picture

Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016).

 http://dx.doi.org/10.1787/888933361613

Figure 3.20 shows that Romania has suffered from the economic downturn which is reflected in the drop in imports. Since 2008, the volume of goods imported has been constantly decreasing.

Figure 3.20. Total volume of maritime freight transport in Romania (thousands of tonnes)
picture

Source: Eurostat, Maritime transport – Goods (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

 http://dx.doi.org/10.1787/888933361626

According to the NIS, the main categories of goods that were transported by sea in 2014 were: agricultural products (33.36%), coal and lignite, crude petroleum and natural gas (18.53%), coke and refined petroleum products (10.05%), metal ores and other mining and quarrying products (8.39%), basic metals (5.41%), chemicals (5.19%), secondary raw materials and municipal wastes (3.05%), wood and products of wood (1.34%), non-metallic mineral products (1.31%) and food products (1.24%). Demand is therefore coming mainly from the following industry sectors: agriculture, energy, extraction and chemicals.

Inland waterway freight transport

According to the NIS, inland waterways freight transport generated an overall value of about EUR 95.5 million in 2014. Employment in this sector reached 1 719 people in the same year. There are 90 active companies in inland waterway freight transport, of which 75 % have 1 to 10 employees, 15% have 11 to 50 employees, and the remaining 10% exceed 50 employees. The number of active firms active in inland waterway freight transport decreased from 112 in 2008 to 90 in 2014 and the employment recorded a decrease of -17% in the same period.

The major player in this sector is Compania De Navigaţie Fluvială Română NAVROM S.A., with an annual volume of over ten million tonnes of goods transported. NAVROM operates towards both internal routes such as Galaţi, Consţanta, Cernavodă, Medgidia, Mahmudia, etc. and external routes such as Ukraine, Serbia, Hungary, Austria and Germany. NAVROM is the incumbent company in the inland waterway freight sector, having being privatised by the Romanian government in 1998.48

According to the NIS, the first ten inland waterway freight companies in 2014 were:

Table 3.5. Top 10 players in the inland waterway freight sector

Company

Turnover 2014 (EUR)

Market share 20141

1.

Compania de Navigaţie Fluvială Română Navrom

50 336 957

52.68%

2.

Romnav

 5 923 150

 6.2%

3.

Trading Line

 3 803 618

 3.98%

4.

Navrom Portservice

 2 751 801

 2.88%

5.

Beo Trade Com

 2 535 468

 2.65%

6.

Danubtrans

 1 833 225

 1.92%

7.

DSSG Fluvial

 1 782 832

 1.87%

8.

Euro Bevrachting Logistics

 1 562 806

 1.64%

9.

Spet Shipping

   688 303

 0.72%

10.

Compania de Navigaţie Fluvială Giurgiu Nav

   293 401

 0.31%

1. Calculated as a percentage of total turnover of the inland waterway freight transport sector. References to “market shares” or “markets” in general, included in this report, do not reflect the same definitions used for purposes of applying competition law.

Source: Ministry of Finance, http://bit.ly/1QxjYPOand Musliu şi Asociaţii calculations.

The above table shows a highly concentrated subsector in which the largest company, NAVROM, holds a market share of over 50%. Moreover, there is significant disparity between NAVROM’s market share and the remaining companies.

Figure 3.21 shows the evolution of inland waterway transport over the period 2005-14.

Figure 3.21. Total inland waterway freight transport in Romania
picture

Source: NIS, Goods transport, by mode of transport (database), http://bit.ly/21a7Nxe (accessed on 26 January 2016).

 http://dx.doi.org/10.1787/888933361639

After a fast recovery and a significant increase in inland waterway freight transport in 2010, the volume of goods handled by inland waterways registered a constant decline in the period from 2011 to 2014, with a CAGR of -3.4%.

On the Danube, three types of transport operate: i) internal, ii) transit and iii) import/export. International transport represents a significant share (28% in 2010, 20% in 2011, 33% in 2012, 36% in 2013 and 32% in 2014) of the total volume of goods transported by inland waterways. Transit has an important share (over 15% in the period between 2009 and 2014), showing that the Danube River is an advantageous transport modality and represents an efficient alternative to rail and road transport.

Figure 3.22. Inland waterway freight transport in Romania, volume of goods carried (thousands of tonnes)
picture

Source: Eurostat, Inland waterways transport by type of vessel (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

 http://dx.doi.org/10.1787/888933361643

According to the NIS, the main categories of goods that were transported in 2014 by inland waterways were: metal ores and other mining products (44.97%), products of agriculture (31.18%), coal and lignite, crude petroleum and natural gas (8.09%), chemicals (5.69%), coke and refined petroleum products (4.7%) and basic metals (2.76%). Hence, demand is driven by the following industry sectors: extraction, energy, agriculture and chemicals.

International maritime transport

As shown in Figures 3.23and 3.24, inland waterway and maritime transport in Romania have not reached a significant scale.

Figure 3.23. International inland waterway freight transport across different markets in Europe, volume of goods carried (thousands of tonnes)
picture

Source: Eurostat, Inland waterways transport by type of vessel (database), http://bit.ly/1yussbN (accessed on 26 January 2016).

 http://dx.doi.org/10.1787/888933361650

Figure 3.24. Maritime freight transport across different markets in Europe, volume of goods carried (thousands of tonnes)
picture

Source: Eurostat, Maritime transport – Goods (database), http://bit.ly/1yussbN (accessed on 26 January 2016). No data available for France, 2014.

 http://dx.doi.org/10.1787/888933361663

Relevant government authorities

The MoT is the main authority responsible for regulation, authorisation, co-ordination and control in maritime and fluvial transport. The Ministry is also responsible for ensuring the functionality of harbours and other naval transportation infrastructure.

Under its subordination there are several entities with specific tasks:

  • Romanian Naval Authority (ANR) is the state authority responsible for navigation safety. Its main tasks are: elaboration and submission for approval to the MoT of draft legislation and binding rules; implementation of rules, regulations and international conventions in Romanian legislation; inspection, registration and recording of Romanian-flagged vessels; recording and certification of seafarers; technical supervision, classification and certification of ships.49

  • National Company Maritime Danube Ports Administration S.A. Galaţi works under the MoT and operates as port authority for the ports whose infrastructure was leased by the MoT, namely Galaţi, Brăila and Tulcea.50

  • National Company Fluvial Danube Ports Administration S.A. Giurgiu acts as port authority within its area of activity. It is responsible for managing the port land, harbour limits and port infrastructure established by MoT for the following river ports: Bechet, Călăraşi, Calafat, Cernavodă, Cetate, Corabia, Drobeta Turnu Severin, Giurgiu, Orşova, Olteniţa, and Moldova Veche.51

  • National Company Navigable Canals Administration S.A. Consţanta is a national company subordinated to the MoT which acts as port authority according to legal regulations and statutes along the Danube-Black Sea Canal and the Poarta Albă-Midia Năvodari Canal and in the ports located in this area.52

  • National Company Maritime Ports Administration S.A. Consţanta is a joint stock company assigned by the MoT to develop activities of national public interest in its capacity as a port administration. The company fulfils the port authority functions for Consţanta, Midia, Mangalia and Tomis Marina ports.53

  • Lower Danube River Administration Galaţi A.A. operates as an autonomous administration under the MoT and serves as a waterways authority on the Romanian Danube sector. Its main tasks are to ensure minimum depth navigation by providing dredging, ensuring coastal and floating signals, conducting topographic measurements, performing construction and repair works to ensure navigation conditions, ensuring pilotage of ships on the Danube stretch between Brăila and Sulina and in the ports situated in this sector and providing the water transport infrastructure to all companies in the sector.54

  • National Company of Naval Radio Communications “Radionav” S.A is a company that works under the MoT and provides radio communication services related to maritime operations and navigation safety.55

  • Romanian Maritime Training Centre (CERONAV) is a public institution that provides theoretical and practical training to staff of sea, river, harbour and oil platforms in accordance with national legislation, international regulations and training standards set by various accredited bodies. As a national body, CERONAV fulfils the obligations of the Romanian state arising from international conventions and agreements relating to staff preparation and training.56

  • Romanian Agency for Saving Life at Sea (ARSVOM) is a specialised technical body under the MoT, responsible for searching and saving human lives at sea and intervening in case of casualties generated by pollution.57

The main trade associations in the inland waterway freight transport are: Romanian Association of Inland Ship Owners and Port Operators (AAOPFR); Romanian Association of Ship owners; Romanian Ship Agents and Brokers Association; Romanian Naval League; and, Employer Organization “Port Operator” Consţanta.

3.2. Restrictions to competitiveness in road freight transport

The road freight sector has historically been a highly regulated sector. In the last decades many OECD countries have significantly liberalised their road freight sector. According to a report by the OECD (2000), “Competition Issues in Road Transport”, the results of the liberalisation have been almost entirely positive, such as reduction of operators’ costs, improved efficiency and innovative new services development. For example, in the United Kingdom deregulation has promoted the development of new types of logistics services, such as distribution contractors providing road haulage as part of an integrated package of logistics service.

The same study by the OECD finds that as of 1998, among the main remaining regulatory constraints in road freight were the complete prohibition of cabotage, pricing, or entry regulations enforced by professional bodies, price control, competition law exemption for road freight, criteria other than the technical, financial and safety criteria considered in granting a licence/permit/concession, regulatory competence to limit the capacity or the number of competitors and reservation of certain freight for rail transport.

Although in 2016 we did not find those obstacles identified within the Romanian road freight transport sector, Romania’s road freight industry remains one of the most regulated in the European Union, as shown in the economic overview (Koske et al., 2014).

Description of the European legal framework

Most road freight transport regulations in Romania are based on European legislation, as they either directly implement European regulations, or transpose European directives. The main pieces of European legislation are the following:

  • European Regulation No. 1071/2009 setting the provisions with which undertakings must comply in order to gain access to the occupation of a road transport operator.

  • European Regulation No. 1072/2009 on common rules for access to the international road haulage market lays down the provisions to be complied with by undertakings that wish to operate on the international road haulage market and on national markets other than on their own (cabotage). It includes provisions relative to the documents to be issued to such undertakings in order to obtain a Community licence. Finally, it also sets down provisions regarding the sanctioning of infringements and co-operation between Member States. The purpose of the regulation is to improve the efficiency of road freight transport by reducing the number of empty trips in international transport operations.

  • European Directive No. 96/53 laying down the maximum authorised dimensions for certain road vehicles circulating within the Community, the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic. The directive also ensures that Member States cannot restrict vehicles that comply with these limits from performing international transport operations within their territories.

  • Directive No. 2003/59/EC on the initial qualification and periodic training of drivers of certain road vehicles for the carriage of goods or passengers. As part of the overall effort to increase safety on European roads, the directive establishes the mandatory initial qualification and periodic training requirements for drivers.

Authorisations

Authorisations required for the provision of services might represent legal barriers to entry on the market. In general, authorisations should ensure consumer protection. However, often the requirements of authorisations are stricter than necessary for consumer protection and can unnecessarily reduce consumer choice. Also, they may make it more difficult, expensive and time-consuming for new companies to enter a market.

The authorisation for repairing, adjusting, reconstructing and dismantling of vehicles

Description of obstacle

Article 122 (m) of the Government Emergency Ordinance No. 195/2002 regarding the traffic on public roads states that the repairing, adjusting, reconstructing and dismantling of vehicles are to be undertaken only by authorised operators. The authorisation is granted by the Romanian Automotive Register (RAR), the technical specialised body designated by the Ministry of Transport (MoT) as the competent authority in the field of road vehicles, road safety, environmental protection and quality assurance.

In order to obtain this authorisation, vehicle repair garages must provide the following documents: i) a copy of the certificate, issued by the RAR, attesting the professional ability of the garage manager, ii) the “criminal record” of the economic operator’s manager, iii) a copy of the company registration certificate issued by the National Trade Register Office, iv) a copy of the tax registration certificate issued by the National Agency for Fiscal Administration, v) a copy of the certificate of incumbency issued by the National Trade Register Office with the corresponding activity field, and vi) a list of the equipment used for providing the service. The opening of a garage is subject to an authorisation tax with the amount depending on the number of technical activities planned to be carried out in it.

In addition, for the authorisation to be maintained, the vehicle repair garages must annually obtain a visa. The visa is granted by the RAR after checking the technical ability of the vehicle repair garages by verifying the existence and conformity of the equipment used for performing the garages’ activities. The vehicle repair garages must pay an annual tax for the abovementioned audit of their technical ability.

Harm to competition

The authorisation requirement constitutes an administrative burden that may reduce the number of operators and raise administrative costs.

Policymakers’ objective

The objective of the provision is to ensure public safety on the roads.

Legal frameworks from other European countries such as France, the United Kingdom and Spain do not require an authorisation in order to run a vehicle repair garage.

In France, starting up a garage is subject to proving the professional qualifications of the person who leads the activity of the operator. Such a person must possess a certificate of professional competence, a certificate of professional studies, a degree or the equivalent of a degree issued by a national directory of professional certifications, or have three years of relevant experience working in the European Economic Area.

Also, French legislation establishes the obligation of garages to be registered in the National Register of Professions. In order to be enrolled in the abovementioned register, the manager of the garage must have attended a preparatory course that is organised by the regional Chamber of Commerce and Industry.

For the registration, the manager of the garage must submit the following documents: i) a statement of intent to create the garage, ii) a statement concerning any (or no) criminal record of the manager iii) the certificate granted by the Chamber of Commerce and Industry attesting to the completion of the preparatory course, iv) a copy of the identity card of the manager.

In the United Kingdom, there seems to be no obligation for the manager of a garage or for the employees directly involved in repairing vehicles to pass an exam or to have a diploma in order to prove their professional qualifications. To convince customers that the garage is reputable, the garage owner joins a trade association with codes of practice that have been approved by the Trading Standards Institute or a trading-standards approved scheme such as “Buy With Confidence”. The membership inspection regime to which garages voluntarily submit ensures that they are monitored in terms of their premises, equipment, technical training, customer care and operation of the code of practice and of their individual ability to quickly remedy any problem, as it arises, to their customers’ satisfaction.

Recommendation

We recommend that the provisions be repealed. The obligation to obtain an authorisation in order to run a vehicle repair garage is disproportionate to the envisaged aim of public safety on roads. The quality of the repairs performed by the garages could be ensured by requiring the manager of the garage to possess a certificate of professional studies or a degree issued, for instance by the RAR, in case the manager does not have a certificate of professional studies. Also, the employees directly involved in repairing, adjusting, reconstructing and dismantling vehicles should have a certificate of professional studies.

Moreover, the policymakers’ objective – public safety on the roads – is supposed to be achieved through periodic technical inspection. According to Government Ordinance No. 81/200058 all vehicles and trailers must be inspected at regular intervals by the RAR or by bodies authorised by the RAR. The ordinance provides a basis for checking that vehicles throughout Romania are in a roadworthy condition and meet the same safety standards as when they were first registered.

Therefore, no authorisation should be required for the garage to operate. Instead, the garage should be checked by the RAR in order to prove that its manager possesses a certificate of professional studies or a degree issued by the RAR and that its employees have certificates of professional studies.

Certification of drivers

Description of obstacle

According to Article 1 of Annex 5 of MoT Order No. 1214/2015 on the approval of norms establishing the conditions for obtaining a professional attestation by road transport staff, in order to transport goods with vehicles exceeding the applicable dimension and/or weight limits, so-called “abnormal load transport”, drivers must obtain a certificate of professional competence. This provision only applies to drivers who use vehicles registered in Romania for transport.

An abnormal vehicle is one that due to its construction exceeds at least one of the maximum dimensions of axle, bogie or total weights (for unloaded vehicles) authorised by Directive No. 96/53/EC and national legislation. The legal dimensions and weights vary between countries, and between regions within a country.59

The abnormal load transport certificate for drivers is required in Romania in addition to the general certificate, called the “certificate of professional competence”.

Harm to competition

The professional certificate for abnormal load transport affects drivers and operators, provides less flexibility in replacing the drivers for these types of transport because an operator needs a driver with an additional certificate in order to transport goods in abnormal vehicles. Also, the provision increases the administrative burden of road transport operators. Moreover, the provision applies only to those drivers who perform transport operations with vehicles registered in Romania. Therefore, besides the additional cost and administrative burden, it discriminates in favour of foreign transport operators with drivers operating vehicles registered in other countries. We did not find a similar requirement in any other European Union Member States.

Policymakers’ objective

There is no official recital for this particular provision. However, it seems that the objective of the provision is to ensure public safety on roads.

The relevant Romanian provision exceeds the requirements of European legislation. Thus, in order to enhance road safety in Europe by ensuring a common level of training and the achievement of the necessary skills and competences for professional drivers, European Directive No. 2003/59 requires a mandatory initial qualification and periodic training for truck drivers, with both attested by the certificate of professional competence. The directive does not require an additional certificate of professional competence for drivers in order to carry out road transport of goods with vehicles exceeding applicable length or weight limits.

Recommendation

The provision requiring an abnormal load transport certificate for drivers should be abolished. Professional qualification requirements concerning abnormal load can be addressed in the initial training undertaken for obtaining the certificate of professional competence. In other EU Member States, such as the United Kingdom and Spain, there is no obligation to obtain a certificate of professional competence for “abnormal load transport”. Thus, the courses related to the abnormal load should be part of the general course. This abolition will harmonise Romanian legislation with that of other EU Member States.

Conformity certificates for superstructures fitted on vehicles transporting dangerous goods

Description of obstacle

Currently only one undertaking in Romania, IPROCHIM SA, is entrusted with issuing certificates of conformity with respect to superstructures fitted on vehicles transporting dangerous goods, and transporting packaging containing dangerous goods. The list, which includes only IPROCHIM, was issued by the Ministry of Economy (MoE) and approved by the Order of the MoE No. 971/2014.

Any undertaking aiming to perform the activity of issuing certificates must first submit a request to the MoE proving that it fulfills the conditions stipulated by Order No. 2737/2012 of the MoE.60

In our understanding, all these conditions are clear and non-discriminatory. Thus, theoretically, any legal person established in Romania and registered in the Trade Register who proves that they can perform specific tasks regarding conformity assessment and inspection of specialised superstructures, should be appointed and designated by the MoE as a certificate-issuing body.

The main shareholder of IPROCHIM SA is the MoE, which owns 72.99% of its shares. The ministry is also in charge of authorising the operators who wish to issue such certificates of conformity. This creates a certain conflict of interest resulting from the fact that the MoE acts as a regulator, operator, and the authority empowered to authorise operators. In practice, requests for authorisation have been submitted by undertakings interested in acting as a certificate-issuing body which did not receive an official response, although, according to Romanian legislation, the MoE should answer within 30 days of receiving an application.

Harm to competition

IPROCHIM SA currently holds a monopoly in the market, leading to higher costs for transport operators who need to obtain a certificate of conformity with respect to superstructures.

Recommendation

Given that the conditions for authorising the performance of this activity set forth in Order No. 2737/2012 of the MoE are clear and non-discriminatory, and considering that operators whose application was rejected or not answered may challenge this decision in court, no recommendation concerning the relevant provisions is given. However, the MoE needs to act in a diligent manner in the light of its potential conflict of interest when receiving requests for authorisations submitted by undertakings interested in acting as a certificate-issuing body.

Transport manager

Description of obstacle

Article 15 of the Methodological Norms approved by Order No. 980/2011 of the MoT,61 which regulates the criteria that must be fulfilled by an undertaking in order to become a road transport operator, both on its own account and for hire/reward, requires the applying undertaking to have professional competence. Undertakings shall thus appoint a transport manager who must have a certificate of competence, fulfill the requirement of good repute, permanently manage the transport activities of the undertaking and must be an employee, director, owner, shareholder or manager of the undertaking. Additionally, the transport manager must reside in the European Union. Finally, this article provides that a natural person can be a transport manager only within one single undertaking.

The requirements of the Romanian legislation are in line with European Regulation No. 1071/2009 – but the obligation of the transport manager to lead only one single undertaking is more stringent.

Thus, according to Article 4 of European Regulation No. 1071/2009, transport managers can either be direct employees or persons so closely linked to the business that they have a real, direct connection with the operator. They can also be independent third parties, such as transport consultants, in the case where the operator does not have a transport manager with a genuine link to the undertaking. According to Article 4 para. (2), a transport manager who does not have a genuine link to the undertaking may serve up to four separate transport operators, as long as their combined fleet does not exceed 50 vehicles. The European regulation provides that Member States may decide to lower the number of undertakings and/or the size of the total fleet of vehicles which the manager may manage.

However, even if the Member States can determine the maximum number of transport operators led by a manager, the Romanian provision makes no link to the total combined fleet of operators, which seems to be the relevant criterion.

Policymakers’ objective

There is no official recital for the provision. It should ensure the quality of transport manager services, since, if a transport manager works for several separate undertakings at the same time, he may not always be available to brief drivers (e.g. on the characteristics of the goods transported, or on the route to choose to avoid delays or additional charges) or to respond to the client’s demands.

Harm to competition

Romanian transport managers are prevented from expanding their business by covering more than one undertaking. This also raises costs for Romanian undertakings, especially for the small ones, which must bear the cost of hiring their own transport manager.

Recommendation

We recommend modifying the relevant Romanian legislation by inserting the provision from the EU legislation, where transport managers can cover up to 4 undertakings and up to 50 vehicles.

More restrictive provisions than those in the EU regulation are not justified, notably due to the fact that Romanian freight hauliers generally have small fleets, so managers can carry out their tasks for more than one operator.62 If the restriction is lifted, the costs of the services performed by a transport manager may drop when he operates as an independent transport manager, and can provide services for more undertakings.

Local taxes

Description of obstacle

Local authorities in their capacity as managers of national roads that cross a municipality can impose additional taxes to those established by the government for using the Romanian national road network (the Romanian vignette).

Local and county councils also charge fees for the use of the local and county roads that they manage.

Harm to competition

These additional taxes increase the costs and administrative burden of road transport operators. There are frequent complaints that these taxes are not levied in a transparent manner and can lead to uncertainty and discrimination of some operators in relation to others. Also, it is difficult and time-consuming for freight hauliers to pay such taxes, as currently there is no efficient tax payment system in place.

As for fee transparency, access to information is often difficult. Most of these taxes are published on the websites of municipalities. However, in practice most of those websites are not well-organised. Also, often the decisions of the municipalities concerning the taxes are published together with other decisions, making it difficult to find them and to calculate the amount to be paid. Theoretically, for operators to find out whether they must pay a tax in a certain locality, they would need to study all local or county council decisions, as there is no official centralised system dealing with local taxes. As a consequence, road transport operators usually only learn of these taxes when they have to transit that locality and are being sanctioned by the competent authorities.

These taxes usually cannot be paid at major points-of-sale for road transport operators (e.g. gas stations), but only on the premises of city halls and county councils. To pay the fees, drivers are forced to leave their vehicles in a parking space and go to the city hall/local council during their operating hours. Generally, no 24/7 service is provided for fee payment, and fees cannot be paid by using a typical means of payment, such as the internet, telephone, etc. Thus, road transport operators in transit suffer a considerable disadvantage when compared to local transporters; they are often stuck in traffic until they obtain the authorisation, or become offenders for reasons difficult to control.

The absence of a transparent and efficient charging system leads to an additional administrative burden, and a differential treatment of market players.

The amount of local road taxes is sometimes even higher than the cost of the national vignette. For instance, the vignette for the national road network (totalling approximately 15 000 km) which consists of roads of normal European carrying capacity of 11.5 tonnes/axle and a total capacity of 40 tonnes, costs EUR 1 210 (RON 5 363) annually, compared to, for instance, Consţanta County, which has county roads with a lower carrying capacity totalling about 800 km in length and an annual fee of EUR 1 400 (RON 6 300).63 The fact that local fees are often much higher than the national vignette is also confirmed by the MoT in Romania’s General Transport Master Plan, issued in 2015.

Policymakers’ objective

The main objective of local taxes is the regulation of local traffic and to avoid congestion in municipalities. Taxes are also aimed at ensuring investment in the infrastructure and its maintenance and thus a high level of road quality and safety, providing drivers with an appropriate network of national, county and local roads.

Recommendation

We do not recommend abolishing local road taxes. However, we recommend that the Romanian government introduce an appropriate legal framework to ensure the transparency and efficiency of the payment system for local road taxes. Local authorities should also find a way to ensure transparency of the tax requirements, notably by making the application of these taxes more transparent for hauliers. County and local councils need to publish these charges and make them easily accessible since they are likely to apply not only to local operators, but also to operators coming from other regions of Romania, as well as from abroad. In particular, in order to ensure easy access for foreign operators, the information related to local taxes should also be made available in English.

To guarantee transparency of local taxes, a good measure might be to publish all road taxes on the websites of the MoT, and the Ministry of Regional Development and Public Administration. Also, an efficient payment system of taxes could be introduced through a new legal framework.

An efficient payment system might involve online payment or payment by mobile phone, as is currently implemented in cities such as London and Milan – but also in Romania. For example, payment for the toll bridge at the Feteşti-Cernavodă station on the A2 Bucureşti- Consţanta highway, introduced by Emergency Government Ordinance No. 8/2015 that ensures tax payment, is made by means of a closed-circuit television (CCTV) system, which records the licence plate of each vehicle entering and exiting the perimeter of the city.

Spare parts for tachographs

Description of obstacle

According to Order No. 181/2008 of the MoT,64 undertakings authorised to perform the installation, repair and/or verification of tachographs and speed limit devices must use only spare parts provided by the manufacturer of those tachographs and speed limit devices, or by suppliers appointed by the manufacturer.

Harm to competition

This provision is likely to eliminate other producers of spare parts for tachographs and speed limit devices. It may also raise costs for transport operators, as it prevents competition on the spare parts aftermarket.

Policymakers’ objective

There is no official recital for this particular provision. A speed limitation device is a piece of equipment used to limit the top speed of a vehicle. A tachograph is a device intended for installation in road vehicles to display, record, print, store and automatically or semi-automatically output details of the movement, including the speed of such vehicles, and details of certain periods of activity of the drivers. A tachograph, moreover, provides information to the road traffic inspection authority regarding the transport operators’ compliance with the regulations, mainly observance of working hours and possible overwork in the road transport industry. The regulation should ensure road safety and prevent accidents. Taking into consideration the importance of these devices for road safety, it is mandatory to eliminate every possibility of their manipulation by the operators. Sometimes, tachographs are manipulated to enable drivers to drive longer and take less rest. If the spare parts aftermarket were to be opened, it might lead to an increased risk of manipulation of these devices.

Moreover, even if the tachograph spare parts aftermarket were to be opened, its impact on competition and on the transport operators’ costs would be reduced as the tachographs generally have a longer life span than that of the trucks; because of this the volume of the spare parts aftermarket for tachographs is relatively small.

Recommendation

Even though this restriction is likely to exclude other producers of spare parts for tachographs and speed limit devices, and may raise costs for freight hauliers, the restriction seems proportional to the objective served, namely to promote road safety by avoiding the manipulation of these devices. Thus, no recommendation is made.

Waybills for transport and registration of incoming-outgoing wood material

European Regulation No. 995/2010, laying down the obligations of operators who place timber and timber products on the market, states that illegal logging is a pervasive problem within the European Union. “It poses a significant threat to forests as it contributes to the process of deforestation and forest degradation, which is responsible for about 20% of global CO2 emissions, threatens biodiversity, and undermines sustainable forest management and development. This also includes the commercial viability of operators acting in accordance with applicable legislation. It also contributes to desertification and soil erosion, and can exacerbate extreme weather events and flooding. In addition, it has social, political, and economic implications, often undermining progress towards good governance, and threatening the livelihood of local forest-dependent communities, and it can be linked to armed conflicts.”65 Combatting the problem of illegal logging in Romania has been a subject of ongoing concern in recent years.

Description of obstacle

According to Government Decision No. 470/2014 for the approval of Norms regarding the origin, movement, and sale of timber materials, the storage regime of timber materials, and the regime of round timber processing plants, as well as of measures for the implementation of European Regulation 995/2010. The undertakings that perform the activity of sale and transport of wood material must obtain specific waybills for the transport and register of the input-output of such materials. Both the waybills and the records are to be printed and sold only by the Imprimeria Naţională S.A., a state-owned company.

The waybills for the transport of wood materials are documents under a special regime, provided with specific security elements, are printed in blocks with 150 sheets, consisting of 50 sets of three sheets each, on carbonless copy paper, with the security elements applied on the first copy. The characteristics of the security elements contained in the waybills are established on the basis of a protocol with the Imprimeria Natională. The characteristics of the security elements are not made public. An Integrated Informational System of Tracking Wood Materials (SUMAL) was established for the traceability of timber harvested from the woods and to provide statistical information.

The waybill is issued by the operator who sells and transports wood material at the point of origin of transport. The operator must upload the standardised information in the SUMAL application, either online or using any electronic terminal that runs this application; this terminal must necessarily exist at the point of origin of the transport. The information uploaded refers among others to the series and number of the waybill for the transport of the wood materials, the point of unloading of the timber, the vehicle registration number and the species, type and volume of the timber. After receiving the information, SUMAL generates a unique code, as well as the date, hour, minute and second of the registration. The law requires that the unique code generated by SUMAL is written on the waybill. The unique code, as well as the date, hour, minute and second of the registration are also recorded in the register of input-output wood materials kept by the operator. The unique code attests to the legal origin of the transported timber. The registers of input-output wood materials are documents under a special regime they are printed in blocks with 100 sheets. The legal provisions do not stipulate whether the registers contain security elements.

Harm to competition

The provisions set up a monopoly in the printing forms of the waybills and the records of incoming-outgoing wood materials. The purchase of those required waybills and registers may therefore lead to higher costs for operators that sale and transport wood material.

Policymakers’ objective

The objective of the provision is to prevent illegal deforestation and smuggling of Romanian wood. However, the monopoly position held by Imprimeria Naţională on printing waybills and registers of input-output wood materials is not fulfilling the policymakers’ objective, namely to prevent illegal deforestation and smuggling of Romanian wood. Instead, this monopoly leads to higher costs for the operators who sell and transport wood material. The waybills also do not need to be printed with security elements as the unique code generated by the application SUMAL attests to the legal origin of the transported timber.

Recommendation

We recommend opening the market and allowing both the waybills and records of incoming-outgoing wood material to be printed by any company willing to perform such an activity.

Opening the market for the issuing of waybills for transport and records of incoming-outgoing wood materials, an activity which is currently performed exclusively by Imprimeria Naţională, should lead to a reduction in the price of waybills and records. The benefits arising from opening the market and liberalising the provision of this service are estimated to be worth approximately EUR 0.3 mln a year.

Geographic restrictions

Auditors of road safety

Description of obstacle

Law No. 265/200866 stipulates that the appointment of road safety auditors/inspectors is made for territorial areas and gives preference to individuals residing in those areas or close to those areas where the auditor/inspector needs to be appointed.

Road safety auditors/inspectors are professional individuals in charge of verifying road construction projects in terms of safety. They also periodically check the existing road infrastructure.

Harm to competition

These provisions create an entry barrier and favour auditors residing in the area where road infrastructure should be inspected in relation to auditors from other areas.

Policymakers’ objective

The law implements European Directive No. 2008/96 on road infrastructure safety management, which requires the establishment and implementation of procedures relating to road safety impact assessment, road safety audit, the management of road network safety, and inspections by Member States. Although the Directive stipulates the criteria for the appointment of road safety auditors, it makes no reference to territorial criteria.

There is no official recital for these specific restrictions. However, this may be necessary in order to make the deployment of auditors/inspectors’ activities more efficient in terms of costs and time.

Recommendation

This restriction exceeds the Directive No. 2008/96/EC requirements, and the appointment of road safety auditors/inspectors should not be linked to the geographical residence of the auditor/inspector. We recommend abolishing the provisions.

Additional tariffs

Description of obstacle

According to Government Ordinance No. 43/1997 on the road regime, as further amended and supplemented, managers of national roads apply tariffs in addition to the Romanian vignette to authorise access to the national road network for vehicles registered in a foreign country that is not a member of the European Union. These tariffs are established through bilateral agreements between Romania and third countries.

The provision authorises Romania to charge differential tariffs to third country hauliers as opposed to Romanian and EU hauliers. It may therefore lead to discriminatory treatment of third country hauliers.

Harm to competition

These provisions discriminate in favour of national and EU transport operators against those from a non-EU country.

Policymakers’ objective

During bilateral talks with third countries, Romania negotiates these additional tariffs together with the number of authorisations which are granted to third country hauliers, taking into consideration the interests of Romanian hauliers.

Recommendation

Even though this restriction is likely to create an entry barrier that discriminates against operators who are not members of European Union, it is our understanding that this restriction is justified for reasons of public interest. Thus, no recommendation for change is made for the specific provision.

Regulatory burden

Plate

Description of obstacle

Government Ordinance No. 27/2011 on road transport, as further amended and supplemented, provides that own-account transport operators, and transport operators who transport goods for hire or reward using a vehicle with a maximum permitted weight above 3.5 tonnes, are required to display on their vehicles a plate containing information related to the dimensions and maximum weight authorised for the vehicle. The plate must be displayed if vehicles do not have a manufacturer’s plate or the manufacturer’s plate does not contain the necessary information.

According to MoT Order No. 980/2011 if the vehicle has a trailer and/or a semi-trailer, it is necessary to have a plate for each trailer in addition to the plate for the vehicle.

In order to obtain the plate it is necessary that the dimensions and maximum weight of the vehicles, trailers and semi-trailers are established. This activity is currently performed exclusively by the RAR. According to the RAR website, there are two ways of establishing the dimensions and maximum weight: i) for vehicles without a towing device the dimensions and weight are established by the RAR based on the information from its database and the vehicle identity card and ii) for vehicles with a towing device, trailers and semi-trailers, the dimensions and weight are established by measuring them. In this case, each of them are measured separately. Thus, not all the vehicles are measured. However, in both the abovementioned cases, fees are received by the RAR.

Policymakers’ objective

In Romania as well as in Europe, heavy goods vehicles must comply with certain rules on weight and dimensions, for road safety reasons, and to avoid damaging roads, bridges and tunnels. These rules are established by European Directive No. 96/53 and Romanian legislation.67

The obligation to display a plate is required by Romanian law so that law enforcers can verify the compliance of the transport operators with the abovementioned legislation.

Harm to competition

Article 6 of European Directive No. 96/53 authorises Romania to opt for a regulatory system whereby information related to the vehicle’s dimensions and maximum weight is included on a plate. However, the same article from the directive stipulates that the information can also result from “a single document issued by the competent authorities of the Member State in which the vehicle is registered or put into circulation. Such a document shall bear the same headings and information as the plates.”

The requirement to display on vehicles a plate containing information related to the dimension and maximum weight authorised for the vehicle applies for all operators established in Romania. It represents an unnecessary burden for road transport operators and may also lead to a rise in costs for national operators compared to EU operators, who do not have such an obligation.

The total cost generated by the obligation to display such a plate on vehicles is approximately EUR 55 per vehicle. As mentioned above, if the vehicle has a trailer and/or a semi-trailer, it is necessary to have a plate for each, thus adding a EUR 55 charge for each additional trailer or semi-trailer. Approximately EUR 45 of this sum corresponds to the fee charged by the RAR for measuring the vehicle’s dimensions. The difference corresponds to the price of the plate. When the provision came into force in January 2014, in order to comply with the plate requirement Romanian transport operators had to purchase these plates, generating an estimated total cost of around EUR 6.3 million.

Recommendation

We recommend repealing this provision. The objective of the provision to verify the compliance of transport operators with the rules on weights and dimensions can be achieved through documentation, such as the vehicle identity card or the periodical technical inspection certificate, which should be carried by the vehicle driver. The vehicle identity card is the single document by which the vehicle is registered and put into circulation. It is issued by the RAR and contains the same headings and information as those appearing on the plate (the manufacturer’s name, identification number, dimensions and weight of the vehicle). The transport operator should keep the original vehicle identity card or a certified copy of it in case the operator is not the owner of the vehicle (for instance, in case of a lease). The periodical technical inspection certificate is issued automatically and free of charge by the RAR or by a body authorised by the RAR to perform periodical technical inspection. It is issued after the performance of the mandatory technical inspection that can include also measuring the vehicles. The periodical technical inspection certificate does not currently contain information referring to the vehicle’s dimensions and weight, but it can be inserted by the issuer. Both the vehicle identity card and the periodical technical inspection certificate should also be kept for trailers and semi-trailers. Carrying an identity card or a periodical technical inspection certificate by the vehicle driver would be in line with EU legislation regarding the vehicle’s dimensions and maximum weight.

According to our estimates, the benefits for road freight transport operators of abolishing the plate requirement for vehicles with maximum weight > 3.5 tonnes, would be approximately EUR 1.14 mln a year.

Copy of transport licence

Description of obstacle

According to MoT Order No. 980/2011 approving the Methodological Norms on the application of the provisions regarding the organisation and performance of road transport and related activities established by Government Ordinance No. 27/2011 on road transport, as further amended and supplemented, road transport operators must obtain a copy of the transport licence for each vehicle in their fleet, which must be renewed annually, although the road freight transport licence issued to transport operators is valid for a period of 10 years.

A copy of the transport licence must be carried on the vehicle on all journeys, and must be presented to any enforcement official upon request. Each copy states the registration number of the vehicle, and cannot be used for any other vehicle in the same transport operator’s fleet.

Harm to competition

The requirement to obtain a copy of the licence for transport of goods by road for hire or reward is in line with Article 4 of EU Regulation 1072/2009. However, the fact that this copy costs approximately EUR 58 per vehicle per year and that it applies only to one registered vehicle increases the costs for hauliers established in Romania. Also, the provision increases the administrative burden for transport operators, as they must obtain a copy every year.

Policymakers’ objective

The transport of goods by road, both on own account and for hire or reward, should be conditional on the possession of a transport licence. For hire or reward transport the licence is called a “Community licence”, and for own-account transport the licence is called a “transport certificate”. Transport operators are required to have a copy of the licence for each vehicle in their fleet. According to point 9 of EU Regulation 1072/2009, the obligation to carry a copy of the transport licence should facilitate effective controls by enforcement authorities regarding the compliance with the authorisation requirement of transport operators.

Research indicates that in some European countries the validity of a copy of the Community licence has the same validity as the licence itself. For example, in Estonia, a copy of the licence is issued for 10 years if the applicant does not require it for a shorter period, and not for longer than the term of validity of the Community licence (10 years). In the United Kingdom and Spain the Community licence is issued for a five-year period, as well as a copy of the Community licence, and it is not specific to one vehicle – it does not contain the vehicle registration number. Also, in Spain a copy costs EUR 5.99 for five years.68

Recommendation

We recommend that the provisions should be modified. There is no need to impose an annual renewal of the copy when the licence is issued for a 10-year period. The copy should be issued at the same time as the licence, and it should be made available for the same period of time as the duration of the licence to which it refers, i.e. 10 years. Although we agree that the number of copies should be the same as the number of vehicles in the operator’s fleet, there is no reason to require specific copies for the registration number of the vehicle. This requirement increases the administrative burden on the operator. For instance, when a truck is sold and another is bought instead, the operator is not able to use the same copy of the licence and he must obtain a new one with a new registration number. Moreover, the cost of the copy should not exceed the administrative cost of issuing it.

The benefits arising from modifying this provision should have a significant impact on costs for freight transport operators, and may lower the overall cost of freight transport services if these savings are passed on to the customer. Moreover, the extension of validity of the licence copy for the entire duration of the transport licence, i.e. up to 10 years, will remove an unnecessary administrative burden for freight transport operators.

The benefits of freight transport operators from modifying the provision are estimated to be around EUR 7.1mln a year.

Legislation not published

Description of obstacle

According to MoT Order No. 980/2011, approving the Methodological Norms on the application of the provisions regarding the organisation and performance of road transport and related activities established by Government Ordinance No. 27/2011 on road transport, as further amended, one of the requirements for obtaining a transport licence is to have good repute. The State Inspectorate for Road Transport Control (ISCTR) is in charge of enforcing this requirement.

The requirement of good repute is in line with Article 6 of Regulation 1071/2009/EC. However, the ISCTR enforcement procedure to verify compliance with the good repute requirement has not been published. According to MoT representatives, the ISCTR enforcement procedure is established in a document entitled “Ediţia I, Revizia 0 – Cod PO 89” recorded with the ISCTR under No. 2508/30.01.2014 and refers to an internal administrative procedure that does not need to be published. Infringements of good repute are recorded in a local database and should be reported in the European Register of Road Transport Undertakings (ERRU) database.

Recommendation

The ISCTR procedure related to compliance with the requirement of good repute of transport operators should be published, to enable the monitoring of the ISCTR’s exercise of power, and to enable operators to present their view in face of a potentially negative decision.

3.3. Restrictions to competitiveness in rail transport

Description of the European legal framework

Rail freight transport in Romania is governed to a significant degree by European legislation. In this section, the main pieces of European legislation will be briefly summarised before restrictions in national Romanian laws are discussed to describe the wider legal framework.

The EU legislation on rail transport aims to achieve the creation of a single, efficient and competitive market for rail throughout Europe, through opening rail markets, promoting competition, tackling barriers to market entry, harmonisation of technical specifications (inter-operability) and harmonisation of safety standards and certification.

Directive No. 91/440/EEC on the development of the European Union’s railways is the main measure that the European Union has taken to increase competitiveness in rail transport. The Directive distinguishes between the provision of transport services and the operation of infrastructure, identifying the necessity for these two areas to be managed separately in order to facilitate further development and efficiency of the European Union’s railways. The Directive covers particularly four areas of policy: 1) the independence of railway undertakings with regard to management, administration and internal control over administrative, economic and accounting matters, thereby holding assets, budgets and accounts separate from those belonging to the State; 2) the separation of infrastructure management and transport operations; 3) the reduction of debt and improvement of finances and 4) access rights to railway infrastructure.

Since 2000, those principles have been progressively implemented through the adoption of three successive packages of EU legislation and the recast of the First Railway Package.69

In 2001, the European Commission issued the First Railway Package to be implemented by the Member States by 15 March 2003.70 This was the first step in liberalising the railway sector through the introduction of open access on the Trans-European Rail Network on a non-discriminatory basis.

The Second Railway Package was proposed in January 2002 by the European Commission, introducing full open access for freight throughout the European Union, by amending EU Directive 91/440 starting 1 January 2007. The Trans-European Rail Freight Network was expanded to include the entire network of a Member State, and not just designated “freight corridors”. Access to that network was available both for international freight services and domestic freight services. The Second Railway Package also enhanced safety and inter-operability, primarily by establishing the European Railway Agency (ERA) to supervise technical standards.71

The Third Railway Package was issued in October 2007. It introduced open access rights for international rail passenger services (including cabotage) by 2010.

Directive No. 2012/34/EU establishing a single European railway area was issued as a separate piece of legislation to any railway package, recasting the First Railway Package with the merger of the three directives in force, Directives No. 91/440/EEC, No. 95/18/EC and No. 2001/14/EC, and their successive amendments. The core provisions of Directive No. 2012/34/EU set out the requirements and procedures for i) the allocation of railway infrastructure capacity, ii) the methods of calculation and collection of infrastructure charges and iii) the requirement for infrastructure managers to grant non-discriminatory access to railway undertakings operating on the European railway network.

Also, Directive No. 2012/34/EU stipulates that a single and independent national regulatory body for the railway sector should be established in each Member State,72 and that the regulatory body should have the necessary organisational capacity in terms of human and material resources, proportionate to the importance of the rail sector in the Member State.

In 2013, proposals for a Fourth Railway Package were released. The Package was adopted by the European Council in December 2015, but as of writing this report (March 2016) has not yet been approved by the European Parliament.

The proposed Fourth Railway Package aims to ensure that public service contracts deliver the best possible value for money, by restricting their size and ensuring that they cannot be granted directly without justification. The new rules would also ease market entry for new rail service operators, by giving them fairer access to infrastructure. It would also simplify procedures for certifying the safety of new rolling stock and gradually transfer certification responsibilities to the ERA. In addition, planned measures to ensure the independence of infrastructure managers would centre on path allocation and infrastructure charging. Member States may decide to allow these to be carried out by an independent body, and an infrastructure manager could outsource functions. Rules to ensure the independence of staff and management would be simplified.

Access to infrastructure

In 1998 the old vertically integrated state-owned monopoly railway company SNCFR was split up. As a result, CFR Marfă S.A. was established as a state-owned rail freight transport operator while railway infrastructure is currently managed by the state-owned national rail company CFR SA. At the moment of writing this report, 23 other private companies operate on the Romanian freight transport market, in addition to the state-owned CFR Marfă. Following Ministry of Transport (MoT) Order No. 461/2003,73 CFR Marfă is the owner of 26 freight terminals.

The main problems identified in the rail sector are access to infrastructure and the independence of the infrastructure manager, CFR SA, when making decisions related to path allocation and the way CFR SA deals with its obligations to grant equitable and non-discriminatory access to infrastructure. We also identified unclear conditions for accessing certain facilities or services and a lack of definition of key concepts. In particular, capacity allocation, access to infrastructure and essential services (such as power supply, etc.), as well as the level of charges for using infrastructure and other essential services, might lead to discriminatory treatment in favour of the state-owned company CFR Marfă.

Unclear conditions for capacity allocation

Description of obstacle

According to Article 7 of the Regulation on Railway Infrastructure Capacity Allocation, approved by Government Decision No. 1696/2006, any request for infrastructure capacity allocation is subject to financial and technical analysis carried out by the infrastructure manager, CFR SA. CFR SA has the right to reject a path allocation requested by railway operators when statistics related to freight transport operating on that route show an under-use below 20% for the timetable in place. This right of refusal and the threshold are also mentioned in the CFR SA Network Statement – Article 7 para. 1) (b) of Annex XV. There are no further details to facilitate calculation of the under-utilisation rate by railway undertakings or to ensure a suitable level of predictability in relation to the CFR SA decision-making process.

Harm to competition

Possible discrimination against private operators could occur due to the fact that the provision is too vague, simply mentioning CFR SA’s right to refuse a path allocation and the 20% threshold, without offering any guidance and transparency about the infrastructure manager’s decision-making process. Any CFR SA refusal to grant access to the railway infrastructure may represent a serious limitation to the provision of services or even market entry. The insufficient legal provision may encourage CFR SA to favour CFR Marfă over its competitors.

Policy objective

The provision aims to transpose Article 27 para. 2) of Directive No. 2001/14/EC, which states that the railway infrastructure manager is entitled to optimise the use of the infrastructure and may terminate a route allocation in case a railway’s operator utilisation rate is underperforming compared to the operational plan (“use it or lose it principle”). The provision therefore should deal with minimising sub-optimal use of capacity.

International comparison

Similar considerations are made by capacity allocation bodies across the EU – e.g. in the United Kingdom, the infrastructure manager, Network Rail, considers whether the entry of a new operator affects the timetable of existing services and could potentially lead to sub-optimal use of capacity.74 Still, no estimated percentage of an underperformance utilisation rate is stipulated within the UK Network Code, but there is a clear description of what qualifies as a failure-to-use case that may justify the rejection of capacity allocation based on sub-utilisation.75 Accordingly, a rejection is justified, e.g. any time the access beneficiary fails to make use of a train slot76 which has been included in the working timetable77 and which relates to the quantum access right.78

Recommendation

We recommend making the provision clearer. Railway undertakings should be provided with guidelines, included both in Government Decision No. 1696/2006 approving the Regulation on Railway Infrastructure Capacity Allocation and in the CFR SA Network Statement. Those guidelines should describe in detail i) instances that can be accounted for to trigger the 20% underperformance threshold by the infrastructure manager, and ii) instances which fall outside the application of this threshold since they do not fall under the responsibility of the railway operator. Acceptable reasons for under-utilisation may include seasonal factors, e.g. commodities for which demand varies during the course of the year, non-economic issues beyond the railway undertaking’s control, a strike or other industrial action. However, these instances should be quantified to the best possible extent in order to facilitate calculation of the underutilisation rate by railway undertakings.

Unclear conditions for accessing facilities or services

Description of obstacles

According to Article 5 para. (1) of Government Ordinance No. 89/2003 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification, when dealing with a request for access to some facilities and services,79 such as a power supply system, fuel supply, freight terminals, etc., the infrastructure manager can reject such requests if there are alternative options in the market. These “alternative options” are not specified or defined.

In addition, Article 18 para. (3) of Emergency Government Ordinance No. 12/1998 on freight railway transport and the reorganisation of the Romanian National Railways Company states that access to infrastructure and services provided in terminals and ports linked to the railway infrastructure can be restricted when there are “viable alternatives” in the market. Again, no definition of “viable alternative” is provided.

Harm to competition

The absence of any explanation of what an “alternative option”/“viable alternative” may be and how it should be assessed makes the provisions unclear and leaves significant discretion to the infrastructure manager, CFR SA. Thus, CFR SA can easily favour CFR Marfă over its competitors by simply limiting their access to essential infrastructure and services.

Policy objective

The provision in Government Ordinance No. 89/2003 was supposed to transpose Article 5 of Directive No. 2001/14/CE, aiming at efficient allocation of capacity. However, there is no justification for the lack of a definition for “alternative options”/“viable alternatives”, in either the provisions of Government Ordinance No. 89/2003 or the provisions of the Emergency Government Ordinance No. 12/1998.

International comparison

A definition of “alternative option” can be found in other EU national legislation, e.g. in Section 2.23 et seq. of the UK Guidance on Appeals to the Office of Rail Regulation under the Railways Infrastructure. The UK Guidance provides several assessment parameters for establishing an alternative option, such as commercial viability and availability, and gives examples for a non-viable alternative (e.g. when using another facility is certain to increase the operator’s costs, so that the rail freight transporter wanting to use the facility could no longer perform the transport at a competitive price).

Recommendation

We recommend making both provisions clearer, so that an unambiguous definition of “alternative option”/“viable alternative” can be provided as further guidance to rail freight transporters. The definition should be in line with Directive No. 2012/34/EU, notably Article 3 para. (10) and Article 13, providing the meaning of “viable alternatives” and the conditions of access to services. This definition should be made available in the CFR SA Network Statement, in accordance with Article 27 and Annex IV of Directive 2012/34/EU.

Other essential facilities

Description of obstacle

Government Decision No. 581/1998 on setting up the National Railway Company “CFR SA”, Annex No. 1 Article 19 subparagraph (o) allows the CFR SA board of administration to approve tariffs for specific services, other than those related to infrastructure access, including, for example, freight terminals, train path preparation, storage on CFR’s land and train path reservation, etc.80

Access tariffs for such services are established unilaterally by CFR SA. They can give rise to some form of discrimination against operators competing with CFR Marfă, as CFR SA and CRF Marfa belong to the same holding group.

Furthermore, since CFR Marfă was established (in 1998), 26 CFR SA terminals have been used by CFR Marfă free of charge, before ultimately being transferred to CFR Marfă (in 2003). CFR Marfă therefore has the possibility to limit or even completely prevent access to its terminals or to discriminate by using unfair terms against private freight operators.

Harm to competition

CFR SA may use its discretion to grant CFR Marfă undue advantages over its competitors. The restriction of competition on the freight transport market could be quite serious due to the fact that CFR Marfă owns a large number of terminals81 that it received from CFR SA.

Freight terminals are generally difficult or impossible to replicate by the market, so it is unlikely that a viable alternative can be found. If either CFR SA or CFR Marfă decide to subject access to their own terminals to unfair and/or discriminatory charges, this may lead to a serious restriction of competition in the rail freight transport market.

The Romanian Competition Authority has fined CFR Marfă in the past for i) applying dissimilar and far higher tariffs to equivalent transactions with other private trading parties compared to state-owned ones (e.g. CFR Călători, the state-owned passenger rail operator, which was provided with services within CFR Marfă terminals) and ii) refusal to deal and conclude contracts with private rail operators for services within CFR Marfă terminals.82

Policy objective

The objective of the provision is not officially described in the provision. However, CFR SA tariffs are claimed to be the same for every transport operator. Regarding CFR Marfă tariffs, there is no official justification.

International comparison

In our research into European experience, we found some discriminatory practices related to charging. A number of cases have been dealt with by German competition and regulatory authorities in which the German infrastructure manager (which is part of the German incumbent holding group) was accused of having introduced discriminatory charges. For instance, the competition authority found that the charging system TPS 1998 allows for charges for DB Regio to be 25%-40% lower than that of its competitors. The German regulator also pinpointed the use of “regional factors” in track access charging (i.e. definition of charges applicable to specific parts of the rail network) which were discriminatory against competitors of the incumbent. 83

Another case concerns DB Energie, the Deutsche Bahn (DB) subsidiary responsible for providing electricity to the rail network. DB Energie applied volume discounts that favour DB operating subsidiaries since only they benefit from the maximum discount available. As a result, competing rail undertakings paid electricity charges 15-20% higher than those paid by DB. In February 2012 BNetzA, the German rail regulator, required that DB Energie reduce the fee by 23%, which it has agreed to do. However, DB Energie did not keep its promise to abolish the discriminatory discount system as of 1 January 2013.84

Italy seems to have faced the same situation as Romania regarding the infrastructure manager (RFI) and the incumbent rail operator (Trenitalia) being under the same state ownership and regarding the assignment to the latter of a large number (61) of freight terminals due to a contract between RFI and Trenitalia in 2002.

In the Report on the Separation between the Railway Infrastructure Management Company and Train Operators (2003),85 the Italian Competition Authority highlighted the potential distortion of competition stemming from the fact that other facilities, such as freight terminals and maintenance infrastructures, are owned directly and/or managed by Trenitalia, Italy’s state-owned rail operator.

Recommendation

We recommend that CFR SA publishes guidelines explaining the methodology it uses to calculate its tariffs, notably with reference to the costs related to each of its essential services. Also, as long as terminal ownership by CFR Marfă continues and as long as CFR Marfă is a state-owned company, CFR Marfă should be under the same obligation as CFR SA to grant access to its terminals to competing railway operators. Notably, both CFR SA and CFR Marfă should grant fair, transparent and non-discriminatory conditions for accessing their terminals (“FRAND terms”).86 This would be in line with Article 10 of Directive No. 2012/34/EU which provides that railway undertakings must be granted the right to access the railway infrastructure in all Member States for the purpose of operating all types of rail freight services under equitable, non-discriminatory and transparent conditions.

Compliance with FRAND terms should be ensured by an independent regulatory body, such as the Rail Supervisory Council. As Directive No. 2012/34/EU requires (Article 56 para. (5), the national regulatory body shall have the necessary organisational capacity in terms of human and material resources, which shall be proportionate to the importance of the rail sector in the Member State. In addition, the Romanian Rail Supervisory Council capabilities need to be strengthened as to be in line with Directive No. 2012/34/EU requirements.

Privatisation of CFR Marfă

The National Rail Freight Company CFR Marfă is a wholly state-owned company operating as a separate subsidiary from CFR SA within a holding structure under the authority of the Ministry of Transport. Privatisation of CFR Marfă was planned for 201387 and then again for 2015,88 but neither transaction has taken place. According to the Minister of Transport, a new attempt to sell may take place in 2017.89

We do not make any recommendation (neither for nor against) concerning the planned privatisation of CFR Marfă. Though privatisation and ownership separation would likely solve the access and discrimination problems described above, and might additionally accelerate investment into infrastructure, we see that there are other issues which the Romanian government needs to take into account when making its decision, especially: EU legislation does not require ownership separation; various models from full ownership separation to vertical separation exist in OECD countries; economic studies dealing with the benefits of ownership separation are not clear-cut and do not necessarily provide “a better solution”.

Ownership separation likely to solve access and discrimination issues

According to the OECD (2013), Recent Developments in Rail Transportation Services, a vertical integration model provides incentives for the vertically integrated company to foreclose competitors and to favour its own transport operator, which might harm competition. It also places a burden on regulators and competition authorities to prevent or remedy such conduct. Experience shows that in a holding structure these forms of discrimination are not readily eliminated by the requirement for non-discriminatory access (OECD, 2013). Furthermore, if a good level of institutional separation is not achieved, deliberate favouring by the infrastructure manager of a sister company or a national operator can occur (OECD, 2013).

For Romania, CFR Marfă’s privatisation may provide the opportunity to address discrimination issues existing in the related Romanian legal framework and solve them simultaneously with the transfer of CFR Marfă to the private sector. Splitting ownership of the infrastructure manager and the rail freight operator would eliminate any incentives for CFR SA to favour its affiliated company, CFR Marfă, through practices aimed at either refusing access or charging unfair prices for essential services such as allocation of tracks, or access to traction services or energy supply.

Investment in infrastructure

As mentioned in the Romanian General Transport Master Plan,90 the Romanian public rail infrastructure has been suffering from continuous degradation, but the privatisation process could improve the allocation of resources and reduce reliance on public funds.

Additionally, privatisation could result in divesting CFR Marfă of the terminals it owns so as to eliminate discriminatory behaviour by CFR Marfă.91 Across the EU, overall, freight terminals, marshalling yards and storage sidings seem to be mostly owned and managed by incumbents’ holdings (in particular in large freight markets such as those in Germany, Austria, Poland, Lithuania and Latvia), except in the United Kingdom and the Netherlands – where the independent infrastructure manager predominantly owns them. In Portugal, Bulgaria, Luxembourg and Slovakia, they are state-owned, but managed by the infrastructure manager.92

Ownership separation not required by EU law

EU legislation does not require separation of ownership. However, it requires that the manager of the rail infrastructure must be independent from any railway undertakings when performing essential functions and that it must keep separate financial accounts and grant access to rail infrastructure in a non-discriminatory manner.

Directive No. 2012/34/EU aims to limit the possibilities of discrimination by increasing the level of transparency obligations on infrastructure managers when settling the conditions of access to railway infrastructure. Railway undertakings must be granted, under equitable, non-discriminatory and transparent conditions, the right to access the railway infrastructure in all Member States for the purpose of operating all types of rail freight services.

The Fourth Rail Package aims to ensure that infrastructure managers can perform all the functions needed to run the infrastructure in an optimised, efficient and non-discriminatory manner. Since this is the simplest and most efficient solution to create a level playing field among transport operators, the Commission proposes an institutional separation of infrastructure management and transport operations. However, where Member States wish to maintain existing holding structures with ownership of the infrastructure manager, the Commission proposes the introduction of strict safeguards to protect the independence of the infrastructure manager with a process of verification by the Commission to ensure that a genuine level playing field for all railway undertakings is put in place.

Various models in OECD member countries

A variety of forms of vertical separation exist among OECD member countries, ranging from mere separation of accounts within a vertically integrated entity to full structural separation. Some countries, such as Sweden93 and the United Kingdom, have implemented full structural separation. Other countries have organised infrastructure and operations into separate subsidiaries within a holding company structure (e.g. Germany and Italy), while outside Europe, most railways are vertically integrated (e.g. U.S. and Mexico).

In Italy, around the year 2000 the state-owned monolith Ferrovie dello Stato (FS) was transformed into a holding company, comprising an infrastructure manager (Rete Ferroviaria Italiana – RFI) and an operator responsible for freight and passenger services (Trenitalia). Furthermore, a law was issued94 that granted all EU railways operators open access to the Italian railway infrastructure, thus depriving Trenitalia of the monopoly it had so far enjoyed on both freight and passenger services.

The UK rail industry has experienced several reforms. The rail sector in the United Kingdom comprises an infrastructure manager, Network Rail (which was a private company with state guarantee, brought back into public sector hands in 2015), an independent economic and safety regulator, the Office of Rail and Road, and private railway undertakings which provide passenger and freight services, most of them subsidiaries of public rail companies such as Deutsche Bahn (German national rail operator), SNCF (French national rail operator), ND (Dutch national rail operator).

Facing increasing costs, the government initiated a Rail Value for Money Study completed in 2011. It highlighted that, compared to other European railways, the UK rail industry was found to show a significant efficiency gap, with rail costs that should have been 20-30% lower (the focus was on infrastructure management costs).95

Economic literature

Regarding the impact of structural separation on the rail sector, there is no evidence in the economic literature (Mizutani and Uranishi, 2013) that either structural separation increases competition compared with a holding company model, or that structural separation improves rail’s modal share96 compared with a holding company model (Van de Velde, 2012). As for the overall impact of restructuring on costs, the issue is more complicated. For example, Mizutani and Uranishi (2013) suggests that effects of structural separation change according to the train density of the railway organisation. Where there is lower train density, it seems that structural separation reduces costs, whereas at high levels of train density it increases costs.

Nevertheless, evidence on rail freight privatisation seems to be positive. A country-by-country analysis clearly indicated that the Member States which were the first to reform their railways by introducing competition in the rail freight transport sector recorded the biggest increases in volume between 1995 and 2004: the United Kingdom (70%), the Netherlands (67%) and Austria (36%), countries where the main operator was the incumbent following privatisation. Analysing the share of this volume handled by the incumbent undertaking, it emerged that, in the United Kingdom, EWS97 accounted for 70% and three other undertakings shared the remainder and in the Netherlands, Railion Nederland accounted for 85% of the volume and 6 other undertakings shared the rest (European Commission, 2006).

In the United Kingdom, Pollitt and Smith (2002) estimate that, after taking account of scale effects, the rail industry has achieved efficiency savings of 13% (or 2% per annum) since privatisation. Lodge (2013) writes that freight operating companies reduced their unit costs by 35% between 1998-1999 and 2008-2009 and traffic increased by 50% since privatisation with half the number of locomotives and two-thirds of the wagons used at the time moving a greater volume of goods (Lodge, 2013).

Conclusion

Due to major differences in market circumstances across countries, a clear conclusion has not yet been reached on whether full vertical separation is better than other structural approaches.

Braking energy and traffic management signalling system

Description of obstacles

When a train brakes, electrical energy is produced by the braking traction (also known as regenerative braking). The generated electricity can be recovered and used both internally by the train for operating auxiliary systems (e.g. to power lights, air conditioning, door opening and closing) and externally: this electricity can be sent back to the grid and used by other trains (Railway Handbook, 2015).

Worldwide, we are seeing an increase in the number of trains equipped with technology to recover electrical energy from braking (Railway Handbook, 2015).

Harm to competition

Romania lacks a legal framework enabling the regenerative braking to be metered and discounted. The lack of a regulatory framework discriminates against those operators that have invested in new technology in their locomotives. For these operators, the absence of the possibility of using braking energy generates no savings in electricity costs.

Policymakers’ objective

There is no official justification for the absence of regulating braking energy, either within legislation on transport or on energy legislation.

International comparison

A good example of a legal framework for regenerative braking discounts, which can be legally claimed by rail transport operators, can be found in the United Kingdom, whereby Article 8 of the Traction Electricity Rules98 issued by the Office of Rail Regulation99 stipulates that a train operator operating a regenerative braking system for any of its vehicles is entitled to receive a regenerative braking discount. Network Rail, the UK’s infrastructure manager, decides the level of regenerative braking discount to be applied to each train operator.

However, most European countries do not seem to have a specific legal framework on compensation for braking energy.

Need for upgrade of railway infrastructure

The introduction of a legal framework needs to be supported by an adequate upgrade of railway infrastructure including the metering devices, dedicated storage facilities and regenerative inverters necessary to exploit the electricity produced by this form of braking. Regenerative braking energy may, in principle, be generated by trains running on the Romanian rail network, at least with respect to those routes that are part of the Trans-European Transport Network (TEN-T) corridors of Romania. As these routes have already been electrified,100 they are theoretically suitable to absorb regenerative braking energy.101 Still, infrastructure upgrading and development for braking energy is also needed in order to exploit the electricity produced by braking, requiring adequate metering devices, dedicated storage facilities or regenerative inverters.

Upgrading infrastructure for braking energy is not the only upgrade the Romanian railway infrastructure required as a part of the EU railway network. At the European level, the deployment of the European Railway Traffic Management System (ERTMS) is a priority, aiming to ensure the inter-operability of the EU railway system. Currently there are more than 20 train control systems across the European Union. Each system is stand-alone and non-interoperable, and therefore requires extensive integration and engineering effort, raising total delivery costs for cross-border traffic. This restricts competition and hampers the competitiveness of the European rail sector compared to road transport, by creating technical barriers to international journeys. As a single European train control system, ERTMS is designed to gradually replace the existing incompatible systems throughout Europe.102

As ERTMS has not yet been fully deployed in Romania, with the exception of the Feteşti- Consţanta corridor, foreign locomotives may need a second signalling system when running trains in Romania. In addition, Romanian locomotives cannot easily run abroad. This affects the ability of both foreign and Romanian operators to compete, increasing their operating costs. Introducing ERTMS would allow market entry into Romania and Romanian operators to be able to compete abroad, as in other EU Member States implementing ERTMS is an ongoing process.103

Recommendation and benefits

We recommend creating an appropriate legal framework whereby metering regenerative braking legally entitles rail transport operators to reduce their electricity costs. Compensation for regenerative braking energy could be introduced in Romanian Law on Energy No. 123/2014 or in a separate piece of legislation.

As explained in Annex 3.A3, we estimate that the expected annual energy savings for freight operators from introducing a framework for compensation of braking energy would be worth around EUR 0.9 million, based on previous experience. Further savings could be achieved for railway companies active in passenger transport if the appropriate technology is installed. The overall outcome is uncertain as trains equipped with braking technology can be significantly heavier and thus increase wear and tear on rail tracks. Therefore, an overall reduction in charges for these trains is not a given even if a system is introduced to account for energy savings. 

Due to the fact that the regenerative braking issue is not just a regulatory matter but also a matter of investment, it is up to the Romanian legislator and public executive bodies in charge to decide on whether the legal framework is to be issued before, or coupled with the required infrastructure upgrade. It is also to be considered that investment costs would be high in order to install an appropriate railway system that allowed the recovery of braking energy and might even be higher than the recovered costs. As there may be other important priorities regarding investments in the railway sector, such as the sustainability of national infrastructure, and investment resources might be limited, an appropriate system for braking energy should be taken into consideration in the medium to long term.

Discrimination based on nationality

Description of obstacles

Article 5 and Article 6 of Annex 1 of MoT Order No. 410/1999104 stipulate the requirement of having Romanian legal personality in order to obtain authorisation for testing and certifying railway products.

A similar nationality condition can be found in the mandatory requirements that must be met in order to operate as a railway transport operator. According to Article 1 para. (9) of Government Emergency Ordinance No. 12/1998, undertakings are required to be registered as a Romanian legal person in order to obtain a transport license issued by the MoT.

Harm to competition

Those provisions may discriminate against foreign companies, acting as a barrier to entry to the market and as they are contrary to Directive No. 95/18/EC and Directive No. 2001/13/EC establishing a common license for the European rail freight network.

Justification

We have found no justification for requesting undertakings to have Romanian legal personality, either for testing and certifying rail products or for engaging in rail transport activities. However, CFR SA claims that there is no discrimination.

Paragraph 2.2.2 of the CFR SA Network Statement provides that there should be no discrimination against foreign operators. Still, both MoT Order No. 410/1999 and the Government Emergency Ordinance no 12/1998 have primacy over the Network Statement under Romanian law.

Recommendation

We recommend amending the provision to enable operators registered in the European Union to legitimately operate in Romania without being subject to the requirement to register in Romania.

Other problems

Legislation transparency

Description of obstacles

In order to verify transport safety, railway products are tested by authorised laboratories. These laboratories are authorised by AFER, the Romanian Railway Authority. The conditions for the authorisation are mentioned in the Annexes to Order No. 410/1999,105 issued by the MoT. However, the mentioned Annexes are not published and they can be obtained only by request from AFER.

Similarly, Article 4 para. (2) of the Regulation on Railway Infrastructure Capacity Allocation, approved by Government Decision No. 1696/2006, refers to the issuing of a MoT Order establishing the conditions for granting CFR SA special rights to allocate public railway infrastructure. As no such Order has been published, it is still unclear whether it was ever issued.

Harm to competition

The lack of transparency may lead to unclear conditions for operators and increase administrative costs.

Justification

We found no justification for the non-publication of the Annexes to Order No. 410/1999, or for not publishing the Order mentioning which special rights are granted to CFR SA.

Recommendation

We recommend that the regulatory framework be more transparent and approachable. The Annexes to Order No. 410/1999 should be published in order to make all the authorisation requirements known to interested operators. To this end, the Annexes should be published both in the Official Gazette and on AFER’s website.

The Order of the Ministry of Transport establishing the conditions for granting CFR SA special rights to allocate public railway infrastructure, if issued, should also be published in the Official Gazette.

Licence renewal

Description of obstacle

In order to ensure the safety of rail transport, railway products are only tested by authorised independent laboratories. Although these laboratories are authorised by AFER for a 10-year period, the authorisation is subject to a mandatory renewal every two years at the end of which these independent testing laboratories need to show they still fulfill all the authorisation requirements, as requested by Article 4 para. (2) of Annex No. 1 of Order No. 410/1999.

Harm to competition

The rather short period of two years may act as an administrative burden which reduces the incentive for independent testing laboratories to invest resources into entering or staying in the business, since there is a risk that their authorisation will not be renewed at the end of the two-year period. Other EU Member States such as Italy have already adopted a five-year renewal term.

Justification

We found no justification for the two-year period.

Recommendation

We recommend extending the renewal period to five years which would be in line with Article 10 of Commission implementing Regulation (EU) No. 402/2013.

3.4. Restrictions to competitiveness in maritime transport

Ports for maritime and inland waterway transport serve as an infrastructure for a wide range of customers, including freight shippers, ferry operators and private boats. One of the main functions of ports is facilitating domestic and international trade of goods, often on a large scale. Several services are necessary for the functioning of a port, such as: provision of transport infrastructure, technical-nautical services (pilotage, towage and mooring), operational infrastructure and equipment, cargo handling and ancillary (or general) services (Cullinane, 2010).

Ports all over the world are organised in various ways. As stated in the guidelines issued by the European Commission, COM (2007) 616, the structure of port management varies considerably across the European Community. In most cases, ports are managed by public entities, which can be designated as port “authorities”, while in some countries they are entirely private businesses, which own the port land. Moreover, in some countries shipping activities taking place in ports are being provided by the port administration under monopoly conditions, while in others they are subject to competition. In Romania, maritime and inland ports are administered by national companies owned by the Ministry of Transport, appointed as port authorities.

Box 3.1. Port organisational structure – Port of Consţanta, Romania

The Port of Consţanta, the main Romanian sea port and the largest one on the Black Sea in terms of area, plays a significant role as the transit hub for the landlocked countries in Central and South Eastern Europe.

  • The ports Midia and Mangalia are located close to Consţanta Port. They are part of the Romanian maritime port system co-ordinated by Compania Naţională Administraţia Porturilor Maritime S.A.

  • The port authority is responsible for the management and development of the port infrastructure for the Romanian maritime ports Consţanta, Midia and Mangalia. It also provides safety services (pilotage, towing) through specialised and authorised private operators.

  • In addition, several private operators handle cargo and invest in machinery and superstructures.

  • Significant freight volume is handled in the Port of Consţanta, while passenger traffic is occasional.

  • The Port of Consţanta, as well as the four river maritime ports in Romania – Brăila, Galaţi, Sulina and Tulcea – are part of the Trans-European Transport Network (TENT).

Description of the European legal framework

The current European framework encompasses several initiatives regarding the establishment of a port services policy. In recent times, the Commission proposed a directive on Market Access to Port Services, issued several guidelines on port services and, recently, in 2013, proposed a regulation which, in an adapted fashion, is currently being debated in the European Parliament.

Even if the Commission proposal might not be eventually adopted by the European Parliament, we consider it a good initiative to establish a framework for the organisation of port services and for financial transparency of ports whose principles the Romanian government might take into account when reforming its national law.

Also, other European legislation relevant to this report provides rules regarding ship inspection and survey organisations, as well as compliance of Member States with flag state requirements.

The European Commission Regulation Proposal on market access to port services and financial transparency of ports 

Compared with other transport sectors, there is no European legislation on port services, either with regard to access to port services or to infrastructure charging. The European Commission has considered several proposals regarding a harmonised ports policy beginning with a Green Paper published on this subject in 1997. In 2001, the Commission proposed a Directive on Market Access to Port Services, the proposal being rejected by the European Parliament in 2003. Furthermore, in 2004, the Commission came forward with a second proposal on the Directive on Market Access to Port Services which was also eventually turned down by Parliament.

In 2007, following a wide consultation of stakeholders, in order to better understand the port sector, the Commission adopted guidelines which provide a framework and a number of related actions for implementation. The Communication on a European Ports Policy (2007) outlined the main issues identified at that time: i) the threats of port performance and hinterland connections; ii) expanding capacity while respecting the environment; iii) the need to modernise ports; iv) the lack of clarity and transparency of public financing and market access restrictions and v) issues on work in ports.

As the soft measures laid down by the Commission in 2007 in its guidelines on fair market access and transparency had almost no impact, in 2013, along with its communication on EU ports, the Commission proposed simultaneously to the European Parliament and Council a regulation designed to establish a framework on market access to port services and financial transparency of ports (European Commission, 2013). With it the Commission attempts to correct significant disparities in the performance of ports in the Trans-European Transport Network (TEN-T). The Commission proposes new rules in order to guarantee the freedom to provide services in these ports through the introduction of more transparent procedures for hiring service providers for eight port services106 in the sea ports within the TEN-T. The Commission also proposes to give port authorities more autonomy on infrastructure charging, provided this is done transparently. Adoption of the proposed regulation was scheduled for 2014, but has been delayed. This is an ongoing legislative process, with the Commission proposal still being debated in the European Parliament.107

(ii) European rules governing ship inspection and survey organisations, as well as compliance of Member States with flag state requirements

European legislation also provides rules and standards for ship inspection and survey organisations. Inspections and surveys refer to control activities that are mandatory for ships under the existing maritime international conventions.108 Directive 2009/15/EC establishes measures to be followed by the Member States in their relationship with organisations entrusted with the inspection, survey and certification of ships for compliance with the international conventions on safety at sea and prevention of marine pollution.

Moreover, under European Regulation No. 391/2009, it is mandatory for survey organisations to fulfill minimum criteria to obtain or to continue to enjoy community recognition. According to Article 3 of the abovementioned regulation, recognition should be granted to organisations that fulfill the criteria established in Annex 1 of the regulation. Recognised ship inspection and survey organisations shall provide their services throughout the European Union.

Another piece of relevant European legislation in the field of maritime transport policy is Directive 2009/21/EC which aims to ensure that Member States comply with their obligations as flag states, to enhance safety and to prevent pollution from ships flying the flag of a Member State.

Finally, Directive 2006/87/EC establishes technical requirements for inland waterway vessels referring to shipbuilding, safety clearance, freeboard and draught marks, manoeuvrability, steering system, engine design and electrical equipment, etc.

Investigation of the Romanian Competition Council into port services performed in the ports administered by Compania Naţională Administraţia Porturilor Maritime S.A.

In 2012, the Romanian Competition Council (RCC) launched an investigation into the port services market with regard to the pilotage and towage services performed in the ports administered by Compania Naţională Administraţia Porturilor Maritime S.A. At the time of writing (March 2016), the investigation is ongoing. According to the RCC press release,109 the investigation covers several practices that may constitute a breach of competition law. First, the investigation analyses a possible abuse of its dominant position by the Consţanta port authority through the imposition of access criteria on pilotage and towage services markets and by applying dissimilar treatment to trading parties with regard to the leasing conditions of port land infrastructure, thereby placing them at a competitive disadvantage. Second, the investigation also refers to two possible anti-competitive agreements: the first one concerns a possible collusion between towage operators that perform the services through the creation of a joint venture, the only one performing these services, while the second one concerns a market-sharing agreement on the pilotage services market.

Pilotage services

Description of the pilotage services sector

Pilotage is a service provided by a pilot with local knowledge and skills which enable him to conduct navigation and manoeuvring of the vessel into and approaching the harbour (OECD, 2011). Pilotage of seagoing ships in Romania is a safety service regulated by Government Ordinance No. 22/1999 and performed under state control for all ships, irrespective of the flag they fly. According to Article 48 of the same law, it must be offered without discrimination in terms of duration, quality and tariffs. The conditions under which economic operators can obtain authorisation to provide ship pilotage services are covered by the Order of the Ministry of Transport No. 547/2014.

According to Article 50 of Government Ordinance No. 22/1999, such services may be based on three different legal arrangements: they may either be provided by the port authority through its own pilots or through specialised operators based on a non-discriminatory agreement between the port authority and the operators (in this case, the port authority outsources the services to specialised operators) or by concession agreements. Currently, the pilotage services in the ports administered by Compania Naţională Administraţia Porturilor Maritime S.A. are provided to freight shippers by the port authority, which has concluded service agreements with four private operators. Nevertheless, pilotage services are managed and billed to freight shippers directly by the port authority. The port authority also sets the timetable for the provision of pilotage services in the three maritime ports.

Authorisation for private pilotage operators

Description of the obstacle

Article 2 of the Order of the Ministry of Transport No. 547/2014 states that the Ministry of Transport, through the Romanian Naval Authority, authorises economic operators to perform pilotage services. Further, it sets out that the port administration and/or authorities managing maritime canals may perform pilotage services without an authorisation, unlike private operators, for which an authorisation by the Ministry of Transport is mandatory.

Harm to competition

The provision may offer state-owned port authorities an unfair competitive advantage as they do not need an authorisation. One can conclude that it is not necessary for port authorities to fulfill the conditions stipulated in Annex 1 of the abovementioned order regarding the authorisation requirements for pilotage operators and port authorities are not verified to that effect. Moreover, the possibility of coexistence of two forms of pilotage service provision to vessels by the port administration and by private parties may lead to a wide range of potential abuses of market power, such as refusal to supply and/or excessive pricing. Thus, port authorities (state operators) and private operators should not be subject to different legal and administrative regimes when performing the same services in competition.

Policy makers’ objective

The justification for these provisions may be that port authorities are required by law to ensure pilotage services, having the alternative to provide pilotage services either directly themselves or through third parties.

Recommendation

Pilotage services should be provided either directly by the port authority or through a third party provider, but not by both. When being outsourced, the services agreement to the private operator should be granted through a tendering procedure subject to fair and non-discriminatory terms.

Our recommendation refers to public tendering and its aim is the introduction of competition for the right to provide pilotage services and therefore to enter the market, so the competition is for the market itself.

Number of pilots required

Description of the obstacle

In order to be authorised by the Ministry of Transport through the ANR, pilotage service providers must have a minimum number of pilots employed per port. Article 1 of the Annex regarding criteria for pilotage operator authorisation set by the Order of the Ministry of Transport No. 547/2014 requires companies to have a minimum of 8 pilots in Consţanta, 4 pilots in Midia and 2 pilots in Mangalia. However, the port authority Compania Naţională Administraţia Porturilor Maritime S.A. has unilaterally established additional, more restrictive, terms and conditions for the provision of pilotage services. For example, for the ports of Consţanta, Mangalia and Midia, it requires that companies have at least 21 pilots servicing those three ports, without the companies being able to serve only one port. These additional criteria are established through the framework services agreement, approved by the board of directors of Compania Naţională Administraţia Porturilor Maritime S.A. Consequently, an operator who might obtain an authorisation for pilotage services under the conditions required by the abovementioned Order of the Ministry of Transport, will in practice not be able to conclude a service agreement with the port authority if it does not additionally fulfill its stricter criteria.

Harm to competition

The minimum number of 21 pilots set by the port authority, which is higher than the minimum number required by the Order of the Ministry of Transport, constitutes an entry barrier for smaller operators who do not have such a large number of pilots at their disposal.

The number of pilots has also been subject to an investigation by the RCC with regard to possible abuse of their dominant position by Compania Naţională Administraţia Porturilor Maritime S.A. At the time of writing (March 2016), the investigation is ongoing.

A comparison with other ports indicates that the tariffs for pilotage services charged in Romanian maritime ports are 2 or 3 times higher than those charged in other EU ports handling a comparable total volume of goods (gross weight), such as Barcelona, Valencia, Genoa and Koper.

Figure 3.25. Pilotage tariffs in different ports throughout Europe
picture

Note: For Burgas and Varna, an average tariff has been determined based on the tariffs of the two port areas of Burgas/the five port areas of Varna. For Mersin an average between the tariffs for container vessels and the tariffs for other cargo vessels is also used. For Valencia and Barcelona, the tariffs used are the maximum rates set by the port authorities.

Source: Relevant port websites: http://bit.ly/1QJpHw6, http://bit.ly/1TLkDxw, http://bit.ly/1V9lEik, http://bit.ly/2522pvA, http://bit.ly/21tjHwV, http://bit.ly/1YVR8bM, http://bit.ly/21tkMoC, http://bit.ly/1TLmxOJ accessed on 7 January 2016,

 http://dx.doi.org/10.1787/888933361670

Policy makers’ objective

The objective of a minimum number of pilots is that pilotage services should be provided non-stop, 24 hours a day, 7 days a week.

Recommendation and benefits

Further to the above, we recommend the following:

The current provision requiring a certain number of pilots should be abolished. The law should not impose a minimum number of pilots per port, but instead require a minimum service level, such as a maximum ship waiting time for pilots to be on board. Each pilotage company shall make its own assessment and shall make its own decision regarding the number of pilots necessary to reach the required service level.

Moreover, pilotage services shall not be granted directly by the port authority, but instead they should be tendered in an open procedure. The introduction of a more transparent procedure like this would ensure more reliable, better quality services for freight shippers and lower costs for the port authority, which is the contracting authority for pilotage services. For the port authority savings to be passed on to freight shippers, the port authority should implement a cost-based approach in the pricing process of the pilotage services provided by it. The required service level must also be transparent, non-discriminatory, objective and relevant to the category and nature of the port services concerned.

We estimate that the introduction of tendering procedures in granting the right of operating pilotage services by the port authority to economic operators would generate savings for the port authority, which is the contracting authority for pilotage services, and further savings for freight shippers, if the port authority were to pass on the savings to its customers, of approx. EUR 3.4 million (mln) a year, as shown in Annex 3.A4. Moreover, the establishment of an independent regulatory body to monitor the activity of the port authority when setting pilotage tariffs may contribute to a further reduction in these tariffs.

Inland ports

Description of the obstacle

According to Article 51 of Government Ordinance No. 22/1999, pilotage of seagoing ships in the ports of Sulina, Tulcea, Galaţi and Brăila is provided by the Autonomous Administration “Administraţia Fluvială a Dunării de Jos” Galaţi by its own pilots, by pilots authorised by the Autonomous Administration “Administraţia Fluvială a Dunării de Jos” Galaţi under a contract for services concluded or by a concession agreement.

The same provision provides that pilotage of ships on the Danube route between Brăila and Sulina are performed in accordance with Article 31 and Article 33 regarding pilotage services of the 1948 Belgrade Convention, ratified by Romania under Decree 298/1948. The abovementioned articles of the Belgrade Convention state that pilotage of vessels is provided by pilots who “depend on port administrations”, and that they are “recruited from among the citizens of the Danube country members of the Administrations concerned”.

Harm to competition

The possibility of the coexistence of two forms of pilotage services provision to vessels by the port administration and by private parties may lead to a wide range of potential abuses of market power, such as a refusal to supply and/or excessive pricing. “Administraţia Fluvială a Dunării de Jos” Galaţi may abuse its exclusive rights granted by the law in order to operate pilotage and harbour manoeuvres. It may also reduce the number of authorised operators and/or their incentive to compete against its own services.

The provisions of the Belgrade Convention should be applied by the signatory states in accordance with the realities of the present times, in the light of the Treaty on the Functioning of the European Union. However, the condition regarding the pilot’s nationality should not be applicable as it is a discriminatory condition in the recruitment process.

Policy makers’ objective

The justification for Article 51 of Government Ordinance No. 22/1999 may be that port authorities are required by law to ensure pilotage services, having the alternative to provide pilotage services either directly themselves or by third parties.

Also, the provision is in line with the Convention regarding the regime of navigation on the Danube, signed in Belgrade on 18 August 1948, ratified by Romania under Decree No. 298/1948.

Recommendation

We recommend that the provision is amended so that pilotage services are either offered by the port authority or outsourced to private companies. When outsourced, the right to provide pilotage services shall be granted through a tendering process under fair and non-discriminatory terms. The port authority should not act both as regulator and service provider in the same port.

Tariffs for pilotage services

Description of the obstacle

Currently, vessels flying the Romanian flag benefit from large discounts on pilotage tariffs compared to foreign-registered vessels. Regarding the pilotage service provided in the ports of Consţanta, Midia and Mangalia by the port authority, the price list available on the port authority website110 indicates that pilotage tariffs will be reduced by 50% for ships registered in Romanian maritime ports.

Harm to competition

Discounts granted to vessels flying the Romanian flag violate the principle of non-discrimination based on the grounds of nationality established by EU law.

Policy makers’ objective

There is no objective justification for the port authority to apply tariffs on a discriminatory basis.

Recommendation

The pilotage tariffs should be set by port authorities based on a transparent cost-based approach. Further, the autonomy of port authorities in setting these tariffs should be balanced by allowing an independent regulatory body the right to supervise them, see below.

To the same effect, to discourage excessive or discriminatory tariffs and to avoid the abuse of the market power of ports, in some countries regulators intervene and set prices. For example, in the Netherlands, pilots are organised in a corporation called Nederlandse Loodsencorporatie (NLc) and do not compete with each other. The Netherlands Authority for Consumers and Markets sets the annual pilotage tariffs based on a tariff proposal submitted by the NLc following an assessment in order to establish whether or not the tariffs are unreasonably high.111

Towage services

Description of the towage services sector

Towage is a service provided by tug boats which move larger ships that either should not or cannot power themselves (OECD, 2011). According to Article 47 of Government Ordinance No. 22/1999, towage of seagoing ships in ports is a safety service and is performed under state control for all ships, irrespective of the flag they fly, without discrimination in terms of duration, quality or tariffs. Towage ensures the safe conduct of shipping and port manoeuvres. The conditions under which economic operators can obtain authorisation to provide ship towage services are covered by the Order of the Ministry of Transport No. 548/2014.

Currently, towage services in Romania are provided by the port authority through a services agreement with one single company, which is a joint venture formed by the previous three largest towage operators in the market.

A study prepared for the Directorate-General Transport and Mobility of the European Commission112 indicated pilotage and towage as the most problematic of port services, having the lowest scores for satisfaction as measured by survey responses. Moreover, price was most frequently mentioned as a challenge for these port services.

In the towage sector, there have been cases of anti-competitive behaviour. For example, the Competition Protection Office of the Republic of Slovenia sanctioned the public limited company and port authority Luka Koper for abusing its dominant position in the market for the organisation of port services. Luka Koper had refused to grant access to the Port of Koper to other private operators to perform towage and mooring activities, resulting in the exclusion of all competition in the markets for towage and mooring services in the Port of Koper (OECD, 2011). In 2007, the Portuguese Competition Authority uncovered a cartel between towage services operators that fixed prices, divided customers and established a monitoring and compensation mechanism in the Port of Setúbal. The price-fixing resulted in significantly higher price levels than those before the cartel (OECD, 2011).

Authorisation for private towage operators

Description of the obstacle

Article 2 of the Order of the Ministry of Transport No. 548/2014 states that the Ministry of Transport, through the ANR, authorises economic operators to perform towage services. Furthermore, the same provision stipulates that the port administration may operate towage services for maritime vessels without authorisation, unlike private operators for whom an authorisation by the Ministry of Transport is mandatory.

Harm to competition

This provision may offer state-owned port authorities an unfair competitive advantage as they do not need an authorisation. One can conclude that it is not necessary for port authorities to fulfill the conditions stipulated in Annex 1 of the abovementioned order regarding the authorisation requirements for towage operators, and port authorities are not verified to that effect. Moreover, the possibility of the coexistence of two forms of towage service provision to vessels by the port administration and by private parties may lead to a wide range of potential abuses of market power, such as refusal to supply and/or excessive pricing.

Policy makers’ objective

The justification for these provisions may be that port authorities are required by law to ensure towage services, with the possibility of providing towage services either directly themselves or by concluding services agreements with private operators.

Recommendation

Port authorities and private operators should not be subject to different legal and administrative regimes when performing the same competing service. We do not recommend that towage services should be provided in competition, but rather that towage services should be provided by the port authority, as is currently the case, for safety and security reasons. The provision should be amended so as to allow towage services to be either provided directly by the port authority or to be outsourced. When outsourced, the services agreement with private operators should be granted through a tendering process subject to fair and non-discriminatory terms.

Number of tugboats required

Description of the obstacle

Article 1 and Article 2 of the Annex to the Order of the Ministry of Transport No. 548/2014 set out criteria to be fulfilled in order to be authorised as a towage operator by the Ministry of Transport, through the ANR. One of the criteria is that an operator needs to have a minimum number of tugboats for each category of vessels requesting authorisation. The vessel categories are defined depending on the length of the vessel and its maximum gross tonnage. An operator may require authorisation for one or more vessel categories. For example, the provisions require at least one tugboat with a hook traction strength of a minimum of 5 tonnes for towage of vessels up to 120 metres in length and weighing 1 000 tonnes; 4 tugboats for towage vessels over 250 metres, etc. Although the abovementioned order is in force, the port authority Compania Naţională Administraţia Porturilor Maritime S.A. unilaterally established additional terms and conditions for the provision of towage services in its ports. For the ports of Constanţa, Mangalia and Midia, the port authority requires companies to have at least 17 towage vessels servicing these three ports, without the companies being able to serve only one port. These additional criteria are established through the framework services agreement, approved by the board of directors of Compania Naţională Administraţia Porturilor Maritime S.A. Consequently, an operator who might obtain an authorisation for towage services under the conditions required by the abovementioned Order of the Ministry of Transport, will in practice not be able to conclude a service agreement with the port authority if it does not additionally fulfill its stricter criteria.

Harm to competition

The minimum number of tugboats set by the port authority, which is higher than the minimum number required by the Order of the Ministry of Transport, constitutes an entry barrier to smaller operators who do not have such a large number of tugboats at their disposal. Moreover, large investments are required in order to acquire tugboats.

The minimum number of tugboats has also been subject to an investigation by the Romanian Competition Council with regard to a possible abuse of dominant position by Compania Naţională Administraţia Porturilor Maritime S.A. At the time of writing (March 2016), the investigation is ongoing.

Figure 3.26 shows that the towage tariffs charged in the Port of Consţanta are similar to those charged in other ports throughout Europe. Actually, in some cases, tariffs charged in the Port of Consţanta are below the average tariffs charged by other ports.

Figure 3.26. Towage tariffs in different ports throughout Europe
picture

Note: For Burgas and Varna, an average tariff has been determined based on the tariffs of the three port areas of each port. For Valencia and Barcelona, the tariffs used are the maximum rates set by the port authorities.

Source: http://bit.ly/1U4laew, http://bit.ly/1QUCX3H, http://bit.ly/1S1UYNQ, http://bit.ly/1QV3QG7, http://bit.ly/1MkqOkv, http://bit.ly/1Pa4Gcs, http://bit.ly/1QUETcD, http://bit.ly/1WnzIDl (accessed on 7 January 2016).

 http://dx.doi.org/10.1787/888933361689

Policy makers’ objective

The objective of a minimum number of tugboats is that towage services should be provided non-stop, 24 hours a day, 7 days a week. Also, this specific number of tugboats is requested in order to ensure safe navigation.

Recommendation and benefits

The current provision regarding the minimum number of tugboats should be abolished. Instead, a minimum service level should be required by law, such as the maximum ship waiting time for a tugboat. Consequently, each towing operator shall make its own assessment and shall make its own decision regarding the number of tugboats necessary to reach the required service level.

Towage services shall not be granted directly by the port authority, but instead they should be open to public tender. Introducing a public tendering procedure for towage services is estimated, as shown in Annex No. 3.A5, to generate savings of approx. EUR 3.1 mln a year for the port authority, which is the contracting authority for towage services. This would also be further savings for freight shippers, if the port authority were to pass on the savings to its customers. For the benefits to be passed on to freight shippers, the port authority should implement a cost-based approach in the pricing process of the towage services it provides and the tariffs should also be validated by an independent regulatory body.

Tariffs charged by port authorities

The tariffs covered in this section refer to tariffs on ships that visit Romanian ports for using the port infrastructure (so-called port tariffs).

Generally, ports are considered as having market power or even as being essential facilities. There is a risk that port authorities may abuse their power against their customers, for example by refusing access to infrastructure, to supply a service or to limit the number of competitors in a certain market in which it is also active. Port authorities might also have the power to set their own dues and tariffs for the use of port infrastructure or for other services provided by them above a competitive level. However, the main customers of freight ports tend to be major shipping lines which are often organised into shipping conferences and consortia. This increases their scale and potentially gives them considerable countervailing buying power.113

Description of the obstacle

Article 37 of Government Ordinance No. 22/1999 gives port authorities the power to set tariffs for the use of port infrastructure and for other services provided by them. The same article states that tariffs are set by the administration in a non-discriminatory way and that tariff setting is based on the substantiation rules drawn up by the administration.

Currently the ANR with competences regarding port services is part of the Ministry of Transport. The port authorities are also owned by the same Ministry of Transport.

Harm to competition

The lack of transparency in the calculation of the tariffs charged by port authorities may lead to abuses as there is a risk that the tariffs they charge may be disproportionate to the economic value of the services provided.

Supervision of port authorities might not be efficient as the Romanian Naval Authority is insufficiently independent from the port authority, both belonging to the Ministry of Transport. The lack of independence of the regulatory body and the existing conflict of interest may lead to distortions of competition in this sector.

Policy makers’ objective

There is no objective justification for the lack of transparency in the calculation of the tariffs charged by port authorities.

Recommendation

We recommend that port authorities set their charges based on a transparent cost-based approach. Furthermore, the autonomy of port authorities in setting charges should be balanced by allowing an independent regulatory body to supervise these charges. For that, we recommend installing an independent supervisory body which has to approve ex ante all tariffs set by the port authorities.

The establishment of an independent regulatory body is in line with The Proposal for a Regulation of the European Parliament and of the Council Establishing a Framework on Market Access to Port Services and Financial Transparency of Ports issued by the European Commission in 2013.114 Article 17 of the adapted version of the proposed regulation states that Member States shall ensure that effective mechanism are in place to handle complaints for all the maritime ports covered by this regulation and, to that and, Member States shall designate one or more bodies which shall be legally distinct from, and functionally independent of, any managing body of the port or providers of port services. Regarding the pricing of port services and port infrastructure tariffs, Articles 13 and 14 of the proposed regulation stipulate that the port service provider shall make available to the independent supervisory body, in the event of a formal complaint and upon request, detailed information on the elements serving as a basis to determine the tariff structure and level, as well as the methodology used for setting those tariffs.

Moreover, the proposed regulation expressly stipulates that, in the event that a Member State retains ownership or control of ports or port managing bodies, it shall ensure an effective structural separation between the functions relating to the supervision and monitoring of the regulation and the activities associated with that ownership or control of the port. The independent supervisory body shall exercise its powers impartially and transparently and with due respect to the right to conduct business freely.

The right to issue compliance certificates with technical rules for shipbuilding

Description of the obstacle

Article 25 of Government Ordinance No. 42/1997 on civil navigation stipulates that compliance with mandatory technical rules for shipbuilding is established by certificates issued by the ANR or by organisations that have concluded agreements with the Ministry of Transport to this effect. Article 26 of the same ordinance stipulates that the Ministry of Transport annually approves and publishes the list of organisations appointed to inspect, survey and issue compliance certificates for ships flying the Romanian flag. However, even if Government Ordinance No. 42/1997 states that the ministry establishes the criteria for choosing the organisations with whom it concludes agreements, the ordinance does not set out any criteria to be fulfilled by those organisations.

European Regulation No. 391/2009 establishes the criteria to be fulfilled by recognised organisations to inspect, survey and issue certification for ships in terms of compliance with the international conventions on maritime safety and the prevention of marine pollution. Only organisations that have gained European Commission recognition under the regulation are allowed to carry out ship inspections and survey activities, as well as issue certificates of compliance within the European Union. The European Commission draws up a list of such recognised organisations and publishes it periodically in the Official Journal of the European Union.

Harm to competition

In the absence of clear criteria for the appointment of such institutions, the ANR, which is owned by the Ministry of Transport and acts as both regulator and operator of the market, may distort competition by regulating access to the market, prohibiting the entry of new competitors and charging supra-competitive fees for its services.

The fact that the Ministry of Transport does not publish in a transparent way the criteria applied to select organisations with which it enters into agreements for the delegation of the right to issue certificates of compliance of ships, cannot have any objective justification. The lack of transparency of these criteria reduces competition in the market for certificates of compliance of vessels flying the Romanian flag.

Policy makers’ objective

The provision is in line with European Regulation No. 391/2009. However, Romanian legislation does not specify further criteria that the Ministry of Transport considers when concluding an agreement with a recognised organisation for inspection, survey and certification of ships flying the Romanian flag.

Recommendation

The criteria for the appointment of organisations in charge of issuing certificates of compliance with shipbuilding rules should be incorporated in the law and should be fair and non-discriminatory. We recommend that the law is amended by having set the conditions to be met by a recognised organisation to conclude a contract with the Ministry of Transport in order to issue certificates of compliance of ships flying the Romanian flag and to operate in Romania. Those criteria should not be more stringent than those set out in European Regulation No. 391/2009 as they may represent a market entry barrier, thus limiting the number of recognised organisations active in Romania.

Unguided discretion

Use of Romanian flag

Description of the obstacle

Article 3 para.1 of the Order of the Ministry of Transport and Infrastructure No. 250/2011 on the compliance by Romania with its flag state obligations stipulates that before allowing a ship which has been granted the right to fly the Romanian flag to operate, the ANR shall take the measures it considers appropriate to ensure that the ship in question complies with the applicable international rules and regulations, especially by verifying the safety records of the ship by all reasonable means and, if necessary, by consulting with the “losing” flag state (the state under which the ship is no longer registered) in order to establish whether any outstanding deficiencies or safety issues identified by the latter remain unresolved. Nevertheless, the provision does not state expressly the measures to be taken and the means of control in order to ensure the ship’s compliance with international ship safety rules, as well as the instances in which the ANR shall consult with the losing flag state.

Harm to competition

The ANR enjoys significant discretion when carrying out this task. This may lead to abuse of power by placing some market operators at a competitive disadvantage in comparison with others. For example, the authority may apply different measures to ship owners in equivalent situations, thereby leading to significant differences of administrative and operative costs for shipowners.

Policy makers’ objective

The objective of the provision is to harmonise the national legislation with European legislation. This provision aims to transpose Article 4 of European Directive No. 2009/21/EC on compliance with flag state requirements. However, discretion granted to Member States by European legislation needs to be specified by national law, which has not been done in Romania.

Recommendation

We recommend to amend the provision in order to indicate the activities that the ANR is entitled to carry out in order to verify compliance with safety rules by vessels.

Inspection of maritime vessels flying the Romanian flag

Description of the obstacle

Article 6 para. 1 of the Order of the Ministry of Transport and Infrastructure No. 249/2011 on the inspection, technical supervision and certification of maritime vessels flying the Romanian flag and carrying out international voyages, establishes that the ANR may suspend or terminate the agreement concluded with a recognised authorised organisation in charge of inspecting vessels if it considers that the recognised organisation can no longer be authorised to carry out the tasks even though this organisation meets the minimum criteria established for such activity under Annex 1 of European Regulation No. 391/2009.

Organisations recognised under European Regulation No. 391/2009 are authorised to perform inspection, technical supervision and certification for vessels flying the Romanian flag through agreements concluded by the ANR.

Harm to competition

The Romanian legal provision establishes the sanction of suspending or terminating the agreement of an organisation authorised to provide inspection services of Romanian-flagged vessels, without specifying the conditions under which this can be done. This may lead to a lack of transparency, predictability and possible abuses by the ANR.

Policy makers’ objective

The objective is to harmonise the national legislation with European legislation. The provision aims to transpose Article 8 of Directive No. 2009/15/EC, which gives the Member States the possibility to suspend or withdraw authorisation, where a Member State considers that a recognised organisation can no longer be authorised to carry out the tasks on its behalf.

Recommendation

The provision should be amended in order to specify the instances in which the ANR is entitled to suspend or terminate the mandate of an organisation authorised to provide inspection services of Romanian-flagged vessels.

Bunkering oil

Description of the obstacle

According to Article 49 of Methodological Norms of 11 September 2007 for the enforcement of the provisions of Appendix VI to the International Convention for the Prevention of Pollution from Ships (MARPOL) 1973, enforced by Government Decision No. 1105/2007, the ANR has the power to suspend the licence of a supplier of liquid fuels for seagoing ships if it is proven that they have supplied improper liquid fuel which does not fulfill the qualitative requirements regarding air pollution as well as to withdraw the authorisation in case of more than one infringement. Article 50 further provides that if an authority included in the MARPOL list115 establishes that an inadequate fuel has been supplied from Romania, the ANR may, before suspending or withdrawing its authorisation, warn the supplier to adopt remedies in order to bring the fuel within the designated parameters. The ANR may require the supplier to prove that the remedial measure has been taken and may also suspend or withdraw the authorisation of the liquid fuel supplier if it does not apply remedial measures, continues to supply inadequate liquid fuel or cannot prove that it has applied remedial measures.

Harm to competition

This provision may lead to more advantageous treatment for some bunkering companies. It grants the ANR significant discretion as to whether a company may only be warned or whether its licence should be suspended or withdrawn for supplying inadequate fuel.

Policy makers’ objective

The actions of the ANR (warning, suspending or withdrawing the licence) are issued depending on the gravity and the repeatability of the situations in which an improper liquid fuel has been provided. The authority, however, aims to remedy the quality of the improper liquid fuel provided by the bunkering companies and to suspend or withdraw the licence only in cases where remedial measures are not carried out.

Recommendation

We recommend that the relevant provision (Article 50 para. 2) be amended in order to clearly establish the instances in which a warning is the proportional and adequate measure to be taken, as well as the instances that require the suspension or withdrawal of the company’s authorisation.

Other problems

Crewing agencies

Description of the obstacle

Crewing agencies carry out the recruitment and placement of crew on vessels. Economic operators wishing to act as crewing agencies must receive an authorisation from the ANR. According to Article 2, para. 3 subparagraph f) from the Annex of Government Decision No. 83/2003, as a condition for authorisation, they must prove that they have already concluded a services agreement or a pre-contractual agreement with a shipowner.

Harm to competition

The requirement to have concluded an agreement or a pre‐contractual agreement with a shipowner may discourage entry into the market by those new economic operators who have the required professional competence to act as crewing agencies but who do not have an agreement or a pre-contractual agreement with a ship-owner. This is a kind of chicken and egg dilemma because it is also difficult to get a contract with a shipowner without being a recognised agency.

Policy makers’ objective

There is no objective justification for a crewing agency to have an agreement concluded with a shipowner prior to authorisation. According to the Ministry of Transport, the condition aims to be a protection measure for the crew from bankruptcy or liability. However, this justification is rather related to another condition for crewing agencies’ authorisation stipulated by the same provision: the establishment of a permanent financial guarantee in the amount of a minimum of USD 100 000.

Recommendation

The contract requirement should be abolished. There is no match between the requirement and the policy objective since shipowners can always cause liability to crew even if the latter has been employed through an authorised crewing agent.

Derogations from technical requirements for inland waterway vessels

Description of the obstacle

Article 7 of the Order of the Ministry of Transport No. 1447/2008 establishing technical requirements for inland waterway vessels gives the ANR the power to grant derogations from the application of all or part of the provisions of the abovementioned order concerning technical requirements for certain categories of inland waterway vessels, depending on vessel capacity. Technical requirements refer to shipbuilding, safety clearance, freeboard and draught marks, manoeuvrability, steering system, engine design and electrical equipment, etc.

Harm to competition

The derogation may grant preferential treatment to some operators in comparison with others.

Policy makers’ objective

The objective is to harmonise national legislation with European legislation. This provision is in line with Article 7 of Directive No. 2006/87/EC. The directive enables the Member State to grant derogations to certain categories of vessel, but the Romanian law transposing the directive does not specify any criteria to be met in order to obtain derogation.

Recommendation

The provision regarding the derogations should be amended in order to expressly state the conditions required to be fulfilled by a market operator in order to be granted derogation from the provisions of this order.

Exclusive right of CFR Marfă

Description of the obstacle

In order to co-ordinate the traffic of maritime and inland waterway vessels, to establish the entry/exit order and the transit of vessels, as well as the allocation of berths in the ports of Galaţi, Brăila and Tulcea, co-ordination commissions for the movement of vessels have been established.

The Order of the Ministry of Transport No. 251/2011 sets out the founding of the co‐ordination commissions for each port and their structure. The measures established by the commissions are mandatory for all economic operators performing services in the ports of Galaţi, Brăila and Tulcea, such as transport operators, loading/unloading operators, pilotage and towage operators, etc.

Article 5 of the Order of the Ministry of Transport and Infrastructure No. 251/ 2011 on establishing the commissions for the co-ordination of maritime and inland waterway vessel movement in the ports of Galaţi, Brăila and Tulcea stipulates that economic operators who provide loading and unloading services in the ports of Brăila, Galaţi and Tulcea must establish their plan for loading and unloading rail wagons on a daily basis with CFR Marfă, the state-owned rail freight operator.

There are currently other rail freight operators operating in the ports of Galaţi, Brăila and Tulcea in addition to CFR Marfă. Unlike CFR Marfă, they are not involved in scheduling the activities of loading and unloading of wagons but have to comply with the timetable established by their competitor, CFR Marfă.

Harm to competition

Other railway operators may be disadvantaged by the fact that the timetable for loading and unloading rail wagons in the ports mentioned is established by CFR Marfă, their competitor.

Policy makers’ objective

This exclusive right to establish the timetable for loading and unloading rail wagons should ensure a more efficient use of port logistics and also guarantee railway transport services safety within the port. Most likely, this provision has been maintained over time since the successor of CFR Marfă, the National Company of Romanian Railways, has historically been the only railway freight operator in the market.

Recommendation

We recommend that the provision should be abolished. The timetable for loading and unloading rail wagons should be established by committees co-ordinating the movement of maritime and inland waterway vessels in the ports of Galaţi, Brăila and Tulcea, so that all rail freight operators transporting goods in these ports benefit from equivalent and non-discriminatory conditions.

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Annex 3.A1. Plates

Recommendation

The provision should be abolished and any information requirements related to the vehicle’s dimensions should be dealt with in documentation such as the vehicle identity card or the periodical technical inspection certificate, which should be carried by the vehicle driver.

Estimates of the benefits arising from abolishing the provision

The provision regarding displaying the plate came into effect on 1 January 2014 and was applied to the total number of freight vehicles with a maximum weight > 3.5 tonnes registered in Romania in 2014.

According to the data provided by the RAR, they performed measuring operations for a number of 153 630 vehicles in 2014. According to the NIS, lorries transporting goods represent 63% of the total freight vehicles with maximum weight > 3.5 tonnes, road tractors represent 8% and trailers and semi-trailers represent 9% of the total freight vehicles with maximum weight > 3.5 tonnes (See Table 3.A1.1).

Table 3.A1.1. Total number of plates by category of vehicle (2014)

2014

Total freight vehicles with maximum weight > 3.5 tonnes, of which:

153 630

Lorries1

 96 725

Road tractors

 12 792

Trailers and semi-trailers

 44 113

1. According to the NIS, lorries transporting goods include both light commercial vehicles (70%) and specialised vehicles (30%).

Source: RAR, NIS, Registered road vehicles (end of the year), by category of road vehicle, by type of ownership, by macro regions, development regions and counties (database), http://bit.ly/21YNinL, Eurostat, Road transport equipment – Stock of vehicles (database), http://bit.ly/1vbibQq.

Thus, in order to comply with the plate requirement, Romanian transport operators were equipped with plates generating a total cost of approximately EUR 6.3 million (See Table 3.A1.2). This figure refers to a one-time operation that took place in 2014.

Table 3.A1.2. Registered road freight vehicles with maximum weight > 3.5 tonnes

Number of freight transport vehicles with maximum weight > 3.5 tonnes

Tariff for measuring operations (LEI)

Tariff for measuring operations (EUR)

Tariff for plate (LEI)

Tariff for plate (EUR)

Total cost (LEI)

Total cost (EUR)

Light commercial vehicles

67 708

 92.20

20.49

43

9.56

 9 154 122

2 034 625

Specialised vehicles

29 017

199.80

44.40

43

9.56

 7 045 328

1 565 757

Road tractors

12 792

199.80

44.40

43

9.56

 3 105.898

  690 256

Trailers and semi-trailers

44 113

169.60

37.69

43

9.56

 9 378.424

2 084 339

Total cost

28 683 771

6 374 978

Source: NIS, Registered road vehicles (end of the year), by category of road vehicle, by type of ownership, by macro regions, development regions and counties (database), http://bit.ly/21YNinL, Eurostat, Road transport equipment – Stock of vehicles (database), http://bit.ly/1vbibQq, RAR’s website, http://bit.ly/1U3fEYT (accessed on 13 April 2016),Musliu şi Asociaţii calculations.

Savings may be achieved by abolishing the plate requirement, given that this requirement also applies to newly registered freight vehicles with a maximum weight > 3.5 tonnes. As this figure does not exist, we referred to Eurostat data available until 2012 showing that the total number of freight vehicles with a maximum weight > 3.5 tonnes corresponds to approximately 30% of the total number of freight transport vehicles in circulation.116 Therefore, we used the 0.3 Eurostat coefficient, applying it to the total number of newly registered freight transport vehicles in 2015.117 According to this coefficient, a total of 26 710 vehicles with a maximum weight > 3.5 tonnes were registered in Romania in 2015. These vehicles were equipped with plates generating a total cost of approximately EUR 1.14 million (mln) a year (see Table 3.A1.3). Assuming that this figure stays the same in the future, EUR 1.14 mln annually corresponds to the savings for Romanian freight transport operators coming from abolishing the plate requirement for newly registered vehicles with a maximum weight > 3.5 tonnes.118

Table 3.A1.3. New vehicles registered for freight transport in 2015

New registrations of freight transport vehicles in 2015

New registrations of freight transport vehicles with maximum weight > 3.5 tonnes in 2015

Tariff for measuring operations (LEI)

Tariff for measuring operations (EUR)

Tariff for plate (LEI)

Tariff for plate (EUR)

Total cost (LEI)

Total cost (EUR)

Light commercial vehicles

34 688

10 406

 92.20

20.49

43

9.56

1 406 937

  312 653

Specialised vehicles

14 866

 4 460

199.80

44.40

43

9.56

1 082 854

  240 634

Road tractors

13 862

 4 159

199.80

44.40

43

9.56

1 009 708

  224 380

Trailers and semi-trailers

25 616

 7 685

169.60

37.69

43

9.56

1 633 788

  363 064

Total cost

5 133 288

1 140 731

Source: NIS, New registrations of vehicles for transport of goods, by macro regions, development regions and counties, http://bit.ly/1YvKLvP, RAR’s website, http://bit.ly/1U3fEYT (accessed on 13 April 2016).

Annex 3.A2. Copy of road transport licence

Recommendation

The provision should be modified. Where the licence is issued for a 10-year period, there is no need to impose an annual renewal. The copy should be issued at the same time as the licence and it should be made available for the same period of time as the duration of the licence to which it refers, i.e. 10 years. Furthermore, there is no reason to require specific copies for the registration number of the vehicle. Moreover, the cost of the copy should not exceed the administrative cost of issuing it.

Estimates of the benefits arising from modifying the provision

Methodology: comparison with data from other similar product markets in Romania.

One copy of the road freight transport licence currently costs RON 260 (approximately EUR 57.8).119 The cost of issuing a copy of the licence should reflect the actual cost to be incurred by the Romanian Road Transport Authority (ARR) for delivering this service, including, for example, the cost of the paper, photocopying and the workforce, while excluding the cost of other inputs such as, for example, document verification given that the ARR is in charge of issuing the original road transport licence.

A possible comparator test can be obtained by reviewing the cost carried by the National Trade Register Office (NTRO) when issuing certified copies, for example, registration of a company’s Statute of Incorporation, in accordance with Government Decision No. 425 of 20 May 2014. These copies are issued at a tariff of RON 4 + RON 0.2/page, resulting in a total cost of RON 4.2 (approximately EUR 1) for a page.

Taking as a benchmark the cost sustained by the NTRO when issuing a certified copy, this results (in our sample case) in an overcharge for freight transport operators of approximately EUR 57/copy of licence.

picture (3)

picture (4)

As shown in Table 3.A2.1 below, the average number of the copies of road freight transport licence issued by ARR over the period 2012-2014 was 124 611.120

Table 3.A2.1. Copies of road freight transport licence (end of year: 2012-14)

2012

2013

2014

Copies of road freight transport licence issued bv ARR

119 898

123 979

129 956

Average number of freight transport vehicles

124 611

Source: Data provided by ARR.

FTOB (freight transport operators benefit) = EUR 57 (the overcharge/copy of licence) * 124 611 (the average number of copies of road freight transport licence issued by ARR) = EUR 7.1 million (5)

The benefits from modifying the provision are estimated at around EUR 13.13 million a year. This figure results from multiplying the average number of freight transport vehicles by the maximum weight > 3.5 tonnes registered in Romania over the past three years with the overcharge paid by freight transport operators for one copy of the licence.

The benefits arising from modifying the provision should have a significant impact on freight transport operators’ costs and may lower the overall cost of freight transport services if these savings are passed on to customers. Moreover, extending the validity of the copy of the licence for the entire duration of the transport licence, i.e. 10 years, will remove an unnecessary administrative burden for freight transport operators who are currently forced to renew the copy of their transport licence annually.

Annex 3.A3. Braking energy

Recommendation

Create appropriate legal framework: Compensation for regenerative braking energy should be introduced in the Romanian Law on Energy No. 123/2014, due to its ability to save energy consumption costs for railway freight transport operators. All metered train operators should pay for net energy consumption after taking into account the regenerated energy. This should imply changes to the existing infrastructure and acquisition of new locomotives.

Estimates of the benefits arising from creating an appropriate legal framework

Methodology: effects of regulatory reform elsewhere

Set forth below are some rough data about electricity supply and consumption in the Romanian rail freight transport sector, as well as a summary of the European experience in savings generated by regenerative braking.

In Romania, electricity for rail transport operators is supplied exclusively by CFR Electrificare, a subsidiary of CFR SA, which operates as the only supplier of traction electricity for the entire rail network as of 1 September 2014. The company also provides other services such as electrified railroad maintenance and operation of electrification facilities. Therefore, the turnover of CFR Electrificare does not correspond completely to the activity of energy supply, but also includes revenues from other services. Hence, we took into account in our analysis only the revenues from the account related to the sales of goods. According to its Profit & Loss Statement for the year 2014, this company generated revenues from sales of goods of approximately EUR 23.5 million (see Table 3.A3.1). We assume that these revenues cover only the revenues generated from supplying electricity to railway transport operators during the months of September to December 2014, the other revenues being derived from services and being in another account. The significant difference between the revenues obtained by CFR Electrificare from sales of goods in 2013 compared with those obtained in 2014, when CFR Electrificare became the exclusive supplier of energy for railway transport operators in Romania, supports our conclusion.

Table 3.A3.1. Revenues from sales of goods of CFR Electrificare

2013 (RON)

2014 (RON)

2014 (EUR)

Revenues from sales of goods (acc. 707) CFR Electrificare

10 876

105 663 899

23 585 691

Source: CFR Electrificare Profit & Loss financial statement, available on www.electrificarecfr.ro.

The estimated value of the annual energy consumption of rail operators (both freight and passengers) is approximately EUR 70.7 million (See Table 3.A3.2). This estimated figure is obtained by multiplying the revenues from sales of goods obtained by CFR Electrificare in the period covering September to December 2014 (4 months) by 3 in order to estimate the annual revenues.

Table 3.A3.2. Estimated revenues from traction energy of CFR Electrificare for 1 year

1 Sep-31 to Dec 2014 – 4 months (RON)

1 year (RON)

1 year (EUR)

Revenues from traction energy (freight and passengers)

105 663 899

316 991 697

70 757 075

Source: Musliu şi Asociaţii calculations.

As shown in Table 3.A3.3 below, the share of rail freight transport in Romania is around 25% of total railway traffic, the balance of 75% being represented by rail passenger transport. In Table 3.A3.3 below, we have used the above coefficient of 24.4%/75.6% between rail freight and passenger transport to calculate the estimated value of the annual energy consumption of rail freight transport operators. This corresponds to approximately EUR 17.26 million.

Table 3.A3.3. Railway traffic in Romania in the period 2006-14 by type of train

Railway traffic in Romania by type of train (thousand train-kilometres)

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average percentage of traffic by type of train

Total

104 374

95 134

92 865

88 994

86 271

92 556

90 124

82 431

77 802

100%

Freight trains

 35 743

25 873

23 061

17 200

19 088

21 464

20 844

18 922

17 749

 24.4%

Percentage of freight trains

34.25%

27.20%

24.83%

19.33%

22.13%

23.19%

23.13%

22.95%

22.81%

Passenger trains

 68 631

69 261

69 804

71 794

67 184

71 092

69 280

63 509

60 053

 75.6%

Percentage of passenger trains

65.75%

72.80%

75.17%

80.67%

77.88%

76.81%

76.87%

77.05%

77.19%

Source: Eurostat, Train movements (database), http://bit.ly/1yussbN.

Table 3.A3.4. Estimated revenues from traction energy for freight trains of CFR Electrificare

1 year (EUR)

Revenues from traction energy (both freight and passengers)

70 757 075

Revenues from traction energy (freight)

17 264 726

Revenues from traction energy (passengers)

53 492 349

Source: Musliu şi Asociaţii calculations.

It is a fact that regenerative braking reduces energy consumption, since through this form of braking rail operators put energy back into the network.

In our research covering European experience of this form of braking, we found that savings vary in accordance with the type of rolling stock used by operators – regional traffic, long distance or freight traffic (Halder, 2015). Generally, the potential of regenerative braking in freight trains is lower than in passenger trains as freight trains have the disadvantage of being much longer and heavier, carrying a larger mass to brake by unpowered axles. According to a measurement made by the Deutsche Bahn Group in the German rail network regarding freight trains, in 2011 this company saved 5.1% of its annual energy consumption by recouping energy produced during braking (DB Schenker, 2012). Also, in 2015, London finished testing a system that collects and recycles energy generated by its underground trains when braking and Transport for London, the London transport authority stated that it is saving up to 5% on its annual energy bill.121 On the basis of these findings, the creation of an appropriate legal framework for energy compensation through regenerative braking may lead to benefits for rail freight operators in Romania of around EUR 0.9 million.

FTOB = 0.05 x EUR17 264 726 = EUR863 236.3 (5)

Annex 3.A4. Pilotage services

Recommendation

Create appropriate legal framework: Pilotage services shall not be granted through direct entrustment, but instead they should be tendered based on fair and non-discriminatory terms to guarantee competition for the market. Charges may be established by the port authority but shall be cost-oriented. Once the charges are established, they shall be validated by an independent regulatory body. Moreover, the law should not impose a minimum number of pilots per port, but instead it should require a minimum service level, such as maximum ship waiting time for pilots to be on board.

Estimates of the benefits arising from creating an appropriate legal framework

Methodology: comparison with data from other geographic markets and effects of the regulatory reform elsewhere.

Set forth in Table 3.A4.1 below are the tariffs for pilotage services applied in different ports of Europe located in Romania, Bulgaria, Italy, Spain, Turkey and Slovenia expressed in EUR currency for 6 different categories of ship gross tonnage – 5 000, 10 000, 38 000, 75 000, 90 000 and 120 000 tonnes.

Table 3.A4.1. Pilotage tariffs throughout different ports in Europe by gross tonnage

Gross tonnage (GT)

Consţanta

Burgas

Varna

Mersin

Genoa

Napoli

Valencia

Barcelona

Koper

Average tariff

5k

 593

 350

 404

 381

 305

 293

  60

 228

 221

 319

10k

 883

 525

 618

 680

 502

 483

 106

 275

 308

 493

38 k

2 179

2 415

2 298

2 473

 979

 998

 351

 694

 648

1 472

75 k

3 903

4 912

4 518

-

1 908

1 530

 676

1 190

1 080

2 465

90 k

4 583

5 930

5 418

-

2 140

1 663

 807

1 419

1 188

2 893

120 k

5 933

7 950

7 218

-

2 837

2 062

1 069

1 559

1 512

3 768

Source: Relevant port websites: http://bit.ly/1QJpHw6, http://bit.ly/1TLkDxw, http://bit.ly/1V9lEik, http://bit.ly/2522pvA, http://bit.ly/21tjHwV, http://bit.ly/1YVR8bM, http://bit.ly/21tkMoC, http://bit.ly/1TLmxOJ accessed on 7 January 2016.

The tariffs are based on the ship’s registered tonnage.

According to Figure 3.A4.1, the tariffs for pilotage services charged in Consţanta are 2 or 3 times higher than those charged in other EU similar ports in terms of the volume of the goods handled, such as Barcelona, Valencia and Genoa (see Figure 3.A4.2).

Figure 3.A4.1. Pilotage tariffs throughout different ports in Europe
picture

Note: For Burgas and Varna, an average tariff has been determined based on the tariffs of the two port areas for Burgas/for the five port areas for Varna. For Mersin an average is also used between the tariffs for container vessels and the tariffs for other cargo vessels. For Valencia and Barcelona the tariffs used are the maximum rates set by the port authorities.

Source: Relevant port websites: http://bit.ly/1QJpHw6, http://bit.ly/1TLkDxw, http://bit.ly/1V9lEik, http://bit.ly/2522pvA, http://bit.ly/21tjHwV, http://bit.ly/1YVR8bM, http://bit.ly/21tkMoC, http://bit.ly/1TLmxOJ accessed on 7 January 2016.

 http://dx.doi.org/10.1787/888933361697

Figure 3.A4.2. Volume of goods handled in different ports in Europe in 2014
picture

Source: Eurostat, Goods (gross weight) – Annual data – All ports – by direction (database), http://bit.ly/1yussbN.

 http://dx.doi.org/10.1787/888933361708

Currently, Compania Naţională Administraţia Porturilor Maritime S.A. (CN APM) provides pilotage services through four pilotage operators, although services are ultimately billed to freight shippers directly by CN APM. The pilotage tariffs are set artificially by CN APM without the charges applied being supported by any study on the costs involved for delivering these services.

The introduction of a more transparent procedure such as public tendering in order to hire pilotage services should ensure more reliable, better quality services for freight shippers and lower costs for CN APM. Furthermore, the establishment of an independent regulatory body to monitor the activity of CN APM when setting pilotage tariffs may contribute to further reducing these tariffs. For the full scope of this recommendation to be applied and the savings to be passed on to freight shippers, a cost-based approach should be implemented.

A European Conference of Ministers of Transport (ECMT) paper (ECMT, 2007) on competitive tendering of rail service showed that in Germany following tendering procedures the special regional authorities which were responsible for planning, managing and procuring regional rail transport realised savings of 20%.

The total turnover of pilotage operators in 2014 was approximately EUR 12.9 million (see Table 3.A4.2). Taking into consideration that pilotage services are billed by CN APM and it retains 25% of the services value for providing the right for pilotage operators to carry out pilotage services in the Port of Consţanta, the total turnover of pilotage operators represents 75% of the pilotage market value. Therefore, in 2014, the market value was approximately EUR 17.2 million.

Table 3.A4.2. Pilotage market value in the period 2012-14

Year

Pilotage operators total turnover (million EUR)

Pilotage market value (million EUR)

2012

11.6

15.4

2013

12.6

16.8

2014

12.9

17.2

Source: Ministry of Finance, http://bit.ly/1QxjYPO, Musliu şi Asociaţii calculations.

The freight shipper’s benefit is calculated as follows:

picture (6)

where FSB is the freight shipper’s benefit, ρ is the percentage change in price related to restriction, R is the sector revenue and |∈| is absolute value of elasticity of demand.

For the price change we use the relevant estimation for the experience with competitive tendering in Germany (20%) provided by ECMT (2007).

In order to assess the elasticity of demand for pilotage services, we used two different approaches.

The “wide” approach

The starting point in this approach is the substitutability between ports. Firstly, it should be noted that freight shippers’ demand for port services is derived from the demand for transportation of goods from a point of origin to a destination point. The point of origin and the destination point are those that mainly set the substitutability between ports. There are also others factors to be considered when establishing the substitutability of ports, such as the ability to handle different freight loads and water depth in the port basins.

Given the geographical context, the Port of Consţanta may face competitive constraints, especially from Bulgarian or Turkish ports, for situations where the destination point is a landlocked country in Central or Eastern Europe. Actually, few constraints are likely to come from Bulgarian ports because of the low level of modernisation, limited capacity and their lack of ability to handle certain cargos (OECD, 2011). Also, the water depth in the port basins in the Port of Varna is almost two times lower than the water depth in the Port of Consţanta.

Within the ATENCO: Analysis of the Cost Structure of the main TEN-Ports, research project for the European Commission (2001), port elasticities were estimated for the container sector. The price elasticities for selected northwest European container ports are shown in Table 3.A4.3.

Table 3.A4.3. Price elasticities of 10% change in port dues

Port

Price elasticity

Bremen ports

4.4

Hamburg

3.1

Rotterdam

1.5

Antwerp

4.1

Le Havre

1.1

Source: ATENCO (2001).

There is a substantial divergence of elasticities among the various ports. Since no estimations on elasticity of the Port of Consţanta exist in the literature, |∈|=2 will be assumed. As pilotage services represent only a small proportion of the overall port costs, in order to determine the elasticity of pilotage services separately, the elasticity of the port will be multiplied by the share of pilotage services in total port costs. A study prepared for the Directorate-General for Transport and Mobility of the European Commission (Price Waterhouse Cooper, 2013) estimates pilotage services as representing 6% of total port costs. Accordingly, the elasticity of pilotage services is estimated at approximately 0.12, resulting from multiplying 0.06 (the share of pilotage services in total port costs) by 2 (the port elasticity coefficient).

Assuming that market value remains constant for the future and that CN APM will pass on the savings to its customers, the freight shippers’ savings arising from the creation of a new legal framework for pilotage services will be approximately EUR 3.48 million a year. Currently there is no significant passenger traffic in the Port of Consţanta (Eurostat, Maritime transport, Passengers [database]). This figure results from the application of Formula 6 mentioned above, using the 20% price change percentage provided by the ECMT Paper and the 0.12 elasticity coefficient for pilotage services estimated above.

The “narrow” approach

According to this approach, the demand for pilotage services in the Port of Consţanta is made up of freight shippers calling into the port; the geographic market for pilotage services is thus limited to the Port of Consţanta.

This approach is based on the fact that, for port services, markets are often defined more narrowly. For example, during a merger investigation, the UK Competition Commission defined the relevant geographic market for towage services as being restricted to individual ports (SvitzerWijsmuller, 2007). Other cases also indicate that the geographic market for port services is limited to a single port. In Porto di Genova v Siderurgica Gabrielli122 the Court of Justice held that the organisation of port activities at a single port constitute a relevant market; and in Corsica Ferries123 it reached the same conclusion in relation to the provision of pilotage services at the same port.

In this case, we consider the elasticity of demand coefficient to be 0 (zero) as pilotage services are compulsory for freight shippers in ports and there is no substitute for these services. Thus, the formula becomes:

picture (7)

For the price change, we use the relevant estimation for the experience with competitive tendering in Germany (20%) provided by ECMT (2007).

FSB = 0.2 * EUR 17.2 million = 3.44 EUR million (8)

Assuming that the market value remains constant for the future and that CN APM will pass on the savings to its customers,, the benefits to freight shippers arising from introducing public tendering into the pilotage services market are estimated at approximately EUR 3.44 million a year.

Annex 3.A5. Towing services

Recommendation

Create appropriate legal framework: Towing services shall not be granted through direct entrustment, but instead they should be tendered based on fair and non-discriminatory terms to guarantee competition for the market. Charges may be established by the port authority but shall be cost oriented. Once the charges are established, they shall be validated by an independent regulatory body in charge of the promotion of competition in port services. Moreover, the law should not impose a minimum number of tugboats per port, but instead it should require a minimum service level, such as the maximum ship waiting time for a tugboat.

Estimates of the benefits arising from creating an appropriate legal framework

Methodology: comparison with data from other geographic markets

Set forth in Table 3.A5.1 below are the tariffs for towing services applied in different ports of the European Union located in Romania, Bulgaria, Italy, Spain, Turkey, Slovenia and Greece expressed in EUR currency for 6 different categories of ship with different gross tonnage and length overall.

Table 3.A5.1. Towing tariffs throughout different ports in Europe by gross tonnage

Reference ship

LOA (length overall)

GT

Consţanta

Burgas

Varna

Genoa

Napoli

Valencia

Barcelona

Koper

Piraeus

Average tariff

Starlink Hope

110

  3 593

  780

 1 391

  980

 737

 595

  500

 541

374

  470

 708

Guo Rui

154

 14 743

1 310

 6 838

2 358

1 624

1 354

 2 209

1 283

533

 860

2 020

KANG QIANG

190

 28 613

1 595

 9 308

3 081

1 866

1 527

 4 486

2 205

652

1 150

2 874

MSC Natalia

244

 40 177

1 915

14 003

3 701

2 148

1 706

 6 442

2 974

652

1 335

3 875

Regina Maersk

318

 81 488

2 815

19 748

5 820

2 546

2 053

13 066

4 957

704

1 450

5 907

CMA CGM Alaska

366

140 259

2 815

30 588

8 868

3 140

2 603

22 489

4 957

704

1 670

8 648

Source: Relevant port websites: http://bit.ly/1U4laew, http://bit.ly/1QUCX3H, http://bit.ly/1S1UYNQ, http://bit.ly/1QV3QG7, http://bit.ly/1MkqOkv, http://bit.ly/1Pa4Gcs, http://bit.ly/1QUETcD, http://bit.ly/1WnzIDl (accessed on 7 January 2016).

Figure 3.A5.1. Towing tariffs throughout different ports in Europe
picture

Note: For Burgas and Varna, an average tariff has been determined based on the tariffs of the three port areas of each port. For Valencia and Barcelona, the tariffs used are the maximum rates set by the port authorities.

Source: Relevant port websites: http://bit.ly/1U4laew, http://bit.ly/1QUCX3H, http://bit.ly/1S1UYNQ, http://bit.ly/1QV3QG7, http://bit.ly/1MkqOkv, http://bit.ly/1Pa4Gcs, http://bit.ly/1QUETcD, http://bit.ly/1WnzIDl (accessed on 7 January 2016).

 http://dx.doi.org/10.1787/888933361711

According to Figure 3.A5.1, the towing tariffs charged in the Port of Consţanta are similar to those charged in the other ports taken into consideration in our analysis. Actually, in some cases, tariffs charged in the Port of Consţanta are below the average tariffs charged by the other ports.

However, the organisational framework for the provision of towing services is similar to that established for pilotage services. CN APM provides towing services through one towing operator and sets the tariffs without supporting the charges applied by any study on the costs involved in delivering these services.

The introduction of public tendering procedures, the establishment of a cost-oriented mechanism to set tariffs and the introduction of an independent regulatory body to review the competitiveness of these tariffs, once established by the port authority, should lead to significant cost benefits for maritime transport operators using Romanian ports. According to the MoF, Logistic Remo Services SRL, the only operator that performs towing services in the Port of Consţanta, had a turnover of approximately EUR 14.1 million in 2014. This figure does not correspond to the total market value as the towing services are billed by CN APM and it retains a certain amount of these revenues for providing the right to perform towing services in the Port of Consţanta (EUR 0.004 x gross tonnage unit of towed vessel). Based on our own calculation covering certain ships having different gross tonnages, as presented in Figure 3.A5.1, we estimate that CN APM has a 10% share of the total value of the towing services market in the Port of Consţanta. Therefore, the turnover of Logistic Remo Services represents 90% of the value of the towing market and in 2014 the market value was approximately EUR 15.66 million.

Taking into account the estimation of a 20% price reduction from the experience with competitive tendering in Germany provided by ECMT (2007) and applying the “narrow” approach previously adopted for pilotage services (reasoning and arguments are also identical), introducing tendering procedures for towing services should generate savings for freight shippers of approximately EUR 3.14 million a year. Using the “wide” approach, the freight shippers’ benefits are estimated at EUR 3.16 million a year (we should note in that respect that towing services elasticity is estimated at 0.12 as towing services are also estimated at 6% of the total port costs, Price Waterhouse Cooper, 2013)

Annex 3.A6. Waybills and records of incoming-outgoing wood transport

Recommendation

The provision should be modified. Romania shall liberalise the provision of this service to all printing companies interested in performing such an activity.

Estimates of the benefits arising from modifying the provision

According to the data provided by Imprimeria Naţională, the number of waybills and records sold by Imprimeria Naţională are the following:

Table 3.A6.1. Number of waybills and records sold in 2014-15

Year

Number of waybills sold

Number of records sold

2014

102 822

14 001

2015

 83 552

 8 729

Source: Data provided on request by Imprimeria Naţională.

One block of waybills (one block contains 150 waybills) costs RON 66 (approximately EUR 14.7; source Imprimeria Naţională’s website) and one record of 100 pages costs RON 54 (approximately EUR 12; source Imprimeria Naţională’s website). Therefore, the total revenues of Imprimeria Naţională for the year 2015 are estimated at approximately EUR 1.22 million from the activity of issuing waybills and around EUR 100 000 from the activity of issuing records.

Table 3.A6.2. Revenues of Imprimeria Naţională obtained from the sale of waybills and records

Year

Number of waybills sold

Price of one waybill (EUR)

Total revenues from waybills (EUR)

Number of records sold

Price of one record (EUR)

Total revenues from records (EUR)

2014

102 822

14.7

1 511 483

14 001

12

168 012

2015

 83 552

14.7

1 228 214

 8 729

12

104 748

Source: Musliu şi Asociaţii calculations.

Introducing competition into the activity of issuing material forms from wood, an activity currently performed exclusively by Imprimeria Naţională, should lead to a cost reduction. The OECD study “Evaluation of competitive impacts of government interventions” (2014) estimates at around 23% the price reduction arising from the introduction of a pro-competitive market structure in order to replace a monopolistic one.124 In accordance with this study, the benefits arising from liberalising the provision of this service to all printing companies interested in performing such an activity are therefore estimated at approximately EUR 0.3 million a year (see Table 3.A6.3).125

Table 3.A6.3. The estimated benefits from the liberalisation of printing waybills and records

Year

Total revenues from waybills and records (EUR)

Average price reduction from introducing competition into the marketplace

Benefits (EUR)

2015

1 332 962

0.23

306 581

Source: Musliu şi Asociaţii calculations.

Notes

← 1. NACE codes covered by this study are: H49.2 – Freight rail transport; H49.4 – Freight transport by road and removal services; H50.2 – Sea and coastal freight water transport; H50.4 – Inland freight water transport; H52 –Warehousing and support activities for transportation. The following NACE codes are not covered by this report: H49.1 – Passenger rail; H49.3 – Other passenger land transport; H49.5 – Transport via pipeline; H50.1 – Sea and coastal passenger water transport; H50.3 – Inland passenger water transport; H51 – Air transport; H52.2.3 – Service activities incidental to air transportation; H53 – Postal and courier activities.

← 2. This definition is taken from OECD, Competition Issues in Road Transport, 2000.

← 3. Source: The General Transport Master Plan of Romania.

← 4. The National Union of Romanian Road Hauliers, Road Transport Market, 2008-2015.

← 5. OECD Economic Studies No. 32, 2001/I, Regulatory Reform in Road Freight.

← 6. In order to compare regulatory approaches in several countries, the OECD has developed quantitative indicators over various aspects of regulation (on a scale from 0 to 6 from least to most restrictive of competition) which aim to measure the degree of the impact of a regulatory restriction on market mechanisms. The OECD’s PMRI for road freight transport was constructed by aggregating detailed information on regulation in relation to two criteria: barriers to entry and price regulation.

← 7. www.untrr.ro.

← 8. www.artri.ro.

← 9. www.fort-romania.ro.

← 10. www.apte2002.ro.

← 11. www.atrt.ro.

← 12. www.atrc.ro.

← 13. www.user.ro.

← 14. www.arilog.ro.

← 15. www.rarom.ro.

← 16. www.isctr-mt.ro.

← 17. www.cisr.ro.

← 18. www.arr.ro.

← 19. The RO-vignette is a tax charged on motor vehicles for using the national road infrastructure.

← 20. This definitionis taken from the Freight Transport for Development Toolkit: Rail Freight, The International Bank for Reconstruction and Development/The World Bank, 2009.

← 21. A route can have one, two or more tracks. The length of the railway route is determined by the length of a single line between stations; i.e. even if a route is characterised by several lines, multi-way lines are considered as one line.

← 22. Source: NIS.

← 23. Source: The General Transport Master Plan of Romania.

← 24. See Government Decision No. 73/2012 regarding the approval of the National Railway Company “CFR” Activity Contact for the period 2012-2015.

← 25. See Government Decision No. 581 of 10 September 1998 regarding the establishment of the National Railway Company “CFR” – S.A. through the reorganisation of the National Company of Romanian Railways.

← 26. Source: AFER, MoF.

← 27. Following the adoption of Government Decision No. 46/2013 on the approval of the privatisation strategy of the national company CFR Marfă and the implementation of Government Decision No. 526/2013 for approval of the main conditions of the contract for the transfer of the ownership of a block of the share capital of CFR Marfă.

← 28. This indicator was constructed by aggregating detailed information on regulation of rail transport based on four criteria: barriers to entry, public ownership, vertical integration and market structure.

← 29. In 2008 this sector counted 23 462 employees (source: NIS), compared to 13 500 in 2014 (source: MoF).

← 30. Source: NIS.

← 31. Source: MoF.

← 32. www.atfer.ro.

← 33. www.asifrom.ro.

← 34. Pan-European Corridor IV (road and rail) connecting western and southern Europe crossing Bucharest and linking Constanţa via road and rail; Pan-European Corridor VII – the Danube connecting western and eastern Europe; Pan-European Corridor IX connecting northern and southern Europe – crossing Bucharest and linking Constanţa via railway.

← 35. Its competences and tasks are established by Government Emergency Ordinance No. 21/2011; www.consiliulferoviar.ro.

← 36. Its competences and tasks are established by Government Decision No. 626/1998 and by Government Decision No. 1561/2006; www.afer.ro.

← 37. OLFR is organised and functions according to the provisions of Law No. 55/16.03.2006 on railway safety and of Government Decision No. 1561/01.11.2006, modifying and completing the Government Decision No. 626/1998 on organising and functioning of the Romanian Railway Authority; www.afer.ro/olfr/.

← 38. CENAFER is established by Government Ordinance No. 58/2004; www.cenafer.ro.

← 39. See Art. 19 of Government Ordinance No. 22/1999.

← 40. Loading/unloading, storage, handling, mooring, sorting, labelling, palletising, ship broker services, bunkering, ship’s stores cleaning.

← 41. Port infrastructure maintenance, signalling, dredging, shipping surveillance, dredging extraction, ship repairs and ship supply.

← 42. Source: Annual Report Port of Constanţa, 2014.

← 43. Source: Constanţa Port Operator.

← 44. Source: The General Transport Master Plan of Romania.

← 45. The Romanian inland waterways ports are: Murfatlar, Medgidia, Cernavodă, Călăraşi, Olteniţa, Giurgiu, Corabia, Bechet, Calafat, Drobeta Turnu Severin, Orşova, Moldova Veche, as well as the local ports Drencova, Gruia, Cetate, Turnu Măgurele, Zimnicea, Hârşova, Turcoaia, Măcin, Gura Arman, Isaccea, Mahmudia, Ovidiu, Chilia Veche, Feteşti, Tişoviţa, Rast, Baziaş, Luminiţa.

← 46. Source: The General Transport Master Plan of Romania.

← 47. Romania allocates EUR 11 300per km a year for maintenance of the section of the Danube for which it is responsible, compared with a budget of EUR 250 000 per km allocated by Austria. See MoT General Transport Master Plan of Romania.

← 48. See Government Decision No. 140 of 23 March 1998 on the approval of companies privatisation strategy for the year 1998.

← 49. ANR is organised according to the provisions of Government Decision no. 1133/2002 and Government Ordinance No. 42/1997 on maritime transport and inland waterway, as amended; http://portal. rna.ro.

← 50. www.romanian-ports.ro.

← 51. www.apdf.ro.

← 52. www.acn.ro.

← 53. The National Company Maritime Ports Administration S.A. Constanţa is a company set up through Romanian Government Decision No.517/1998, altered and completed by Government Decision No. 464/2003, through the reorganisation of the former Autonomous Enterprise “Constanţa Port Administration”; www.portofconstantza.com/apmc/.

← 54. In accordance with the provisions of Government Decision No. 492/2003 and with the international conventions and agreements towhich Romania is a party; www.afdj.ro.

← 55. It is established by Government Decision No. 525/1998; www.radionav.ro.

← 56. Subordinated to the Ministry of Transport and works under the provisions of Government Decision No. 33/2003 and Government Decision No. 449/2003; www.ceronav.ro.

← 57. ARSVOM is a public institution with a legal personality founded by Government Decision No. 33/2004 and approved with amendments by Law No. 337/2004; www.arsvom.ro.

← 58. Government Ordinance No. 81/2000 on the registered road vehicle certification of compliance with the technical norms on road safety, environmental protection and category of use according to their destination, through periodic technical inspection.

← 59. According to Government Ordinance No. 43/1997 and the information posted on the website of the International Transport Forum, in Romania the legal dimensions and weights are the following:

Permissible maximum weights of lorries (in tonnes)

Weight per non-drive axle

Weight per drive axle

Lorry 2 axles

Lorry 3 axles

Road train 4 axles

Road train 5 axles and +

Articulated vehicle 5 axles and +

10

11.5

18

25/26 (46)

36

40

40/44 (13)

Permissible maximum dimensions of lorries

Height

Width

Length

Lorry or trailer

Road train

Articulated vehicle

4 m

2.55 m

12 m

18.75 m

16.50 m

← 60. MoE Order No. 2737/2012 on the procedure related to the appointment of institutions performing checks on superstructure built on top of vehicles transporting dangerous goods, as well as packaging.

← 61. MoT Order No. 980/2011 on the application of the provisions regarding the organisation and performance of road transport and related activities established by the Government Ordinance (GO) No. 27/2011 on road transport, as further amended and supplemented.

← 62. As shown in the economic overview, the Romanian road freight sector in 2014 mainly consisted of small companies, with about 91% of companies having less than 10 employees.

← 63. According to information received from the National Union of Romanian Road Hauliers.

← 64. Order No. 181/2008 of the MoT on the approval of Regulations concerning the conditions for installation, repair and verification of tachographs and speed limitation devices, as well as for the authorisation of the economic operators performing such activities.

← 65. European Regulation No. 995/2010 laying down the obligations for operators who place timber and timber products on the market.

← 66. Law No. 265/2008 on the management of traffic safety on road infrastructure and Order No. 358/2012 on the approval of Guidelines related to measures to improve traffic safety on road infrastructure, implementing Directive 2008/96/EC on road infrastructure safety management.

← 67. Government Ordinance No. 43/1997 on the road regime, as further amended and supplemented.

← 68. http://bit.ly/1RwcGGA.

← 69. Directive No. 2012/34/EU establishing a single European railway area.

← 70. The First Railway Package includes i) Directive No. 2001/12/EC amending Directive No. 91/440/EEC on the development of the Community’s railways, ii) Directive No. 2001/13/EC amending Directive No. 95/18/EC on the licensing of railway undertakings, and iii) Directive No. 2001/14 for infrastructure capacity allocation and charging, and safety certification.

← 71. The Second Railway Package includes: i) Directive No. 2004/51 further amending Directive No. 91/440/EEC; ii) Directive No. 2004/49/E on safety on the Community’s railways; iii) Directive No. 2004/50/EC amending inter-operability Directives No. 96/48/EC and 2001/16/EC; and iv) Regulation No. 881/2004 establishing a European railway agency.

← 72. Since 2011, Romania has fulfilled the requirement of establishing an independent regulatory body, as the Rail Supervisory Council is no longer a part of the Ministry of Transport, but under the aegis of the Romanian Competition Council.

← 73. The full title is Order of MLPTL (the Ministry of Public Works, Transport and Housing) No. 461/2003.

← 74. Network Rail must observe The Network Code, Part J – Changes to Access Rights, Article 4, regarding the failure to use cases.

← 75. According to Article 4.1.1 UK infrastructure manager Network Code, Part J.

← 76. A train slot is a licence that allows its holder, a railway company, to run a train on a specific section of track at a specific time.

← 77. The working timetable shows all movements on the rail network including freight trains, empty trains and those coming in and out of depots. It also includes the unique identification code for each train, and intermediate times for journeys, including which stations a train is not scheduled to stop at.

← 78. A quantum access right means any right under an access agreement in respect of a number (or quantum) of train slots in any specified period (including rights to train slots in respect of additional trains or relief services), and includes part of such a right.

← 79. The facilities are mentioned in Annex 2 of Government Ordinance No. 89/2003.

← 80. Tariffs for specific services are covered by Annex 23, List and Level of the Charges for Related Activities and Other Activities, to the CFR Network Statement.

← 81. According to CFR Marfă’s website and as mentioned in The Romanian General Transport Master Plan, Chapter 5, Railway Transport (point 8.1.28), CFR Marfă owns 26 freight terminals.

← 82. Romanian Competition Council Decision No. 119/2006,upheld by the Romanian Supreme Court of Justice.

← 83. Commission staff working document impact assessment accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2012/34/EU.

← 84. Ibid.

← 85. http://bit.ly/1nqL4KM.

← 86. FRAND is an abbreviation for “fair, reasonable and non-discriminatory”.

← 87. http://bit.ly/1oE5j8Y.

← 88. http://bit.ly/1Ssmsit; http://bit.ly/1o52Ung.

← 89. http://bit.ly/1QDuejn.

← 90. The Romania General Transport Master Plan, Chapter 5, Railway Transport.

← 91. It should be noted that in Romania ownership and management of the intermodal terminals were transferred from the infrastructure manager to CFR Marfă, creating an atypical situation unlike that in many other European countries, as results from Diomis – Evolution of intermodal rail/road traffic in Central and Eastern European Countries by 2020, page 26.

← 92. Report from the Commission to the Council and the European Parliament – Fourth report on monitoring development of the rail market, 2014.

← 93. Sweden has managed to introduce intra-modal competition for the provision of most services.

← 94. Law 388/2000.

← 95. Realising the Potential of GB Rail -Final Independent Report of the Rail Value for Money Study-Detailed Report notably page 30 and page 31.

← 96. A modal share is the percentage of travelers using a particular type of transportation or number of trips using said type; in freight transportation, this may be measured in mass.

← 97. EWS is the former UK rail freight company, sold to Deutsche Bahn in 2007.

← 98. http://bit.ly/1T4b5Og.

← 99. Office of Rail and Road, as of writing this report (March 2016).

← 100. According to Eurostat, about 40% of the total railway network has been electrified.

← 101. CFR SA Network Statement 2015 indicates that 99% of the rail network is electrified on Pan European Corridor IV and 87% of the rail network is electrified on Pan European Corridor IX.

← 102. According to www.ertms.net/, the ERTMS Benefits Section.

← 103. The European Commission is currently following a “corridor-based approach”, with Romania included in Rail Freight Corridor 7 (RFC7). Corridor 7 has been defined to run through the Prague-Vienna/Bratislava-Budapest-Bucharest-Constanţa and Vidin-Sofia-Thessaloniki-Athens axis According to the Implementation Plan of Rail Freight Corridor 7 “Orient Corridor” based on Regulation (EU) No. 913/2010 of the European Parliament and of the Council of 22 September 2010 concerning a European rail network for competitive freight. The management board of RFC7 considers investment planning along the corridor a very important matter and an investment plan has been drawn up, including a deployment plan for ERTMS. ERTMS requires an infrastructure update before it can be introduced to the whole territory of Romania, not only within the Romanian part of RFC7.

← 104. MoT Order No. 410/1999 on the authorisation for testing and certifying railway products used in construction activities, upgrade, operation, maintenance and repair of rail infrastructure and rolling stock, railway and subway.

← 105. Ibid.

← 106. Pilotage, towing, mooring, dredging, bunkering, cargo handling, passenger services, waste reception facilities.

← 107. http://bit.ly/1LtTxD7.

← 108. According to Article 2 of Directive 2009/15/EC, “international conventions” means the International Convention for the Safety of Life at Sea of 1 November 1974, (SOLAS 74) with the exceptionof chapter XI-2 of the Annex thereto, the International Convention on Load Lines of 5 April 1966 and the International Convention for the Prevention of Pollution from Ships of 2 November 1973 (Marpol), together with the protocols and amendments thereto, and the related codes of mandatory status in all Member States, in their up-to-date version.

← 109. Romanian Competition Council, press release, November 2012, http://bit.ly/1oqNGcS.

← 110. http://bit.ly/1QJpHw6, accessed on 17 February 2016.

← 111. Authority for Consumers & Markets’ website, http://bit.ly/1oxc9gj.

← 112. PwC (2013), Study aimed at supporting an impact assessment on: “Measures to enhance the efficiency and quality of port services in the EU”, submitted to: European Commission Directorate-General for Mobility and Transport Unit B3 Ports & Inland Navigation, page 42, http://bit.ly/1QJnEbd.

← 113. The global container shipping sector is a concentrated one, with the five largest container shippers having a cumulated market share of almost 50%, according to Statista (2016), leading the ship operator’s share of the world liner fleet as of 18 January 2016: http://bit.ly/1Ws2ORL.

← 114. http://bit.ly/1QllKmP.

← 115. 153 states are currently signed up to thenotes MARPOL Protocol (1973/1978), https://imo.amsa.gov. au/public/parties/marpol78.html.

← 116. Eurostat, Road transport equipment – Stock of vehicles (database), http://bit.ly/1vbibQq.

← 117. NIS, New registrations of road vehicles for transport of goods (database), http://bit.ly/1Ohytzt.

← 118. According to RAR, some freight vehicles are already equipped with the manufacturer plate, so the savings might be smaller than estimated.

← 119. Romanian Road Authority – ARR.

← 120. Our first estimates were based on data of NIS and Eurostat which are not in line with the data provided by ARR.

← 121. UK Government, http://bit.ly/1U3m76b.

← 122. Case C-179/90 [1991] ECR I-5889.

← 123. Case C-18/93 [1994] ECR I -1783.

← 124. A caveat should be noted. The price reduction of 23% is an average estimation of price change based on a number of findings from ex post studies of pro-competitive regulatory reforms, i.e. a conservative estimate.

← 125. In order to estimate the benefits arising from modifying this provision, we used the 2015 data as the quantity of wood exploited decreased significantly in 2015 compared with 2014 (as a consequence, the number of the waybills sold also decreased) due to extensive investigation of the Public Prosecutor’s Office into illegal logging.