Special report No 4/94 on the urban environment together with the Commission's replies
Date: 1994-12-08
Institutions: European Court of Auditors
Subjects: EU policy, European Regional Development Fund, development plan, environmental protection, town planning, urban area













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31994Y1231(07)

Special report No 4/94 on the urban environment together with the Commission's replies  


Official Journal C 383 , 31/12/1994 P. 0001 - 0014 





SPECIAL REPORT No 4/94on the urban environment together with the  Commission`s replies(94/C 383/01)(Observations pursuant to Article 188C(4), paragraph 2,  of the Treaty on European Union)CONTENTS Paragraphreference Pages0. INTRODUCTION ... 0.1 - 0.3 21. DIFFICULTIES CONCERNING POLICY FOR THE PROTECTION OF THE URBAN ENVIRONMENT ... 1.1 - 1.4 22. ACTIONS MANAGED BY ENVIRONMENTAL DEPARTMENTS ... 2.1 - 2.9 2 The 'Urban environment` unit ... 2.1 - 2.5 2 The 'LIFE` instrument ... 2.6 - 2.9 33. URBAN PILOT PROJECTS FUNDED BY THE ERDF ...  3.1 - 3.13 3 Projects funded ... 3.1 - 3.3 3 Selection of initiatives ... 3.4 - 3.5 4 The innovative nature of projects ... 3.6 - 3.7 4 The state of progress of the projects examined ...  3.8 - 3.13 44. THE RECITE PROGRAMME FUNDED BY THE ERDF ... 4.1 - 4.8 5 European cooperation networks ... 4.1 - 4.3 5 Difficulties concerning monitoring and assessment ... 4.4 - 4.8 65. ACTIVITIES CONCERNING TRAINING, RESEARCH, TRANSPORT, ENERGY AND THE CULTURAL DOMAIN  ... 5.1 - 5.5 66. CONCLUSION ... 6.1 - 6.7 7Tables 1 and 2 ... 8The Commission`s replies ... 100. INTRODUCTION0.1. Observing the principle of subsidiarity, the Treaty gives the  Community general responsibility for the preservation, protection and improvement of the quality of  the environment and, therefore, of the urban environment. In addition to this, issues concerning  the quality of life in urban areas are closely linked to all questions of economic and social  development and are thus influenced by Community action in these areas. It was in this spirit that  the Commission presented a 'green paper` on the urban environment in June 1990. 0.2. In its Resolution of 28 January 1991 () on this 'green paper`, the Council pointed to the  Community dimension of any policy concerning the urban environment. It acknowledged that the  solution of problems relating to the urban environment was an essential precondition for any  sustainable development of towns and cities, and that close and continuing coordination of policies  in the many domains that affect urban areas was vital to success in this field. The Council also  stressed the importance of urban and regional planning as an integrating framework for decisions  regarding land use, services and infrastructures, and it also acknowledged the important role that  may be played by the exchange of experiences and demonstration projects. 0.3. In conjunction or in parallel with the distribution of the 'green paper`, Community actions  have given increasing attention to concerns about the urban environment, through various  initiatives, the implementation of which will be examined in the following paragraphs. 1. DIFFICULTIES CONCERNING POLICYFOR THE PROTECTIONOF THE URBAN ENVIRONMENT1.1. Action to  protect the urban environment is dependent on complicated factors. Air pollution, water pollution,  noise pollution and the quality of city life are all factors that are linked to economic and  industrial development, climatic conditions, the nature of the terrain and transport and energy  policies. Essentially, it is good administrative management at local level, including utilization  of suitable technologies, that will guarantee the conditions for harmonious urbanization and the  development of quality for present and future urban populations. 1.2. Public aid may be used for studying problems, developing information resources, promoting  research, experimenting with different methods and processes and improving training, but it cannot,  alone, induce changes in behaviour patterns, which are far more dependent on legislative change and  the will of the administrative authorities. Similarly, public aid cannot rehabilitate all run-down  sites and, in any case, one of the principles of intervention on environmental issues is that of  prevention at source. 1.3. In this spirit, Community action to protect the urban environment concerns mainly the raising  of awareness, exchanges of experience, pilot research projects and the devising of methods and  models. It is an action that focuses on promotion and support, whose effectiveness is largely  dependent on the commitment and diligence of local partners. 1.4. The Commission`s green paper dates from June 1990 and, at that time, several initiatives that  were likely to have an impact on the urban environment were already under way, in a piecemeal  fashion, within the framework of various Community policies. This means that a considerable effort  needs to be made to reach a more unitary overall approach, though this is a difficult objective,  since each sectoral policy has other priorities that have to be combined with environmental  concerns. 2. ACTIONS MANAGEDBY ENVIRONMENTAL DEPARTMENTSThe 'Urban environment` unit2.1. Within the  Commission`s DG XI, the Unit responsible for 'the urban environment, air quality, transport and  noise` prepared the Commission`s green paper of 1990 and provides the secretariat for the group of  experts set up in application of the Council Resolution of 28 January 1991. Its main activities  concern the development of legislation on, in particular, the use of fuels, urban transport  strategies, air quality and noise control, including work on a database on air quality in several  European towns and cities. 2.2. The Unit also tries to ensure that protection of the urban environment is taken into account  in actions undertaken and, in some cases, funded by other Commission departments. This is an  essential function to ensure that the actions of these other departments can benefit from the  contribution of this specialized Unit and to limit the risk of parallel initiatives being conducted  in an uncoordinated fashion. 2.3. In addition to these activities, the Unit manages a budget appropriation of some ECU 2,5  million a year, which was, until 1991, covered by a separate budget heading (item B4-3045, 'Urban  environment`) but has, since 1992, been incorporated into the appropriations covered by article  B4-304, 'Environmental legislation`. This budget appropriation has to cover, in addition to the  financing of studies concerning the development of the legislation, the funding of pilot projects,  exchanges of experience, studies and seminars within the framework of specific actions concerning  town planning, urban transport, historical heritage or the natural environment in towns and  cities. 2.4. Contracts are subject to standardized monitoring, the various intermediate and final reports  usually being presented correctly by contractors. However, the contribution of subsidized actions  to the realization of Community objectives should be more carefully planned and assessed. 2.5. According to the budgetary remarks on article B4-304 for 1993, one of the main projects funded  concerns aid granted to a body specializing in the urban environment, which was set up in December  1991 and is based in Berlin. During 1992 and 1993 this body received ECU 450 000, which accounted  for approximately half of all the resources available to the body in question for that period. The  body`s activities for 1992-93 were, to the extent of about ECU  131 000, subcontracted to a Dutch  establishment and to the extent of about ECU  61 000 to an American consultant. Both were selected  by the contractor by direct negotiation, and consist mainly of training initiatives, seminars and  exchanges, essentially for nationals of Eastern European countries, and are often held on the spot  in those countries. These activities are not in conformity with the wording of article B4-304 of  the 'Environmental legislation` budget and have little impact with regard to the objective of  protecting the urban environment in the Community. The 'LIFE` instrument2.6. DG IX also finances similar measures to those under Article B4-304 using  the LIFE financial instrument for the environment that was set up by Council Regulation (EC) No   1973/92 of 21 May 1992 (). One of its objectives concerns 'measures aiming to improve the quality  of the environment in urban areas, both central and peripheral`. On the basis of this objective,  two measures were supported in 1992 and eight in 1993, with total aid of ECU 5,7 million, for  overall expenditure of some ECU 27 million (Table 1). 2.7. The two 1992 measures, concerning the cities of Dublin and Genoa, were selected on the basis  of proposals which had been submitted by the Member States for the instruments preceding LIFE. For  both of these measures difficulties emerged in defining the initiatives, which considerably delayed  the launching of the measures. The Dublin project consists of drawing up an inventory of  information to identify and manage environmental problems in the city. It was first approved only  in part. A new decision in October 1993 approved other parts, increased the aid by ECU 0,3 million  and extended the completion date to June 1995. In the case of Genoa, the project approved in  December 1992 should have been completed in December 1993 (aid of ECU 1,35 million for a total  expenditure of ECU 5 million). However, the project had not even begun by that date and the city  authorities were preparing a revised plan of action. The advance payment of 40 %, made in March  1993, had not been used. 2.8. In contrast with other areas of intervention covered by LIFE, actions concerning the urban  environment to be implemented in 1993 were not the object of a call for tenders published in the  Official Journal. Priorities were, however, defined by the Commission, with the assistance of a  committee of representatives of the Member States, and were published (Official Journal No C 331 of  16 December 1992, p. 11). These priorities concern the definition and development of integrated  management methods and, in particular, the development of practices whose purpose is to reduce the  pressure of traffic in public urban areas, mixed use of land and the promotion of cleaner public  transport systems. 2.9. The Member States submitted 119 proposals on this basis, of which eight were finally accepted.  Clearer and well publicised priorities and conditions governing Community funding would have  facilitated selection procedures, which were conducted using inadequately completed questionnaires.  Most expenditure on projects accepted at present does not appear to be closely related to the  declared priorities (Table  1): some projects concern the renovation of a district and one  investment project is more to do with the development of tourism (construction of an amphitheatre  and a riverside quay and purchase of a boat). Completion dates for the eight projects accepted  range from the end of 1994 to the end of 1996. 3. URBAN PILOT PROJECTS FUNDED BY THE ERDFProjects funded3.1. Under Article 10 of Council  Regulation (EC) No 4254/88 of 19 December 1988 (), the ERDF may (chapter B2-18 of the budget for  'Temporary measures and innovative actions`) contribute to the funding, at Community level, of  pilot projects that: (a) promote the creation of infrastructures, investment in enterprises and other specific measures  with a marked Community value, particularly in internal and external border areas of the  Community; (b) encourage exchanges of experience and development cooperation among the Community`s regions, as  well as innovative actions. 3.2. Although it mainly relates to economic and social cohesion, expenditure under this Article 10  is closely linked to the issue of the urban environment, since, during the budget years 1990-1993,  a total of 32 urban pilot projects, with execution periods varying between a year and a half and  four and a half years, were funded, for an overall investment of ECU  204,3  million and Community  aid of ECU 101,1 million. Selection of these projects was based on the following criteria: urban  planning or renewal of European interest, innovative nature, demonstration potential, contribution  to the development of the region concerned. The Court examined seven of these 32 projects. 3.3. The projects subsidized, which are listed in Table  2, cover four main areas of intervention:  economic development in areas with social problems, environmental actions linked to economic ends,  the revitalization of historic centres, and the utilization of technological advantages in towns  and cities. Actions generally comprise the restoration of buildings, as well as exchanges of  experience, training activities, study centres or service centres. Selection of initiatives3.4. Pilot projects and, therefore, the towns or cities to benefit from  aid, were selected on the basis of bilateral mutual agreements, subject, moreover, to few  formalities. The conditions for the granting of public aid seem to lack transparency and the  methods applied do not make it possible, in particular, to ascertain whether the initiatives  selected were in fact the most worthy. At the very least, the procedure for the granting of aid  should include a simple but specific public call for tenders to ensure that potential initiatives  can be identified, and it should also include the drawing-up of a set of criteria for assessment  and comparison that make it possible to classify such initiatives in order of merit. 3.5. Such a procedure was applied in the case of the 18 studies relating to conservation of  European cities and funded under budget heading B2-6023 of the 1992 budget, with an appropriation  of ECU 1,5 million. A fortiori, such a procedure should also be implemented in the case of pilot  projects, the cost of which is 60 times higher. The innovative nature of projects3.6. The experimental or innovative nature of projects subsidized  has still, in most cases, to be demonstrated. Actions similar to those funded as pilot projects can  mostly be found in operational programmes covering Objectives 1 and 2, classed as, for example, aid  for tourism, the improvement of run-down areas, environmental action or the renovation of historic  centres. Even when a pilot project includes some more innovative aspect, this aspect is often  difficult to put into action and, as the Court observed during its on-the-spot checks, remains only  partially implemented, if at all. 3.7. In some cases (e.g. Bordeaux, Copenhagen, London, Lyons and Rotterdam), funding under Article   10 has made it possible to grant aid to municipalities which at that time would not otherwise have  been eligible for any ERDF action. The project reports and information obtained on site by the  Court with respect to the Fuenlabrada and Parla project in Spain showed that these municipalities  had been chosen by the national authorities because they were the only large units south of Madrid  that were not included in the areas eligible under Objective 2. The state of progress of the projects examined3.8. The aim of the Fuenlabrada and Parla project  mentioned above is to improve the area around an industrial zone and create a kind of 'green belt`.  The area in question is partly agricultural land and partly waste ground which is subject to  illegal dumping of waste. Strictly speaking, the project hardly qualifies as 'urban`. The execution  period originally stated ran from April 1991 to September 1993. At the end of 1993, work had still  not begun because of problems concerning the availability of land and compulsory purchase  procedures - questions that had not been settled prior to approval of the project. The deadline for  completion of the work was extended to September 1994, though there was no guarantee that this  second deadline could be met. At the end of 1993, the 50 % advance of ECU  2,3 million, which had  been paid by the Commission in early 1992, remained available in the accounts of the autonomous  region of Madrid. 3.9. The project concerning the city of Lyons covers five measures (scientific and technical  research centre, employment centre, local employment scheme, workshops for artists and artisans,  and the communication and dissemination of experience), which fall within the framework of  traditional actions for the social development of urban districts. Only the scientific and  technical research centre, the economic and social value of which continues to be speculative, is  clearly innovatory in nature; the other operations are typical of the Objective 2 operational  programmes financed by the ERDF (for which this city is not eligible). Approved in December 1991,  the project should, according to the original timetable, have been completed in December 1993. At  that date, only the second and third measures were in progress, whilst the scientific and technical  research centre, which accounts for more than half the total expenditure of ECU 3,9 million, had  had to be completely redefined. In the meantime, the city of Lyons had requested two successive  postponements of the dates set for the completion of commitments and payments. 3.10. In the case of Athens, the project, which was to be conducted between 1 January 1991 and 31  December 1993, consisted of the setting-up of a leisure centre, the rehabilitation of degraded land  and the conversion of old buildings into an administration and training centre. In September 1993,  only 9 % of the project had been executed and consisted mainly of work on infrastructures, which  had been begun without any of the preliminary environmental impact studies required by the relevant  national legislation having been carried out. The chances of the project being completed appeared  to be in doubt because of the presence on the site of high and medium voltage electricity lines,  which it would be difficult to move because of the lack of available space. Also, the junction of  two major railway lines on a neighbouring plot is also causing significant problems as regards  traffic and accessibility. The advance of ECU  2,3 million paid by the Commission in April 1991 was  being kept by the recipient in an interest-earning account. 3.11. In Genoa, the project comprised the restoration of two historic buildings, which had been  derelict for many years, and the creation of an archaeology park. These architectural works were to  be accompanied by a more innovative action, comprising the setting-up of an urban observatory, with  a view to developing information exchanges, research and promotion concerning urban issues. The  execution period for the project, which was originally timetabled to run from 1  February 1992 to  31 December 1993, was extended by a year. In December 1993, the planned construction and  restoration work was at an advanced state of progress, though this was, in the main, only the first  phase of a project to be completed later. By contrast, there were no clear prospects concerning the  urban observatory. 3.12. A similar observation must be made with regard to the projects in Dublin, Copenhagen and  Aalborg. Although the parts relating to infrastructures and traditional architectural work were  progressing without too much difficulty, little progress was being made on the more innovative  aspects of the projects (cultural actions, experimentation with eco-technological methods,  exchanges of knowledge or information). 3.13. The use by the Commission of a technical assistance consultancy (the 'Bureau Recite`, which  was mainly managed by ECOTEC) in order to have the monitoring of the projects carried out is not  entirely satisfactory. It is not clear to the managers of the projects what authority and  responsibilities have been vested in the TAC and some prefer direct communication with DG XVI  because of language problems. 4.  THE RECITE PROGRAMME FUNDED BY THE ERDFEuropean cooperation networks4.1. Article 10 of  Council Regulation (EC) No 4254/88, which we have already mentioned above, is also the legislative  basis for funding of the RECITE (regions and Cities of Europe) programme, which was launched in  1991 to contribute to the setting-up of European cooperation networks among local or regional  authorities with populations of more than 50 000. Each network has a certain number of members,  including a network leader, and the objective is to encourage the exchange of knowledge and  experience and, generally, to promote cooperation among member towns and regions. 4.2. At the end of 1993, 36 networks had been set up, with overall Community funding of ECU  47,8  million, corresponding to a participation rate that tends to vary between 50 % and 75 %, according  to the network concerned. Some of these networks (urban observatory, Environet, districts in  crisis, etc.) are closely linked to issues concerning the protection of the urban environment. 4.3. The design of the RECITE programme represents a relatively innovative approach to development  problems, with the promotion of exchanges of information and experience and the establishment of  practical forms of collaboration between the towns concerned. The improvement of information and  contacts, the setting-up of common databases, the search for complementarity and a less isolated  approach to problems could make for more active management and make it possible to act on the basis  of more complete knowledge of the issues concerned. Difficulties concerning monitoringand assessment4.4. Because of its slightly experimental nature,  this design also implies a certain flexibility in implementation and constant opportunities for  adaptation. Network members may change, initiatives may prove less feasible than was envisaged and  demand a significant change in the activities originally planned. This means that it is essential  to have an effective structure for monitoring measures in order to ensure satisfactory results. 4.5. Now, the activity of each network essentially depends on the diligence and initiative of its  leader. It is not practicable for the Commission itself to monitor the functioning of the various  networks and it has, under contract, allocated on-going responsibility for monitoring and  assessment to a firm of consultants, working in conjunction with correspondents in the various  countries involved. For the monitoring and assessment of urban pilot projects and networks of towns  and regions, for the period August 1992 to December 1994, a contract to the value of ECU 840 000  was awarded on the basis of a public call for tenders. In December 1992, an additional agreement  reached by direct negotiation increased this expenditure by ECU 466 000 to cover additional  services relating to the organization of a conference and other services generally carried out by  further subcontractors. This procedure considerably reduces the value of the original call for  tenders. In another case, concerning a contract with the same firm but relating to other  activities, an additional agreement worth ECU 902 000 was reached a posteriori, with most of the  services it covered having already been begun by the contractor. 4.6. The expenditure documentation submitted for the purpose of justifying the payment of Community  aid is extremely varied. Some managers submit all their revenue and expenditure accounts, others  confine themselves to an overall picture showing the breakdown between the main headings. Greater  homogeneity should be aimed for in this field. The Court`s audits (at Lyons, Roskilde, etc.) showed  moreover that non-manager cities were very ill-informed of the overall management of the network. 4.7. For the first years of the 'Medium-sized cities Commission` network a sum of ECU  403 000, or  37 % of total expenditure, was spent on travel, including travel to attend a seminar organized in  Guadaloupe. 4.8. In Genoa, in connection with the 'urban observatory` network, it was discovered that the  commitments entered into by the city`s delegates as regards participation in the network had not  been honoured. The municipal authorities had not been informed of the undertakings agreed and there  was an evident communication problem in this respect, which indicates the need for stricter  monitoring to ascertain the impact of the networks on the policies of the towns concerned. 5.  ACTIVITIES CONCERNING TRAINING, RESEARCH, TRANSPORT, ENERGYAND THE CULTURAL DOMAIN5.1. Several Community programmes concerning  training, research, transport and energy (STEP - science and technology for environmental  protection; Joule - non-nuclear energy and the rational use of energy; Drive - road transport  informatics and telecommunications; Thermie - European technologies for energy management; Euret -  technology in the field of transport, PERU: regional and urban energy planning) also include  actions that directly concern the urban environment. In its examination of the Commission`s files  the Court was unable to find any trace of coordination between these programmes which would help  conclusions to be drawn in respect of improved development of the urban environment. 5.2. For example, the main aim of the Drive programmes (Community aid of some ECU 185 million) is  the development of electronic systems to help to improve road-traffic management and, at the same  time, to reduce the environmental impact of road transport. The aim of the projects is to increase  road safety, ensure better absorption of traffic increases, reduce air pollution and other  nuisances and ensure better transport management. Apart from the public and private institutions  involved in road management or other technical aspects, it is mainly major firms in the automobile  and electronics sectors that are participating in the projects funded. This programme mainly  considers the effects of urban transport, rather than its causes. There should be improved liaison  with initiatives being run in parallel by other departments of the Commission that concern, for  example, reducing road traffic or alternative modes of transport to the motor-car. 5.3. Similarly and as provided for by Council Regulation (EC) No 2008/90 of 29 June 1990, the  Thermie (Community contribution of ECU 710 million for the period 1990-94) programme aims to  promote technologies for energy management. It represents, particularly as regards the rational use  of energy and the use of renewable sources of energy, a direct link with issues concerning the  protection of the urban environment, since it includes actions to reduce the air pollution caused,  in particular, by means of transport and heating systems. The 10  projects examined by the Court  (Community contribution of ECU 6,4 million to total eligible costs of ECU 17,5 million) involved  actions concerning buildings, transport, geothermal energy and energy from biomass and wastes.  Contact between the authorizing Directorate-General and the other Directorates-General concerned,  as documented in the files, is very limited, even though some of the projects concern conurbations  that are also benefiting from intervention under the LIFE instrument (Bologna) or from urban pilot  projects (Copenhagen). 5.4. With respect to training, the operational programmes of the Social Fund for Germany, Italy,  Spain and Portugal contain actions in favour of the urban environment, which, however, cannot  always be clearly identified in the files. In Germany, actions are being undertaken in the Laender  of Berlin, Bremen and North Rhine-Westphalia, with planned Community aid of ECU 42,4  million, ECU  2,5 million and ECU 12,7  million, respectively. However, an on-site examination in Berlin made it  possible to confirm that some of the training did not specifically concern the environment and that  the number of trainees was much lower than expected. In Italy, actions concerned mainly water  purification, the treatment of solid urban wastes and the optimization of the use of cultural and  historical resources. For the regions of Molise, Campania, Sicily and Puglia, the measures  benefited from allocations from the Fund of ECU 2,3 million, ECU 12,9 million, ECU 5,3 million and  ECU 4,3 million, respectively, but their execution was characterized by long delays and, in some  cases, had even been abandoned. In Portugal training/employment programmes for the unemployed  concern the restoration of cultural and historical heritage, but it proved impossible to identify  the funds granted in the files and an on-site examination by the Commission`s departments led to  the questioning of the quality and value of the training. 5.5. Item B3-2000 of the budget for the 'protection and promotion of Europe`s cultural heritage`  provides an appropriation (appropriations for commitment of ECU 6,8 million in 1993 and payment  appropriations of ECU  4,5 million) to cover Community aid for actions for the conservation and  protection of cultural heritage of European importance, as well as monuments and historic places.  Various initiatives thus funded, such as the restoration of buildings or the landscaping of parks  or gardens, have a direct link with the protection of the urban environment and are similar, in  some respects, to projects funded under the LIFE instrument or the ERDF. 6.  CONCLUSION6.1. Disparate initiatives have been taken with a view to achieving better knowledge  of the problems facing towns and cities and to helping find solutions. These initiatives make it  possible to exchange experience and to support new approaches taken by local authorities to a new  and complex problem. All actions are, however, still marked by a certain lack of precision as  regards basic objectives in both the short and longer term. What type of town needs to be given  priority? What type of local environment needs to be promoted? What conditions need to be met for  Community aid to be used judiciously?6.2. Funded actions must not essentially be a response to  piecemeal problems but must have a value as demonstration projects and be likely to have a  multiplier effect. This means that they must be integrated into more long-term urban-planning  programmes, must promote more generalized use of new methods of managing the life of urban  districts and must be an effective alternative to the problems of property speculation, the  destruction of the urban fabric or the inappropriate use of public land - all of which are concerns  that should play a greater role in determining the granting of Community aid. 6.3. The various Community actions are also marked by considerable fragmentation. Their diversity  may be an advantage and a source of expertise, but it also requires an overview that is generally  lacking. The various Directorates-General take action in a highly independent way. Consultation  among departments is usually organized within the framework of the procedure for the approval of  decisions concerning aid, but it principally aims merely to prevent a single initiative from being  funded from several sources. 6.4. This consultation is too fragmented, too rapid and takes place at too late a stage in the  procedure to allow joint reflection and the seeking of closer cohesion and greater complementarity.  Some kind of overview is sometimes undertaken at the level of beneficiary towns or bodies, but this  is not always the case and, even at this level, knowledge of all the aspects of Community actions  concerning a single area is not necessarily guaranteed. 6.5. Examination of the projects funded reveals a great lack of precision and summary preparation  as regards the definition of the operations to be undertaken. Some applications submitted for  Community aid are little more than working hypotheses, whose lack of practical feasibility emerges  only later. This leads to delays in implementation and changes, sometimes major ones, to the  operations that were originally planned and for which Community aid was granted. Above all, the  adaptations required often lead to abandonment of the most difficult and innovative aspects of  projects in favour of traditional work whose value is far more limited in terms of the construction  of a model urban environment or the acquisition of knowledge in this area. 6.6. The difficulties may be partially explained by the experimental nature of some initiatives,  which calls for room for adaptation of the projects from one phase to the next and for a flexible  approach. From this point of view, the most interesting initiatives are also the most difficult,  since they are the ones that make it possible to explore new forms of intervention, and it is only  logical that they should encounter the greatest problems concerning their execution. It is not  desirable that the Commission, simply to reduce the risks, should give priority to less innovative  operations. 6.7. Whilst the most important aspect of the Commission`s efforts in the field of the urban  environment is their innovatory nature and whilst the real innovations must always be planned with  a degree of flexibility, it is even more important that measures should be effectively coordinated,  both at Community and at local level, and that the Commission should devote enough resources to it  to ensure the precise and systematic monitoring of every measure. This report was adopted by the Court of Auditors in Luxembourg at the Court  meeting of 8  December 1994. For the Court of AuditorsAndré J. MIDDELHOEKPresident>TABLE>>TABLE> COMMISSION REPLYto the observations of the Court of Auditors on the urban environment0.  INTRODUCTION0.1.-0.3. In its introduction, the Court traces the origins of the urban environment  policy to the Commission`s Green book on the urban environment and the Council Resolution of 28  January 1991 () which underlined its importance. The Urban Environment has subsequently been incorporated as an essential theme requiring  development as part of the 5th Action Programme: a new strategy for the environment and sustainable  development (). The targets to be achieved for the protection of the urban environment have been  specified in terms of integrating the environment into the industry, energy, transport and tourism  sectors, focusing especially on themes of air, water and noise. The principal aims are to encourage  the optimum use of resources and to assist the responsible partners to implement the relevant  legislation. 2. ACTIONS MANAGEDBY ENVIRONMENTAL DEPARTMENTSThe 'Urban environment` unit2.4. The Commission  notes the Court`s comments and has already taken measures to ensure that all projects to receive  financial support are gauged against criteria which ensure consistency and coherence with Community  policy on the urban environment. An ex-post evaluation of the projects is also carried out before  the release of the final payment on the project. The Commission will nevertheless re-examine how  and where the ex-post evaluation can be improved. 2.5. The budget commentary on B4-304 for 1993, concerning the European Urban Environment Academy in  Berlin, was introduced by the European Parliament. The Commission`s contribution to the Berlin Academy is based on the requests received from the  Academy. These requests outlined the projects which were to be carried out. The level of funding in  the earlier years was kept modest as required by the budgetary authority. The principles underlying a grant of a financial contribution imply that the Commission does not  manage the projects in question. As the operational management lies with the beneficiary, the  Commission can determine neither the choice of subcontractors nor the experts chosen by the  beneficiary. The Commission also notes that the budget commentary does provide for the policy coordination in  conjunction with third countries in Europe. The LIFE instrument2.7. Limited by the budgetary funds available for LIFE projects, the Commission  rations the resources to the best projects. In the case cited by the Court, the Commission,  following the consultations of the LIFE committee, decided to allocate ECU  403 706, in 1992, to  the Dublin project. Following a review, again agreed by the LIFE committee, it chose to grant a  further ECU  313 540 on the 1993 budget to ensure that the project could be followed in its  entirety, as foreseen by the initial application. The Commission is aware that the 40 % advance on the Genoa project remains to be used. The cause  for the project`s delay is due to rapid change in the Genovese political situation. The Commission  hopes that, once this situation is stabilized, the project may be able to proceed. In the  meanwhile, the Commission has taken administrative measures to ensure that the project duration is  extended to reflect the current reality. (See also the reply to paragraph  3.11.)2.8-2.9. No  matter the route by which a LIFE project is received, the Commission ensures transparency by  publishing each year the type of activities to be accorded priority. The projects do meet the priorities of the programmes which were either active at the time or were  in the process of adoption and had been agreed by the Urban Environment Committee, which consists  of the representatives of the Member States. This situation was transitional and, at that moment,  the proposed Council Regulation for LIFE [COM(91) 28 final of 31  January 1991] did foresee that  action and demonstration projects could be taken for the restoration and safeguard of urban  centres. The reference to the Urban Environment project was encompassed by the Commission`s then  proposed plans to present the 5th Action Programme as mentioned in the proposed Regulation for  LIFE. 3. URBAN PILOT PROJECTSFUNDED BY ERDFSelection of initiatives3.4-3.5. It is true that there has  not been an overall formal procedure for the selection of Urban Pilot Projects. When the first such  projects were launched in 1990 (London and Marseille), it was not expected that urban issues would  arouse such interest at Community level. On the basis of past experience, the Commission will however in the future adopt a more systematic  approach in this area. A call for proposals was required for participation in the studies on the conservation of European  cities (budget line B2-6023), given the absence of a formal legal basis. No such call for proposals  was carried out in the context of urban pilot projects under Article 10 of Regulation (EEC) No  4254/88, since these are required to comply with all the relevant requirements of the Regulations  on the Reform of the Funds. The innovative nature of projects3.6-3.7. The innovatory character of the Urban Pilot Projects  resides both in the types of measures supported and in the way different measures are linked  together and/or the approach envisaged to implement them, involving the local actors concerned in  both the public and the private domain. As the Court of Auditors remarks, the more innovative elements a project includes, the more  difficult it is to implement. This is in the nature of pilot actions and indeed an extra effort is  required to assist in their task the authorities managing more innovative projects. Article 10 of Regulation (EEC) No 4254/88 has allowed assistance to be given to cities or parts of  cities not eligible under objectives 1, 2 or 5b of the Structural Funds. Many of the worst urban  problems are to be found in large cities not eligible under the Funds. The projects selected in  London, Lyon and Rotterdam are typical examples. It is interesting to note that for example in  France, among the 11 'Grands Projets Urbains` selected by the French government for special  assistance, only two are eligible under Objective 1, 2 or 5b. In other Member States, the situation is similar. The state of progressof the projects examined3.8. MadridThe Madrid (Fuenlabrada and Parla)  project is a genuine urban project because it has connections with the decline of the urban economy  of Madrid and the redevelopment programme is of importance within the context of the economic and  environmental development of the Madrid conurbation. The project experienced significant delays due to problems in land acquisition and obtaining  planning permission. Planning permission for the centre was only received in May 1994. As a result  expenditure so far is indeed low: up to May 1994 the project had spent Pts 94,4  million (about ECU  597 000) and committed Pts 243,3  million. 3.9. LyonThe project experienced initial delays due to administrative reasons and the complexity  of the arrangements for implementing the actions, notably establishing the necessary partnerships.  However, significant progress has been made and it appears that the project will be completed by 30  June 1995 (payments deadline). The 'centre de découverte` is expected to be completed as currently  planned. The 'centre de découverte` is not the only innovatory action. Innovatory elements are included in  the 2nd  action, 'maison de l`emploi`, which concerns the development of 'parcours d`emploi` (i.e.  alternating different types of training with a period of employment by industrialists themselves).  The third action, 'structure de l`emploi local`, concerns the innovative idea of a period of  training followed by practice in the context of a real job leading to the self employment of  trainees, that is the establishment of their own enterprises under the guidance of a more  experienced person. Overall the project tries to promote partnership between private enterprise and  the authorities responsible for training and employment actions. In June 1993 the project requested an extension of six  months on both the commitments and the  payments deadlines. A second extension was requested in June 1994 for a further six  months, but  only on the commitments deadline. The reason for requesting the second extension was that the  commitments for two of the five actions were not made by the deadline of 30  June 1994. For one of  these two actions ('ateliers d`artistes et d`artisans`) the commitments were made on 4 July 1994.  The commitments for the other action, exchange of experience and communication (small budget: FF   345 000), will be made in autumn 1994, but its financing has been assured by the partners. 3.10. AthensThe project experienced initial delay due to the long procedure for the settlement of  property rights (12 public organizations shared the right of use of the particular piece of land). Environmental Impact Study: As regards environmental impact, one of the main objectives is to  improve overall environmental quality in Western Athens. In the first stage of the project, the  managing organization has examined the environmental conditions of the area and the basic  environmental parameters were discussed during a workshop which took place in Athens in April 1992.  As stated in the interim report of May 1994, the environmental impact study of the whole project  has been commissioned and its conclusions will be submitted together with the final report. The electric cables occupy a part of the land which is not under development at the moment and is  not part of the project. In any case, the public power corporation has proposed a specific plan for  the removal of these cables over the next two years. The railway lines are not part of the project. However, the railway company has plans to remove the  line on the east side so that the two rail lines no longer intersect. The existence of this type of  traffic in the area is considered positive by the project manager because it will bring in more  visitors and increase accessibility. 3.11. GenoaThe urban observatory project experienced considerable delays due to successive changes  in municipal administration (three changes over a two year period). However, the new administration  has approved the project, which will continue as planned. In April 1994 the realization of the  observatory was assigned to an external agency and activities have already commenced. 3.12. Dublin, Copenhagen and AalborgThe Dublin and Aalborg projects will present their final  reports before the end of 1994 and Copenhagen by the end of 1995. It is expected that the  innovative elements will be stressed in all three reports. 3.13. The follow-up of the projects would hardly be feasible without a technical assistance office,  in this particular case the Ecotec/Recite Office, due to the large number of complex projects  involved and the limited human resources available for this work in the Commission`s services. The responsibilities of the Recite Office have gradually been better specified. At present, the  position has been clarified for all project managers. A management guide has been published and  distributed. The Recite office has the role of monitoring/evaluation and technical assistance. The  Commission takes the decisions on all contractual obligations. 4. THE RECITE PROGRAMMEFUNDED BY THE ERDFDifficulties concerning monitoring and assessment4.4.  The launch of the Recite Office (monitoring/evaluation and technical assistance) was a first  attempt at creating an effective structure for the Recite networks and the urban pilot projects. On  this basis, consideration is now being given to experimenting between 1994 and 1999 with other  structures for the effective monitoring and assessment of measures. 4.5. The original contract with Ecotec already foresaw the firm`s collaboration in the preparation  of an International Conference on Interregional Cooperation. This participation turned out to be on  a larger scale than originally envisaged, and additional financing was formalized in the amendment  to the contract referred to by the Court. Consequently, there was no reason to organize a public call for tenders to finance the Conference. In the other case mentioned by the Court, the authorizing department`s proposal for commitment of  expenditure, involving an addition to the existing contract, failed to win the approval of the  financial controller. However, in so far as approval was withheld on account of internal problems  at the Commission for which the contractor could not be held responsible, the Commission decided to  overrule the financial controller`s decision. 4.6. The differences referred to reflect the systems of the various local or regional authorities  concerned. With the support of the Recite Office, the Commission therefore developed a guide for  project managers, including guidance on financial presentation by the networks and pilot projects.  As for the communication of information, the Recite Office publishes a periodic news-letter and a  bulletin which is distributed to all partners of the networks. These publications give information  about the progress and results of all pilot projects and networks co-financed under Article 10 of  the ERDF Regulation. 4.7. The network 'Commission des Villes` encouraged a one year programme of exchange of experience  between 40 cities across 11 Member States in four areas of common interest: integration in urban  areas; urban engineering; technological developments in the service of cities; and urban renewal.  Given the nature of the project and the large number of partners, it is normal for expenditure to  be of the order described in the report. 4.8. The Commission does not engage in the day-to-day monitoring of all participants in Recite  networks. This is the responsibility of the chef de file, in this case, the lead city of the  European Urban Observatory (EUO), Barcelona, which has established contacts with Genoa in order to  clarify the exact status of their participation in this network. 5. ACTIVITIES CONCERNING TRAINING, RESEARCH, TRANSPORT, ENERGYAND THE CULTURAL DOMAIN5.2. The report states that it is principally  the big automobile and electronics companies that participate in the DRIVE programme. However, out  of 495 participants in DRIVE projects from large and small industries, administrations and research  establishments, only 116, i.e. 23 %, are assured by large industries, for a total of ECU  41  million, i.e. 38 % of the funding of the programme. It should also be noted that the programme addresses not only the effects of urban transport but  also its causes. The possibilities for reducing road traffic and alternatives to the private car  are also examined. In fact, urban traffic control, public transport and management of transport  demand are components of urban projects that have been designed by the city authorities themselves  and that integrate telematics solutions into their overall transport planning. Telematics for  public transport and demand management comprise two out of the seven areas of the transport  telematics programme. Regarding coordination within the Commission, the programme contributes positively to the  establishment of the Community policies on transport and environment. An example of current  coordination is the Polis network of cities, which includes 40 cities and was set up with the  active support of the Regional Fund. The cities involved in the Polis network have promoted the  successful parts of the Thermie programme, thus contributing to the complementarity of the two  programmes. These coordination efforts will be further increased in the 4th Framework Programme. 5.3. The Commission would stress that the authorizing Directorate-General is perfectly aware of the  environmental policies drawn up by the Commission`s other departments. It should be emphasized  that, in that Directorate-General, the competent department is engaged in a constant liaison  process and, for example, maintains regular contacts so as to ensure that environmental policy is  integrated into the development of technology in the energy field. Moreover, the Thermie programme, which the Commission acknowledges as one of the main tools with  which to achieve the Community objective of stabilizing CO2 emissions by 2000, has been the subject  of close cooperation between the departments concerned as regards the publication of annual public  calls for tender, on which European industry bases proposals for projects concerning emissions of  pollutants. Particularly where the urban environment is concerned, the Thermie programme issued  calls for tender for specific projects in the building and transport sectors. As the project  descriptions show, the environmental component is very significant. It should also be mentioned that the Directorates-General concerned jointly organize events  concerning energy and the environment, e.g. the European Biofuels Forum in Tours in June 1994, the  'Buses serving the public` Week in Brussels in October 1994 and an 'energy and the environment`  stand at the Thermie exhibition in Berlin in September 1994. None the less, the Commission is aware of the growing significance of the environmental component  and will take all appropriate action to strengthen contacts and collaboration between the  Directorates-General concerned by the problems and policies relating to the urban environment. 5.4. The issues raised by the Court in this paragraph are currently being examined by the  Directorate-General concerned. In particular, the Court`s remarks concerning Berlin will be examined with the authorities  concerned as part of an on-the-spot control mission. 5.5. The Commission`s funding for cultural activities under item B3-2000 of the budget for the  'Protection and promotion of Europe`s cultural heritage` is characterized by its concentration on  cultural projects. The aim is to highlight projects which set an example of how to conserve  Europe`s heritage and to encourage exchanges of information on appropriate methods and techniques  for restoring certain types of monument. With this in mind, pilot projects are organized around a different theme each year and the winning  projects are selected on the advice of a panel of experts. The annual themes are chosen according  to the specific problems which arise in connection with the conservation of buildings and it would  not be appropriate to distinguish arbitrarily between monuments located in urban, urbanized and  rural areas. Most of the projects referred to in the report place emphasis on the search for  innovative solutions. The approach taken is different from that for the conservation and  restoration of the cultural heritage, which attaches prime importance to preserving traditional  methods and know-how. The pilot-project approach thus complements, but differs from, the approach  in the urban environment field. Moreover, the objectives and procedures of this approach, which are  designed mainly to strengthen cooperation between Member States and practitioners, particularly by  swapping experience and know-how in the field of heritage conservation, are very different from  those on which the aforementioned action in favour of the urban environment is based. The  Commission (DG X) will endeavour to take account of, or include, the conservation of cultural  heritage in all Community programmes and policies, particularly those in support of the urban  environment, in conformity with Article  128  (4) of the Treaty on European Union. Finally, it should be noted that, at the Council`s request and as a result of the entry into force  of Article 128 of the new Treaty, the Commission will be presenting before the end of the year a  communication on cultural heritage proposing a coherent programme of action. Within this framework  the current work under the pilot projects on the conservation of buildings will be reviewed,  particularly in order to take account of the specific needs in this area. 6. CONCLUSION6.1-6.2. The Commission agrees with the Court`s general assertion that the management  of the urban environment is an innovative and a complex matter. However, it does not share the  Court`s view that the basic objectives - short or long term - to be achieved, are imprecise. The Commission, as part of the annual budget exercise, presents the budgetary authority, not only  with details of the short term objectives to be achieved, but also how they are to be achieved.  Concerning the long term, the Community`s 5th Action Programme clearly outlines the objectives to  be achieved over an eight year period, together with the instruments to be used and an indication  of the economic and social actors (e.g. local authorities and enterprises) urged to co-operate and  collaborate in protecting the environment. The activities to be supported have, as a pre-condition,  that they be demonstration projects having a multiplier effect or be projects necessary for policy  formulations. 6.3 and 6.7. The Commission is sensitive to the Court`s implicit request for improved coordination  of projects which appear to be autonomous. It has recognised the need to give more attention at  Community level to the problems of cities and to contribute to the implementation of urban policies  developed at the national, regional and local levels, whilst respecting the principles of  subsidiarity. The Commission will continue to seek to ensure improved coherence of the actions aimed at resolving  the problems of urban areas. As concerns its internal coordination, the Commission is aware that certain shortcomings require  attention, principally at the procedural level where internal consultations sometimes take place at  too late a stage. It would point out however that in view of the varied nature of the actions  undertaken, and the fact that many different scientific and social disciplines are involved in  dealing with the complexities of modern cities, coordination is necessarily more difficult than in  other fields. Some programme management problems do arise from various technical constraints. At present the Commission coordinates the programmes and projects to protect and improve the urban  environment through formal structures such as coordination meetings, both at unit and department  levels (e.g. the establishment of integration/environment correspondents in Directorates General).  There has been some progress towards a more coordinated approach between the departments involved,  and the Commission will take steps to encourage the necessary further development in this area. Coordination within DG XVII will be improved as result of an internal reorganization which took  effect on 1 June 1994. The new organization chart features a newly created Unit A5 within which a  new section 'programme evaluation` has been created. One of the new section`s tasks will be to make  proposals for improving coordination between the different programmes managed by the  Directorate-General. 6.4 and 6.7. Further to the publication of the Green paper on the Urban Environment () in June 1990  and the 5th Action Programme on environment and sustainable development, the Commission has issued,  in December 1992, a review of the 'Community Activities in Urban Matters` which was updated in July  1994. In parallel with these developments the Commission issued a Communication [COM(93) 645 final  of 14.  2.  1994] on Energy and Economic and Social Cohesion which in particular dwelt on the urban  aspects of energy use. These efforts, complemented by the work of the Urban Environment Group on  the sustainable cities project running from 1993 to 1995, indicate that the Community perspective  on the Urban environment is reviewed and updated on a regular basis. These reviews and their  dissemination ensure that Community policy on the urban environment and its actions are coherent  with the many initiatives being undertaken at national and local levels. Nevertheless, given the  multitude of activities undertaken, each one emphasising a particular aspect of the problems  associated with the urban environment, it is natural for the Court to imply that a further cross  fertilisation of information on these projects can be beneficial. 6.5-6.6. The Commission notes the Court`s conclusion relating to improvements in the definition and  description of projects and will seek to ensure that future projects are defined with greater  precision. Nevertheless, when dealing with innovative and demonstration projects, experience shows  that considerable modifications to the projects are necessary and this forms part of the learning  process. The Commission emphasises that its flexibility in monitoring the projects` progress should  not be taken as evidence of imprecision in project definitions. () OJ No C 33, 8. 2. 1991, p. 4.  () OJ No L 206, 22. 7. 1992, p. 1.  () OJ No L 374, 31. 12. 1988, p. 15.  () OJ No C 33, 8.  2.  1991.  () OJ No C 138, 17.  5.  1993.  () COM(90) 218 final, 27.  6.  1990.