On Mar. 25, EFTASA issued pre-art 31 letter re incorrect application.
EFTSA sent Norway pre-art 31 letter re incorrect application art 5.3a Reg 1370/2007.
Context
In Oct. 2024, informed NOR GVT it had opened own initiative case re application of Reg 1370/20071 (Land PSO Regulation), as amended by Reg 2016/23382, in Norway.
Re temporary direct award of railway services per art 5.3a Land PSO Reg, as amended.
Ministry of Transport had published announcement on its website stating it instructed Railway Directorate as competent authority to directly award temporary railway public service contract for so-called South bundle (Traffic Package 1 South).
That, for up to 5 years under art 5.3a of Land PSO Regulation; more details provided.
Matter also brought up by NOR GVT, discussed in annual package meeting in late Oct.
Exchange of information EFTSA-NOT GVT took place in the months that followed.
In Dec. 2024 EFTASA received complaint where complainant alleged decision taken by Ministry of Transport to instruct Norwegian Railway Directorate to award public service obligation (PSO) contract for Trafikkpakke 1 to Vy Gruppen breached Reg 1370/2007.
Key Aspects
Preliminary view is decision to directly award temporary contract cannot be justified.
As conditions justifying such a direct award of a public service contract are not fulfilled.
Land PSO Regulation completes liberalization of railway market, legal framework currently provides that all public service contracts must be competitively tendered out following end of transition on Dec. 25, 2023.
Direct award of public service contract applies now as exception to main rule and is only allowed in specific circumstances in Land PSO Reg, must be strictly interpreted.
Letter's Background Section presents the national railway situation relevant to case.
EFTA Court has confirmed exceptions must be interpreted strictly, and their scope must be determined with regard, in particular, to the aims pursued by that act.
Thus, provision allowing for derogation from general principle cannot be interpreted in way to extend effects beyond what necessary to safeguard interests it seeks to secure.
EC has stressed same principle in interpretive guidelines on Land PSO Reg application.
EFTSA preliminary view is that NOR GVT has failed to demonstrate the existence of an exceptional circumstance in present case which would justify the use article 5.3a.
While EEA States have certain discretion when specifying PSOs, they must always do so in accordance with the applicable legal framework.
In railway passenger transport sector they must respect, inter alia, general principles of EEA law as well as art 2a(l) and definition of PSO in art 2(e) of Land PSO Regulation.
Obligation to assess willingness of market to provide services in question had been established by CJEU (EU Court) prior to entry into force of the 4th Railway Package.
Therefore, obligation to do so was not introduced by revision of Land PSO Regulation.
Yet, NOR GVT had ample time to comply with the alleged new requirements.
Timeline for Action
NOR GVT invited to submit observations on letter by Apr. 24, 2024* typo (2025).
After that date, EFTSA will consider, in light of any observations received whether to initiate infringement proceedings in accordance with art 31 of Agreement between the EFTA States on Establishment of a Surveillance Authority and EFTA Court of Justice.
Regulators
EFTASA
Entity Types
Corp
Reference
Lt 1517632, 3/24/2025; Case 93059; Land PSO Reg 1370/2007
