Public service obligations
Regulation (EC) No 1370/2007 on public passenger transport services by rail and road is of major importance for the organisation and financing of public transport services by bus, tram, metro and rail in the Member States. Its aim is to create an internal market for public passenger transport services while confirming Member States' competence to defining public transport services according to the needs of the population. The Regulation achieves this by complementing the general rules on public procurement. It also lays down the conditions under which compensation payments stipulated in public service contracts and concessions for public service obligations in public passenger transport services shall be deemed compatible with the rules of the internal market in the EU and exempt from prior State aid notification to the Commission, which would be otherwise required.