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COM (80) 86

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Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant l'ouverture au public des archives historiques de la Communauté économique européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 (JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit règlement.

In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning the opening to the public of the historical archives of the European Economic Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this file have been declassified in conformity with Article 5 of the aforementioned regulation. In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar 1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003 (ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5 der genannten Verordnung freigegeben. COMMISSION OF THE EUROPEAN COMMUNITIES

COM(80)86 final

Brussels . 11th April 1980

RELATIONS WITH IN THE TRANSPORT SECTOR / IN PARTICULAR : A COMMUNITY FINANCIAL

CONTRIBUTION TO THE BUILDING OF A MOTORWAY

(Communication from the Commission to the Council )

/ • fC/V' ' i: - \ \N rv * ' ■ – i y < s ,, .) ^ - .v > .4 V\ o -.7 V/x

COM (80 ) 86 final CONTENTS

V ZÈ31

/ ' I.INITIAL SITUATION AND SIGNIFICANCE OF RELATIONS WITH AUSTRIA 1 IN THE TRANSPORT SECTOR 1 . Transport policy situation 1

1.1 . The geographical importance of Austria for transport , 1 particularly transit 1.2 . Effects on Austria 2 1.3 . Austria 's request in respect of the financing of the IKPA motorway 3 1.4. Introduction of a road tax in Austria 4 1.5 . Initiatives and moves within the European Parliament 5 1.6 . Exchange of views between the Commission and Austria 6 1.7. Exploratory talks - accession of 6 1.8. Interim - summing-up 7 2 .. The wider political context of relations between the Community and Austria in the Transport sector 8 ' 2.1 . Importance with regard to integration policy' 8

2.1.1 . The accession of Greece ' 8 2.1.2 . Intra-Community aspects 9 2.2 . Importance for external relations 9 2.2.1 . Cooperation with the EFTA countries , 10 2.2.2 . Relations with Austria 10 2.2.3 . Relations with Yugoslavia 11 2.2.4 . Relations with and Middle Eastern countries 13 3 . Conclusions ^ 13

II . ANALYSIS OF SPECIFIC TRANSPORT PROBLEMS AND ASSESSMENT OF MUTUAL INTERESTS 15 4 . Transport infrastructure - IKPA motorway 15 4.1 . Commission infrastructure policy 15 4.2 . Cooperation with certain non-member countries 15 4.3 . Community financial contribution towards the building of the IKPA motorway 16 - 2 -

4.3.1 . Request from the Austrian Government 16 4.3.2 . Evaluation of Community interest 17 4.3.3 . Effect of the opening of the IKPA motorway 19 on traffic carried by other lines of communication ( impact on the network ) 4.3.4 . Summary 19

5 . Allocation of infrastructure costs - Austrian road tax 20 5.1 . The problem 2Ck . 5.2 . Situation at Community level 20 5.3 . Situation regarding road tax in Austria 21 5.4 . Summary 21

6 . Access to the market 22 6.1 . Carriage of passengers by road 22 6.2 . Carriage of goods by road 22 6.2.1 . 22 6.2.2 . 23 6.2.3 . 24 6.3 . Inland shipping 24

7 . Weights and Dimensions 25

8 . Cooperation between Railways 26

9 . Combined road / rail transport (" ferrout«ge "> 26

10 . Other subjects 27 11 . Assessment of interests from the Transport economy viewpoint 27 . 11.1 . IKPA motorvay 27 11.2 . Austrian road tax 28 11.3 . Road transport quotas 28 11.4 . Other subjects 29

12 . Conclusions 29 III . TACTICAL AND NEGOTIATING PROBLEMS

13 . Type of Approach to the Negotiations and their extent 13.1 . Approach by type of problem 13.2 . The broader approach

14 . Need for a Community decision on the financing of the IKPA motorway , 14.1 . Tactical reasons 14.2 . Transport Policy reasons 14.3 . External policy reasons

15 . Conclusions - - 7 -, i

IV . PROCEDURAL PROBLEMS

16.1 . Continuation of exploratory talks 16.2 . Budgetary aspects

V. CONCLUSIONS

ANNEXES

I - Maps ' II - Analysis of transit traffic in the NW-SE corridor III- Forecast of Transit flow of goods and passengers in the NW-SE corridor in Austria IV - Impact of IKPA on the existing and future transport infrastructure Relations with Austria xn the transport sector , in particular a Community financial contribution to the building of a motorway

I. INITIAL SITUATION AND SIGNIFICANCE OF RELATIONS WITH AUSTRIA IN THE TRANSPORT SECTOR

Transport policy situation

1.1 . The geographical importance of Austria for transport , parti­ cularly transit > Because of its location , Austria occupies a strategic position in Central Europe as far as inland transport is concerned , espe­ cially from the Community 's point of view . It is a pivot of great importance for North-South traffic in Europe . ' significant , A/ and constantly increasing , portion of intra-Community traffic is obliged to go through Austrian territory , particularly traffic to and from . The accession of Greece and the growth of trade between the present Community and this new Member State will further promote this trend . More broadly : Austrian overland territory carries a very large share of the/traffic between the Community and its trading partners in South-Eastern Europe , particularly Yugoslavia , and in the Middle East . The need to pass through Austria applies not only to the comnercial carriage of goods , but also to movements of private individuals be they notably by . private car tourists or migrant workers/ "It is thus evident , from the geographic viewpoint alone , that the transit of goods and passengers through Austria is of considerable economic and political importance for the Conmunity / which-consequently- has every interest in seeing a smooth flow of traffic through that country assured . ' - 2 -

1.2 . Effects on Austria Conversely , /tiiis applies equally to Austria , which is obliged to bear the burden of this transit traffic and provide the appropriate facilities . Statistics^ show that transit goods traffic through Austria has grown exceptionally fast in recent years : between 1972 and 1977 its volume increased from 5.4 million to 14 million 0 tonnes , with 95% of it going to or coming from the Community . This is more than double the volume of road haulage traffic transiting Switzerland , Yugoslavia , Greece and Turkey . To provide a comparison : only 8.4 million tonnes passed through territories and 7.9 million through France (/6f transit far larger than Austria . At the same time , the volume of transit road traffic through Switzerland has never reached a comparable level and amounts to only some 0.4 million tonnes at present , because of various restrictive measures , which have been in force for many years , in particular , the 28 tonne limit on the total weight of road vehicles , both Swiss and foreign , using the Swiss road network .

./•

Studies carried out by the European Conference of Transport Ministers ( ECTM ) , Paris 2The road transport of goods in transit across Austria amounted to about 2.25 milliards of tonnes/km in 1977 ; in comparison the level in Germany reached about 5.25 milliards of tonnes/km in 1977 , on a much greater road network than exists in Austria . This increase in road transit , together with the increases in road transport from and to Austria and in domestic traffic , has produced an increasingly difficult situation for Austria , which is finding itself obliged , ever-increasingly and rapidly , to : ( i ) provide adequate road infrastructure ( ii ) allocate public funds for this purpose ( iii ) suffer ill effects on the environment and quality of life . The situation is aggravated by Austria 's being a small mountains country , so that there are additional difficulties in finding solutions to the problems of transit traffic .

1.3 . Austria 's request in respect of the financing of the IKPA motorway On the north-west/south-east route known as the "- ' route""'' , at present used for transport between Germany and Yugoslavia , the situation is particularly difficult and stretched . This route consists of local roads , often narrow and in mountainous terrain , where the infrastructure is clearly inadequate to meet the demands of the traffic ; it is consequently noted for frequent long traffic jams and an exceptionally high accident rate . At present about 180 O00 lorries a year use this route in . transit , repre­ senting about 840 million tonne-kilometre , and the average 2 yearly rate of growth is forecast as 5,9% . In addition , this route is very heavily used by tourists and migrant workers coming from or going to South-Eastern Europe . To remedy this situation , Austria has decided to speed up the . construction of a transverse NW/SE motorway , known as the "Innkreis-Pyhrn-" ( IKPA ) , which will link the German motorway network at Passau with the Yugoslav road network at

- ./. -

"Migrant workers' route " 2 See Annexes II and III - 4 -

Spielfeld/Maribor and will cross Austria passing close to Linz and \

In view of : ( i ) the importance to Europe of the planned IKPA motorway as an essential part of the road link between the north­ west and south-east of Europe ; ( ii ) the fact that , now and for the future , 90% of the volume of transit traffic using the NW-SE route throuqh Austria now originates or terminates in the Community ; ( iii ) the budgetary constraints on the financing of this motorway , Austria made a formal and detailed request to the Commission in March 1977 for a financial contribution from the Community towards the faster building of the motorway . Austria would like 2 this contribution to total some 370 million EUA .

It should also be pointed out that because of frequently difficult road traffic conditions , which are highly acute on the " ", local people in Austria have on several occasions blocked roads . The situation is continuing to develop along these lines and it is to be feared that due to political pressure local , regional and federal authorities will be impelled to impose restrictions on road traffic comparable to those aoolvinq in Switzerland for some years , unless alternative solutions are found in the medium term .

1.4 . Introduction of a road tax in Austria

To cope with the constantly increasing financial burdens of providing and maintaining road infrastructures , at a time of major budget deficits , Austria unilaterally introduced on 1 July 1973 a heavy road tax affecting foreign and Austrian commercial vehicles . At the same time , Austria imposed

see maps in Annex I ? see paragraph 4.3 . for details of the Austrian request - 5 -

severe restrictions on the quantity 'of Diesel fuel which may be brought into Austria duty-free in the tanks of lorries . Discussions carried out by the services of the Gonmission in 1977/78 with the Austrian authorities led to the elimination of certain discriminatory proposals and helped to achieve a reduction in the rate of tax^ropo^ed . Nevertheless , these measures , intended to obtain payment for , the vise of infrastruc­ ture , have caused an increase in transport costs in Austria"^ and additional delays at the frontier , where foreigners are * required to pay the tax .

( At its meeting on 12 June 1978 , the ( Transport ) Council adopted a resolution regretting the introduction of these measures in Austria , approving endeavours to find appropriate solutions at ' European level and invi ti ng ' the Corranission to report to it on initiatives to be taken to this end .

While it is true that Austria has in the meantime indicated that it is prepared in principle to fall in with the Community system of allocating road infrastructure costs , as soon as this system comes into force and on condition that Austria 's excep­ tional situation is taken into account , the tax remains a very serious problem in relations between the Community and Austria .

1.5 . Initiatives and moves within the European Parliament In view of the particular importance of Austria for the Community in the transport sector and bearing in mind the increasingly difficult situation for transit traffic , the European Parliament has on several occasions taken the opportunity to express its concern and stress , the need to find appropriate solutions jointly with Austria . –

For example , in the "Giraud Report " of 2 February 1976 on problems of transit through Austria and Switzerland Parliament stressed the connunity of interests in the transport sector and called for joint efforts to remedy the inadequacies of – " ./. ^"According to information from Austria , foreign hauliers had to pay a total of 280 million Austrian Schillings in the first six months of the application of the road tax . - 6 -

transit infrastructures . By the same token , in the " Seefeld Report " of 5 January 1979 on the status and development of the coirmon transport policy , Parliament emphasized that the need to improve transit through Switzerland and Austria was a priority matter .

The same issues have prompted numerous parliamentary questions , together with an in-depth debate by Parliament during its part- session of 24 September 1979 , when speakers from all the poli­ tical groups stressed the need to improve transalpine transport and for closer cooperation between the Community and Austria ( and Switzerland ) on this matter .

1.6 . Exchange of views between the Commission and Austria

In the light of the constantly increasing .importance of transport in bilateral relations with Austria and as part of efforts to deepen and diversify cooperation between the Community and the EFTA countries , a regular exchange of views between Austria and the Commission on transport matters was instituted in March 1978 . This exchange of views makes it possible , in particular , to compare developments in Austrian and Community transport policies , with the aim of preventing excessive divergences and to discuss pressing problems .

Although the usefulness of this exchange of views has been proved in the meantime , particularly in that each side has a better understanding of the other 's problems , this can obviously be no more than a jumping-off point for the joint implementation of practical solutions to the specific problems which have been encountered , particularly in the field of transit road traffic .

1.7 . Exploratory talks/Accession of Greece Alongside the problems posed by Austria 's request for financial assistance and the introduction of the road tax , the Community found itself faced , more recently , with yet a third highly concrete problem : the quantitative restrictions deriving from the quota and authorization system applicable in Austria to - 7 -

» transit road traffic . This problem was discussed in the negotiations on Greek , accession and , at the 11th session of the Conference at minis- 1 terial level on 3 April 1979 , the Community and Greece agreed that " .... in accordance with the procedure already agreed upon , as soon as the instruments of accession are signed , the Conmission will embark on exploratory talks with Yugoslavia and Austria ν 1 · on the arrangements applicable to the international carriage of goods by road with a view to finding ways and means , if necessary by concluding an agreement , of applying the measures introduced in traffic between Member States by the various Community acts constituting the 1 acquis communautaire 1 to traffic to and from Greece ." .

In accordance with this agreement the Community should make sure , by reaching an arrangement with Austria , that the libera­ , lization measures for intra-Coromunity transport by road intro­ duced by Community legislation are fully applied in future traffic with Greece without there being any interference in the form of quantitative restrictions on the part of non-Community countries of transit .

Commission departments held the/ opening round of these exploratory talks with the Austrian authorities on 19 and 20 July 1979 . It rapidly emerged that Austria is not prepared to make concessions to meet the wishes set out by the Accession Conference , unless the Community is prepared to offer counter benefits in terms of financing transit infrastructures - more particularly the tKPA Motorway . /

1.8 . Interim suppinq-up \ ■ This outline of the general situation as regards relations with Austria in the transport sector is sufficient to show the complexity and interrelatedness of the problems , including the Austrian request for financial aid . These various aspects of

Ltoc . 00NF/GR/2 4/7 9 , ./. - 8 -

transit by road should be looked at in the broader settinq with other problems over transport havinq an effect on relations with Austria"'' . However , the importance of relations between Austria and the Community in the transport sector must first be placed in its wider political context of integration policy and external relations .

2 . The wider political context of relations between the Conmunity and Austria in the transport sector

2.1 . Importance with regard to integration policy 2.1.1 . The accession of Greece

Relations between the Conmunity and Austria in the transport sector play an important role in the context of Greece 's accession . Given the geographical remoteness of Greece from Community centres , and its lack of conmon frontiers with other Member States it is obvious that transit through Yugoslavia and Austria is of paramount importance as far as land transport links are concerned . Greece 's accession to the Community will mean in the medium and long term , that trade between it and the present Member States will increase significantly , and with it transport , especially by road , in terms of volume and of the number of movements . At present , between 75% and 85% of 2 overland goods transport with Greece is by road . At present , between 75% and 85% of overland goods transport with Greece is by road . In 1978 , trade by road between Greece and the Member States amounted to 955.000 tonnes ( 83.3% ) ; compared with Bl . 000 tonnes ( 16.4% ) by rail . The major part of the road freight carried between Greece and the Community takes the route through Yugoslavia and 2 Austria known as the "Gastarbeiterroute " . In 1977 , for example 90.3% of Greek exports carried by road to the Community took this route . It follows that replacing the Austrian section of this route by a well-constructed north-west/south-east motorway is of importance for intra-Conmunity

See Chapter II , p. 15 2 See Annex II and III - 9 -

transport and future trade with Greece . If the view is taken that it is also the Community ' s duty to provide good communication links with Greece in the interests of promoting the latter' s complete and rapid integration , the building of the IKPA motorway is of special interest to the Comnunity . Moreover , with the enlargement of the Community in mind the Commission has decided to amend its proposal for a regulation on the financial support for infrastructure projects of common interest to make it capable of being applied also if there are nrojects in non-member countries whose execution is of particular importance to the Community .

\ / ■ Finally , it should also be recalled that in addition to road infrastructure the problem of quantitative controls in force in Austria , which has already been mentioned , has a special importance in the context of Greek adhesion"'".

2.1.2 . Intra-Community aspects ι However , the state and development of relations between Austria and the Community in the transport sector do not just affect future trade between the Community and Greece ; they also concern some trade flows between Member States , notably Italy . The consequences of the road tax and the quantitative restrictions on transit show the extent to which Austrian transport policy decisions can adversely affect trade , above all with Italy . The consequences of the introduction of the road tax and the application of quantitative restrictions for transit show to what extent Austrian decisions on transport policy can have a negative influence on trade especially with Italy . Although it is correct that the interest for Italy in having a direct access to the IKPA is rather limited , it is nevertheless true that Italy has every interest to avoid a deterioration of relations with Austria ; that led to difficulties on other transit routes , notably the Brenner , and the maintenance or even intensification of Austrian restrictions . With this in mind , the Community 's efforts to improve and

See paragraph 1.7 . - 10 -

intensify relations with Austria in the transport sector would be beneficial and avoid additional constr»int .<» in th® ft it' 're

2.2 . Importance for external relations Apart from matters of political integration , relations with Austria in the transport sector - and the building of the IKPA motorway in particular - are of particular)^ioftthe Corrmunity ' s external relations , namely for cooperation with the EFTA countries and bilateral relations with Austria , Yugoslavia , Turkey and the Near East . 2.2.1 . Cooper ation with the EFTA countries Since tariffs between the Community and EFTA were finally removed , the parties have begun to consider how their future relations should develop . For the Community , this resulted in the adoption by the Council on 18 December 1978 of a Coreper report , with the Council agreeing that , " should cooperation in addition to the free trade agreement be considered desirable by both parties , the Community would be prepared to undertake such cooperation to the mutual advantage of the parties concerned ". In June 1979 the Council instructed Coreper , with the Commission 's help , to continue efforts to increase coope­ ration with the EFTA countries .

Against this background , transport assumes special importance , especially in the case of Austria , in view of its geographical situation . Reinforcement cf relations with Austria in the transport sector , and more particularly help from the Community for the building of the IKPA motorway , would provide an exanple of the Community 's willingness to achieve progress in steppi ;, up cooperation in all cases of mutual advantage . 2.2.2 . Relations_with Austria ( a ) The provisions of the State Treaty of 1955 between Austria .% the United States , the USSR , the United Kingdom and France have meant that Austria has not applied to become a member of the Corrmunity , although it did negotiate throughout the 1960s to obtain special associate status . Finally , in July 1972 , it concluded two free-trade agreements with the Communities , with which it has a number of other agreements . Apart from Switzerland , it is with Austria that the Community has achieved its greatest trade surplus , which , in fact , compares with the size of its trade deficit with Japan . ( b ) Transport has particular importance in relations which Austria a country which has most of its frontiers in common with those of tne Community . ) . If one disregards the three unsettled problems mentioned above - namely the financing of the IKPA motorway , the tax and quota restrictions on road transit - the importance of transport , especially the carriage of goods in transit , in relations with Austria has led the Community to conclude a number of agreements with that country . These are : - an agreement on the introduction of through international rail tariffs for the carriage of coal and steel through Austrian territory ( 1957 ), and , - various agreements on the simplification of customs procedures and the transit of goods through Austria . Also , when the President of the Commission visited Vienna early last October , transport matters figured largely in discussions be held with Chancellor Kreisky , various members of the Govern­ ment and the Austrian Parliament on bilateral relations between the Community and Austria . The President stressed the need for greater cooperation in the field of transport . It emerged , in particular , from these talks that Austria considered financial support for the building of the IKPA motorway to be extremely important for its relations with the Community . This is confirmed moreover , by the fact that Austria , has recently begun a diplomatic offensive in the capitals of the Member States to advance its cause . : '

2.2.3 . Relations with Yugoslavia . ' Negotiations between the Community and Yugoslavia with a view to concluding a cooperation agreement are still proceeding . The agreement will enhance cooperation through closer links between the Community and that country , which is bound to mean an increase in traffic between them - and - 12 - especially goods traffic . Most of this traffic will pass through. Austria .

The cooperation envisaged will relate to transport , among other things and will aim in particular to : improve and develop services , especially as regards land transport , in particular to achieve complementarity ; - encourage the improvement of infrastructures to the mutual benefit of the parties "^". On 14 November 1978 , the EIB and Yugoslavia signed a loan agreement for 25 million EUA . The loan - for fifteen years at 9.65% per annum - will finance five sections of the planned trans-Yugoslavia motorway . Work has begun and the second of four instalments has been paid over . As part of a new agreement on cooperation it is planned that the financial protocol to the agreement will contain certain provisions with regard to financing the Yugoslavian road network . The EIB has said it is ready to set aside 200 million EUA for investment projects in Yugoslavia , and it is likely that these resources will go as a priority to improving Yugoslavian road , rail and telecommunications networks . The Coimunity institutions have therefore already contributed to building certain sections of the trans-Yugoslavia motoiv^y - and they might be led to envisage other actions , among them to financing the motorway link envisaged between the Austrio- 2 Yugoslav frontier at Maribor and . In this context the construction of the north-west/south-east motorway through Austria should be thought of as an important complementary element in providing an effective infrastructure network for relations between the Community and Yugoslavia , notably in the light of the latest political developments .

./. Council negotiating directives of 6 February 1979 2 See Annex I - point 2 - 13 - /

2.2.4 . Relations with Turkey and Middle Eastern countries

' » In view of the special economic and political situation of Turkey , which is now the only country with associate status , the Community should consider anything likely to promote the special relationship with that country . All improvements to road links with Turkey , which pass through non-member countries , must be considered as an appreciable element in improving trade , especially in view of the acute economic crisis the country is suffering . The Community has a cooperation agreement with Israel and preferential agreements with Syria , Lebanon and Jordan . The desired effects of these agreements can only be enhanced by the improvement of motorway links even if the IKPA and trans- Yugoslav motorway are only partial elements . The Gulf countries have become one of the Community 's main export markets . Better land transport along this route is a major factor in maintaining and improving the Coranunity 1 s competitiveness in these markets , ■ ι which are much sought after .

1 \ 3 . conclusions

This general survey of relations between the Community and Austria in the transport sector and their wider significance , show§ that the problems arising , and in particular any future financial contribution to building the IKPA motorway , are highly charged politi­ cally and go beyond mere transport matters . They have a substantial effect on the whole range of bilateral relations with Austria and on certain aspects of Community integration as well . It is important , for both political and transport reasons , that satisfactory solutions should be found which will both safeguard and , further the Gornrtiunity 1 s interests and , at the same time , meet legitimate Austrian wishes as far as possible . From this point of view it can be taken that the most important common factor is to ensure a smooth flow of transit traffic through Austria on a mutually acceptable basis . In view of the interdependence of the Comnunity and Austria in the field of transport , a framework of suitable conditions can only be created by strengthening cooperation and by the joint application of well-balanced , practical measures . - 14 -

In order to clarify the starting points along the choosen route , it is necessary , leaving to one side the general and political interest - which is difficult to quantify - noted above , to draw up a detailed list of points of agreement or disagreement on both sides ; this would relate to the various parts of transport policy which are important in connection with Austria . Given the combination of political appraisal , on the one hand , and analyses of specific transport interests on the other , it should then be possible to put forward clear policy options so that the right course of action can be selected . - 15 -

II.

ANALYSIS OF SPECIFIC TRANSPORT PROBLEMS AND ASSESSMENT

OF MUTUAL INTERESTS

4 . Transport infrastructure - IKPA motorway

1 1 • 4.1 , Commission infrastructur 1 policy

In its memorandum on the role of the Community in the development of transport infrastructure^, the Commission stated the conviction that the common transport policy could not attain its objectives , as defined in the Treaty, unless it also dealt with transport infrastructure.

The Commission's approaoh to infrastructures is to avoid the continuance of action without an overall concept of the infrastructure needs of the Community developed in the framework of the common transport' policy. In faot , this is the object of the Council Decision instituting a consultation procedure and setting up a committee in the field of transport infra- 2 structure . With the same objective the Commission has proposed to the Council a Regulation to establish machinery to provide financial support for certain projects of Community interest^.

However , both the decision and the proposal for a regulation relate only to transport infrastructures in Community territory.

4.2 . Cooperation with certain non-member countries

Because of the increasing flows of transport between Member States cros­ sing the territory of non-member states , the objectives of the Community 's transport infrastructure policy oould be served by the execution of certain projects outside ^Community territory. This applies particularly to routes through Austria and Switzerland.

^OM ^) 55O final QJ L 54 of 25 February 1978 "^OJ C 207 of 2 September 1976. - 16 -

With the accession of Greece , routes through Austria and Yugoslavia will 'become particularly important . It accordingly seems expedient to extend the concept of "Community interest " to include certain infra­ structure projects in non-member states whioh would significantly improve overland links between Member States . The Commission has therefore decided to amend accordingly its proposal for a regulation on support for infrastructure projects of Community interest*.

4.3 . Community financial contribution towards building the IKPA motorway

2 For the reasons given above Austria has decided to speed up the building of a motorway linking the Austrian frontier at Spielfeld/ Maribor to the German motorway terminating at Passau. and passing in Austria nearto Linz and Graz.

4.3.1 . Request from the Austrian Government

Austria has asked the Community for a contribution towards the building of 116.5 Jem of motorway on the 3^7 km total length of the IKPA. The various parts of the motorway which are included in the request for Community financial support are shown in Annexe 1 .

To this end Austria wishes to obtain t

- non-returnabl e subsidies of 100 m UCE and

- a contribution to interest charges reducing the effective rate paid by Austria to 3%; the cost to the Community would be about 270 m UCE. The payment of these sums would be spread over about 20 years .

Discounting the total finanoial outlay to 1978 gives the following figures discounted at a number of rates < in million UCE

5 . 5* 6% 10% 254.3 204.8 175.0 151.3

Doo C0M(80 ) 58 2 „ ' , , •/ See para 1.3 » - 17 -

The contribution requested from the Community represents 455" of "the total cost of those motorway sections to which the request relates . The cost of building these sections is one third of the total cost of building the whole motorway .

4.3*2 . Economie evaluation o " Community interest

The economic benefits to the Community of the building of the IKPA motorway have been analysed in detail by consultants . The main oonolusion of the study was that in the short term neither other modes of transport nor possible other routes provide a realistic alternative to meet the traffic demand expected during the coming decades .

The economic benefits were calculated as follows :

<. / - Growth in the volume of goods and passengers travelling through Austria along the NW-SE corridor was calculated on conservative assumptions for the coming decades^. An estimate was then made of the probable share of road -transport and of the proportion of this which will probably use the IKPA motorway . Prom these were calculated the movements of commercial and private vehioles to give an idea of the future utilization of the IKPA motorway . - Savings in travelling time and acoident costs were then calculated for these vehicle movements . All other benefits , including savings in operating costs , were disregarded . The study did cover the possible 'benefits of other savings but for various reasons , and in the interests of prudence , these were not taken into account .

See Annexes II and III - ' -A - 18 -

- The estimated benefits were then opportioned between the countries of south-west Europe , the Near East and the Middle East , so that the "Community interest " oould be assessed.

There are two ways of assessing the benefits for the Community i a ) one method is to consider the benefits resulting directly from a contribution by the Community , i.e. ;o base them on the completion of the motorway in 1987 instead of 1998.

Discounted to 1978 values , the benefits for the Community are as follows , with four possible discount rates » Discount rate t 3 » 5% 6% 8% 10% Benefits ( in million EUA ) t 18 14.3 12 10,1 b ) The other method is to assess not only the benefits of the early completion of the IKPA motorway but alBO the resulting benefits for transit traffic if the project is financed entirely by Austria. This assessment which takes into account the benefits over the entire life of the IKPA project ( 50 years ) gives the following I results t Disoount rate < 3*5% 6% 8% 10%

Benefits : 113 106.4 44.3 32.4

To estimate the Community interest solely from the viewpoint of transport economics for a possible application under the financial regulation mentioned in para 4*1 * above only the advantages noted under a ) should be considered.

•/. - 19 -

ν 4»3«3 » Effect of the opening of_the_IKPA motorway_on traffic carried ty_other lines of communication ( impact on the network )

An assessment of the effects of the opening of the IKPA motorway must of necessity "be based, on the assumption that the links between it and the German ai d Yugoslav motorway networks will be completed. The works in Germany are in progress at the moment . The most immediate impact will inevitably be on the "Gastarbeiterroute" in Austriaf but it will also affect other routes which are currently congested, e.g. the Muni oh-Sal zburg motorway ; traffic on these will fall substantially *

, The effeots on the other modes of transport are diffioult to oalculate. Generally f little time would be saved by using the IKPA motorway ( around one and a half hours ) in relation to journey times. The effect on competing modes of transport should be limited, therefore. Account should also be taken of the possible effeot of any commercial moves or infrastructure projects planned by the oompeting modes. These ' aspects are discussed in detail in Annex III.

4*3*4 * Summary ' »

The foregoing arguments show that expediting the building pf the IKPA motorway should theoretically be of direct benefit to the Community in Baving transport costs. How muoh Community support might be given and subject to what political oonditions must still be disoussed, however ( see part IV ).

/• - 20 -

5 . Allocation of infrastructure costs - Austrian road tax

5.1 . The problem

The planning and financing of infrastructure investments underlie policy in this field.. This must also "be "backed up "both by a policy for the maintenance and optimum use of such infrastructures and on the other hand "by a system of allocation costs to the users * The allocation of costs through fuel and vehicle taxes is an important aspeot of the Common Transport Policy*.

5.2 . Situation at Community level

Acting on a Commission proposal , the Council of Transport Ministers approved on 12 June 1978 the text of a Directive to introduce a Community system for taxing heavy commercial vehicles ; formal adop­ tion of this Directive is still dependent , however , on the withdrawal of a reservation "by one Member State , linking this question to an agreement on weight and dimensions of vehicles , a field where the Com­ mission has already put forward proposals to the Council .

The Community system of taxation envisages that an amount has to be paid in respect of each vehicle , in the form of diesel fuel duty and a tax on the vehicle itself , the total being related to the cost of using the infrastructure . The principle of taxation solely in the country of registration was chosen in order to facilitate trade and not to impede frontier orossing ( the nationality principle ). The level of tax, however , is based on the total distance oovered including the portion performed in other countries .

The nationality prinoiple is already applied in the form of reciprocal exemption in bilateral agreements between Member States , and with and between the majority of non-member countries .

Other methods of oharging also exist , in particular the collection of motorway tolls in some countries . - 21

5.3 . Situation regarding road tax in Austria

» The introduction "by Austria from 1 July 1978 of a road tax also payable "by foreign vehicles and collected at the frontier^ is to a reversal of Austrian policy on the subject , since the nationality principle has been replaoed by the terri­ toriality prinoiple. i.e. charges pro rata time spent in Austria. The coexistence of these two principles creates serious problems s of double taxation and has led to an increase in the cost , of road transport operations to/from or through Austria and hampers crossings of its frontiers . The restrictions on the importation of duty-free fuel linked to the tax constitute an additional obstaole. In addition, this action by the Austrian authorities has been taken ' as a pretext by other non-member countries such as Turkey, Yugoslavia 2 and more recently Switzerland to consider introducing or increasing similar charges.

5.4. Summary ■ '■!.' -

The road tax in Austria seems counter to the Community system and to the praotices general in Europe. It represents a major obstaole , especially to intra-Community road transport through Austria. To remedy this un­ satisfactory situation for the Community , the main objeotive should be to bring Austria to align itself on the Community system^. It is therefore important that the proposed Community directive Bhould be adopted by the Counoil and put into effect as soon as possible so that the Community will have a firm negotiating base. The introduction by all Member States of taxes levied on Austri&av. vehicles using the territory of the Community is an alternative course of aotion whioh should not be excluded from negotiations with Austria.

- ■ ./•

See pdint 1.4 * 2_ ...... Switzerland now proposes to introduce a road tax; its introduction ' will however depend on the result of a referendum. ^ See pbint 1.5 « - 22 -

6. Access to the market

6.1 . Carriage of passengers "by road Multilateral negotiations axe in progress ^" on this subject between the Community and certain other European third countries } further nego­ tiations are planned. The present negotiations have revealed that Austria is keen to secure greater liberalization. At present , there are no particular problems concerning carriage of passengers in a bilateral ( Community/Austria) setting.

6.2. Carriage of goods by road.

6.2.1 . The carriage of goods by road between the Member States and Austria and of goods through Austria is as a general rule subject to quota arrangements and therefore to quantitative restrictions .

However , certain types of transport operation are free of quotas or even authorizations , under the terms of Resolutions of the European Conference of Ministers of Transport ( ECMT)j these transport 'operations are largely those which were libe­ ralized in respect of trade between Member States by the Council Directive of 23 July 1962 ( First Directive , subsequently a­ mended on several occasions! The extent to which some operations have been liberalized is even sometimes greater than has happened within the Community itself .

As far as non-liberalized operations are concerned, authorizations are issued either from a very small multilateral quota created by the ECMT ( 144 authorizations valid in Austria for EEC Member States ), or under bilateral quota arrangements between the indi­ vidual Member State ooncerned and Austria. In most cases , these quotas make no distinction between transit traffic and exchange traffic. As far as utilization of Community authorizations is concerned, valid only in the territory of the Community , Member States usually fall back on authorizations granted under bilateral quota arrangements for transit through Austria.

■^ Negotiation of an Agreement on the international carriage of passengers by road by means of occasional coach and bus services

OJ No 70 of 6 August 1962 The consultations with the Member States , whioh are to be extended to include Greece v have shown apart from the road tax levied by Austria - what all contest - the Member States say they are satisfied with the present situation, except for two of them which consider that too few transit authorizations are granted by Austria* Two other Member States point out that they have refused increases in their bilateral quotas requested by , Austria^*

Furthermore, the Member States have unanimously stated their preference for settling any problems in this field in the framework of their bilateral agreements with Austria*

6.2.2. Despite this , the problem of applying the Community quota to Greece^ remains.

Enlargement will entail not only the validation of Community quota authorizations in respect of operations between the present Member States and Greeoe already held by these Member States but also the allocation to Greece of an appropriate share of this quota*

The utilization of these Community authorizations will olearly depend on the number of transit authorizations which Austria grants t

Any negotiations with Austria on the utilization of the Community quota for traffic from or to the Member States and Greece is a Community matter and must therefore ,be conducted by the Commission and concluded by the Council .

•/ •

Italy and the United Xingdom ^Belgium and Franoe '

See paragraph 1*7„ 1 - 24 -

During -the negotiations concerning the accession of Greece , the Member States have permitted only exploratory talks on this subject , though not ruling out the possibility of Community- level negotiations at stage two . The attitude of Austria during these first exploratory talks held with the Commission 's services pursuant to the engagements undertaken by the Community vis -k-via Greece lead to the conclusion that such negotiations will be 1 necessary .

6.2.3 * Within the context of these same discussions Austria had drawn attention , inter alia , to this interests of its carriers in having a"suffioient"share in the haulage trade in transit through its territory . and in obtaining more authorizations for it3 traffic with certain Member States .

Austria has also shown some interest in schemes for cooperation with Member States and the Community concerning participation in traffic within the Community ( association with the Community quota scheme , for example ). Depending on the circumstances , this interest could also be borne in mind in sectoral negotiations relating specifically to market access or in negotiations embracing all the transport interests of both parties .

6.3 * Inland shipping

The Austrian Government has more than once expressed its desire for Austria to be regarded as a riparian State of the Rhine and for its shipping to enjoy the same treatment as vessels belonging to Rhine navigation , even to the extent of becoming a member of the Central Commission for the Navigation of the Rhine ( CCR ).

This preoccupation of the Austrian Government assumes a special importance with the imminent oomplotion of the Main-Danube link

«r

See paragraph 1.7 » - 25 -

and. the implementation of the Additional Protocol of 17 October 1979 to the Mannheim Convention , which restricts the right of freedom of conveyance on the Rhine to vessels belonging to the fleets of riparian States and to the fleets of the EEC Member States to meet the unfair competition practised by some Eastern bloc countries . Austria 's interest in gaining access to Rhine navigation could be a factor in the context of negotiations extending to the transport interests of both parties f particularly when one takes account of the fact that the admission of Austria to Rhine traffio or its accession to the Convention of Mannheim depend upon a prior Community deoision*

7 . Weights and diment ions The weights and dimensions of commercial road vehioles are a subject of great importance for the harmonization of the conditions of competition in road transport . The latest Commission proposal * calls for a Community-type vehiole . The maximum standards considered by the Commission as most favourable from several points of view ( economic , energy consumption , etc.) may not be recognized to be so by Austria. In faot , the total laden weight per­ mitted by Austria is 33 tonnes whereas the Commission proposal goes up to 44 tonnes . If the Commission 's propoBalwere adopted and the maximum weight of 44 tonnes were thus introduced , the maintenance of a maximum total loaded weight of 38 tonnes by Austria , would then constitute an added barrier to intra- Community trade through this country.

One has only to recall here the adverse repercussions on transit traffic through Switzerland of the weights and dimensions of vehicles to 28 tonnes ^ in force in that country . to realize the importance of a refused by Austria to fall into line with Community standards . Close cooperation with Austria ♦ I on this matter is therefore required .

•/ •

COM ( 78j 728 final of 4 January 1979 ? See paragraph 1.2 - 26 -

8 . Cooperation "between Railways

The Railways' operating deficits are a cause of concern to all Govern­ ments } and. the critioal condition of the Railways is a serious obstacle to the implementation of a common transport policy . Some integration of the Member States' Railways might help to improve their operating results , but this integration can be considered only in the very long term . Meanwhile the Commission is endeavouring to increase commercial , technical and administrative cooperation between the Community 's Railways . With this in view the Council adopted the Decision of 20 May 1975 on "the improvement of the situation of railway undertakings ^". A number of schemes operated in this connection could also be advantageous to the Railways of transit countries , in particular Austria. As with road transport , a substantial proportion of intra-Community rail traffic passeB through Austrian territory , fully justifying the extension of cooperation between the Community 's Railways to the Austrian railsystem .

9 . Combined road/rail_transport ( " ferroutage ") Combined road/rail transport could help Austria with its problems in terms of road congestion and environmental protection . Being aware of the value of combined road/rail transport for the carriage of goods over long distances on major routes , the Community , in a Directive of 17 February 1975 t "backed up by the Directive of 19 December 1978 , has laid down common ruJ.es for the combined road/rail carriage of goods between Member States , including container traffic , freeing it from any quantitative restrictions ( quotas ) and removing various administrative constraints ( authorizations ).- •/.

1 OJ L 152 of 12 June 1975 2 OJ L 48 of 22 February 1975 3 OJ L 5 of 9 January 1979 - 27 -

The Commission has also proposed to the Council that negotiations should • be opened to extend this system to certain non-Conununity countries , including Austria1 . A set of actions to promote this technique is also "being prepared by the Commission for environmental and energy- saving reasons in particular * It is in the Community 's interests to harmonize its actiorswith Austria's intentions on this subject.

10 . Other subjects

Apart from the matters already mentioned, others are of mutual interest to the Community and Austria, in particular t

– summer time – transport rates and conditions - frontier problems - social conditions in the road transport seotor ( amendment of the AETR agreement ). 1

11 . Assessment of interests from the transport economy viewpoint

The foregoint brings out the fact that , from the transport angle , Austria and the Community have varying degrees of interest in achieving solutions to the various types of problem. ^

11.1 IKPA motorway

Austria would obviously like to see the IKPA motorway built as soon as possible for this will put an end so much the sooner to the diffi­ cult situation on the road corridor which at present constitutes the "Gastarbeiterroute". At the same time , Austria is extremely in­ terested in obtaining Community financial support for this project , , seeing its budget deficit will preclude its bringing completion of the IKPA motorway forward to 1987 on its own. '

•/•

Doc. COM ( 75 ) 188 final 2 "European Agreement concerning the work of crews of vehicles engaged in international road transport " ooncluded under the auspices of the Economic Commission for Europe (ECE) - 28 -

Furthermore , assessment of the Community 's economic interest in the expedited completion of this motorway has shown that the Community , too , would derive direct "benefits from it which , although not so great as Austria 's , could on their own warrant some degree of Community financial aid . And the long-term "benefits of the IKPA motorway to the Community should also not "be lost from sight .

11.2 . Austrian road tax

Austria 's interest in aligning its system of oommeroial vehicle taxation with the Community system ( which is not yet operative ) appears somewhat limited . Because the Community countries with one exception have not retaliated against Austria 's introduction of the road tax , Austria has not suffered in economic terms from its unilateral action ; on the contrary it has "benefitted . On the other hand , the Community has a major interest in having this Austrian tax modified to remedy the problem of double taxation of Community commercial vehicles travelling to and from or via Austria . Prom this angle , it has every interest in seeing Austria come into line with the Community system of taxation .

11.3 . Road transport quotas

Although the Community quota now covers only a small proportion of road transport , its application to transit through Austria will create an opening for the future and thus help facilitate roadborne trade between the Member States of the Community , including Greece . Austria , however , has no interest per se in applying this Community system to intra-Community traffic in transit . At need they have some interest in being able to take part in the Community 's system in so far as it would permit Austrian carriers to operate within and through Community territory . But Austria 's interest is less than - 29 -

the Community ' s i its traffic in Austria is concentrated on a few very "busy routes ; Austrian traffic is dispersed over the whole of the Community road network . .

11.4 . Other subjects Mutual interest as regards the subjects discussed in paragraphs 7 "t° is more or evenly 1 JSS "balanced . However , it can only be resolved in the medium , or even the long term . Likewise with inland shipping , although there the Austrian interest is greater . « . .

12 . Conclusions

This review of the different transport-policy sectors important to rela­ tions with Austria has shown a series of transport problems of mutual interest which argue for close cooperation between the Community and Austria . A distinction must be made, however , between those issues which require praotical solutions as soon as possible and which should therefore be given priority treatment , and those which may be left for the longer term . At the same time , various degrees and perspectives of interest on . the part of Austria and of the Community must be distinguished . A The most aoute problem at this stage in the Austrian 's eyes is their request for a financial contribution towards the construction of the IKPA motorway . The Community should obtain the abolition , or , in its absence , a sub­ stantial relaxation of the present quantitative restrictions for road transit traffic across Austria - no obstacle in Austria to intra-Com­ munity traffic carried out under the Community systems - and a rapid so­ lution to the problem of the Austrian tax . It scarcely seems conceivable 1 that the Community will contribute financially to the construction of the IKPA motorway if counter benefits in these areas are refused . The other problems present less urgency , but it is important to point the way to solutions regarding th«&. In view of the complexity and interrelatedness of the various issues , their varying degrees of urgency , the standing of Austrian and Community interests , and the political considerations , the question is how , and on what lines of behaviour , to act towards Austria.

./. - 30 -

III .

NEGOTIATING AND TACTICAL PROBLEMS

13 . Type of approach to the negotiations and their extent

In theory one could consider a range of approaches for dealing with Austria on the various problems mentioned. One extreme would be an approach s o rs strictly by / which would aim at resolving each one of the various transport problems by separate negotiations in order to conclude a separate and speoific agreement for each problem sector .

The other extreme would consist of an integrated approach which would aim at finding solutions to the various problems in the context of a "parcel", simultaneously or in several stages . Between these two extremes one could consider various combinations of matters and of timing depending upon the urgency , the practicability and the opportunity.

13.1 Approach by type of problem

This approach would entail reaching solutions with Austria in each problem sector , in order to seek trade-offs of interests in each sector instead of a balance of interests over several problem sectors . For example 1 negotiations might be to deal only with the .icad tax recently introduced unilaterally by Austria . Such an approaoh would assume that there is a more or less equal level of interests on both sides at stake in each problem so that a specific agreement c7U^>e achieved } otherwise (i.e. where there is a clear disparity of interests ) sectoral solutions would be unattainable . On the other hand , the view oan be taken that a sectoral approach is a better way of taking account of the unique characteristics of eaoh issue without complicating the negotiations with considerations arising from other problem sectors . - 31 -

Although a certain balance of Austrian and Community interests oan be seen in some matters such as combined road/rail transport , cooperation between railways , etc *, there are others where it is hard to see how the sectoral approach could apply,- notably with the main issues the financing of the IKPA motorway * Here it seems impossible to work out & autually ^ advantageous solution at sectoral level , for Austria's interests outweigh the Community's ) and it would appear odd , to say the least , for the Community to ask Austria for offsets in terms of 1 financing infrastructures in order to achieve sectoral balance * The offsets necessary for the Community in return for a financial contribution to the building of the IKPA motorway can therefore come only from another problem sector (for example transit authorisations j in other words , .

an entirely separate approach sector by sector , without any regard for develop­ • ments in the other sectors is not valid for this case. -

13*2 * A Broader Approach ' "

13*2*1 * In these circumstances it is worth considering whether it does not seem preferable for the Community to pursue the various subjects in some association with a broader approach in order to obtain advantages in trading off one interest against another * This would be impossible if each subject were dealt with in isolation * - 32 -

At the same time it would be needful to avoid tying one 's hands by too close an association of the subjects in such a way that if one did not satisfy the Au3trians on one subject - e.g. the financial contribution for the IKPA motorway - this could be considered as a own blookage for the Community to pursue other subjects on theii/ merits .

13.2.2 . Thus as far as the main questions of a financial contribution towards the IKPA motorway , the road tax and the authorisations for road transit are concerned - matters for which different levels and interests exist between the Community and Austria - one should envisage the pursuit of these subjects in such a way and with such timing that the Community could act in one sector without losing sight of the situation in the other sectors . Such an approach should allow a positive and mutually satisfying result to be obtained for the two sides would see their interests safeguarded in the light of an , overall balance . In this perspective a positive result could be achieved by the two parties if on the one hand the Community gave Austria a financial contribution for the IKPA motorway and on the other Austria met the Community 's requests concerning the road tax and the authorisations for road transit carried out under the cover of the Community systems .

At the same time , for the other categories such as combined transport , railway co-operation etc . - areas in which the level of interest is more or less the same , one might envisage the creation of initial bases for more advanced co-operation in the medium and the long term between the Community and Austria } possibly some practical measures could already be envisaged : in considering these other matters - 33 -

one should not deprive oneself of the possibility of advanoing in one sector by means of ooncessions in another even if t for some problems effective solutions can only be found during several consecutive or parallel stages.

13.2.3 . This broader approach would have the advantage of providing a realistic basis for the short term priority solutions of the most pressing problems in Austria/Community relations in the transport sector , while a start is made on the joint solution of other problems . This approaoh will permit the general policy line of improving co-operation between the Community and the EFTA countries to be followed.

14. Need for a Community decision on the financing of the I.K.P.A. motorway

. It is now three years since the Austrians first requested financial support to build the I.K.P.A. motorway. Meanwhile , the problems raised in this document must be taken into account within the Community 's overall relations with Austria. It is now essential to draw up the main lines for Community action to resolve the problems. Solutions will depend to a large extent on the Council taking decisions on proposals from the . Commission. In fact the issue is sufficiently clear and has reached the point where the Community should now take the appropriate initiatives regarding Austria. - 34 -

14.1 . Tactical reasons

Change in the Austrian road, tax and to some extent the improvement of the Austrian road-transit quota system especially for traffic to and from Greece , are issues on which the Community is asking for something. Austria has linked the Community 's requests with a Community financial contribution to the I.K.P.A. motorway , whilst the Community has seen link between that contribution and the tax problem. If the Community took up a negative position towards the Austrian request , there vrould probably be no progress towards the Community attaining its objectives ( l ). In the Austrian's opinion , the Community has nothing else to trade in the transport sector of sufficient value to obtain the necessary concessions on the road tax and Community road transit quotas .

( l ) Cf. point 1.7 . - 35 -

14.2 . Transport policy reasons

« « From the transport viewpoint , it appears desirable to create the conditions for the IKPA motorway to be built swiftly . Not only are there economic benefits for the Community - it is also : acessary to show a degree of European solidarity in tackling jointly the mounting problems of road transit , including/the transalpine region . As a result of the present unsatisfactory situation there is an increasing tendency to introduce unilateral measures suoh as taxes oonoeived as protective measures in the absenoe of European solutions , but which are liable to bring deterioration in the entire transport system . In these circumstances , the Community - which depends on and benefits so greatly from , the lines of communication aoross the , needs aotively to contribute towards the solution of the problems in question . It is in this spirit that , during discussion of the Austrian road tax on 12 June 1973 , the Transport Council asked the Commission to submit a report on the initiatives to be taken to achieve European solutions .^

For all these reasons , it appears justified and desirable from the transport angle , that the Community decides as soon as possible on the Austrian request and the other related transport problems in order to come to seme olear and quick policy decisions . The issues to be taken into consideration in this context include not only the problem of the IKPA motorway , but also road tax and transit authorisations . Further , progress in these fields could help towards forming a basis for effective ca-operation between the Community and Austria on a range of other issues of mutual interest .

1 ) cf. point 1.5 « - 36 -

14.3 * Erternal policy reasons

The external relations situation also argues for a favourable decision by the Commission on the Austrian request . Austria , directly neighbouring the Community , provides a geographical bridge to East and South-East Europe . It is on the periphery of free Europe and is politically neutral . The Community , thus , has an interest to ensure that the economic and political situation of Austria is as stable as possible . Reference is made also to the points set out in paragraph 2.2 . concerning the significance of transport for the Community 's political relations with the EFTA countries , Austria , Yugoslavia , Turkey and middle eastern countries . It is again emphasised , however , in view of Greek acoession , that the improvement - of transport links with Greece via Austria ( and Yugoslavia ) merit special attention in order to enoourage its full and rapid integration. Prom that viewpoint , the maintenance of good relations with Austria is necessary and , to that end , a positive Community attitude to the financing of the 3XPA motorway would not fail to have favourable effects in the short and the long term ; similarly with intra-Comraunity trade with Italy via Austria.

15 . Conclusions

In view of the foregoing considerations concerning the problems of negotiation and tactics for the approach to be adopted towards Austria , it is recommended that the Community negotiates solutions with Austria taking account of the following guidelines to be treated in parallel :- (1 ) the prinoiple and the mechanisms of a Community financial contribution towards building the IKPA motorway and the principle and the meohanisms of Austria's removing its quantititative restrictions on road transit performed by Community carriers under Community regulatory arrangement s j

( 2 ) an undertaking by Austria to align itself with the Community ^"a system of charging for the use of road infrastructures with the aim of adapting the Austrian road tax to this system - in line with previous statements to this effeot by the Austrian Government ;

(3 ) joint declaration of intent to co-operate and seek solutions for the other matters of mutual interest .

(l ) See point 1.5 * - 38 -

IV.

PROCEDURAL PROBLEMS

16.1 . Continuation of exploratory talks

So that proposals on directives for negotiating , whioh will complement this paper , can be put to the Council , the Commission is undertaking as soon as possible and in the spirit of the present communication , to continue the exploratory talks , already begun with the Austrian Government , on the implications of Greek membership of the EBC^. These talks should clarify possibilities of bringing the financial support into the wider context of relations with Austria , notably in the transport sector , as described in paragraph 15 above . In doing this , it should be possible also to gain a dearer idea of the amount of and arrangements for the financial support whioh the Community can reasonably acoept .

It should be possible to complete the explanatory talksyxSfs spring , BO that immediately thereafter a communication , together with draft directives for negotiation , can be presented to the Council . It is only in this way that it will be possible to meet the deadlines set by Greek Membership of the Community and to keep parallel vis-&~vis development of relations with Yugoslavia .

16.2 . Financial aspects

Austria's request for a financial contribution towards the building of the IKPA motorway amounts to approximately 370 million UA in all spread over 20 years . It is divided into contributions taken in various forms , e.g.outright

1 ) See point 1.7 . - 39 -

grants or low interest loans^"' .

What the Community may finally be prepared to grant Austria depends not only on the Community's economic interest in earlier building pf this motorway but also on the political interest in having a fast road link between Greece and other Member States , a link also benefiting transport to and from Yugoslavia, Turkey and the Middle East . Consideration will also have to be given to how far Austria is willing tp satisfy Community requirements in the other areas mentioned herein, such as road taxes and authorisations for road transit . The final sum will thus depend on the negotiations to be carried on with Austria. This also applies to fixing the form in which the contribution as finally made and its spread over a number of years. ,

draft of the 1980 In the latest / budget the Commission included a budget line ( 378l)to cover credits whose use is decided on in application of the regulation about X financial support for infrastructure projects of Community interest .

Should the explanatory talks and negotiations with the Austrian Government reach conclusions this year,, a positive .result enabling Community finanoial support to be decided on and to move for , with the first installment to be committed during the course of 1980 , it would be opportune to use line 3781 for budgetary provisions . This, however , presupposes that the regulation on financial support would have been adopted by the Council .

l ) See point 4-3.1 - 40 -

V.

CONCLUSIONS

The arguments put forward in this Communication on external relations and Community interests in transport lead the Commission to propose to the Council :

- to recognise the importance of improving relations with Austria in the transport sector within the framework of closer relationships with EPTA countries , particularly in view of Greek accession to EEC ;

- to adopt a favourable position in the principle of a Community financial contribution for the building of the IKPA motorway ;

- to treat the financial support in the overall context of negotiations with Austria aimed at improving co-operation in the different sections of transport policy , including the application of Community laws to traffic with Greece crossing Austria ;

- to take note of the Commission 's intention to submit draft negotiating directives as soon as the explanatory talks with the Austrian Government on this subject are completed together with a financial estimate ; any Community financial contribution towards the construction of the motorway would be included in the Community budget ;

- to speed up its consideration of the Commission 's proposal on financial support for transport infrastructure of Community interest , recently amended ^ to allow the IKPA project to be included in a programme of schemes which could benefit from financial assistance ;

- to adopt definitely as soon as possible the proposal for a directive 2 ) on the adjustment of national taxation systems for commercial vehicles an indispensible element in bringing the Austrian position close to the Community policy on imputation of infrastructure costs.

^ Doc . ( COM 80 ) 58 final of 7.2.80 and O.J. No . C 207 of 2.9.76 2 ) ' O.J. No . C 95 of 21.9.68 ANNEX I

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Analysis of transit traffic iri the NW-SE corridor

The economic assessment of the value of the Innkreis-Pyhrn motorway project "(IKPA) to the Community is mainly based on an evaluation of the advantages to goods and passengers in transit between the Community and Southeast Europe , Near and Kiddle East which would aocount from a earlier completion of the motorway than Austria claims possible without assistance.

The baas at this Community economic assessment is a forecast of traffio flow in the NW-SE corridor through Austria ; the forecast concentrates on the flows between the countries principally concerned. The forecast is based on an analysis of a time series of past flows . The following tables illustrate the development in passenger and goods transport for both inland transport modes ( rail and road) and maritime transport .

1 . Cood3 trancport flows 1.1 . Rail and road A first table gives traffic volumes and the rail/road traffic split . It illustrates the central position which Austria holds in rail traffic between Northwest and Southeast Europe because of its geographical location .

Table 1 : Rail/ road ratio for transit traffic through Austria on the Austrian/ Yugoslavian border ( 1976 )

Rail Total Transit traffic Road 1000 t % 1000 t % 1000 t % -

in the direction of Yugoslavia 1,151 47 1,305 53 2,456 100 from the direction of Yugoslavia . 638 • 40 940 60 1,578 100 both directions 1,789 44 2,245 56 4,034 100 ail exit zones 8,946 41 12,891 59 21,837 100 Jail entry zones 9,105 42 12,747 58 21,852 100 I In tabic 2 the average values for traffic distribution between rail and road set out in table 1 are broken down into 10 main commodity proupu . The table shows that the railway carries the largest sharo of bulk good ;;

Table 2 : Rail/ road ratio for transit traffic through Austria on the Austrian/ Yugoslavian ~ border ( 1976 ) by main categories of goods

in direction of Yugoslavia from direction of Yueroslavin 3oods category Rail ! Road Rail Road [ 1000 t % 1000 t % 1000 t % 1000 t %

Agricultural and forestry products and live animals 67 56 53 44 " 183 35 347 65 ι 1 Foodstuffs and fodder i 92 41 133 59 . 65 24 208 76 I 2 Solid fuels 3 92 8 3 100 . S 3 Petroleum products 23 49 ' 24 51 4 91 9 ; » 4 Ores and metallic waste 4 75 1 25 6 72 2 23

5 Metal products 154 68 73 32 • 57 57 43 43 6 Mineral raw materials or products and building materials 74 68 35 • 32 28 66 24 34

7 Fertilizers 2 89 11 2 99 1

8 Chemical products I 281 58 200 42 61 75 20 25 ! 9 Machinery , vehicles , processed goods and spe­ cial transport goods 452 37 785 63 230 43 305 57

Total 1.151 47 1 . 305 53 * 638 40 940 60 I

Table 3 finally gives a survey of the distribution between modes according to country of origin and country of destination in Southeast Europe and the Near East . - 3 - \

Table 3 : Rail/ road ratio for goods transit traffic through Austria to S-E Europe/ Near East ( 1975 ) ( in % )

Country of origin/ Transit to . . . Transit from . . destination Rail Road Rail Road

I Yugoslavia 79 21 60 40 Greece 33 67 43 57 Romania 87 13 84 16 Turkey 16 . 84 ■ J 1 99 other Near East and Middle East States 2 98 100

As for road traffic tables 4 and 5 show the development of road transit traffic in both directions in the NW/SE corridor for 1974 - 1976/77 . The tables , inter alia, lead to the following conclusions :

- During the period observed the road transit traffic in the corridor increased considerably ( some 50 %) \

- The proportion of total NW - SE transit traffio with origin or destination in a Community country was over $0%. Ta -> 4 : Goods traffic by road in . NW - SE transit through Austria . 1974 - 1S77 { 1 . 000 t )

1 - Γ• kev to I V , ( Greece Rorr.arr.a ^• οηο ί _τ^–■ i 19-6 , 1976 1974 [ 1375 1977 1574 ; 1975 I 1976 1977 | 1974 lt lS75 597 6 | 1977 '1974 ' 1 97 D ! 1976 | 1977.j μ 9 ί 4 ι 1977 jj 1 974 | 1975 | from | p 97 6 I i I1 I : ί α > 1 ■ ■ ι ί i!LJ I I 1I 1i I 18 23 23 30 I 31 17 9 ! • Belgium / Luxembourg i 11 I 22 j! 31 1 3 i! 3 !i *!I 2 i 11 i! 15 I 94 Fed . Rep. Germany 197 203 207 239 78 126 171 193 23 22 32 1 72 ' "I 23 iI 53 i I -, 5 4 3 8 2 1 3 3 1 1 1 1 . Denrr.ark j 4 6 5 F rance 5 7 8 7 5 6 11 • 15 10 6 9 9 < 6 Cnited Kingdom 13 13 15 20 8 8. 7 9 4 3 I : 8 15 13 15 Ireland I • ! 1 / i * 1 1 I 2 Italy 2 1 1 I * 26 19 39 41 57 61 18 24 30 3 5 10 Netherlands I 14 I 6 L!fJ I Community total 281 290 314 366 118 176 247 281 44 34 52 42 89 129 159 ; 114 2 6 11 other countries 24 32 31 41 { 8 18 11 14 3 9 3 11 j 8 I 1 1473 868® 258 295 47 43 55 44' 170 : 122 ■ 143 469 644 1168 ! Total 304 322 345 407 126 195 95 | 140 | 716 lI | _j * wi-hout "beyond" Source : österreichisches Statistisches . Zentralamt/Bundesministerium für Verkehr Table 5 : Goods traffic by road in SE-NW transit through Austria . 1974 -. 1977 ( 1,000 t)

3 I! Turkev bevond Total Yugoslavia I Greece Romania i– -.--i 1977 / j 974 1975 1976 1975 1976 1977 1974 1975 I11976 11977 i 1974 I 1975 1976 1977 1974 , 1975 1976 119771 1974 1975 1 1976 LLII I I .1 | 1977 1

10 28 30 9 10 20 18 1 2 3 5 7 14 ; 8 ! Belgium / Luxembourg 1 M I I 72 77 60 I Fed . Rep. Germany 140 1 84 212 216 108 212 293 315 26 26 30 34 49 1 1 I I Denmark 3 3 5 4 2 4 6 5 1 i 9 13 17 5 5 6 6 France 8 7 10 9 3 9 12 26 11 i 7 *O I 16 14 13 13 5 17 8 15 8 3 3 ! s 12 I United Kingdom 9 | ! Ireland 1 2 1 - Italy 2 9 1 1 7 1 1 I Netherlands II 22 26 ι 36 ! 40 8 19 28 2 6 9 L13 31 11 10 91 I 1 581 108 I 116 92 I Community total 201 258 306 I 312 126 277 367 403 50 I 52 j 7oj! 6! ! » I other countries 26 31 35 43 2 41 12 3 LJM ί L_J _J1 ! j 1 I 7901 9551 947® 379 4ld 53 I 62 1I 77 1151 122 I 27 50 Total _ | 227 2 89 340 3551 I 138 280 55 | ! 73 1 lOOj IHi 1 1 J I 1 ! i

without " beyond" Source : österreichisches Statistisches Zentralamt/ Bundcsministerium für Verkehr - 5 -

1.2 . Maritime transport

The statistics available show the following picture for merchant shipping between the Member States of the Community and the main relevant areas :

Table 6 : Maritime transport for main countries and destination areas ( 1976 . 77 ; 1000 tonnes ) *

Greece Mediterranian Middle East countries F.R. of Germany 412 9' 636 17 630 Prance 821 20 241 91 851 Italy 4 269 68 998 70 051 Netherlands 1 291 11 966 94 000 Belgi um/ Lux. 137 5 292 7 132 U.K. 764 7 845 54 381 Ireland*

Denmark * 26

TOTAL E.E.C. 7 720 123 978 335 045

* figures not available > Sources : Eurostat , 1976 (Greece ) 0ECD, 1977 (Mediterranian countries : Gibraltar , Malta, Maròc , Algeria, Tunesia , Libia, Egypt , Cyprus , Syria^ Libanon , Israel , Jordania. Middle East : Persian Gulf and Red Sea countries

2 . Passenger transport flows

Forecasts of passenger transport are given in the study on the future of European passenger transport , ( COST project 33 ) • The forecasts have been modified and interpreted for the purposes of the IKPA project .

On this basis the following table has been made up. Table 7 contains a breakdown of passenger transport flows by count ry-to-country link for road transport (Ireland and Italy are excluded). The table shows that the transit passenger car flow through the corridor is largely dominated by traffio between the Federal Republic of Germany and Yugoslavia ( 50,9 %) • Table 7 : Passenger and car flows in road transport between Community countries ano Yc.gock.via / Greece/European Turkey in 1975 ( both directions )

1 , 000 people ( overall ) 1,000 cars ( corridor )

Connection (T

D - YU 776 26 802 35 9 371 . 6 20.0 391 . 6 50.9 GB - GR 248 4 251 11.3 43,0 1.2 44.2 5.7 D - GR 192 10 202 9.0 47.1 0.4 47.5 6.2 F - GR 122 10 132 5 . 9 9.4 1.6 11.0 1.4 F - YU 113 16 129 5.8 14.5 3 . 6 18 . 1 2.3 NL - YU 121 4 125 5 . 6 49.9 . 3.0 52.9 6 . 9 GB - YU 111 8 119 5 . 3 33 , 8 4.4 38.2 5.0 B /L- YU 97 4 101 4.5 43 . 9 3.0 46.9 6 . 1 DK - YU 85 0 85 3.8 40.5 0 40.5 5 . 3 DK - GR 79 4 83 3.7 20.9 1.8 22 . 7 2.9 NL - GR 61 6 67 3.0 12.2 2.6 14 . 8 1.9 B / L-GR 61 6 67 3.0 14.0 2.4 16.4 2.1 F - TR 16 2 18 0 . 8 3 . 3 0.8 4 . 1 0.5 D - TR 13 2 15 0.7 5 . 1 1.4 6.5 0 . 8 DK - TR IX 0 11 0 . 5 4 . 7 0 4.7 0.6 GB - TR 9 0 9 0.4 2.3 0 2.3 0.3 NL - TR 7 2 9 0.4 2.5 1.4 2.5 0.5 B /L-TR 7 0 7 0 . 3 2.5 0 2.5 0.3 –r : 1–- £ Community 2,129 ! 104 2,233 100.0 721.2 47. 6 768 . 8 100.0

j

excluding Italy and Ireland Key : Source : COST project 33 and own estimates H = holiday traffic B = business travel OP = other private travel Αλι\£.Χ 111

Forecast of transit traffic flow of roojJp_J*nd_J3nspen£er^ NW - SE corridor in Austria

The passenger forecasts are derived from COST project 33 . The freight flows are derived from a forecast of foreign trade development "between the relevant countries.

- The latter forecasts assume that the volume of foreign trade can be expected to grow in line with real economic growth for Yugoslavia , Greece and Turkey. However , the development outlook for the national economies of the Near and Middle East gives ground to believe that their overall economic • growth will exceed that of their foreign trade. The results of the forecasts for the two groups of countries mentioned are presented in the following tables 8+9 *

Table 8 : Imports and exports relevant to the project from/to Greece , Yugoslavia , Turkey according to country of destination/origin in 1975 and 2000 ( 1000 tonnes , $>).

I M P 0 R T S EXPORT S

Growth Growth Countries 1975 2000 rate p. a. 1975 2000 raté tJ.a. 1975-2000 1975 - 2000

Fédéral Republic of Germany 1.000 t 2,114 9,772 6,3 2,294 9,645 5.9 in fo 41.3 39.5 40.7 35.4

/ United Kingdom/ Netherlands/ Belgium/Luxem­ bourg 1.000 t 1,837 8,807 6.5 1,922 10,762 7.1 in ia 35.9 ~ 35.6 " " 34.1 39.5 I Franc e/ Swi t z er- j land 1,000 t 916 5,294 7.3 1,347 6,049 6.2 in % 17.9 21.4 23.9 22.2

Denmark 1000 t 251 866 5.1 72 736 ' 9.7 I in % 4.9 3.5 !.3 2.7

TOTAL 1,000 t 5,177 24,739 6.5 5,637 27,247 6.5 in % 100 100 loo 100 - 2 -

Table 9 * Imports and exports relevant to the project from/to the Near and Middle East according to country of destination/origin in 1975 and. 2000 (l 000 tonnes , % ) .

L M P 0 R T S E X PORTS

Growth Growth ! Countries 1975 2000 rate p. a . 1975 2000 rate p. a . l 1975-2000 1975-2000 \ j ; Federal Republic ! of Germany I j 1,000 t 342 1,412 5.8 2,049 7,354 5.2 » 22.3 20.9 34.2 33.1 United Kingdom/ | Netherlands/ S Del /ri um/Luxem- ; bourg 1 , 000 t 66 5 2,212 4.8 2,666 10,443 5.6 i in tfo 43.4 31.4 44.5 47.0

I France// Switzer- I 1 1,000 t 475 3,148 7.6 1,156 4,155 5.3 31.0 46.6 19.3 18.7 | i Denmark 1,000 t 51 74 1.6 120 267 3.3 | in % 3.3 1.1 2.0 1.2 } <1 *) ! TOTAL ' 1,000 t 1,532 6,756 6.1 5,990 22,218 5.4 ! in % 100 100 100 100

*) excluding oil and oil products

The assumptions about the future distribution of transport between the com­ peting modes ( modal split ) were established on the basis of past developments , the anticipated extension of infrastructure and other factors which influence goods and passenger transport ( commodity structure , income trends , degree of motorisation ) . The selection of routes in road transport ( assignment) was estimated on the basis of time and cost comparisons , taking into account the influence of traffic guidance measures . The conversion of passenger and goods flows into vehicle flows was carried out by means of a forecast of the degree of car occupancy ( persons per car) and of the average load per lorry , ■taking account of empty runs . The resulting forecast gives estimates of vehicle flows in transit traffic through the Northwest-Southeast corridor of Austria distributed among the Innkreis-Pyhrn motorway , the Tauern motorway and the two-lane federal roads ("Gastarbeiter route"). The following results of the traffic forecasts are of importance for the estimates of the benefits :

- Goods transport in NW-SE road transit through Austria is expected to increase from about 2 million tonnes in 1975 to about 9«3 million tonnes in the year 2000 ( both directions ). That corresponds to an average annua % growth' * of 6.4 • - The overall volume of relevant foreign trade is , on the other hand , growing at an average rate of 6.1 $ per annum . The greater increase of lorry transport results from the above-average increase in foreign trade in those commodity groups which are largely transported by lorry . Lorry flows in transit through the Austrian Northwest - Southeast corridor sire expected to increase from about I65 . OOO lorries in 1975 to some 682.000 in the year 2000 ( both directions ). That corresponds to an average annual increase of 5«9 The lower growth rate in comparison with the volume of goods carried results from the expectation that the load per lorry will increase as a consequence of a decreasing proportion of empty runs . / - The average share of the Innkreis-Pyhrn motorway in lorry transit is estimated at 71 $ of total flows through the corridor . That corresponds to an increase from about 165,000 lorries on the IKPA in 1980 to some 484,000 lorries in the year 2000 . - Car transit through the NW-SE corridor is expected to increase from about 0,9 million cars in 1975 to some 1.6 million cars in the year 2000 The average share of the IKPA is estimated at 45 of corridor transit . That corresponds to an increase from about 470,000 cars in 1980 to some 720,000 cars in the year 2000 . AN ., EX TV .) ,r- pact o f ] KPA on the existin r and f uture transport infrastructure

I 1 . Impact on other road links 1.1 . One can. imagine that the IKPA , once finished nay contribute to re­ lieving the overcharge of the existing roads within the corridor , thus helping to create a more rational repartition of the traffic flows . In order to appreciate the results of the IKPA it is necessary first to evaluate the project as part of the total network in which transit through Austria takes place , taking into account other road improve­ , ment schemes underway on the network . In this context two other roadlinks are of prime importance : Nuremberg - Regensburg - Passau , which provide major relief to the Nuremberg - - Austrian bordor route and the improvement of road links in Yugoslavia .

By 1985 "the direct IKPA link-up Regensburg - Passau will be com­ pleted . The Spielfeld - Zagreb connection is likely to reach motorway status at a later stage , as will the extension of the road between Ljubljana and the Austrian frontier , this background it has to be noted that according to Austrian estimates the IKPA will be completed only about I998 should no Community aid be given to speed up the construction .

1.2 . With regard to the situation after completion of both the Tauern and the Innkreis-Pyhrn motorways the following considerations were taken into account in the route split estimate : For goods transport the IKPA will attract by far the largest share of traffic because it is the fastest , shortest and cheapest through road route to all Southeast European areas beyond Split/Yugoslavia and to the Near and Middle East . The Tauern route will largely take traffic to Trieste and the Adriatic ports of Yugoslavia and to and from the North Yugoslavian areas .

Taken as a whole the following distribution of goods traffic es ex­ pected : Innkreis-Pyhrn motorway : 71 % Tauern motorway : 24 1° "Gastarbeiter route" : 5 5°

The Tauern motorway is generally more attractive to passenger trans­ port than to goods transport because in a car the greater altitude is not considered a disadvantage and because the Tauern route is touristically more attractive . This factor is especially relevant in holiday traffic in the summer months , which largely determines the volume of total passenger transit traffic . Taken as a whole , the following route distribution is expected for passenger transport :

Innkreis-Pyhrn motorway 45 % Tauern motorway : 45 f> "Gastarbeiter route" : 10 £

However, it should be noted that for passenger traffic this breakdown is subject to a large number of imponderabilia ( e.g. tourist developments ).

\ • 2 . Relation to other transport modes

. 1 . Rail transport

In contrast to road traffic , there are in general few new construction projects in the rail sector . This is a consequence of the loss of trade to the road transport sector which the railways have suffered in most western countries . Hence , from the overall viewpoint there is a lack both of demand for new line3 and of the financial resources for exe­ cuting new large-scale projects . Railway investment is consequently directed mainly towards improving the efficiency of existing lines ( e.g. by electrification).

The future development of railway infrastructure between the European Community and Southeast Europe / Near East must also be assessed against this general background. There may be general ideas about the need to construct new , efficient - rail connections in this area. However , these mostly do not relate to projects which will become relevant to the evaluati on sof the IKPA project within the period under consi deration . Fur­ thermore , it is assumed that the rail share of traffic in NW-SE transit will average out over the period under consideration at about the level it held in 1975 . Seen in the short term this in an optimistic assumption for rail and a pessimistic one for lorry transport as the transport shares have evolved further in favour of the road since 1975 » But seen over the entire period under consideration it may be regarded as a reasonable assumption . ' ' . 2 . Inland waterway transport (-Danube ) . Although inland shipping is certainly of quantitative importance in transit "traffic through Austria, it plays .a negligible role in the assessment of the IKPA project . For one thing, the major areas of origin or destination for IKPA traffic in- Southeast Europe and the Near East are served either not at all or to a minimal extent by inland waterway transport , another reason is that the performance characteristics of in­ land waterway transport places it mainly . in competition with rail and - 3 -

maritime transport rather than with road haulage . This situation will not be substantially altered by the completion of the Rhine-Main- Lanube Canal .

2.3 - Maritime transport

In general there is no close competitive relationship between maritime shipping and road transport . The major factors for the customer in assessing transport performance - cost , travel time and capacity - differ so widely from shipping to road transport that for a given transport « requirement the one is seldom a practical alternative to the other .

Nevertheless , the recent past showed a rapid increase in imports by the Near East countries which led to a direct shift in the distribution of transport between maritime and road transport to the advantage of road transport . The major cause probably lies in the shortcomings of the Middle East ports . They have led not only to an increase in roll-on/ roll-off transport but also to a rise in the share held by through road transport . This development was assisted by the fact that the rapid increase in imports by the Middle East countries occurred to a con­ siderable degree in goods categories in which the share held by road transport in generally high over shorter distances or on better roads .

For maritime transport it must be assumed that the developments in the Near East with regard to increased imports and to transport distribution were to some extent exceptional phenomena . The growth in imports will slow down and the extension of port facilities in these countries will reduce the supremacy of roll-on/roll-off transport over container and conventional general cargo traffic , as well as lessen the necessity for road transport to compensate for shortcomings in port capacity.

3 . Changes in transport patterns and possible shifts in the traffic , re­ lating to competition between ports

The competition between the Italian and Yugoslav Adriatic ports ( southern ports ) on the one hand and the ports of the Hamburg - Antwerp range (northern ports ) on the other will not be influenced by the construction of the IKPA motorway .

The stimulus for this competition will mainly be found in changes in major economic patterns which in turn will lead to shifts in points of origin and destination of transit traffic . The following analysis may give an indication of the direction the competition is likely to The analysis of the competitive situation in the past between the northern and southern ports revealed, particulary for the port of Triest , competitive advantages in freight and ship costs as well as in the cost of transport to and from South Germany, particularly , Bavaria . In addition there was the possibility that the hinterland of the port of Triest would extend northwards . These advantages were , however , seen against disadvantages mainly to do with the number and frequency of sailings , the efficiency of port facilities and the speed of clearance at ports and borders . Up to 1975 "the competitive disadvantages apparently outweighed the advantages , for transit transports via Triest diminished steadily in the period from 1971 to 1975 ( excluding pipeline traffic). This applied particularly to transit traffic brought to and from Triest by road, which decreased by some 140.000 tonnes (= 27 $) in that period.

In the recent past there has , however , appeared to be a turn for the better in the competitive situation of the southern ports . The major causes are the sharp increase in imports hy the oil countries of the Near and Middle East in the wake of the oil price-rises and the re­ opening of the Suez Canal . The advantage of being geographically located between the European industrialised countries and the rapidly developing oil countries of the Middle East is enjoyed equally by all the southern ports , i.e. by Venice and Triest in particular, but also by Genoa, > Livorno and Ravenna and the Yugoslav ports of Rijeka and Koper. Yet not all the ports -are equally equipped to translate this geographical advantage into increased port turnover :

Triest undoubtedly has the most favourable conditions . Installations for handling container and roll-on/roll-off traffic, which has increased considerably in traffic with the Near and Middle East , have been built . Three further roll-on/roll-off ramps are planned and will be constructed to take roll-on/roll-off vessels up to 20,000 or even 30,000 dwt in case ro-ro-traffic in the Mediterranean should attain this order of magnitude in the future. In addition the port of Triest 's connections with its hinterland have been improved by the Tauern motorway and the introduction of container freight trains from Nuremberg, Stuttgart , , \ Munich and Salzburg. Further improvements are expected from the planned Monte Croce Carnico tunnel ( Plocken pass ), which will shorten the distance from Munich to Triest by about 100 km . Finally, the port of - 5 -

Triest has succeeded in increasing the * frequency of regular sailings to the Eastern Mediterranean . The first successes of the measures taken in Tri6st and of the accelerated economic development in the Near East are reflected in the development of Triest' s transit "business in 1977 .

In the Yugoslav ports considerable extension of the facilities is planned , particularly in Rijeka. Rijeka has hitherto served as a * transit port mainly for Austria , and Czechoslovakia . Trans­ port to and from the Federal Republic of Germany is mainly concentrated on rail since its road connections with its hinterland have hitherto been inadequate . Planned road construction measures will presumably not be completed until the mid-80s .