Local authorities keep right to provide public transport

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The new rules come as a proposed update of a regulation dating back to 1969, when the Community had just six member states, which is aimed at clarifying the legal situation about how local councils and authorities can legitimately organise public transport and finance public services.

The most important aspect is that local authorities will be given the choice of whether to operate public transport themselves or entrust it to an outside provider. Whichever they choose, everything must be fully transparent to citizens and to the operators concerned, and contracts can be no longer than eight years for road and 15 for rail.

The privatisation of many transport services, plus court judgements and the arrival of the EU internal market in 1992, have meant the 1969 regulation conflicts with internal market rules and thus creates legal uncertainty. A notable judgement came in 2002, when the European Court of Justice ruled that Helsinki was entitled to reject the lowest tender by an outside provider to run the city’s bus service as accepting a higher tender benefited the city’s air through using buses with cleaner technology.

This is not the first time an attempt has been made to update the 1969 regulation. The latest draft responds to concerns by MEPs that local authorities should be given the choice of whether to run transport themselves or contract it to outsiders.

This news story is taken from the September 2005 edition of T&E Bulletin.