ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)507
Vol.1981/0153

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM <81)507 final
Brussels .16th September 1981
COMMUNITY ASSISTANCE FOR TRANSPORT INFRASTRUCTURE :THE
EVALUATION OF"COMMUNITY INTEREST "FOR DECISION MAKING
4
(Report from theCommission totheCouncil )
;
*C'"-
COM (81)507final ,

-1
Cosraranityassistar.cefor"transportinfrastructure s
theevaluationof'Communityinterest 1fordecisionmaking
Introduction
TheCommission'sproposaltocr-r.teafinancialinstrumenttoassistinfra­
structureprojeotsstipulatesthautheprojectshouldheshowntoheof
Communityinterest#WhilstnationalInterestisofprimaryimportanceininfra­
structureplanning,someaspectsofmajorprojectscanbeparticularly relevant
totheCommunityasawhole.These'Communityinterest*aspectsinthe
Commission'sviewmeritattentioninconjunction Withnationalfactors.
A
ThequestionsposedonCommunityinterestcanheplacedintwogroups:-
firsttonthepracticability ofidentifyingtheCommunityascompared
tothenationalinterest'ofaproject;-
secondsthepossibilityoftranslating Communityinterestintoaquantifiable
'''form. ' .,
Thispaperisaddressedtothe&equestionsinanattempttoproposeapractical
andacceptableapproach.
ThestartingpointofthepaperistheCommission'sproposalforafinancial
instrument.ThepapercontendsthattheconceptofCommunityinterestisboth
relevantandappropriateforworkinthisfield*Anattemptismade,by
referencetobothnationalpracticeandaspeoificCommissionsponsoredstudy,
todemonstratethattheinclusionofCommunityinterestinprojectevaluation
islogicalandpractioal.Itissuggestedthatthepracticaldevelopmentof
thenotionofCommunityinterestcanbebestachievedbythejointexamination
ofahumberofprojects.However,itisstressedthateconomicevaluation
willbeavaluablebutnotexclusivepartoftheinformationsuppliedtothe.
decisionmakers.TheobjectofevaluatingCommunityinterest
isnottosubstitutefortheessentiallypoliticaldecisionprocess.
Rather'ihsaimistoilluminatecertainfactorsofparticularimportancetothe
Communitysothattheycanbebetterintegrated :intothewholeprocess.The
proposalsthataremadearebasedsubstantially on.theapproachtoevaluation
nowgenerallyadoptedbyMemberStates. -,„'
O.J.Ho.C.207of2.9.76andC0M(80)58final

1.3 .This paper hasbeen prepared following discussions with theCommittee
onTransport Infrastructure although itremains theresponsibility of
theCommission alone .Theaim isnot topropose adetailed solution to
alltheproblems ataneconomic level buttoshow that progress ispossible
now andthat practical experience will provide further answers .Ithas been
prepared byreference tonational material andreference toreports
published byinternational bodies .Thecomprehensive information given in
thereport ontheGerman transport evaluation system ,theDanish plan ,
information from the Netherlands theUKand Ireland have also been taken
into account ^".
Thefour main parts ofthenote cover :-
I:Objectives ofeconomic evaluation attheCommunity level .
II :The distinction between the notification and evaluation
ofprojects .Theaims ofevaluation systems .
Ill :Theevaluation ofprojects intheMember States :the
development ofnational systems toincorporate Community
interest .
/
IV :The treatment ofexternal factors inthe evaluation .
l)Notably :
Gesamtwirtschaftliche Bewertung vonVerkehrswegeinvestitionen ,
Bonn ,Februar 1980
Planlaegningsvirksomheden I-Ministeriet forOffentlige Arbejder ,
Oktober 1979 Copenhagen .
C.O.BoA .manual -Departmant ofTransport ,London 1979 *

-3-
2.-ObjectivesofeconomioevaluationattheCommunitylevel
2.I*WhatdoesCommunityinterestmean:intheory?
!
2.1.1.Thegrowthofsocialandeconomicactivityinanysocietyleads
inevitablytoanincreaseinthedemandfortransport.Thetransport !
sectoroftheeconomypresentsamixedcharacterwithacombination j
ofpublicand.privateenterprisebeingresponsiblefortheprovision
ofservices.Theinfrastructurerequirementsfortransportaregenerally
theresponsibility ofpublicorquasi-public -bodies.Eveninthose \
caseswheretheprivatesectorplaysaroleand _
thisroleisinvariablycloselyconstrained *bytheState,the'
construction ofnewtransportinfrastructure -facilitiesclearlyhas
importantsecondaryconsequences forindustry,environment,regional
policyetc.Theseimportant"externalities *combinedwiththelackof
anydirectchargingmethodforinfrastructure usehaveledtothe.
developmentofmethodstoaiddecisionmakingbyencompassingthe
benefitsandcostsofschemesinauniformframework.Thegrowthof
trafficandthegeneralpressureonStatefundsintheMemberStates 1
hasledtoincreasingattentionbeingpaidtoidentifying andif
possiblequantifyingthebenefitsandcoststhatprojectscompeting
fornationalfundsoffer.InaCommunityof10,nationalresources
,availableforinfrastructure varyconsiderably .Actionbythe
.Communitytodevelopthepossibilities ofindividualMemberStates
infavourof.projectsofprovenCommunityinterestbenefitsnotonlythe
MemberStatesconcernedbutalltheCommunity.
2.1.2.Thepressuretoensurethatinvestmentinnationalinfrastructure
makesamaximumcontributiontothenationalinterestfindsaparallel
attheCommunitylevel.*Itisnotparticularly remarkablethatthe
removaloftariffandotherbarriersintheCommunityhasledto:- ;'
first;ageneralincreaseintradeandsocialcontact
secondsachangeinthedistributionofeconomicactivitiesasa ;
.resultofgreaterlocationalfreedom
third:anincreaseinwealth(disposable ■income}leadingtoa
greaterexpenditureonholidaysandtravelingeneral
fourth:aparticularchangeinthestructureoffrontierregions .
oftenartifioallyrestrictedin"thepast*

-4-\
Radioal changes mthevolume tnature andstructure oftfaffio inthe
Community have resulted .Although international traffic isgenerally a
small part ofnational flows ,inrecent years some international and
transit traffic flows' have grown considerably quicker than national
traffic .These developments have reached astage where they cannot he
ignored ifthe effective planning ofmajor transport infrastructures
projects istobeensured .
2.1.3 .This growth ofinternational traffic isonly onereason forputting
forward thecase foradding aCommunity dimension tothat ofnational
interest .Itisalso necessary todemonstrate that Community interest
andnational interest arenot 'identical andboth justify consideration
intheprocess ofallocation ofresources . \
2.1.4 .There areanumber oftypical situations which demonstrate theneed to
identify theoverall impact ofprojects :-
first :where there exists abudgetary priority problem and aproject
ofimportance forCommunity traffic cannot beincluded inthe
national programme .
second :where theranking accorded tovarious costs /benefits differs
between theCommunity assessment and the 1national assessment .
This might arise insaythecase ofenergy saving orindustrial
development :theMember State considers'' ;some factors tobe
priority issues whilst theCommunity hasitsownsetofvalues ;
third :where technical standards differ e.g. aMember State with a
majority of,say ,DC1500 vrailways might prefer tocontinue
this system whereas throughrunning from other systems would be
facilitated byusing AC25KV;orwhere therail gauge inuse
will not allow combined transport trains tooperate .first
second
third

-5-
fourth:where"theoveralllevelofprovxsionfortransport
infrastructure investmentbyaMemberStateerenthough
.correctlyallocatedcouldnotfinancethelevelof
facilitiesnecessaryfortransportinfrastructure tokeep
pacewitheconomicandsocialdevelopment (i.e.thecasein
certainregionsparticularly of'poorer'Communitymembers).
Thesepossiblesituations ^reputforwardasexamplesofCommunity
andnationalinterestnotnecessarilyconverging.WheretheCommunity
interestisestablished ,theproposedfinancialinstrumentprovides '
'thepossibilityofaCommvonitycontribution .
•1.5«IfitisacceptedthattheCommunity isjustifiablyinterested
insecuringconsideration innationaltransportinfrastructure
planningforCommunityinterestthequestionishowtoidentifythe
natureoftheinterestanditsmagnitude.Clearlytobeeffective
theamountofCommunityassistanceshouldbe ,;
sufficienttoensuretheprotestisundertaken.Thissimplebutvital
factcanbeillustrate ?"ojtheexampleofahypothetical roadproject
whichonthebasisofthenationalevaluation hasarateofreturn
of,say,8%whereastherequiredminimumrateofreturnis10/5:•
-n.thisprojecthas,however,aCommunityinterestinthatitwilldivert
traffiofromcongestedrealsinneighbouring States.Ifthebenefits
totheseStatesarecalculatedtheyamounttoa4$returnonthe
>
.costsoftheprojeot.ButallthesecostsaremetbytheoneState,
wherethe!projectislocated.
Inthishypotheticalcasethe4i°'Communityinterest*addedtothe
8%nationalinterest,whichitselfincludesfactorsofCommunity
interest,wouldrendertheprojectacceptable.Hence,Community
financialassistanceof-a-minimumof2/»wouldenabletheprojectto
beundertakenandatthesametimeproduceCommunity-wide benefits.
Thisverysimpledemonstration ofthemechanismpoints'uptheneed
tobeabletotracetheresultsofprojectsontheCommunitygenerally.
Ifthiscanbedonethequestionishowaretheseresultstobeemployed
toaidadecision -maJcingprocessthatmustbeveryflexibletogiveproper
\ -
weighttothelargenumberofdifferentfactorsinvolved.•

-6-
4
2.2.Communityinterest:inpractice
2.2.1.Majortransportinfrastructure projeotsarenowalmostinvariably
subjecttosomeformofquantitative analysis:arecentreport
on'InvestmentCriteria *concludedthatevaluation methods'are
.indispensableforthepreparationofdecisionstoday*.^
Giventhebasicinformation andanalysisthatisappliedtoprojects
atthenationallevelthequestioniswhetherthescopeofthe
evaluationcanbewidenedtoincludetheCommunitydimension.
2.2.2.WhatfactorsarelikelytoenterintothecalculationofCommunity
interest?Thetwobroadgroupsarethoseaffecting:-
firstlyiintra-Communitytransportconsideration ,i.e.Community
interestintrafficterms;
secondly:factorslinkedtotheimplementing ofCommunityobjectives
.Ve.g.economicconvergence,regionalpolicy,energypolicyand,
ofcourse,transportpolicy,inotherwords'generalCommunity'
interest. ' ,
2.2.3.Thefirstgroupoffactorsoccurthroughremovingtheconstraintofnational
frontiers -forthe measurement ofbenefitsandcostsof
nationalprojects.Thisisimportantinthecaseofmajorschemeswhich
resultinnotableimprovements intheCommunity'sprincipalroutesystem
e.g.aprojecttoconstructabridgeovertheGreatBelt(Storebaelt)
inDenmarkwouldhaveconsequences inGermanyandevenfurthertothe
South(nottomentiontheimpactonothernonCommunityScandinavian
countries):againtheconstructionofamotorway betweenAlsace
andHJONwouldcauseimportanttrafficdiversions onroadsin
Luxemburg,GermanyandBelgium.
2.2.4.Thesecondgroupoffactorsassociateprojectswiththeachievementofover
allCommunityobjectives.ACommunityobjectiveistoreduceenergy
consumptionparticularly ofexternalfuels.Thisgoalwouldbehelped
bytheprovisionofacomprehensive Communitysystemofcombined
transport.Suchasystemtobeefficientwouldneedtohaveawide
FinalreportECMTexpertsgroup"Investmentcriteria".Exchangeof
informationoninvestmentcriteriaappliedtotransportinfra­
structureprojects.

-7-
coverageandoffercompetitiveservicesthroughouttheCommunity
irrespective offrontiers:inthiswayoneofthemaindisadvantages of
railservicescould "beovercome.Thechancesofsuchanetwork "being
establishedwithoutCommunityassistancelookslim.The'Community
interest *insuchasystemwouldbeestimatedinfunctionofits
%
potentialtoattractinter-Community trafficinthelongrunand
thussavefuelaswellasimprovingtherailways *financialsituation.
Againinthecaseoftheprovisionoffacilitiestoregionsofspecial
needtheCommunitywouldhaveaninterestinensuringthatfacilities
weresuchastomatchthedemandsthatwouldbemadeuponthem.
2.2.5*Thenatureandemphasisof'Communityinterest *couldchange
inthelongterm.Initially,theaspectsofprojectslikelytoarise
wouldinvolveestimating howandinwhatwaytheindividual Member
Stateswouldbenefitdirectly .intermsoftheusemadebytheirnationals
"ortheconsequences ohtrafficflowwithintheirborders.However,with
time,ifageneralconceptofa'corenetwork *composedoflinksof
particular Communityinterestcanbelaiddown,'moregeneralaspects
■relatedtothequalityofserviceingeneralonthenetworkcouldbe
includedintheprojectselectionprocess.Inthiscontextthereisa
parallelwith,planningofthenationalnetworkswherethecriterionof
justifyinganoptimalstandardofservicethroughoutthesystemhasto
bebalancedagainstthecompetingfinancialdemandsofdifferentmodes
andregions.Inthissituationanoverviewhastobetakenofthe
relativebenefitsofschemesfordifferentpar^softhenetworktoensure
thatthetotalbudgetisbeingusedtomaximumadvantageinthelightof
^thepriorityobjectivessetfortheCommunity.

-δ-
3.–Thedistinction "betweenthenotification andevaluationof
projects.Theaimsofevaluation systems.
•)
3.1,Theproposedregulation onfinancialassistancefortransport
infrastructure requirestheMemberStatestosubmitpotential
projectsaccompanied "byarieconomicevaluation(cost-benefit
analysis)0Beforegoingontodiscussthepossibleformofthe
evaluationitisusefult'oconsiderwhattypesofprojectare
i
potentially ofCommunityinterest.Indoingsoitishopedto
clarifythedistinction betweenthelistofsuggestedtypesof
projectsmentionedintheregulationthatcouldbecandidatesand
theprocessofidentifying andevaluating Communityinterestitself.
Article1oftheproposedregulationliststhefollowingpotential
categories :-
-projectstobeundertakenintheterritoryofaMemberStatethe
failureofwhichtobe^undertakencreatesabottleneckinCommunity
trafficj ■' ;
-cross-frontier projectswhicharenotsufficiently viabletopass
thethreshold,basedonavailableresources,whereaMemberState
wouldbewillingtointervene ?
-projectshavingasocio-economic profitability atthenational
levelwhichisinsufficient tojustifytheirundertaking butfrom
theCommunitypointofview,takingaccountoftheCommunity^
objectives,haveagreaterbenefit?
<•-projectswhichfacilitate ;'.thestandardisation ofworkonthe
Communitycommunications network.
'Ir,
3.2.TheqgroupsareintendedtobenomorethanguidelinestoCommunity
interest:thetransmission ofa.projecttotheCommissiondoesnot
implythatafavourable :decisionwillensue.Rather,theCommission
willprepareanopinion <ontheprojectwhichwillbesubmittedtothe
Communitybudgetaryauthoritiesforafinaldecision.TheCommission's
opinionwillinoludeanevaluationoftheCommunityinterestofthe
projectaspartofthesupportingevidence.
'■i'
■ . ·
:<1

Looking attheguidelines noted above thefollowing points emerge
first :projects should becapable ofmeeting accepted economic .
criteria necessary foradoption when Community interest istaken
- >into account . "
t - '- ■
secondtacceptable projects will belikely topresent substantial
benefits forinternational traffic ortocontribute notably to
thesuccess ofCommunity policies i.e. regional ,energy etc .
Thevarious stages fortheconsideration ofaproject areshown ina
diagram I.Itmaybenoted that thescreening ofprojects toselect
those of -potential Community !interest isanearly stage oftheprocedure
. '· ': ';»■ ·andisnotdirectly linked to .evaluation .Inpractice ,intheearly
stages oftheprocess ,there are ,clear advantages tobegained from
considering awide range ofschemes todevelop aframework of"casfe
{ ■• .
studies "toprovide guidelines fortheselection process ..

PROJECT
GENERATION PUBLIC
y
Cost/benefit
analysis
Considerfor
inclusionin
national "budget
L -
-^-4-,Screeningofprojectsfor
potentialCommunityassistance
rën
EvaluationPRIVATE
\/
Financial
appraisal
>/
Approve
Φ
*
Su"bmission
1 .►
Consultation with >
MemberStates
OpinionbyCommission|,
BudgetDécision 1

-11-
4.–Theevaluation ofprojects intheMember States :
the development ofnational systems toincorporate
Community interest , *'
4.1 »This part ofthenote "briefly comments onthe evaluation
methodology applied in "theMember States .Some ofthemain
areas that need tobeconsidered inaCommunity interest
evaluation are outlined . -
4*2.The objectives ofproject evaluation intheMember States :
Theobjective ofevaluating transport infrastructure projects is
%poffer guidance fordecision making :theinformation provided
"bytheevaluation relates tothe costs and ^benefits that the
project offers .Theexact nature oftheevaluation system ,what
itcovers etc.tvaries from country tocountry according tothe
deoision making system inuse :however ,thefundamental objective .
remains the same . ' 1
4.2.1 .Intheprivate sector oftheeconomy thecosts andreceipts of
aproject areforecast andafinancial appraisal isundertaken
toestimate the rate ofreturn .This rate ofreturn is
compared with thelending rates andtheprofitability ofother
potential projects ,taking account ofrisk ,andadecision onthe
investment istaken .Inthepublic sector ,where thebulk of •
transport infrastructure projects arefound ,asimilar financial
appraisal isseldom either possible orsufficiently comprehensive .
Themany factors involved inamajor transport infrastructure project
arenormally neither expressed inmarket prices e.g. environmental
-factors ,regional policy effects noradequately quantified ,time
^savings ,energy savings etc.Forthis reason ithasbecome common
practice toadopt awide ranging approach toevaluation andto
attempt toinclude factors notincluded inthenormal financial
evaluation .Themethods adopted intheMember State resemble toa-
greater orlesser degree those ofsocial cost–benefit analysis .

-12-
4.3.Theplaceofcost-benefit analysismthedecisionmakingprocedure
Someofthedoubtsthathavebeenexpressedaboutthepracticability
ofevaluatingtheCommunityinterestofprojectsstemfroma
misunderstanding ofthenat'ireofaneconomicevaluation.An
economicevaluationisbutoneelementofthedecisionprocessset
outbytheCommission ;itisanimportantelementbutnotthesole
ordecidingfactor.Thispointcanbeclarifiedbyconsidering how
theeconomicevaluationrelatestotheproposedCommunityprocedure.
4.3.1.Ashasbeennotedabovethedevelopment ofsophisticated methods
toevaluatecostsandbenefitsintheMemberStatesisintended
totranslateintomonetaryvaluesthe"external"benefitsfrom
investmentprojectsandcomparethemwiththesocialcosts,capital
andothers,involved.Inpracticethecoverageoftheanalysisis
incompleteandconsiderable 'greyorblank*areasremain.Thereare
certaineffectswhichcanbeidentifiedandmeasuredbystudying
thewaysinwhichtheyaretreatedonthemarket.Certainother
effects,usuallytermedintangible,cannotbeaccuratelyidentified
andmeasured.Hence,althoughtheevaluationprocedureattemptsto
aidthedecisionmakersbyreducingtheareawhereintuitivejudgment
hastobemade,itisseldom,ifever,complete.Eveninthose
MemberStateswheredetailedstatisticsareavailableandacompre­
hensiveevaluationisnormallyundertakentheroleofthedecision
makeractinguponhisorherjudgementremainspreponderant .The
Commissionisproposingaprocessfortheprovisionoffinancial
assistancethatisessentiallysimilartothatoftheMemberStates;
anevaluationwillbeundertakenbutthedecisionremainsfirmlyin
thehandsoftheCommunities'budgetaryauthorities .

-13-
4.4.■Theelementsthatfigurein-theeconomicevaluations
undertaken byMemberStates
4.4*1.Thebasicelementsofanevaluationofatransportinfrastructure
projectare:– ~ ~
first:anassessement ofthecosts,bothconstruction and
1.... ....■maintenance :,"shadow™pricesmaybejustified -insome
--cases;- ""
second:thetraffic^flowsinvolved,forlargerprojectsincluding
generatedtraffic* .'
third:acalculationofthechangeinoperatingcostsforusers,
(incomparisonwiththestatusquoposition);
/
fourth:thetimesavingsexpressedinmoneyterms. •
'fifth:•accidentsavings
Otherelementsaresometimesaddedtoexpandtheevaluationnotably
inthefieldofexternaleffects.
4»4«2.Vliththeseelementsquantifiedinmoneytermsadiscountedrate
ofreturniscalculated.Insomecasesanalternativepresentation
oftheelements,calleda"planningbalancesheet"or"multi->.
priteriaanalysis",isundertakenbyassigningweightstothe
variouscostsandbenefitstoarriveatacomprehensive ranking
ofthepossiblecoursesofaction.Thisinformationisincludedwith
otheradvice,onsocialmonetarymattersetc.foradecisiontobe
made. -
4»5»Theprocessofmovingfromanevaluationofnationalinterest
toCommunityinterest
4.5.1.Thepracticeofcarryingoutadetailedevaluationofmajorprojects
"iswidespreadintheMemberStates.Thebasicinputs -foran
evaluationarethereforealreadyassembledatthenationallevel.
Thetransformation ofa.nationalinterestevaluationtoaCommunity
interestmightbeundertakenby,either:anewapproach',starting
.*"Shadowprices*-thesearepricesappliedtofactorswhichitis
consideredhaveamarketpricestructurethatdoesnotreflecttheir
valuetosocietyingeneral.

-14-
frombasicd&taandassemblingthis,plusany.newdata,into
aspecificCommunityinterestcalculation ^or,developingthe
existingnationalevaluationinordertotakeCommunityfactors
intoaccount.Thechoiceofthelatterofthesecoursesisno.t
difficulttojustify.Buildinguponthenationalevaluation,which
isinalleventsamajorpartofthetotalevaluation,willsimplify
theadditionalcalculationsthatareneeded,reducethedateinputs
andmaketheintegrationprocessofnationalwithCommunityfactors
lesscomplex.
* ,;.;
4.5.2.TheCommissionhasundertakenaCommunityinterest*evaluation
ofamajorprojectaspart;ofthesupportprogrammefortransport
11■infrastructure policy:;abriefsummaryoftheprincipalresultsof
thisstudyareshowninAnnex1(studyofCommunityinterestofprojects
forafixedlinkacrosstheChannelfromFrancetotheUK).The
principalextensionsthatwereundertakenforthestudywerethe
following:-
<
first:■anexamination -oftheimpactoftheprojectonMember
StatesotherthanPranceandtheUKi.e.theeffecton
transportoperationsinthosecountries;
second:anassessmentoftheprojectsimpactonCommunitypolicies,
'I
notablyregionalandenergy;
third:adistributionofuserbenefits(surpluses)bytheState
oforiginoftheusers.
InviewofthecostandgeneralimportanceoftheChannelCrossing
projectstheirevaluationhadtobearelativelylongand
comprehensive process.Thenatureoftheevaluationprocessshould
evidentlybeinsomeway1relatedtotheimportanceoftheproject;
formostprojectsthetypeofevaluationundertaken £>rtheChannel
Linkwouldnotbejustified.

4.5»3»Althoughithas"beensuggestedabove,(para.3.)»thatthe
Communityinterestevaluationframeworkcan"bebasedessentially
uponthenationalevaluationtherehastobeacertainconvergence
„inthe^approachesadoptedinordertorenderthemcomparable.
Theprincipalareaswherecomparability shouldbelookedfor'
are:-- -
-Timehorizons
–Traffioforecastingassumptions (scenarios)
–Valueofbenefits(notablytimesavings)
–Hatesofdiscount. ~
Thebasiogoalofensuringthatresultsoftheevaluationsare
comparableistoensurethatCommunitybudgetaryresourcesare
'$* 1 '•
allocatedinanoptimummanneri.e.thatprojectsofferingthe
highestCommunity/'interestreceivethehighestpriority:
additionallytheMember"Stateswillrequiretoknowhowtheprojects
comparewiththemarginalprojectsoftheirownnationalpool.
4.5*4»Possiblythemoststraightforward oftheelementstodealwithisDIS­
COUNTRATE.Hereitissuggested "thattheMemberStatespresentthe
.calculations discounted ,attheusualrateemployed.However,
appendedtotheevaluationatableofcosts/benefits^byyear,is
givenwhichwillallowtheCommissiontocalculateboththeinternal
1.. ...2rateofreturnontheprojectanditsnetpresentvalueunder
differingratesofdiscount.TheCommissionbelievesthatthis
procedurewillbeeasyandeffective.
Thatrateofinterestwhich,whenusedtodiscountthecashflows
associatedwithaninvestmentproject,reducesitsnetpresent
valuetozero.
2_... _.-,.,, ■
'Thenetvaluenowofastreamofcostsandbenefitsarisinginthe
-futurecalculatedbydiscountingatarateofinterestrelatedto
currentinterestrate3.

-16-
4»5*5*mentionofpresentingatimestreamofcostsandbenefits
fromtheproject "brings?upimmediatelythequestionofthetime
horizontoemploy1Againitisclearthatthevaryingnatureof•
projectsandpracticeintheMemberStatesmeansthatthe*
TIMEHORIZONemployedwillvary.Itisagaindifficulttolay
*downanygeneralrulethatisuniversallyapplicabletoallprojects,
allregionsandalldiscountrates.Asolutionwouldlieinthe
provisionofatableofcostsandbenfitsyearbyyearwitha
statementofthelikelynatureofthecostandbenefitstreams
throughaperiodof$0years:insomecasesthelifeofaproject
i3limitedtechnicallytosay25yearsbutforthemajorityof
transportinfrastructure projects ,afiftyyearlifeisbothfeasible
andreasonable.Wherea,shortertermhorizonisemployedthanthe
technicalcharacteristics indicateasfeasibleastatementof.
residualvaluescanbemade.
4.5*6.Thecommonvaluationofbenefitspresentsmoreproblemsthanin
discountratesandtimehorizons.Themostimportant
benefitstemmingfromtransportinfrastructure projectsisusually
TIMESAVINGS.Theyareafunctionofthetrafficforecasts
(seebelow)andthevalueoftimeofthe
variousgroupsofusers.Quiteimportantdifferencesexistbetween
theapproachesadoptedbyMemberStatese.g.certainStates
calculatetimesavingspervehicle,otherscalculatethetime
savingsperperson;thesedifferences implythatadirectcomparison
oftimesavingswillbeofverylimitedvalue.Anapproachtothe
solutionofthisdifficulty maybefoundin:-
first:clearstatementsbytheMemberStatesofthe
approachesemployed,
second:-theapplication ofare-weighting formulatotheactual
timesaved(onacountrybycountrybasis)toconvertto
.acomparablefigure.
Timesavingsarenormallythemostimportantquantifiable benefit
inprojectevaluation.Inviewoftheirimportanceconsiderable care
shouldbetakenintreatingtheirvaluationinCommunityinterest
projects.

■W-
4»5«7 •Onthequestion ofSCENARIO 'Stheobjective should "betoconsider
the "benefits andcosts ofprojects against thebackground ofa
number ofpossible economic situations .Itiswell known that no
single forecast canbereliable over more than ashort period and
hence theperformance ofaproject should be-considered inrelation
toarange ofpossibilities .Thework onpreparing asystem of
broad forecasts oflong distance traffic nowunderway aspart of
$theCommission 'sprogram should beofvalue inthis field .
4»6.Toconclude ,therecommended wayforward istousenational methods
initially andtoattempt todevelop keys torelate estimates toa
given 'bench mark *.Inthelonger term ajoint research programme
could beenvisaged torelate particularly tovalues touseforcosts
andbenefits occurring ontheprincipal routes .'

–The "treatment ofexternal factors inthe evaluation
*The form ofthe evaluation procedure
.1.Thepoint hasalready "been made that anevaluation isnotaimed atre­
placing therole ofthenational decision maker "butrather atreorganis­
ingandclarifying theinformation available .Furthermore ,itisclear
that whatever claims aremade noevaluation canhope tocover more
than aps.rt oftheproblem areas concerned .The evaluation system
adopted forCommunity interest will need tobeaccompanied byabroad ,
flexible but structural presentation oftheproject intheframework
ofsocio-economic development . -
,2.Inthecase ofproject evaluation atthenational level where the
objective istochoose between alternative ways ofachieving agiven
objective ,theinability tomeasure allelements involved need notbe
ofgreat importance .Frequently oneofthealternative projects
considered canbedemonstrated tobesosuperior tothe others interms
ofquantifiable elements that itsoverall superiority canreadily be
accepted .However ,inthecase ofCommunity interest evaluation ,
external factors arelikely tobemore important than atthenational
level .
The importance ofexternal factors 1 \•
1.Theimportance ofexternal factors forCommunity interest schemes is
easily demon'?'' rated .The concept ofanexternal factor isapplied to
any effect which isnotreflected inthedirectly calculated impacts
ofascheme i.e. thenoise ,pollution ,regional employment ,trade -
development effects ofaproject .These have tobesetagainst the
tangible effects which aredirectly measured andthose ,such astime
savings which arealso nowhabitually included inaproject evaluation ,
nthe case -ofpotential Community interest projects their essential
Community interest will Lieeither :intheir direct benefits tctirffic
flow andaccessibiLity,_or -:intheir external impact beybnd the "
frontiers ofthecountry concerned orontheachievement ofaCommunity
policy within that country ...

-19-
Consideration ofthecandidates forCommunity aidwill point tipthe
importance oftheexternal factors that they involve andhowtotreat
them .
5.2.2.Given theimportance ofexternal factors thenecessity toarrive at
aclear understanding oftheobjectives oftransport intheregions ,
forindustry etc .,isclearly "brought out.Whilst itispremature to
saywhat these objectives areitisimportant totake note ofthegreat
programme inwhioh individual projects areundertaken and .therequirements
oftheDecision of1978 facilitate this .Atanopening phase ofthe
exercise itisclearly important toengage inanpep1oratory exercise
designed tocreate acommon understanding ofthepractical objectives to.,
"befollowed ..Such anapproach will dictate aflexible system capable of
being adapted tocope with projects ofvarying natures .Thedevelopment
ofobjectives fortransport inconnection with industrial ,regional
andother external objectives .must take place inthecontext of
aninteiv-play between the various Member States and thfe Commission .Asa
.first step itseems sensible fortheMember States themselves totake
Xaviewontheimportance ofprojects inthelight oftheir ownoverall
programmes ,theprojects thezdn andsubmit likely candidates .Theconsequential
process ofexamination will produce aclearer answer tothequestions ,
''whether some general objectives canbesetupandhowthese factors are
tobeincluded inthe overall evaluation * ,
5.3.Theprincipal objectives
Grossly simplifying thewhole exercise ofCommunity involvement in
transport infrastructure schemes ,two central groups ofobjectives can
beidentified : •
first :those relating toprojects designed toimprove conditions on
main routes :these areessentially transport objectives capable
ofbeing quantified (subject tothepoints made inf&rt III),
/ ■ "• •
second :those relating tomore general objectives towhich transport can
contribuite ,e.g.regional development ,industriai policy etc.

-20-
5.3.2 .Forcertain projects itialikely that thebenefits under thefirst
heading will besufficiently large topresent agood case foraction
whatever the outcome ofananalysis ofpoints inthe second group .
However ,formany projects itwill benecessary toattempt toidentify
the relevant factors and toconsider howthey relate tothe net value
oftheproject under thefirst heading .This task will have tobe
accomplished inccnneotion with actual projects .TheCommission is
currently engaged onstudies toproduce amethodology that will beapplied
tocertain test cases intheAlps and inLess developed regions notably in
Italy .The results ofthis work will beavailable tothe Infrastructure
Committee atthe end ofthe year .
Thework undertaken inthe .evaluation byMember States isbeing examined
and theexperience inGermany ,France andelsewhere onmulti-criteria analysis
should beparticularly useful (seeAnnex 2).
5.4 .Asnoted above (4.5.2 .)theCommission hasunderway aprogramme ofstudies
designed toprovide evidence ofthenature ofCommunity Interest and tohelp
with theevaluation ofprojects .Thefirst results ofthis programme illustrate
thefeasibility oftheproposals setout int.his paper .Theempirical analysis
ofproblems shows that much canbeaccomplished onthebasis ofexisting infor -
N -
mation .Ithasbeen demostrated that aclear andcomprehensive appreciation
ofthe basic elements ofprojects can goalong way toproviding the
information needed for effective decision making .Tomeet this
objective projects should beaccompanied bystatements that show
thebasic elements ofthehypotheses and calculations that have been
made .Points ofparticularly interest that have been shown tobe
ofespecial relevance are e.g. time savings ,theactual time saved
and tli value assigned ,the .flows ofcosts and benefits over time etc .
Such besicinformation will beofconsiderable value inthe carefull
and deta 'led .consideration ofprojects that theCommission considers to
beofparticular importance .With such information available itwill -
beperfectly feasible for the Commission and theMember States to
examine theincidence andimportance oftheeconomicortechnical parameters
that have been employed theevaluation .This possibility will gofartomeet
-thecriticism that atleast intheinitial phase oftheoperation nouniform
criteria will beused .Anexamination oftheimportance ofadopting different

21
evencommon standards fopsuchelements astimesavings will beboth
feasible andeasy toundertake .Given thepossibility ofbenefiting
fromtheresults ofpractical experience withrealprojects itwill
bepossible tomove intimetowards amoreuniform structure following
therequirements ofthedecision making authorities .
Inconclusion ,it"isargued that asolution tothequestion ofexternal
'factors would consist ofanapproach having anumber ofphases *-
I'irsx tthesubmission ofprojects "byMember States with anational
.appreciation oftheir Community interest .This phase would
Nprooeed simultaneously toareview ofmethodology bythe
/Commission andanexamination oftest cases } .
second .:ajoint oonsultation onprojects toarrive atanappreciation of
their Community interest andtodevelop flexible guidelines for
.future project selection andevaluation } ,
third :thedevelopment ofanetwork ofCommunity interest having certain
clear objectives setoutforfuture development .Thepreparation -
ofmutually acceptable procedures forevaluation including the
incorporation ofexternal andintangible elements .
Thethree elements ofthis approach areconsidered toberealistic and
practical .Toadopt such anapproach would becost-effective interms of .
national resouroes andwould preserve theessential flexibility andfree­
domofselection that should characterise ;theopening steps ofthe
Community programme .-

-22-
6.–Conclusions
6.1.Whatvailevaluationachieve?
Thecasefcrevaluatingmajortransportinfrastructure projects
to"betterunderstandtheirimportancefortheCommunitycan"be
arguedonseverallevels,
6.2.Atthemost"basiclevelthecaserestsontheclearevidencethat
transportprojectscauseeffectswhichcanspreadbeyondnational
frontiersandimposecostsand"benefitsonneighbouring countries
indeedontheCommunityasawhole.InaCommunitycommittedto
developmentformutualself-interestitisclearlyunacceptable for
nationalinteresttobethesolefactorinvolvedindecisionmaking.
InthissituationthevalueofanevaluationofCommunityinterest
isevident.
6.3.TheQuestions:
6.3.1.Thisargumenthoweverignoresthefundamentalquestionsofs-
-whatpurposedoestheevaluationserve
-isitpractical •:- ■-
-howcost–effectiveistheprocess?
6.3.2.Inordertoanswerthesequestionsthesubjecthast.obetreatedin
amannerwhichtakesbetteraccountoftherealitiesofthe
Community.Clearlytoevaluateprojectsforthesakeofexpanding
knowledgebutwithnolinktopracticalpolicyisafutileacademic
exercise.ACommunityinterestevaluationhastobecloselyrelated
r/tothepracticalpossibilities ofCommunityinfrastructure planning.
Havingmadathispointitisimmediatelyclearthattheapplication
ftheevaluationcanbeconsiderablyrestricted.TheCommunitycan,
o.practicalgrounds,onlyexpecttotakeapracticalrolein
relationto.largeprojectshavingawidespreadimpact.Furthermore,
thefactthat'Communityinterest *isinmostifnotallpracticalcases
likelytobelimitedtoalevelwellbelow'nationalinterest *means
thattheComm-mitywillplayanassociateroleandintervene
inprojectstoaILaitedfinancialextent:Inotherwords,the
Communityshouldnotbeexpectedtojustifyfinancingprojectswhich

-23-
performparticularly poorlyinanationalevaluationbutratherfor
projectsthataremarginalorhavesomespecialfeaturesrequiring
assistancethattheCommunityasawholecould "bestprovide.The
answertothefirstquestionisthereforethatanevaluatioriwillonly
"beusefulindirectrelationtoafeasiblecourseofCommunityaction:
itisunlikelynottoservetochangenationalprioritiessubstantially
.andwillreferessentiallytolargeprojectsonthemajorroutes."
6.3.3.Turningtothesecondquestion,thisisessentiallythepointtowhich-
thispaperhasbeenadressed.Thepaperhasnotclaimedtoprovidemore
thananapproachtothepracticaldevelopmentofasystemsajustification
fortheCommission'sbeliefthatitsproposalsarefeasible.Ithasbeen
shownthatMemberStatesnowalmostuniversally adoptmethodstoevaluate '
projectsinthepublicsectorthattakeaccountofexternalfactors.It-
hasbeenarguedthatbyadoptingaflexibleapproachatthebeginningofthe
exerciseitwillbepossibleforMemberStatestopresentprojects,
possiblytakenfromthe"bottlenecks Report",withtheirownpresentation
ofCommunityinterestandtoinvestigate eachoftheseprojectstoidentify
factorsof'commoninterest.Formanyprojectson.thetrunkroutesit
willbepossiblebyastudyof"theirtrafficconsequences,timesavingsetc.
toestablishafirstapproachtotheirimportancefortheCommunity.
Thusitisnotclaimedthatthisshortnotepresentsmorethanavery.
briefsketchoftheproblemanditssolution.However,itishopedthat
sufficientargumentshavebeenadvancedtoindicatethatapractical
approachcanbedevisedifthewillexiststomaketheefforttounderstand
thesometimesdifferingapproachesadoptedintheMemberStatesandto
reachanagreementonacommoninterpretation .
........ •\ .
6.3.4*Finally,i3the'proposalcost-effective ?Thereisnoanswertothispoint.
TheCommission'spositionisthatitshouldnotengageinahactivity
thatcouldbemoreefficientlyundertakenbytheMemberStatesconcerned.
InthiscasetheCommissionbelievesthatthenatureoftheproblemgoes
'beyondnationalfrontiersandconcernstheCommunity.Itmightbefeasible
toconsiderbiletaralnegotiationtomeetthisneedforcoordination andco-
finaneeforthereasonsgiveninthebottlenecksreport(para.5>3.1*)*How­
ever,foranumber,ofprojectssuchaprocessislikelytobeevenmore
1COM(80)323final

-2A-
difficulttoarrangeefficiently andinvolvethesamemethodological
problemsasworkinginasystematicyetflexiblemannerthroughthe
Community, -,
6.4.Ifitisacceptedthattheargumentsputforwardontheneedandfeasibility
ofevaluating Communityinterestareacceptedthenextstepistotake
practicalaction.Withoutachievingasatisfactory andacceptableevaluation
ofCommunityinterestinthecontextofpracticalprojectsintheMember
Statesitislikelythatdoubtsonthesystemanditspracticability will
remainandcreateamajorhandicapforthefinaldevelopment ,ofaCommunity
programme#
4

ANNEX 1
TheNatureandExtentofPossibleCommunityInterest
intheConstruction ofaFixedLinkacrosstheChannel
Summary£f_the__R£srult_s__of the_Stud^
ThisstudyexaminedtheeffectsthroughouttheCommunity
oftheconstruction offixedlinksofvarioustypesacrosstheChannel.
ThecostsandbenefitsaccruingtoeachMemberStatewereidentifiedand-
quantifiedasfaraspossible.
Itwasassumedthatthefixedlinkwould"beopenedin1985#Thefirst
stageofthestudywasconcernedwithforecastingthetrafficlikelyto
useeachtypeoffixedlinkuptotheyear2000.Onthebasisofthefore­
casts,afinancialappraisalwasthadeofthereturnstotheoperatorsof
thelink.Thisappraisalindicatedthatalltheprojectsexaminedwere
likelytoproveprofitableifthecostandrevenueforecastswereachieved
inpractice.Acost/benefitanalysiswasthenundertakentotakeintoaccount
theeffectsontheoperatorsofexistingcross-Channel services,(including
portsandairports),thenetbenefitsto.theusersofallCross-Channel
servicesandtheeffectsonrailwayundertakings androadauthorities.The
resultsofthisanalysisindicatedthatbothsingle-track anddouble-track
railtunnelswouldprovidenetbenefitsevenifeconomicgrowthwasslow
andinspiteoftheuseofhighdiscountrates(10-15%)•Aroadbridgeora
combinedroad/raillinkwouldprovidesubstantialnetbenefitsatdiscount
ratesof3-5/&. .
. 7 ''
Anfexamination ofthedistribution ofthenetbenefitsledtothe
conclusionthatalthoughthemajorshare,ofbenefitsaccruedtotheUnited
KingdomandFrance,otherMemberStatesalsoshouldobtainsubstantial
benefits. '
)
Thescopeofthenational(United-KingdomandFrance)cost/benefit
studywasbroadenedtocovernon-transport effectsofafixedlink,including
effectson:-

H
ANNEX 2
Multi-Criteria Analysis:approachtothepresentation
ofevaluationResultsemployedinGermany
1.Cost-Benefit analysisaimstopresentasingleconclusionuponthe
evaluationofcompetingprojects.Multi-criteria analysisaimstoemploy
anextensiverangeofcriteriaofdifferentcharacterinordertoreflect
theimpactofaprojectondifferenttargetgroups.
2.Bytheuseofvaryingcriteriaitishopedthatmulti-criteria analysiscan
bemorecomprehensive andflexiblethanstandardcost-benefit aialysis.
However,itshouldbenotedthatitispossibletoextendthescopeof
cost-benefit analysisinordertotakeaccountofthedistributional
aspectsoftheprojectsbeingevaluated.
3.Thereareclearlycertainadvantagesin.theapproachusedinmulti-criteria
analysisalthoughtherearealsodrawbacks.TheCommissionisconsiderung
howtheapproachmightbedevelopedtoapplytoinfrastructure projectsand
therewouldbeadvantagesintheMemberStateswithexperienceinthis"
approachusingthetechniqueinconnectionwithprojectssubmittedtothe
Commission .
4.TheGexfoantransportministryhasdevelopedaunifiedapproachforthecon­
siderationofprojectswhichisshowninthetableattached.Thisapproachis
notintendedtoserveasmodelfortheCommunitybutitdoesshowthe
practicability ofaimingforacommonapproachtoprojectsatsomefuture
date.
Dicl.

2 ANNEX 1
-theenvironnent
–regionaleconomies ~
–eachsectoroftheeconomy(intheconstructionphase)
–energyconsumption.1
'''''s '
,Theseaspectswerenotincorporatedintothecost/benefit
analysis,eitherbecausetheyrelatetothedistribution of"benefits
ratherthantheirtotalvalueor"becauseofdifficulties ofquantification
(environmentalfactors).Theresultsofthispartofthestudywere,
however,generallyfavourabletoalltypesoffixedlink.Furtherstudy
isunderwayintotheformulation ofexternalbenefitsandtheirincorporation
intotheevaluation system.
Inconclusionthestudydemonstrated : '
-thateconomicevaluationcouldproduceconsiderable usefulevidencefor
the-consideration oftheCommunityinterestofmajorprojects;
"thedegreetowhichamajorinfrastructure projectcouldcontribute
toimprovements intransportoverawideareawasshown;- ,
-thescopeforCommunityinvolvementinplanningandfinancing
wasclarified. V" .""

AnnexofAITITEX2
Project : Land:
ProjectNo.:
Situation:
I.Resultofmacro-economic evaxuation
"1.Importantcharacteristics ofproject
Lengthx
Costs:
Worksplanned.:
Capacity(annualaverage)
(Forecast1990>medianforwholesection)
2.Macroeconomic benefitsandcosts
Unweighted
benefits
M.EM/yr.Weights
Alternatives
.1Weighted
benefits
Alternatives
VT
1,Primarycost-savings
Ulmmm––■–i^MI«h«nn'a.w
(vehiclerunningscosts,i
infrastructure maintenance )!
2.Contributions totraffic
safety2Γ
3.Improvement ofaccess-;
ibilityofcentraltowns,IIT
placesofwork,leisure j
areas
4.Regionaleconomic !
benef-.ts(effectson !If
employment,regional ].preference) i
5.Environnantaleffots,}•
"(noise,e.zhaustémissions,jF
f^hindrancetomovement ;withinurbcTareas) i
6.Non-transport fonctions N,0,51
1'<1'2i t&
31
1'1
Totalbenefits Σν■MillionDMperyear
Investmentcosts(incl.
noise -protection)ΚMillionDMperyear
Cost/benefit3ratioΣ!ί
Source:Bundesverkehrcwegeplan80-DerBundesminister fürVerkehrBonn