Entry Into Force of the Law on Spanish Rail Services Delayed Until 31 December 2004

Article published in Mondaq by Inés de Alvear, Julio López Quiroga and Ana Montero

June 28, 2004

The entry into force of the Law 39/2003, of November 17, 2003, on the Rail Sector, which was meant to take place on May 18, 2004, has been postponed until December 31, 2004 by Royal Decree-Law dated May 7, 2004.

Law 39/2003, of November 17, 2003, implemented European Directives number 12/2001, 13/2001 and 14/2001 and brought in a dramatic reorganization of the legal regime on State managed rail services.

The European Directives provided for, inter alia, the obligation to separate the activities of management of the rail infrastructure and exploitation of transportation services, at least from an accounting point of view, although not necessarily by establishing different bodies handling each one.

The Spanish Law went for the option to place independent Administrative Bodies in charge of each one. Therefore, the Law extinguished the Public Entity 'Gestor de Infraestructuras Ferroviarias' and created two independent Administrative Bodies ('Administrador de Infraestructuras Ferroviarias' and 'RENFE-Operativa') to undertake each activity.

Also, a 'Comité de Regulación Ferroviaria' was incorporated to monitor the activities of the public and private companies involved in the rail market to ensure plurality and loyal competence on the provision of rail services.

The approval of the Law 39/2003 was heavily disputed in Congress at the time. Therefore, the change of the ruling Political Party brought about by the elections just a month before the date set for its entry into force suggested changes to come.

The deferral stems from the significant transformation introduced by the new Law 39/2003 which currently only contains general principles and guidelines that require further development.

In particular, the Royal Decree-Law of May 7, 2004 emphasises the time constraints regarding the enactment of implementing regulations to the Law. These implementing regulations shall establish a complete and coordinated legal framework that ensures efficiency and order in the application of the new regime, together with safety in the provision of services.

Moreover, special mention is made to the fact that the Law 39/2003 contained no provisions regards the internal organization and functioning of the new Administrative Bodies created, which by-laws had to be approved by means of implementing regulations before the entry into force of the Law.

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