Public Service Obligations (PSO) Guidelines: The European Commission's push for liberalisation

The ETF has always maintained that public transport must stay in public hands for the good of the workers and passengers.

If we look at what the liberalisation of rail has brought us, we see worse working conditions, working hours, fewer permanent jobs and ultimately, services have not improved.

Competition for the sake of competition is not the solution for better public transport. In collaboration with unions and local communities, local authorities are best placed to decide how to run public services.

However, the European Commission doesn’t seem to agree…

The revised version of the PSO Regulation adopted in 2016 as part of the 4th railway package makes it possible for competent authorities in each EU Member State to choose to award rail and road public service directly to their own operators or by way of competitive tendering up to 2023 and beyond. The European Commission want to fix this “flaw” by trying to make competitive tendering the norm and directing award the exception through interpretative PSO guidelines.

The fourth railway package was approved in 2016, and with it, the revised PSO regulation (Public Service Obligations). Four years later, the European Commission (EC) adopted new targets to increase cross-border rail traffic in the EU as part of its climate initiatives. According to the European Commission, the liberalisation of rail must be accelerated to achieve the climate targets.

Unions agree on the importance of public transport in meeting our objectives under the Green Deal. The democratically enacted Fourth Railway Package still gives the Member States the option of contracting rail passenger services through direct awarding to their own companies or through public tendering – not really a carte blanche for full liberalisation. This is why the European Commission decided in 2021 to try to make competitive tendering the norm and directly award the exception.


Through interpretative Public Service Operations (PSO) guidelines.

It is common for European Commission guidelines to accompany some EU laws, and the PSO guidelines were due to be revised. It’s important to know that in adopting Guidelines, the European Commission does not need to involve the European Parliament and the Council. However, this doesn’t mean that the European Commission can exceed its purpose and violate the spirit of EU law.

The role of European Commission guidelines is to provide clarification on the provisions set out in EU legal acts and not to add further limitations or requirements. The issue is that current draft guidelines favour competitive tendering over direct awarding, even though no such prevalence stems from the PSO Regulation itself.

Any attempt to change the legal interpretation of existing EU legislation through guidelines without a proper legislative process and involvement of co-legislators is undemocratic.

Changes impacting the operation of PSO regulations should go through the proper legislative process and involve co-legislators to ensure that the needs of workers and passengers are taken into account.


The European Commission has not yet published the revised guidelines: there is no further consultation with the social partners and stakeholders.

The draft of interpretative guidelines was circulated to a very restricted number of stakeholders for consultation purposes in December 2021, ETF included. It was clear that the draft far exceeded the spirit and the political aims and objectives of the PSO Regulation itself. Changes of this kind can only be subject to a proper legislative process, with full involvement of the co-legislators, the European Parliament and the national governments.

A special case confirming the European Commission’s “Agenda”: the Dutch rail award

This summer, the European Commission found out that the Dutch government intends to extend the direct rail award to the national public operator for the 2025 – 2035 period.  EU Transport Commissioner Vălean threatened in writing that the EC would be ready to support any court proceedings opened by private rail operators against this decision. EU Commissioner Vălean also threatened the Dutch government with infringement procedures.

The ETF, together with FNV Spoor, alerted the European Parliament. A group of Dutch MEPs wrote back to Vălean. This encouraged the Dutch Parliament to give the green light to the Dutch government plan.

Union Action

The ETF and its transport union members regard this as blatant evidence of disrespect for EU democracy. We have sent over 10 letters to European Commission officials over the past year (2022-2023).

We have raised the issue with Member States and the European Parliament. The European Parliament has sent the Directorate General for Mobility and Transport (DG MOVE) requests to attend its TRAN Committee (European Parliament Committee on Transport and Tourism) and to commit to keeping the guidelines within the spirit of the law. The last invitation to the January TRAN meeting was rejected by DG MOVE. Meanwhile, the EU commissioner for Transport is taking action against Member States that continue to award rail passenger services via direct award.

Finally, on 2 March 2023, at the repeated invitation of the European Parliament’s TRAN Committee, the European Commission attended the committee meeting to provide an explanation and present the draft guidelines in question. The European Parliament reiterated that they would not accept any attempt by the European Commission to alter the spirit of the Public Service Obligation (PSO) regulation without involving the Council and Parliament in a co-decision procedure. MEPs have expressed regret that the EC has not presented any text regarding the issue, causing upheaval among all parties concerned.

Two days ahead of this, the ETF took action in front of the European Parliament on February 28 to defend democracy and public transport.

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