COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 15.10.2002
COM(2002) 557 final
COMMISSION REPORT
ANNUAL REPORT OF THE COHESION FUND (2001)
2TABLE OF CONTENTS
FOREWORD 5
SUMMARY 6
1. G ENERAL CONTEXT 8
1.1. Convergence and economic development in the beneficiary countries of the
Cohesion Fund 8
1.1.1 Greece 8
1.1.2. Spain 8
1.1.3. Ireland 91.1.4. Portugal 101.2. Conditionality 10
2. I
MPLEMENTING PRINCIPLES AND ASSISTANCE GRANTED 11
2.1. Coordination with othe r Community policies 11
2.1.1. Public procurement 112.1.2. Competition 112.1.3. Environment 112.1.4. Transport 122.2. Coordination with the Structural Funds : the strategic reference frameworks 14
2.2.1. Environment 142.2.2. Transport 162.3. Implementation of the budget: commitments and payments 182.3.1. Budget available 182.3.2. Budget implementation 192.3.3. Implementation of the budget for the previous period (1993-99) 20
3. T
HE PROJECTS AND MEASURES ADOPTED 21
3.1. Assistance from the Fund by Member State 21
3.1.1. Greece 213.1.1.1 Environment 213.1.1.2 Transport 233.1.2. Spain (including the outermost regions) 243.1.2.1 Environment 25
33.1.2.2 Transport 29
3.1.3. Ireland 303.1.3.1. Environment 313.1.3.2. Transport 313.1.4. Portugal 323.1.4.1. Environment 333.1.4.2. Transport 343.2. Technical assistance and studies 353.2.1 General policy of the Fund 353.2.2. Technical assistance at th e initiative of the Commission 35
4. M
ONITORING , ASSESSMENT AND IRREGULARITIES 36
4.1. Monitoring: Committees and missions 36
4.1.1. Greece 364.1.1.1 Monitoring Committees 364.4.4.2. Monitoring missions 364.1.2. Spain 364.1.2.1. Monitoring Committees 364.1.2.2. Monitoring missions 374.1.3. Ireland 374.1.3.1. Monitoring Committees 374.1.3.2. Monitoring missions 384.1.4. Portugal 384.1.4.1. Monitoring Committees 384.1.4.2. Monitoring missions 384.2. Inspections and conclusions 384.2.1. Greece 394.2.2. Spain 394.2.3. Ireland 394.2.4. Portugal 394.2.5. Conclusions 394.3. Irregularities and suspension of aid 40
45. A SSESSMENT AND EVALUATION 41
5.1. General 41
5.2. Examination and ex-ante appraisal of projects 41
5.3. Cooperation with the EIB when a project is considered 415.4. Economic and social impact of the Fund in  the Member States and on economic and
social cohesion, including employme nt, in the European Union 42
5.5. Ex-post evaluation programme 42
5.5.1. Environment 425.5.2. Transport 42
6. I
NTER -INSTITUTIONAL DIALOGUE , INFORMATION AND PUBLICITY 43
6.1. Annual report for 2000 43
6.1.1. European Parliament 436.2. Information from the Member States 436.3. Other events 436.3.1. Information for the social partners 436.4. Commission measures on publicity and information 43
A
NNEX I4 5
5FOREWORD
This annual report on the ac tivities of the Cohesion Fund covers the calendar year
2001. It provides information on the se cond year of the 2000-06 programming
period.
The reporting format reflects the require ments of the Cohesion Fund Regulation. It
has been adapted to take into acc ount the comments made by the European
Parliament, the Economic and Social Committee and the Committee of the Regions.
It is hoped that it will also serve as a useful reference document for everyone
interested in the promotion and furthera nce of the economic and social cohesion of
the European Union.
6SUMMARY
Economic environment and conditionality
Most of the Member States receiving a ssistance from the Cohesion Fund continued
to respect the macro-economic criteria; only in Portugal was this not the case.
On 25 July 2002 the Portuguese authorities announced that the public deficit for
2001 had reached 4.1% of GDP, well above the reference level of 3%. Following that
announcement, the Commission decided to initia te the excessive deficit procedure, as
laid down in the Council resolution on the Stability and Growth Pact.
This problem did not arise in the other Cohesion Fund countries.
Budget implementation
The final amount, after indexation, of th e resources of the Cohesion Fund for 2001
was €2 715 million.
The commitments and payments made were as follows:
Summary table of implementation of the CF for 2001 appropriations (en €)
Commitment appropriations Initial Movements Final resources Implementation CancelledCarryovers to
2002
Budget 2001 2 715 000 000 0 2 715 000 000 2 711 685 504 0 3 314 496
Appropriations carried over from
2000 (not implemented)413 546 759 0 413 546 759 413 546 759 0 0
Appropriations made available
again (decommitted in 2000)000000
Repayments of advances
(reimbursements)000000
Totals 3 128 546 759 0 3 128 546 759 3 125 232 263 0 3 314 496
Payment appropriations Initial Movements Final resources Implementation CancelledCarryovers to
2002
Budget 2001 2 860 000 000 0 2 860 000 000 1 983 398 232 876 601 768 0
Appropriations carried over from
2000 (not implemented)300 000 000 0 300 000 000 0 300 000 000 0
Repayments of advances
(reimbursements)000000
Totals 3 160 000 000 0 3 160 000 000 1 983 398 232 1 176 601 768 0
COORDINATION WITH THE STRUCTURAL FUNDS : THE STRATEGIC REFERENCE
FRAMEWORKS
Transport
In 2001, the transport sector account ed for 48.5% of total Cohesion Fund
commitments. As in the past, the Commission insisted that the work of the Fundshould concentrate on railways.
Environment
The environment accounted for 51.5% of total Cohesion Fund commitments for
2001. The priorities in this sector remained  the supply of drinking water and the
treatment of waste water and solid waste.
7Information and publicity
An information meeting with all 15 Member States was held in Brussels on
24 October. At that meeting, the Commission presented the draft Regulation on thesystems of management and control and the procedure for implementing financial
corrections of assistance granted under the Cohesion Fund as well as the Report of
the Cohesion Fund for 2000.
Evaluation
A programme of ex-post evaluations extending over three years was launched in
1998. In all, 120 projects were evaluated, 60 in the environment sector and 60 in
transport. Implementation of the environm ent projects raised no major problems and
they achieved their objectives. However, thos e in the transport sector encountered a
number of problems leading to cost overr uns and the postponement of deadlines.
Irregularities and the suspension of assistance
Under Article 3 of Commission Regu lation (EC) No 1831/94 concerning
irregularities and the recovery of sums wron gly paid in connection with the financing
of the Cohesion Fund and the organisation of  an information system in this field,
1 the
beneficiary Member States are obliged to notify the Commission of irregularitieswhich have been the subject of initial administrative or judicial investigations.
One of the Member States, Greece, notified the Commission of four irregularities in
2001 involving a total of €2 429 040, statin g also that the national authorities had
taken the steps required to safeguard the financial interests of the Community. Inthree of these cases, proceedings to recove r the amounts wrongly paid are in progress
while in the fourth the contractor for the project was required to correct thedeficiencies, and has already done so.
Under the same Regulation, the other three beneficiary Member States informed the
Commission that they had detected no irregularities during the year in question.
                                                
1 OJ L 191, 29.7.1994.
81. G ENERAL CONTEXT
1.1. Convergence and economic development in  the beneficiary countries of the
Cohesion Fund
1.1.1 Greece
Following the Council decision of 19 June 2000, Greece entered the euro zone from
1 January 20012. In 2001, economic policy in Greece followed the guidelines of the
first stability programme, which was submitted in December 2000 under the
requirements of the Stability and Growth Pact. The first stability programme wasaimed at confirming the stability stance of macroeconomic policy while improving
the functioning of the markets through st ructural reforms. The Council issued an
opinion on the programme on 12 February 2001
3.
In 2001, despite a significant improvement in the budgetary position of general
government as compared with 2000, th e budgetary target of the 2000 stability
programme was not reached. The governme nt deficit fell from 0.8% of GDP in 2000
to 0.4% of GDP in 2001, or a small surplus of 0.1% of GDP including the receipts of
the UMTS claims. The stability programme projected a surplus of 0.5% of GDP in
2001. Missing the budgetary objective was th e result of lower budget revenues, in
particular tax revenues, due to slower than expected growth in real GDP, and to an
overrun in current primary expenditure, partly  offset by significantly higher non-tax
revenues, mainly non-budgeted receipts from the sale of mobile phone licenses
(UMTS), which amounted to around 0.5% of GDP. The primary surplus reached6.3% of GDP. The debt-to-GDP ratio fe ll further, from 102.8% of GDP in 2000 to
99.7% of GDP in 2001.
In December 2001, Greece submitted its fi rst update of the stability programme,
covering the period 2001-04. The progra mme was assessed by the Council on
12 February 2002
4. Building on the budgetary results in 2001 and on a slower real
GDP growth scenario than assumed in the initial programme, the updated stability
programme projects the gene ral government surplus to increase during the period but
at a slower pace; it should reach 0.8% of GDP in 2002 and 1.0% of GDP in 2003.The general government debt ratio is proj ected to decline further to 97.3% of GDP in
2002. The budgetary strategy of the Gr eek stability programme consists in
maintaining high primary surpluses assisted by a significant reduction in interestpayments, resulting from lower interest rates and a declining debt ratio.
1.1.2. Spain
In 2001, the main economic policy guidelines  implemented in Spain were described
in the 2001-04 Stability Programme Upda te. The programme reaffirmed the
economic strategy followed in recent ye ars based on fiscal consolidation and
structural reforms and was considered by th e Council as being in accordance with the
Stability and Growth Pact
5. Within the international economic downturn, GDP grew
                                                
2 OJ L 167, 7.7.2000.
3 OJ C 77, 9.3.2001, p.1.
4 OJ C 51, 26.2.2002, p.5.
5 OJ C 109, 10.4.2001.
9by 2.8% in 2001 compared to 3.6% previous ly assumed in the update. Despite this
weaker output growth and after register ing a deficit of 0.3% of GDP in 2000, the
target of a general government balanced  budget was met while the debt-to-GDP ratio
envisaged in the update was slightly overs hot. In contrast price developments were
worse than expected, not only because of price rises among the more volatile items,but also because core inflation deteriorated.
The third Stability Programme Update, covering 2002-05, was submitted to the
European Commission on 9 December 2001 a nd was assessed by the Council on
12 February 2002
6. In its Opinion the Council considered the update to be in
conformity with the provisions of the Stability and Growth Pact and consistent withthe broad economic policy guidelines. The general government balanced budget
reached in 2001 is extended to 2002 and 2003 and small surpluses of 0.1% and 0.2%
of GDP are expected in 2004 and 2005 respec tively. The fiscal strategy outlined in
the update remains unchanged compared to  the previous programmes. It relies on
primary current expenditure restraint unde rpinned by falling interest payments,
which allows for an increase in public investment. In turn, the programme envisagesa new reform of personal income tax to take effect from 2003, implying a tax burden
reduction consistent with th e maintenance of fiscal c onsolidation. An additional
downturn in the debt-to-GDP ratio is foreseen, falling below 56% in 2002 and
reaching 50% by the end of the programme period.
1.1.3. Ireland
Ireland’s stability programme for the pe riod 2001-03 was considered by the Council
as being in conformity with the Stability and Growth Pact
7. In contrast to previous
years, the general government outturn fo r 2001 was far below target, resulting in a
surplus estimated at 1.7% of GDP rather  than 4.3% as planned. A large tax
undershoot was chiefly responsible for this under-performance, although some
expenditure overruns were also recorded. The weakness of tax receipts is largely
blamed on lower growth, which was probabl y some 2 percentage points below the
8.8% assumption underlying the 2001 budget. Th e government debt to GDP ratio fell
further, to about 36% in 2001.
The new update of the stability programme , covering 2002-04, wa s assessed by the
Council on 12 February 20028. In 2002, the Irish authorities expect a small surplus,
but thereafter the balance is projected to slide into (minor) deficit. However, thebudget projections for 2003-04 incorporat e large contingency provisions (against
unforeseen developments), without which a small surplus would be recorded in each
year. The Council therefore concluded th at, provided these contingency provisions
are not used, the close-to-balance objective of the Stability and Growth Pact wouldbe broadly respected throughout th e programme period. Regarding debt
developments, the stability programme envisages a near-stabilisation of the debt ratioover the period to 2004 at the very low level of 34% of GDP.
As a result of its spectacular growth pe rformance over the past decade, Ireland's
unemployment rate has declined rapidly,  to 3.8% in 2001 from a peak of 15.6% in
                                                
6 OJ C 51, 26.2.2002, p. 8.
7 OJ C 77, 9.3.2001.
8 OJ C 51, 26.2.2002.
101993. However, the international and domes tic slowdown in 2001 led to a moderate
rise from about mid-2001, to 4.3% in Febr uary 2002. Ireland has made remarkable
progress in achieving nominal convergence. From 77% of the EU average in 1991,nominal GDP per capita is estimated to ha ve risen to 121% in 2001. In GNP terms,
which may be a better gauge of Irish perform ance given a significant degree of profit
expatriation, the increase is fr om 71% to an estimated 102%.
1.1.4. Portugal
In 2001, budgetary developments took place under the strategy of the Stability
Programme Update (2001-04) , which was assessed by  the Council on 12 March
2001
9. The programme set a general government  deficit target of 1.1% of GDP. The
deficit outcome estimated by the Portug uese authorities in the February 2002
notification is 2¼% of GDP. Slower ec onomic growth than expected was an
important factor behind this considerably  worse than targeted budget outcome in
2001. However, other factors are also behi nd this, notably an underestimation of the
revenue losses implied by the reform of di rect taxes implemented in 2001, and lower
than projected efficiency gains in ta x collection and administration. Moreover,
despite a restrictive package adopted in June, current primary expenditure exceeded
the target.
The third Stability Programme Update, covering 2001-05, was adopted by the
Portuguese government on 13 December  2001 and assessed by the Council on
12 February 2002. Despite budgetary slippa ge in 2001, it maintains the objective of
balancing general government account s by 2004, implying a considerably more
demanding path of fiscal consolidation in 2002-04. The Council considered that once
economic recovery is established, the Port uguese government should strengthen its
efforts to move rapidly towards its medi um-term objective of a zero deficit in 2004.
This calls for, as a minimum, strict respect of the rule of capping at 4% nominalcurrent primary expenditure growth in central government for the years 2003 and
2004, and may also require additi onal discretionary measures.
On 25 July 2002 the Portuguese authorities announced that the public deficit for
2001 had reached 4.1% of GDP, well above the reference level of 3%. Following that
announcement, the Commission decided to initia te the excessive deficit procedure, as
laid down in the Council resolution on the Stability and Growth Pact.
1.2. Conditionality
Most of the Member States receiving a ssistance from the Cohesion Fund continued
to respect the macro-economic criteria; only in Portugal was this not the case.
Following the announcement by the Portuguese authorities on 25 July 2002 of a
public deficit of 4.1% of GDP (see 1.1.4 a bove), the Commission decided to prepare
a report to the Economic and Financia l Committee for its opinion. The Commission
may subsequently make a recommendation to the Council, which will decide on the
action to be taken.
This problem has not arisen with the ot her countries eligible under the Cohesion
Fund.
                                                
9 OJ C 109, 10.4.2001, p.4.
112. I MPLEMENTING PRINCIPLES AND ASSISTANCE GRANTED
2.1. Coordination with ot her Community policies
2.1.1. Public procurement
The Commission pays particular attention to  ensuring that Community legislation on
public procurement is rigorously applied to projects part-finan ced by the Cohesion
Fund.
When an application is submitted, the form used to request assistance requires
applicants to send copies of published calls for tenders and other information
confirming correct observance of the procedure for awarding contracts. If contractshave not yet been awarded when an app lication is made, the beneficiary Member
State is required to provide information on compliance with the rules on the award of
public contracts when interim payments are made or the final report presented.
In its inspection missions, the Commission undertakes routine checks on compliance
with the relevant Community directives on public procurement and the correctness of
the tender selection procedures.
2.1.2. Competition
Council Regulation (EC) No 1164/94 estab lishing a Cohesion Fund states that
assistance from the Fund must, in particular , be in keeping with competition policy.
In this regard, considera tion of applications for finance concerns mainly an
assessment of the compatibility with the Treaty of the measures part-financed by theFund in order to ensure that assistance complies fully with the Communitycompetition rules, and in particular those on State aids.
As it has in the past, the Commission finds that these aids do not generally raise
problems of incompatibility with competition law, in that they are directed towardsinfrastructure projects for transport or the protection of the environment which,
unless they infringe the rules on public pr ocurement, do not pr ovide specific firms
with any special advantage. Accordingly, from the competition point of view,Community monitoring continues to concern mainly the aspects regarding freeaccess to infrastructure by all operators meeting the technical and legal conditionsrequired.
2.1.3. Environment
The annual report for 2000 described the pr inciples of environmental policy as
defined in Article 174 of the Treaty and th e directives most closely concerned with
the implementation of projects pa rt-financed by the Cohesion Fund.
It also stressed both the importance of the contribution of the Cohesion Fund to
achieving the objectives of the Treaty, and in particular to resolving specificproblems such as reducing water polluti on and implementing appropriate waste
management, and the need to incorporate th e environmental dimension into transport
infrastructure so as to reduce and m onitor its undesirable secondary effects.
12In 2001, the Commission continued its e fforts to implement environmental
legislation both through the direct financing of infrastructure to treat waste water andwaste and by ensuring the correct application of certain directives as a priorcondition for granting finance. This concerns  both the subject-based directives with a
large spatial component (e.g. those on na ture conservation a nd the management of
waste and waste water) and the directive on environmental impact assessments(EIA).
Drawing up the lists of Community site s for the Natura 2000 network remains a
priority for the Commission. The first Comm unity list of such sites was approved on
28 December 2001 for the region of Macaronesia (Canary Islands, Madeira and theAzores).
The initiative taken by the Commission to link the granting of Community finance to
submission of the lists of Natura 2000 site s, which should have been sent in 1995,
has considerably speeded up the process.
Where appropriate, the Commission has asse ssed whether applications for part-
finance under the Cohesion Fund are comp atible with Article  6 of Directive
92/43/EC (the “Habitats” Directive).
The Commission has assessed a pplications for finance for the treatment of urban
waste in the light of the policy and legislation applicable in this sector.
Projects for the treatment of urban waste water
10 can be financed only at the
appropriate level depe nding on the designation of the zones (primary in the case of
less sensitive zones, secondary in the case of  normal zones and tertiary in the case of
sensitive zones) as provided for by Directive 91/271/EEC.
When assessing applications for part-fina nce, the Commission has also had regard to
the inclusion of projects in integrated op erational systems and their incorporation in
plans for the water basin.
The projects financed by the Cohesion Fund have permitted a pplication of the
polluter pays principle by using different levels of aid11. Application of the polluter-
pays principle will soon be strengthened by  application of the framework directive
on water12.
2.1.4. Transport
While TENs transport projects of common interest are financed from the trans-
European transport networks budget line, the Cohesion Fund provides funds
specifically for TENs transport infrastructure.
Coordination between the TENs budget and the Cohesion Fund is important because
these Community financial instruments take  into account the need for links between
the central regions of the Community and those structurally handicapped by their
insular, landlocked or  peripheral status.
                                                
10 Directive 91/271/EEC.
11 Working document No 1, application by DG REGIO of the polluter-pays principle.
12 Directive 2000/60/EC.
13The TENs Regulation does not allow the sa me phase of a single project to be
financed both by the TENs budget and from other Community sources but, in somecases, feasibility studies financed thro ugh the TENs budget may be followed by
support from the Cohesion Fund and the EIB for the construction works of the actualinvestment.
The TENs Financial Regulation ((EC) No  2236/95) was amended by Regulation
(EC) No 1655/99 to provide for medium-t erm planning via indicative multi-annual
programmes for Community funding (MIP) and for the encouragement of public-
private partnerships, together with the use of a small amount of the budget line (1%-
2%) to support projects involving risk capital.
The MIP proposal 2001-06 that was adopted by the Commission in September 2001
provides a total of some €2.8 billion for 11 priority projects (Essen projects), the
Global Navigation Satellite Syst ems project (‘Galileo’) and f our groups of projects of
“common interest”.
In 2001 a total of €563 million in commitment appropriations was allocated to TENs
transport projects under the MIP, the Galileo project and projects  of common interest
outside the MIP.
As regards the distribution of support in 2001 by mode, by far the greatest part of the
Union spending on transport under the TEN s-T budget went to ra il projects (almost
55%), followed by Galileo (20.6%) and roads (12%).
On 12 September the Commission adopted a White Paper on tran sport which makes
improving transport conditions one of its main points for reflection, based on:
– reducing congestion;
– installing new infrastructure, particularly railways;
– charging as a way of restoring balance between modes and financing
infrastructure.
To achieve these ambitious objectives, the Commission will use the finance available
under the TENs-T budget, the Cohesion Fund and the European RegionalDevelopment Fund (ERDF) and the Inst rument for Structural Policies for
Preaccession (ISPA) in the future member countries.
142.2. C OORDINATION WITH THE STRUCTURAL FUNDS : THE STRATEGIC REFERENCE
FRAMEWORKS
2.2.1. Environment
Greece
The strategic reference framework (SRF) for the environment sector is described as a
separate Chapter of the operational programme for the environment in the GreekCSF for 2000-06. This Operational Progra mme was approved by the Commission on
24 July 2001 (Decision C(2001) 1357). The SRF is a tool in an overall assistance
package whose aim is to enable Greece to  comply more fully with its obligations
under EU environmental legisl ation and to contribute to  sustainable development.
The financial contribution of the Cohesi on Fund to this environmental plan cannot
meet all Greece’s major infrastructure needs in the field of drinking water, urbanwaste-water and solid waste management. However, it is expected to facilitatesubstantial progress in the right direction.
As regards solid waste management, the overall plan of action is based on the
National Solid Waste Management Plan prepared by the Ministry of the
Environment, Planning and Public Works and submitted to the European Union.
Using management plans agreed at national, regional and local level, the general goal
is the correct management of all categorie s of solid waste and where appropriate the
restoration of the environment where it ha s been degraded and polluted by waste.
Similar plans have also been made for the urban waste-water management sector
throughout the country in accordance with Directive 91/271/EEC. The Cohesion
Fund and funds from the ERDF will help th e Greek authorities to comply with this
Directive.
Spain
The priority sectors for assistance to be  financed through the Cohesion Fund for the
2000-06 programming period are:
– management of municipal, i ndustrial and hazardous waste;
– sewerage and waste-water treatment
– water supply.
This assistance should be governed by a c oordinated strategic a pproach, designed for
each of the sectors selected and organised within programmes identifying the mainpriorities in the different sectors; it should also be coordinated w ith assistance in the
same sectors financed by the Structural F unds. The contents of each of the sectoral
strategic frameworks were already de scribed in the Annual Report 2000 for the
Cohesion Fund.
Once the managing authority adopted th e programme complements in 2001 and the
programming period for the Structural Funds for 2000-06 for the Spanish Objective 1
15and Objective 2 areas was finalised, the financing of the different forms of assistance
by the Structural Funds was establishe d. For the measures concerning sectors
selected as priorities for financing by  the Cohesion Fund, this also required
coordination among the authorities responsible  for managing the relevant Funds and
projects.
Ireland
The Irish authorities presented their strategic reference framework for the
environment sector in 2000 and it continue s to form the basis for considering
assistance to individual projects in the waste water and solid waste sub-sectors.
Coherence between Structural Fund prog rammes and the Cohesi on Fund priorities is
relatively easily to ensure because of th e concentration of Cohesion Fund assistance
on a small number of major construction projects. Acceptable projects in the solidwaste area, a sub-sector requiring significant investment, have still to be presented.
The reference framework was described in more detail in the annual report for 2000.
Portugal
The environment strategic framework for Portugal for 2000-06  includes the
following priorities:
– further development and completion of the basic environment infrastructure;
– providing the conditions needed for su stainable developmen t, environmental
protection and the manageme nt of natural resources.
Cohesion Fund assistance will be provided fo r the larger water supply, urban waste-
water drainage and treatment, and urban solid waste treatme nt infrastructure projects.
The main objectives for water supply and wa ste-water drainage and treatment are to
increase significantly the population served and, in the case of water supply, improvethe quality of drinking water in line with  Community directives and increase supply
reliability.
% population served by the systems in 2006
(mainland Portugal)
Supply of drinking water 95
Waste-water drainage and treatment 90
Solid waste treatment 98
For water supply and urban waste-water drainage and treatment an integrated
systems approach, with an intermunicipal system covering the complete water cycleand managed by a single entity, has generally been adopted.
These intermunicipal systems usually cover ma jor parts of one or more river basins.
This is a departure from the previous situation in which most municipalities managedtheir own individual systems.
The entity managing these systems is either a public sector company, in which the
municipalities now hold an important stake, or an intermunicipal association whichhas a specific status under law. In either case, the transfer and sharing of
16management responsibilities for these integrated systems required complex
negotiations and the drafting of service agreements between the parties.
Cohesion Fund assistance is being supplemente d with ERDF funding to help build or
renovate the smaller local components of these systems. This two-tier assistance
mechanism required and will continue to require a close coordination of the overallproject development schedule and prioritisation in order to ensure the properdeployment of the overall systems, i. e. the Cohesion Fund ‘backbones’ and the
smaller projects at the level of the regional programmes (Norte, Centro, Alentejo,Lisboa e Vale do Tejo, Algarve, Madeira and the Azores).
During 2001 the Environment Thematic Group was created under the authority of the
Community support framework Monitoring Committee. One of its main tasks is tomonitor and report on the implementation of the strategic framework for theenvironment in Portugal.
2.2.2. Transport
Greece
The strategic reference framework (SRF) for the transport sector in Greece was
approved under the operationa l programmes “Roads, ports  and urban development”
and “Railways, airports and urban trans port” in March and April 2001 respectively.
The SRF provides for assistance together with part-financing by the ERDF aimed
mainly at:
a) completing the TENs priority road routes in Greece (the Pathe, Egnatia and Ionian
highways and the Corinth—Tripo lis—Kalamata/Sparta motorway;
b) completing the Pathe rail route and its electrification from Athens to the Bulgarian
border;
c) completing and modernising infrastructure in two ports (Igoumenitsa and Heraklion);d) completing the modernisation of the air traffic control system in Greece.
The priorities for the transport sector for the current period under the agreed strategy
are motorways, railways and ports.
Their main aim is to implement the trans-European networks by constructing the
Pathe and Egnatia pr iority key routes.
As regards railways, further efforts are needed to properly and fully implement the
Pathe rail route and electrify the Athens—Thessaloniki—Promachon line.
Spain
As part of discussions between the Commission and Spain, the Spanish authorities
submitted a document on investment in the trans-European transport networks(TENs), setting out the general strategy  in this area in the 2000-06 programming
period. As a complement to this document,  the Spanish authorities defined a strategy
for using the Structural Funds and the C ohesion Fund to improve the coherence and
complementarity of these two instruments.
17This strategy of using the Funds to fi nance investments in the trans-European
transport networks is relatively clear and simple and may be summarised as follows:
– The high-speed rail lines in the strategic framework (Madrid—Barcelona—
French border, Madrid—Valladoli d, Madrid—Valencia and Córdoba—
Málaga) are the main routes which will help improve intermodal balance andsecure more rational and environmenta lly-friendly distribution. These projects
are the major priority for the period 2000-06 and this, together with the factthat, apart from the Córdoba—Málaga line, they are interregional, means thatthe Cohesion Fund is the main source of  finance for three of the four. The
exception, the Córdoba—Málaga line, w ill be part-financed by the ERDF.
– The part-financing of these major rail lines solely by the Community Funds
should not obscure the search for a better multiplier effect from these Fundsthrough use of public-private partnership formulas. However, in the case of rail
this can become a possibility only through the introduction of a competitivecharging system which will attract traffic from other competing forms oftransport (road, air), while also achieving the aim of rebalancing the variousmodes of transport.
– Investment in the high-speed lines will achieve its goals only if it is supported
by the development of conventional lines so that the benefits are feltthroughout the country. Since the Cohesi on Fund cannot contribute to that aim,
use of ERDF resources appears the main way of extending benefits to theObjective 1 regions.
– High-capacity road routes may be divi ded into two categories: those which
complement the existing network or link the main transport routes and thosewhose main role is to reduce existing congestion in certain developed areas. Inthe first case, use of the Community Funds (ERDF) is essential. In the second,private sector participation may be attracted through toll systems.
– Ports and airports are also extremely important forms of transport
infrastructure. However, because they  occupy limited amounts of space, rather
than constituting networks as terrestrial infrastructure does, they can befinanced relatively easily from the charges levied on sea or air transport. InSpain, this is the reason why specific pub lic bodies are set up for that purpose.
However, the investment required to re duce the deficit on infrastructure of this
type does not exclude a certain c ontribution from the Community Funds.
Ireland
The Irish authorities presented their strategic reference framework for the transport
sector in 2000. This reference framework con tinues to form the basis for considering
assistance to individual projects in the road  and rail sub-sectors. Coherence between
the relevant Structural Funds progra mmes and the Cohesi on Fund priorities is
relatively easily ensured in view of the concentration of Cohesion Fund assistance on
a small number of major constr uction projects. The major priority projects have been
selected in both sub-sectors.
The reference framework was described in more detail in the annual report for 2000.
18Portugal
The strategic guidelines for the Cohesi on Fund in the field of transport did not
undergo any major changes in 2001.
However, Cohesion Fund assistance was high ly concentrated on the rail sub-sector:
the effective start of modernisation work on two vital sections of the Norte line andapproval of two appli cations concerning the last section of the direct rail link
between Lisbon and the Alentejo and the Algarve.
This means that all the projects concerning the modernisation of the north/south link
are now under way (apart from a small s ection around Lisbon). This, together with
other investments to modernise the Algarve line, will reduce the journey time fromLisbon to Faro to 2 hours 45 minutes in 2004.
It has not proved possible in the past to  make the rail sector substantially more
competitive than road transport for passengers and goods. Hence the rail sub-sectorwas given greater importance in 2001 in orde r to help improve the balance between
transport modes throughout the system in Portugal.
Assistance from the Fund to investment  on the Lisbon—Faro route has already
improved access to the port of Sines in response to growing goods traffic to and from
that port. This should give that line a fresh boost and increase its ability to competewith the roads in transport to the Algarve.
The bulk of this investment concerns th e renovation and complete electrification of
the line in order to increase its speed, reliability and safety. It will also permit theintroduction of new passenger se rvices employing tilting trains.
A section of the Lisbon underground networ k was also adopted in 2001. This will
help improve connections be tween the network as a whole and the international
Oriente station and w ill have undoubted benefits for the environment.
2.3. I
MPLEMENTATION OF THE BUDGET : COMMITMENTS AND PAYMENTS
2.3.1. Budget available
In accordance with Article 4 of Regu lation (EC) No 1164/94, as amended by
Regulation (EC) No 1264/1999 (the Cohe sion Fund Regulation), Cohesion Fund
resources available for commitment for 2001 amounted to €2 615 million at 1999prices. The final amount entered in th e budget after indexation was €2 715 million.
In accordance with the brackets for the allocation of resources by Member State laid
down in Annex I to the Cohesion Fund Regu lation, the indicative allocation of these
appropriations by country is as follows:
Country Lower limit Upper limit
€ mill % € mill %
Spain 1655 61.0% 1723 63.5%
Greece 434 16.0% 488 18.0%
Ireland 54 2.0% 163 6.0%
Portugal 434 16.0% 488 18.0%
Technical assistance 2 2
19The budgetary authority also decided to enter €2 860 million in payment
appropriations for the Cohesion Fund.
Under Article 7 of the Fina ncial Regulation, the Commi ssion decided to permit the
carryover of €413.5 million in commitment appr opriations, the balance available at
the end of 2000, and the carryover of €300 million in payment appropriations. Thedecommitments totalling €10.9 milli on in 2001 were cancelled.
2.3.2. Budget implementation
The tables showing the budgetary imple mentation of Cohesion Fund resources in
2001 and carryovers to 2002 are as follows:
Summary table of implementation of the CF for 2001 appropriations (en €)
Commitment appropriations Initial Movements Final resources Implementation CancelledCarryovers to
2002
Budget 2001 2 715 000 000 0 2 715 000 000 2 711 685 504 0 3 314 496
Appropriations carried over from 2000
(not implemented)413 546 759 0 413 546 759 413 546 759 0 0
Appropriations made available again
(decommitted in 2000)00 0 00 0
Repayments of advances
(reimbursements)00 0 00 0
Totals 3 128 546 759 0 3 128 546 759 3 125 232 263 0 3 314 496
Payment appropriations Initial Movements Final resources Implementation CancelledCarryovers to
2002
Budget 2001 2 860 000 000 0 2 860 000 000 1 983 398 232 876 601 768 0
Appropriations carried over from 2000
(not implemented)300 000 000 0 300 000 000 0 300 000 000 0
Repayments of advances
(reimbursements)00 0 00 0
Totals 3 160 000 000 0 3 160 000 000 1 983 398 232 1 176 601 768 0
Under Article 7 of the Fina ncial Regulation, a ppropriations not implemented at the
end of the year are cancelled, unless th e Commission adopts a specific decision to
carry them over. All the commitment appropriations carried over were used by31 March 2001. No payment appropria tions were carried over to 2002.
The tables of implementation by country  and by type of project, (environment,
transport or mixed) are as follows:
Budget implementation of appropriations for 2001 including appropriations carried over to 2002
Commitment appropriations for 2001 (including appropriations carried over to 2002)
Country Environment Transport Mixed Total
Amount % Envir Amount % Transp Amount Amount %
Spain 865 912 007 51.7% 810 332 029 48.3% 0 1 676 244 036 61.8%
Greece 253 138 698 54.2% 214 261 684 45.8% 0 467 400 382 17.2%
Ireland 39 734 066 34.6% 75 265 934 65.4% 0 115 000 000 4.3%
Portugal 237 919 087 52.2% 217 780 043 47.8% 0 455 699 130 16.8%
Technical assistance 0 0.0% 0 0.0% 656 452 656 452
Total 1 396 703 858 51.5% 1 317 639 690 48.5% 656 452 2 715 000 000 100.0%
Payment appropriations for 2001
Country Environment Transport Mixed Total
Amount % Envir Amount % Transp Amount Amount %
Spain 647 308 574 66.1% 332 222 094 33.9% 0 979 530 668 49.5%
Greece 161 587 555 63.4% 93 393 201 36.6% 0 254 980 756 12.9%
Ireland 203 731 649 65.5% 107 313 707 34.5% 0 311 045 356 15.7%
Portugal 201 503 013 46.5% 232 134 366 53.5% 0 433 637 379 21.9%
Technical assistance 0 0.0% 0 0.0% 4 204 073 4 204 073
Total 1 214 130 792 61.3% 765 063 368 38.7% 4 204 073 1 983 398 233 100.0%
20To reflect implementation of the commitme nt appropriations allocated in 2001, the
appropriations carried over to 2002 are incl uded in the above table but those carried
over from 2000 to 2001 are not included.
Implementation in 2001 enabled the allo cations of appropriations among the
Cohesion Fund countries to be rebala nced where implementation in 2000 had
deviated slightly from the indicative br eakdowns adopted by the Commission. Those
countries which had exceeded their alloca tion in 2000, such as Ireland, received an
under-allocation in 2001 and vice-versa, e.g. Greece).
The following table shows total imp lementation in 2000-01 for each country
(excluding technical assistance):
Total implementation of commitment appropriations 2000-01 (including carryovers to n+1)
Country Av. percentage 2000 2001 Total (in € million)
Spain 61.02% 1601.3 1676.9 3278,.2
Greece 16.81% 435.6 467.4 903.0
Ireland 5.30% 169.6 115.0 284.6
Portugal 16.87% 450.8 455.7 906.5
Total 100.0% 2657.3 2715.0 5372.3
2.3.3. Implementation of the budget for the previous period (1993-99)
The 1993-99 budget was fully committed as planned by 31 December 1999. The
outstanding amount to be settled for the period 1993-99 was dealt with as follows in
2001.
Settlement in 2001 of commitments for the period 1993-99
CountryInitial amount to be
settledDecommitments PaymentsFinal amount to be
settled
Spain 2 060 532 662 7 125 100 622 003 948 1 431 403 614
Greece 749 668 182 769 818 168 696 947 580 201 417
Ireland 251 821 464 0 99 415 024 152 406 440
Portugal 320 356 542 2 414 493 162 610 592 155 331 457
Technical assistance 1 393 518 561 659 521 698 310 161
Total 3 383 772 368 10 871 070 1 053 248 209 2 319 653 089
The size of the amount to be settled for 1993-99 at the end of 2000 was less than the
Cohesion Fund budget for one year.
A large part of this outstanding amount re lates to projects continuing into the new
period 2000-06. This means that the amount to  be settled will be dealt with through
interim payments rather than closures.
213. T HE PROJECTS AND MEASURES ADOPTED
3.1. Assistance from the Fund by Member State
3.1.1. Greece
During 2001 the Commission approved C ohesion Fund assistance totalling €797.8
million, of which €398.2 million was committed in that year’s budget.
Including commitments made as a result of decisions taken in previous years (€69.2
million) brought the total amount committed during 2001 to €467.4 million.
The following table shows the Cohesion Fund assistance approved in 2001 and the
total amount committed in that year.
Total eligible cost Total CF assistance Commitments 2001*
Environment 374 627 934 298 827 349 253 138 698
Transport 919 635 445 499 036 159 214 261 684
Total CF 1 294 263 379 797 863 508 467 400 382
% Environment 29% 37% 54%
% Transport 71% 63% 46%
* including commitments based on decisions taken in 2001 and in previous years
3.1.1.1 Environment
In 2001 the Cohesion Fund concentrated its financial support on the following
priority sectors: waste water and waste-wa ter treatment, management of solid waste,
water supply and flood protection. The aim wa s to complete the cycle of assistance,
filling the gaps in the existing systems so as to implement the agreed strategicreference framework.
During 2001, the Commission approved C ohesion Fund assistance totalling €298.8
million, of which €242.8 million was committed from that year’s budget. Theassistance approved and appropriations committed break down as follows:
– In 2001 21 new projects were approved for a total of €280.2 million in
Cohesion Fund assistance, of wh ich €224.2 million was committed from that
year’s budget. The following table shows the projects adopted in 2001:
22Total cost Cohesion
Fund
assistanceCommitment
2001Project No Name
€ €
CCI2001GR16CP
E 014Construction and improvement of the water supply and
drainage networks and extension of the waste-watertreatment station in the municipality of Larissa25 000 000 18 750 000 15 000 000
CCI2001GR16CP
E013Construction and improvement of the water supply and
drainage networks and extension of the waste-watertreatment station in the municipality of Karditsa20 000 000 15 000 000 12 000 000
CCI2001GR16CP
E 030Improvements on the river Xirias 40 194 000 29 443 500 23 554 800
CCI2001GR16CP
E 016Construction and improvement of the water supply, rain
water and waste-water networks in Nafplio11 372 000 8 529 000 6 823 200
CCI2001GR16CP
E 002Integrated waste-management system in the region of
Western Macedonia (Phase A)12 974 868 9 731 151 7 784 921
CCI2001GR16CP
E 003Internal and external water supply networks in and
around the municipality of Kozani , remote control –
remote management of leaks27 940 000 20 955 000 16 764 000
CCI2001GR16CP
E 004Construction of an outfall (section II) in Western Attica 21 300 000 15 975 000 12 780 000
CCI2001GR16CP
E 005Rain and waste-water draina ge pipes in the remaining
area of the municipality of Preveza10 271 460 7 703 595 6 162 876
CCI2001GR16CP
E 006Water supply and drainage in the municipality of
Igoumenitsa10 564 930 7 923 698 6 338 958
CCI2001GR16CP
E 001Extension – improvement and modernisation of water
supply systems - waste-water drainage in the municipalityof Ioannina10 270 924 7 703 193 6 162 554
CCI2001GR16CP
E 007Waste-water network and treatment station in the town of
Grevena15 115 518 11 336 639 9 069 311
CCI2000GR16CP
E 007Waste- and rain-water drainage in the town of Patras 14 271 500 10 703 625 8 562 900
CCI2000GR16CP
E 002Supplies to Patras  from the rivers Piros  and Parapiros :
studies and compulsory purchase14 600 000 10 950 000 8 760 000
CCI2000GR16CP
E 003Supplies to the greater Corfu and Paxi Region: first
phase studies and compulsory purchase10 271 460 7 703 595 6 162 876
CCI 2001GR1-
CPE-024Waste-water network and treatment station in Chalastra 19 515 000 14 636 250 11 709 000
CCI2000GR16CP
E023Waste- and rain-water drainage in Kilkis 15 800 000 11 850 000 9 480 000
CCI2001GR16CP
E022Extension and improvement of water supply and drainage
networks in Serres11 000 000 8 250 000 6 600 000
2001-GR-16-C-
PE-026Construction of waste- and rain-water networks in
Heraklion and Alikarnassos and improvement of the
treatment station in Heraklion -Crete21.302.274 15.976.706 12.781.365
2001-GR-16-C-
PE-009Construction of drainage networks for four urban areas of
Chania  - Crete19.000.000 14.250.000 11.400.000
2001-GR-16-C-
PE-025Water supply and evacuation of waste- and rain-water -
Corfu20.000.000 15.000.000 12.000.000
2001-GR-16-C-
PE-008Networks for water supply and the drainage of waste- and
rain-water in Ermoupolis on Syros23.864.000 17.898.000 14.318.400
Total 374 627 934 280 268 952 224 215 161
– The Commission approved seven request s to amend decisions taken in
previous years in 2001. Cohesion Fund assistance amounts to €18.5 million, all
of which was committed in that year’s budget.
23The following table shows the amended decisions adopted in 2001:
Project No Name Total cost Cohesion Fund
assistanceCommitments
2001
(€) (€)
CCI 1994GR16CPE
003 94/09/61/029-3Waste-water drainage and treatment plants in
Pyrgos1 230 618 984 494  984 494
CCI 1995GR16CPE
001 95/09/61/011-
10Evinos  dam: Electro-mechanical plant  990 500 742 875  742 875
CCI 1994GR16CPE
001 94/09/61/027-3,
078Waste-water drainage and extension of water
treatment plants in Markopoulo. Waste-water
drainage in Kalyvia. Waste-water drainage in
Kouvaras10 867 161 8 145 814 8 145 814
CCI 1994GR16CPE
087 94/09/61/024Waste-water drainage and water treatment
plants in Parga2 680 000 2 144 000 2 144 000
CCI 1994GR16CPE
076 94/09/61/034Renovation of a waste tip in Ano Liossia 6 670 000 5 336 000 5 336 000
CCI
1994GR16CPE055Drainage network and waste-water treatment
plant in Soufli 440 518  352 414  352 414
CCI
1994GR16CPE074Drainage network and waste-water treatment
plant in Didymoteiho1 066 000  852 800  852 800
Total 23 944 797 18 558 397 18 558 397
– In addition, based on decisions taken in the previous year, €10.4 million was
committed under that year’s budget (water  supply to Thessaloniki-Aliakmon).
– Finally, 54 requests to amend deci sions with no financial impact were
submitted by Greece and approved by the Commission. The amendmentsconcern minor changes in the physical wo rks, reallocations in the financial plan
and extensions of contracts.
3.1.1.2 Transport
Under the aid decisions approved in 2001 by the Commission, the Cohesion Fund
assistance for the transport sector amounts to €499 million, of which €214 millionwas committed from that year’s budget.
The approved grants and total committed appropriations break down as follows:– Six new projects receiving €400.5 million in Cohesion Fund assistance were
approved in 2001; €120.5 million was committed from that year’s budget. Thefollowing table shows the new projects adopted in 2001.
24TITLE Commitments Rail Motorway Total cost CF assistance
2000GR16CPT004
Construction of a new railwayin Limena Ikoniou31 823 091 31 823 091 143 000 000 71 495 710
2001GR16CPT003
Egnatia section Nymfopetra-
Rentina-Asprovalta17 905 500 17 905 500 160 580 675 88 428 566
2001GR16CPT001
Corinth-Tripolis-Megalopolis-Kalamata road3 520 000 3 520 000 8 000 000 4 400 000
2001GR16CPT004
Via Egnatia, Metsovo Panagia
interchange32 070 941 32 070 941 255 710 613 140 814 720
2000GR16CPT005
Arta-Filippiada bypass21 336 120 21 336 120 48 500 000 26 670 150
2000GR16CPT006
Agrinio bypass13 829 985 13 829 985 125 000 000 68 737 500
Total 120 485 637 31 823 091 88 662 546 740 791 288 400 546 646
– The Commission approved three requests to am end decisions taken in previous years.
Cohesion Fund assistance amounts to €98.5 million, of which €35 million was committed
from that year’s budget. The following ta ble shows the amended decisions adopted in
2001.
TITLE Commitments Motorway Total cost CF assistance
1994GR16CPT941
Pathe - Raches to Agroinvest inst. section (km
240 to km 244)3 651 817 3 651 817 15 601 387 8 591 372
1994GR16CPT942 "
Pathe, Skotina-Litohoro-Dion-Katerini section6 586 212 6 586 212 28 537 050 15 714 783
940833036 940965016-k
Cohesion - Via Egnatia Dodoni Tunnel section24 709 462 24 709 462 134 705 720 74 183 358
Total 34 947 491 34 947 491 178 844 157 98 489 513
– In addition, based on decisions taken in the previous years, an amount of €58.8
million was committed from the 2001 budget.
– Finally, the Commission approved eleven  requests for amended decisions with
no financial impact submitted by Greece. The amended decisions relate tominor changes in the physical works, reallocations in the financial plan andextensions to contracts.
3.1.2. Spain (including the outermost regions)
The Commission approved Cohesion F und assistance totalling €2 213 million, of
which €1 677 million was committed from the 2001 budget. Of these commitments,51.7% went to the environment and 48.3% to transport infrastructure. They reflect
new decisions adopted that year and am endments to and a nnual instalments of
decisions adopted earlier. The following table shows the amount for each sector.
25Total eligible cost *
(€ million)Total assistance*
(€ million)Commitments 2001*
(€ million)
Environment 1 400 1 092  867
Transport 1 621 1 121  810
Total CF 3 020 2 213 1 677
% Environment 50.5 % 49.3 % 51.7 %
% Transport 49.5 % 50.7 % 48.3 %
* rounded figures
3.1.2.1 Environment
The Cohesion Fund continued to concentr ate its financial support on the three
priority sectors, water supply, draina ge and waste-water treatment, and the
management of solid urban, industrial and hazardous wa ste. Exceptionally, during
the year three urban environment project s were approved to complete the second
phase of projects adopted earlier. The a im was to help the municipalities and regions
to improve drinking water supplies and wa ste-water networks and the collection and
treatment of waste.
The contribution of the Cohesion Fund by sectors shows that the drainage and
treatment of waste water continued to receive the bulk of resources for theenvironment, followed this year by solid waste.
Sector Total eligible cost
(€ million)Total assistance
(€ million)% of
assistanceCommitments
2001 (€ million)
Water supply 267.13 218.19 19.99 162.66
Drainage and sewage treatment 575.99 464.94 42.59 375.50
Management of solid waste 550.63 403.75 34.33 301.37
Urban environment 41.23 32.98 3.02 26.38
Technical assistance 0.95 0.81 0.07 0.65
Total 1 456.24 1 137.94 100.00 866.56
Water supply
During 2001, Community assistance for measures to improve water supply totalled
€218.2 million, 20% of the amount allocated  to the environment sector.
The projects financed in this sector are intended primarily to ensure adequate
supplies of drinking water of sufficien t quality to consumers in conformity with
Community directives. They will improve the quality of drinking water in a numberof towns, such as the Granada metropolitan area, the provinces of Murcia andAlicante (through construction of a tunne l to supply high-quality water to those
areas) and solve the problems of drought in  the provinces of Córdoba (Colada dam)
and Huelva (Andévalo region).
26WATER SUPPLY -Projects adopted in 2001
No of project Name of project Total cost (€
million)CF assistance
(€ million)
2000 ES 16 C PE 008 Water supply in the Guadiana basin: Colada dam 17 516 490 13 137 367
2000 ES 16 C PE 010 Water supply in the Segura basin 77 957 530 66 263 900
2000 ES 16 C PE 011 Water supply in the Ebro basin 10 789 700 9 171 245
2000 ES 16 C PE 074 Water supply measures in the Canary Islands.
2001 - Group I18 030 380 14 424 304
2000 ES 16 C PE 078 Water supply in the Duero basin - 2001 5 389 000 4 311 200
2000 ES 16 C PE 094 Water supply in the Tagus basin - 2001 12 578 895 10 063 116
2000 ES 16 C PE 113 Water supply projects in the Ebro basin - 2001 -
Group 17 301 580 5 841 264
2000 ES 16 C PE 115 Water supply in the Guadiana basin - 2001 -
Group 119 474 109 15 579 287
2000 ES 16 C PE 121 Water supply in the north basin - group 2001 13 639 823 10 911 858
2000 ES 16 C PE 133 Water supply in the Guadiana basin: Andévalo
area14 274 020 11 419 216
2001 ES 16 C PE 002 Water supply to Lorca and Puerto Lumbreras 10 691 899 9 088 114
2001 ES 16 C PE 020 Water supply projects on the Canary Islands. 2001
- Group II5 201 930 4 161 544
2001 ES 16 C PE 023 Water supply in the north basin: Asturias, 2001 8 187 144 6 549 715
2001 ES 16 C PE 039 Water supply in the north-east area of the
Montejurra association of municipalities9 991 826 7 993 461
2001 ES 16 C PE 040 Supply of drinking water to the metropolitan area
of Granada28 170 639 22 536 511
Waste-water treatment
This sector absorbed €465 million in 2001, 43% of the amount allocated to the
environment by the Cohesion Fund and the la rgest portion of the resources available
for this sector. Once again, efforts concentrated on compliance with Directive91/271/EEC and setting up the national dr ainage and water treatment plan.
32 decisions were adopted for projects a nd groups of projects in the main water
basins and one to amend a project al ready adopted. These projects concern
improvements to treatment  networks, collectors a nd treatment stations.
27WASTE -WATER TREATMENT - Projects adopted in 2001
No of project Name of project Total cost
(€ million)CF assistance
(€ million)
2000ES16CPE005 Drainage and water treatment in the Segura basin 35 812 000 28 649 600
2000ES16CPE026 Drainage and water treatment in the Guadalquivir basin:
Doñana area5 051 000 4 293 350
2000ES16CPE040 Drainage and water treatment in the Basque Country – North
basin - III18 288 000 14 630 400
2000ES16CPE067 Drainage and water treatment in the Guadiana basin: Campiña
Sur, Guadajira river and Vegas Bajas55 593 000 47 254 050
2000ES16CPE068 Drainage and water treatment in the Júcar basin: Alzira
treatment station22 291 000 18 947 350
2000ES16CPE070 Drainage and water treatment in the Duero basin 2001 8 765 589 7 012 471
2000ES16CPE073 Drainage and water treatment projects in the Canary Islands 14 311 412 11 449 130
2000ES16CPE075 Drainage and water treatment projects in the Guadiana basin -
(Group 2001)7 947 582 6 358 065
2000ES16CPE077 Drainage and water treatment in the south and Guadalquivir
basins16 740 149 13 392 119
2000ES16CPE079 Drainage and water treatment in the Duero basin 2001 - Group
112 389 685 9 911 748
2000ES16CPE080 Drainage and water treatment in the Júcar basin - 2001 - Group
19 573 982 7 659 186
2000ES16CPE082 Drainage and water treatment in local communities in
Catalonia. Ebro basin - Group 200025 831 026 20 664 821
2000ES16CPE085 Drainage projects in the north III basin: Basque Country -
2001- Group 224 392 387 19 513 910
2000ES16CPE086 General project for water management in the River Ripoll basin
- Sabadell11 665 762 9 332 610
2000ES16CPE090 Drainage and water treatment projects in the Guadalquivir
basin - 2001 - Group 117 256 819 13 805 455
2000ES16CPE096 Drainage projects in the north basin: Galicia - Group 2001 20 013 023 16 010 418
2000ES16CPE097 Drainage projects in the north basin: Asturias - Group 2001 7 999 745 6 399 796
2000ES16CPE104 Project to restore urban sewerage network in Terrasa 10 453 800 8 363 040
2000ES16CPE105 Drainage and water treatment projects in the Guadalquivir
basin -2001 - Group 217 465 354 13 972 283
2000ES16CPE129 Drainage in the Balearic Islands basin - 2001 - Group 1 4 818 960 3 855 176
2001ES16CPE015 Drainage in the Duero basin 2001 - Group 2 18 858 662 15 086 930
2001ES16CPE016 Drainage in the Guadiana basin - 2001 - Group 2 8 791 770 7 033 416
2001ES16CPE018 Drainage in the Ebro basin: inland basins in Catalonia 2001-
Groupe 324 707 273 19 765 818
2001ES16CPE022 Drainage and water supply in the north basin - Galicia -2001 8 589 716 6 871 773
2001ES16CPE032 Drainage in the north basin: Galicia - 2001 - Group 2 10 605 737 8 483 790
2001ES16CPE034 Drainage measures in the Ebro basin - 2001 - Group 2 7 632 857 6 106 286
2001ES16CPE036 Drainage in the north basin: Galicia - 2001 -Group 3 24 446 167 19 556 934
2001ES16CPE048 Drainage in the north basin: Asturias - 2001 - Group 2 15 379 899 12 303 919
2001ES16CPE049 Drainage in the north basin: Basque Country - 2001 - Group 1 27 456 928 21 965 542
2001ES16CPE051 Drainage in the Canary Islands basin - 2001 - Group 2 6 521 500 5 217 200
2001ES16CPE056 Drainage and water treatment in the Tagus basin - 2001 - Group
235 472 793 28 378 234
2001ES16CPE061 Drainage in the Tagus basin - 2001 - Group 3 18 703 718 14 962 974
Solid waste
In order to implement the National Pl an for solid waste approved in 2000, the
Spanish authorities submitted a large number of projects in this sector.
In 2001, 23 decisions were adopted on wa ste management and one to amend a
project adopted earlier. Most concer ned projects from municipalities either
individual or grouped by Autonomous Community. Assistance totalling €375 millionwas granted, 34% of the total for the environment.
28Priority was given to solid urban waste pr ojects involving pre-sorting for collection,
composting and recycling plants, the produc tion of methane, pne umatic collection
and the closure of tips, such as that at Valdemingómez in Madrid, with use of thegases produced for energy.
WASTE - Projects adopted in 2001
No of project Name of project Total cost
(€ million)CF assistance
(€ million)
2000ES16CPE002 Complex for the industrial exploitation of solid urban and non-
special industrial waste in Cantabria65 194 920 15 405 578
2000ES16CPE014 Waste management measures in Asturias 2001 - Group I 8 668 100 1 134 000
2000ES16CPE018 Waste management measures in Castile-La Mancha 20 709 900 16 567 920
2000ES16CPE020 Waste management measures in Extremadura (2nd phase of the
master plan)16 972 500 13 578 000
2000ES16CPE029 Waste management measures in Murcia 11 083 500 8 866 800
2000ES16CPE069 Construction of a plant to produce methane and compost the
biodegradable fraction of solid urban waste, including the use forenergy of the gases from the Pinto tip45 580 758 36 464 606
2000ES16CPE132 System of pneumatic collection of solid urban waste in the
historic centre of Palma de Majorca15 311 600 12 249 280
2000ES16CPE138 Waste management in Andalusia - 2001- Group 1 31 636 559 25 309 247
2000ES16CPE140 Waste management in Castile-La Mancha - 2001- Group 1 16 564 736 13 251 789
2000ES16CPE141 Waste management in Castile-León - 2001 35 517 017 28 413 614
2000ES16CPE146 Waste management in Melilla 3 792 471 3 033 977
2001ES16CPE005 Selective collection in Zarzaquemada Sur and development of a
selective collection system in Zarzaquemada Norte10 930 910 8 744 728
2001ES16CPE007 Waste management in Andalusia - 2001 -Group 2 16 348 755 13 079 004
2001ES16CPE009 Waste management in Asturias - 2001 12 899 865 10 319 892
2001ES16CPE010 Waste management in Catalonia - 2001 16 088 089 12 870 471
2001ES16CPE011 Waste management in Galicia - 2001 - Group I 10 070 843 8 056 674
2001ES16CPE012 Waste management in Madrid - 2001 - Group 2 76 785 683 61 428 546
2001ES16CPE014 Underground containers for solid urban waste in Cantabria 3 355 297 2 684 238
2001ES16CPE026 Waste management in Valencia - 2001 - Group 2 39 256 200 31 404 960
2001ES16CPE030 Plant for the treatment, recycling and exploitation of solid urban
waste in La Rioja9 766 446 7 813 157
2001ES16CPE045 Waste management in Galicia - 2001 - Group 2 26 270 031 21 016 025
2001ES16CPE046 Plan to generate methane by the association of municipalities for
the management of solid urban waste in La Ribera - Navarre4 577 603 3 662 082
Urban environment
Exceptionally, three decisions were adopted  in this sector. These projects are the
second phase of projects a pproved earlier, which they co mplete. Assistance in this
sector in 2001 totalled €33 million, 3% of  the total for the environment.
URBAN ENVIRONMENT – Projects adopted in 2001
No of project Name of project Total cost
(€ million)CF assistance
(€ million)
2000ES16CPE043 Plan to restore the rivers of Pamplona: Arga (2nd phase),
Elorz and Sadar10 800 638 8 640 510
2000ES16CPE061 Environmental restoration of the lower part of the River
Besos. Phase II16 275 417 13 020 333
2001ES16CPE060 Restoration of the urban environment in municipalities in
the Autonomous Community of Catalonia14 149 877 11 319 901
Technical assistance
Assistance worth €812 268 was provided to s upport the management of the Cohesion
Fund during the period by improving the qualit y of applications for assistance to the
projects submitted, improving the evaluation and monitoring of projects, managing
29inspection visits and facilita ting the management of Cohesion Fund resources by the
Autonomous Communities and municipalities.
Outermost regions
Operations continue to take  account of the importance attached to the development
of the outermost regions (Canary Islands),  as stressed in the Commission’s Report on
the measures to implement Article 299(2 ) of the Treaty (COM(2000) 147 final).
Community assistance totalled €35 million.
Supply of drinking waterThe Cohesion Fund regards this sector as of particular importance in the Canary
Islands because of its specific difficulties.  The measures presented in 2001 continue
to stress water-supply networks  in medium-sized localities.
Waste-water treatmentThe Canary Islands are lagging behind in this regard and substantial efforts are
continuing to improve wate r quality considerably. The measures presented in 2001
stress improvements to plan t in treatment networks.
Solid wasteBecause of their island nature, the options open to the Canary Islands for solid-waste
treatment are very limited. The Cohesion Fund has sought to remedy this situation
and provide basic infrastructure. The sche mes already begun for the construction of
environmental centres are continuing.
3.1.2.2 Transport
Under the aid decisions approved in 2001 by the Commission, the transport sector
took 51% of total assistance a nd 48.3% of the commitments made.
During 2001, the Commission adopted a total of 12 decisions to finance projects in
the transport sector concerning inves tment there totalling €1 621 million. Assistance
approved totalled €1 121 million.
The breakdown by mode of transport is as follows:.
Mode of transport Total eligible
cost (€ million)CF assistance
(€ million)% of assistance Commitments 2001
(€ million)
Roads 183.5 156.0 13.9 91.6
Railways 1 055.9 762.7 68.0 651.7
Ports 381.6 202.2 18.1 67.0
Total 1 621.0 1 120.9 100.0 810.3
Road network
For this mode of transport, the priority continued to be progre ss on links with France
and the development of links between road  networks forming part of the trans-
European networks.
30In 2001, the Commission approved assistance for both projects submitted by the
Spanish authorities. These concerned the Zaragoza ring road, an important means oflinking the various trunk roads which meet there, and part of the trans-Catalonia
highway between Cervera and Santa María del Camí. This link completes this majorroute.
The following table shows the projects adopted in 2001 in the roads sub-sector.
ROADS - Projects adopted in 2001
No of project Name of project Eligible cost
(€ million)CF assistance
(€ million)
2001.ES.16.C.PT.011 Cervera – S.M. Camí expressway 128.2 108.9
2001.ES.16.C.PT.013 Southern ring road, Zaragoza 55.3 47.0
TOTAL 183.5 155.9
Rail network
In 2001 the investment effort for the high -speed line from Madrid to Barcelona and
the French border continued. This is one of the major projects identified as prioritiesby the European Council in Essen (9-10 December 1994). The decisions approved in2001 concerned mainly the construction of this line in the Autonomous Communityof Catalonia in preparation for extending the work to Barcelona.
RAILWAYS - Projects adopted in 2001
No of project Name of project Eligible cost (€
million)CF assistance
(€ million)
98.11.65.002 Amendment TGV (Madrid – Lleida) 141.1 101.7
Miscellaneous projects TGV (Lleida – Tarragona – Martorell) 914.8 660.9
Total 1 055.9 762.6
Ports
During 2001 the Cohesion Fund provided financ ial support for the project to enlarge
the Port of Barcelona. This part-financin g concerns only certain phases of the whole
plan, specifically two breakwaters (East a nd South) and some corrective measures to
offset the environmental impact of the works.  These form part of the master plan for
the Port of Barcelona, which includes all the operations related to the enlargement.
The master plan seeks to eliminate the main structural bottlenecks in the port caused
by lack of space and the European-gauge rail connections.
Enlargement of the Port of Barcelona is a project of common interest within the
meaning of Article 7 of Decision 1692/96/EC on Community guidelines for thedevelopment of the trans-European tran sport networks (TENs-T). The Cohesion
Fund is making a decisive contribution to the overall viability of the project.
Its financial contribution amounts to €202 million. The European Investment Bank is
providing a further €250 million to finan ce other phases of the master plan.
3.1.3. Ireland
During 2001 the Commission approved only one new Cohesion Fund grant to Ireland
totalling €87.1 million, of which €37.8 million was committed from the 2001 budget.Four other commitments were  made during the year amounting to €77.2 million and
31involving either the first or subsequent instalments of projects already adopted. This
pattern of commitments is influenced by the size of the allocation available to Irelandand the trend initiated in recent years of moving away from support for small
projects to support for large pr ojects with multi-annual budgets.
In terms of commitments, the balance between transport and environment projects is
improving over the period 2000-06 with th e ratio rising from 19.3%/80.7% in 2000
to 38.0%/62.0% in 2000-01 respectively. With  a small group of large projects it is
relatively difficult to ensure balance each year. However the objective is still toensure a 50:50 balance over the whole programme period.
Nine projects from 1993-99 were closed and the final reports for five other projects
were considered in 2001. In addition, am endments were made to 22 projects on
which decisions had been taken in 1994-99.
IRELAND - PROJECTS ASSISTED IN 2001- WASTE-WATER TREATMENT
CCI N° Project Name Type of project/commitment 2001 Commitment
(€ million)
2000 IE 16 C PE 001 Dublin Region Waste-
water Treatment (Stage V)Second annual instalment 16.27
1999 IE 16 C PE 002 Limerick Main Drainage
(Stage III)Second annual instalment 23.46
TOTAL 39.73
IRELAND - PROJECTS ASSISTED IN 2001 ROADS
CCI N° Project Name Type of project/commitment 2001 Commitment
(€ million)
2000 IE 16 C PT 001 M50 South Eastern
Motorway (Stage II)First annual instalment 37.88
2000 IE 16 C PT 002 M1 Cloghran - Lissenhall
(Stage II)Second annual instalment 19.40
2000 IE 16 C PT 003 M1 Lissenhall -
BalbrigganFirst annual instalment (1)17.98
TOTAL 75.26
(1) The grant was adopted in December 2000.
3.1.3.1. Environment
The two priorities for the environment sector for the current period are the collection
and treatment of waste water and th e management of solid urban waste.
Waste-water collection and treatment
No new project was assisted in 2001.
Solid waste
No new project was assisted in 2001.
3.1.3.2. Transport
As in the environment sector, there are only two priority sectors for this period, roads
and public transport.
32Roads
During 2001 one grant decision was made. It related to the construction stage of a
previously supported motorway project. Th is project is situated on the M50, a
priority route under the trans-European networks - transport initiative.
Roads
Projects adopted in 2001
Project reference NameTotal eligible cost
(€ million)CF assistance
(€ million)
2000/IE/16/C/PE/001M50 South Eastern
Motorway (Stage II)87.1 74.0
The objectives of the M50 project  can be summarised as follows:
The M50 South Eastern Motorway (Stage II): the M50 South-eastern Motorway is
part of the M50 Dublin Ring Road, which is itself part of the E01 between the ports
of Larne and Rosslare. The project is the ‘ missing link’ in the chain of projects which
will provide a complete C-ring motorw ay around Dublin. The planning and pre-
construction phase of the proj ect including detailed design, site investigation and the
EIA was assisted by the Cohesion Fund under Stage I. The Commission iscontributing to the building and constructi on costs of approximately 8.6 km of the
main motorway, the provision of relate d structures and three interchanges.
As with previous priority road projects funded by the Cohesion Fund, and in view of
the volume of construction work invol ved compared to the limited volume of
Cohesion Fund support available, the Co mmission and the Irish authorities have
agreed that the relevant grant decisi on will target funding towards selected
construction costs of this project.
Rail
No new project was supported in 2001.
3.1.4. Portugal
During 2001 the Commission approved 16 new projects for which finance totalling
€566.7 million was provided; of this, €327.7 million was committed from the 2001
budget.
Following these commitments and including projects adopted in previous years
which have an impact on the budget for 2001, the total commitments for the yearwere as follows:
Total eligible costs
(€ million)Total CF assistance
(€ million)Commitments 2001
(€ million)
Environment 2001 457 302.3 231.7
Transport 2001 354.7 264.4 96
Environment previous years 116.8 64.6 6.3
Transport previous years 649.4 504.5 121.8
Total 1 577.9 1 135.8 455.8
333.1.4.1. Environment
As in the previous period, the main prio rities for assistance from the Fund in 2000-06
are waste-water treatment, the supply of dr inking water and the treatment of urban
waste. In accordance with the guidelines in the framework directive on water,Portugal has adopted a new approach to water management. The projects submitted
are drawn up by water basin and cover the whole cycle, i.e. the capture, treatmentand distribution of drinking water and also  the appropriate treatment of waste water
(drains). Accordingly, the following breakdown shows only the integrated watersector and urban waste.
During 2001 the Commission adopted 12 ne w projects in the field of the
environment, seven in the water sector  and five in the urban waste sector.
Total eligible
costs
(€ million)Financial
assistance
(€ million)% of total
environment
assistanceCommitments 2001
(€ million)
Integrated water sector 301 185.2 61.3 % 148.2
Urban waste sector 156 117.1 38.7 % 83.4
Projects from previous years - - - 6.3
Total 457 302.3 100 % 237.9
Water
In the previous programming period assistance from the Fund was concentrated in
the most densely populated regions. During the new period, as was noted last year,
assistance is now being provided also to less densely populated regions, including the
Autonomous Region of Madeira, in line with  the strategy adopted for the sector.
The management model adopted, based on in termunicipal systems, allows for the
implementation of large-scale projects whic h achieve substantial economies of scale
and make it easier to monitor the strategy.
The seven projects approved represent an  investment of €301 million, of which the
Cohesion Fund will provide €185.2 million. This  is about 61.3% of the assistance
granted in 2001 to environmental projects in Portugal.
Water sector Projects adopted in 2001
No of project Title Total eligible cost
(€ million)CF assistance
(€ million)
1998/PT/16/C/PE/002 Treatment of waste water from Lisbon –
Alcântara treatment station33.4 10
2000/PT/16/C/PE/005-
010Grouped studies, technical projects and technical
assistance – 1st phase36.6 31.1
2000/PT/16/C/PE/009 Minho Lima intermunicipal system 39.1 25.4
2000/PT/16/C/PE/007 Zêzere Côa intermunicipal system 54.9 34.6
2001/PT/16/C/PE/002 Optimal water management in the Autonomous
Region of Madeira – 1st phase39.7 29
2001/PT/16/C/PE/007 Zêzere Nabão intermunicipal system 63.7 44.6
2000/PT/16/C/PE/004Treatment of waste water from Greater Oporto
south – Sobreiras treatment station33.6 10.5
Urban waste
As they did in the previous period (1993 -99), the Commission and Portugal continue
to pay great attention to the management of urban waste in order to meet the targetsset in the Strategic Plan for solid  urban waste (PERSU) adopted in 1996.
34During the year, the Cohesion Fund a pproved five new pr ojects to implement
strategies defined in the PERSU, including  the construction of a national network of
primary infrastructure for the collection, tr eatment and disposal of waste and the
closure of uncontrolled tips ( lixeiras ) where most urban waste was disposed of in
environmentally unacceptable conditions.
While in the past such infrastructure was built mainly in the coastal regions of
Portugal - the most densely populated -, as  in the previous year, the Cohesion Fund is
now providing assistance in inland areas of  Portugal so that soon the whole country
will be covered.
With this end in mind, in 2001 the Commi ssion approved two new projects (see table
below) establishing systems for the treatme nt of waste produced in inland regions of
continental Portugal, approved new phases for two projects adopted previously and
approved a project on the implementation of measures to raise the level of treatmentin some systems already in operation.
The five projects approved represent an  investment of €156 million, of which the
Cohesion Fund will provide €117.1 million. This  is about 38.7% of the assistance
granted in 2001 to environmental projects in Portugal.
Treatment of URBAN WASTE Projects adopted in 2001
No of project Name of project Total cost
(€ million)CF assistance
(€ million)
2001/PT/16/C/PE/001 Baixo Alentejo waste treatment system 22.1 18.9
97/10/61/015 West regional waste treatment system –
increased assistance31.3 26.6
2000/PT/16/C/PE/002 Incineration centre on Madeira – 2nd phase 68 45.4
2000/PT/16/C/PE/015 Cova da Beira waste treatment system 16.4 13.9
2001/PT/16/C/PE/003 Supplementary measures for waste treatment 18.2 13.6
3.1.4.2. Transport
The financial volume of the projects adopt ed in the rail sector in 2000 meant that
there was little scope for adopting new transport projects since the commitment
instalments to be charged to the budget for 2001 for those projec ts already accounted
for a large part of the quota allocated to Portugal. The table below shows the
amounts for new projects and the amount of commitments for the 2001 instalments
of projects adopted in 2000. It also shows that in 2001 virtually all (92.6%) of the
funds allocated to transport were spent on the rail sector.
As it had done in 2000, the Cohesion Fund ma de a substantial effort to support
investment in the Portuguese rail system. This continued to be concentrated on two
lines of major strategic importance (Norte and Algarve) which form part of priorityproject 8.
Total eligible
costs (€ millionFinancial assistance
(€ million)% of total transport
assistanceCommitments
2001 (€ million)
Rail sector 315.6 244.8 92.6% 80.3
Ports sector 39.1 19.6 7.4% 15.7
Projects from
previous years121.8
Total 354.7 264.4 100% 217.8
35The Commission adopted four new projects (s ee table below), two forming part of a
broad programme to modernise the Al garve line, one to extend the Lisbon
underground railway by constructing a sec tion to allow intermodal links and a
project to improve access to the port of Aveiro.
The four projects approved represent an  investment of €354.7 million, of which the
Cohesion Fund will provide €264.4 million.
Rail sector Projects adopted in 2001
No of project Name of project Total cost
(€ million)CF assistance
(€ million)
2001/PT/16/C/PT/001 Modernisation of the Algarve line – Section IV 9.5 7.6
2001/PT/16/C/PT/002 Lisbon underground – S.Sebastião –Alameda
section132.1 98
2001/PT/16/C/PT/003 Modernisation of the Algarve line – Section V 174 139.2
2000/PT/16/C/PT/010 Port of Aveiro – road and rail access 39.1 19.6
3.2. Technical assistance and studies
3.2.1 General policy of the Fund3.2.2. Technical assistance at the initiative of the Commission
Spain
Technical assistance at the initiative of the Commission was used for the ex-ante
evaluation of a project for th e environmental restoration of mining waste in the Rio
Tinto region of Andalusia. The aim of th e mission was to assess the development of
the Aguzadera basin.
364. M ONITORING , ASSESSMENT AND IRREGULARITIES
4.1. Monitoring: Committees and missions
4.1.1. Greece
4.1.1.1 Monitoring Committees
EnvironmentMeetings of the Monitoring Committee and of the special Committees for the
Psyttalia, Evinos and EYDAP major project s were held in Athens in May 2001. The
work of these Monitoring Committees is recorded in the relevant minutes.
TransportA meeting of the Monitoring Committee was held in Athens in May 2001. The work
of this Monitoring Committee is recorded in the relevant minutes.
4.1.1.2. Monitoring missions
A number of project visits were underta ken in 2001. The objective was twofold: to
verify progress in the completion of th e relevant projects and to clarify the
difficulties with certain projects .
The project visits are listed in Annex 1.
4.1.2. Spain
4.1.2.1. Monitoring Committees
In 2001 a Monitoring Committee met in Madr id on 26 and 27 April. This was the
fifteenth meeting of the Cohesion Fund Monitoring Committee.
The Committee is subdivided into seven specific Committees by sectors and by
managing authority:
– Committee for projects submitted by the Autonomous Communities
– Committee for reafforestation projects
– Committee for projects submitted by local authorities
– Committee for transport projects submitted by the national government
– Committee for the HST South project: Madrid—Barcelona line
– Committee for public-private partnership projects
– Committee for environmental (including water) projects submitted by the
national government
37Each session of the Committee looked at the situation at 31 December 2000 for
certain projects and groups of projects (63 d ecisions in all) previously selected in
partnership by officials from the Minist ry of Finance and the Commission. Figures
on the projects not selected were also sent to the Committee and to the Commissionfor information.
Discussions covered strategic issues in the transport sector and the problems of
certain environmental projects. At the same time, the Commission set out the newguidelines to be introduced for the amendment of decisions.
The Spanish authorities announced to this Co mmittee the dispatch of applications to
amend the financing plan and the dates for the end of work on a large number ofprojects. They also announced the clos ure of certain projects, stating that
administrative matters relating to the reception of the works could delay thesubmission of the final reports.
Applications for payment of the balan ce for reafforestation projects had been
submitted as planned.
In 2001, 19 decisions were closed and the balances paid.
4.1.2.2. Monitoring missions
The missions were carried out to assess and check the progress of projects being
implemented and to clarify the difficulties encountered in their implementation (see
Annex I).
4.1.3. Ireland
4.1.3.1. Monitoring Committees
In 2001 there were two meetings of the Monitoring Committee, on 18 May and 18
October. In general, the Commission was satisfied with the quality of the informationthe Irish authorities supplied on the ma nagement of projects and outstanding
questions were addr essed adequately.
At these meetings the Committee examined written progress reports on up to 41 open
projects from the period 1993-99 and on 7 projects from the period 2000-06.
There was also progress with the successful  completion of 9 further projects in 2001.
The outstanding projects from the period 1993-99 to be completed at end-2001represent around 30% of the proj ects supported in that period.
In respect of project amendment and/or  extension requests in 2001, the Commission
informed the Irish authorities that it was reviewing its policy towards extensions ofthe end-date for Cohesion Fund projects a nd that new guidance would be prepared
for the Member States on project amendments to reflect the Commission’s morerestrictive policy. In advance of this guidance, the Commission has started to includea clause restricting the possibility of amending decisions which have already beenamended several times.
384.1.3.2. Monitoring missions
The project visits undertaken in  2001 had the following objectives:
– to check progress in the completi on of the relevant projects, and
– to clarify the difficulties with certain projects reported to the Monitoring
Committee previously and to approve project amendments.
The project visits undertaken are listed in Annex I.
4.1.4. Portugal
4.1.4.1. Monitoring Committees
As required by the Fund Regulation, the Monitoring Committee meets twice a year.In 2001 these meetings took place on 15 and 16 May and 11 and 12 December. They
considered each project individually and pr ovided an opportunity to discuss general
topics such as publicity, inspections, public procurement, the implementing rules andmiscellaneous information.
In Portugal there is a specific Committee to monitor the extension of Madeira airport
and one for solid waste projects. The pr oject for the construction of the Alqueva
hydroelectric station is monitored by the general Committee and also in the broaderforum of the Structural Funds Monito ring Committee for the specific integrated
development programme for the Alqueva (PEDIZA).
4.1.4.2. Monitoring missions
Besides attending meetings of the Monitoring Committee, in 2001 the Portugal unit
of the Regional Policy DG carried out a num ber of monitoring missions to check on
the progress of projects, to acquire on-the-spot knowledge of the problems
encountered in implementation and to find the best solutions for the normal
implementation of the projects.
From 5 to 7 November that unit also took pa rt in an inspection by the relevant unit of
DG REGIO of Cohesion Fund assistance to projects 95/10/61/026 – Valorsul and
95/10/65/002 – Port of Lisbon – Sta. Apolónia.
Other technical missions relating to consideration of certain applications were carried
out during the year, in particular on the West region, Simtejo and Simlis integrated
intermunicipal water systems on 14 December with Águas de Portugal.
The monitoring missions carried out by the Portugal unit of the Regional Policy DG
are listed in the Annex.
4.2. Inspections and conclusions
In 2001, the Commission carried out six inspections regarding the Cohesion Fund.
These were designed to look at the mana gement and inspection system established
by the Member States in that sect or and check on a number of projects.
394.2.1. Greece
Inspection by DG REGIO :
During 2001, DG REGIO undertook an inspection in Greece to audit the Cohesion
Fund systems and a major project. The main findings concerned the very substantial
overrun in the costs of the works incurred without complying with the Directive onpublic procurement, particularly when wo rk that had not been anticipated was
ordered. This situation was ge nerally due to a lack of preparation in the projects
submitted to the Commission.
4.2.2. Spain
Inspection by DG REGIO:
During 2001 there were three audit missions to Spain, one to the national
administration and two to Autonomous Comm unities. The situation in Spain varies
because the decentralised organisation of administration gives greater responsibility
for the management and inspection of pr ojects to the Autonomous Communities. The
initial results of the inspections nevertheless reveal a general problem of inadequateinspection of systems and projects by the local authorities. In the case of one groupof projects, it appears at this stage th at the rules on public procurement were not
complied with.
4.2.3. Ireland
Inspection by DG REGIO: No audit mission was carried out in Ireland during 2001.
4.2.4. Portugal
Inspection by DG REGIO:
Two audit missions were carried out in Po rtugal during 2001 to look at the Cohesion
Fund systems there and four specific pr ojects. It was found that checks were
inadequate (lack of 1st and 2nd level checks) and there were, inter alia , staff
shortages. In the case of the four Cohesion Fund projects inspected, the 1996
decision on publicity had not been complied with.
The evaluation of a revenue-generating pr oject had been done very inaccurately so
that actual revenue was very much higher  than that taken in account when the
application for finance was submitted to the Commission.
4.2.5. Conclusions
The limited audit work carried out by Regional Policy DG on the Cohesion Fund in
2001 permits some matters of concern to be highlighted. These include the lack of
publicity of EU finance (Decision of 1996), the existence of ineligible expenditure,
the not always satisfactory implementation of tendering procedures, failing to takerevenue into account, insufficient project preparation and the absence of a division
between the payment and the inspection function.
The checks which began in 2001 were in tensified throughout 2002. They entailed
detailed analysis of the management and inspection systems in the four Member
40States eligible under the Cohesion Fund a nd the audit of a significant number of
major projects in this sector.
The draft Regulation laying down implementing rules for Regulation (EC) No
1164/94 as regards management and insp ection systems and the procedure for
implementing financial corrections concer ning the Cohesion Fund was finalised. It
should be adopted by the Commission in the first half of 2002.
4.3. Irregularities and suspension of aid
Article 3 of Regula tion (EC) No 1831/9413 concerning irregularities and the recovery
of sums wrongly paid in connection with the financing of the Cohesion Fund and the
organisation of an information system in this field requires the beneficiary Member
States to notify the Commission of irregularities as soon as a preliminaryadministrative or judicial finding has been made.
In 2001, one Member State, Greece, notified the Commission of four cases of
irregularities involving a total of €2 429 040. These concerned payment for
expenditure not planned when projects we re approved. The case was detected as a
result of inspections carried out by the ap propriate depa rtments of the Ministry of
Finance. In the course of these communications, the Greek authorities informed theCommission of the measures required to sa feguard the financial interests of the
Community. In three of the four cases pr oceedings to recover the amounts wrongly
paid are under way and in the fourth the contractor was required to correct theshortcomings in the project, which has been done.
The other three beneficiary Member States notified the Commission under the
Regulation that they had detected no irregularities during the year.
                                                
13 OJ L 191, 29.7.1994.
415. A SSESSMENT AND EVALUATION
5.1. General
As required by the Fund Regulation, th e Commission and the beneficiary Member
States assess and evaluate Cohesion Fund pr ojects in order to ensure that Community
aid is effective.
Every application for assistance must be accompanied by an ex-ante appraisal of the
project by the Member State, showing that the medium-term socio-economicadvantages are in keeping with the resources deployed. The Commission thenconsiders this evaluation, possibly with th e assistance of experts from the European
Investment Bank or outside consultants. On that basis, it approves the project if
appropriate and decides on the ra te of Community part-finance.
Once a project is operational, the Commission's ex-post  evaluation shows whether
the goals originally planned have been or will be achieved and what impact theproject has had on the environment.
5.2. Examination and ex-ante appraisal of projects
As part of its updating of the Guide for th e cost/benefit analysis of major projects,
during 2001 the Commission carried out substa ntial internal work to make the ex-
ante financial analysis of the various pr ojects more coherent. This included
consideration of the discounting rate us ed, the arrangements for applying the
polluter-pays principle to water management  projects, taking account of historic
costs prior to the submission of a project to the Commission in calculating financialprofitability and the possible accounting for financial costs. The results of these
considerations should be presented to th e Member States for discussion during 2002.
5.3. Cooperation with the EIB when a project is considered
Under a framework contract signed by the two institutions in 2000 and valid until the
end of 2006, the Commission may ask the Eur opean Investment Bank for technical
assistance in appraising Cohesion Fund pr ojects, major projects supported by the
ERDF and projects financed by ISPA. It also receives regular information from theEIB about projects submitted to one of these three Funds to which the Bank has itselfdecided to grant assistance.
In 2001, the Commission asked the EIB for ove r a score of analyses of Cohesion
Fund projects, mainly located in Spain and mostly in the transport sector. Followingthe reports, the Commission asked the Member  States to amend certain projects or
undertake further preliminary studies. These discussions meant that some transport
projects could be reduced in scale in order to reduce investment costs without
jeopardising achievement of the goal s and to avoid possible technical or
administrative problems relating to the implementation of drainage projects.
425.4. Economic and social impact of the F und in the Member States and on economic
and social cohesion, including em ployment, in the European Union
The Regulation establishing a Cohesion Fund requires the Commission to assess the
economic impact of the Fund, both in term s of each project and in terms of
Community assistance as a whole.
The work carried out in 2001 on updating the Guide for the cost/benefit analysis of
major projects will improve a ppraisal of the socio-economic impact at the level of
each project during the ex-ante and ex-post  evaluations. The new Guide, which is
expected to appear in spring 2002, will c ontain practical exampl es of cost/benefit
analyses of transport and environment projects illustrating the Commission’srequirements as regards the analysis of the projects submitted to it. More consistentanalysis will also help estimate the overall effect of Community assistance.
5.5. Ex-post evaluation programme
An ex-post evaluation programme was established for a three-year period starting in
1998. A total of 120 projects have been evaluated, 60 in each of the two fields forwhich the Cohesion Fund is responsible.
5.5.1. Environment
Implementation of the environment proj ects raised no major problems and the
projects achieved their goals. Design, c onstruction and operati on were generally
satisfactory, although certain treatment plants required further works and the timerequired to bring certain waste-management  projects on stream had to be extended
because of the unexpected reluctance of users to comply with the obligations of pre-sorted collection.
The environmental impact of the projects was very satisfactory, particularly in the
case of drainage projects, where the impact was immediate. By improving livingconditions and creating jobs, the projects had a very positive social impactmeasurable through increased land values  and the expansion of tourism and the
economy in the areas served by the new infrastructure.
5.5.2. Transport
By contrast, in the transport sector , project implementation met a number of
difficulties which took the form of cost ove rruns of varying extent and delays in
completion, higher than expected compulso ry purchase costs, price increases during
construction, changes to the original project, administrative and institutional
problems and so on.
However the overall socio-economic impact of the projects was very positive and the
achievement of the policy objectives of economic and social convergence betweenthe regions exceeded expectations. The time  savings and greater safety provided by
the new infrastructure are frequently re markable. Traffic expansion on the trans-
European network exceeded estimates and the projects greatly improved access to
certain areas of the Community, reduced the economic isolation of the outermost
regions, mitigated the impact of borders and substantially alleviated congestion inurban areas provided with new infrastructure. The impact of implementing theprojects on job-creation was limited. The e nvironment received a great deal of
attention: applications were accompanied by an environmental impact assessmentand many measures were taken to offs et any negative impact of the projects.
436. I NTER -INSTITUTIONAL DIALOGUE , INFORMATION AND PUBLICITY
6.1. Annual report for 2000
6.1.1. European Parliament
In its own report14, Parliament welcomed the 2000 annual report, which it regarded
as a vital tool for assessing the work of the Fund.
However, it noted that the Commission was dissatisfied with the quality of the ex-
ante evaluations. Parliament also drew attention to what it regarded as the
insufficient number of inspections carried out by the Commission in 2000, whichwas smaller than in previous years.
The inspections which began in 2001 conti nued in much more intensive fashion
throughout 2002.
Parliament also noted that the Commission needs to be more strict in ensuring
compliance with the rules on transparency in the awarding of public contracts.
6.2. Information from the Member States
An information meeting with the 15 Member States was held in Brussels on 24
October 2001.
At that meeting, the Commission presente d the Annual Report of the Cohesion Fund
for 2000. It also distributed the draft Regu lation on management and control systems
and the financial corrections applied unde r the Cohesion Fund. Some articles of that
draft Regulation were then discussed.
6.3. Other events
6.3.1. Information for the social partners
A meeting with the social partners was held on 14 March 2001 at which the work of
the Cohesion Fund during 2000 was presented.
6.4. Commission measures on publicity and information
The Commission produced a particularly la rge number of publications in 2001 and
restructured its series of brochures (suc cess stories by country and topic; brochures
on different types of areas). All these new brochures featured examples of successfulprojects part-financed by the Cohesion Fund.
The annual report was published in an appr opriate format and summarised in the
Inforegio information bulletins published by the Regional Policy DG.
                                                
14 Turco report.
44Special material was produced  for specific events such as information meetings,
conferences and exhibitions (portable st and, computer-designed slide shows and
graphics, audio-visual material and prin ted matter). Some of this information
material may be accessed directly via the Inforegio web site on the Commission’s
Europa server.
The Commission also organised meetings with the authorities in Portugal and Greece
to discuss information and publicity for re gional and cohesion policy. Information on
the Cohesion Fund was also discussed at these meetings.
45ANNEX I
List of monitoring and quality-control missions carried out in 2001 
Greece
– March Waste-water treatment station at Kozani.
– March Technical meeting on roa d, railway and port projects.
– April Technical meeting on the amendm ents requested to Cohesion Fund
environment projects.
– May Meeting of the Monitoring Committee for Cohesion Fund projects.
– May Meeting with the Ministry of National Economy relating to road and
railway projects.
– June Inauguration of a Cohesion Fund project in Athens, and training
seminar on Cohesion Fund projects.
– July Meeting on Cohesion Fund projects at  the Ministry of the environment.
– October Meeting on Cohesion Fund projects in the Epirus region .
Spain
The monitoring missions carried out by the geographical unit were as follows:
– January: HST project. Madrid—Barcel ona—French border. Visit with EIB
representatives to update  the evaluation report.
– July: Barcelona. Project 2000.ES.16.CPE.061. Environmental restoration of the
final section of the River Besos. 2nd phas e. On-the-spot visit as part of the
examination of the project to secure information on the environmental goal tobe achieved from the authorities responsible for the project.
Ireland
25-27 March – Dublin
Project No 96/07/61/011 - Publicity and In formation: The Commission was informed
about progress being made and the reasons for extending the date for the completion
of the project. It assessed the extent to which the project had a measurable impactbeyond complying with Decision 94/455/EC.
The Three Rivers project: No 94/07/61/014 (River Suir catchment water quality
management scheme), No 95/07/61/001 (« TITLE»), No 94/07/61/015 (River Liffey
catchment plan): The Commission inquire d about the reasons for integrating
elements of the three decisions in a catch ment monitoring and management project
and requested full and transpar ent financial accounts of the elements of each of the
projects.
46Project No 95/07/61/013 - Dublin Water Suppl y III: The purpose of the visit was to
verify the progress with project planning el ements requiring an extension of the end-
date (Stillorgan reservoirs) and to verify the changes made to the works requiredunder the CF grant decision (Dun Laoghaire/Killiney).
Project No 96/07/61/001 - Dublin Water Cons ervation: The purpose of the visit was
to verify the delivery of the Dublin water conservation strategy and to validate theneed for an end-date extension and that  the required volume of work was being
completed to meet the physical de scription of the grant decision.
Project No 99/07/61/003 - Dublin Region waste-water supply (treatment works)
Stage V: The purpose of the visit was to ve rify the physical progress in construction
of the treatment works at Ringsend, Dub lin. The visit to the treatment plant
comprised a short presentation of the project at the site office and a tour of theextensive works in progress. Recent inform ation/publicity material and photos of the
works were provided by the Corporation.
Project No 98/07/61/004 - Dublin Region waste-water supply (submarine pipeline,
Dublin). The visit, which was also part of  a tour of the Ringsend works, comprised a
short tour of the pipeline works site at Ringsend and an inspection of the publicity
boards on display at the nature reserve and along the sea front which has been fenced
along the pipe trench.
Project No 99/07/65/002 - Heuston Station and SW rail corridor development: The
purpose of the visit was to make a first in spection of the recently agreed project
Heuston Station and SW  corridor development.
17 May - DublinProject No 96/07/65/010 - M50 Southern Cr oss Motorway: The purpose of the visit
was to check progress towards completion with a view to opening to traffic insummer 2001 and the information and publicity arrangeme nts to date.
Portugal
Monitoring missions
– 4 May - Setúbal
Project No 97.10.61.018 – Drainage system in Setúbal including interceptors and a
waste-water treatment station.
– 5 and 6 June - Vila Nova de Gaia, Esposende and Vila do Conde
Project No 94/10/61/010-011; 97/ 10/61/004 - Drainage system in Vila Nova de Gaia
and waste-water tr eatment stations.
Project No 95/10/61/015 - Drai nage system in Esposende  and waste-water treatment
stations
Project No 96/10/61/019 – Southern interceptor at Vila do Conde.
– 26/11/2001 – Madeira (Funchal)
47Project No 2001/PT/16C/PE/002 – Optimal water management in the Madeira
archipelago
– 22/6/2001 – Madeira (Funchal)
Projects Nos 96/10/61/007 and 2000/PT/16/C/ PE/002 – 1st and 2nd phases of the
waste treatment centre on the Madeira archipelago.