New Measures Adopted to Support the Transport of Passengers

Inés de Alvear Trenor.

08/10/2008 International Law Office


The agreement of June 11 2008 between the Department for the Carriage of Goods of the National Road Transport Committee and the government was reached as a result of transport sector strikes brought about by increases in oil prices.

This update summarizes the terms of the agreement reached one week later on June 19 2008 between the government and the Department for Passenger Transport of the committee.

Terms

The agreement contains similar undertakings to those agreed with the Department for the Carriage of Goods. Like the earlier agreement, it was entered into with a representative group of ministries including the Ministries of Public Works, the Economy, Justice, Labour, Education and Trade and Industry. As with the earlier agreement, the undertakings will become enforceable only after relevant resolutions have been adopted and the necessary legislative actions taken.

In summary, the Ministry of Public Works has committed to:

  • establish a term for payment for services and set a default interest rate;
  • establish an automatically updated price for services linked to the price of oil;
  • increase the subsidies for retirement from the transport sector at a certain age;
  • ease requirements for transfer of the relevant transport authorizations; and
  • perform other actions related to penalties, inspection and infrastructure investment.

Other ministries have also assumed further commitments, such as:

  • deferring payment of social security contributions;
  • reducing taxes on specific activity;
  • offering privileged credit conditions;
  • issuing value-added tax returns;
  • reinforcing training requirements; and
  • promoting legislative reforms (particularly in relation to the latest Road Transport Contracting Bill).

The commitments undertaken with the Department of Passenger Transport only (as opposed to those agreed on June 11 2008 with the Department of the Carriage of Goods) are comprised of:

  • the review of concession tariffs on the regular lines for inner city transport;
  • the review of taxi tariffs; and
  • the performance of studies to investigate the competitive conditions with other types of transport provided under concessions.

Existing Legislation

As with the agreements with the Department of the Carriage of Goods, most of the actions described above have yet to become part of existing legislation. However, some of them have already been implemented, as described below.

New general contracting conditions
Order FOM 2180/2008 establishes automatic updates of prices for the provision of public passenger transport services

This order resolves to: (i) establish a formula to be applied to calculate the applicable price of the relevant transport when oil prices have increased between the date of entry into a contract and the date of the actual provision of transport service; and (ii) provide an equal term for payment of amounts due for transport services as for other services (Law 3/2004, which incorporated EU Directive 2000/35/EC).

New rules regarding administrative authorizations
Order FOM 2183/2008 amends the Order FOM of July 23 1997 on authorizations for the private transport of passengers by bus. It establishes a number of possibilities for transferring authorizations to companies (capital contributions and mergers).

Deferral of social security contributions
A June 26 2008 resolution of the Treasury of Social Security of the Labour Ministry authorizes the deferral of payment by road transport companies of their quotas of social security contributions. This resolution applies to all road transport companies, whether involved in the carriage of goods or the carriage of passengers, and entitles them to defer payment of their quotas of social security contributions for a specific term.

Future Legislation

It remains to be seen how the rest of the government’s commitments on road passenger transport will be implemented into specific rules.

While these commitments wait to be introduced, over the summer the government has approved a set of actions intended to help medium-sized companies cope with the current financial difficulties and to establish the economic programme for 2008 and 2009. Both these initiatives contain specific references to the transport sector.