The transport and tourism committee backed draft rules to allow rail operators to use all rail track and stations in EU domestic rail markets, and to open up bidding for public service contracts, the Parliament committee said.
Most domestic rail services across the EU are currently provided under public service contracts, many of which are awarded without a bidding process, it said.
The change will be phased in, with the rules on directly awarding contracts to a specific rail operator set to lapse after seven years leaving competitive tendering as the standard approach. However, incentives to move towards competitive tendering before this time, such as shorter possible contract lengths for directly awarded contracts, would be included, the committee said.
Direct awards would still be possible, under new and stricter conditions.
"For example if awarding a contract directly is justified because it would offer better quality of service or cost efficiency, then performance requirements, such as punctuality and frequency of services, quality of rolling stock and transport capacity would be included in the contract, to sharpen the focus on passenger needs," the committee said.
Member states could limit a new operator's right of access if a new service would compromise the 'economic equilibrium' of an existing public service contract, and public service operators would also have to comply with social and labour law established by EU law, national law or collective agreements.
Easier access to the market for rail operators should encourage them to provide new passenger services and boost business and investment. It should also improve service quality and innovation in the sector, which is lagging behind other transport modes in numbers of passengers carried, the committee said.
The proposals will still need to be endorsed by the full Parliament in December, it said.
Infrastructure expert Francis Tyrell of Pinsent Masons, the law firm behind Out-Law.com said the proposed rules will not have much impact in the UK.
"We already have open tender for franchises and the ability to provide services on an open access basis," he said.