ix it 
* tir COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 30.05.1996 
COM(95) 571 final 
TRANS-EUROPEAN NETWORKS 
ANNUAL REPORT 
TO THE 
COUNCIL AND 
THE EUROPEAN PARLIAMENT 
DECEMBER 1995 

CONTENTS 
CONCLUSIONS AND RECOMMENDATIONS 4 
TRANS-EUROPEAN ENERGY NETWORK 6 
Table: Financing the 10 priority energy projects 10 
TRANS-EUROPEAN TELECOMMUNICATIONS NETWORK 11 
TRANS-EUROPEAN TRANSPORT NETWORK 16 
Table: Progress on Transport priority projects 24 
Table: Problems concerning transport priority projects 25 
Annexes: Setting up public/private partnerships in the transport sector 
I. Financing : Public/Private Partnerships 26 
II. TEN and Competition in the transport sector 29 
III. Public procurement rules for transport TEN 33 
IV. Project authorities for trans-European network projects 34 
CONNECTING WITH CENTRAL AND EASTERN EUROPE AND THE 
MEDITERRANEAN BASIN 36 
JOINT ENVIRONMENTAL PROJECTS 40 
Annexes 
I Description of some specific waste project examples 48 
II Description of some specific water project examples 52 
III Criteria for Joint Environmental Projects 54 
GENERAL TABLES: 
Progress of TEN legislative procedures 55 
Community funding of TEN 56 
The European Council, at its meeting in Brussels in December 1993, asked the 
Commission to submit to it each year in December a report on progress of the trans-
European infrastructure networks in the spheres of transport and energy and on the 
implementation of the operation programmes in the area of information infrastructures. 
The present report is drafted in the light of the conclusions of the 
Essen and Cannes European Councils. 
CONCLUSIONS AND RECOMMENDATIONS 
v. 
1. Trans-European networks are vital to jobs, competitiveness and cohesion in the 
European Union. Considerable progress has been made since Essen, but there remain 
substantial problems related to the level of priority of TENs projects in Member States and, 
especially in transport, their financing requires greater effort. 
2. For energy TEN, the Commission considers that there is a need for Member States 
to speed up the examination of requests for authorizations. Similarly, the EIB should 
continue the examination of requests for financing for priority projects. The rapid adoption 
of the TEN energy guidelines is essential so that the Commission can implement them soon. 
The creation of the Internal Energy Market should also be a priority. 
3. As far as telecommunications TEN is concerned, speedy adoption of the proposed 
TENs Telecom Guidelines is needed, together with confirmation of the importance of the IDA 
Programme as an essential component of TEN-Telecom 
4. The development of environmental network infrastructure requires approval of the 
definition of Joint Environmental Projects (JEPs) and their selection criteria. The Commission 
also supports moving forward into an operational phase in which a limited number of pilot 
projects in the waste and water sector will be selected and launched. Provisions should be 
considered so that JEPs could receive administrative and financial support analogous to that 
provided for trans-European networks. 
5 For the transport TEN, the Council and European Parliament should compromise in 
order to adopt the transport network guidelines as quickly as possible 
6. Progress has been slower than anticipated on parts of some priority projects. The 
Member States concerned need to make concerted efforts to solve the problems that are 
holding up these projects, which will require national priorities to be adapted in consequence. 
Unfortunately, the national authorities concerned see no potential for substantial cost 
reductions without severely affecting the scope and viability of most of the priority projects. 
Research done for the Commission shows that the socio-economic return of international 
transport infrastructure projects is greater than previously thought. This should be taken into 
account when adopting the necessary decisions, requested by the Essen European Council, to 
"top up" the funds currently available for TENs. 
7 Although the examination of individual priority projects shows substantial scope for 
enhancing the involvement of the private sector, very few public-private partnerships (PPPs) 
are being set up. In order to help in their promotion, the Commission has set up a "One-
Stop" Help Desk on the application of Community public procurement and competition rules 
in relation to PPPs It urges Member States to keep up political pressure to implement PPPs 
and, where there are legal or administrative barriers to the implementation of PPPs, to make 
.Extract from the Commission's "Progress on TENS" report to the Madrid 
European Council (CSE (95) 571). 
any necessary changes. There is a need to develop public support mechanisms, including 
public equity, particularly for projects involving mixed sources of financing. Therefore the 
Commission supports~*he widening of the activities of the EIF to equity operations. 
8. Unfortunately, Member States' funding for the priority projects has not always been 
made available as anticipated, resulting in delays in progress. Clear financial shortfalls are 
revealed so far for two priority projects, for which the Member States concerned are seeking 
Community financing: 
Project Financial shortfall 
0995-99) 
PBKAL Belgian section 200 MECU 
Netherlands section 120 MECU 
UK section (CTRL) 240 MECU 
HST East 200 MECU 
9 The Commission urges the Member States concerned to complement the measures they 
have already taken and try to identify additional support to help meet these shortfalls. The 
current TEN budget line cannot accommodate these requests, and if Member States' action 
were to fail to make up the financial shortfalls, this would lead to serious delays to these 
already mature projects Given the strong element of Community interest in these projects, 
additional Community support would be justified. 
10. The Commission welcomes the establishment of "project authorities" in the form 
multi-national European Economic Interest Groupings (EEIGs) for the promotion phase of 
certain links to ensure better coordination and promote the possibilities of PPPs. It notes the 
particular problems that have arisen in some railway projects and urges the Council to adopt 
a European Company Statute, which would provide a legal vehicle for cooperation during the 
construction phase. 
11 The Commission will focus its own work on TENs projects more sharply to help 
accelerate progress on the ground 
THE TRANS-EUROPEAN ENERGY NETWORK 
I. Progress in the development of the trans-European energy network 
The regulatory framework for trans-European energy network 
1 Regarding the Community legislation specific to energy TENs, the two Commission 
proposals on the "Guidelines" and "More favourable Context" for the development of 
trans-European electricity and natural gas networks2 were the subject of a common 
position of the Council on 29 June 1995 Their second reading by the European 
Parliament was recently completed and the final adoption of these proposals is expected 
by the end of 1995 or beginning of 1996. The "Guidelines" identify 43 projects of 
common interest which represent a reference scheme for the development of energy 
networks in the coming years. The 10 priority projects confirmed at Essen are included 
in this scheme 
2 After the adoption in September 1995 of the regulation drawing up the rules for the 
granting of financial aid to the TEN, the Commission has been able to decide the first 
commitment of such aid to energy TEN projects, using the 1995 budget allocation. 
3. Regarding the implementation of the Internal Energy Market, progress has been 
recorded in the discussion of the Commission proposal for the electricity market, and it 
is hoped that the Council could adopt a common position on this proposal before the end 
of this year. Such agreement would allow discussions on the Commission proposal for 
the natural gas market to resume as from the beginning of 1996 The Treaty rules, 
including the competition rules and procedures, are naturally applicable to the energy 
sector This means in particular that TENS should not lead to a reinforcement of any 
dominant position of undertakings which control them. 
Progress in building the infrastructure for the trans-European energy networks 
4 The Essen Summit identified a list of 10 priority projects in the energy sector, 5 within 
electricity networks and 5 within natural gas networks. These energy priority projects are: 
(1) Italy-Greece: electricity interconnection 
(2) France-Italy: electricity interconnection 
(3) France-Spain: electricity interconnection 
(4) Spain-Portugal: electricity interconnections 
(5) Denmark electricity connection East-West 
COM (93) 685 f of 19.1 1994 
(6) Greece: main gas pipelines and LNG station 
(7) Portugal: main gas pipelines and interconnections with 
Spain 
(8) Spain: interconnections with Portugal and main gas 
pipelines in Extremadura and Galicia 
(9) Algeria-Morocco-Spain: gas pipeline 
(10) Russia-Belorussia-Poland-EU: gas pipeline. 
5. In connection with these priority projects, some progress has been achieved during the 
twelve months which have passed since the Essen Summit. This progress concerns 
mainly the natural gas projects in Spain and Portugal. 
Out of the 10 energy priority projects agreed at Essen Summit: 
• the 5 natural gas projects are under construction, though for the Russia-
Belorussia-Poland-European Union project only the first phase is under way and for 
the Spanish projects the main pipelines in Galicia and Extremadura are still subject 
to definition. 
• 1 out of the 5 electricity projects is under construction (the Northern electricity 
interconnection between Portugal and Spain); 
• the construction of 3 other electricity projects has not yet started: the electricity 
interconnections between France-Italy and Italy-Greece because of delays in the 
authorization procedures and East-West Denmark connection, this project being the 
subject of a reassessment by its promoters; 
• as for the last electricity project, the electricity interconnection between France and 
Spain, construction has been suspended on the Spanish sice, waiting for the 
authorization procedures to be completed on the French side. 
6. Regarding the remaining common interest projects identified by the TEN Energy 
Guidelines, construction work has started in a few cases, although in most cases, the 
projects are in their pre-construction phase. 
Financing the development of the trans-European Energy Networks 
7 In general, the financing of energy networks is secured by the companies in the sectors 
concerned, using their own resources or calling on the capital market For the 10 priority 
projects, the Christophersen Group considered that financing problems could be solved 
through the use of existing Community financial instruments. 
8. The total investment cost for the 10 priority projects is estimated at around 4350 
MECU; this estimate does not include the cost of the sections of priority projects to be 
built in third countries (in Algeria and Morocco for the Maghreb gas pipeline and in 
Poland, Belarus and Russia for the new Russia-EU gas pipeline). A significant part of 
the investment cost for the development of these 10 priority projects will come from the 
companies of the energy sectors concerned. 
9. Community funds available to these priority projects are mainly aids from the Structural 
Funds (for projects in Objective I regions) and loans from the EIB and the Commission 
(under the ECSC Treaty). Complementary support might be given from the EIF (loan 
guaranties) and from the TEN Energy budget line. 
10. Since 1993 the Structural Funds have already committed in favour of the energy 
priority projects around 640 MECU and are assessing demands for around 758 MECU. 
1 1. Likewise since 1993 Community Loans of the order of 1380 MECU have been already 
agreed to by the EIB and the Commission (ECSC) in favour of energy priority projects; 
requests for loans of more than 500 MECU are still being examined by the EIB and 
Commission Services. It is worth noting that included in the figure of 1380 MECU 
mentioned above are loans of about 540 MECU the EIB has committed for the sections 
of the Maghreb gas pipeline to be build in Algeria and Morocco. 
12. Regarding the granting of financial support from the TEN Energy budget line, an 
amount of 12 MECU has been recently committed with the aim of promoting feasibility 
and other studies concerning 12 projects of common interest from the Guidelines list, 
of which 3 are Essen priority projects (the France-Spain and the Spain-Portugal 
electricity interconnections and the Greek natural gas project) 
13. Regarding the activity of the EIF, loan guarantees for an amount of 207.7 Mecu were 
signed for 2 key gas projects (the Trans-Mediterranean II gas pipeline to Italy and the 
natural gas project in Portugal) the last project being in the Essen priority list This 
represents about 40% of the total amount guaranteed by the Fund during the first year 
and a half of operation (1994,1995) 
( Connecting the trans-European energy networks to third countries 
14. Priority projects and other common interest projects do take account of the need of the 
energy networks of the Community to be interconnected with those of third countries 
The TEN Energy Guidelines also provide for a procedure to be followed in order for 
such projects to be recognised as "mutual interest projects" by the third country(ies) 
concerned. 
15 Connection of the CENTREL (Poland, Czech Republic, Slovakia and Hungary) and 
UCPTE electricity grids is scheduled for the last quarter of 1995 This will represent 
air important stage in the integration of the European electricity grids. Further extension 
of the UCPTE grid towards the Balkan countries and the interconnection of the 
extended UCPTE grid with the CIS countries are the subject of studies under the 
PHARE and TACIS programmes 
16. Studies of East-West gas interconnections in Europe and of regional projects of 
interest to Central and Eastern European and/or Union countries have been and are being 
made under the PHARE programme. These studies complement actions to be taken from 
1995 in connections with projects of common interest identified by the Community 
guidelines. 
II Problems remaining to be solved 
17. The implementation of several priority projects is still facing problems, owing to the 
difficulty of obtaining the authorizations for the construction and /or of gathering finance 
for the investment. 
18. Projects still encountering authorization problems delaying the beginning of their 
construction are: 
• the Italy-Greece electricity interconnection; 
• the France-Italy electricity interconnection; 
• the France-Spain electricity interconnection 
19 Projects still encountering economic appraisal and/or financing problems are 
• the Italy-Greece electricity interconnection 
(loan requested from the EIB); 
• the Denmark East-West electricity connection 
(the electricity companies concerned are reassessing the project). 
• the Greek natural gas project 
(EIB and Commission (ECSC) services have laid down certain conditions for the 
granting of loans); 
• the Portuguese natural gas project 
(loan requested from the Commission (ECSC)); 
• the natural gas projects in the Spanish regions of Extremadura and Galicia 
(redefinition of the projects, Structural Funds (ERDF) commitments need to be 
redefined accordingly); 
• the Spanish section of the Maghreb natural gas pipeline project (Structural Funds 
(ERDF) aid has been sought and an EIB loan is envisaged) 
TABLE 1 
TRANS-EUROPEAN ENERGY PROJECTS: FINANCING OF THE 10 PRIORITY 
PROJECTS 
(a) 
ELECTRICITY NETWORK PROJECTS 
a4 Italy - Greece interconnection 
b6 France - Italy interconnection. 
b7 France - Spain interconnection. 
b10 Spain - Portugal interconnections 
c2 Denmark: East-West connection. TOTAL 
COST 
304 
170 
115 
110 
170 EUROPEAN UNION 
LOANS 
decided 
[or under appraisal] 
EIB 
[100] 
57 ECSC (in 
FINANCIAL 
CONTRIBU­
TION FROM 
THE ERDF(b| 
decided 
35 
Not eligible 
Not eligible 
Not eligible MECU) 
REMARKS 
ON THE 
FINANCING 
SCHEME 
Not finalized. 
Finalized. 
Finalized. 
Finalized 
Not finalized 
NATURAL GAS NETWORK PROJECTS 
e6 Greece 
Main pipeline system 
and LNG terminal 
e5 Portugal 
Main pipeline system 
f6 Spain-Portugal 
Interconnections Portugal-Spain 
Main pipeline systems in 
Extremadura and in Galicia 
h4 Algeria-Morocco-Spain 
Section from Tangier-, (MO) to 
Cordoba (SP) 
h7 Pussia-Belarus-Poland-E.U 
Section in Germany 
TOTAL 1285 
462 
386 
72 
446 
830 
4350 7 + [219] 
(e) 
354 
(e) 
224 
(e) 
100 
(c) 
742 + [319] 83 + [97] 
(e) 
[102] 
(e) 
83 + [199] 683 
173 
156 
(•') 
1047 Not finalized 
Not finalized 
EIF loan 
guarantee 
Finalized. 
EIF loan 
guarantee 
Not finalized. 
Not finalized 
Not finalized 
(a) Same project code as in Guidelines (OJ No C 216 of 21/8/1995) 
(b) Under the Community Initiatives REGEN (89-93) and INTERREG II (94-99) and under the Community support 
frameworks for the periods 89-93 and 94-99. 
(c) Total EIB loans decided for the "Maghreb pipeline" amount to 641 MECU, for works in Algeria, in Morocco and 
for the Gibraltar crossing (Tangiers - Tarifa). 
(d) Sections in the Eastern Lander of Germany might be eligible to assistance from the ERDF. 
(e) EIB or ECSC loans are referred to the global project which is larger than the priority project concerned. 
Telecommunications Trans-European Networks 
I. Progress to Date in This Field 
1. The trans-European Telecommunications networks (TEN-Telecom) have been subject since 
1993 to a number of actions with a view to define the proposals to be made to the Council and 
European Parliament, in particular for the adoption of a series of guidelines as foreseen in the 
Title XII of the EU Treaty. Already in 1993, two initial proposals of guidelines were sent to the 
Council and Parliament: one concerning trans-European networks for communication between 
Administrations (TNA-IDA)1; one covering a subset of TEN-Telecom, i.e. TEN-ISDN2. 
Furthermore, in July 1993, the Commission submitted a communication on TEN-IBC3 to the 
other Institutions. 
2. The Council of Ministers and the European Parliament have adopted the TEN Financial 
Regulation and the TEN-ISDN guidelines. Moreover, the Proposal concerning the general TEN-
Telecom guidelines is being examined by the Council and Parliament, and a policy debate is 
expected for the Telecommunications Council on 27 November 1995. The TNA-IDA initiative 
gave way to the proposal for an IDA Programme This was adopted at the Industry Council 
meeting on 6 November 1995. 
3. However, despite the progress mentioned above, previous European Council meetings (e.g. 
Essen) expressed themselves only in general terms about TEN-Telecom. It is therefore suggested 
that upcoming European Council meetings should consider TEN-Telecom in a similar way as 
other TEN sectors such as transport or energy for which specific projects have been identified. 
Certain specific aspects of the Telecommunications sector, which lead to act in this sector in a 
partially different way as in the other TEN sectors, have to be recalled: 
i) the bottle-neck in the field of telecommunications is associated mainly with the development 
of applications and with problems of interoperability of generic services at European level (cf. 
the Bangemann Group report), 
ii) any action has to take account of the increasingly liberalized context of the 
telecommunication sector. 
TEN-TELECOM IN THE CONTEXT OF THE LIBERALIZED MARKET 
4 The liberalization of telecommunications implies in particular that the projects to be supported 
have to be identified following a procedure which allows competition between initiatives 
stemming from market or social needs rather than, as in. the other TEN sectors, on the basis of 
proposals made by the Administrations of the Member States In this context, the role of the 
TNA-IDA concerns iclcinalics applications for information exchange between Administrations 
ISDN (Integrated Services Digital Network) is a network allowing transmission under an integrated and digilali/.cd 
form of voice, data and fixed images, al medium speed rates (Mkb/s). 
IBC Inieuraicd Broadband Communication 
public authorities is to select the priority fields in which projects may receive support. 
Community support should be awarded to projects in areas of public interest which will bring 
strong socio-economic benefits and for which the financial viability is not immediately 
sufficient. These projects should be implemented in the framework of public / private 
partnerships including in particular local or regional authorities. The support awarded has to be 
compatible with competition law and state aid regulations. 
5. In this perspective, supporting the development of trans-European telecommunications 
applications, generic services and networks will bring an important contribution to the 
exploitation of the benefits of the information society. 
SCOPE OF THE IDA PROGRAMME 
6. The IDA Programme concentrates on maximizing interoperability, with specific reference to 
increasing the efficiency, effectiveness and transparency of public services in the context of the 
internal market. 
7. Member State Administrations and European Institutions are implementing interoperable 
telematic networks and services, in accordance with the Council decision, in order to exchange 
information by means of activities "in the following specific fields: 
Production and promotion of architecture guidelines and operational requirements to achieve 
interoperability 
Practical introduction of electronic mail on the basis of X.400 
Practical implementation of trans-European networks in the following areasCustoms and taxes; 
Fisheries; Agriculture; Social security; Public procurement; Health; Statistics; Commercial 
policy; Competition policy; Culture; Telematic projects aiming at facilitating the Community 
decision making process; Support to agencies (Environment, Internal market, Public health, 
Translation centre). 
Horizontal activities (provision of generic services, progress in the legal and contractual 
framework ) 
II. Results (1993-1995) 
TELECOMMUNICATIONS - GENERAL 
8. The preparatory phase for TEN-ISDN and TEN-IBC involved budgetary resources of 7 MECU 
in 1993 and 14 MECU in 1994. During the 1995 exercise, where a budget of 22 MECU was 
allocated, these types of action were further developed and pursued 
9. These preparatory projects were either feasibility studies of pilot projects, in the domain of 
EURO-ISDN and broadband communications, aiming at improving the understanding on the 
type of actions and on the priorities which should be implemented in realising trans-European 
networks in these areas. 
10. These actions allowed the analysis of the principal obstacles regarding the deployment and 
usage of ISDN based solutions through a number of feasibility studies and pilot projects, in the 
field of health care, teleworking, education, applications for SMEs, desktop multimedia 
services. In addition, studies on terminal issues and quality of service in the field of ISDN were 
performed. 
11. The main objective of the broadband related efforts (TEN-IBC) was to gain a better 
understanding of the potential demand and the technico-economic viability of broadband 
applications, eg. in the domains of ATM-bandwidth4 on demand services, multimedia e-mail, 
scientific networks, city information highways, transfer of radiological images on ATM 
networks. These projects have triggered the constitution of common interest groups and 
consolidated the basis for launching viable trans-European applications, in particular in the 
fields of public interest, during the years to come. 
IDA PROGRAMME 
12. The following results have already been achieved: 
production of the IDA architecture guidelines; 
introduction of a backbone X.400 network offering services over and above those offered 
by public Administrative Domains (ADMDs) and in all 15 Member States, 
operational or pilot networks in the context of the following projects: Social security 
(TESS / SOSENET); Employment (EURES); customs & taxation (QUOTA, VIES, EBTI, 
TARIC): Agriculture (PHYSAN, IDES); public procurement (SIMAP), fisheries (FIDES); 
statistics (DSIS) 
e-mail connectivity for an initial group of committees comprising 270 members; 
provision of e-mail services for the European Institutions 
ATM (Asynchronous Transfer Mode) is an advanced transmission and switching system using very high 
transmission speeds, which allow for instance the transmission of TV quality images 
III. The-Challenge for the Future 
TELECOMMUNICATIONS-GENERAL 
13. The future work programme for the trans-European telecommunications network aims to 
promote the implementation of trans-European telematic applications of collective interest 
based on interoperable generic services and on interconnected digital networks with a view to 
facilitating the transition towards the information society; 
improving competitiveness of European enterprises and strengthening the Internal 
Market; 
strengthening economic and social cohesion; 
stimulating new activities leading to job creation. 
Within these broad objectives, the 1996 work programme will establish specific priorities for 
each of the three levels : 
the feasibility study, the validation, and the deployment of applications of collective 
interest, broad enough to reach a critical mass of users and generate a strong 
participation of the private sector in providing investment in the context of 
public/private partnerships; 
the promotion of interoperable services in Europe, by establishing and implementing 
common specifications based on European and world-wide standards, and their 
extension to a multimedia environment; 
the promotion and stimulation of access to trans-European interconnexted and 
standardised basic networks, and in particular the promotion of EURO-ISDN, the 
development of broadband networks (mainly based on the ATM technology), and 
their interconnection to mobile and satellite networks 
Lastly, a specific priority for Community action is given to SMEs in two areas : 
identification of applications which have an important impact on their activities; 
a minimum presence of SMEs in the consortia responding to the Commission calls 
for proposals 
14 These issues have been considered in the Communication of the Commission to the Council 
and European Parliament presenting the methodology for the implementation of the information 
society applications and proposing the TEN-Telecom guidelines" The concrete implementation 
of the guidelines during the year 1996 will offer the opportunity to fine-tune these principles 
in concrete cases 
IDA PROGRAMME 
The IDA Programme will obviously pursue the implementation of telematic networks while at 
the same time addressing and resolving a number'of key issues 
'Document COM(V5)224 final of .11 Ma\ 1W5 
14 
15. The legal problems affecting all electronic interchange of information / documents (such as 
authentication of the user(s), electronic signature, data protection and data security) are 
encountered by IDA projects as a matter of course. This is particularly sensitive within public 
administrations, given the nature of the information exchanged. Member States have quite 
different legislation in this area. Harmonisation is urgently needed. Some studies to this effect 
have been started. 
16. Commitment from Member States is vital for the success of IDA projects This has not 
always been forthcoming. 
17. The European Parliament Opinion and the Council of Ministers have differing views on the 
legal basis for the IDA Programme. Such differences should not endanger the success of 
the Programme, as, in the past, they have with respect to budgetary resources. 
IV. Conclusions 
18. Telecommunications networks are the backbone of the future information society. 
19. In the surge of the increasing Community activity for the promotion of the information society, 
1996 will be the first year for a regular action in the field of trans-European 
telecommunications networks. This action is planned to be intensified during the following 
years, with a view to bringing a substantial contribution to the fruition of the economic and 
social benefits linked to the development of new services and applications on the information 
highways. 
To allow for the implementation of projects in all proposed domains, the Council and the 
Parliament are requested to adopt as quickly as possible the proposed Decision on the 
TEN-Telecom Guidelines. 
20 IDA is a concrete programme, already delivering results. 
The continued implementation of these administrative telematic networks will 
dramatically improve the management of the internal market and bring direct benefits 
to European citizens. The European Council is therefore requested to confirm the 
importance of the IDA Programme as an essential component of TEN-Telecom. 
15 
TRANS-EUROPEAN TRANSPORT NETWORK 
I Progress 
1. The development of the Trans-European Transport Network (TEN-Tr) requires the building 
or upgrading of links for the various modes of transport, in particular for the road and rail 
network. 
TEN 
Transport 
(common 
position) 
Network 
Priority 
Projects all railways 
existing 
50,300 add or 
upgrade 
23,600 
6,766 HST 
existing 
5,300 add or 
upgrade 
13,600 
4,044 roads 
existing 
48,000 add or 
upgrade 
27,300 
5,234 
1 
The "all railways" figures include high speed (HST) and conventional lines. In the years 1993-
1995 about 2500 km of roads and about 2000 km of railways have been started. Substantial 
work has also been done on the airports of the TEN-Tr. An important upgrading programme is 
being prepared for the ports, which is due to be implemented next year and focuses particularly 
on short sea shipping. 
Priority Projects 
2. Community resources have been focused on the priority projects endorsed by the European 
Council at Essen, (see Table 1 for progress on these projects). 
Community legislative framework 
3. In October 1995, a Common Position was adopted in the Council on the Commission 
proposal6 on the guidelines for the development of a trans-European transport network The 
European Parliament will shortly complete its second reading. 
4. The Council Regulation on Financial Aid for TENs7 came into force on 23 September 
1995. 
5. The Council adopted a common position on the High Speed Train Interoperability 
Directive8 in June 1995. The "Association Européene pour l'Interopérabilité Ferroviaire" (AEIF) 
has been established,to help develop standards under this Directive 
Commission proposal No CO\l(94) 106 
7 Council Regulation No. 2236/95/fiC. 
K Commission proposal No COM (94) 107 
Financing 
6. An overview of the present status of financing for the TEN-Tr and in particular the 14 
priority projects is set out in the following table (all figures in MECU): 
Network 
F'riority 
Projects 
only Total 
costs up 
to 2010 
400,000 
99,000 Total Expenditure9 
95-99 
220,000 
45,000 95 
>11,000 
c. 2,600 EU grants up 
1993 to 1995 
Trans­
port 
Budget10 
625 
c. 
362.512 Structural 
Assistance 
11 
3,962 
687 EU loan operations up 
1993 to 1995 
EIB 
6,417 
5,800 EIF 
guarantees 
161 
71 
7. The European Investment Bank (EIB) has been contracting loans at a rate of IBECU a year 
for priority and related projects, and is likely to continue to do so. EIB loans for TEN projects 
are being extended in the framework of a "TEN window" set up by the Bank following the 
Essen Council13. In the course of 1995, it has concluded new lending operations for the 0resund 
(688 MECU) and some of the motorway projects. 
8 Created at the Edinburgh Summit in order to cover specific financial needs in relation to 
TENs, and formally established in June 1994, the EIF has already become involved in several 
priority TENs. In the case of Malpensa airport, 71 MECU worth of guarantees have been 
extended. The Fund is pursuing the identification of suitable financial arrangements for other 
priority projects, notably CTRL. 
9 The Essen European Council confirmed the objective of facilitating public-private 
partnerships (PPPs) for TEN-Tr projects (see Annex I). PPPs are in place for the Channel 
Tunnel Rail Link and West Coast Main Line in the UK and have been introduced for three 
sections of the Greek motorways 
As reported In Member Stales to the Commission 11ns will include any financing <>i financial support received from 
Community sources 
Further to the TFN budget line of this year it includes grants under another budget line of-4 (JO Ml-'.Cl' between I WO and 1994. 
Hie Community structural assistance comprises the Cohesion and the structural funds in particular IFDFR; the figures are 
estimates 
Hie priority proiccts have only been identified as a group lor funding purposes since the adoption of the TF.Ns Financial 
Regulation However. Community funding was given to projects which became priority proieds. prior to 1995 
Loans extended under the TFN window can be characterised by longer maturities, adequate financial engineering and eail\ 
involvement m the financial and contractual structuring v\ the project. 
17 
10. The Community public procurement and competition rules are often perceived as a barrier 
to PPPs by project promoters. Analysis has shown that the rules do include flexibility for the 
setting up of PPPs. The Commission has agreed guidance on the application of Community 
public procurement and competition rules (see Annexes II and III). The Commission has also set 
up a One-Stop Help Desk (fax: 32 2 295 6504) on these matters encouraging early consultation 
by project promoters to give better guidance and support . 
11. The Commission is drawing up a "Common Transport Infrastructure Promotion 
Programme" (CTIPP), within the framework of Regulation 2236/95, to promote financial 
planning on a multi-annual basis for TEN-Tr projects. This will also provide an overview of 
Member States' commitments to projects within the TEN-Tr. 
Coordination 
12. The Commission has continued to hold project seminars for most priority projects; monthly 
meetings keep the Commission, the European Investment Bank (EIB) and the European 
Investment Fund (EIF) abreast of their respective activities; two high-level groups are ensuring 
better coordination of the satellite-based positioning and navigation project GNSS and the 
various aspects of road transport telematics Germany has taken on the coordination of the 
work on a radio-based traffic message channel for road traffic, with the help of 1 1 other 
Member States. 
13. The Essen European Council confirmed the need for cross-border "project authorities" for 
the larger international projects, reflecting the positive experience of such projects in e.g. the 
0resund project and the negative impact of a lack of such coordination e.g. on the PBKAL. 
"European Economic Interest Groupings" (EEIGs) are a suitable legal instrument to ensure cross-
bordei co-ordination in the planning phase of trans-national projects. A number of these have 
been established: "Alpetunnel" for the HST Lyon-Turin and "SEM" for the HST South 
"ERTMS" has been set up by the operators of the high speed train services to develop a 
common European control command system. The Austrian Government has created a new 
railway infrastructure management company for the Brenner link, in which they would like to 
include partners from other Member States. 
Third Countries 
14. The Commission considers the development of TENs links to central and eastern Europe as 
a fundamental part of the pre-accession strategy for these countries and is therefore 
concentrating efforts on these tangible connections ( see the relevant section of this annual report 
for more details). Work continues on linking the TEN-Tr to the networks of third 
countries,coordinated through the regular meetings of the G24, chaired by the Commission A 
Communication is being prepared on connecting TEN-Tr with third countries' networks 
15 The Barcelona Euro-Mediterranean Conference is expected to create a framework for 
promoting infrastructure projects in the area, with support from the newly established 
Community assistance programme MEDA. More details to be found in the relevant section of 
this report. 
18 
II. PROBLEMS 
Legislation ^*^ 
16. The guidelines for the TEN-Tr are only proceeding slowly through the legislative process, 
blocked by disagreement between the Council and the European Parliament on whether to 
include the priority projects agreed at Essen and on whether to include an article on the need for 
environmental assessments. The Commission believes every effort should be made to resolve 
these disagreements as soon as possible. 
Priority Projects 
17 See Table 2 for details. Problems have also been encountered because of Member States' 
reluctance to adapt their national priorities to take account of the trans-European networks. 
While welcoming the concept of TENs and their advantages for Europe in terms of 
competitiveness, jobs and economic cohesion, many countries take the attitude that it is up to 
other countries to develop the network, while they concentrate on national priorities without 
adapting their planning. 
18. Methods used by national authorities to evaluate the socio-economic benefits of their 
sections of large scale cross-border infrastructures substantially underestimate the true gains 
because they each exclude the benefits to non-nationals. Such methodology may be quite 
appropriate when deciding the level of national subsidy for a national project, however it means 
that, taken together, the national measures of socio-economic benefit miss out at least half of the 
international benefits. For example, the benefits to French passengers travelling on the English 
section of the London-Paris High Speed Train are being missed, as are the benefits to UK 
travellers on the French section 
19. Research done for the Commission in the context of the Paris-Brussels-Cologne-
Anistcrdam-London (PBKAL) High Speed Train working group and endorsed in their report 
shows that including these neglected benefits increases the socio-economic return of the project 
by a quarter, taking it up from 7.2% to 9.5%. 
20 This international element of the socio-economic return of a particular priority project can 
be thought of as the 'Community benefit'. Work is currently underway to measure how much has 
been neglected for other priority projects, alihough figures as large as that found for the PBKAL 
are unlikely since that project concerns so many Member States. 
21 Failure to take account of the 'Community benefit' of the priority projects is one aspect of a 
recurring problems of low or contlicting national priorities for many of the priority projects. This 
is reflected in terms of slow progress in defining projects (e.g. Brenner), contlicting scheduling 
on the part of national authorities each side of the border (e.g. PBKAL, HST-East), failure to 
resolve financing questions (e.g. PBKAL, Brenner, HST-East) and inability to form 
multinational projeci authorities to coordinate work on projects (e.g. PBKAL, Brenner). See 
below for a more de ;led analysis of problems concerning the priority projects. The 
Commission believes that Member States should re-examine the prioritisation at present given to 
TENs projects, especially those endorsed as priority projects at Essen. 
22. The Commission believes that the definition of several of the priority projects should be 
altered to reflect better the needs of the trans-European transport network. In particular, the High 
Speed Train East should be extended to the east and renamed the HST Paris-Munich-Vienna. 
The rail/combined transport north-south route in Ireland should be extended to Londonderry 
in the north. The Lisbon -Valladolid motorway should have a different route as proposed by 
the Portuguese government. The Ireland -UK-Benelux road link should be extended to cover 
rail and combined transport. This redefinition should be carried out in the context of discussion 
on the TEN guidelines. 
Financing 
23. As requested at the Cannes European Council, a review of the costs of the priority projects 
has been undertaken to try to identify possible reductions. The Commission has sought 
information on costs from Member States and has established working groups to examine in 
detail the possibility for cost reductions on some particular projects. PBKAL, HST East, the 
Brenner link of the HST North-South and the Greek Motorways The results so far indicate 
cost increases rather than savings and current estimated total investment costs for the 14 priority 
projects are about 99 BECU (compared to 92 BECU mentioned at the Essen European Council). 
Reduction of these costs seems impossible without drastically reducing the feasibility and scope 
of the projects. The Commission is prepared, with the help of expert advice, to go more deeply 
into the question of cost reductions with Member States; however, it considers the matter 
primarily a responsibility of the authorities in the Member States concerned. 
24. The budgetary restrictions in Member States continue to have a significant impact on 
transport infrastructure investment and appear likely to delay the progress of the TEN-Tr. 
25 The planned Community TEN-Tr budget for 1995 - 1999 provides less than 4% of the total 
required investment for the 14 priority projects over that period. Therefore, although Council 
Regulation 2236/95 on Financial Aid for TENs allows the Community to fund up to 10% of the 
total project costs, this will not be possible. Member States have bid for nearly three times the 
amount available this year 
26. Problems with a number of priority projects have highlighted the difficulties of not being 
able to make multi-annual financial commitments from the TEN-Tr budget. In early 1995, the 
Commission requested information from Member States on their plans up to 1999 and is now 
drawing up a multi-annual programme covering public, private and Community funding 
Analysis based on these figures shows severe financing problems for two projects in particular 
the HST East and the HST PBKAL For the PBKAL, Member States have requested 
additional Community to help meet these shortfalls of 200 MECU for the Belgian section, 120 
MECU for the Netherlands section and 240 MECU for the UK section (CTRL) The French 
Government has requested 200 MECU of additional Community funding for the HST East 
27. While innovative forms of infrastructure provision are emerging, the existing financial 
support mechanisms used by the public sector are not evolving at the same pace and are too 
20 
often oriented towards traditional public financing schemes. The Community is making specific 
efforts to adjust and reshape its financial support mechanisms to meet these emerging needs, for 
example by creating the EIF, setting up the "TEN window" at the EIB, and developing new 
forms of Community budget support. Member States have not really taken up the challenge of 
finding alternatives to public finance for projects. The rather low figures for the financial return 
on investment for many of the projects make such propositions unattractive for the private 
sector, unless public commitments are given to raise the profitability or reduce risk. That many 
Member States are not moving to promote PPPs is shown by the low proportion (c 5 %) of 
applications for funding from the TEN-Tr budget in the form of interest rate subsidies. In a 
number of Member States legal barriers still exist, which are at odds with the European 
Council's repeated calls for the promotion of PPPs 
28. Of the 14 priority projects, most are purely public, but some have left some scope for the 
involvement of private partners (Malpensa airport, TAV Turin-Venice, Netherlands and UK 
sections of PBKAL, West Coast Main Line, Ireland-UK-Benelux road links, PATHE 
motorway). Of those priority projects still at a more conceptual stage, the HST Lyon-Turin, 
the HST/combined transport Munich-Verona (Brenner), the Lisbon-Valladolid motorway 
and HST South are all serious potential candidates for public/private partnerships. 
29. The lack of appropriate sources of equity deserves a particular mention, as this creates a 
"confidence gap" related to the risk of the project, which acts as a barrier to the development of 
PPPs. Public equity support would attract investors and introduce new forms of flexibility in the 
financial structure of PPPs. The EIF's,statute specifically provides for the possibility of equity 
provision, however, a positive decision from the EIF's General Meeting is needed to allow the 
Fund to widen its activities, which are currently limited to issuing loan guarantees. The 
Commission strongly recommends that the necessary steps are endorsed by the Fund's 
shareholders at the next General Meeting. (See Annex I) 
30. Besides equitv. other forms of public support should to be used whenever appropriated to 
facilitate the launching of a particular project. The Commission is currently examining the 
possible role of several innovative means of support, such as subordinated lending and other 
forms of quasi-equity. contributions in kind, etc In view of the large financing needs of some 
of the projects (eg Brenner tunnel, HST Lyon-Turin) the need for a more diversified loan 
supply, possibly involving the borrowing and lending powers of the Community, could become 
apparent and should therefore not be excluded altogether The Commission is also examining 
other ways of reducing the confidence gap by helping counter non-commercial risk, since this is 
identified by the private sector as a particular obstacle to its involvement. The Commission will 
report on its work in 1996. (see also Annex I) 
Coordination 
31. Although some European Economic Interest Groupings (EEIGs) have been established, 
there is still considerable reluctance to create project entities (see Annex IV) The Commission 
feels this is particularly the case for the PBKAL and the Brenner link. The lack of such 
entities is often an additional barrier to the development of PPPs 
21 
32. The unlimited liability of EEIGs makes them inappropriate for the construction phase of a 
project. The Commission's proposal for a European Company Statute, on the table in the Council 
for several years, would overcome this problem . If agreement cannot be reached quickly on this 
broad-ranging instrument, at least an alternative version, tailor-made for transport infrastructure 
should be adopted. 
Imputation of costs 
33. Despite the important and constantly rising demand for transport infrastructure and related 
services, the transport sector appears unable to generate sufficient project related revenues. The 
role of direct user chaiges deserves closer examination, since this type of revenue would not 
only increase the scope for private involvement by increasing the financial profitability of the 
projects concerned, but would also help to foster competition between transport modes on a 
balanced basis, while improving economic resource allocation in general. User charges 
moreover allow the internalisation of all or part of the external costs related to transport. This 
will be considered further in the Commission's Green Paper on the Internalisation of External 
Costs 
?? 
III. CONCLUSIONS AND RECOMMENDATIONS 
34. The main conclusions and recommendations are to be found in the front part of this report. 
They are therefore not repeated here. However, some final comments are added 
35. The Council and European Parliament should seek to adopt the transport network guidelines 
as quickly as possible. The TEN financial assistance regulation is based on the assumption that 
these guidelines are in place. Only for 1995 it contains a transitional clause which allows to use 
the TEN budget line without guidelines. The 1996 budget execution procedures require valid 
guidelines for the selection of projects to be supported. 
36. The progress made so far in establishing the Trans-European Transport Network is 
remarkable but the progress has been slower than anticipated particularly on some priority 
projects. The momentum introduced by the Essen summit should be increased in order to bring 
these priority projects back to motion. The current methodologies under-estimate the economic 
return of international transport infrastructure projects ; this justifies to top up the Community 
funds currently available for TENs but also to top up the current budget allocations of the 
Member States to these crossborder projects. 
37. Although the examination of individual priority projects shows substantial scope for 
enhancing the involvement of the private sector, very few public-private partnerships (PPPs) are 
being set up. Member States should reexamine the potential for PPPs and, where there are legal 
or administrative barriers to the implementation of PPPs, to make any necessary changes. The 
Commission will act as follows: 
Setting up of the Commission's "One stop" Help Desk in relation to PPPs 
Study the various ways to cope with non-commercial risks. 
Setting up a multi-annual framework for the financing of TEN-Tr projects covering public, 
private and Community funding (the Common Transport Infrastructure Promotion 
Programme" or CTIPP). 
Starting the discussion on the internalisation of external costs and more balanced 
competition between transport modes by forwarding a Green Paper on the subject for 
adequate project-related revenue generation, notably in the form of direct user charge 
38 The efforts to link the Transport TEN to the networks of third countries should be 
continued, aiming particularly to foster public-private partnerships for projects of mutual interest. 
23 
Table 1: PROGRESS ON TRANSPORT PRIORITY PROJECTS 
For the North-South High Speed Train (HST)/Comhined Transport (Berlin-Nurnberg-Mùnchcn-
Verona) (450 MECU spent in 1995) work to upgrade for high speeds is proceeding as planned on a 200 
km long section between Berlin and Nurnberg. Signalling work has been undertaken on the Inn Valley 
section in Austria. 
For PBKAL (Paris-Brussels-Cologne-Amsterdam-London HST) (500 MECU spent m 1995) the high 
speed train links front Brussels to Paris and to the Channel Tunnel are progressing, with the building and 
upgrading of links underway and proceeding according to the revised schedule. For the Channel Tunnel 
Rail Liitk (CTRL) in the UK, two bidders have been shortlisted and a winner is expected to be announced 
by the end of the year. A Commission chaired working group was established for the PBKAL project, 
which has drawn up a report on the scope for financing the projecl. 
The Spaiush and French Governments have concluded an agreement to build the HST South (Madrid -
Montpellier/Dax) (150 MECU spent in 1995) with the possibility of involving the private sector in the 
cross-border section from Figueras to Perpignan. A European Economic Interest Grouping (EEIG) has 
been established for this, under the supervision of an Intergovernmental Committee. 
The Dutch Parliament lias authorised the starting of the procedures necessary to obtain a building permit 
for the Bctuwe Railway Line for combined transport (80 MECU spent in 1995) This process should 
take about Iwo years, after which conslniclion may starl. 
The Italian and French Govenuncnts have agreed to undertake the necessan, studies lo compete 
preparatory work for the building of the cross-border section of the HST Lyon-Turin (40 MECU spent in 
1995). the tunnei between St-Jean de Maurienne and Susa. An EEIG has been established to cam' ou' 
teclmical studies and an Intergovernmental Committee will start work in early 1996 on preparing a 
concession for this link 
The Greek motorways (290 MECU spent in 1995) have been under constniction since 1990 and arc 
progressing as scheduled. Tendering has been completed for about 40% of the PATHE branch and 25% 
of the Via Egnatia. Work on the 200km Igoumenitsa-Panagia link started this year. Several sections of 
these projects will be built by private concessions. 
The Cork-Dublin-Belfast-Larne-Stranraer conventional rail link (62 MECU spent in 1995) is on 
schedule and should be completed by 1999 
The constniction of the Malpensa airport (Milan (1X0 MECU spent m 1995) is largely complete and its 
connection to the railwav network is progressing well 
For the 0resund fixed link. (450 MECU spent in 1995) work stalled on the tunnel under the Drogden 
Channel in July 1995. as did dredging and reclamation work. Work on the high bridge across the Flinle 
Channel and approach bridges for this is due to stan in Novcmher 1995 
For the Nordic Triangle (.160 MECU spent in 1995). major work has been carried out on the Swedish 
Malmo-Goteborg and Malmo-Stockholm rail links. Work on t lie Swedish road sections 
Malmo-Gôleborg(E6). Malmo-Stockholm (E4) and Stockholm-Norwegian border (E18) is progressing. In 
Finland, the road sections east of Turku and the Helsinki bypass are progressing. Major upgrading of the 
rail line between Turku and Helsinki is underway and some work has started on other sections such as 
Kereva-Lahti. 
For Traffic Management projects, work is in hand on the civilian satellite European Global Positioning 
and Navigation System (GNSS) and the first transponders have been ordered from Inmarsat. The 
implementation of the ground network started in Summer 1995. A bilateral agreement with our US 
partner, the Federal Aviation Administration, was successfully concluded at the end of October. An EEIG 
has also been established by the operators of the high speed train services, which is working on a 
common European Rail Traffic Management System. A radio-hased digital road traffic warning 
system (RDS-TMC) is shortly to be initiated, cooidinaled between 1 I Member States, wiih support from 
the TENs budget line. 
24 
Table 2: PROBLEMS CONf ERNING TRANSPORT PRIORITY PROJECTS 
Little progress has been made on a decision to build the Brenner base tunnel through the Alps, an 
essential part of the HST/combined transport North-South (Berlin to Verona, via Miinchen and 
Brenner). The economic benefits of this project will largely accrue to Southern Germany and Northern 
Italy, as most of the traffic will only transit through Austria. Austria's overwhelming interest is to promote 
a switch from road to rail for transit traffic, in order to limit the negative impact on the environment, 
however this interest is not sufficient to justify Austria's financing its share of the costs of the tunnel 
alone. Additional economic evaluation is being undertaken, wliich will not be completed until the end of 
1996. This will be complemented by a Commission study on traffic forecasting for the whole Alpine 
region. The Austrian Government have created an infrastnicture management company, in which they 
would like to include international partners, but this is also proving difficult 
Most of the work on the PBKAL (Paris-Brussels-Kôln-Amsterdam-London HST) project is now seriously 
behind original schedules, which is having a significant financial impact on the completed French section, 
causing estimated losses lo SNCF of 300 MECU. The report of the PBKAL working group, chaired by 
the Commission, identified significant problems with the financing of the links to the north of Antwerp 
and east of Liege in Belgium, highlighting a financing shortfall currently of the order of 1 BECU. Using 
the figures identified for this working group, after taking into account UK support, there is also a shortfall 
of some 240 MECU for CTRL. It is thus clear that a lack of resources could create major financial 
problems for this project. The absence of European-level companies to build and operate railway 
infrastructure is emerging as a major obstacle to financing. 
The HST East (Pans-eastern France-southern Germany, including Luxembourg link) remains a project 
requiring substantial public support Under the current French legal system private sector involvement is 
ver>' difficult, however the French Government have agreed to examine the possibility o\' public-private 
partnership financing for the second phase. In 1994. the French Government officially requested a large 
Community subsidy for this project (530 MECU of which 360 MECU over the period 1995-99). A 
working group, established by the Commission and French Ministère des Transports, has reported that the 
current scarcity of resources in the TEN budget line will result in a project financing gap in the range of 
200 MECU 
The Portuguese Government has indicated that it wishes to realign its section of the Lisbon-Valladolid 
motorway. On the Spanish side, progress is slow with major technical studies lasting three years still 
needed before construction can start 
Little progress has been made on the Ireland-UK-Benelux road link, in spite oi~ its crucial importance. 
Although the French and Spanish governments have agreed in principle to its construction, no date has yet 
been agreed for work to start on the HST South (Madrid - Montpcllicr/Dax). 
The Betuwe conventional rail/combined transport line has been delayed because of planning and 
political problems; previously due to start m 1995-96 it is now likely lo be two years later 
2S 
Annex I 
FINANCING PRIVATE / PUBLIC PARTNERSHIPS 
General 
1. The Essen Council endorsed the recommendation of the "Christophersen Group" 
confirming the objective of facilitating private/public partnerships and inviting Member 
States, the Commission, the EIB and the EIF to take appropriate measures to this effect. One 
of the main reason for introducing the PPP model was the need to accelerate the 
implementation of TENs. 
2. The main obstacles to changing the current model of constructing and operating the 
priority TENs are the lack of financial profitability of many projects as well as a number of 
institutional and political barriers. Moving away from the traditional approach of public 
funding for major infrastructure projects is not easy. Project financing, the required financing 
set-up for PPPs, means that debt is secured on the project revenues and physical assets, rather 
than on the credit support of the project sponsor. The complexity of the legal and financial 
basis of PPPs, combined with familiarity with public financing schemes, put PPPs at an 
initial disadvantage in relation to the latter. As the public sector moreover absorbs risk in a 
non-transparent way, financial failure does rarely come into the open. This favours the 
widely-held belief that the cost of capital for state-backed infrastructure is lower than for 
comparative financing structures involving private risk-taking. 
3. Limited financial profitability is a common characteristic of projects in the transport 
field. They therefore inevitably need substantial grant support, amounting to significantly 
more than allowed under Regulation 2236/95, which limits Community support to 10% of 
the total project costs The Community's Structural and Cohesion Funds provide an 
alternative source of support for projects in areas which qualify. For other projects, the grant 
contribution from the Community will remain marginal. National budgetary support is also 
becoming an increasingly scarce resource as Member States exert strict control over 
budgetary outlays in the run-up to monetary union. 
4 The Community is gradually adjusting its financial support instruments to enable it to 
support this change in approach by participating in the financing of PPP operations whenever 
appropriate. However, the decisions to set up PPPs are taken at Member State level, where 
it is clear that the traditional inclination towards public financing is still verv much alive 
Member States should be urged lo renew their efforts to increase the involvement of the 
private sector in major transport infrastructure projects. The Commission has prepared a set 
of proposals on financing issues which may help lo go in this direction. 
Proposals for the financing of PPPs 
5. Grants are the only form of support capable of filling the "profitability gap" in some 
PPPs. These grants should not necessarily take the form of cash endowments They can also 
consist of transfers of assets (land, track, equipment), on-going concerns, or pre-existing and 
profitable links of the same network Public subsidies should be determined by the expected 
20 
socio-economic benefits of a project, which for infrastructure projects will normally be above 
their financial profitability. 
Slates, regions, local authorities and of course the Community, should contribute in 
proportion lo the benefits they expect to derive from projects. In the Commission's view the 
Union-wide interests are not sufficiently represented in budgetary appropriations. 
6. Equity capital is the foundation of the financing structure of any private firm, including 
infrastructure companies. Public equity does not raise the profitability of a project as such, 
but helps to absorb risk and attract private equity. A project's equity base is the prerequisite 
for attracting lending support in sufficient quantities, filling the "confidence gap" between 
investors and lenders. Public equity support also introduces new forms of flexibility in the 
financial structure of PPPs. Compared to grants, it allows for a certain return should the 
project perform well and, therefore, for the possibility of recouping funds and re-cycling 
them into other projects. The public sector can also set a cap on its remuneration, thus 
enhancing a project's private profitability. 
Member States might want to consider using pail of the grants from the TEN Budget line lo 
finance some of their equity holdings in priority projects. More generally, public authorities 
should try to increase their involvement as equity providers in PPPs, hence establishing true 
partnership relations with private promoters and investors. 
7. Subject to agreement at its General Meeting in June 1996, the EIF will soon be able to 
increase its role as an equity provider to TEN projects. The EIF's involvement in equity 
operations at this initial stage will remain limited. One opportunity which the Fund might 
want to consider is the investment of equity in project development authorities, as the 
embryo of future project implementing bodies. 
The Community should strongly support this enlargement of the Fund's role, especially as 
the need for substantial amounts of equity from private and public investors is increasingly 
apparent in the framework of public-private partnerships 
8. Some debt instruments (subordinated debt in particular) should be mentioned as valuable 
means of providing risk-bearing funds. Subordinated loans (or quasi-equity in general) allow 
for greater risk exposure than senior debt and therefore are a useful alternative to equity in 
a number of instances. Subordinated loans notably offer the advantage that managerial 
control remains in the hands of the equity providers as long as debt is serviced This can 
be useful if the public sector wants to share part of the risks without interfering in the 
management of the project in question 
The use of various forms of quasi-equity should be encouraged, wherever appropriate, to 
favour particular forms of co-operation between the public and the private sector. The new 
T'inancial Regulation favours support in the form of subordinated debt and quasi-equity m 
general e.g. in the form of interest subsidies or of subsidies towards meeting the cost of 
guarantee fees (whether extended by the EIF or others), etc. 
9 At present the EIB is the main loan finance provider for the priority projects. In a few 
specific instances, it might however prove useful to seek a diversification of the sources of 
27 
loan supply. The huge financing needs of some of the mega-projects (e. g. Brenner tunnel, 
Lyon-Torino, etc.) might provide a rationale for this approach. 
In spite of the mixed views expressed so far by the Council on this option, the use of the 
borrowing and lending powers of the Community should not be excluded altogether as a 
complementary form of Community loan support. 
10. In a PPP, risks should be borne by the parties best able to control them. Private 
infrastructure promoters agree on the crucial importance of administrative and public policy 
risks, such as cancellation of the project, planning delays or delays in passing legislation, 
legislative changes, changes in safety or other legal standards. Such risks in general cannot 
be borne by the private sector. The difficulty is compounded in the case of cross-border 
projects by the presence of different national authorities and legal systems. 
The Commission acknowledges the relevance of those risks and the importa? ice of finding an 
adequate solution. It will therefore undertake a comprehensive study on non-commercial 
risks and possible ways to cover them, notably a Community insurance or guarantee 
mechanism against non-commercial risks, improved contractual agi-eemenls between 
promoters and public authorities, legislative steps at the appropriate level, etc. 
11. The frequent lack of financial profitability in transport infrastructure projects is not so 
much because of the particular nature of the transport sector (demand for traffic is strong and 
on the increase) but rather the apparent inability of the sector to generate sufficient project 
related revenues. Direct user charges increase competition between, and within, transport 
modes and allow for the internalization of some of the negative externalities linked to 
transport. More generally, they improve the efficiency of the allocation of economic 
resources. The recommendation of the Cannes European Council on "establishing fairer 
competition between modes of transport" pointed this way and the adoption of the "vignette" 
Directive 93/89/EEC on 25.10.93 constitutes another step in this direction. 
Charges based on the actual use being made of (he infrastructure (e.g. road tolls, etc.) 
should become increasingly used to develop PPPs, notably because project related revenue 
greatly increases the potential for private involvement, while freeing scarce budgetary 
resources. 
12. Risk evaluation and transaction costs among the different public and private parties 
involved in a PPP could be reduced by improving the provision of factual knowledge so that 
planning and negotiations are carried out on an objective basis. 
hi this respect the Commission could consider ways of improving the availability of 
frequently up-dated traffic statistics, among which the setting up a traffic statistics 
observatory. 
28 
Annex II 
TENs AND COMPETITION IN THE TRANSPORT SECTOR 
1. The creation of the trans-European transport network will involve, at least for 
some of the links, calling on private investors to assist, either by themselves or together 
with the public authorities, in designing, funding, constructing and, where appropriate, 
operating the infrastructure. 
2. Organizing infrastaicture access so as to open it up to a range of users offering 
competing transport services or services in different market areas is one way of helping 
to obtain funding for the infrastructure as it will increase the income derived from its use. 
3. The public authorities and private operators involved in projects often feel that the 
application of Community competition rules acts as an impediment to the development 
of these projects. In order to assess exactly what kind of difficulties are being faced by 
the promoters of projects, talks were held with representatives from railway companies, 
the Ministries of Transport, banks, a specialized lawyer and promoters of existing 
infrastructure and proposed infrastructure projects 
4 These talks have shown that there are three types of problem 
a dearth of information on the part of the people concerned, 
concern about the length of the procedures to be followed; 
the basic question of how to reconcile financial profitability and freedom of access 
to infrastructure. 
THE DEARTH OF INFORMATION 
Outline of the problem 
5 The talks held by the Commission have above all revealed that there is a general 
lack of information about Community law on the part of the promoters of infrastructure 
The design of such infrastructure generally continues to be based solely on the legislation 
applicable in each Member State concerned and fails to give due importance to 
Community legislation from the initial stages of the projects. 
6. Another point to emphasize is the general confusion between competition rules 
and Community, and/or national, rules on public procurement 
7 As a result of this state of confusion, some promoters wrongly believe that 
compliance with the specific rules on public procurement suffices in order to be in 
conformity with Community law 
Solutions proposed 
8 The Commission is prepared to help to make more information available for all 
parties concerned with the creation of infrastructure the public authorities, transport 
companies, banks and private investors This information must cover both the basic rules 
1°\ 
applicable to the Member States and to companies and the procedures to be followed in 
order to be granted exemptions. 
The Commission departments concerned therefore need to be involved as early as 
possible in the projects. Project promoters should therefore take the initiative to contact 
these departments as early as they can to obtain all necessary information and advice. 
The Commission guarantees total confidentiality in its examination of these projects. For 
any information about competition rules, project leaders can contact Directorate-
General IV or the Commission's "One-Stop Help Desk" (Fax 32 2 295 65 04). 
9. Project promoters should also contact their national competition authorities who 
will be able to provide them with all necessary information about competition rules 
THE LENGTH OF THE PROCEDURES TO BE FOLLOWED 
10 Outline of the problem 
Project promoters would like to receive the Commission's formal position on the 
eligibility of their project within a reasonable period of time 
However, the fact is that there are certain procedures which have to be followed by the 
Commission before it can adopt a formal decision and that these take time. 
1 I. Solutions proposed 
There are two possible solutions: 
12 It is extremely useful if the parties involved contact the Commission departments 
concerned before signing agreements. This is often done when the Commission is 
handling important business and should avoid difficulties arising after the notification of 
the agreements and thereby slowing down the processing of applications 
It will also ensure that the Commission departments concerned are fully informed about 
projects from the very start and are therefore able to process the applications more 
rapidly 
13 It is also necessary for the parties involved to be able to predict, with a reasonable 
degree of certainty, when they can expect to receive a reply from the Commission 
Following the notification of agreements on the funding of TENs, and provided the 
parties have contacted the Commission departments before finalizing the agreements, the 
Commission will do its utmost to take a final decision within a maximum period of six 
months This presupposes that the Commission has all the necessary information 
available prior to notification of the agreements 
THE RELATIONSHIP BETWEEN FINANCIAL BALANCE AND THE RIGHT OF 
ACCESS TO INFRASTRUCTURE 
30 
14. Outline of the problem 
The infrastructure in question requires a high level of investment, repayable over very 
long periods, and with a generally low level of profitability. 
15. Project promoters must therefore obtain the maximum of guarantees as regards the 
utilization of the infrastructure and the payment of user charges. To do this, 
infrastructure operators can follow either of two approaches: 
either wait until the infrastructure is complete before offering capacity to 
transport companies wishing to provide services using the infrastructure, 
or reserve capacity, at the start of the project, for transport companies 
which for their part undertake to pay user charges 
16. None of the people met during the present study expressed the wish for all of the 
infrastructure capacity to be reserved for a single user This kind of reservation would 
limit the sources of income from the infrastructure. 
17 On the other hand, all of them stressed the fact that the infrastructure operator 
should be able, if he so wished, to reserve at least part of the capacity for transport 
companies which contribute to the financial balance of the project There is also the 
question of the use of the transport equipment bought by companies which are also 
project promoters 
18. The project promoters are also aware of the fact that the reservation of capacity 
over a long period is contrary to the principles of freedom of access to infrastructure and 
competition. 
19 Solutions proposed 
20. Community legislation does not allow all infrastructure capacity to be reserved for 
a single company or group of companies but does not prevent an operator reserving 
capacity for a number of companies which are able to operate transport services in 
competition. 
21. The specific features of each project have to be taken into consideration when 
assessing the lawfulness of the capacity reservation agreement The following general 
criteria nevertheless apply 
If an infrastructure operator wishes to give transport companies the 
opportunity of reserving capacity from the very start of the project, this 
opportunity should be proposed to all Community undertakings that may 
be interested 
The capacity reserved for a company should be proportional to the direct 
or indirect financial commitments entered into by that company and should 
correspond to the operational requirements planned over a reasonable 
period 
A new infrastructure is generally not congested as soon as it is put into 
seivice. A company, or a group of companies within the meaning of 
Article 3 of Directive 91/440/EEC, should therefore not have all of the 
capacity available reserved for it. Some of the capacity should remain 
available so as to allow competing services to be operated by other 
companies. 
The companies awarded user rights may not object to these rights being 
withdrawn if they are not used 
The duration of capacity-reservation agreements must not exceed a 
reasonable period of time, to be agreed in each particular instance 
32 
Annex HI 
PUBLIC PROCUREMENT RULES FOR TRANSPORT TEN 
(1) At Community level, existing public procurement rules lay down a framework for 
selecting, on a competitive basis, the contractors for the execution of a given piece of trans­
port infrastructure. Either of two distinct sets of rules apply, Directives 93/37 for public 
authorities or 93/38 for the so-called utilities. The aim of the Directives is of course not to 
be an obstacle but to ensure value for money under the best possible conditions. 
(2) In order to clarify the possibilities offered by the existing legal texts with regard to 
their application in TENs and public/private partnerships, the Commission examined the 
compatibility of existing public procurement rules with: 
i) the technique of project financing (concessions) that allows the participation of 
the private sector on a risk basis in building and operating infrastructure projects 
in partnership with the public sector; 
ii) the need to associate the private sector as early as possible in studying the fea­
sibility of an infrastructure project and participating in its conception. 
(3) The conclusion drawn is that the Directives do permit such activities and that conse­
quently no legal action is required. The Commission view is that existing provisions on 
concessions under Directive 93/37 are an adequate framework for the participation of the 
private sector in the award of concessions by public authorities in the TENs priority projects. 
As for pre-tender discussions the Commission view is that, in so far as effective competition 
is guaranteed in the tender phase, the principles of Community law do allow such prelimi­
nary technical discussions 
(4) In order to inform all parties concerned about the possibilities for public/private sector 
co-operation offered by public procurement rules more detailed analysis of this issue is in­
cluded in the Commission's Communication to the Council and to the European Parliament 
on Public Procurement in the European Union (reference to follow). The Commission will 
issue specific guidelines as appropriate in the course of 1996. 
(5) In order to reduce any misunderstandings and delays in projects related to public 
procurement rules, it is recommended that for the priority projects Commission services are 
consulted before the publication of tender documents. For this purpose a "One-Stop Help 
Desk" (fax: 00 32 2 295 6504) has been established in the Commission to channel such 
requests. 
Annex IV 
PROJECT AUTHORITIES FOR TRANS-EUROPEAN NETWORK 
PROJECTS 
1. The Christophersen Group and the Essen European Council agreed that European 
level legal vehicles would greatly facilitate the coordination and financing of complex trans­
national infrastructure projects. Ideally, a company should be created to own the project -
at least temporarily, and to implement and manage it. 
2. The Project Authority for a cross-border infrastructure project should consist of four 
elements: 
a project Agreement between the Member States involved 
a project Commission consisting of delegates of the Member States 
a project Promoter 
a project Company which acts as infrastructure manager 
The project agreement will normally ^e a memorandum of understanding during the 
promotion phase, but may need to be a treaty during construction. It should cover 
the project definition and details such as a description of the work to be undertaken, 
a timeschedule, and the financial and organisational arrangements. 
The project commission makes the day-to-day decisions during the execution of the 
project, keeping in contact with the national administrations and delegates. It must 
be empowered to do the necessary for granting the concessions It may be appropriate 
to delegate part of its power to the project promoter and to the project company at 
some stage. 
The project promoter, could be an association or better a EEIG, involving at least 
all the public sector parties. Since large infrastructure projects are mostly carried out 
in the public domain, political backing is crucial for their successful implementation. 
During the promotion phase the project promoter will initiate first technical, 
economic and environmental studies, particularly on the economic viability and 
financial feasibility of the project. During the execution of the project it acts as 
moderator and facilitator for the project. 
The project company is a business undertaking which acts as an infrastructure 
manager. For railway infrastructure such an entity is defined in Directive 
91/440/EEC as "any public1 body or undertaking responsible in particular for 
establishing and maintaining railway infrastructure, as well as for operating the 
control and safety system" The legal form of the project company may change at 
the different stages of a project, it may start as a EEIG, but for detailed design and 
construction it must be a public company limited by shares, a "société anonyme" or 
an equivalent form, such as that foreseen by the European Company Statute 
"11 îe Commission believes thai public private partnership entities cm be considered as public bodies l'or lins purpose. ;LS they fulfil a 
publie service by providing railuay infrastructure 
34 
On the more familiar national level, the legal framework and the government fulfil the 
role of the agreement and the commission, while the railway companies could undertake 
the role of project promoters and project management companies. 
3. In most cases the details of the priority projects are set out in a memorandum of 
understanding or in a treaty. Also, Intergovernmental Committees or working groups 
have been created for most projects, so the basic coordination mechanisms are in place. 
However, there are still problems with these arrangements as the delegates have to get 
endorsement from their respective administrations. The Committees or working groups 
do not have the power needed to effectively manage the projects. 
4. The Commission notes with satisfaction the first signs of cross-border coordination 
in the creation of a series of EEIGs (European Economic Interest Groupings) for the 
promotion of some transnational projects (see main report, paragraph 15). Railway 
companies seem to have recognised the advantages of cross-border coordination and, 
together with regional authorities, are taking advantage of the possibilities provided by 
this particular legal vehicle for carrying out preliminary economic and technical feasibility 
studies. 
5. The provisions of the EEIGs do not meet the requirements of the execution phase 
of large scale infrastructure investments because of the unlimited liability of the project 
owners in such structures. This is a serious drawback as no other legal vehicle exists at 
the Community level that could be used in the execution phase of trans-national 
investment projects. Therefore, investors have to seek solutions through national legal 
structures (as in the case of the Channel Tunnel) or rely on inter-governmental co­
operation (PBKAL, Brenner, most HST projects). However, such structures are usually 
expensive to set up and do not meet all the essential criteria such as protection for 
shareholders, limited liability of founders and the legal security of the instrument. 
To endow the Community with effective tools for undertaking cross-border investments 
and for attracting private investors in a public/private partnership.The Council should 
adopt, without further delay, the proposal on the European Company Statute. The 
benefits of such a statute would not only be felt in transport projects such as the high 
speed train and freight railway networks, but also in other TEN projects in the area of 
energy and telecommunications. 
35 
CONNECTING WITH CENTRAL AND EASTERN 
EUROPE AND THE MEDITERRANEAN BASIN 
A. CONNECTING ENERGY NETWORKS TO THIRD COUNTRIES 
The role of the Union 
1. The energy sector has been recognised as a major area for economic cooperation 
with third countries, both for reasons of European integration and because the 
Member States are largely dependent on external energy sources, particularly of gas, 
and it is desirable to increase the number of such sources in the interests of the 
Union's security of energy supply. Development of Union and other European 
energy production and transmission capacities is, indeed, one of the principles of the 
European Energy Charter. 
2. TEN energy priority projects and other common interest projects do take account of 
the need of the energy networks of the Union to be connected with those of third 
countries. There is specific provision in the TEN Energy Guidelines for the 
procedure to be followed in order for such projects to be recognised as "mutual 
interest projects" by the third countries concerned, within the framework of existing 
agreements between the Union and such countries. *o* 
3. In both the electricity and natural gas sectors, the studies supported under the 
PHARE and TACIS programmes, in conjunction with those that will be supported 
from 1995 under the Energy TEN programme where projects of common interest are 
concerned, will lead to the selection of priority network projects for the third 
countries concerned. 
Electricity networks 
4. The development of electricity interconnections with third countries is a priority for 
the Community Guidelines, there are projects for the interconnection of the Union 
with the Countries of Central and Eastern Europe including the Baltic Sea and the 
Balkan regions, the CIS, the EEA countries, Switzerland, the countries of North 
Africa and the Mediterranean. 
5. In the wider European context, test connection of the Centrel (Poland, Czech 
Republic, Slovakia and Hungary) and (Western European) UCPTE electricity grids 
was successfully carried out in October 1995. This represents an important stage in 
the integration of the European electricity grids. Further extension of the UCPTE 
grid towards the Balkan countries and the interconnection of the extended UCPTE 
grid with the CIS countries are the subject of studies under the PHARE and TACIS 
programmes In th Mediterranean area, a submarine electricity connection between 
Spain and Morocco is being established, and in the Eastern Mediterranean electricity 
connections between Greece and Turkey and between Turkey and Syria are also 
envisaged. 
36 
Natural gas networks 
6. Where natural gas is concerned, interconnections have been or are being made with 
third country gas grids so as to allow either the transmission or the transit of gas to 
the Union. This is increasingly the case with Norway, the countries of Central and 
Eastern Europe and the CIS, and those of the Mediterranean, in particular North 
Africa, with pipelines from Algeria through Tunisia to Italy and from Algeria 
through Morocco to Spain and on to France. Studies of East-West gas 
interconnections in Europe and of regional projects of interest to Central and Eastern 
European and/or Union countries have been and are being made under the PHARE 
programme. 
B. CONNECTING TRANSPORT NETWORKS TO THIRD COUNTRIES 
(a) CENTRAL AND EASTERN EUROPEAN COUNTRIES 
Infrastructure development 
1. Connecting Trans-Europeah-Networks to the Countries of Central and Eastern 
Europe not only serves a short and medium term objective of stimulating economic 
growth and employment, but also helps to integrate their economies with that of the 
Union. 
2. An essential element for the accelerated improvement of infrastructure is the gradual 
harmonisation of legislative and regulatory mechanisms which are applied in the 
region.The adoption by the CEC's of the "Acquis communautaire" is moreover essential 
for their integration into the Union. The Union is tackling this process of "legislative 
approximation" through three complementary processes: , 
the implementation of the Europe Agreements ; 
the negotiation of sectoral market access agreements ; 
the White Paper on the extension of the Internal Market legislation to the Central 
European countries. 
The aim of these processes is to establish structures that prevent distortion of competition 
in emerging transport, telecommunication and energy markets and to promote 
international trade and cooperation. 
3 The potential investment level in Trans-European Networks is enormous. The full 
development of main international road transport corridors1 for Central and Eastern 
Europe is estimated to require funds between 30 to 45 billion ECU. Upgrading main 
international railway lines' to Western European standards is estimated to require a further 
Community support is geared lo the nine "Crete Corridors" in line with the conclusions of the second Tan-European Transport 
Conference. Crete March 1W4 
37 
25 to 30 billion ECU. Such a level of investment reaches not only beyond the absorptive 
financial and institutional capacities of the Central and Eastern European Countries 
themselves, but also beyond the availability of external finance. 
4. Pressures on strained national budgets makes the financing of infrastructure 
increasingly problematic. While International Financial Institutions are undoubtedly called 
upon to provide a major share of the financial requirements for the modernisation and 
upgrading of transport systems, the sheer scope of the required financial resources is such 
that supplementary arrangements and non-conventional financing with private sector 
involvement will be required. 
5. The Trans-European Network approach adds a particular dimension to this process 
as a significant part of the economic viability of individual projects stems from their 
integration into the overall network. Individual links need to be appraised from a network 
perspective, extending far beyond national borderlines. The network approach introduces 
considerable opportunities as the profitability of region-wide networks exceeds the 
profitability of the individual links constituting the network. 
6. As different legal and regulatory frameworks have to co-exist and as a 
supplementary level of coordination ^between different countries arises, particularly for 
cross-border projects, additional difficulties arise. Thus transnational links often suffer 
from different national preferences and priorities on each side of the border. 
Because of interrelations between projects belonging to the same network, delays in the 
realisation of certain key links have a significant impact on the revenues of already 
existing links through revenue shortfalls. A concerted, coordinated and accelerated build­
up of the network, minimising leads and lags in the realisation of key links, is therefore 
bound to improve significantly the economic benefits for all parties concerned thus 
enhancing the possibilities for a fast realisation of the project. 
7. Especially in the light of the economic situation in the Countries of Central and 
Eastern Europe it is essential that the planned infrastructure should be closely adapted to 
actual needs in order to use the scarce available resources in an optimal way. 
Development of Trans-European-Networks in Central and Eastern Europe must therefore 
be based on a realistic assessment of infrastructure demand. 
8. Projects offering the highest rate of return would rather involve the maintenance, 
rehabilitation and upgrading of existing infrastructure than the construction of brand new 
motor ways and high-speed rail lines. There will of course always be justification for the 
need to construct some new infrastructure for instance the removal of bottle-necks such 
as urban by-passes, border crossing points, a few selected stretches of road where the 
traffic is particularly heavy and where existing infrastructure is dilapidated. 
The role of the Union 
9. The Treaty of European Union stipulates that in the field of Trans-European-
Networks "the Community may decide to cooperate with third countries to promote 
projects of mutual interest and to ensure the inter-operability of networks." The 
Association Agreements with the countries of Central and Eastern Europe foresee that a 
priority area of cooperation shall be "construction and modernization, on major routes of 
common interest and trans-European links" of transport infrastructure. 
10. The European Council in Copenhagen in June 1993 emphasised that the 
Community should support the development of infrastructure networks in Central and 
Eastern Europe mainly through the temporary lending facility of the European Investment 
Bank. At its meeting in Essen in December 1994, the European Council decided on a 
comprehensive strategy for preparing the associated Countries of Central and Eastern 
Europe for accession to the European Union. The Pre-accession Strategy highlighted that 
the integration of the associated countries into the Trans-European-Networks is a key 
element in strengthening their economic and political ties to the Union. 
11. Community support is geared to the nine "Crete corridors" in line with the 
conclusions of the Pan-European Conference in 1994. 
12. Within the framework of G24 coordination, Memoranda of Understanding 
between the various Governments and the Commission have been signed, to promote the 
coordinated development of the Berlin-Warsaw-Minsk-Moscow and Helsinki-St 
Petersburg-Moscow-Kiev-Bucharest-Plovdiv-Alexandroupolis corridors. 
13. A structured dialogue between Transport Ministers from central and eastern 
European countries and the Council, initiated at a joint meeting on 28 September, will 
continue to assess needs and agree projects of mutual interest. 
PHARE 
14. The Council emphasised that Phare should offer technical assistance and 
authorised the Phare Programme within the existing budgetary limits to provide 
additional funds for capital expenditures for the development of infrastructure of 
community interest. 
15. Following the Essen Council the Commission has developed Phare in the 
direction of a Multi-annual financial instrument and significantly increased the investment 
focus. Today up to 25 % of the total Phare appropriations can be made available for the 
co-financing of infrastructure projects notably related to the development of Trans-
European-Networks. Multi-annual investment programmes for the development of Trans-
European-Networks covering the period 1995 to 1999 have been negotiated with all the 
Partner Countries with the close involvement of the International Financial Institutions 
and notably the European Investment Bank. 
16. The Phare contribution for the co-financing of infrastructure projects related to the 
Trans-European Transport Network is planned to increase to around 190 MECU in 1996. 
The corresponding figures in 1993, 1994 and 1995 were 30 MECU, 75 MECU and 1 19 
MECU. 
Balkan Region 
17. The Union attaches great significance to improving the networks of the successor 
states to the former Yugoslavia in an integrated Trans-European framework taking into 
account Community priorities and to promoting cooperation between these states towards 
that end, as soon as political circumstances permit. 
39 
(b) THE EURO-MEDITERRANEAN PARTNERSHIP 
18. At the Essen and Cannes meetings, the European Council proposed a new approach 
to the Union's Mediterranean partners. The economic dimension of the Euro-Mediterranean 
partnership provides for the Mediterranean partners to be integrated into a Euro-
Mediterranean economic area. The aim of opening up the Mediterranean countries 
economically and integrating them into the European (EU and non-EU) economy 
presupposes that these countries have efficient economic infrastructure systems, in 
particular in the transport, energy and telecommunications sectors. The linking of the trans-
European networks in these areas to the corresponding infrastructure in the Mediterranean 
Basin (or their joint development) is therefore at the heart of the issue of the Euro-
Mediterranean partnership. 
19. The draft Declaration and work programme adopted at the Barcelona Conference 
(27-28 November) specifically refer to this in the sections on transport, telecommunications 
and energy. Although, because of the level of development, the high-speed train networks 
do not have any great potential in the Mediterranean region, the connection and extension 
of the road transport (motorway, ports), telecommunications and energy networks are 
nevertheless essential for the integration of the Mediterranean economies into the European 
economy. v 
40 
JOINT ENVIRONMENTAL PROJECTS (JEPs) 
AN ENVIRONMENTAL "NETWORK" APPROACH FOR WATER AND WASTE 
1. At the Essen European Council the Heads of State or Government have taken note 
of the potential relevance of a network approach in selected sectors of 
environmental protection, have invited the Commission, the Council and Member 
States to examine the possibility of establishing guidelines for environmental 
network infrastructure and the obstacles to environmental infrastructure, stressing 
the use of existing financial instruments in support of possible future guidelines 
and priority projects. 
2. To follow up the Essen mandate, the Commission established a High Level 
Working Group with representatives of the national environmental departments. 
The Group convened four times. In addition, the Commission organized in 
October a workshop on waste and one on water at which were attending public 
and private competent experts and authorities. 
3. The network approach as it was envisaged in the White Paper on Growth, 
Competitiveness and Employment, was not the result of theoretical or conceptual 
considerations. It was conceived to solve problems in a practical manner. In fact, 
the network approach it is aimed at ensuring the realisation of certain 
infrastructure investments in which the economic benefits have an impact which 
is spread beyond their immediate geographic location. These are the type of 
investments which are essential in order that the potential of the internal market 
be attained, but which are hampered by administrative and financial constraints. 
4. In the transport, energy and telecommunications sector, these investments aim at 
ensuring the interconnection of existing networks in order to fully develop their 
potential. In the case of the environment, such investments are aimed at ensuring 
an effective solution to the problem of resource management and/or pollution 
which because of its cross border dimension gives rise to frictions and constrains 
productive activities or risks being a direct or indirect obstacle to free exchange 
within the internal market. 
5. In most of these cases, the difficulties which slow down or constrain investment 
result essentially from: 
- the difficulty of ensuring an equitable and balanced sharing of the costs and 
benefits in relation to the territorial impact of the problem 
- the difficulties in promoting an operational and effective partnership between the 
many public and private sector actors involved 
- the difficulty of taking action at the operational level in a context characterised 
by significant administrative, regulatory and cultural differences 
- the difficulty to overcome the decentralized nature of responsibilities for the 
design, financing and implementing of the relative small size environmental 
projects 
40 CK 
6. On the basis of the analysis and deliberations on future prospects conducted by 
the high level group as well as the workshops, the Commission considers that 
environmental investment should benefit from a similar support as that which is 
given to investment in the transport, energy and telecommunications fields. In 
effect, environmental investment is important in order to fully exploit the potential 
of the internal market. As well, the modalities applied in a network approach are 
equally applicable in the environment as compared to the other sectors. 
7. Taking into account the specific characteristics of the environmental sector, the 
high level group agreed to define initiatives in this context as "Joint 
Environmental Projects (JEPs) The latter is defined as "a course of actions by 
Member States acting jointly or in coordination to develop a project or prepare the 
development of a project of common interest for environmental protection and 
improvement within the Union". These projects should ensure or accelerate the 
realisation of investment which is necessary to fully exploit the potential of the 
internal market. In this perspective, the approach aims at ensuring a more 
efficient and effective use of both administrative and financial resources. In their 
implementation, JEPs will promote and enhance the development of new and 
clean technology. 
8. The high level working group established selection criteria for JEPs (see Annex 
B.2) 
9. The two workshops came up with concrete project proposals, some of which are 
in an advanced stage of preparation and could be launched within a relative short 
delay (see annex B.2). Both the high level group and the workshops underlined 
that if the projects are to be successfully launched an administrative and financial 
incentive should be provided . It involves not only a more optimal use of existing 
financial instruments, but also the inclusion of JEPs in those which are up to now 
limited to infrastructure projects in the field of transport, energy and 
telecommunication. 
10 In the opinion of the Commission the next step in this dossier implies selecting 
and implementing a certain number of pilot projects aimed at testing 
implementation modalities. 
RESULTS OF THE ANALYSIS AND DELIBERATIONS ON FUTURE 
PROSPECTS 
I. JUSTIFICATION OF ACTION 
A. HORIZONTAL CONSIDERATIONS 
A joint approach will optimize the cost effectiveness of the investments, increase 
the environmental benefits and thus the overall economic viability of the 
investment. Other advantages including acceleration of the investment, achievement 
of higher standards and capacity harmonisation can be availed of. It will create the 
conditions for increased employment and coherence at the Community level in the 
41 
implementation of certain environmental interests. Joint Environmental Projects are 
not per se aiming at the fulfilment of the obligations which derive from existing 
Community environmental legislation. 
12. Promoting JEPs could give rise to the following more specific economic and 
financial benefits which could outweigh economic costs: 
(a) Concertation of existing environmental technology would be encouraged and, 
therefore, economies of scale could be more rapidly available at the research and 
development/application stage, on the design of projects and on the suppliers side. 
(b) New environmental technologies would be encouraged, leading to the creation of 
new domestic and export markets ( market scale for the EU is expected 20 billion 
ECU/p.a, worldwide 200+ billion ECU/p.a. by the end of millennium ) 
(c) Reduction of financial costs, both capital and operating. 
A coordinated and better planned investment reduces the risks of failures and 
delays. A meaningful packaging of relative small projects reduces the 
administration cost and hence the spread required from the financial institutions. 
Further cost reductions can be achieved by avoiding duplication, reducing logistical 
costs, developing markets for quality' recycled materials (waste) etc. 
B. WASTE. 
13 A large and continually increasing quantity of the waste produced in the EU 
Member States ( in total: 700 million tonnes of which industry 30% and municipal 
waste 17% ) is still discharged without any form of recovery or environmentally 
friendly treatment. Only some Member States have developed some infrastructure 
to manage their waste. Many suffer from an overdependence on (older) landfills 
(70%) as a disposal route with its negative environmental impacts, like pollution 
of ground water and surface water, greenhouse effects (methane emissions). 
Contrary to the USA, there is still limited experience in the EU in providing 
integrated waste management services. Alternatives, in particular recycling and 
incineration with energy recovery , will become crucial elements for a greater 
sustainability in an overall process of waste minimisation. 
14. During the workshop on waste (Brussels, 19/20 October. 1995) the justification for 
acting jointly derived from the strong need to effectively remedy a great 
information gap on both waste management techniques and markets for the 
recovered products. Taking account of the different degrees of development in and 
demand for environmental infrastructure in the different regions of the European 
Union, the implementation of JEPS would contribute to a reduction of these 
differences and hence strengthen cohesion between the different areas. 
15. Another justification for JEPs which is particularly relevant in the field of recycling 
is related to the desirability of reaching critical volumes of waste in order to make 
projects economic viable and to reduce logistics costs e.g. in waste collection by 
developing networks of installations JEPs create an opportunity for developing 
projects involving both the private and public sector . Furthermore , JEPs will 
stimulate, on a voluntary basis, a better integration of environmental considerations 
in the various industrial sectors. 
42 
16. At the workshop four different categories of waste flows (plastic, electronic 
consumer goods, " end of life " vehicles and the issue of heavy metals) were 
selected for examination by participants representing experts from private and 
governmental bodies. The workshop identified some 30 projects within the different 
categories. The main conclusion of this workshop was that JEPs respond to a clear 
need. It is worthwhile to proceed with JEPS through bringing necessary 
partners/actors together and by creating the means for realization. 
Annex I gives an overview of the most promising examples . 
C. WATER: 
17. To an ever increasing extent, different areas within the European Union are 
confronted with constraints in economic growth due to water shortages 
(Spain,Islands etc). Other areas face a quality problem derived from heavy use and 
discharges or have experienced the (repeated) problems of flooding. Other 
technological and institutional inefficiencies in water management like high levels 
of water wastage (leakage of treated (potable) water is estimated at around 15% or 
3 billion ECU), relative low recycling rates in manufacturing industry or limited 
institutional capacity due to a high degree of fragmentation are demanding different 
and in some cases joint responses for a more efficient use, control and clean-up 
of water. 
18. Water policy is an obvious area for international cooperation and therefore for 
Joint Environmental Projects. Rivers, lakes and ground water aquifers do not 
respect international boundaries and, indeed, rivers, lakes and seas often actually 
delineate such boundaries. Pollution from one Member State will often impact on 
another and water abstraction from one Member State might lower water levels in 
their neighbour's territory. International cooperation should therefore be the norm 
in this policy area and, increasingly, this is so. A number of international 
conventions and agreements cover the management of these joint resources. 
Additionally, the Commission is considering a more institutionalised approach to 
the question of river management which would require cooperation in water 
management (quality and quantity) on a river basin basis. 
19. JEPs are mechanisms with a joint approach to common problems. In other words, 
rather than have each Member State work separately on the solution to a common 
problem in the design or construction of their physical infrastructure, they could 
cooperate in the exchange of ideas and share in the costs in developing appropriate 
technologies and monitoring and setting up pilot projects. A wide range of JEPs 
can be established dealing with infrastructure issues.They will not necessarily 
involve support for the actual construction of the physical infrastructure where there 
would appear to be little to be gained from a joint approach. Rather JEPs should 
facilitate that the Member States can undertake measures more quickly, more 
efficiently or reach more ambitious targets. 
20. The Water workshop (Copenhagen, October 11/12, 1995) acknowledged the 
importance of a River Basin Management (RBM) as an overall guiding principle 
in water management. Covering more than two Member States River Basin 
Management falls naturally within the concept of JEPs. Coordinated planning and 
management (quality and quantity) of shared river basins is essential for 
environmental and economic reasons. The Rhine and the Elbe Commission have 
43 
produced considerable improvements in the water quality. As regards the quantity 
aspects new arrangements have to be made. The projects which were identified by 
the Workshop dealt with the different aspects of rehabilitation, maintenance and 
use of the larger shared river basins in Europe. Referring to the floods in the 
different Member States a European " flood alleviation and wetland restoration " 
project could be considered as a Joint Environmental Project. For the other shared 
European river basins it seems natural to learn from the existing bodies. The 
formation of an " umbrella network " of river basin commissions could be the 
cooperative structure under which relevant JEPs projects could be developed or 
implemented. 
21. For the Water Workshop four different target areas were selected : 1) Water 
(supply) management including reduction of water demand; 2) Waste water 
treatment and sewage disposal; 3) Port waste facilities; and 4) River basin and 
surface water(resources) management. 
The workshop identified series of projects distinguishing two categories of projects 
examples: 
a) Projects which include a distinct physical network, 
b) Projects which lead to (better, cost saving and/or faster) improvements in 
environmental infrastructure. 
Annex U gives the most relevant project examples . 
44 
II CRITERIA TO BE RESPECTED 
22. As mentioned above the ad-hoc Group has shaped and defined the networking' 
approach into Joint Environmental Projects in order to better define the needs, the 
scope and the objectives of the possible environmental undertakings. A set of nine 
guiding criteria ( See annex EQ ) provides a framework, in which the various 
objectives of JEPs should be achieved. They cover in part descriptive, essential and 
desirable factors: 
- strengthening joint and more coordinated actions between Member States (i.e. a 
minimum of two), possibly involving non-Union countries when significant 
benefits could be accrued within the territory of the Union , as an answer to 
important environmental problems in the water and waste sectors. 
- enhancing the relationship between environmental effectiveness and economic 
efficiency (added-value). 
- stimulating the development and the implementation of new technology under 
adequate conditions of scale 
- intensifying, where opportune, public/private partnerships in financing and 
implementing the projects and 
- Obviously, assisting in achieving in a more coherent way agreed Community 
policies and objectives . 
23. The results of the two workshops made it clear that these guiding principles/criteria 
were an appropriate basis towards the realization of JEPs . It became evident that 
a clear need - in the waste workshop recognized from both the public and private 
sector - for JEPs and that a range of the environmental infrastructure investments 
, in view of cost-effectiveness considerations, should only be envisaged in a joint 
approach. 
HI CONSTRAINTS TO BE ADDRESSED 
24. There are some constraints to the further development of JEPs. In many of the 
instances there are linked to the specific institutional and administrative situation 
of the environmental sector. The main impediment which has been experienced is 
the decentralized nature of responsibilities for the design, financing and 
implementing of environmental infrastructure projects. In particular, the water sector 
which is very fragmented is more reluctant to cooperate. 
25. With so many different players involved, the following difficulties could be 
encountered: 
- a lack of a focal point for JEPs further development and promotion. 
- a deficient structured flow of information (availability and quality of data for 
those potentially involved; 
different levels of experience/sophistication of the local/regional authorities, 
the organisational gap between the central and more regulatory oriented 
government bodies and the more implementation and operationally oriented 
local/regional authorities; 
different approaches between Member States on the actual involvement and 
potential role of private operators and vice versa ; 
a lack of will/incentive to act jointly. 
26 Other constraints are of a more regulatory nature partly due to existing regulation 
but also in some instances due to a lack of regulation: e.g. different and sometimes 
45 
opportunistic interpretations of existing Community or national waste regulations 
("proximity" principle) complicates transboundary transport. There is a need of 
certain (quality) standardization of waste treatment and recycled products . 
Harmonization in waste handling , standardization and certification will result in 
more homogeneous fractions , secondary raw materials and final products 
facilitating an increase in markets. 
27. Further examination might be necessary into the question as to whether price 
differences between the Member States for water and waste disposal inhibits the 
cooperation or the joint undertakings between the Member States. 
28. On the financing of JEPs the following can be said. JEPs are by definition (see 
criteria) more likely to yield higher benefits/profits than if the same problems were 
treated separately by different national operators. In these circumstances it will be 
difficult a priori to justify on economic grounds any element of continuing 
grant/subsidy per se .The existing sources of finance for environmental 
infrastructure (Community and national) are of course under heavy pressure from 
the demands of Member States implementing EU directives. With regard to 
investment finance from public sources there is always an opportunity cost to be 
reckoned with, whatever the nature of the investment. 
29. The very organisation of JEPs involves inherent difficulties which must be faced and 
solved by the partners if the project is to get off the ground. As stated above, these 
involve the added complications of different standards, planning procedures, 
regulations and pricing etc.There is therefore a case to request some incentives to 
offset these up-front constraints 
30. It is clear that if the realization of JEPs producing significant economic and 
environmental benefits can be more rapidly mobilized by means of a financial 
incentive to prompt and accelerate the process, an incentive financing for 
(additional) up-front costs is justified i.e. by financing (pre-) feasibility studies, pilot 
projects, demonstration plants etc. Once the "added value" in terms of economic 
efficiency and environmental effectiveness of the projects can be determined in more 
precise terms, the necessary financial engineering at the subsequent realization stage 
will be much facilitated. 
31. At EU level, several existing financing instruments could, in principle, kick-start 
the process Most suited for the immediate necessities of JEPs incentive financing 
could be the financial instrument for the environment (LIFE), which already allows 
for demonstration projects, awareness raising projects and technical assistance 
projects. LIFE, though, imposes restrictions as to the financing of feasibility studies 
and "typical infrastructure projects". Besides, the overall amounts available and the 
ceilings for the different eligible activities would allow only for the financing of a 
few and very small projects. 
32 Other possibilities consist of the Cohesion Fund and Structural Funds inter alia the 
Community Initiative programme INTERREG II and the so-called Art 10 
(innovative) actions within the framework of the European Regional Development 
Fund (ERDF) However, these possibilities are limited because most of the monies 
are already earmarked at the operational level for the coming years and furthermore, 
the functional and the geographic eligibility criteria do not allow for a horizontal 
application linked to the implementation of JEPs. There is also the European 
46 
Investment Fund (EIF). It could play a more active role as a leverage mechanism, 
either by extending its guarantees to JEPs or by facilitating equity participation. In 
this perspective, the environment would have to be integrated as a separate 
objective in the EIF Statute 
33 However, given the above-mentioned constraints, in particular the 
institutional/administrative ones, and the necessity of a visible acknowledgement 
incentive financing of JEPs should imply a financial support analogous to that 
provided for TENs. 
x-x-x-x-x-x-x-x-x-x 
47 
ANNEX I - EXAMPLES 
DESCRIPTION OF SOME SPECIFIC WASTE PROJECT 
from the workshop on waste (Brussel, 19/20 October) 
a. Plastic 
Plastic is a material which can be found in most consumable products, therefore the 
results of the parallel session on plastic waste should be seen jointly with those of the 
other 3 parallel sessions. 
The proposals which correspond best to JEPs, implying that they are not only "ideas" but 
have reached a more advanced maturity stage are: 
1. Building of joint plants for the recycling of engineering plastics 
This is very good example of waste for which the volumes reached at national level do 
not economically justify their recycling. Therefore such plastics are at present discarded, 
while, if a common strategy was developed, they could be recycled and put on the 
market again. 
2. Development of joint facilities to treat PVC cables containing heavy metals 
The presence of hazardous substances, such as heavy metals, in waste is one of the major 
concerns of the EU waste management policy. 
This is an example of pilot project, already developed at laboratory scale in Denmark, 
which could be more effectively brought to full operational scale by a joint action 
between several Member States. 
3. Extension to other waste streams of existing recycling schemes and technology In 
particular: end-of-life vehicles and electrical/electronic waste 
A recycling programme for the recycling of large quantities of discarded plastic 
equipment is already initiated, bringing together all the actors of the chain, from the 
producer, to the recycler. Such an experience could be transferred to other waste streams 
with the participation of several Member States. 
4. Creation of EU wide or international data basis on recovery technologies and of market 
opportunities 
One major obstacle for recycling in scarcely populated areas relates to the difficulty of 
obtaining the necessary information. 
The possibility to advertise recycled products at large distances, in particular via internet, 
and to access to computerized information networks could help solving this problem. 
5. Setting tip of an integrated network for recycling PET bottles 
The experience gained in the USA may be of help. It concerns in particular highly 
populated areas. New recycling technologies can be developed around this kind of waste. 
48 
b. Electronic Consumer goods 
1. Recovery of Television-sets and Personal Computers-monitors 
After collection of TV-sets and PC-monitors, appropriate dismantling and de-pollution are 
required in order to optimise both separation of parts and materials and recovery of these. 
Existing environmental and economy of scale problems for the recovery of television sets 
(screens and CRTs in particular) and PC-monitors, may be overcome by the networking 
of intermediate disassembly units and recovery installations in different Member States 
of the European Union. 
The composition of CRTs and PC-screens varies greatly: the development of a data base 
for easing recovery processes is required. 
2. Recycling of batteries from electrical and electronic equipment 
Batteries, part of electrical and electronic devices and appliances vary in size and type. 
Despite the fact that they contain hazardous substances, batteries are mostly disposed of 
in landfills without precaution. 
Networking of facilities which after an appropriate collection of old batteries, provide for 
their efficient separation (button cells, silver oxide, nickel-cadmium, etc) as well as 
recovery, would contribute to overcoming the problem's economy of scale as well as 
decreasing the environmental risk. 
3. Monitoring of the electronic consumer goods waste stream and establishment of an 
information centre 
The optimisation of existing or future infrastructures for the management of the electronic 
consumer goods waste stream requires an adequate knowledge of the quantities and types 
of products put into the market (per year), customer's behaviour, the flow of products and 
materials, information on refurbishing the level of recovery treatments. 
A joint european network which could lead to and information centre (of network of 
centres) would cover the constant request for data of that nature and serve the needs of 
dismantlers and recyclers of those appliances. 
c. End-of-life vehicles (ELV) 
With a view to the arising quantity of waste from end of life vehicles (ELV) as well as 
its hazardous characteristics the JEPS workshop has given due attention to possible means 
to improve the situation of the treatment of ELV. Given that the metallic part of a car (70 
- 75%o, with a tendency to decrease) apparently does not pose major difficulties in terms 
of proper handling and recovery, the automotive group focused mainly on the remaining 
part, which are the shredder residues 
Four projects were proposed, based on an analysis of the automotive life cycle from the 
design phase until the treatment of the ELV as illustrated in the figure below. 
49 
LIFE CYCLE OF POSSIBLE JEPS 
I CARS I I 
Design (A) Feedback of recyclers to: 
(1) car makers 
(2) material suppliers 
Consumption No projects 
Parts trade No projects 
Dismantling (B) Larger scale European network for 
Dismantling material trade. 
materials Life cycle analysis (e.g. what are the costs 
of transport ?) 
(C) Classification system of quality 
Shredder NFM No projects 
Fluff (D) 
(l)Larger scale for incineration with energy recovery 
(2) Larger scale for further separation for material re-use 
FM No projects 
FM = Ferrous metals 
NFM = Non-ferrous metals 
50 
The projects can roughly described as follows: 
a) Infrastructure for exchange of information between car manufacturers, material 
suppliers and recovery industry. 
b) Establishment of a European network for recovery material from ELV. 
c) Classification system of the content of materials to be recovered which can not be 
traded as parts. 
d) Establishment of an infrastructure for the treatment and valorisation of shredder 
residue. 
The proposals reflect the unsatisfactory situation at present where there is a lack of both 
an exchange of information between the different economic operators involved and, partly 
due to this, economies of scale . 
The participants stressed the importance of approaching each project on its own merits 
and feasibility.The group clearly felt that the pursuit of the proposed projects would yield 
in considerable economies of scale and positive environmental impact. 
Possible confidentiality of information was identified as an obstacle to open exchange of 
information. The administrative burden arising out of legislation on the shipment of 
waste was mentioned as another obstacle to the establishment of a European network for 
recovery material from ELV as well as of an infrastructure for the treatment and 
valorisation of shredder residue. 
d. Heavy Metals 
1 Treatment and management of residues from waste combustion 
Waste incineration is an economic activity which is of importance in all EC Member 
States. The treatment and/or disposal of residues of such incineration raises considerable 
problems; optimal solutions have not yet been found. The project aims at developing 
processes for the treatment of such residues, the recovery of materials and the safe 
disposal of residues, including demonstration projects. 
2. Treatment of mercury-containing wastes 
Mercury-containing wastes are often small in volume, but are very hazardous and difficult 
to treat. This leads to very high treatment costs. The project aims at creating a joint plant 
for several Member States, which would be economically attractive for participating 
countries. 
3. Decontamination of soil contaminated with heavy metals 
The project aims at developing the technology for a cost-effective large-scale treatment 
of soil which is contaminated with heavy metals. Its environmental and economic interest 
is particularly great in urban agglomerations. 
51 
ANNEX 2 
DESCRIPTION OF SOME SPECIFIC PROJECT EXAMPLES 
from the Water workshop (Copenhagen, 11/12 October 1995) 
a) Projects which include a distinct physical network; 
b) Projects which lead to (better, cost saving and/or faster) improvements in 
environmental infrastructure. 
As regards the first category two groups of projects are mentioned. 
1) Port reception facilities 
This relates to a cluster of projects which if done jointly will improve the situation 
of dumping waste at sea and consists of three main components: 
- Upgrading of current technology for reception and treatment of chemical port waste, 
i.e. ballast water, bilge water,etc. to improve the cost recovery 
- Construction and extension of adequate port waste facilities particularly in the 
Mediterranean and the Eastern Baltic Sea. 
- Setting up a tracking system monitoring the waste flow between the ports of 
Europe. 
Development of a cost-effective surveillance satellite to detect accidental spills and 
illegal discharges enabling a better and quicker response from ground recovery 
equipment could be considered within this group of projects. 
2) River monitoring systems 
In order to enable a coordinated planning and management for a River Basin a 
river monitoring network is necessary.The monitoring system should both serve water 
resources management and contingency purposes facilitating the involved countries 
to predict and deal with current water shortages and water quality changes. The 
system should involve on-line monitoring and transboundary electronic 
interconnections between the stations along the river basins. Such a system could be 
a tool for planning common investments in other infrastructure installations like dams, 
specific treatment plants etc. 
The second category of project examples include common parallel 
pilot/implementation projects in various Member States, addressing similar 
infrastructure problems with new or available technologies. A range of projects were 
discussed in the workshop of which some are mentioned here : 
1) Use of alternative water resources in future urban water supply. 
A project concerning development and implementation of a new concept of urban 
water management including specific projects on substitution of drinking water with 
secondary water sources of lower quality (rain water, slightly polluted ground water, 
treated waste water etc.) for specific purposes. 
52 
2) Sludge treatment and disposal. 
r 
Projects dealing with processes for treatment of waste water sludge in relation to the 
final means of disposal and the potential environmental problems this may cause. 
Processes for the removal of heavy metals from waste water sludge prior to its 
disposal on agriculture land is essential. In addition, the management of industrial 
discharges in relation to control of the input of harmful substances into the public 
sewer needs to be addressed. 
3) Nitrogen removal at low temperatures. 
Development and implementation of facility modifications and operational strategies 
for safe and stable performance of the temperature sensitive nitrification process in 
urban waste water treatment plants in cold and temperate climate. 
4) Waste water treatment for specific areas. 
The establishment of waste water treatment facilities in small communities with e.g. 
large seasonal invasions of tourists. Projects could include the implementation of 
small waste water treatment plants as well as larger central facilities, in which the 
space capacity out of the tourist season is used for treatment of septic sewage from 
the local population. 
5) Storm water treatment and reuse. 
The development and establishment of simple treatment facilities for storm water like 
sedimentation ponds. Because of the low content of pollutants typical for storm water, 
the possibility of reuse for agriculture or other purposes is obvious.Depending on the 
purpose for which the water is reused, monitoring of water quality and in some cases 
further treatment are factors of importance. 
ANNEX 3 
- JEr-S-
CRITERIA FOR JOINT ENVIRONMENTAL PROJECTS 
DESCRIPTION 
1. Member States acting jointly or in coordination to develop a project (or prepare the 
development of a project ) of common interest for environmental protection and 
improvement within the Union. Projects involving non-Union countries may be treated 
as JEPS when the significant benefits therefrom accrue within the territory in the 
Union. 
2. JEPS would provide opportunities for the development of new technology allowing 
for its implementation under economic viable conditions. 
3. Any Community support for JEPS should not include support for a R&D and 
technology project for which funds are available. 
CRJTERIA 
Essential: 
4 As compared to purely national projects, a JEP- project shall yield significant "value 
added" in the sense of environmental effectiveness and capital and operational cost 
savings. 
5. Major EU environmental priority policy areas e.g. in the water and waste sector shall 
be targeted and within those and other relevant sectors JEPS shall assist in achieving 
agreed Community policies and objectives. 
6. The project will concern significant physical, including monitoring, infrastructure 
projects and objectives 
Desirable. 
7. It should lead to the development of new and improved structures of administrative 
partnership between Member States. 
8. Desirably, the project should promote the development and use of advanced 
environmental technology. 
9. The project should, where appropriate, involve the private sector 
54 
r «. 
Annex 1: PROGRESS OF TEN LEGISLATIVE PROCEDURES 
Field 
Financial 
Regulation 
TRANSPORT 
Multimodal 
HST 
interoperability 
TELECOMS 
Global approach 
ISDN 
Guidelines 
Actions 
IDA (3) 
l"NA 
ENERGY 
Gas and electricity 
Guidelines 
Connected measures COM. Prop. 
2 March 1994 
29 March 1994 
15 Apnl 1994 
31 May 1995 
12 March 1993 
12 March 1993 
12 March 1993 
12 March 1993 
19 January 1994 
19 January 1994 ESC Opinion 
28 April 1994 
23 November 1994 
23 November 1994 
pending 
21 December 1993 
21 December 1993 
7 June 1993 
7 June 1993 
27 Apnl 1994 
27 Apnl 1994 Opinion of 
Committee Regions 
9 May 1994 
27 September 1994 
28 September 1994 
pending 
17 May 1994 
17 May 1994 
17 May 1994 
17 May 1994 
17 Mac 1994 
1 7 N lay 1994 EP: 1st reading 
30 November 1994 
18 May 1995 
19 January 1995 
January 1996 
19 Apnl 1994 
19 April 1994 
17 November 1994 
17 November 1994 
18 May 1994 
18 May 1994 Common position 
31 March 1995 
2X September 1995 
28 September 1995 
? beginning 1996 
22 December 1994 
(D 
21 Dccembei 1994 
(2) 
29 June 1995 
29 June 1995 EP: 2nd reading 
13 July 1995 
pending 
pending 
13 June 1995 
20 September 1995 
r< 
26 October 1995 
26 October 1995 Counciliation 
n.a. 
Spring 1996 
n.a. 
n.a 
n.a. 
January 1996 
in Adoption 
18 September 1995 
mid-1996 
end 95/ beginning 
96 
? mid January 1996 
11 October 1995 
6 November 1995 
? Jan 96 
? Jan 96 
(1) The Council ha.s suspended discussion of the "Actions" proposal pending agreement on the financial regulation 
i2) Change of legal basis resulting in deletion of TN.A (Article 2.35 in place of 129(c)) 
(3) Tito TEN Financial Assistance Regulation does not apply to IDA 
55 
Annex 2: EU FINANCING of TENS (MECU) 
Z Field 
TRANSPORT 
ENERGY 
TELECOMM. Type of 
assistance 
Loans 
Guarantees 
Aids 
Loans 
Guarantees 
Aids 
Loans 
Guarantees 
Aids Instrument 
EIB (i)(2) 
EIF (2) 
Structural Fund (i) (3) 
Cohesion Fund 
TEN heading 
(14 priority projects) 
ELB (i)(2) 
ELF (2) 
Structural Funds (l) (3) 
TEN heading 
EIB(i)(2) 
EIF (4) 
Structural Funds (i)(3) 
TEN heading 1993-
1994 
4 342 
75 9 
884 0 
1 827.0 
385 
180 
1 077 
207.7 
675.7 
0 
3 787.8 
156.1 
294.7 
21 1995 
2 075 
85.2 
115.0 
1 076.6 
240(4) 
182.5 
304 
0 
87.8 
12(4) 
506.6 
0 
0 
22(4) TOTAL 
6 417 
161.1 
999.0 
2 963.6 
625 
362.5 
1381 
207.7 
763.5 
12 
4 294.4 
156.1 
294.7 
43 
(1) TEN and TEN-related projects 
(2) Signed contracts 
(3) Appropriations committed 
(4) Proposals approved by the TEN Financial Assistance Committee at its meetings on 10. 11 and 12 October. 9 and 20 November 
last. 
56 

ISSN 0254-1475 
COM(95) 571 final 
DOCUMENTS 
EN 07 15 11 
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ISBN 92-77-96467-7 
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