The Current Regulatory Framework for the Railway Sector
At a legal level, there are few existing rules in the field of rail transport and these few were issued several decades ago and have an extremely limited scope. In fact, the railway regulatory framework includes, among others, Law 76 of 1920, which establishes some safety standards for the operation of railway transport, Decree 1075 of 1954, whose article 1 gives the status of arterial roads to railway lines, with all the rights and preferences intended for public service; also, there is Law 105 of 1993, that defined the transport infrastructure owned by the Nation as the one that fulfills the basic function of integration of the main production and consumption areas of the country, and its integration with other countries. Such infrastructure is constituted, among others, by the railway lines owned by the Nation, which includes its area, traffic signals, and infrastructure for traffic control.
In addition to those mentioned above, there are two key laws for understanding the current Colombian railway regulatory model. On the one hand, the repealed Law 104 of 1892, by which the national government was authorized to develop the railway infrastructure in Colombia under the concession model, and, on the other hand, the Law 336 of 1996 (National Transport Statute), which establishes that the railway transport mode is an essential public service regulated by special rules, and allows the concession of railway infrastructure for its rehabilitation, maintenance, preservation, control, operation, and provision of transport services. Moreover, this law allows the local authorities and companies to access the national railway network, prior to fulfillment of the requirements determined by the corresponding regulation and under the terms set in the concession contract, in the case of roads under concession. Due to these two laws, the development of a great part of the country’s railway infrastructure has been conducted under the concession model and, as a result, the regulation of each of the roads has been incorporated in the corresponding contract.
Therefore, Colombia has developed its regulatory scheme through multiple concession contracts, and it has caused a variety of technical applicable to this type of infrastructure. This situation is critical regarding the railway projects that the national government pretends to develop for connecting the different productive areas of the country, considering that the diversity of standards will hinder the transit of the rolling stock through the roads built and managed by several concession contractors 1 .
Industry and technical regulation
For the future development of Colombia’s railway network, it is essential to have unified technical regulation that allows the harmonization of transport structures, nevertheless, these are developed through diverse concession contracts or PPP contracts.
However, the implementation of a robust technical regulatory framework will require time, effort, and leverage from all available experience from the government and railway industry. About the latter, it is worth highlighting that the participation of the industry in the process of producing technical standards has been identified as a good practice in other countries, to the extent that the technical knowledge of the private sector is being put to good use, the local reality of the railway service’s operation is incorporated into the policy development process and allows to consider different perspectives for the solutions that are intended to be found through legislation.
In effect, in cases such as the United Kingdom the private sector adopts a leading role in the identification of the regulatory needs and the drafting of technical standards, which corresponds to mandatory self-regulation. In this scenario, although the Government holds the normative force, the private sector is the one who truly develops these rules, which implies a different scheme than the generally used one in Colombia for regulatory production.
In the process of issuance of new regulations in Colombia, the participation of the industry is limited to the public consultation processes. In this way, the public consultations take place, mainly, regarding:
- The issuing of the regulatory agenda of the ministries and administrative departments head of the sector.
- The development of the Regulatory Impact Analysis (AIN by its acronym in Spanish), that are tool for the decision-making of technical regulation.
- The socialization of the specific regulation projects, in compliance with the requirement of public consultation and publicity established in article 8 of the Law 1437 of 2011.
The described public consultations are of great relevance for the publicity and transparency of the policy planning and the regulatory projects to be issued by public entities, such as the Ministry of Transport, the National Roads Institute (INVÍAS by its acronym in Spanish) or the National Infrastructure Agency (ANI by its acronym in Spanish). Nevertheless, this kind of consultation is based on the premise that the policy development process is conducted from the top down, that is, the public sector is the one who bears the burden of the entire rulemaking process, whose result is put into consideration of the industry before its issuing.
Under this scheme, the private industry´s participation is limited to the final phase of the rulemaking process, seeking to introduce adjustments or modifications to the project presented by the public sector. In this sense, it is possible that the public consultations do not have broad participation from the industry during the rulemaking process, especially in those cases where the industry perceives that its comments or observations will not be considered or will be taken into account only in a tangential way. Even more, in those cases where the State does not have a solid rulemaking capacity for the specific sector, this scheme may lead to inadequate rules for solving the market failure that is intended to counteract.
Unification of Technical Regulation in the Railway Bill
Bill No. 337/23 by means of which the conditions for the development of railway infrastructure are defined and established, was recently approved in the first debate and introduced a relevant principle in its article 20, which subjects concession contracts to the technical regulation issued by the Ministry of Transport or, in its absence, to international standards.
Even though this is a key step towards standardizing technical standards in this sector, it still leaves ample room for ambiguity. In effect, if there is no national technical regulation which is the applicable international standard? Needless to say, there are multiple international standards among which stand out the ones produced in the United States by AREMA and in Europe by the European Union Agency for Railways (ERA) among other standardization entities of the union. Moreover, there are relevant standards that come from the United Kingdom and other regions.
At this point, it is essential that the industry becomes an active agent in the technical regulation process of the sector, which provides the government with key elements to define the international standards applicable to the country and its local adaptation. This participation should not be limited to a simple consultation of regulatory projects, even less in a sector where the State has had limited participation, until now, and is far removed from debates and technical discussions that affect this service. The participation of the industry must be more active and capable to inform the State’s decisions and to identify those essential aspects in which the regulation is critical for the benefit of the sector.
Alternatives for the participation of the industry in the Technical Regulation
Even though the new bill could be used to connect in active way the industry to the technical normative production process in the railway sector, the current legal framework in Colombia offers alternatives. In effect, for the participation of the industry in the rulemaking process one could seek the system of standardization –aimed at the production of voluntary technical standards–, as an area and a task in which the involvement of the industry could be considered for the elaboration of technical standards, with more participation and responsibility in the process.
To this end, the creation of a Sectoral Standardization Unit (USN by its acronym in Spanish) that takes over the preparation of technical standards specific to the railway sector (called Sectoral Technical Standards –NTS by its acronym in Spanish), within the international guidelines of the activity. In terms of Decree No. 1074 of 2015 and Resolution MCIT 228 of 2009, this Unit would be integrated by industry stakeholders, through associations, guilds, or private non-profit organizations representing the sector’s interests.
Such Railway-USN, according to article 2.2.1.7.4.1 of the Decree 1074 of 2015, must be recognized and approved by the Department of Regulation of the Ministry of Commerce, Industry and Tourism (MCIT by its acronym in Spanish).
In this way, the NTS prepared by the Railway-USN would be of voluntary application, but they could be submitted to the adoption process as Colombian Technical Standards (NTC by its acronym in Spanish), these are technical standards approved or adopted as such by Colombia's National Standardization Organization –Colombian Institute of Technical Standards and Certification (Icontec by its acronym in Spanish)–, and could be incorporated in a technical regulation or another mandatory measure, in whole or in part.
In this way, following the proposed scheme from Article 20 of the Railway Bill, it could be the industry, through the Railway-USN, the one who proposed the international standards applicable in Colombia or the technical standards in the matter. However, this proposal of the Railway-USN would not be mandatory until the Ministry of Transport adopts it as a technical regulation.
Then, the technical regulation would cease to be a collection of patchwork spread over several concession contracts, for it to become a combination of regulatory instruments where the government -headed by the Ministry of Transport- with the active participation of the industry since the beginning, defines those aspects that all the railways of the national network must generally comply with, as well as those elements that must be even to all the operators of such infrastructures or to those who mobilize rolling stock through these ones.
