# EUR-Lex - 52011DC0741 - EN

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# 52011DC0741

**/* COM/2011/0741 final */ REPORT FROM THE COMMISSION ANNUAL REPORT ON THE COHESION FUND (2010) **

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TABLE OF CONTENTS

1. Financial execution of the 2000-2006 period in 2010 and closure of projects 1

2. Economic environment and conditionality 5

3. Audits and financial corrections 6

4. Irregularities notified by the Member States 9

5. Evaluation 10

6. Information and publicity 11

This report is presented in conformity with Article 14(1) of Regulation (EC) No 1164/1994 and covers the implementation during 2010 of Cohesion Fund projects adopted under the 2000-2006 period as well as ex-ISPA projects in the Member States concerned, including Bulgaria and Romania. Information provided are limited to the 2000-2006 period as Regulation (EC) No 1084/2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/1994 does not require the presentation of an annual report on the Cohesion Fund for the 2007-2013 period.

As a consequence, this report covers Cohesion Fund operations in the fifteen beneficiary Member States - thirteen Member States as of end-2006, i.e. Greece, Spain, Portugal, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, as well as ex-ISPA projects adopted in the 2000-2006 period in Bulgaria and Romania which joined the European Union on 1 January 2007. It must be recalled that, as a result of economic growth, Ireland has not been eligible since 1 January 2004; nevertheless, on-going Cohesion Fund projects are still to be closed.

Details on the implementation in 2010 of projects adopted under the 2000-2006 period for each Member State are presented in the Commission Staff Working Document accompanying this report.

1. FINANCIAL EXECUTION OF THE 2000-2006 PERIOD IN 2010 AND CLOSURE OF PROJECTS

The Member States eligible for the Cohesion Fund support can be divided into three groups: a group of four Member States eligible from the beginning of the programming period 2000-2006 (Greece, Spain, Ireland and Portugal), a second group of ten Member States that joined the European Union in May 2004 (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia), and the group of two Member States (Romania and Bulgaria) that joined the European Union in January 2007.

1.1 Extension of the final date of eligibility of expenditure

The "Guidelines on the Closure of Cohesion Fund and Ex-ISPA projects 2000-2006"[1] refers to the period of eligibility of expenditure which is set out in each individual decision granting financial assistance. In accordance with the principle of sound financial management, and the guidance sent on 9 March 2005 by the Directorate-General for Regional Policy to the Member States, for all Cohesion Fund projects the Commission set the final eligibility date, as a general rule, not beyond 31 December 2010.

In April 2010, the Commission adopted as one of the measures in support of the European Economic Recovery Plan, the "Amendment of the Guidelines on the closure of Cohesion Fund and ex-ISPA projects 2000-2006"[2]. This amendment stated that the Commission may under justified circumstances decide to extend the final date of eligibility. The Commission took into account that projects first approved from 2004 onwards may have been particularly affected by issues of providing the required national public or private co-financing, or by the ability of beneficiaries to respect the original schedule of works. The Commission reflected that such projects were in the midst or even only at the start of their implementation when the crisis set in.

For projects first approved by Commission decision after 1 January 2004 the Commission may decide, on the basis of a duly justified request, to extend the final date of eligibility to 31 December 2011. If, moreover, it concerns a project with a Cohesion Fund contribution of at least EUR 100 million, the final date of eligibility may be extended to 31 December 2012.

Exception for the extension of the final date of eligibility beyond the dates above is possible only under exceptional and duly justified circumstances (i.e. administrative or legal proceedings having suspensory effects, cases of force majeure which have serious repercussions for the implementation of the project supported by the Cohesion Fund, or manifest errors attributable to the Commission).

The amendment of the guidelines on closure was welcomed by the respective Member States and the Commission believes it will contribute to more efficient and effective implementation of the 2000-2006 Cohesion Fund projects. As a consequence, a number of the Member States requested extensions of the final date of eligibility for several dozens of Cohesion Fund projects in 2010 which would mean that implementation of these projects will continue to the end of 2011 or 2012.

1.2 Payments made in 2010 for projects adopted under the 2000-2006 period

In general, there were fewer final payments for Cohesion Fund projects (and ex-ISPA) for the period 2000-2006 than initially expected. Closure payment claims require thorough analysis of the closure documents and, depending on their completeness and quality, it can result in final payments at later stage than initially foreseen. The 2010 initial budget for payments for the 2000-2006 Cohesion Fund projects amounted to EUR 2,500 million. The transfer of appropriations resulted in a final budget of EUR 2,321 million. In order to close the gap between the available resources and the demand for payments, transfers have been made to the budget line related to the 2007-2013 Cohesion Fund programmes. For the period 2000-2006, the available appropriations of EUR 2,321 million were fully implemented by the end of 2010. This is a lower execution than in year 2009 (EUR 2,777 million) illustrating the fact that the Cohesion Fund project implementation cycle is reaching its final stage.

As far as the ex-ISPA budget lines are concerned, the budget initially foreseen for 2010 amounted to EUR 560 million. In September (during the Global Transfer procedure), the appropriations were reduced by an amount of EUR 184 million. After further transfers in December 2010, the final appropriations amounted to some EUR 368 million. The available appropriations were implemented in their entirety.

Table 1 presents the overall execution of payments in 2010 (including technical assistance) for the Cohesion Fund and the ex-ISPA projects.

Table 1. Implementation of the Cohesion Fund and ex-ISPA payments in 2010 (in EUR)

Payment appropriations | Initial | Movements | Final Resources | Outturn |

Cohesion Fund | 2 500 000 000 | -179 383 717 | 2 320 616 283 | 2 320 616 283 |

Ex-ISPA | 560 000 000 | -191 878 478 | 368 121 522 | 368 121 522 |

TOTAL | 3 060 000 000 | -371 262 195 | 2 688 737 805 | 2 688 737 805 |

Table 2 shows the level of 2010 payments for each Member State and for each sector. The main beneficiary countries are Spain in the EU-4 group, Poland in the EU-10 group and Romania in the EU-2 group. In 2010, payments were higher in comparison to the payments made in 2009 for the following countries: Poland (+ EUR 108 million or 13 % increase of payments made in 2009), Slovakia (+ EUR 14 million or 29 % increase of 2009 payments).

Table 2. Payments made in 2010 to the Cohesion Fund and ex-ISPA projects per Member State and per sector

Spain | 12 884 382 648 | 11 128 639 199 | 86,4% | 1 755 743 450 | 13,6% |

Ireland | 625 755 407 | 580 710 223 | 92,8% | 45 045 184 | 7,2% |

Portugal | 3 482 652 576 | 2 979 319 277 | 85,5% | 503 333 299 | 14,5% |

Czech Republic | 1 226 218 717 | 1 061 982 697 | 86,6% | 164 236 020 | 13,4% |

Estonia | 425 431 731 | 368 686 651 | 86,7% | 56 745 080 | 13,3% |

Hungary | 1 481 998 333 | 1 075 837 677 | 72,6% | 406 160 656 | 27,4% |

Latvia | 713 737 155 | 578 052 034 | 81,0% | 135 685 121 | 19,0% |

Lithuania | 825 210 750,63 | 691 544 300 | 83,8% | 133 666 450 | 16,2% |

Malta | 21 966 289 | 17 573 031 | 80,0% | 4 393 258 | 20,0% |

Poland | 5 634 539 614 | 4 652 759 522 | 82,6% | 981 780 092 | 17,4% |

Slovakia | 765 689 903 | 646 665 528 | 84,5% | 119 024 375 | 15,5% |

Slovenia | 254 129 012 | 214 745 183 | 84,5% | 39 383 829 | 15,5% |

Romania | 2 035 838 573 | 1 550 268 645 | 76,1% | 485 569 928 | 23,9% |

Estonia | 37 | 21 | 1 | 129 290 305 | 16 |

Greece | 124 | 58 | 8 | 1 298 010 305 | 66 |

Spain | 407 | 164 | 57 | 4 272 630 917 | 243 |

Ireland | 10 | 4 | 0 | 357 368 796 | 6 |

Cyprus | 2 | 0 | 0 | 0 | 2 |

Latvia | 46 | 19 | 9 | 143 251 895 | 27 |

Lithuania | 51 | 16 | 1 | 171 791 687 | 35 |

Hungary | 47 | 12 | 1 | 34 389 692 | 35 |

Malta | 3 | 0 | 0 | 0 | 3 |

Poland | 130 | 6 | 0 | 68 915 348 | 124 |

Portugal | 109 | 36 | 6 | 825 206 357 | 73 |

Slovenia | 28 | 13 | 3 | 81 180 871 | 15 |

Slovakia | 39 | 11 | 3 | 145 781 900 | 28 |

Romania | 63 | 6 | 4 | 15 776 582 | 57 |

Cyprus | NO | NO |

Czech Republic | NO | 6 814 711 | 6 814 711 | NO |

Estonia | NO | NO |

Greece | NO | 31 141 | -157 142 | -126 001 | NO |

Spain | NO | 115 666 | 21 006 031 | 21 121 697 | NO |

Hungary | NO | YES – transport sector |

Ireland | NO | 627 640 | 627 640 | NO |

Latvia | NO | 506 270 | 506 270 | NO |

Lithuania | NO | 30 177 | 30 177 | NO |

Malta | NO | NO |

Poland | NO | 111 246 392 | 111 246 392 | NO |

Portugal | NO | 12 925 561 | 12 925 561 | NO |

Romania | NO | 1 728 070 | 1 728 070 | NO |

Slovenia | NO | NO |

Slovakia | NO | 1 668 163 | 1 668 163 | NO |

Cyprus | 0 |

Czech Republic | 10 | 5 900 612 | 17,07% | 467 210 | 5,14% |

Estonia | 0 |

Greece | 16 | 8 011 028 | 23,18% | 18 046 | 0,2% |

Spain | 8 | 6 661 294 | 19,27% | 5 779 950 | 63,59% |

Hungary | 3 | 1 748 494 | 5,06% | 1 748 494 | 19,24% |

Ireland | 3 | 1 627 701 | 4.71% | 0 |

Latvia | 2 | 120 155 | 0,35% | 0 |

Lithuania | 7 | 5 055 374 | 14,63% | 626 036 | 6,89% |

Malta | 0 |

Poland | 15 | 939 617 | 2,72% | 0 |

Portugal | 11 | 4 372 226 | 12,65% | 321 775 | 3,54% |

Romania | 0 |

Slovenia | 0 |

Slovakia | 1 | 127 985 | 0,37% | 127 985 | 1,41% |

TOTAL |76 |34 564 486 |100 |9 089 496 |100 | |

5. EVALUATION

The Commission in close cooperation with the Member State and managing authorities carries out the ex-post evaluation. The most recent Cohesion Fund ex-post evaluation was launched in 2009 examining all Cohesion Fund and ex-ISPA projects implemented during the years 2000-2006, and the final report is expected in January 2012. The evaluation assesses the contribution of the Cohesion Fund and ISPA (i) to the development of the EU transport system, (ii) to achieving the EU acquis in the field of environment and (iii) to the impact of ISPA as a preparation for the programmes of the Structural and Cohesion Funds. As part of the overall Cohesion Fund ex-post evaluation, ex-post cost-benefit analyses were conducted for a sample of transport and environment projects, to identify lessons for future programming periods.

The first results from the ex-post evaluation for transport infrastructure show that the Cohesion Fund co-financed 1,281 km of new roads and 3,176 km of reconstructed roads (4,457 km roads in total). As regards, the rail sector 2,010 km of new rail and 3,840 km of reconstructed rail (5,350 km rail in total) were co-financed by the Cohesion Fund.

6. INFORMATION AND PUBLICITY

AS FROM 1 JANUARY 2007 ALL ISSUES CONCERNING THE COHESION FUND HAVE BEEN DEALT WITHIN THE COORDINATION COMMITTEE OF THE FUNDS (COCOF, ESTABLISHED ACCORDING TO REGULATION (EC) NO 1083/2006).

Several issues relevant for the Cohesion Fund were presented and/or discussed during the meetings of the COCOF. These include:

- DG Regional Policy informed about a proposal for a more flexible final date of eligibility (33rd and 34th meeting of the Coordination Committee of the Funds, Brussels, 28 January 2010 and 10 March 2010);

- DG Regional Policy informed the Member States about the adoption of the Amendment of the Guidelines on the closure of Cohesion Fund and ex-ISPA projects 2000-2006 (April 2010);

- DG Regional Policy held a debate on the Revised Guidance note on the amendment of decisions taken by the Commission for Cohesion Fund projects on the basis of Regulation (EC) No 1164/1994 as amended (38th meeting of the Coordination Committee of the Funds, Brussels, 22 September 2010);

- DG Regional Policy presented the final version of the COCOF note 08/0007/03 "Revised guidance note on the amendment of decisions taken by the Commission for Cohesion Fund projects on the basis of Regulation (EC) No 1164/1994 as amended" of 24 September 2010 which became available in all three working languages (39th Coordination Committee of the Funds meeting, Brussels and Mons, 20 and 21 October 2010).

In 2010, the Directorate-General for Regional Policy has continued to report in great detail on the Cohesion Fund in its Annual Activity Report[4] and to publish details of major projects, including those financed by the Cohesion Fund, for both of the periods 2000-2006 and 2007-2013. The details of many of these projects are available in a searchable database on the INFOREGIO website. Cohesion Fund projects have also been included in a specific publication showcasing 150 examples of projects co-financed by European regional policy.

[1] "Guidelines on the Closure of Cohesion Fund and Ex-ISPA projects 2000-2006", SEC(2008) 415 of 4 April 2008

[2] "Amendment of the Guidelines on the closure of Cohesion Fund and ex-ISPA projects 2000-2006", SEC(2010) 0405 of 19 April 2010

[3] Regulation (EC) N° 2185/1996, OJ L 292, 15 October 1996, p.2

[4] Published at http://ec.europa.eu/atwork/synthesis/aar/index_en.htm