EUROPEAN COMMISSION Brussels, 19.12.2011 SEC(2011) 1212 final/2 CORRIGENDUM:

Annule et remplace le document SEC(2011)1212 final du 19.10.2011

Ne concerne que la version EN (ajout des annexes) COMMISSION STAFF WORKING PAPER Impact Assessment Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Union Guidelines for the development of the trans-European transport network {COM(2011) 650 final}

{SEC(2011) 1213 final}



TABLE OF CONTENTS 1. Procedural issues and consultation of interested parties 1.1. Background in the development of the TEN-T policy 1.2. Organisation and timing 1.3. Consultation process 2. Problem Definition: why is there a need to act? 2.1. The Europe 2020 Strategy: A renewed political context 2.2. Description and scope of the problem: a fragmented network not fit for purpose 2.3. Why is the TEN-T network fragmented? 2.4. How would things evolve, all things being equal? 2.5. Does the Union have the right to act? 3. policy objectives 3.1. Policy Objectives 3.2. Possible trade offs and synergies between the objectives 4. Policy Options for TEN-T development 4.1. Two-pronged process leading to identification of policy options 4.2. Pre-screening of envisaged alternative policy options 4.3. Description of the policy options retained for in-depth assessment 5. Impact analysis of policy options

5.1. Economic impacts of the options 5.2. Social impacts of the options 5.3. Environmental impacts: Climate effects, Air pollution, Noise 5.4. The positive impact of implementation measures 5.5. Sensitivity analysis of the policy options 5.6. Choice of the appropriate legal act 6. Comparison of the options 6.1. Effectiveness 6.2. Efficiency 6.3. Coherence 6.4. Conclusion 7. Monitoring and evaluation ANNEXES attached: - Annex 1: Documents and studies / Ex-post assessments and similar / Audits – assessments consulted - Annex 2: Ex-Post evaluation of the TEN-T network policy - Annex 3: Pre-screening of policy options - Annex 4: TEN-T and Environmental Legislation - Annex 5: Monitoring and Evaluation - Annex 6: Description and analysis of the modelling work for the TEN-T Guidelines

- Annex 7: Case Studies - Annex 8: Glossary 1.Procedural issues and consultation of interested parties Identification Lead DG: Directorate General for Mobility and Transport Agenda Planning: 2011/MOVE/009 1.1.Background in the development of the TEN-T policy The Trans-European transport network (TEN-T) policy has been developing since the mid 80ies to provide the infrastructure needed for a smooth functioning of the internal market, to ensure economic, social and territorial cohesion and to improve accessibility across the entire EU territory. The first support framework was set up in 1990, leading to the insertion of trans-European networks in the Maastricht Treaty (1992) and the adoption of a list of 14 major projects at the European Council in Essen in 1994. The first Guidelines defining the TEN-T policy and infrastructure planning were adopted in 1996. In 2004, a thorough revision of the Guidelines took into account the EU enlargement and the expected changes in traffic flows. The list of Priority Projects covering the Member States of the recent enlargement was extended to 30. Apart from theses 30 Priority Projects, which are declared to be of "European interest", the Guidelines include maps for each Member State for each of the transport modes. All these are declared to be "projects of common interest". In addition to the Guidelines, financial and non-financial instruments aimed at facilitating the implementation of projects. These instruments include the TEN Financial Regulation and the Cohesion Fund, the European Regional Development Fund (ERDF) and loans from the European Investment Bank as well as coordination initiatives taken by the Commission. In light of the challenges for the TEN-T policy that have also been identified by the White Paper 'Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system (hereinafter "the White Paper"), the revision of the Guidelines accompanied by this impact assessment report defines a long-term strategy for the TEN-T policy that would contribute to the transport sector meeting the goals of the White Paper with a 2030/2050 horizon. 1.2.Organisation and timing For the preparation of the revision of the Guidelines, an inter-service group on the TEN-T policy review was set up on 6 October 2010 and meetings were organised between December 2010 and April 2011 in order to collect the views of various services. For the preparation of this Impact Assessment, an Impact Assessment Steering Group (IASG) was set up and met three times between December 2010 and April 2011. Comments from participating DGs have been received and taken into account until 13 April 2011. 1.3.Consultation process With a view to preparing the ground for later policy developments, the Commission launched a reflection on the future of TEN-T Policy in February 2009 with the adoption of a Green Paper opening the debate on main challenges and on key objectives for TEN-T Policy and possible ways to meet them. The Green Paper proposed three network planning options (dual structure with the wide TEN-T "comprehensive network" and updated Priority Projects; Priority Projects only; a new dual layer structure comprising the "comprehensive network" and a "core network"). Building on the contributions from stakeholders, the Commission set up six Expert Groups, which between November 2009 and April 2010 analysed a number of key aspects of the future TEN-T development. The Expert Groups' recommendations were included in a Commission Working Document which was presented for public consultation on 4 May 2010. These two public consultations attracted more than 530 contributions in total. A large majority of contributors supported the option of a new dual-layer approach to TEN-T planning, with a "comprehensive network", that would mainly update and adjust the current TEN-T, as the basic layer; and a "core network", overlaying the comprehensive network and consisted of the strategically most important parts of the TEN-T. Other aspects that enjoyed large support and have been particularly relevant for the current exercise were: the promotion of more environmentally-friendly solutions for transport; resource efficiency; the identification of infrastructural needs from a genuinely European perspective, with a stronger view to meeting service requirements; continuity with previous developments, in particular continued support for the implementation of the current Priority Projects in a future core network; and strengthening the link between transport and TEN-T policy, for instance in the development of interoperability and traffic management systems. The summaries of all the contributions received are available on DG MOVE's website.

Large Ministerial and stakeholder conferences were held in October 2009 in Naples and in June 2010 in Zaragoza. The Zaragoza conference provided a framework for in-depth presentations and discussions with Member States, the European Parliament and stakeholders on the Green Paper, on the Commission's working document of May 2010 and on the main conclusions of the Expert Groups. Taking into account the results of the public consultation process, the Commission came forward in January 2011 with a Staff Working Document that further developed the methodology and the planning and implementation scenarios. This Working Document has been presented and discussed during the Informal Transport Council held in Budapest on 7th and 8th February 2011 and the TRAN Committee of the European Parliament on 14 February 2011. In light of the above, it can be concluded that the consultation process has been wide and intensive, meeting all the Commission's minimum consultation standards. In addition, this 2-year long process of internal and external consultation has played a key role in focusing the Guidelines' revision on a limited choice of options. 1.4. External expertise used in the assessment A wide range of external opinions was collected during the revision process. In addition to the already mentioned Expert Groups, a number of other studies and ex-post evaluations were carried out. An ex-post evaluation was carried out on the 2000-2006 TEN-T Programme and a mid-term review on the 2007-2013 TEN-T Programme was recently conducted. This is following directly upon the work carried out by the TEN-T Executive Agency (hereinafter TEN-T EA) on a mid-term review of the TEN-T Programme, whereas DG MOVE and the Agency jointly conducted a mid-term review of the multi-annual programme portfolio. In parallel, important reviews conducted with the Member States on the implementation of the Priority Projects in 2010 have delivered a detailed view of the progress achieved today on the projects of European interest. The transport model TRANSTOOLS and the TENconnect studies I and II were used to help define the planning methodology. Further studies have been taken into account, including on the TEN-T planning methodology, on the impact of the development of ports on TEN-T and a post recession revision of the study "Traffic flow: Scenario, Traffic Forecast and Analysis of Traffic on the TEN-T, taking into consideration the external dimension of the Union". The list of key documents that have been used for the purpose of this Impact Assessment report are listed in annex 1. 1.5. Consultation of the Impact Assessment Board Following the submission of a draft report to the Impact Assessment Board (IAB) on 15 April 2011 and a hearing with the IAB on 18 May 2011, the IAB sent its opinion on 23 May 2011, asking DG MOVE to resubmit the draft report. In its opinion of 23 May 2011, the IAB made five recommendations that were addressed in the final version of the IA report in the following manner: (1) The report should clarify the objectives of the proposal and explain the links between them. The revised IA defines more clearly the general objective of the proposal and establishes a closer link between the general objective as revised and the specific objectives. The possibility of trade-offs or synergies between these objectives and of addressing them in a balanced way within the policy options have also been assessed in a new subsection 3.4. The objective related to the standards for management systems and harmonisation of operational rules on the TEN-T projects of common interest has been detailed further. (2) The report should improve the presentation of policy options and consider assessing in greater detail a wider range of policy options. Section 4 of the report has been revised to include a summary of the planning and implementation scenarios assessed to generate the policy options, as well as to clarify the criteria and the pre-screening process used to discard a number of unviable options, initially presented in Annex 3. The revised IA report also includes a short description of each option, as well as a summary of the qualitative assessment of the options' effectiveness with regard to achieving each of the specific objectives of the policy initiative. The argument why only two policy options (in addition to the baseline scenario) have been retained has been strengthened. The differentiation between the baseline and Policy Option 1 has been strengthened as well as the rationale for retaining Policy Option 1 for in-depth assessment. (3)The report should improve the assessment of impacts The revised IA report explains in the beginning of section 5 why the results of a fully-fledged modelling exercise of the expected impacts of the envisaged Policy Options could not be used as the primary support for the assessment of impacts. An annex has been added to the IA report to provide full transparency on this aspect (see new annex 6). As the Board suggested, the modelling results have been used to provide an order of magnitude of impacts. They also have been considered, where available, in conjunction with the results of other studies to complement the qualitative analysis of impacts. The assessment of various impacts has been strengthened. Amongst others, the description of environmental impacts has been improved and includes a more thorough assessment of the "rebound effect". Also the impact on employment and their link to the estimated investment needs have been substantiated further. Finally, the revised IA report discusses in more details how the expected policy impacts are likely to be affected by the implementation aspects and by the budgetary constraints faced by Member States. (4) The report should be clearer about the differences in expected impacts of policy options The revised IA report substantiates and explains in greater detail why the expected positive impacts are likely to be higher in policy Option 2 compared to Option 1. To this end, the comparison of options in section 6 of the report has been further developed. (5) Procedure and presentation

Following the Board's recommendation, the different positions of the stakeholders have been better reflected throughout the report, especially in section 4 of the IA. The revised IA report also makes more clear use of proportionality and subsidiarity as conditions that need to be met by all policy options as part of the process of policy options pre-selection. The revised IA report addresses also the technical comments transmitted by the IAB to DG MOVE. A revised version of the IA report has been sent to IAB on 15 June 2011.On 7 July 2011, the IAB issued a positive opinion on the revised IA report, which contained three main recommendations for further improvement: (1) Further strengthen the assessment of options Following the IAB recommendation, the qualitative assessment of the impact of options has been further improved, particularly by strengthening the argumentation with regard to the expected occurrence of modal shift and the ensuing consequences for air and noise pollution. More examples on the impact of transport infrastructure on employment have been added and short term and long term impacts have been distinctly highlighted. (2) Improve the comparison of options The IAB noted that some of the scores assigned to options' effectiveness in addressing the problem drivers were not consistent with the qualitative assessment developed earlier. Consistency has subsequently been ensured. (3) Report the stakeholders' views Following the IAB recommendation, the stakeholders' views have been more consistently reported throughout the document. With regard to procedure and presentation, the IAB also recommended that efforts be made to bring the length of the report closer to the recommended 30 pages. Efforts to this end have been made, but giving the wide scope of the policy area covered, the wide ranging changes proposed and the high number of initial policy options that needed to be assessed, the margins for shortening the length of the report were limited. 2.Problem Definition: why is there a need to act? As noted earlier, it is through the Maastricht Treaty that the Union has been given the task of contributing to the establishment and development of trans-European infrastructure networks in the area of transport. The goal inscribed in the Treaty is to support the development of the internal market, reinforce economic, social and territorial cohesion, link islands, landlocked and peripheral regions with the central regions of the Union and bring the EU territory within closer reach of its neighbouring states. 2.1.The Europe 2020 Strategy: A renewed political context The recent economic crisis has wiped out years of economic and social progress and exposed structural weaknesses in Europe's economy. To get the EU economy back on track, the Commission adopted on 3 March 2010 the Europe 2020 strategy (hereinafter 'the EU2020 Strategy') for smart, sustainable and inclusive growth. The strategy, setting out a vision of Europe's new social market economy for the 21st century, was endorsed by the European Council on 17 June 2010. Promoting sustainable transport has been identified as one of the means for achieving one of the three key EU2020 priorities: sustainable growth. The ensuing 'Resource efficient Europe' flagship of the EU2020 Strategy called for the modernisation and decarbonisation of transport through, amongst others, infrastructure measures, and announced the intention of the Commission "to accelerate the implementation of strategic projects with high European added value to address critical bottlenecks, in particular cross border sections and inter modal nodes (cities, ports, logistic platforms). It also called on Member States to "ensure a coordinated implementation of infrastructure projects, within the EU Core network, that critically contribute to the effectiveness of the overall EU transport system". Transport infrastructure being considered as the backbone of the internal market, this objective has been also retained as one of the "Twelve levers to boost growth and strengthen confidence" in the recently adopted Single Market Act. The Transport White Paper: new priorities for TEN-T As a follow up of the EU2020 Strategy, the Commission adopted on 28 March 2011 a roadmap towards a competitive and resource efficient transport system. This strategy sets out to remove major barriers and bottlenecks in many key areas across the fields of transport infrastructure and investment, innovation and the internal market. The aim is to create a Single European Transport Area with more competition and a fully integrated transport network which links the different modes and allows for a profound shift in transport patterns for passengers and freight. The White Paper aims at dramatically cutting carbon emissions in transport by 60% by 2050. More specifically, the White Paper has concluded that no major change in transport will be possible without the support of an adequate network and a smarter approach to using it. Infrastructure planning and adequate development, i.e. defining where transport flows and which (combination of) modes as well as technologies are available for use, are seen as essential components in the process of redefinition of the transport system to inverse its current unsustainable trends. The EU Budget Review: new financing framework for TEN-T The EU2020 Strategy also urged that all EU policies, instruments and legal acts, as well as financial instruments, be mobilised to pursue the Strategy’s objectives. Consequently, in its "EU Budget Review" Communication, the Commission suggested ways to adapt the budget to tomorrow's requirements and set a number of key principles to better target the use of EU funds to secure the Union objectives, and as set out in the EU2020 Strategy: prioritisation - "directing resources where the rewards can come more quickly, more broadly and more strongly"; focusing on the EU added value - "plug gaps left by the dynamics of national policy-making, most obviously addressing cross-border challenges in areas like infrastructure, mobility, territorial cohesion…- gaps which would otherwise damage the interests of the EU as a whole".

Cross-border infrastructure is given as "one of the best examples of where the EU can (…) deliver better value results. Transport, communication and energy networks bring enormous benefits to society at large". 2.2.Description and scope of the problem: a fragmented network not fit for purpose The EU 27, taken as a whole, is well endowed with transport infrastructures. It currently counts 5,000,000 km of paved roads, out of which 61,600 km are motorways, 215,400 km of rail lines, out of which 107,400 km electrified, and 41,000 km of navigable inland waterways. Its maritime ports handled 414 million passengers and 3,934 million tonnes of freight in 2007, while about 14 million tonnes of freight and almost 800 million passengers were carried through its airports. Whereas most of these transport infrastructures have been developed under national policy premises, the TEN-T policy has helped to complete a large number of projects of common interest, interconnecting national networks and overcoming technological barriers across national borders. Amongst the success stories is the high-speed railway line linking Paris, Brussels, Cologne/Frankfurt, Amsterdam and London. It has not only interconnected national networks and marked a breakthrough of a new generation of railway traffic across borders, but it has also provided citizens and business travellers with a competitive travel option within Europe. Similarly, the fixed rail/road link between Denmark and Sweden, linking up two regions on each side of Øresund, has led to a significant increase in cross-border trade patterns and has served as a powerful lever of economic development, in particular the emergence of a common labour market between Copenhagen and Malmö. As regards intelligent transport systems, TEN-T policy has helped in particular to prepare the various modal intelligent transport systems (ITS) projects, such as European Railways Traffic Management System (ERTMS), the Single European Sky Air Traffic Management Research (SESAR), Vessel Traffic Management and River Information Services. Nevertheless, the wide consultation process, the external expertise, the ex-post assessments conducted and the internal analysis used over the last two years have shown that the European Union does not dispose yet of a complete trans-European infrastructure network, and especially not for rail and inland waterways, where essential parts are still missing and constitute important bottlenecks. The infrastructure network in the EU today is indeed fragmented, both from a geographical and a multi-modal perspective. It is also not sufficiently integrated in the international trade flows that feed the European internal market. Despite important efforts towards improvement, European rail and inland waterway networks are still lacking capacity and efficiency. Only the road network is nearly complete and provides access to intermodal nodes, albeit significant improvements are still needed in EU12. The air and sea transport networks are available, but no priorities have been given to establish a 'hierarchy' within those networks and/or a good interconnection. 2.2.1 The infrastructure network is fragmented between countries Missing cross-border sections The current fragmentation of EU infrastructure networks can be illustrated by Figure 1 showing the current status of implementation of the Priority Projects. Even if good progress has been achieved (the green sections) many of the planned Priority Projects will not be completed by the deadline agreed and set in the current Guidelines (around 2015 – 2020 in most of the cases). On some sections works will start only after 2013. This is mainly the case for cross-border sections which clearly appear to be the most complex projects on the TEN-T in terms of implementation. This led the 2010 TEN-T Priority Project progress report to conclude that today’s TEN-T mainly consists of an assembly of national sections that are not yet or only partially interlinked. Divergences between eastern and western parts of Europe For the time being, a considerable disparity in the quality and availability of infrastructure persists within the EU. The Member States which joined the EU in 2004 and 2007 have a motorway network of a limited extent (about 4.800 km, though they are readily catching up on this), have no high speed rail lines and – more importantly – their conventional railway lines are often in poor condition. The initial Guidelines and Priority Projects were approved well before the last two rounds of enlargement. While the revision of the Guidelines in 2004 partly addressed this matter, an imbalance between old and new Member States continues to endure, not least due to widely differing starting endowment levels. Figure 1 illustrates that North-South connections are predominant whereas East-West connections are still lacking. Missing connections with neighbouring and overseas countries Despite high traffic volumes on many connections between the EU and the neighbouring countries, the Guidelines so far have not included these connections among the priority objectives. Apart from these, the Priority Projects do not include links to the neighbouring countries. Moreover, most of the major Seaports, the connecting points of the EU to overseas countries, are not included in the Priority Projects. 2.2.2 The infrastructure network is fragmented between and within transport modes Multi-modal "hard" infrastructure is missing By functioning mostly separated from each other, the different modes are further fragmenting the network. Currently, important ports and airports remain poorly linked to the rail network, and a large share (>40%) of long distance freight transport (> 300 km) is carried out by road transport in isolation. Inland waterways are also in many cases not connected with logistics centres. Intermodal nodes, enabling the exchange of passengers and goods across modes, are underdeveloped. Important nodes in cities, such as big railway stations and major airports, do in many cases not have well functioning multimodal links. The lack of intermodal nodes, and therefore of efficient co-modality options, increases infrastructure capacity bottlenecks in all modes, and in particular in road, rail and ports.

Source: TENtec Interoperability is lacking The current TEN-T is further fragmented by a lack of interoperability, i.e. of compatibility among the technical parameters, operational systems and rules that are used on the different Member States' networks. Differing sets of operational rules and standards, based on longstanding traditions and legislation of individual Member States, are multiplying the barriers and bottlenecks in the transport system. The effectiveness of huge investments in infrastructure alone is severely hampered because interoperability problems and operational rules such as train control signalling systems, document handling, language regimes, train crew certifications, composition of trains, tail lights and so forth are not tackled at the same time as the "hard" infrastructure in a traditional sense, comprising of aspects such as rail gauge, train length, axle loads and traction energy supply systems. As highlighted in the Special Report from the European Court of Auditors, rail transport is the most prominent example where interoperability between and within transport modes is missing. The EU currently uses seven gauge sizes and seven types of electric currents (with different voltages and frequencies, alternating or direct current, etc). In certain cases where efficient solutions have been brought about – for instance multi-current locomotives able to circulate on several networks – then these efforts and investments are hampered in the absence of harmonisation of sometimes tiny details – such as the manual exchange of tail lights marking the end of the train. Figure 2 shows another example of the need to coherently address both infrastructure and the way that infrastructure is used. Figure 2: Example from the Special Report from the European Court of Auditors Road transport is also hampered by interoperability issues. Today, international hauliers need on-board units that deal with the Eurovignette, five different national vignettes and eight different tags and tolling contracts if they wish to drive on all European tolled roads without stopping at tollbooths. In addition, the limited penetration of the common European systems such as ERTMS for rail and RIS for inland waterways as well as the lack of compatibility between the various national river and air traffic management systems are yet other examples of the various factors hindering the integration of the network. Conclusion The lack of integration of the TEN-T logically leads to a suboptimal use of the infrastructure, by causing detours in traffic and bottlenecks. It results in economic inefficiencies, disparities in terms of social and territorial cohesion and higher external costs to the society in the form of congestion, accidents, air and noise pollution, and other environmental impacts. The fragmentation of the network is therefore an important obstacle to the free movement of people and goods, an analysis confirmed by the conclusions of the ex-post and mid-term review reports (see annex 2). As a consequence, the existing TEN-T is not adequate to support the major transformation envisaged by the White Paper towards a competitive and resource efficient transport system by 2050. The subsections below analyse why today's TEN-T is not capable of supporting this transformation. 2.3.Why is the TEN-T network fragmented? Following the process of internal and external consultation, and on the basis of the various assessment reports cited above, the Commission has identified that the fragmentation is due to 2 main aspects, the conceptual planning of the network configuration and its implementation. This translates into four main drivers, contributing to the problem of a fragmented TEN-T network. These drivers are: the insufficient EU-level planning of network configuration, insufficient adoption of common standards and rules for the interoperability of networks within the TEN-T, the limited cooperation among Member States in project implementation and the lack of sufficient conditionality of EU funding instruments. The first driver relates to the planning aspect, while the three others concern the implementation of the TEN-T policy. 2.3.1 Insufficient EU-level planning of network configuration Spatial configuration of the network has lacked a genuine European design Transport infrastructure has been historically designed to serve national rather than European goals and national infrastructure planning remains to a large extent disconnected from planning at EU level. This is due, not least, to the fact that Member States do support the largest share of the budget with regard to transport infrastructure investments, including TEN-T projects. Quite naturally, national authorities see therefore investment efforts on their respective territories mostly as national investments rather than as contributions to a Union objective. The current methodological approach to TEN-T planning and implementation also reflects and reinforces this tendency to approach transport infrastructure from a primarily Member States' individual interests perspective. Thus, as regards the TEN-T wider/basic layer, where responsibility for completing the large numbers of projects concerned rests almost entirely with the Member States, "planning" has essentially meant adding together significant parts of national networks and connecting them at the common borders. In practice, that meant Member States submitting national network maps outlining existing and planned infrastructure for the various modes, on the basis of a broad set of characteristics for network configuration presented in the TEN-T Guidelines. These maps are appended in Annex I to the current Guidelines. Projects developing or improving infrastructure along these outline maps are deemed "projects of common interest" and are eligible for funding support from the EU budget.

The selection of the Priority Projects has also been, to an important extent, a primarily bottom-up exercise. As a methodological approach, it has been developed in mid-1990s and endorsed by the European Council in Essen in 1996 when it adopted a first list of (fourteen) Priority Projects. It relies on proposals for development of projects along the (wider/basic) TEN-T outline presented by the individual Member States, which are then examined by the Commission for their compliance with a set of rather broadly formulated criteria for "priority projects", i.e. projects that are to be treated with priority in awarding financial support from the EU budget. Thirty Priority Projects are currently benefitting from EU financial support and their list is appended as Annex III to the current Guidelines. The list of projects inevitably reflects the Member States' inclination to give priority to transport sections linking up centres of national interest and, as such, the bottom-up bias of the selection process. There are thus Priority Projects without any cross-border dimension (Priority Projects 5, 10 and 29), or with a limited regional/national planning scope that lead to overall network inefficiencies/incongruence. For instance, Priority Projects 11, 12 and 20 rather belong to a single traffic flow, whereas Priority Projects 4, 28 and 17 are overlapping in important segments (See Figure 1). In addition, a focus mainly at modal level, rather than an integrated approach across different modes of transport has been identified as another consequence of the current Guidelines provisions with regard to project selection. Thus, some Priority Projects address rail, others road or inland waterways, but there is no coherence between them leading to a multi-modal network approach. The predominantly bottom-up network development is no longer adapted to new framework conditions Mobility has increased over the last decades and has developed in a context of generally cheap oil, expanding infrastructure and loose environmental constraints. Now that those framework conditions have changed, the building of new infrastructure to reduce congestion and accommodate higher levels of traffic is less and less a desirable solution. The impact of infrastructure on the environment also is a growing concern. In addition, the current economic crisis reasserts the importance of putting budget accounts into a long-term sustainable path. This implies reducing public deficit and debt and improving the quality of public finance. More cost-effective solutions have to be found to tackle transport needs than relying on expanding ‘hard’ infrastructure. 2.3.2 Insufficient implementation of common standards and adoption of common rules for the interoperability of networks within the TEN-T The TEN-T policy so far has lacked a true perspective of harmonisation through EU legislation to address interoperability issues across both national networks and modes. The Court of Auditors Special Report and the European Coordinators Issues Paper have particularly stressed this issue. Currently, the TEN-T Guidelines only include target standards in the inland waterway sector. With the absence of links between TEN-T policy and existing EU legislation, Member States have not sufficiently implemented all EU level technical specifications: ERTMS in the railway sector; implementation of the Single Sky policy and the ATM Master Plan for air transport; ITS for road transport. This situation has prevented the TEN-T policy to serve as a useful lever to accelerate the deployment of much needed intelligent equipment on the network. Moreover, there is a close relationship existing between certain TEN-T instruments such as legally binding interoperability and safety standards, and transport market opening. They strongly encourage further initiatives similar to those taken in the field of rail interoperability. As a result, infrastructures are underused due to market arrangements reflecting the situation before market opening. 2.3.3 Limited cooperation among Member States in project implementation In addition to the lack of Member States planning coordination, TEN-T development so far has been crippled by insufficient Member States cooperation in order to coordinate their projects' implementation. This is particularly true of Priority Projects with a cross-border dimension, where active cooperation between a wide range of stakeholders is necessary. This aspect is highlighted by the conclusions of a number of specific studies, such as the multi-annual Priority Projects portfolio review, the European Coordinators' Issues Paper and the Court of Auditors' Special Report. This limited cooperation between Member States on cross-border projects has had implications at various levels: the lack of joint traffic forecasts led to differing investment plans; the lack of investment planning coordination led to disconnected or contradictory timelines, capacity planning, alignment, technical and interoperability characteristics, cost-benefit and environmental assessments; the lack of congruent investment decisions coupled with Member States' tendency to give priority to national transport sections linking up centres of national interest particularly affected investments in TEN-T projects, leading to extensive delays. 2.3.4 Lack of sufficient conditionality of TEN-T funding instruments As indicated above, the TEN-T Guidelines are linked with financial instruments to facilitate the implementation of projects identified as being of common interest. These instruments include: the TEN-T programme, the Cohesion Fund, the European Regional Development Fund (ERDF) and loans from the European Investment Bank. While the TEN-T Guidelines do not specifically deal with financial aspects, they do specify the characteristics of the projects eligible for financial support from the EU budget and, not least, the criteria for identifying the projects that are to be funded with priority. As such, the TEN-T Guidelines constitute an important instrument of conditionality for the allocation of EU funds. So far, the EU financial instruments supporting the TEN-T development have not proved sufficient to deliver complete projects within the timeframe agreed by the Guidelines, nor to ensure a focus of funding on the projects with highest EU added value. And part of the reasons for this lie in the rather loose framework for guiding investment decisions that the TEN-T Guidelines provide. The TEN-T Guidelines provide a framework of conditionality of TEN-T funding instruments by means of provisions concerning both the planning of the network configuration and the implementation of the projects developing it. As highlighted above, the current bottom-up approach to planning has failed to ensure the development of a TEN-T configuration that constitutes a fully connected network, and in particular of cross-border links and multi-modal connecting points that generate the trans-European and, respectively, multi-modal dimensions of the TEN-T – and, as such, its EU-added value. At the level of implementation, the limited cooperation among Members States, particularly in cross-border projects, means that even when planning did address such high EU-added value links, delivery was significantly delayed. In addition, the lack of provisions for common operational rules and standards adoption along the TEN-T for most modes, as also pointed out earlier, mean that high "hard" infrastructure investments, with important EU funding contribution and EU-added value potential, remain significantly underused. While the overall situation has improved over the years, especially with regard to the delivery of Priority Projects, thanks to new implementation instruments, such as the TEN-T Executive Agency (TEN-TEA) and the European Coordinators, and improved conditions for disbursing support under the TEN-T programme, the delays in implementation of a number of projects reflect the currently limited capacity at EU level to guide implementation of EU projects, especially for the cross-border sections. Generally, The Priority Project implementation mid-term reviews and the recent mid-term review made clearly apparent that there is still room for improving the impact of TEN-T co-funding, notably by focusing on the particular issue of cross-border coordination, touching upon issues of technical interoperability and operational rules, and by focusing on the problem that the financial perspectives do not permit to overturn the current 7-year limit of the perspectives. As regards the structural funds, EU funding has largely supported project implementation, but projects implementation lies with Member States for projects which generally need prior approval by the Commission. The current prioritisation of investment in the TEN-T Guidelines leaves many investments decisions follow rather national than European value added aspects. Moreover, significant capacity problems in design, implementation and management of large infrastructure projects on all modes constrain the progress in a number of countries eligible under the Cohesion Fund. As the Conclusions of the 5th Cohesion Report state, the future Cohesion Policy needs to impose stronger conditionalities in order to concentrate resources on European value added. The discussions with Member States show that they are open for stronger ex-ante conditionalities for TEN-T investments. 2.4.How would things evolve, all things being equal? The Commission has carried out an analysis of possible future developments for TEN-T policy in a scenario of unchanged policies, the so-called baseline scenario.The baseline scenario is identical with the Reference scenario applied for the Impact Assessment accompanying the White Paper. The Reference scenario is a projection, not a forecast, of developments in absence of new policies beyond those adopted by March 2010. It therefore reflects both achievements and deficiencies of the policies already in place. This projection provides a benchmark for evaluating new policy measures against developments under current trends and policies., .

The time horizon for the baseline scenario developed below is twofold: 2030 and 2050. 2030 is the target date for the achievement of the trans-European transport infrastructure framework as set in part 3 of this document. The 2050 horizon is required to ensure consistency between long-term impacts of proposed options of the trans-European infrastructure network and the goals of the White Paper. 2.4.1 Specific assumptions for infrastructure developments In terms of infrastructure development, the baseline scenario assumes that the current Guidelines will apply, thus continuing the development of the current Priority Projects and the wider TEN-T. Among others, without prejudging the result of the negotiations for the Multiannual Financial Framework, it is assumed that the current financial perspective approach would be pursued for the period 2014-2020, including the availability of a similar TEN-T budget. According to the current forecasts drawn up in cooperation with the Member States, the total investment cost of the 30 TEN-T Priority Projects will be realised by 2025, which would represent an accelerated implementation pace. The National transport plans currently discussed between the Commission and the Member States in the Framework of the Open Method of Coordination have also been taken into account in this forecast. It is also assumed as part of the baseline scenario that, at European level, the Commission will continue its efforts to encourage Member States to coordinate their infrastructure policies, with a view to exchanging best practices and identifying obstacles to funding and solving cross-border constraints. In particular, the Open Method of Coordination is expected to have a certain impact through fostering transparency and up-to-date monitoring of project planning and implementation across Europe. Moreover, the European Institutions and Member States will continue to rely on the work of the European Coordinators, taking care of 11 of the most difficult Priority Projects of the TEN-T network. 2.4.2 Expected developments Impacts on drivers to TEN-T fragmentation In the baseline scenario, by definition, the planning of the network will not change since the current Guidelines remain unchanged. The current dual layer with the basic layer and the 30 Priority Projects will be pursued. In 2030, in the baseline scenario, the fragmentation of the infrastructure network in general is not likely to improve, despite the completion of Priority Projects. First of all the absence of a revised planning would mean that interconnectivity issues across borders as well as multimodality aspects would remain inadequately addressed. The same would be the case of connections with the neighbouring countries. Second, as far as the interoperability of networks is concerned, a certain progress will be achieved, particularly in the interoperability of traffic management systems (ERTMS, ITS, RIS, SESAR). But overall, the impact on TEN-T efficiency would be too little, too late. As an example, the introduction of ERTMS on the European interoperable network provides an important indicator of progress towards interoperability. Currently, around 4000 kilometres of lines for commercial services are in service in ten Member States, in particular high speed lines, and by the end of 2015, and 2020, this should grow to 11 500 km and 23 000, respectively. In addition, a binding European Deployment Plan (EDP), adopted on 22 July 2009, aims at a swift and coordinated deployment by 2015 of ERTMS on 6 Corridors. Nevertheless, even if the above targets are reached by 2020, the interoperable section of the TEN-T will not constitute an interoperable European-wide network (see map below). The six corridors of the EDP represent only 6 % of the Trans-European Network track length, even though they do carry 20% of the rail freight traffic. Moreover, as European Coordinator K. Vinck noted, "from an implementation point of view, delays are noticed on nearly all corridors". Figure 3: ERTMS Corridors Source: UIC As regards operational rules, much progress is not to be expected, since the different barriers to interoperability (administrative requirements, cross acceptance of vehicles, certification of vehicles operators, technical and commercial controls) would not be tackled together. Without increased top-down coordination between Member States, the situation is not likely to improve, despite the involvement of the European Coordinators and the use of the Open-Method of Coordination. As indicated in the common report of the Coordinators, interoperability issues need to be addressed in common and alongside the planning and financial issues. In the absence of further legal and political commitments, it is unlikely that large and complex cross-border projects will be implemented and the capacity of current instruments to achieve a better conditionality of EU funding will remain limited. The co-funding within the TEN-T budget is likely to be too limited to kick off works on major cross-border sections or important bottlenecks with cross-border effects. Continuing with the current TEN-T policy approach would still leave key aspects of strategic European interest – i.e. solving bottlenecks and filling in missing links, developing multimodal connecting points – inadequately addressed. Some improvements could be achieved by means of the continuous sustained efforts of the European Coordinators, but their intervention will still address mainly the problem, and not its causes. Impacts of TEN-T fragmentation In the baseline scenario, with the continuation of the current Guidelines and current implementation, the free movement of goods will remain constrained by the low level of infrastructural interconnectivity between the European markets, especially as concerns the peripheral areas of Europe. The current market segmentation of the Internal Market will thus endure, limiting the choice for consumers and the size of market for enterprises, especially for small businesses. Figure 4: Change in accessibility between 2005 and 2030 In addition, the expected rise in fuel costs and congestion levels by 2030 will lead to further divergence in accessibility at regional level. Peripheral areas with a high share of road transport are expected to worsen their situation, facing higher average transport cost increases than central areas. Moreover, with economic activity continuing to demonstrate signs of concentration in central EU regions, transport costs may hamper economic growth and job creation in peripheral regions. In the baseline scenario, the poor connection with neighbouring and 3rd countries and the lack of European-wide corridors providing easier access to EU markets for imports and an easier exporting route for exports, especially towards Eastern Neighbours, will limit the capacity for imports and exports with 3rd countries. The lack of adequate hinterland connections for major EU ports will create similar issues, since they would not prove an attractive/cost efficient point of (physical) access into the EU market.

It can be deducted from the above that the baseline scenario would have little if any positive impact on EU competitiveness. Indeed, its impact could be negative, due to the constraints on the free movement of goods, accessibility (see map above) and trade with third countries resulting from the lack of infrastructure. Moreover, the development of intelligent transport systems and management systems will be limited to the development foreseen in the current legislation (see above). Impact on the transport system In the baseline scenario, the Transport system will continue to be made of modes mostly co-existing apart from each other, with modal share following the current trends. Therefore, the potential efficiency gains from co-modality would be limited to the initiatives already in place. Road transport, for which most of the European-wide network is realised, will continue to grow but will be hampered by congestion problems around major nodes. Though its share will be somewhat diminished, road will remain the main long distance transport mode. With transport prices continuing to rise in line with rising oil prices, the overall efficiency of the transport system is therefore likely to further decline as highlighted in the 2011 Transport White Paper. Rail transport efficiency would remain low due to continuing physical fragmentation and interoperability problems of the European network. Maritime transport would be affected by the lack of connection between ports and the other modes (hinterland connections). Total transport activity is expected to continue to grow in line with economic activity. Total passenger transport activity would increase by 51% between 2005 and 2050 while freight transport activity by 82%. The growth will not however be distributed proportionally among transport modes, nor across EU Member States. In terms of modal split, the various modes are in general expected to maintain their relative importance at EU level. Passenger cars are expected to remain the largest mode, with almost 70% of total passenger activity, though this would represent a decrease of 3% compared to 2005 levels. Air, on the contrary is expected to grow by 3.4%, reaching 11.8% of total activity and consolidating its position as the second most important passenger mode (in terms of passenger*kilometres). Railways are expected to gain 0.2% and reach 6.3% of total passenger transport volume. As regards freight, total transport volumes are expected to grow by 42%, with road and maritime transport growing at comparable rates. Rail is expected to grow faster (by almost 50%), aided by an expected slower increase in fuel costs and the positive impacts of the opening of the rail markets. The geographic distribution of transport growth is not uniform. In absolute terms, road transport in EU-15 will attract most of the growth in demand. EU-10 and EU-2 will increase their transport volumes much faster though in relative terms, by 76% and 96% respectively. Growth is expected to be high for all modes in these member states, with road being the one growing fastest. Inland waterways traffic, especially in the Danube, is also expected to grow by more than 80%. Source: Impact Assessment Report accompanying the White Paper on Transport (2011) In the baseline scenario, road traffic congestion, expressed as congested versus total driving time, is to increase, according to the White Paper Impact Assessment. Congestion costs are projected to increase by about 50% by 2050, to nearly 200 bn € annually. The lack of new planned infrastructure connecting the peripheral areas would worsen this situation, as would the limited development of intelligent transport systems and interoperability, especially for rail. Cooperation among Member States (and sometimes also between Member States and local authorities) would continue to remain limited, thus failing to leverage the potential of synergic efforts at EU level to address major bottlenecks and inadequate or inexistent cross-border sections and, therefore, to reduce congestion. Figure 5: Congestion by 2030 in reference scenario Source: Impact Assessment to the Transport White Paper, Annex 3 In the baseline scenario, the administrative burden on transport operators will remain the same as far as the implementation of the TEN-T Guidelines is concerned. Still, the administrative burden will be reduced in line with the existing legislation for rail freight, reporting formalities for ships or the Single European sky Impact on the environment According to projections presented in the White Paper Impact Assessment Report, fuel consumption (Mtoe) and emission of CO2 (Mio tonnes) are expected to increase by 15 % in 2020 (EU-25) in the baseline scenario. Oil products would still represent 89% of the EU transport sector needs in 2050. By implementing existing legislation, NOx emissions and particulate matter would drop however by about 40% and 50%, respectively, by 2030 and roughly stabilise afterwards. As a result, external costs related to air pollutants would decrease by 60% by 2050. These projections are also supported by TENconnect II study results The above data, coupled with that concerning the efficiency of the transport system, congestion and innovation presented earlier, indicate that the baseline scenario would have a negative impact on energy use on both a 2030 and 2050 time horizon, due to its negative impacts with regard to the overall efficiency of the transport system, including reducing congestion, encouraging modal shift and promoting innovative technologies development and adoption. The impact on land-use change would be very limited as far as TEN-T infrastructure is concerned, since no further planning would be made and only the already planned infrastructure may be built. However, it would not prevent Member States from building projects of their own interest. It can be concluded that, if continuing with the current policy approach, the identified problem of infrastructure network fragmentation, in a context of expected increases in transport activities, would lead to increasingly negative economic, social and environmental impacts over time. With no policy change, the EU will not have the necessary infrastructure for addressing the goals inscribed in the Treaty and the priorities set out in the White Paper. Sensitivity analysis Considering the high degree of uncertainty surrounding projections over such a long time horizon, especially for such a complex system as transport network, an evaluation is provided below for the possible impact of external factors on the assumptions underlying the baseline scenario. First, the high degree of uncertainty regarding budgetary constraints at the level of the Member States and the unknown factors concerning the next EU multi-annual financial framework and the TEN Financial Regulations needs to be taken into consideration. The development of hard and soft infrastructure, being extremely costly, very much depends on the public and private resources available. The situation described above in the baseline Scenario is rather an optimistic scenario (Figure 1 of this document, from the 2010 Progress Report illustrates the existing delays on many sections of the Priority Projects) in terms of infrastructure development since it considers that the EU and the Member States will have sufficient resources available to complete the 30 Priority Projects by 2025. However, if investments in transport infrastructure are seen as a way out the crisis, the development of the TEN-T could be accelerated further.

2.5.Does the Union have the right to act? Articles 170 – 171 of the Treaty on the Functioning of the Union define the objectives and scope of the TEN-T policy. Article 170 specifies that “To help achieve the objectives referred to in Articles 26 [the completion of the internal market] and 174 [economic, social and territorial cohesion] and to enable citizens of the Union, economic operators and regional and local communities to derive full benefit from setting-up of an area without internal frontiers, the Union shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures.” It also specifies that "action by the Union shall aim at promoting the interconnection and interoperability of national networks as well as access to such networks." Article 171 sets the obligation that “the Union shall establish a series of Guidelines covering the objectives, priorities and broad lines of measures envisaged in the sphere of trans-European networks; these Guidelines shall identify projects of common interest”. Article 172 sets the Framework for the application of the principle of subsidiarity, by stipulating that ''Guidelines and projects of common interest which relate to the territory of a Member State shall require the approval of the Member State concerned.'' Moreover, Member States, as well as the regional or local authorities, bear the lion share of the financing related to the construction, maintenance and management of infrastructure. The need for coordination between the Union establishing the Guidelines and the Member States implementing it has led to the setting up of the TEN-T Guidelines Committee, as stipulated in the Article 21 of the current Guidelines. This Committee has been involved at every stage of the revision of the TEN-T Guidelines. In areas which do not fall within EU exclusive competence, EU action has to be justified. In the present case, it is therefore necessary that the subsidiarity principle set out in Article 5 (3) of the Treaty on the European Union is respected. This involves assessing two aspects. Necessity test Firstly, it is important to be sure that the objectives of the proposed action could not be achieved sufficiently by Member States in the framework of their national constitutional system, the so-called necessity test. Given the fact that the overall concept is to create an EU-wide integrated transport network, the Member States per se are not able to meet these challenges individually for the following reasons: As pointed out in the problem definition, Member States primarily consider transport flows of national importance when planning future infrastructure. Infrastructure planning to cater for long distance transport flows of European importance is, conversely not sufficiently considered by Member States. For the same reason, even when planning is cross border, they tend to allocate less importance and resources to the building of the cross border sections, as has been the experience with the current Priority Projects. In some cases, the countries of both sides of a border are interested in the corresponding project to a different extent. Regarding implementation, the lack of coordination between Member States leads to the development of different standards and operational rules hindering the coherence of the functioning of the TEN-T network and the Internal Market as a whole. Therefore, the coordinated development – both in terms of planning and implementation – of TEN-T infrastructure to support long distance transport flows of European interest and economic, social and territorial cohesion needs to be undertaken at Union level. The proposed policy options for renewed TEN-T Guidelines will focus on addressing trans-national aspects that cannot be satisfactorily taken into account by Member States, such as filling the missing links that could facilitate cross-border transport, the interoperability of equipment and establishing an internal market for Intelligent Transport Systems (ITS) and services. EU coordination would have thus also a clear added value with respect to setting of standards and increasing the quality of services as well as the management of cross-border infrastructure links and international traffic flows. Test of EU added value Secondly, it has to be considered whether and how the objectives could be better achieved by action on the part of the EU, the so-called “test of European added value”. The rationale for a European action in the field of TEN-T stems from the trans-national nature of the identified problem. However, it has to take into account that a ‘one size fits all’ approach would not be an adequate response. Therefore, an action at EU level coupled with actions at all administrative levels would yield significant added value. For these reasons, the policy objectives set out in section 3 of the present Impact Assessment report cannot be sufficiently achieved by actions of the Member States alone, but can rather, by reason or scale of the proposed action, be better achieved with high involvement of the EU. 3.policy objectives Section 2 has shown that the TEN-T today is not sufficiently integrated to the extent of supporting the major transformation towards a competitive and resource efficient transport system by 2050. More specifically, it has been explained that the current fragmentation of the TEN-T network at all levels is a major obstacle to a smooth and resource efficient functioning of the internal market and to economic, social and territorial cohesion. This section defines the general, specific and operational objectives of the proposed initiative, discusses possible trade-offs and synergies between objectives and verifies their consistency with other EU horizontal objectives. 3.1.Policy Objectives 3.1.1 General Objectives The overall aim of this initiative is to provide by 2030 for the establishment of a complete and integrated TEN-T that would maximise the value added for Europe of the network. This optimal network would cover and link all EU Member States in an intermodal and interoperable manner. This network would also provide links to neighbouring and third countries, as well as all transport modes and systems that would support the move towards a competitive and resource-efficient transport system by 2050. This aim is consistent with the 'Inclusion Growth' initiative of Europe 2020, the Single Market Act and with the general goal of the TEN-T policy; to improve the competitiveness of the EU economy as a whole, to support the completion of the internal market, and to contribute to a balanced territorial development of the Union.

In addition, as stipulated in the Europe 2020 Strategy, and further detailed in the White Paper, the TEN-T shall contribute to the 'Sustainable Growth' initiative, and in particular the 'Resource Efficiency' flagship, by facilitating a reduction of GHG emissions by 60% for transport. It will also be in line with the renewed Sustainable Development Strategy by contributing to more sustainable mobility. 3.1.2 Specific Objectives The general objective of establishing a complete and integrated TEN-T that would maximise the value added for Europe of the network can be translated into more specific goals. Each of these 4 specific objectives intends to address one of the 4 drivers leading to the problem of fragmentation. The first specific objective shall enhance the EU planning that will enable to define the optimal network as defined above and to identify "the missing links" in the current TEN-T: Define a coherent & transparent approach to maximise the EU added value of the TEN-T, addressing aspects of network fragmentation linked to missing links, multimodality, and adequate connections to neighbouring and 3rd countries, as well as ensure adequate geographical coverage. The next three specific objectives shall design a sound governance structure to secure the implementation of the optimal network and of the "missing links" identified. This governance structure would foster the implementation of European standards for management systems and push for the development of the harmonisation of operational rules and enhance MS cooperation. This will ensure that EU funds are allocated to the identified "missing links" and to the implementation efforts of these missing links. These specific objectives for implementation are: Foster the implementation of European standards for management systems and push for the development of harmonised operational rules on the TEN-T projects of common interest. This objective however does not aim at imposing new specific standards and rules, but rather at ensuring the effective adoption and implementation of common European standards already developed, both in the field of traffic management and information systems and in the field of operational rules and technical specifications of physical infrastructure. Enhance Member States cooperation in order to coordinate investments, timing, choice of routes, environmental and cost-benefit assessments for projects of common interest. Ensure that the optimal network configuration is a key element in the allocation of EU funding enabling the focus on cross-border sections, missing-links and bottlenecks.



Table 2: Mapping problem, drivers and objectives Problem General objective Fragmentation of TEN-T network Establish a complete and integrated TEN-T network that would maximise the value added for Europe of a network Drivers to the problem Specific objectives Planning Planning Dr.1 Lack of a genuine European design in the spatial configuration of the network SO1 Define a coherent & transparent approach to maximise the EU added value of the TEN-T network Implementation Implementation Dr.2 Insufficient implementation of common standards and adoption of common rules for the interoperability of networks within the TEN-T SO2 Foster the implementation of European standards for management systems and push for the development of the harmonisation of operational rules on the TEN-T project of common interest. Dr.3 Limited cooperation among Member States in project implementation SO3 Enhance Member States cooperation in order to coordinate investments, timing, choice of the routes, environmental and cost-benefit assessments for projects of common interest Dr.4 Lack of sufficient conditionality of TEN-T funding instruments SO4 Ensure that the optimal network configuration is a key element in the allocation of EU funding allowing to focus on cross-border sections, missing-links and bottlenecks 3.1.3 Operational objectives In addition, the specific objectives have been further detailed in the following operational objectives, with two operational objectives for each of the specific objectives. The methodology to define the network configuration should allow to: connect all main airports and seaports to other modes, especially (High-Speed) railways and inland waterway systems by 2050; and to shift 30% of road freight over 300 km to other modes such as rail or waterborne transport by 2030, and more than 50% by 2050. The implementation of European standards and adoption of common rules should be realised by: ensuring by 2030 the deployment of European transport management systems (ERTMS, SESAR, ITS, RIS, SSN and LRIT) on the projects of common interest

and ensuring the commitments of Member States to agree on common operational rules in order have fully functional projects of common interest by 2030. The enhancement of Member States cooperation will be realised by: Obtaining binding commitments by Member States for the implementation of essential cross-border projects with a binding timetable; and obtaining binding commitments by Member States for the implementation of bottlenecks and missing-links on their territory that have cross-border effects. The optimal network configuration shall allow: ensuring priority for cross-border projects, bottlenecks and missing-links, interoperability and intermodality; and ensuring conditionality of EU funding upon compliance with EU environmental legislation (SEA, EIA & Natura 2000). 3.2.Possible trade offs and synergies between the objectives The overall goal in developing the TEN-T, and of the current revision process, is to maximise EU added value of the TEN-T network. Efficiency, from the point of view of the EU, could be seen as fulfilment of the whole set of objectives laid down in the Treaty in a balanced way, against the corresponding costs and efforts. Achieving a sound balance between traffic demand in central regions and accessibility in peripheral ones is therefore in this context, efficient. The approach to planning the network configuration, as set out in the first specific objective, will be aimed at identifying the optimal network configuration from an EU-added value perspective. This methodology shall therefore find the right balance between a large coverage of the Union by the network and the need to take into account the main traffic flows, in order to solve the potential conflict between territorial cohesion and economic competitiveness. A geographical approach for strategic network planning does not necessarily contradict a purely traffic driven/competitiveness approach, as the geographical distribution of main nodes (major cities and economic centres) is the main driver of major long-distance traffic flows. As set out in the fourth specific objective, an optimal network configuration shall be a key element in optimising the conditionality for the use of EU funds. As such, there should be no trade off between a network configuration that adequately covers the entire territory of the Union and an efficient allocation of EU funding. On the contrary, ensuring that EU funds are allocated only to projects aimed to develop parts of the optimised network configuration, coupled with stronger measures as concerns implementation requirements (as ensured by specific objectives 2, 3 and 4), will ensure that EU funds are allocated primarily to projects that ensure a high EU-added value. Moreover, the approach to define and implement the network shall be flexible, based on traffic needs: a four-line motorway, multi-modal connections or a high-speed rail line will not be needed on each connection of the network. Therefore, costs shall be in line with the needs, allowing for the maximisation of the EU added value by a smart approach for the allocation of EU funds. Another possible trade off would be between the objectives of "Inclusive Growth" and "Sustainable Growth". Building new infrastructure can lead to an increase in traffic and so to increased emissions of pollutants and greenhouse gasses. The TEN-T policy aims at addressing this trade off first of all by enhancing modal shift, as set out in the 1st and 2nd operational objectives. Nevertheless, infrastructure planning measures alone would not be sufficient. They would need to be combined with a strong implementation approach and other transport policy measures (such as pricing, cleaner technologies …) in order to make transport more efficient and cleaner. Some of these measures are included in the operational objectives of the TEN-T Guidelines and some of them are part of the general transport policy, as set out in the Transport White Paper. In this way, transport infrastructure planning and implementation can serve both general objectives of inclusive and sustainable growth by being a main implementation tool of multiple initiatives of transport policy. 4.Policy Options for TEN-T development This section will explore alternative policy options aimed at establishing a complete and integrated TEN-T network by 2030 as described in section 3 above. 4.1.Two-pronged process leading to identification of policy options As described in the first section of this report, the input of the process of internal and external consultation, together with the findings of external studies and assessments, has allowed the Commission to identify more precisely the problem to be solved, the four main underlying drivers and the corresponding fields for action, namely the conceptual planning and the means for implementation as explained in part 2.4 above, and possible actions that would be appropriate to address those issues. On this basis, the two-pronged process described below was applied for generating a range of possible policy options that could address the drivers identified earlier as leading to TEN-T's current fragmentation and help thus achieve the objectives set out in section 3 of this report. 4.1.1. Identification of generic scenarios for planning and implementation The Commission has first identified a range of possible generic policy scenarios in each field for action (planning and implementation). The scenarios are presented in Table 3 below. Coherence with the overall EU Treaty objective of economic, social and territorial cohesion, with the Europe 2020 Strategy and its main priorities, with the priorities set in the White Paper for transport and the budgetary principles set out in the EU Budget Review Communication (as outlined in part 2.1 of this report), has provided the main conceptual grid that guided the Commission in considering the generic scenarios in the first place.

Five "planning scenarios" have been envisaged: business-as-usual, guidelines discarded, selection of new PPs (or Essen), Core Network and dense comprehensive network. The "planning scenarios" have been developed starting from the three policy options proposed for consideration in the first stage of the public consultation (Green Paper, February 2009), and taking into consideration the subsequent stakeholders' input. The possible planning scenarios submitted to public consultation in February 2009 included one scenario, namely "Priority Projects" only, which was later not retained as part of the planning scenarios considered for the present IA. A majority of stakeholders considered this scenario as forfeiting the Treaty objectives of ensuring overall internal market accessibility and support for economic, social and territorial cohesion, as it diverts EU focus and funding away from the development of the overall/comprehensive TEN-T. The lack of coherence of this possible planning scenario with the overall Treaty objectives is therefore the reason why this scenario has not been eventually retained among the planning scenarios considered for policy options development., Five "implementation scenarios" (i.e. addressing issues such as standards allowing interoperability, cooperation among Member States and conditionality of funding) have been elaborated: business-as-usual, guidelines discarded, regulatory approach only, reinforced coordination and EU full operational management. These alternative "implementation scenarios" had not been distinctly considered in the first stage of public consultation. Rather, the need for tackling, at the same time, both planning and implementation aspects of the TEN-T policy became apparent following the public consultation process. Scenarios envisaged in the field of planning Name Content A1 - Business as usual -Same framework as in baseline, including the currently designated 30 PPs; -No identification of further PPs. A2 - Guidelines discarded -No EU guidance towards identification of projects of common interest following the end of the current MFF; -No “European interest” priority status as well as any eventual further EU support towards covering financial needs for current PPs. A3 - Selection of new PPs (or Essen 2) -Identification of new priority projects following the current, primarily bottom-up approach to project selection, as endorsed by the Essen European Council in 1994; -Largely unchanged process with respect to wider TEN-T identification and PP selection; -Upgrade of the wider TEN-T (based on projects completed and/or abandoned by Member States); -Revision of criteria for Priority Project identification to better specify the elements that would constitute the European added-value of priority projects. A4 - Core Network -Enhanced top-down and multi-modal approach to TEN-T planning; -Two planning layers: basic layer (comprehensive network resulting from an updating and adjustment of the current wider TEN-T) and top layer (core network, overlaying the comprehensive network and constituted of the EU strategically most important parts of the TEN-T); -Definition of methodologies for transparently and coherently identifying the network components for both layers across the territory of all Member States, and insuring their multi-modality; -Continued consultation throughout the process of application of the methodology, ensuring ownership of the process (and results) of TEN-T configuration identification by the Member States. A5 – Dense TEN-T network Same as in A4, but criteria and standards that in A4 would be applied to entire/comprehensive TEN-T network Table 3a: Planning scenarios







Scenarios envisaged in the field of implementation Name Content B1 – Business-as-usual -Same as in baseline, including the current implementation instruments ; -Continuation of initiatives currently under way with regard to interoperability standards and TEN-T projects. B2 – Guidelines discarded -No TEN-T implementation support activities foreseen or financed at the end of the current MFF at EU level. B3 – Regulatory approach only -Discontinuation of current coordination instruments, limiting EU action to a TEN-T Regulation that will strictly define the priority projects/network map to be funded, the interoperability standards to be applied and the timetables for completion; -Funding strictly conditional upon all criteria and standards being met. B4 – Reinforced coordination -Reinforced coordination at PP level or at Corridor level; -Coordinated approach ensured by individual PPs or Corridor Decisions at PP/Corridor level in the undertaking of infrastructural investments, the management of PP/corridor capacity, the deployment of interoperability standards and traffic management systems; the Decisions will place the overall management authority under the aegis of the European/Corridor Coordinators, while the TEN-T EA will continue in its role of support towards project preparation and implementation. B5 – EU full operational management (through a Regulation) -Complete centralised management of the planned network via the EU agencies under the coordination of the Commission and the European Coordinators; -EU level responsibilities including management of project proposal development and accompanying cost-benefit analyses and environmental impact assessments, management of funding and implementation of all TEN-T projects, establishment and deployment of interoperability standards and systems across the network. Table 3b: Implementation scenarios 4.1.2. Identification of possible policy options As pointed out earlier, the consultation process made apparent that only intervention covering both fields (planning and implementation) would be capable of tackling at the same time and in a satisfactory way all the various problem drivers and addressing all the specific policy objectives. In light of this, the interaction between each of the five scenario envisaged for action at the level of planning with each of the five scenario envisaged for action at the level of implementation (including the respective planning and implementation scenarios pertaining to the baseline) has been considered within alternative policy options. 25 (theoretically) possible alternative policy options, constituting potentially viable policy alternatives for achieving the objectives identified in section 3 above, were thus initially generated. Nevertheless, for reasons of compatibility between scenarios, five theoretical combinations involving the A2/"Guidelines discarded" scenario were discarded from the beginning, as this planning scenario is not compatible with any implementation scenario. "Guidelines discarded" was considered subsequently as a policy option in its own, without an implementation dimension. Following this second phase of policy options generation, a total of 21 possible policy options , as briefly presented in the table below, have been identified. B1 B2 B3 B4 B5 A1 Business as usual / Continuation with current 30 PPs and current implementation approach Continuation of current 30 PPs but with no further EU implementation support Continuation of current 30 PPs with a purely regulatory approach to implementation Continuation of current 30 PPs with reinforced coordination Continuation of current 30 PPs with full EU operational management A2 Guidelines discarded Guidelines discarded Guidelines discarded Guidelines discarded Guidelines discarded A3 MS selection of new PPs ( 2) with current implementation approach MS selection of new PPs ( 2) with no further EU implementation support MS selection of new PPs ( 2) with purely regulatory approach to implementation MS selection of new PPs ( 2) with reinforced coordination MS selection of new PPs ( 2) with full EU operational management A4 Dual layer (core and comprehensive) network with current implementation approach Dual layer (core and comprehensive) network with no EU implementation support Dual layer (core and comprehensive network with purely regulatory approach to implementation Dual layer (core and comprehensive) TEN-T with Reinforced coordination Dual layer (core and comprehensive) network with full EU operational management A5 Dense TEN-T with current implementation approach Dense TEN-T with no further EU implementation support Dense TEN-T Purely regulatory approach to implementation Dense TEN-T with reinforced coordination Dense TEN-T with full EU operational management Table 4: Identification of possible Policy Options

4.2.Pre-screening of envisaged alternative policy options The high number and complexity of the resulting possible policy options raised issues of feasibility and efficiency of an in-depth assessment for all of them, making a preliminary assessment and the discarding of policy options necessary. The Commission performed therefore a preliminary assessment of the 21 possible policy options on the basis of their effectiveness in addressing current problem drivers (and, as such, towards attaining the policy objectives of the TEN-T Guidelines revision) and of their efficiency. In parallel, the coherence of the possible policy options with the principles of subsidiarity and proportionality has been assessed. As regards the effectiveness criterion, each planning and, respectively, implementation scenario has been assessed with regard to its capacity to have a significant impact on the problem driver(s) it was designed to address. This preliminary analysis has proved an effective approach to reducing the range of policy options to those that promised to promote a sufficient departure from the current approach (business-as-usual/baseline scenario) in terms of achievement of the overall TEN-T policy objective. The selection rule was given by the presumption that only those scenario combinations that would ensure a significant (positive) impact (i.e. rated medium [++] or high [+++]) on all problem drivers would be worthwhile considering as viable alternative policy options, capable of ensuring the achievement of the overall TEN-T policy goals. Conversely, any combination of scenarios for which the assessment included insufficient (i.e. negative [ - ] or none [ 0 ]) impacts on any of the drivers was discarded for further consideration as a policy option. I.Insufficiently addressing the "planning" driver, that underpins aspects of TEN-T fragmentation due to the absence of a genuine European design, will mean perpetuating current physical – geographical and modal – fragmentation problems (missing cross-border links, missing or insufficiently developed inter-modal nodes/platforms, traffic bottlenecks) and failing to ensure "the establishment of a complete and integrated TEN-T that would maximise the value added for Europe of the network ". II.Insufficiently addressing the "interoperability" driver, even in a scenario where the physical fragmentation aspects are addressed, will lead to a situation where, due to limited interoperability, the TEN-T will still fail to function as an "integrated" network. III.Insufficiently addressing the "limited cooperation among Member States in project implementation" driver would mean failing to fully leverage the efforts towards improved European planning coordination and interoperability. Continuing incongruence and delays in building cross-border links (see p. 13 in this report) would lead to an undesirable scenario where the impact of high investments of EU and Member States resources (financial but not only) would be importantly diluted, as sections on the TEN-T with significant EU-added value will fail to be timely delivered. IV.Finally, insufficiently addressing the "conditionality of EU funding instruments" would mean risking that the efficiency of (limited) EU and Member States funds would remain suboptimal. They would continue to be dispersed towards favourite (i.e. highly politically rewarding) Member States projects, rather than being focused towards projects that would make most EU added value sense (i.e. from an enhancing overall EU competitiveness and balanced territorial development perspective). The outcome of this selection process is summarised in the table 5 below. A more detailed assessment of each scenario's impacts on the problem drivers is presented in Annex 3 to this report. Table 5: Effectiveness in addressing current problem drivers

Impacts on Options Planning coordination Interoperability (adoption of common standards & systems) Member States cooperation in project implementation Conditionality of EU funding A1B1 Business as usual / Continuation with current 30 PPs and current implementation approach [0] Continued limited coordination in a bottom-up process [0] Slow but not sufficient progress [+] Improvements due to continued European Coordinators' support [0] Current provisions are maintained A1B2 Continuation of current 30 PPs but with no further EU implementation support [0] Continued limited coordination in a bottom-up process [0/-] Rhythm of adoption likely to slow down [-] Likely deterioration due to removal of European Coordinators and TEN-TEA support [-] Likely shift towards projects of primarily MS rather than EU interest A1B3 Continuation of current 30 PPs with a purely regulatory approach to implementation [0] Continued limited coordination in a bottom-up process [0/+] Progress but in a likely slow rythm [+] Improvements but likely not to the extent aimed for [0/+] High on paper but likely limited in practice due to implementation inefficiencies A1B4 Continuation of current 30 PPs with reinforced coordination [0] Continued limited coordination in a bottom-up process [++] Sustained progress due to specifically targeted support [+++] Substantial increase due to strong emphasis on binding coordination commitments [+++] High due to strong focus on both binding commitments and measures to support implementation A1B5 Continuation of current 30 PPs with full EU operational management [0] Continued limited coordination in a bottom-up process [++] Strong EU-level coordination but likely strained implementation capacity [-] Likely resistance by MS to shifting project implementation responsibilities at EU agencies level [+] High in principle but likely much less effective in practice due to inefficiencies in implementation in an overly top-down approach A2 Guidelines discarded [-] MS are left to choose new projects for development in complete freedom n/a n/a n/a A3B1 MS selection of new PPs (Essen 2) with current implementation approach [+] Better criteria leading to better EU steering of PP selection process [0] Slow but not sufficient progress [+] Improvements due to continued European Coordinators' support [0] Current provisions are maintained



A3B2 MS selection of new PPs (Essen 2) with no further EU implementation support [+] Better criteria leading to better EU steering of PP selection process [0/-] Rhythm of adoption likely to slow down [-] Likely deterioration due to removal of European Coordinators and TEN-TEA support [-] Likely shift towards projects of primarily MS rather than EU interest A3B3 MS selection of new PPs (Essen 2) with purely regulatory approach to implementation [+] Better criteria leading to better EU steering of PP selection process [0/+] Progress but in a likely slow rythm [+] Improvements but likely not to the extent aimed for [0/+] High on paper but likely limited in practice due to implementation inefficiencies A3B4 MS selection of new PPs (Essen 2) with reinforced coordination [+] Better criteria leading to better EU steering of PP selection process [++] Sustained progress due to specifically targeted support [+++] Substantial increase due to strong emphasis on binding coordination commitments [++] Strong focus on both binding commitments and measures to support implementation but diluted by lower levels of coordination in planning A3B5 MS selection of new PPs (Essen 2) with full EU operational management [+] Better criteria leading to better EU steering of PP selection process [++] Strong EU-level coordination but likely strained implementation capacity [-] Likely resistance by MS to shifting project implementation responsibilities at EU agencies level [+] High in principle but likely much less effective in practice due to inefficiencies in implementation in an overly top-down approach A4B1 Dual layer (core and comprehensive) network with current implementation approach [++] Enhanced coordination due to clear methodology for network configuration applied consistently across all MS [0] Slow but not sufficient progress [+] Improvements due to continued European Coordinators' support [0] Current provisions are maintained A4B2 Dual layer (core and comprehensive) network with no EU implementation support [++] Enhanced coordination due to clear methodology for core network configuration applied consistently across all MS [0/-] Rhythm of adoption likely to slow down [-] Likely deterioration due to removal of European Coordinators and TEN-TEA support [-] Likely shift towards projects of primarily MS rather than EU interest A4B3 with purely regulatory approach to implementation [++] Enhanced coordination due to clear methodology for core network configuration applied consistently across all MS [0/+] Progress but in a likely slow rythm [+] Improvements but likely not to the extent aimed for [0/+] High on paper but likely limited in practice due to implementation inefficiencies



A4B4 Dual layer (core and comprehensive) TEN-T Reinforced coordination [++] Enhanced coordination due to clear methodology for core network configuration applied consistently across all MS [++] Sustained progress due to specifically targeted support [+++] Substantial increase due to strong emphasis on binding coordination commitments [+++] High due to strong focus on both binding commitments and measures to support implementation and strong planning coordination A4B5 Dual layer (core and comprehensive) network with full EU operational management [++] Enhanced coordination due to clear methodology for core network configuration applied consistently across all MS [++] Strong EU-level coordination but likely strained implementation capacity [-] Likely resistance by MS to shifting project implementation responsibilities at EU agencies level [+] High in principle but likely much less effective in practice due to inefficiencies in implementation in an overly top-down approach A5B1 Dense TEN-T with current implementation approach [+++] Strong planning coordination for entire TEN-T (and not just a selected core) [0] Slow but not sufficient [+] Improvements due to continued European Coordinators' support [0] Current provisions are maintained A5B2 Dense TEN-T with no further EU implementation support [+++] Strong planning coordination for entire TEN-T (and not just a selected core) [0/-] Rhythm of adoption likely to slow down [-] Likely deterioration due to removal of European Coordinators and TEN-TEA support [-] Likely shift towards projects of primarily MS rather than EU interest A5B3 Dense TEN-T Purely regulatory approach to implementation [+++] Strong planning coordination for entire TEN-T (and not just a selected core) [0/+] Progress but in a likely slow rythm [+] Improvements but likely not to the extent aimed for [0/+] High on paper but likely limited in practice due to implementation inefficiencies A5B4 Dense TEN-T with reinforced coordination [+++] Strong planning coordination for entire TEN-T (and not just a selected core) [++] Sustained progress due to specifically targeted support [+++] Substantial increase due to strong emphasis on binding coordination commitments [+++] High due to strong focus on both binding commitments and measures to support implementation and high planning coordination A5B5 Dense TEN-T with full EU operational management [+++] Strong planning coordination for entire TEN-T (and not just a selected core) [++] Strong EU-level coordination but likely strained implementation capacity [-] Likely resistance by MS to shifting project implementation responsibilities at EU agencies level [+] High in principle but likely much less effective in practice due to inefficiencies in implementation in an overly top-down approach Legend: [-] negative; [0] none; [+] low; [++] medium; [+++] high. As the table above makes apparent, following this preliminary assessment three scenario combinations came out as clearly viable policy options – A3B4, A4B4, A5B4 (in green), with a forth at the limit – A1B4 (in yellow). The latter combination scores high in terms of positive impacts on all but one of the drivers, rendering it potentially relevant for further consideration. Nevertheless, when approached as a policy option, it became apparent that it would not make a viable alternative. A reinforced approach to coordination (B4) could importantly improve the rhythm and consequently possibly the cost-effectiveness of the current 30 priority projects, but would not solve the central issue of network fragmentation due to current planning (A1). As argued in part 2 of this report, the currently planned priority projects simply do not add-up into, nor support, a geographically coherent, well-integrated, multi-modal network, that adequately covers the territory of all the EU Member States. The efficiency of each scenario in attaining the specific policy objectives set out was also initially considered as part of the preliminary assessment process. However, it became apparent that, although an important information, cost estimates would not help discriminate among the options for the purpose of discarding them. Nevertheless, the preliminary estimates showed that a dense comprehensive network approach (A5) rendered any option including this planning scenario far too costly (as compared to the others) and difficult, if not impossible to implement within the envisaged 2030 horizon. Moreover, if fully implemented, the result would be a dense, high standard, abundantly multi-modal network that would likely be under-used (hence little cost-efficient) on many of its parts. In parallel, the Commission has also assessed the coherence of each policy option with the principles of subsidiarity and proportionality. As compliance with these principles is a sine qua non condition for any Union policy initiative, any policy option that did not fulfil this condition could not therefore constitute a viable alternative for action. The results of this screening are presented in the table below (for the detailed considerations, see Annex 3).

Planning A1 Business as usual/ Continuation with current 30 PPs A2 Guidelines discarded A3 MS selection of new PPs (Essen 2) A4 Dual layer (core and comprehensive) network A5 Dense TEN-T Subsidiarity and Proportionality Compliance Yes No Yes Yes No Implementation B1 Current implementation approach B2 no further EU implementation support B3 Purely regulatory approach B4 Reinforced coordination B5 Full EU operational management Subsidiarity and Proportionality Compliance Yes Yes No Yes No Table 6 : Compliance with subsidiarity and proportionality principle It became thus apparent that any policy option that included, at the level of planning, the "A2/Guidelines discarded" or the "A5/Dense network approach" scenarios, and/or at the level of implementation, the "B3/Regulatory approach only" or the "B5/EU full operational management", could not constitute viable policy options, due to their contravening of the principles of subsidiarity and/or proportionality. Following this assessment, option A5B4 was discarded for further consideration as a viable policy option, in spite of the fact that, according to the effectiveness criteria, would have been most promising in terms of addressing current drivers and thus achieving the TEN-T policy objectives. 4.3.Description of the policy options retained for in-depth assessment In light of the above pre-screening process and taking into account that the pre-screened policy options should also respect the proportionality and subsidiarity principle, the two alternative policy options retained for in-depth impact assessment are the scenario combinations "A3B4/Selection of new priority projects with reinforced coordination" – labelled "Option 1", and "A4B4/Core network approach with reinforced coordination" – labelled "Option 2". The "A1B1/Business as usual" policy option, described extensively above in section 2.4 of this report, has featured in the subsequent impact assessment process as the reference/baseline scenario; for convenience, it has been labelled "Option 0". 4.3.1. Content of Policy Options Policy Option 0: Baseline scenario Policy Option 0, which has been presented in section 2 above, represents the future without any additional policy intervention to change current trends. Policy Option 1: "Essen 2" with reinforced corridor coordination Under this option, the approach to planning the TEN-T remains unchanged, relying on the predominantly bottom-up selection process as endorsed by the Essen European Council in 1994. The Member States will thus continue to be responsible for developing project proposals, while the Commission will select and prioritise projects that will be financially supported from the EU budget based on the extent to which the projects fulfil the criteria set out in the Guidelines. The 30 Priority Projects included on the current list will continue to be developed and funded according to the current Guidelines. The current Guidelines’ criteria for TEN-T identification and selection of projects of European interests will remain largely unchanged. The current TEN-T map will be however updated, to reflect evolutions in Member States' developed and planned infrastructure. In addition, drawing on the experience so far, and taking into account the expert and stakeholder recommendations, criteria will be revised in order to better specify the elements that would constitute the European added-value of the Priority Projects that will be subsequently selected. In particular, references to multi-modality aspects and links to third countries will be added. This should ensure that new Priority Project proposals will more effectively address current fragmentation aspects resulting from a limited coordination in TEN-T configuration planning. As far as implementation is concerned, the individual Priority Project D