Annual report on the Cohesion Fund (1996)
Date: 1997-06-23
Institutions: European Commission
Subjects: Cohesion Fund, activity report, environmental protection, implementation of the budget, transport infrastructure

• ;ï%%ÏV&$ïfe< 

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  23.06.1997 
COM(97)  302  final 

ANNUAL REPORT 
ON THE COHESION FUND 

1996 

(presented  by  the  Commission) 

PREFACE 

The  present  annual  report  on the activities of the Cohesion  Fund  covers the calendar  year  1996. 
It has. however, been  necessary to include  some remarks on activities  in earlier years  as well  as 
comments  on  planned  measures  for  the  future  in order  to give  the  reader  the  full  picture  of the 
current  affairs  of the  Fund. 

The  reporting  format  is  largely  unchanged  from  previous  reports  and  reflects  the  detailed 
requirements  of  the  Annex  to  Annex  II  to  the  Cohesion  Fund  Regulation.  Nevertheless, 
comments  made  by  the  European  Parliament,  the  Economic  and  Social  Committee  and  the 
Committee  of the  Regions on earlier  reports have been duly taken  into account  and  adjustments 
made  in the presentation.  In particular attention  has been given  to a detailed  explanation  of how 
the  conditionality  principle  has  been  implemented  and  to  the  Commission  Decision  on 
information  and  publicity  measures.  The  specific  requests  for  a  section  on  ultra-peripheral 
regions and  for  a developed  section  on evaluation  have also been  met. 

The  report  fulfils  the  legal  requirements  of  the  Cohesion  Fund  Regulation.  It  is  hoped  that  it 
will  also  serve" as a useful  reference  for  all  who are  interested  in the  promotion  and  furtherance 
of the  economic  and  social  cohesion  of the Union. 

Annual report of ihe Cohesion l-'und 1°*% 

E X E C U T I VE  S U M M A RY 

Economie  and  Social  Cohesion  is  one  of  the  main  objectives  of  the  Treaty  on  European  Union. 
During  1906 the  Cohesion  Fund  continued  and  reinforced  its  contribution  to  the  achievement  of 
this  objective. 

lc>%  was  in  many  ways  a  key  year  for  the  Cohesion  Fund:  the  teething  troubles  of  a  new 
instrument  for  cohesion  had  been  dealt  with  and  the  Fund  was  fully  operational:  experience 
gained  since  the  first  operations  in  109?  formed  the  backbone  of  current  management  practices 
and  the  first  ex  post  evaluations,  i.e.  the  assessment  of the  effects  of  completed  projects,  could 
be  undertaken. 

The  importance  of  this  last  point  can  hardly  be  overstated:  the  weight  of  the  Cohesion  Fund  as 
an  instrument  to  favour  economic  and  social  cohesion  depends  on  its  ability  to  demonstrate 
the  usefulness  of  the  completed  projects,  be  it  in  terms  of  better  transport  facilities,  shorter 
travel  distances,  savings  in  transport  time,  more  efficient  goods  handling,  reduced  air  pollution 
and  better  environment  in  the  towns  and  cities  concerned,  improved  fresh  water  management 
ranging  from  catchment,  supply  and  distribution  of  drinking  water  for  human  consumption  to 
proper  treatment  of  used  water  and  sewage  and  environmentally  friendly  handling  of  solid 
waste,  to  mention  but  a  few  examples.  In  the  coming  years,  more  and  more  Cohesion  Fund 
projects  will  be  completed,  thus  providing  the  basis  for  an  overall  evaluation  of  the  efforts  of 
the  Union  and  the  Member  States. 

1906  was  also  the  mid-point  year  between  1993.  the.year  of  the  first  project  decisions,  and 
1009.  the  last  year  covered  by  the  present  Fund  Regulation.  Appropriately,  therefore,  a  mid 
term  review  of  Member  State  eligibility  with  respect  to  the  GNP  criterion  was  carried  out  in 
1006.  All  four  Member  States  continue  to  be  eligible. 

Furthermore.  1006  was  the  first  year  in  which  the  Commission  undertook  an  examination  of 
Member  States"  compliance  with  their  economic  convergence  programmes  in  tjie  field  of 
public  deficits:  the  conditionality  principle  was  applied  by  Commission  decisions  in  June  and 
No\  ember  concerning  Spain.  Portugal  and  Greece.  On  each  occasion,  all  three  Member  States 
were  considered  to  have  a  budgetary  performance  within  the  targets  recommended  b\ 
the 
Council. 

The  financing  strategy  of  the  Fund  was  further  consolidated  in  1996  in  line  with  the  provision^ 
of  the  Cohesion  fund  Regulation.  The  balance  between  the  two  areas  of  assistance  -  transport 
infrastructure  and  environment  -  reached  an  almost  perfect  50/50  distribution.  This  reflects  the 
determination  of  the  Commission,  which  is  fully  supported  by  the  European  Parliament,  the 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  to  achieve  an  equal  level 
of  fmaneini:  for  the  two  areas  of  Cohesion  Fund  financing  for  the  whole  period.  The  result  in 
100^  brings  tins  objective  clearly  within  reach. 

In  line  with  remarks  made  by  the  European  Parliament  in  its  opinion  on  the  1 0<-M  Cohesion 
fund  Annual  .Report  and  reiterated  concerning  1005  and  by  the  Committee  of  the  Regions  and 
the  Economic  and  Social  Committee,  the  efforts  to  allocate  a  higher  proportion  of  finance 
within  the  transport  sector  to  rail  transport  facilities  continued. 

<v ( ' o h e s i c i;  l;u 

Furthermore  the  projects  financed  in  the  most  remote  regions  received  special  attention  in 
1996:  a  separate  section  of  this  annual  report  gives  more  details  (see  point  2.3.5). 

The  Fund  finances  transport  infrastructure  projects  only  where  they  are  either  part  of  the 
trans-European  Transport  Network  (TEN  -  transport)  or  feed 
the  network  directlv.  This 
represents  the  strategy  for  setting  priorities  for  the  Cohesion  Fund  in  the  field  of  transport 
in  relation  to  completing 
infrastructure,  a  strategy  which  has  already  shown  its  usefulness 
missing  parts  of  the  TEN. 

the  supply  of  drinking  water,  waste-water 

The  directives  concerning 
the 
treatment  of  sewage  continue  to  set  the  priorities  for  assistance  in  the  field  of  environment. 
Other  emironment  measures,  which  may  be  seen  as  improving  environmental  levels,  mav  also 
be  eligible  and  may  receive  part-financing  from  the  Fund.  Some  examples  concern  projects 
relating  to  coastal  protection,  reafforestation  and  desertification,  habitat  protection  and  nature 
conservation. 

treatment  and 

The  polluter-pays  principle  is  applied  whenever  a  project  is  part-financed  by  the  Cohesion 
in  the 
Fund.  Through  a  procedure  of  double  consultation  of  the  responsible  departments 
Commission,  every  project  is  submitted  to  detailed  examination  and  verification  of  compliance 
with  Community  legislation.  This  procedure  also  aims  at  assuring  that  the  best  evaluation 
practices  available  are  applied. 

The  Commission  stated  in  the  1995  report  on  the  Cohesion  Fund  that  there  is  room  for 
improvement  of  analytical  methods  and  their  practical  application.  In  line  with  this  statement 
the  Commission  has  carried  out  a  study  with  external  consultants  on  the  Application  of  the 
Polluter-Pays-Principle  in  Cohesion  Fund  Countries  to  gain  further  insight  into  the  practical 
and  theoretical  issues  involved.  The  main  results  of this  study  are  presented  in  Chapter  2. 

The  combating  of  unemployment  and  the  creation  of  new job  opportunities  is a  high  priority  for 
the  Commission.  The  1995  annual  report  on  the  Cohesion  Fund  presented  some  first  estimates 
of  the  short  and  long  term  employment  effects  of  funded  projects.  The  present  report  develops 
these  estimates  further  and  also  outlines  some  key  findings  from  the  study  carried  out  for  the 
Commission  by  the  London  School  of  Economics  into  the  overall  socio-economic  effects  of 
projects.  The  section  on  employment  is also  a direct  response  to the  requests  from  the  European 
Parliament,  the  Economic  and  social  Committee  and  the  Committee  of  the  Regions  for  more 
information  on  the job-creation  generated  by the  Cohesion  Fund. 

The  European  Investment  Bank  continues,  under  the  agreement  with  the  Commission,  t^  be 
consulted  for  its  financial  and  technical  expertise  on  major  projects  presented  by  the  Member 
States.  This  increases  the  quality  of  assessment  of  the  proposals  beyond  what  the  Commission 
itself  can  provide  and  therefore  gives  added  value. 

Budgetary  implementation  for  the  year  was,  once  again,  close  to  100%  -  an  impressive  figure 
considering  that  each  individual  project  must  be  fully  scrutinised  before  commitments  and 
payments  can  be  made  and  that  continuous  monitoring  and  checks  on  physical  indicators  are 
made  prior  to  any  further  release  of  funding. 

The  monitoring  and  follow-up  of  projects  has  continued  on  a  high  level  throughout  the  year. 
The  Monitorimi  Committees  have  held  regular  meetings  and  have  included  representatives 

Annual  report  of the Cohesion  Fund  1906 

from  local  and  regional  bodies  as  well  as  national  level.  It  is  important  to  underline  that  no 
cases of fraud  have been  reported  on Cohesion  Fund  projects; the responsible  authorities  of the 
Member  States and the  Union  have carried  out numerous  inspections and checks  in this respect, 
as  described  in  Chapter  5.4.  Some  cases  of  irregularities  have  been  detected  and  the  necessary 
corrective  measures taken. 

In June  1996 the  Commission  adopted,  after  having  received  the  observations  of the  European 
Parliament, a Decision  on  information  and  publicity  measures.  The  Decision  includes  details 
on  the  use  of  bill-boards,  brochures,  audio-visual  presentations,  TV  and  other  media.  Each 
project  part-financed  by  the  Cohesion  Fund  must  be  given  appropriate  information  and 
publicity.  These  measures  may  be  included  in the  request  for  Fund  financing,  which  will  make 
modern  and  efficient  publicity  attractive  for fhe  promoter of a project. 

Annual report of the Cohesion  Fund 1006 

CONTENTS 

PREFACE 
EXECUTIVE SUMMARY 

CHAPTER  l  - IMPLEMENTATION  OF COHESION FUND PRINCIPLES 

1.1 
1.2 
1.3 
1.4 
1.5 

* 

Background 
CoiKditiorjality 
Mid-term review 
Information and publicity measures 
First Cohesion Report 

CHAPTER 2-  FINANCIAL ASSISTANCE COMMITTED AND PAID BY THE FUND 

2.1 
2.2 
2.3 

2.4 

2.5 
2.6 

Spain 
Portugal 
Greece 
Ireland 

Budget available 
Breakdown by Member State 
Budget implementation 
2.3.1 
2.3.2 
2.3.3 
2.3.4 
2.3.5  Most remote regions 
Assistance for studies and technical support measures 
General 
2.4.1 
At the initiative of the Commission 
2.4.2 
2.4.3 
At the initiative of the Member States 
Payments by Member State: payments in  1996 
Projects closed 

CHAPTER 3-  CONVERGENCE  AND CONDITIONAIJTY 

3.1 
3.2 

Background 
Convergence programmes 
Spain 
3.2.1 
Portugal 
3.2.2 
Greece 
3.2.3 
Ireland 
3.2.4 

CHAPTER  4 - ASSESSMENT OF THE PROJECTS AND MEASURES ADOPTED 

4.1 

General 
4.1.1 

Assessment of projects 

Annual report of the Cohesion Fund 1996 

8 

8 
8 
10 
10 
12 

14 

14 
14 
15 
16 
34 
52 
61 
70 
75 
75 
76 
77 
77 
78 

94 

94 
94 
94 
95 
95 
96 

98 

98 
98 

4.2 

4.3 
4.4 

4.5 

4.6 

4.7 

mœme-gOTeraring projects 

Environmental protection 
Common transport policy 
Public procurement 
Competition 

4.1.2 
Trans-European transport networks 
General strategy 
4.2.1 
Reinforcement  of the transport network in  1996 
4.2.2 
Essen priority projects 
4.2.3 
4.2.4 
Group of Commissioners (TENs)/Kinnock high level group 
Trarisport/ejivironment balance 
Assessment of compatibility with the other policies 
4.4.1 
4.4.2 
4.4.3 
4.4.4 
Socio-economic impact of the Cohesion  Fund 
4.5.1 
4.5.2 
4.5.3 
4.5.4 
Co-ordination and consistency with other  financial  instruments 
4.6.1 
4.6.2 
4.6.3 
4.6.4 
4.6.5 
The role of the EE3 in evaluating projects 
4.7.1 
4.7.2 

Structural  funds 
TENs transport budget line 
Life programme 
European Investment  Bank 
EEA financial mechanism 

Introduction 
Economic appraisal of projects 
Overall socio-economic impact 
Employment 

On-going institutional cooperation 
The results of cooperation in  19% 

CHAPTER  5 - MONITORING AND CHECKS 

5.1 

5.2 

5.3 
5.4 
5.5 
5.6 

Monitoring Committees 
Spain 
5.1.1 
Portugal 
5.1.2 
Greece 
5.1.3 
Ireland 
5.1.4 
Inspection missions 
5.2.1 
5.2.2 
5.2.3 
5.2.4 

Spain 
Portugal 
Greece 
Ireland 

Role of the EIB 
Fraud and irregularities 
Legal proceedings in progress 
Sound and Efficient  Management  (S EM) 

100 
101 
101 
102 
105 
107 
108 
108 
108 
110 
111 
112 
113 
113 
113 
115 
119 
120 
121 
122 
123 
123 
124 
125 
125 
125 

126 

126 
126 
128 
129 
131 
131 
132 
133 
133 
134 

135 
135 
136 
13 6 

CHAPTER  6 - INTERINSTITUTIONAL DIALOGUE, INFORMATION AND PUBLICITY 

137 

6.1 

Annual report to the European Parliament, the Council the Economic and 

Annual  report of the Cohesion  Fund  1996 

Social Committee and the Committee of the Regions 
6.1.1 
6.1.2 

The European Parliament 
Economic and Social Committee and the Committee 
of the Regions 
Information to the Member States 
Information to the social partners 
Other information events 
Commission publicity and information measures 

6.2. 
6.3 
6.4 
6.5 

137 
137 

138 
138 
139 
139 
140 

The  maps  included  in  this  Annual  Report  are  for  illustration  purposes  only  and  do  not 
legally engage the Commission. 

Annual report of the Cohesion Fund 1^96 

CHAPTER  1  - Implementation of Cohesion Fund principles 

CHAPTER  1 

IMPLEMENTATION  OF  COHESION  FUND  PRINCIPLES 

1.1 

BACKGROUND 

The  Cohesion  Fund  is  subject  to a number  of  general  rules  which  are  specific  to the  Fund  and 
which  are  laid  down  in  its  Regulation.  This  chapter  gives  details *on  the  three  main  areas: 
conditionality.  the  mid-term  review  of  the  GNP  figures  of  the  Member  States  and  the 
Commission  decision  concerning  information  and publicity measures. 

1.2 

CONDITIONALITY 

1996  was  the  first  year  in  which  the  principle  of  conditionality  applied.  To  prepare  for  the 
implementation  of the  principle, the  Commission  had  already  decided  - on  20  December  1995 
as reported  in the  1995 Annual  Report - on the practical  application  of conditionality. 

Eligible  Member  States  must  have  a programme  leading to the  fulfilment  of  the  conditions  of 
economic  convergence  as  set  out  in  Article  104c  of  the  Treaty,  which  relates  to  government 
deficits.  Article  6  of  the  Cohesion  Fund  Regulation 1  requires  the  Commission  to  suspend 
financing  for  new  projects  or - in the  case of projects  divided  into different  stages - new  stages 
of projects,  if the  Member  State concerned  is found  to have an excessive  deficit. 

The  Commission  has  decided  to examine  conditionality  twice  a year:  in  spring  and  in  autumn. 
This  allows  for  the  possibility  of reacting  to new  economic  data as soon  as they  are  known  and 
verified.  The procedure  is as  follows: 

in  spring  the  deficit  for  the  previous  year  is  examined  on  the  basis  of  the  notification 
from  the  Member  States and the Commission's  spring economic  forecasts: 

in  autumn,  normally  in November,  the  deficit  for  the  current  year  is assessed  based  on 
the  Member  States  of  budgetary  implementation  by  end-
the  notifications  from 
September  and the Commission's  autumn  forecasts. 

Member  State  government  deficits  must  be  in  line with  the annual  recommended  targets  set  by 
the  Council.  Comparisons  are  made  with  the  Council  recommendations  for  the  relevant  years: 
if the  target  is met  then  financing  of new  projects  or new  stages  of  projects  can  continue  or  be 
resumed,  as  the  case  may  be.  If  the  target  is  exceeded  then  financing  of  new  projects  or  new 
stages  of  projects  is  suspended,  provided  that  the  deficit  is  significantly  off  the  mark  for 
reasons  other  than  exceptional  circumstances  outside the  control  of the  Member  State.  Projects 
already  approved  are not  affected. 

Regulation (EC) No 1  164/94 of  16 Mav 1994. 

Annual report of the Cohesion  fund  1996 

CHAPTER  1  - Implementation of Cohesion  Fund principles 

The Commission  takes all the necessary  steps to verify  the data to ensure that the  information  is 
correct.  A  high  degree  of  certainty  is  necessary,  not  least  if  the  decision  reverses  previous 
decisions,  i.e. when  suspending or resuming  financing. 

In  1996 the  spring  examination  took  place  in  May/June and  concerned  the  deficit  performance 
in  1995. 

For  that  year  the  targets  recommended  by  the  Council  for  the  government  deficits  relative  to 
Gross  Domestic  Product  and the deficit  performance  were then estimated  as  follows: 

Greece 
Portugal 
Spain 

recommended  target 
for  1995 
10.7% 
5.8% 
^ 9% 

1995 deficit  performance  (*) 

9.2% 
5.4% 
5.8% 

(*) Commission  spring  1996 Economic Forecasts 

In each  case  the  Commission  therefore  concluded  that  the  government  deficits  were  inside  the 
recommended  target  and that  approval  of new projects  and  stages of projects  could  continue  in 
the three  Member  States. 

Following  an  internal  audit  of  government  accounts,  the  Spanish  Government  revised  the 
deficit  for  1995  by  adding  0.8% to the  previous  figure  of  5.8%. Consequently  a revised  deficit 
figure  of  6.6%  of  GDP  was  reported  officially  to the  Commission  on  1 September  1996  under 
the excessive  deficit  regulation-. 

A  deficit  of  6.6%  is  clearly  outside  the  recommended  target  of  5.9%  for  1995.  Mad  the 
Commission  been  in  possession  of  the  revised  figures  at  the  spring  examination,  suspension 
would  have  been  introduced  in June  1996. However  that  suspension  would  have  been  lifted  in 
autumn  1996  because  the  deficit  performance  for  1996  was  forecast  at  4.4%.  which  coincides 
with  the  recommended  target  for  1996. In these  circumstances  the  Commission  decided  not  to 
suspend  financing  from  the  Cohesion  Fund  provided  that  the  Spanish  commitment  to  limit  the 
government  deficit  to  4.4%  could  be  verified.  The  Spanish  authorities  will  provide  all  the 
necessary  data  and  information  necessary  for the monitoring of the target. 

The  autumn  examination  in  1996  was  carried  out  in  October/November  and  concerned,  in 
accordance  with  the procedure, the deficit  performance  forecast  for  1996. 

For Greece.  Portugal  and  Spain  the targets and forecast  deficits  were then  estimated  as  follows: 

Greece 
Portugal 
Spain 

recommended  target 
for  1996 
1_6% 
4.3% 
4.4% 

forecast  1996 deficit  (*) 

7.9% 
U)% 
4.4% 

) Commission  autumn  1996  Economic  Forecasts 

2  Regulation  ( EC)  No  3605 '93. 

Annual  report  ol  the  Cohesion  Fund  1996 

CHAPTER  I - Implementation of Cohesion  Fund principles 

that  the  Portuguese  deficit  was 

On  this  basis  the  Commission  concluded 
the 
recommended  target.  A Greek  deficit  of  7.9%  would  be  outside  the  target,  but  verification  of 
the  reliability  of the  data did  not  give  sufficient  reason  to  believe  that  the  final  outcome  would 
indeed  exceed  the  target  value.  In neither  case, therefore,  did  the Commission  find  it  necessary 
to suspend  financing  of new projects.  However, the Commission  did  write  a letter to the  Greek 
authorities to urge them  to take all necessary  steps to avoid  exceeding the target  for  1996 and  to 
inform  them  of the consequences of non-compliance  with the recommended  target. 

inside 

1.3 

MID-TERM  REVIEW 

The  Cohesion  Fund  provides  financial  contributions  to  projects  in  Member  States  with  a  per 
capita  gross  national  product  (GNP),  measured  in  purchasing  power  parities,  of  less  than  90% 
of the Community  average. 

Article 2(3) of the Cohesion  Fund  regulation  stipulates with  regard to the GNP criterion  that the 
Member  States  "... shall continue to be eligible for  assistance  from  the Fund  provided  that,  after 
a  mid-term  review  in  1996,  their  GNP  remains  below  90%  of  the  Community  average.  Any 
eligible  Member  State  whose  GNP  exceeds  the  90%  threshold  at  that  time  shall  lose  its 
entitlement  to  assistance  from  the  Fund  for  new  projects  or,  in  the  case  of  important  projects 
split  into several technically  and financially  separate stages, for new stages of a project." 

The Commission  undertook  the mid-term  review on  12 June  1996. The  most  up-to-date  figures 
available were those for  1995, which  were as  follows: 

Per capita GNP  in  1995 (in  PPS), EUR  15=100 

Greece 
Ireland 
Portugal 
Spain 

65.8 
78.9 
72.3 
75.7 

All  four  Member  States  therefore  continue  to  meet  the  GNP  eligibility  criterion  and  therefore 
also continue  to be eligible  for Cohesion  Fund  financing. 

It  should  be  noted  that  Article  2(2)  of  the  Cohesion  Fund  Regulation  provides  that  until  1999 
only  these  four  Member  States  may  be eligible,  and  that  consequently  no  other  Member  State 
may be put on the  list at the present time. 

1.4 

INFORMATION  AND PUBLICITY  MEASURES 

Article  14(3) of the Cohesion  Fund  Regulation  requires the Commission  to adopt  detailed  rules 
on  information  and  publicity,  inform  the  European  Parliament  thereof  and  publish  them  in  the 

Annual report of the Cohesion  Fund 1996 

CHAPTER  1  - Implementation of Cohesion Fund principles 

Official  Journal.  The  Decision  was  adopted  on  25  June  1996  and  published  in  the  Official 
Journal  on 27 July0. 

The  thrust  of  the  Decision  is that  each  and  every  project  carried  out  with  the  assistance  of  the 
Cohesion  Fund  is  to  be  promoted  by  appropriate,  timely  and  comprehensive  information  and 
implementing  the  projects,  whether 
publicity  measures.  The  authorities  responsible  for 
national,  local  or  regional,  are  also  responsible  for  publicity  and  information.  The  measures 
must  be  carried  out  in  collaboration  with  the  Commission.  The  Decision  concerns  the  media, 
information  material,  information  events  and  the  use  of  all  modern  forms  of  communication, 
including audio-visual  presentations and videos. 

Every  project  must  as a minimum  include  on-the-spot  information  and  publicity  measures,  and 
information  material  explaining  its  content  and  the  Community  contribution  must  be  made 
available  at  local  and  regional  level. To this minimum  requirement  are added  other elements of 
publicity  and  information;  the  bigger  the  project,  the  more  comprehensive  and  widely 
distributed  the  information  and  publicity.  These  extra  elements  comprise  regular  news 
conferences,  bill-boards  and  permanent  commemorative  plaques, brochures  of  general  interest, 
professional  video-clips  and  presentations  intended  for  national  radio  and  TV  channels.  It 
should  be  noted  that  the  competent  authorities  may  include  the  cost  of  information  and 
publicity  in the  eligible  expenditure  for  a project;  these costs  may therefore  be part-financed  at 
the same rate as Cohesion  Fund  projects  in general,  i.e. at 80% to 85%. 

The  Commission  must  also  be  active  in  this  field  and  in  particular  organise  regular  news 
conferences  in  the  Member  States  concerned,  not  least  in  cases  where  major  investments 
(exceeding  ECU 20 million) are concerned. 

It  is  important  to  note  that  the  Monitoring  Committees  have  a  key  role  in  overseeing  the 
measures  and  making  sure  that  relevant  information  is  made  available  to  the  public.  It  should 
be  recalled  that  should  a  Member  State  fail  to  respect  its  obligations  on  information  and 
publicity,  the  Commission  reserves  the  right  to suspend,  reduce  or even  cancel  assistance  from 
the Cohesion  Fund for  the  projects. 

The  European  Parliament,  which  was  consulted  on  the  draft  proposal  before  the  Commission 
adopted  its  Decision,  approved  the  general  measures  proposed  but  set  out  a  number  of 
particular  concerns  relating  to  their  implementation.  Parliament  pointed  out  that  the  notion  of 
information  is  wider  and  more  comprehensive  than  publicity  and  criticised  the  proposal  for 
focusing  only  on  the  latter.  It  also  stressed  the  need  to  guarantee  the  dissemination  of 
information,  involving  the  national,  regional  and  local  authorities,  and  encompassing  all 
structural  measures  supported  by  the  Union  through  the  Cohesion  Fund  and  the  Structural 
Funds, in  particular  in the  fields  of transport  infrastructure  and the  environment. 

In  the  final  Decision,  the  Commission  responded  positively  to  the  concerns  of  the  Parliament 
by  specifying  that  the  measures  are  additional  to those  other  arrangements  for  information  and 
publicity  undertaken  for  regional  and  cohesion  policies  by  the  Member  States  or  by  the 

Commission  Decision of 25 -lune  1996 concerning  information  and publicity  measures to be carried 
out by the Member States and the Commission  concerning the activities of the Cohesion  Fund under 
Council  Regulation (EC) No  I  164 94 (96/455 EC) - OJ No L188, 27.7.1996. p 47. 

Animai report of the Cohesion  Fund  1 0C)6 

CHAPTER  1  - Implementation of Cohesion Fund principles 

12 

Commission.  A  specific  reference  was  made  in  this  context  to  the  decision  on  publicity  and 

information  on the Structural  Funds and the Financial  Instrument for  Fisheries Guidance^. 

1.5 

FIRST COHESION  REPORT 

Presentation  of  the  first  Report  on  Economic  and  Social  Cohesion  in  the  European  Union, 
adopted  by the Commission  on  6 November  1996, stems from  the Treaty  of  Maastricht,  which 
introduced  the  requirement  for  a three-yearly  report on progress  towards  achieving  cohesion  in 
the  Union  by reducing  disparities  between  living  standards  and  the  opportunities  for  economic 
development  in the Member  States, regions and social groups. 

The main  message  of the report  is clear: progress has been made. In scarcely ten  years, the  four 
poorest  countries  in  the  Union  have  raised  per  capita  income  from  66%  to  74%  of  the 
Community  average, 
the  Union's  structural  policies.  Nevertheless, 
unemployment  remains  a constant  problem  whose  impact  on  certain  regions  and  social  groups 
is particularly  serious. 

largely 

thanks 

to 

Over the  last ten years, economic  growth  in the Union  has averaged just over 2% per year while 
employment  has  increased  by  0.5% per year. This means that  some  7 million  net jobs  per  year 
have been  created  since  1983. 

Over  that  period,  differences  in  per  capita  incomes  between  the  Member  States  have  fallen 
sharply,  largely  thanks to  progress  by the  beneficiaries  of the  Cohesion  Fund  (Spain,  Portugal, 
Greece  and  Ireland),  where  per  capita  income  rose  from  66%  to  74%  of  the  Community 
average.  The  most  remarkable  results  were  recorded  in  Ireland,  with  annual  growth  rate  of 
4.5% between  1983 and  1995, followed  by Spain (3.0%) and Portugal (2.6%). 

In terms  of employment,  the  results  are  less clear-cut.  In Ireland,  where  economic  growth  was 
highest,  employment  increased  by only 0.2% per year between  1983 and  1993, despite  a recent 
upturn.  The  situation  is  similar  in  many  other  Member  States,  while  the  deep  recession  in 
Finland  and  Sweden  has resulted  in a fall  in the actual  number of jobs  in those  countries.  In the 
Netherlands. Germany. Greece and  Spain, the rate of job-creation  has been above average. 

In  Portugal.  Belgium,  western  Germany, the Netherlands  and  the  United  Kingdom,  the  rate  of 
job-creation,  although  variable,  has  been  high  enough  to  reduce  the  rate  of  unemployment.  In 
most  other  countries,  by  contrast,  unemployment  has  risen,  most  dramatically  in  Finland  and 
Sweden  but  also  in  two  of  the  four  countries  eligible  under  the  Cohesion  Fund,  Spain  and 
Greece,  where  unemployment  has  increased  sharply.  In  Spain,  more than  one  potential  worker 
in five  is now  unemployed. 

Within  the  Union,  disparities  in  unemployment  have  increased.  Unemployment  is  a  problem 
which  affects  the  whole  of  European  society  but  its  impact  on  different  social  groups  varies: 
unemployment  among  those  aged  under  25  is  almost  twice  as  high  (21% in  the  first  half  of 
1996) than the overall  rate. Unemployment  amongst women  is also high:  12.5% in the first  half 
as  against  9.5%  for  men.  Furthermore,  those  with  only  a  basic  level  of  training  are  harder  hit 
than those with further  qualifications  (an unemployment  rate of  13% as against 9%  in  1994). 

OJNo  L  152,  18.6.1994, p. 39. 

Annual report of the Cohesion  Fund 1996 

CHAPTER  1  - Implementation of Cohesion Fund principles 

13 

Long-term  unemployment  is  very  worrying:  in  1995,  49%  of  those  unemployed  had  been 
without  a  job  for  over  a  year  and  25%  for  over  two  years.  These  figures  confirm  that 
unemployment  is a  serious  structural  problem  in  Europe  which  excludes  certain  social  groups 
from  the  labour  market. 

The  impact of unemployment  on poverty cannot  be denied.  Statistics seem  to show that  poverty 
is increasing throughout  the  Union, particularly  in a number of northern  Member States. 

Annual report of the Cohesion Fund 1' 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

14 

CHAPTER  2 

FINANCIAL  ASSISTANCE  COMMITTED  AND  PAID  BY  THE  FUND 

2.1 

BUDGET  AVAILABLE 

At  the  Edinburgh  European  Council  in  December  1992.  the  Heads  of  State  and  Government 
decided  to grant  ECU  15  150 million  (at  1992 prices) to the  four  beneficiary  Member  States  for 
the period  1993-99. The year-by-year  breakdown of the appropriations'is as follows: 

Year 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

Total 

Amount 

1 500 

1 750 

2 000 

2 250 

2 500 

2 550 

2 600 

15 150 

ECU million (1992 prices) 

Subsequenth.  adjustments 
indexation,  commitment 
appropriations  for  1993,  1994.  1995.  1996 were  set at  ECU  1 565  million,  ECU  1 853  million. 
ECU 2  152 million  and  ECU 2 444 million  respectively. 

inflation  meant 

that,  after 

for 

Payment  appropriations  for  those  years  totalled  ECU  1 000  million,  ECU  1 679  million,  ECU 
1 750 million  and  ECU  1919  million. 

As  in  1995.  the  budgetary  authority  (the  European  Parliament  and the Council  of the  European 
Union)  decided,  in  1996. to transfer  ECU  300  000 to the  budget  line  managed  by  UCLAF  (the 
Anti-Fraud  Coordination  Unit) to provide  it with  both  commitment  and payment  appropriations 
to  combat  fraud  connected  with  the  Cohesion  Fund.  This  transfer  increased  the  commitment 
appropriations  available to the Cohesion  Fund  in  1996 to ECU 2 443.7 million  and the payment 
appropriations  to ECU  1919  million. 

In  view  of  the  above,  the  1997  budget  was  set  at  ECU  2  748.7  million  in  commitment 
appropriations  and  ECU  2 325.7 million  in payment  appropriations. 

2.2 

BREAKDOWN  BY MEMBER  STATE 

An  indicative  breakdown  of  these  amounts  was  then  carried  out  pursuant  to  Annex  I  to  the 
Regulation,  which  lays  down  brackets  of  52% to  58%  for  Spain.  16% to  20%  for  Greece  and 
Portugal  and  7% to  10% for  Ireland. 

The table of indicative brackets was therefore  as follows: 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

15 

Member 
State 

1993 

SPAIN 

GREECE-PORTUGAL 

IRELAND 

ECU  million  (1992  prices) 

52% 

780 

55% 

825 

58% 

870 

16% 

240 

18% 

270 

20% 

300 

7% 

105 

9% 

135 

10% 

150 

1994 

910 

962.5 

1 015 

280 

315 

350 

122.5 

157.5 

175 

1995 

1040 

1  100 

1  160 

320 

360 

400 

140 

180 

200 

1996 

1 170 

1 237.5 

1 305 

360 

405 

450 

157.5 

202.5 

225 

1997 

1300 

1 375 

1 450 

400 

450 

500 

175 

225 

250 

1998 

1326 

1 402.5 

1479 

408 

459 

510 

178.5 

229.5 

255 

1999 

1352 

1430 

1508 

416 

468 

520 

282 

234 

260 

TOTAL 
93/99 

7 878 

S 332  J 

8 787 

2 424 

2 727 

3 030 

1  I6Ô.5 

I  363.5 

1515 

2.3 

BUDGET  IMPLEMENTATION 

Commitments  for  1996  at  31  December  totalled  ECU  2  443.64  million,  99.99%  of  the 
appropriations  available. The table  below  shows the breakdown  of Cohesion  Fund  commitments 
bv Member  State and bv sector. 

Commitment  appropriations  -

1996:  E CU  2 443.7  million 

ECU  mil 

lion 

•M.S. 

Environment 

% 

Transport 

% 

Total 

Allocation 

£ 

GR 

IRL 

P 

663  549  515 

49.44 

678  383  056 

50.66 

1341  932  571 

235  865  092 

53.81 

202  441  610 

46.19 

438  306  702 

99  920  131 

45.07 

121  770  026 

54.93 

221  690  157 

54.91 

17.94 

9.07 

217  966  578 

49.59 

221  526  518 

50.41 

439  493  096 

17.99 

TOTAL 

1217  301316 

49.86 

1 224  121  210 

50.14 

2 4 4 1 4 22  526 

99.91 

Tech.  Ass. 

-

-

-

-

2  212  643 

0.09 

TOTAL 

1217  3 0 1 3 16 

49.89 

1 224  121  210 

50.11 

2 4 43  635  169 

100.0 

The unused balance of commitment appropriations was:  (2 443 700 000 - 2 443 635 169)  = + ECU 64. 831 

Air • xal report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

16 

Payment appropriations -1996: ECU  1 919 million 

ECU million 

M.S. 

Brviroriment 

% 

Transport 

% 

Total 

Allocation 

E 

GR 

IRL 

P 

295 940 565 

26.61 

816  116 839 

73.38 

1  112 057 404 

59.4 

127 062 978 

51.91 

117 689 309 

48.08 

244 752 287 

13.07 

80 315 065 

42.46 

108 805  171 

57.53 

189  120 236 

10.10 

124  133 591 

38.2 

200 762 086 

61.79 

324 895 677 

17.36 

TOTAL 

627 452  199 

33.54 

1 243 373 405 

66.46 

1 870 825 604 

99.94 

Tech. Ass. 

-

-

-

-

1  156 625 

0.06 

TOTAL 

627 452  199 

33,52 

1 243 373 405 

66.46 

1871982  229 

100 

Balance of payment appropriations: (1 919 000 000 - 1  871 982 229) = 47 017 771 (2.25%). 
Implementation of appropriations for payments for  1996 amounted to 97.75%. 

Appropriations to combat fraud  (see also Chapter 2.1 of this Report) 

Appropriations made available: ECU 300 000 used by UCLAF from budget heading 3010. 

2.3.1 

SPAIN 

Environment 

The  projects  submitted  by  Spain  in  1996  confirmed  the  national  priorities  for  the  environment: 
principally  the  provision  of  infrastructure  to  supply  water  for  domestic  use  and  to  treat  waste 
water,  the  management  of  urban,  toxic  and  dangerous  waste,  afforestation,  the  planning  and 
restoration of the coastline and the urban  environment. 

All  these  measures  apply  throughout  the  country.  This  year,  particular  attention  was  paid  to 
providing  increased  finance  for  measures  on  the  Canary  Islands  as  one  of  the  most  remote 
regions.  These  include desalination  plants,  coastal  improvements  and the widening  of  road  GC1 
at  Tenerife. 

The strategy for the submission of projects  is based on national or sectoral plans, or on legislation 
adopted  by  the  Autonomous  Communities,  in  order  to  ensure  a  significant  impact  in the  sector 
concerned. 

Spain submitted the following  groups of projects: 

0  groups of operationally  related projects, dealing with the supply of drinking water,  undertaken 

bv the national  administration; 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

17 

0  groups  of  projects  concerning  drainage  and  water  treatment,  undertaken  by  local  authorities 

under the national  sectoral  plan: 

0  groups  of  projects  concerning  the  treatment  of  urban  waste  adopted  at  regional  level  and 
carried  out  by  a  number  of  municipalities  under  the  Plan  on  waste  management  being 
approved  or  legislation. 

As  in  1995.  priority  was  given  to  drainage  and  water  treatment  projects  submitted  by 
municipalities  and  intended  to  implement  Directive  91/271/EEC  on  waste  water  in  order  to 
achieve  the  objectives  laid  down  for  1998  and  2000.  Further  finance  was  also  provided  for 
projects  submitted  by  the  Autonomous  Communities  during  the  previous  year  and  adopted  in 
annual  instalments. 

A greater  number  of  large-scale  projects  for  the  supply  of drinking  water  was  submitted:  these 
included  the Casrama  system  in Madrid  and the desalination  plants at Ceuta  and  in the  Balearic 
and  Canary  Islands. 

In the  other  sectors  of the environment, the  continuing  high  level  of applications  for  assistance 
made  by  the  Spanish  authorities  in  1996  reflects  the  persistent  difficulty  in  proposing  large-
scale  projects  in  the  various  sectors  eligible  for  assistance.  This  aspect  is  also  linked  to  the 
implementation  to  a  number  of  bodies,  such  as  the  central 
strategy  of  decentralising 
administration  and the regional  and  local  authorities. 

In  1996.  the  Spanish  authorities  submitted  48  applications  for  Cohesion  Fund  finance  in  the 
sector of the environment; total  assistance amounted  to ECU  795.5 million. 

The  Commission  adopted  69 new  decisions  concerning  some  589 projects  and  measures  in  the 
field  of  the  environment  in  Spain.  During  1996,  assistance  totalling  ECU  663.6  million  was 
provided  towards  eligible  costs  of  ECU  1 001  million.  This  represented  49.5%  of  the  total 
assistance  allocated  to  Spain  from  the  Cohesion  Fund.  The  decisions  adopted  in  this  field  in 
1995 resulted  in a financier  commitment  of ECU 31.6 million  in  1996. 

Annual report of the Cohesion Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

Projects  approved  broken  down  by  sector 

Sectors 

Total  cost 

Assistance 

ECU 

ECU 

Commitments 
1996 
ECU 

% 

Number o 
decisions 

Number of 
projects 

Supply  and  quality  control  of 
water 

270 510 625 

229 579 585 

151 703 799 

23% 

10 

41 

Waste 

97 509  139 

78 007 307 

89 644 443 

14% 

Drainage  and  water  treatment 

482 056 374 

388 866 478 

300 593 456 

45% 

Urban  environment 

79 681  467 

63 745  170 

63 745  170 

10% 

Afforestation 

42 758 247 

33 313 468 

33 313 468 

5% 

Coasts 

28 893 322 

24 559 324 

24 559 324 

4% 

19 

24 

12 

3 

1 

TOTAL  Environment 
Budget  1996 

1 001 409  174 

818071  332 

663 559 660 

100% 

69 

49 

85 

14 

386 

14 

589 

More  details  highlighting  the  most  important  projects  are  given  below.  The  projects  approved 
also  comply  with  the  priorities  set  out  in  the  Fifth  Community  Action  Programme  on  the 
Environment  and  Sustainable  Development,  the  objectives  of  Article  130r of the  Treaty  and  the 
requirements  for  implementing  the  Community  Directives  on  the  environment. 

•  W a t er  supply 

Before  approving  the  national  water  plan.  Spain  decided  to  draw  up  a  White  Paper  setting  out 
the  objectives  and  priorities  for  measures  in  this  area. 

In  1996  the  Cohesion  Fund's  contribution  to  this  sector  represented  2 3%  of  the  resources 
available  for  environmental  projects,  or  about  ECU  152  million  for  41  projects  grouped  in  10 
decisions. 

The  decisions  adopted  in this  sector  had  three  main  objectives: 

0 

0 

to  increase  the  population  served  by  infrastructure  to  distribute  drinking  water,  facilitate  the 
sustainable  development  of  the  area  in  question  and  improve  the  quality  of  water  to  the 
levels  laid  down  by  Community  Directives.  These  include  the  Casrama  system  in  Madrid 
and  other  measures  to  continue  projects  already  approved 
in  the  inter-municipal  body 
linking  Algodor  and  Almoguera-Mondejar: 

to  ensure  supplies  of  drinking  water  to  those  affected  by  drought  by  improving  health 
conditions  and  quality  of  life  of  the  people  concerned.  To  this  end.  the  Cohesion  Fond 
financed  desalination  plants  in  Palma  de  Majorca.  Calvia.  Ceuta  and  Tenerife,  since  it 
considered  this"solution  to  be  the  best  way  of  achieving  the  water  quality  laid  down  by  the 
Communitv  Directives  and  overcomiim  obstacles  created  bv  the  lack  of  water: 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

0  stepping  up the  introduction  of water  information  systems  by  installing  such  a system  on the 
Tagus  and  extending  measures  to  improve  water  systems  and  the  environment  already 
financed  by the Cohesion  Fund  in  1994. 

The  infrastructure  financed  will  also  help  preserve  aquifers,  reduce  the  over-exploitation  of 
ground  water  and  check  erosion  and  desertification  in  accordance  with  the  Fifth  Communitv 
Action  Programme on the  Environment  and  Sustainable  Development. 

•  Treatment  of waste  water 

On  the  basis  of the  guidelines  laid  down  in the  national  plan  for  the  drainage  and  treatment  of 
waste  water  adopted  in  February  1995.  Spain  continued  during  1996  its  investments  in  this 
sector  in order to meet  its obligations  under Directive 91/271 /EEC  by the deadline. 

The  Cohesion  Fund  continued  to  make  a  substantial  contribution  to  this  work:  45%  of  part-
financing  for  Spain  in the environment  sector concerned  projects  for the drainage and  treatment 
of  urban  waste  water.  Of the  ECU  300  million  committed.  ECU  31  million  was  accounted  for 
by  annual  instalments  of  decisions  adopted  in  1995  while  the  remainder  was  committed  to 
cover 24 new  decisions comprising  a total  of 85 projects. 

Because  of  the  decentralisation  of  responsibility  in  this  sector  in  Spain.  20  of  these  new 
decisions  concerned  applications  for  aid  from  municipalities  responsible  firstly  for  the 
implementation  of the projects  and then  for the operation  and maintenance  of plant. 

When  considering  these  aid  applications,  the  Commission  paid  particular  attention  to  ensuring 
that  the  infrastructure  complied  with  the  environmental  requirements  imposed  by  Community 
legislation,  and  in  particular  Directive  91/271 /EEC.  Similarly,  in  order  to  ensure  that  the 
projects  financed  form  part  of  a  complete  drainage  system,  any  grant  for  a  waste-water 
collector  is dependent  on  its being  linked  to a treatment  plant. 

The  infrastructure  financed  combines  measures  to  improve  the  environment  by  reducing  the 
burden  of pollution  in the effluent  discharged  and by helping  improve the quality of surface  and 
bathing  water  and  preventative  measures  to  protect  ecosystems  and  public  health.  Some 
projects  include  programmes  for  reusing  water,  so facilitating  more  rational  utilisation  of water 
in the areas worst affected  by drought. 

•  Waste  management 

The  amount  corresponding  to  commitments  in  the  1996  budget  for  the  waste  sector  was 
considerably  higher  than  in  1995.  However,  of the  16 new  aid  decisions  covering  a total  of 49 
projects.  12 corresponded  to aid  applications  submitted  in  1995 but  still  under  consideration  at 
the  beginning  of  1996. 

This  is the  sector  whose  management  is most  decentralised:  ten  decisions  concern  applications 
submitted  by  municipalities  and  the  other  six  applications  from  Autonomous  Communities. Of 
these  applications,  which  were  adopted  in  February  1995  and  comply  with  the  Community 
priorities  and  criteria  laid  down,  particularly  by  Directive  91/689/EEC  laying  down  parameters 
for  hazardous  waste, three  form  part  of the national  strategy  on  hazardous  waste  for  1995-2000 
and the restoration  of contaminated  soil  for  1995-2005. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

20 

The other  decisions  concern  projects  to  improve the management  and  treatment  of  urban  waste 
and  follow  the guidelines  laid  down  in the  regional  plans on waste and the agreements  between 
those  responsible  for  the  environment  at  national  level  and  the  local  authorities.  They  concern 
plant  to  facilitate  the  selective  collection  of  waste  at  the  point  of  sorting,  the  most  efficient 
form  of  transport  and  the  establishment  of transfer  centres,  exploitation  through  recycling  and 
composting  and  the  filling  in  and  sealing  of  old  tips  of  the  restoration  of  certain  existing  tips. 
All  these  measures  are  in  line  with  the  relevant  Community  policy,  particularly  Directive 
91 !\56  EEC. 

•  Afforestation 

In  1996.  the  Spanish  authorities  submitted  the  applications  for  aid  for  afforestation  projects 
under  the  afforestation  Plan  drawn  up  for  1995-99,  which  includes  measures  for  afforestation, 
combating  erosion  and desertification  which  form  part of the national  Plan for the restoration  of 
water and  forestry  resources drawn  up for each  water  system. 

As  in  1995. the  projects  were  submitted  by  the  national  administration  and  the  Autonomous 
Communities  grouped  by water  system. 

In  this  field,  three  decisions  concerning  applications  for  aid  submitted  in  1995  were  adopted: 
they  include  366  measures  to restore  plant  cover  through  afforestation,  the treatment  of  forests 
to  improve  existing  vegetation,  work  on  the  maintenance  of  seasonal  water-courses,  the 
consolidation  and  strengthening  of  banks  and  their  stabilisation  against  land-slips  by  means  of 
dykes  and  breakwaters. Other complementary  measures  were planned,  including  improvements 
to water  systems which  have  deteriorated. 

The  applications  for  aid  made  in  1996  were  subjected  to  a  multicriteria  analysis  which  will 
determine the projects  likely to be financed  by the Cohesion  Fund  in  1997. 

•  Improvement  and  restoration  of the  coastline 

The  coastline  of  Spain  is  7  880  km  long,  of  which  4  900  km  is  accounted  for  by  continental 
Spain  and  2 890 km  by the  islands. This  part  of the territory,  which  accounts  for  7.2%  of total 
surface  area,  is  home  to  35%  of  the  country's  population  and  receives  almost  all  (85%) 
seasonal  visitors.  This  pressure,  which  has resulted  in the  degradation  of the  coastline,  has  led 
the  Spanish  Government  to  undertake  measures  to  protect  and  restore  the  coast.  In  1983  an 
action  plan  for  the  coasts  was  introduced  and  a  law  on  the  coasts  was  published  in  1988. This 
integrated  planning  for  coastal  protection  underlies  the  measures  in  this  area  submitted  for 
financing. 

As  in  previous  years,  a  large  number  of  the  projects  concerning  the  coasts  divided  into  three 
categories  were  submitted  by the central  administration. 

They  concern  the  restoration  and  renewal  of  beaches  to  reverse  the  process  of  erosion,  the 
planning  of the coast to restore  its advantages  and  nature as  it is present  on the seashore  and  the 
restoration  of  the  coastal  environment  to  protect,  conserve  and  restore  the  natural  features  of 
areas of considerable  ecological  value. 

In  coordination  with  those  responsible  for  the  projects,  targeting  of  the  assistance  to  be 
provided  has  been  improved  and  14  projects  were  approved  through  a  decision  covering  the 

An. .tial report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

three categories  mentioned.  Four projects  are  in the remote region  of the Canary  Islands  and  the 
remainder  on the Atlantic  and Cantabrian  coasts. 

•  Urban  environment 

As in previous years, projects concerning the urban  environment  were submitted  on the basis of 
the  objectives  of the  Fifth  Community  Action  Programme  on  the  Environment  and  Sustainable 
Development. 

The  Commission  adopted  14  projects  through  12  decisions  which  accounted  for  10%  of  the 
1996 budget allocated  to the environment  in Spain, or ECU 63 745  170. 

The  projects,  which  were  submitted  by  the  municipalities,  are  in  Madrid.  Catalonia  and 
Aragon. 

They  are  intended  to  improve  the  quality  of  life  in  urban  areas  where  environmental  problems 
weigh  most  heavily  on  those  living  there.  To  that  end,  finance  has  been  provided  to  restore  a 
historic  area  of  Madrid  through  integrated  planning  measures  and  the  creation  of  green  areas, 
monitoring  of  atmospheric  pollution  in  Madrid,  the  reduction  of  noise  levels  on  the  first 
Barcelona  ring road and the restoration  of run-down  parks and green areas. 

Other  measures financed  in this  sector  include the restoration  of natural  areas,  improvements  to 
river  banks  and  the  creation  of  green  areas  and  parks  in  urban  area  to  protect  rivers  and 
improve water quality. 

It is interesting  to note that most  of the projects  concerning the  urban  environment  approved  in 
1996  will  provide  benefits  in  a  number  of  ways:  the  creation  of  green  areas,  the  removal  of 
contaminated  soil  and  improving water quality  in rivers. 

This  will  increase  the  impact  of  the  Cohesion  Fund  on  development  in  the  area  of  the 
environment  in  Spain. 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

-n 

Solid Waste 
Treatment funded  by the 
Cohesion Fund 

SPAIN 

%  Barcelona 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial assistance committed  and paid  by the Fund 

23 

Dam and reservoir 
River training works 
funded  by the 
Cohesion Fund 

SPAIN 

Barcelona 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial  assistance committed and paid by the Fund 

24 

Water  Source 
Water  Supply 
Water 
Treatment 

Projects  funded 
by the 
Cohesion Fund 

SPAIN 

Barcelona 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

25 

Sewerage  Wastewater 
Treatment funded  by the 

Cohesion Fund 

SPAIN 

* 

* 

Air  ial report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

26 

Transport 

In  1996  the  Cohesion  Fund  continued  to  make  an  important  contribution  to  the  financing  of 
Spanish  transport  infrastructure  projects,  principally  road  and  rail, in  line with  the objectives  of 
the  "Plan  Director  de  Infraestructuras  1993-2007"  and  the  Community's  guidelines  for  the 
development  of  the  trans-European  transport  network.  A  total  of  ECU  678.38  million  of 
assistance  from  the  Fund  was  committed  to  transport  projects  in  1996,  representing  50.5% of 
the  total  allocation  for  Spain.  This  includes  commitments  for  new  projects,  or  stages  of 
projects,  as  well  as  commitments  relating  to the  1996 annual  instalments  of  projects  approved 
in previous years. One amendment  to an earlier decision  was also approved  during the year. 

As  shown  in the  following  table,  commitments  relating  to  road  projects  in  1996 accounted  for 
ECU  567.37  million  (83.6%  of  the  transport  total)  and  to  rail  projects  ECU  111.02  million 
(16.4%). 

Transport  projects in Spain:  1996  commitments 

SECTOR 

TOTAL COST 
(ECU  MILLION) 

i 

ROADS  & MOTOR  II A YS 

1 783.068 

GRANT 

APPROVED 
(ECU  MILLION) 
1 506.529 

COMMITMENTS 
1996 
(ECU  MILLION) 
567.367 

RAILWAYS 

314.028 

266.924 

111.016 

% 

83.6 

16.4 

TOTAL  TRANSPORT 

2 097.096 

1 773.453 

678.383 

100.0 

NO OF 
DECISIONS 

16 

2 

18 

Note: 

includes projects approved in previous years 

•  Roads 

A major  part  of Cohesion  Fund  assistance  was devoted  to road  projects  in  1996. as  in  previous 
vears.  reflecting  the  need  to complete  and  upgrade the extensive  trunk  road  system  in  Spain  in 
response  to  the  continued  growth  of  traffic.  All  assisted  projects  relate  to  the  trans-European 
road  netw orks  and  are  intended  to  achieve  the  objectives  of  the  TENs  and  of  the  general  plan 
for  roads  in Spain. These  include the completion  of sections of the most heavily  used  motorway 
corridors:  the  connection  of  outlying  regions  with  the  major  centres  of  economic  activity:  the 
offsetting  of  the  excessively  radial  structure  of  the  Spanish  road  network:  the  relief  of  urban 
congestion:  and  the  integration  of  the  Spanish  road  network  with  that  of  its  immediate  EU 
neighbours. 

In  line  with  these  objectives,  the Cohesion  Fund  has  since  1993 concentrated  assistance  on  the 
following  main  corridors and sections of the Spanish  motorway and express road  system: 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

Corridor/section 

Rias Bajas  motorway 
(Galicia-Madrid-N.Spain-France) 

Madrid  ring  road  M40 

Madrid-Granada 
(Bailén-Granada) 

Zaragoza-Huesca-Somport-France 
(incl. Somport  tunnel) 

Mad rid-Valencia 

Costa  Cantâbrica 
(Galicia-Irùn) 

Trans-Catalonia  highway 
(Lérida-Gerona) 

Length* 
Kms 

Grant 
1993 - 1996# 
(ECU million) 

276 

35 

]16 

70 

57 

38 

36 

718.75 

272.99 

270.10 

187.58 

123.50 

102.07 

58.62 

*  length  of  section  constructed  or  improved  with  Cohesion  Fund  assistance 
#  total  grant  approved  under  the  interim  financial 
all  figures  have  been  rounded 

instrument  and  the  Cohesion.  F.und to  end  1996 

In  1996  nine  decisions  relating  to  new  projects,  or  new  sections  of  existing  projects,  were 
approved  involving  a total  Cohesion  Fund  grant  of ECU  590.97  million,  of which  ECU  329.29 
million  was  committed  from  the  1996  budget.  In  addition,  commitments  amounting  to  ECU 
213.14  million  were made relating to the  1996 instalments  of six projects  approved  in  previous 
years,  and  a commitment  of  ECU  24.95  million  was  made  in the  form  of an  amendment  to an 
earlier  decision.  In  total,  commitments  in  favour  of  road  projects  amounted  to  ECU  567.37 
million  in  1996.  bringing  the  overall  total  committed  from  the  Cohesion  Fund  to  roads  and 
motorways  in Spain  since  1993 to ECU  1 786.11 million. 

The  following  are  the  main  motorways  and  trunk  roads  for  which  decisions  were  approved  in 
1996: 

•  Rias-Bajas  motorway 

The  main  purpose  of this  motorway, which  covers  a total  of 300 km.  is to connect  Galicia  with 
the  main  Spanish  road  network  and  corridors  to  France.  It  will  also  provide  an  important 
alternative  outlet  for  traffic  from  North  Portugal  to Northern  Spain  and  the  rest  of  Europe. The 
section  from  Porrino.  at  the  western  extremity  of  the  corridor,  to  Orense  was  approved  for 
assistance  in  1995 (Cohesion  Fund grant  ECU  212.84 million). 

In  1996 approval  was given  for two additional  sections of the route as follows: 

Annual  repon  of  the  Cohesion  Fund  19% 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

28 

Section 

Camarzana  de Tera-Rio  Mentes 

182.6 km 

ECU million 
512.64 

ECU million 
435.74 

Length 

Project Cost 

CF grant 

1996 
commitment 
ECU million 
212.47 

Rio Mentes-Fumaces 

14.5 km 

59.12 

50.25 

20.19 

In  addition,  a commitment  of  ECU  51.09  million  was  made  in  respect  of  the  1996  instalment 
for  the  Orense-Porrino  section  referred  to  above.  Total  assistance  approved  for  this  project  so 
far  under  the  Cohesion  Fund  and  the  earlier  financial  instrument,  which  financed  the  initial 
feasibility  studies, amounts to ECU  718.75 million. A request  for  assistance  relating to the  final 
section  of the  motorway.  Benavente-Camarzana  de Tera. was received  at the end  of November 
1996. The projects  as a whole  is expected  to be completed  by end  1999. 

•  Trans-Catalonia  highway 

A new  section  of this  road  corridor  - Artés to  Sta.  Maria  de 016 - was approved  for  assistance 
from  the Fund  in  1996 with  a total  grant of ECU  15.49 million. Including another  section  which 
was  approved  for  assistance  in  1994.  total  assistance  from  the  Cohesion  Fund  towards  this 
project  amounts to ECU  58.62  million. 

This  road  axis,  which  will  ultimateh'  connect  Lérida  with  Gerona,  is  intended  to  avoid  the 
congested  area  around  Barcelona  and  open  up  a  direct  route  from  central  Spain  to  the  North 
Eastern  coastal  area and routes to France. The road axis will  provide a link  between  three  major 
trans-European  network  corridors:  the  A7  motorway  at  Gerona,  the  E9  motorway  at  Manresa 
and the A2 at  Lérida. 

Related  projects  approved  for  finance  by the Cohesion  Fund  in  1995 include the  Lérida  by-pass 
(ECU  80.34 million) and the Baix Llobregat motorway  (ECU  129.91 million). 

•  Express  roads  in  the  Basque  Country7  and  Navarra 

Four projects  were approved  in  1996: 

0  N 121-Puerto de  Velate 

This  project,  for  which  total  assistance  from  the  Fund  of  ECU  24.15  million  was  committed, 
involves  the  construction  of  two  tunnels  and  associated  access  roads  which  are  aimed  at 
reducing the height of the  Velate pass, thus improving traffic  speed  and road  safety.  The overall 
objective  of  the  project,  which  is  located  on  the  Pamplona-Behobia  route,  is  to  improve 
communications  between  the Ebro valley and south west France. 

0  Motorwav  connection  NI with  A8 

This  project  consists  of  a new  section  of  motorway  connecting  the NI  highway  at  the  Lasarte-
Oria  interchange  with  the  A8  motorway  in  the  vicinity  of  Aritzeta,  with  associated  access 
sections  (totalling  4.42  km).  Its  principal  objective  is to  provide  a  better  connection  between 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

29 

the  two  major  road  corridors  while  avoiding'existing  congestion  around  San  Sebastian. 
Assistance  from  the  Fund of ECU  16 million was approved  for the  project. 

0  NI  motorwav  Salvatierra-Navarre 

A new  1  1  km  section  of motorway  is involved  in this project  on the Nl  which  connects  Vitoria 
with  Pamplona  (Navarre)  and  with  San  Sebastian  and  the  French  border  crossing  at  I run.  The 
overall  objective  is  to  improve  north-south  connections  and  communications  between  the 
Basque  country  and  its  neighbouring  communities.  Assistance  committed  to  the  project  from 
the  1996 budget totalled  ECU 9.28  million. 

0  Motorwav  Guipi'izcoa-Navarre 

This  project,  for  which  ECU  8.45  million  of assistance  was committed  in  1996, concerns  work 
on  two  sections  of  the  new  A15  motorway  and  the  associated  tunnels.  The  motorway  links 
Guipi'izcoa  (San-Sebastiân/Irùn) with  Navarre  (Pamplona)  and  is  intended  to  improve  national 
connections  as well  as  international  communications  between  the  Ebro valley, the  Autonomous 
Communities  of eastern  Spain  and south west  France. 

•  Seville-Granada-Almeria  motorway 

This project  consists of work  on the by-passes of Guadix and Alcudia  de Guadix  involving a 13 
km  section  of  motorway  for  which  a  total  grant  from  the  Fund  of  ECU  16.06  million  was 
approved, with  ECU  7.71  million  committed  from  the  1996 budget. The project  will  contribute 
towards  the  completion  of  the  important  motorway  route  between  Seville,  Granada  and 
Almeria. 

•  GC1  motorway,  Gran  Canaria 

Assistance  of ECU  15.54 million  was approved  for this project  which  is aimed  at  improving the 
heavily  used  GCI  motorway, the major  route on the  island. 

The  following  table  summarises  the  situation  regarding  1996 budgetary  commitments  made  in 
favour  of  roads  and  motorway  projects  in  Spain  including  the  new  decisions  approved  during 
the year as well  as annual  instalments for  projects  approved  in earlier years: 

Annual report of the C  hesion Fund 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

30 

Road/Motorway 

Type of commitment 

1996 commitments 

Rias Bajas  Motorway 

Camarzana de Tera-Rio Mente 
Rio Mente-Fumaces 
Orense-Porrino 

Trans-Catalonia highway 

Artés-Sta. Maria de 016 
Lérida by^sass 

Bailén-Granada motorway 

Bailén-AIboîote 

Somport tunnel (stage II) 

Baix Llobregat motorway 

Zaragoza-Huesca motorway 
Villanoeva de Gàllego-Huesca 
NÎ21 Puerto de Velate 

Connection N1-A8 motorway 
(Gorpûzcoa) 

' 

new section 
new section 
'96 instalment 

new section 
'96 instalment 

'96 instalment 

'96 instalment 

'96 instalment 

'96 instalment 

new section 

new section 

NI  motorway Salvatierra-Navarra 

new section 

A15 motorway Guipôzcoa-Navarra 

new section 

SeviDe^jianada-Almeria motorway 

Guadix by-pass 

GC1 motorway Gran Canaria 

N234 Gilet-Soneja 

Total  1996 commitments 

new section 
new section 

modification 

ECU million 

212.465 
20.188 
51.085 

15.493 
13.067 

24.421 

21.456 

54.014 

49.091 

24.154 

16 002 

9.279 

8.452 

7.712 
15.535 

24.951 

567.367 

All  these  projects  form  part  of  and  continue  the  established  overall  approach  of  the  Cohesion 
Fund,  i.e.  to  contribute  to  the  completion  of  the  high  priority  road  sections  of  the  Spanish 
transport  corridors. 

•  Railways 

The  infrastructure  master  plan  1993-2007  includes  a  number  of  programmes  for  the  rail 
infrastructure  network,  including  high-speed  lines,  structural  measures,  secondary  lines,  the  rail 
network, safety,  conservation and maintenance. 

\nnual  report of the Cohesion Fund 1996 

CHAPTER  2 - Financial  assistance  committed  and paid by the Fund 

3 ] 

In  1996.  the  Cohesion  Fund  continued  to  provide  assistance  in  accordance  with  the  two 
guidelines  for  the  railways  adopted  during  1995  and  which  form  part  of  the  various  measures 
forming  part  of  the  programme  of  structural  measures  in  that  Plan  and  the  trans-European 
Transport  Network,  including  major  and  secondary  access,  the  modernisation  of  railway  track 
and  adjustments  to  speeds: 

0 

third  stage  of  adaptation  of  the  "Mediterranean  Corridor"  conventional  line:  the  aim  of  this 
project  is  to  raise  speeds  to  200/220  km/h  on  a  section  which  forms  part  of  a  priority 
corridor  whose  two  earlier  stages  were  financed  in  1993  and  1994.  The  commitment  to  be 
met  from  the  1996  budget  amounted  to  ECU  81  702  278: 

0  modernisation  of  the  conventional  rail  network:  this  project  includes  a  number  of  measures 
throughout  the  network.  The  commitment  to  be  met  from  the  1996  budget  amounted  to  ECU 
29  313  774. 

The  strategic  objective  is  a  high-quality  rail  network.  The  measures  are  intended  to  introduce 
high  running  speeds  on  the  main  railway  lines. 

lines,  the  Catalayud-Riola  and  Zaragoza-LIeida  sections  of  the 
As  regards  the  high-speed 
TGV-south  Madrid-Barcelona  line  have  been  submitted  for  finance  from  the  Cohesion  Fund. 
Their  adoption  will  take  account  of  completion  of the  whole  of the  line. The  Spanish  authorities 
have  been  asked  to  provide  details  of  cost  and  of  the  economic  and  environmental  impacts. 
However,  no  reply  was  received  in  1996. 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial assistance committed and paid by (he Fund 

Trans  European 

Rail  Network 

Cohesion  Fund 

SPAIN 

Barcelona 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial assistance committed  and paid by the Fund 

Trans-European 

Road  network 

Cohesion  Fund 

SPAIN 

Annual report of the Cohesion  Fund  1996 

Barcelona 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

34 

2.3.2 

PORTUGAL 

Environment 

The  projects  adopted  by  the  Cohesion  Fund  in  1996  continue  the  strategy  of  assistance 
followed  since  1993 which  seeks to provide  infrastructure  for the supply  of drinking  water,  the 
treatment  of waste and  run-off  water and the management of solid  urban waste. 

The  projects  chosen  are  those  of  the  greatest  significance  in  these  fields  which  will  provide 
systems for the most densely  populated  parts-of the country. 

A  large  number  of the  projects  submitted  or  approved  in  1996 continue  operations  financed  in 
the  past,  either  by  the  cohesion  financial  instrument  or the  Cohesion  Fund.  Examples  include 
the  systems  to  supply  drinking  water  to the  region  of  greater  Oporto  south  and  the  continuing 
construction  of water supply  systems  in the Algarve. 

The following  points should be noted: 

0 

0 

the  considerable  effort  made  by  Portugal  in  these three  areas. This  effort,  part-financed  by 
Cohesion  Fund  assistance,  is  intended  to  bring  about  very  substantial  changes  in  these 
sectors.  The  Cohesion  Fund  assistance,  which  is  concentrated  on  a  limited  number  of 
systems  whose  implementation 
is  regarded  as  a  priority  and  whose  economic  and 
environmental  impact  is  greatest,  will  make  a  decisive  contribution  to  achieving  these 
results; 

the  establishment  of  inter-municipal  bodies  to  manage  the  largest  projects  concerning  both 
drinking  water  and  waste.  In  most  cases,  a  central  body  takes  a  holding  in  these  inter-
municipal  bodies  and  has  a  supervisory  role.  This  solution  should  both  enable  those 
concerned  to  participate  in the  management  and  implementation  of the  systems  and  ensure 
the  coordination  and  maintenance  of technical  and  organisational  skills. There  will  usually 
be  economies  of  scale  and  more  efficient  implementation  and  management  of  the  systems 
may be expected. 

In  1996,  the  Portuguese  authorities  submitted  for  Cohesion  Fund  finance  23  new  applications 
for  aid  in  the  field  of the  environment  totalling  ECU  508.0  million  towards  a total  investment 
of ECU  597.9  million. 

The  Commission  adopted  21  environmental  projects  in  Portugal  (10  of  which  had  been 
submitted  in  1995). Total  eligible  investment  was  ECU  620.6  million  and  assistance  amounted 
to ECU  527.7 million,  of which  ECU  166 million  would  come from  the  1996 budget. 

In  1996, after  a fairly  long running-in  period,  investment  in the environment  began  to absorb a 
very  large  proportion  (about  50%)  of  the  resources  of  the  Cohesion  Fund.  This  trend  should 
increase  in the vears to come. 

Annual report of the Cohesion Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid by the Fund 

J:> 

Breakdown  by sector of decisions to grant assistance adopted  in  1996 

Sectors 

Number  of 
projects 

Assistance 
(ECU  m) 

% 

Commitment 
1996  budget 
(ECU  m) 

% 

Waste  water 

Supply  of  drinking 
water 

Waste 

Total 

11 

4 

6 

21 

117.6 

22.3 

65.5 

31.5% 

214.8 

40.7 

25.3 

15.1% 

195.5 

527.7 

37.0 

100 

75.3 

166 

45.4% 

100% 

In  addition  to  the  ECU  166  million  committed  as  a  result  of  decisions  adopted  in  1996,  ECU 
43.3  million  was  committed  in  1996  to  finance  projects  adopted  in  previous  years  and  ECU  8.7 
million  to  provide  further  assistance  for  nine  projects  adopted  earlier. 

This  means  that  49.6%  of  the  Cohesion  Fund  budget  allocated  to  Portugal  for  1996  was  used 
for  projects  in  the  field  of the  environment. 

Commitments  in  1996  were  broken  down  as  follows: 

Breakdown  of appropriations  by sector  in  1996 

Sectors 

Commitments  1996 

% 

Waste  water 

Supply  of drinking  water 

Waste 
~Ôthï? 

"Total 

(ECU  m) 

72L8 

6ÏÏ2 

753 
8^ 

2Î8 

33.4% 

28.1% 

34.5% 
4B 

100% 

Supply  of drinking  water 

5 

Further funding  for  nine projects. 

Annual  report of the Cohesion  Fund  1996 

CHAPTER  2 - Financial  assistance committed  and paid by the Fund 

The  Cohesion  Fund  assistance  requested  in  1996  was  intended  to  increase  the  percentage  of  the 
population  of  Portugal  supplied  with  mains  drinking  water  and  ensure  the  levels  of  service  and 
quality  laid  down  by  Community  directives.  In  1990,  the  percentage  of  the  population  of 
Portugal  supplied  with  mains  drinking  water  (77%)  was  still  below  the  Community  average 
(95%).  Considerable  progress  has  been  made  since  then,  mainly  thanks  to 
infrastructure 
provided  by  means  of  Cohesion  Fund  assistance. 

In  1996.  the  Cohesion  Fund's  contribution  to  this  sector  represented  28.1%  of  the  resources 
available  for  environmental  projects,  about  ECUO 61.2  million. 

The  projects  adopted  in  1996  concerned  mainly  the  implementation  or  improvement  of  large 
regional-scale  systems  serving  large  metropolitan  areas  and  a  substantial  percentage  of  the 
population. 

0  There  are  water  supply  systems  in  the  region  of  Oporto  (north  and  south)  which  serve 
virtually  all  the  municipalities  around  Oporto  and  the  city  itself.  These  systems  are  managed 
as  concessions  by  specialist  companies,  which  makes  for  more  efficient  management  and 
means  that  the  municipalities  in  question,  which  have  a  capital  holding  in  the  management 
company,  are  involved. 

The  systems  financed 
include  those  for  the  catchment  and  treatment  of  water  and  for 
supplying  drinking  water  up  to  the  reservoirs  of  each  municipality.  They  increase  the 
economies  of  scale  at  the  level  of  the  treatment  and  production  of  water. 

Finance  for  a number  of  municipalities  making  up the  greater  Oporto  south  system  (the  Vale 
de  Cambra  sector,  improvements  in  Vila  Nova  de  Gaia  and  the  Valongo  sub-system)  was 
approved  in  1996.  The  second  stage  of  the  system  to  supply  greater  Oporto  north  was  also 
approved.  The  Fund  will  contribute  ECU  166  million  (of  which  ECU  18.4  million  was 
committed  from  the  1996 budget)  to these  projects. 

0  The  Cohesion  Fund  approved  a  project  for  the  Lisbon  metropolitan  area  covering  a  system 
to  supply  water  to  Lisbon  and  the  Tagus  Valley.  The  project  financed  forms  part  of  a  larger 
programme  of  assistance  to  which  the  Cohesion  Fund  has  already  contributed  about  ECU  60 
million  and  which  should  increase  the  capacity  of  the  distribution  network  for  Lisbon  and 
the  Tagus  Valley  from  the  Castelo  de  Bode  dam  and  the  Asseiceira  treatment  station.  It  will 
serve  some  15  000  people  whose  water  at  present  comes  from  underground  sources  which 
are  inadequate  as  regards  both  quality  and  quantity.  ECU  4  million  was  granted  to  this 
project. 

0 

In  the  south,  the  Cohesion  Fund  made  a  substantial  contribution  in  the  Algarve  for  large 
projects  to  capture  and  distribute  water  in  all  the  municipalities  in  the  region:  the  water 
supply  system  for  the  western  part  (Barlavento)  was  approved  in  1996  and  will  receive 
assistance  totalling  ECU  43  million 
(of  which  ECU  2.1  million  was  committed  from  the 
1996  budget). 

Finance  from  the  Fund  will  be  used  to  construct  a  system  with  two  treatment  stations,  two 
regulating  reservoirs,  two  supply  pipes  and  an  automatic  management  system  to  serve  a 
population  put  at  1 50  000  permanent  residents  but  rising  to  350  000  in the  high  season. 

•  T r e a t m e nt  of  waste  water 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial  assistance committed  and paid by the Fund 

37 

During  1996  Portugal  made  significant  progress  in  implementing  the  Community  Directives  on 
waste  water,  particularly  Directive  91/271/EEC. 

Nevertheless,  the  introduction  of treatment  systems  in  this  sector  is  still  lagging  well  behind  the 
deadlines  laid  down  in  the  Directive  so  the  efforts  made  must  be  maintained  and  even  stepped 
up. 

In  1996  commitments  by  the  Cohesion  Fund  for  this  sector  accounted  for  33.4%  of  resources 
allocated  to  environmental  projects. 

As  far  as  assistance  granted  as  a  result  of  new  decisions  is concerned,  the  sector  received  40.7% 
of the  appropriations  allocated  to the  environment. 

0 

In  1996.  in  the  densely  populated  area  of  Oporto  the  Cohesion  Fund  granted  assistance 
worth  ECU  10.6  million  for  a  project  to  clean  up  the  basin  of  the  river  Leça 
(Greater-
Oporto  South,  Matosinhos-Leça  area).  The  project  should  clean  up  the  Leça  and  other 
smaller  water  courses  and  ensure  a marked  improvement  in the  quality  of  water  at  the  coast. 
The  project  will  help  implement  Directive  91/271/EEC  and  the  level  of  treatment  of  the 
final  effluent  should,  in  particular,  take  account  of  the  sensitivity  of  the  area  of  reception. 
Taken  as  a  whole,  the  assistance  provided  in  the  Leça  basin  will  benefit  some  76  000 
people. 

In  the  same  area,  the  Cohesion  Fund  financed  one  stage  of  a  project  concerned  with  the 
of  Vila  do  Conde  and  Povoa  do  Varzim 
treatment  of  water  fi-om  the  municipalities 
(assistance  totalling  ECU  3.5  million). 

0  Another  large  project  concerns  cleaning  up  the  Sesimbra  basin.  It  includes  the  interceptor 
system,  the  collectors,  pumping  stations,  discharges  and  a  treatment  station  for  waste  water. 
The  geographical  location  of  the  Sesimbra  basin,  the  rugged  topography  of  the  area  and  the 
fact  that  part  of  the  area  is  in  the  Arrâbida  natural  park  require  complex  solutions  which  are 
expensive.  The  project  should  put  an  end  to  the  discharge  into  the  sea  of  urban  effluent  by 
providing  complete  treatment  and  final  disposal  by  means  of  submarine  pipes  to  meet  the 
quality  standards  laid  down  in  Directive  91/271/EEC  for  the  treatment  of  waste  urban  water 
(assistance  granted:  ECU  6.6  million). 

0  The  Cohesion  Fund  granted  finance  for  the  first  stage  of  a  project  for  the  dredging  and 
cleaning  up  of  the  ria  de  Aveiro  (assistance:  ECU  4  million).  This  is  an  area  of  the  greatest 
environmental  importance  comprising  a  lagoon  classified  as  a  special  protection  area  for 
birdlife  under  Directive  79/409/EEC  on  the  conservation  of  wild  birds.  The  project  is  also 
intended  to  improve  the  hydrodynamics  of  the  Ria  de  Aveiro,  check  coastal  erosion. 
strengthen  the  barrier  of  dunes  and  reverse  the  process  which  is  threatening  to  make  the 
lagoon  disappear.  This  project  is  linked  to  other  projects  financed  in  the  past  in  the  same 
area,  such  as  the  system  to  treat  liquid  effluent  in the  Ria  de  Aveiro. 

0 

In  the  Algarve,  the  main  work  of  the  Fund  in  1996  involved  the  second  stage  of  the  project 
concerning  the  collection  of  waste  wafer  and  the  Portimâo  treatment  station,  the  first  stage 
for 
of  which  was  also  financed  by  the  Fund.  The  project  forms  part  of  the  general  project 
the  complete  upgrading  of  the  Barlavento  Algarvio  which  has  been  designed  to  provide  the 
requisite  integrated  solutions  and  economies  of  scale.  Total  investment  is  planned  to  reach 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

38 

about  ECU  80  million.  En  1996  the  Cohesion  Fund  granted  assistance  worth  ECU  7.7 
million.  The  general  objective  of  the  Barlavento  Algarvio  network,  in  a  region  which 
includes  protected  areas  and  is of  great  environmental  value,  is to  ensure  the  protection  of 
an environment  which  is subject  to growing pressure from  the growth  of towns and  tourism. 
In  the  same  region,  the  Cohesion  Fund  also  financed  the  waste-water  treatment  system  in 
Aljezur  (ECU  1.3 million). 

0  During  1996 the Cohesion  Fund provided  assistance  in the  region  of Sotavento  Algarvio  for 

the system  for the treatment  of waste water in Louie. 

•  The Cohesion  Fund  financed  four  projects  in the  Lisbon  metropolitan  area  which  form  part 
of an overall  strategy to improve water quality  in the estuaries of the Tagus and on the  coast. 

The  Fund  granted  assistance  for  a  new  stage  of  the  project  to  clean  up  the  Estoril  coast 
which  will  complete  the  system  for  that  coastline,  so  providing  full  coverage  for  the 
municipalities  of  Oeiras  and  Cascais  and  improving  a bathing  area  where  pollution  is  very 
severe. The  system  will  meet  the  needs  of the  population  of 600  000, which  could  grow  to 
1.5 million  over the life of the  project. 

In  the  Chelas  area,  the  Cohesion  Fund  financed  the  extension  to  the  network  of  collectors 
and  the  work  to  enable  the  treatment  station  to  meet  the  parameters  laid  down  in  Directive 
91/271/EEC.  More  intensive  treatment  should  mean  that  the  effluent  can  be  used  for 
irrigation  and  to  clean  urban  areas.  The  project  is  to  receive  assistance  worth  ECU  21.8 
million, of which  ECU 3.7  million  was committed  in 1996. 

The  Fund  also  contributed  ECU  25.8  million  to finance  work  on  regulating  the  flow  of  the 
river  Trancào.  and  removing  and  treating  polluted  mud.  The  river  is  in  a  very  urban  area 
which  has benefited  from  a series  of measures  which  began  at the end  of the  eighties,  some 
of  which  (two  treatment  stations  in  particular)  have  already  received  assistance  from  the 
Cohesion  Fund.  The  removal  of  polluted  mud  and  the  régularisation  of  the  course  of  the 
river should  mean  that  lasting benefit  can be derived  from  this work. The project  should  also 
continue to restore biotypes (vegetation  and habitat)  in the Tagus estuary. 

On  the  same  river,  the  Cohesion  Fund  provided  ECU  1.3  million  of  assistance  for  the 
system  to  treatment  waste  water  from  Povo  de  Galega,  which  is  located  further  upstream 
and  is a key factor  in eliminating  pollution  from  the basin. 

•  Waste 

In  1996 Portugal  adopted  a Strategic plan for  solid urban waste, part-financed  by the  Cohesion 
Fund,  which  lays  down  priorities  and  defines  the  projects  to  be  carried  so  that  waste  can  be 
treated  n Portugal  in accordance  with Community  Directives. 

The  investment  submitted  to  the  Cohesion  Fund  forms  part  of  this  plan.  To  carry  out  the 
measures  planned,  inter-municipal  bodies,  with  the  participation  of a national  body,  have  been 
set  up to  implement  and  manage  the  main  projects.  This  solution  should  facilitate  participation 
by  the  administrations  concerned  and  provide  the  technical  capacity  required  for  the  effective 
implementation  of the  projects. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

39 

Cohesion  Fund  commitments  in  this  sector  in  J996  accounted  for  34.5%  of  the  resources 
available  for  environmental  projects.  Six  decisions  to  grant  assistance  totalling  ECU  195.5 
million  were adopted; of this amount  ECU  75.3 million  was committed  in  1996. 

0  In  the  Lisbon  region,  completion  of  the  Inter-municipal  network for  the  treatment  of  solid 
urban  waste  from  the  metropolitan  area  of  Lisbon  (Valorsul)  is  intended  to  provide  an 
integrated  solution  to the problem  of managing and  using  urban  waste generated  in  northern 
greater  Lisbon.  Valorsul  covers  four  municipalities  -  Amadora,  Loures,  Lisbon  and  Vila 
Franca  de  Xira  - which  have  a total  population  of  about  1 330  000  and  each  year  generate 
over  550  000  tonnes  of  waste,  19%  of  the  national  total.  In  the  circumstances,  the 
construction  of  an 
the  only 
environmentally  correct  solution.  The  incinerator  has three  lines, each  of which  can treat  28 
tonnes per hour. 

to  generate  energy  from 

the  waste  was 

incinerator 

Valorsul  also  intends to organise  the  selective  collection  of waste  - paper,  cardboard,  glass, 
scrap  metal  and  plastic  - as  part  of the  integrated  management  of  solid  urban  waste  and  to 
examine  whether  plants  can  be  built  to  recycle  glass  and  sort  waste.  The  total  investment 
planned  amounts to ECU  193.9 million, of which the Cohesion  Fund has financed  ECU 96.9 
million. 

0  In  the  north,  a  project  concerning  a. factory  to  incinerate  solid  waste from  greater  Oporto 
(LIPOR)  was  financed.  The  plant  will  treat  solid  urban  waste  from  seven  municipalities 
associated  with  LIPOR  and  the  waste  from  an  existing  composting  unit.  The  seven 
municipalities  taking  part  in  LIPOR  -  Espinho,  Gondomar,  Maia,  Oporto,  Valongo, 
Matosinhos  e  Vila  do  Conde  -  have  a  population  of  one  million  and  produced  390  000 
tonnes of solid  waste in  1994. 

Existing  treatment  capacity  is  virtually  exhausted  so  LIPOR  has  to  find  new  means  of 
securing  a permanent  and  integrated  solution  to the problem  of managing  waste and  turning 
the residue to good  account. 

At  the  same  time,  LIPOR  will  launch  selective  collections  and  use  recycling  to  reduce  the 
volume  of  waste  to  be  treated.  The  incinerator,  to  be  managed  and  installed  by  the 
concessionaire  for  the  lifetime  of  the  investment,  will  be  built  under  concession.  The 
Cohesion  Fund will contribute ECU 72.18 million to the investment of ECU  127.5 million. 

0  Also  in  1996,  the  Cohesion  Fund  financed  a  project  relating  to  the  treatment  network  for 
solid  urban  waste  on  the south  bank  of  the  Tagus  (LIMARSUL).  The  project  forms  part  of 
the  network  for  the  treatment  of  solid  urban  waste  on  the  south  bank  of  the  Tagus  in  the 
Lisbon  area  and  includes  eight  municipalities.  The  LIMARSUL  association  comprises  five 
of  them:  Alcochete,  Barreiro,  Moita,  Montijo  and  Palmela.  The  project  is  intended  to 
provide  a  rapid  solution  for  the  treatment  and  appropriate  disposal  of  solid  urban  waste 
generated  by almost  300 000 people. It should  also permit the two existing tips to be closed 
under good  conditions.  Assistance granted totalled  ECU 9.1  million. 

0  In  southern  Portugal,  a  series  of  studies  and  projects  on  the  regional  network  for  the 
selective  collection,  sorting  and  treatment  of  solid  urban  waste  has  been  launched.  The 
purpose  of  the  series  of  studies  is  to  prepare  for  the  establishment  of  a  network  for  the 
treatment  of solid  urban waste from  the Algarve  comprising the sub-networks  of  Barlavento 
and  Sotavento. It will  include facilities  for selective collection  and sorting as well as tipping. 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

40 

The  network for  treatment  of solid  urban waste from  Cascais, Sintra  and  Oeiras  is  another 
large  project  for  the  treatment  of  solid  urban  waste.  The  project  should  facilitate  the 
selective  collection  and  treatment  of  solid  urban  waste  and  forms  part  of an  integrated  plan 
for collection, treatment  and final  disposal. 

Annual report of the Cohesion Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

41 

PORTUGAL 

Solid Waste Management 
funded by the Cohesion Fund 

Porto 

Coimbra 

Lisboa 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

42 

PORTUGAL 

Dam and reservoir 
River training works 
funded by the  . 
Cohesion Fund 

Porto 

Coimbra 

Lisboa 

Annual  report of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

43 

PORTUGAL 

Water Source 
Water Supply 
Water Treatment Projects 
funded by the Cohesion 
Fund 

Porto 

Coimbra 

Lisboa 

Annual  repon  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial  assistance committed and paid by the Fund 

44 

PORTUGAL 

Sewerage  Wastewater 
Treatment Projects funded by 
the Cohesion Fund 

Porto 

Coimbra 

Lisboa 

Annual  report of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

45 

Transport 

During  1996,  Cohesion  Fund  assistance  for  transport  in  Portugal  continued  to  follow  the 
guidelines defined  earlier. 

However, there was a significant  development  in the Portuguese strategy concerning  project  No 
8 on  list  I adopted  by the  Essen  European  Council  (Lisbon/Valladolid  road  route), the  scope  of 
which  was extended. 

Following  an  initiative  taken  by  the  Portuguese  authorities  and  the  efforts  made  by  the 
Portuguese  and  Spanish  Governments,  the  Dublin  European  Council  of  13  and  14  December 
endorsed  the proposal  that this project  should  become a multi-modal  link between  Portugal  and 
Spain  and the rest of Europe. 

This priority  project  should  therefore  be regarded  as a multi-modal  route capable  of imposing a 
coherent  and  integrated  structure  on  the  various  forms  of transport  used  throughout  the  north 
west  of the  Iberian  Peninsula, which  is the only way of achieving  a significant  improvement  in 
the overall  efficiency  of the system. 

This  project  includes  two  of  the  major  corridors  on  the  Peninsula  -  Portugal/Galicia  and 
Portugal/Irun  - and  should  provide  rapid  alternative  links  between  Portugal  two  main  areas  of 
economic  activity  and the centre of the Union. Inside Portugal, this multi-modal  link  comprises 
a number of sub-projects  concerning rail, road, sea and air transport. 

The  rail  aspect  includes  the  Minho  and North  lines and the Beira  Alta  and  Sud  lines  while  the 
road  section  includes  the  main  routes  from  Valença  to  Vila  Real  de  S.  Antonio  (IP1),  Torres 
Novas to Gardete (IP6), Gardete to Guarda (IP2) and Aveiro to Vilar Formoso (IP5). 

Sea  transport  will  also  be  upgraded,  mainly  by  improving  land  and  sea  access  to  the  ports  of 
Leixôes,  Lisbon.  Setubal  and  Sines, which  constitute  gateways  for  the  road  routes  referred  to 
above. 

The  air  component  should  integrate  air  links  between  the  main  urban  centres  into  the  system 
through  works  at  the  airports  of  Oporto  and  Faro  and  the  construction  of  a  new  airport  at 
Lisbon. 

The  priorities  selected  by  the  Portuguese  authorities  are  in  line  with  the  strategy  pursued 
hitherto  by the  Cohesion  Fund  since they  broadly  follow  with  the  strategic  priorities  and  main 
guidelines  for action  followed  by the Fund  in previous years. 

Projects  and  commitments 

In  1996,  the  Portuguese  authorities  submitted  for  finance  from  the  Cohesion  Fund  seven  new 
applications  for  aid  in  the  field  of transport,  involving  assistance  totalling  ECU  461.9  million 
towards total  investment  of ECU 600.1  million. 

Annual report of the C  lesion Fund 19vt 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

46 

The Commission  adopted  six transport  projects  in  Portugal  (four  of which  had  been  submitted 
in  previous  years).  Total  eligible  investment  was  ECU  346.6  million  and  assistance  totalled 
ECU 248.1  million, of which  ECU  10.6 million  would  be met from  the  1996 budget. 

Breakdown of new projects by sector 

Type of  project 

Number 

Read 

Rail 

Ports 

Total 

2 

1 

3 

6 

Assistance 
(ECU  m) 
128.8 

104.9 

14.6 

248.1 

% 

51.9% 

42.3% 

5.8% 

100% 

To  this  amount  should  be  added  the  1996  annual  instalments  for  three  projects  adopted  in 
previous  years,  which  increases  total  commitments  to  ECU  221.5  million.  The  Tagus  Bridge 
project  alone accounts for 46.6% of the amounts committed  this year for  transport. 

Of the  Cohesion  Fund  resources  allocated  to  Portugal  in  1996, 50.4% went to  finance  projects 
in the field  of transport. 

Breakdown  by sector of appropriations  for  1996 

Type of  project 

Commitments  1996 

Number of  projects 

(ECU  m) 
167.1 

39.9 

14.5 

221.5 

5 

2 

10 

Road 

Rail 

Ports 

Total 

•  Road  network 

% 

75.4% 

18% 

6.6% 

100% 

Efforts  to  speed  up  completion  of  main  roads  in  Portugal  forming  part  of  the  trans-European 
networks continued  during  1996. 

In the  case  of the  Valença/Vila  Real  de  S. Antonio  route, the  Cohesion  Fund  adopted  in  1996 
the  project  for  the  Braga  Oeste/Ponte  de  Lima  section  for  which  the  application  for  assistance 
was  submitted  right  at  the  beginning  of  the  year.  Completion  of  this  road  route  to  the  north, 
towards  the  Spanish  frontier,  which  was  planned  for  the  end  of  1998,  now  requires  only 
construction  of the  Ponte de  Lima/Valença  section  (the  Portuguese  authorities have  undertaken 
to submit this for Cohesion  Fund  financing  in  1997). 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

47 

Similarly,  work  on  the  Montemor/Estremoz  section  began  in  1996,  although  the  Commission 
has  not  yet  received  an  application  for  finance.  However, 
the 
Palmela/Marateca  project  (already  completed  and  open  to traffic)  and  the  Marateca/Montemor 
project,  both of which  form  part of the Lisbon-Madrid  corridor. 

this  section  extends 

Apart  from  the  two  sections  approved  earlier  between  Alcanena  and  Abrantes  with  a  total 
length  of  41.7  km,  no  further  Fund  assistance  is  planned  for  the  Torres  Novas/Gardete  (IP6) 
main  road.  The  project  adopted  in  1993  (Alcanena/Atalaia)  has  now  been  completed  and  the 
file  on  it  closed.  The  final  report  on  the  second  section  part-financed  by  the  Fund 
(Atalaia/Abrantes), where work was completed  in  1996, is awaited. 

The  IP6  is  one  of  the  sections  of  the  Lisbon/Valladolid  road  corridor  and  now  includes  the 
Portugal/Spain-Europe  multimodal  link. 

Of  the  sections  where  finance  was  granted  to  increase  traffic  capacity,  the  expansion  of  the 
sections  of  motorway  between  Alverca,  Vila  de  Xira  and  Carregado  and  between  Oporto  and 
Aguas  Santas,  accounting  for  a total  of  18.4 km  of the Valença/Vila Real  de  S. Antonio  route, 
was completed  and the files  closed. 

High  priority  continued  to  be  given  to  relieving  congestion  in  urban  areas  and  so,  after  an 
increase  in the  assistance  granted  in  1995 to the CRIL,  it was decided  to provide more  funding 
for the CREL,  which  will  enable the  Fund  to contribute to all the works  comprising  the  Lisbon 
outer ring road. 

Work on the new Tagus crossing  in Lisbon  continued at a steady pace in  1996. Problems  which 
arose  in  connection  with  the  implementation  of  measures  to  reduce  the  impact  on  the 
environment,  for  which  provision  was made  in the  decision  granting  assistance,  resulted  in the 
signature  of  a  memorandum  of  understanding  between  the  Commission  and  the  Portuguese 
Government  which  included  extension  of  the  area  of  the  Tagus  estuary  receiving  special 
protection  and  improved  national  measures  for  monitoring  the  environmental  impact  of  the 
project. 

•  Rail 

During  1996 the  work  of the Cohesion  Fund  in this area  continued  to be guided  by the  priority 
strategic objective  of renovating the main rail  links with the rest of Europe. 

The  strategic  importance  of  the  North  and  Beira  Alta  railway  lines,  which  is  demonstrated  by 
the  fact  that  the  Portuguese  authorities  regard  them  as  one  of  the  key  parts  of  the  priority 
project  to  provide  a  multi-modal  link  between  Portugal-Spain  and  the  rest  of  Europe,  fully 
justifies  the  Fund  assistance  approved  in  the  past  for  projects  forming  part  of  the  general 
programmes to modernise these two lines. 

From  1996,  assistance  from  the  Fund  should  be  concentrated  on  projects  on  the North  line  to 
support  the  major  effort  to  invest  in  infrastructure  (almost  ECU  865  million)  which  Portugal 
will  make on this route between  now and 2000.  • 

An  application  for  assistance  submitted  at  the  beginning  of  1996  was  approved  at  the  end  of 
last year and applications  for complementary  finance  for that line should  be  forthcoming. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

48 

•  Sea  transport 

Ports  play  a fundamental  role  in the economy  of  Portugal. This  role  could  be further  increased 
by ensuring  that they  are  interoperable  with  other  modes of transport.  The shifting  onto the  sea 
of  some  of  the  traffic  currently  travelling  by  land  should  have  a  beneficial  effect  on  the 
environment. 

Cohesion  Fund  assistance  has  gone  to  investments  likely  to  promote  accessibility  and  links 
between  the ports and other modes of transport and  improve port services and  infrastructure. 

While  avoiding  the  creation  of  over-capacity  in  ports,  it  is  important  to  concentrate  efforts  on 
those  ports which  have the best potential  for this type of traffic  and programme  investment  in a 
way which  takes account of likely changes  in demand. 

In  1995  the  Commission  undertook  a study  which  analysed  the  investment,  whether  proposed 
or  being  prepared,  in  the  four  main  ports  of  Portugal.  As  a  result  of  that  study,  technical 
discussions  were  held  on  the  various  possible  scenarios  for  those  ports  and  the  problems  of 
competition  and coordination  between  them. The projects  adopted  in  1996 concern  the ports of 
Leixôes, Lisbon  and  Setûbal. 

0  In  the  Port  of  Leixôes,  the  Cohesion  Fund  financed  the  second  stage  of  work  on 

restructuring  and  modernisation. 

Leixôes.  which  is  the  main  port  for  northerp  Portugal  and  so  handles  a  large  part  of  the 
traffic  generated  by  economic  activities  in  the  Oporto  area,  operates  with  a  degree  of 
efficiency  but  its container terminals need to be expanded to avoid  congestion. 

The  decision  adopted  in  1996  (total  cost  of  the  project  ECU  17.2  million,  Cohesion  Fund 
assistance  ECU  7.0  million)  relates  to  investment  for  a number  of  purposes:  completion  of 
two  container  terminals  and  measures  to  increase  safety  in  the  port  and  protect  the 
environment, mainly through  the purchase of equipment to combat oil  pollution. 

0  The  Cohesion  Fund  also  provided  ECU  6.5  million  to  finance  work  on  the restructuring  of 
the  Roche  de  Conde  de  Obidos  and  Alcântara-Norte  quays  in  the  port  de  Lisbon.  This 
restructuring 
to  solve  problems  caused  by  erosion  and  provide  new 
infrastructure.  The  main  aim  of  the  project  is  to  construct  a  mooring  to  meet  the  present 
requirements  of  the  passenger  terminal  and  so  deal  better  with  the  growth  in  cruise  traffic. 
Other planning projects  to make operations  in the port of Lisbon  more efficient  are currently 
being  considered. 

intended 

is 

0  A decision  on the  system  to control  and manage  sea traffic  (VTS) in the port of Setûbal  was 
approved  in  1996. It  involves  the  construction  of a tower  and  the purchase  of  equipment  to 
provide  services to sea traffic  in this port. The project  is an integral  part of investment  under 
the programme  for  the  modernisation  and  expansion  of  the port  of  Setûbal  to  which  the 
Structural  Funds have already provided  some ECU 21.3 million  in assistance. 

The  port  of  Setûbal  has  very  considerable  medium  and  long-term  potential,  particularly 
when  the  new  Tagus  Bridge  comes  into  service  in  1998.  This  development  should  be 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

49 

regarded  as closely  connected  with  the developments  planned  in  Lisbon  since  the  two  ports 
serve the same economic area. 

in  overcapacity  so  a  choice  had 

A study  has shown  that,  if all the projects  submitted  by Portugal  were approved,  they  would 
result 
for 
Lisbon/Setubal  can  be approved  only as part of an overall  solution.  Discussions  on this  point 
are continuing. 

to  be  made.  Supplementary  projects 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial  assistance committed and paid by the Fund 

50 

PORTUGAL 

Trans-European 

Road  network 

Cohesion  Fund 

Porto 

Coimbra 

Lisboa 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

51 

PORTUGAL 

Trans-European 

Rail  Network 

Cohesion  Fund 

Porto 

Coimbra 

Lisboa 

Annual report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial  assistance committed  and paid by the Fund 

52 

2.3.3 

GREECE 

Total  assistance  granted  to  projects  approved  for  Greece  in  1996  amounted  to  ECU  438  295 
646.  Financial  commitments  for  environmental  projects  totalled  ECU  235  854  036,  or  53.8%  of 
the  assistance  granted  to  projects  in  Greece  in  1996.  Financial  commitments  for  projects  in  the 
transport  sector  totalled  ECU  204  441  610,  or 46.2% of the  total  assistance  granted  to  Greece. 

The  table  below  gives  the  breakdown  by  field  and  sector  of  assistance: 

TABLE OF COMMITMENTS  OF ASSISTANCE  FOR PROJECTS IN GREECE  (1996) 

Environment 

T 

Water supply 

2.  Waste water and  treatment  " 
3. 

Protection  of the 
environment 

Total  1 

Transport 

T 

Roads 

__ 

__ 

__ 

A j r p o r ts 

Total  2 

T o t a l is 

Environment 

Assistance (ECU) 

% of  total 

70 839 413 

164 004 093 
1010  530 

235 854 036 

~ 

30Ô 

69.5 
0.5 

53^8 

Assistance (ECU) 

% of  total 

124 070 006 

62 720 007 

15 651  597 

! 

202 441 610 

438255*46 

6ÏÏ3 

3LÔ 

7?7 

46^2 

18Ô 

Since  the  aim  of  the  Cohesion  Fund  is  to  promote  economic  and  social  cohesion,  it  has 
provided  assistance  to  improve  infrastructure,  provide  infrastructure  which  is  missing  and 
protect  nature. 

Work  on  the  environment  has  been  in  line  with  the  objectives  of  the  Fifth  Programme  on  the 
Environment  and  Sustainable  Development  and  forms  part  of  a  general  and  coherent  strategy 
on  the  environment. 

The  first  objective  concerns  the  management  of  water  resources.  It  is  vital  to  ensure  that 
enough  water  is  available,  that  water  resources  are  well  managed,  that  drinking  water  is  of 
adequate  quality  and  that  supplies  of  drinking  water  match  demand. 

The  second  objective  is  to  provide  the  country  with  infrastructure  for  the  treatment  of  waste 
water  and  to  help  it comply  with  its obligations  under  the  relevant  Directives. 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

53 

The third  aim  is manage waste in accordance with the Community  strategy for  2000. 

The greatest  lack  is in the  infrastructure  for dealing with waste. 

The  Cohesion  Fund  has  provided  assistance  for  waste  water  in  all  regions  of  Greece  on  the 
basis of the following  principles: 

0 

0 

the  adoption  of  projects  which  are  as  complete  as  possible,  operational  and  form  part  of a 
coherent overall  integrated  strategy adapted  to the economic and  social  development  of each 
region; 

the  protection  of  the  environment,  since  the  projects  adopted  as  a  priority  are  principally 
those where the beneficiary  town  is near to a sensitive area or has a population  equivalent  to 
over  15 000  people.  The  Community  calendar  also  imposes  certain  immediate  priorities 
(1998-2000). 

The  Cohesion  Fund  is concerned  that  the  resources  of drinking  water  available  should  be  well 
managed. 

In  addition  to  the  shortage  of  infrastructure,  the  mechanism  for  monitoring  and  checking  the 
application  of environmental  policy needs to be  improved. 

As has been  noted. Cohesion  Fund  assistance  to Greece  for the environment  accounted  in  1996 
for  53.8% of Community  assistance  to Greece. The breakdown  of assistance  by  objective  is as 
follows: 

-  water supply: financial  commitments totalling ECU 70 839 413, or 30%;6 
- 
-  nature protection: financial  commitments totalling ECU  1010  530, or 0.5%. 

treatment  of waste water: financial  commitments totalling ECU  164 004 093, or 69.5%; 

Two  major  projects  were  approved  in  1995  on  a multi-annual  basis.  The  first  concerns  water 
supplies  to Thessaloniki  from  the  River Aliakmon,  the  other  the  second  stage  of the  biological 
treatment  of water  in Thessaloniki. 

In  1996, a number  of medium-sized  and  small  projects  were  approved,  also  on  a  multi-annual 
basis. They  included  the disposal  of waste water and a biological  treatment  station  at Volos; the 
water  and  drainage  system  in  Alexandroupolis;  water  supply  and  waste-water  disposal  at 
Larissa; the waste-water  drainage  system  at Rhodes; completion  of the drainage  grid  in  Larissa 
and completion  of the treatment  station  at Markopoulo and of the waste-water  drainage  systems 
at Kalyvia. Kouvara and  Markopoulo. 

The projects  approved  include work  on the construction  of networks, water  supply, the  disposal 
of waste  water and the biological  treatment  station  in each  region  selected. 

Projects  for  the  disposal  of  waste  water  were  adopted  on  condition  that  biological  treatment 
stations  already  existed,  or,  if  they  were  being  built,  finance  was  guaranteed.  Biological 
treatment  stations  were  financed  provided  that  systems  for  the  disposal  of  waste  water  existed 
and  so contributed  to the proper operation  of the stations financed  by Community  funds. 

6  This percentage includes a small part of the funding  for water supplies in Thessaloniki corresponding 

to forecast  implementation  in 1996. 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

54 

The prospects  for  the creation  of jobs,  both during  implementation  of the project  and  during  its 
operation,  was a factor  taken  into account when they were adopted. 

•  Water  supply 

Cohesion  Fund  assistance  for  drinking  water  was  mainly  concerned  with  solving  problems  of 
quality and  quantity. 

This  category  of  projects  includes  one  major  project,  the  one  to  supply  water  to  Thessaloniki 
from  the  River  Aliakmon,  further  work  on the  Evinos  major  project  to  supply  water  to  Athens 
and  improvements  to the Momos aqueduct which goes with the Evinos major  project. 

In the case of the project  to supply water to Athens, the Cohesion  Fund has paid  attention  to the 
sound  management  of  water  resources  and  improvements  to  the  pipes  supplying  water  to  the 
capital.  The  Evinos/Mornos  tunnel  has  been  used  to  supply  water  to  Athens  since  summer 
1995.  The  Cohesion  Fund  has  also  approved  studies  and  measures  to  stabilise  earth 
movements. 

In  the  case  of  the  major  project  to  supply  waster  to  Thessaloniki,  the  Fund  was  concerned  to 
ensure  sound  management  of  water  resources,  monitoring  of  existing  facilities  and  an 
obligation  to complete the networks  required. 

It  is also  monitoring  closely  the  project  to establish  a bank  of hydrological  and  meteorological 
data  which  help  meet  requirements  relating  to  the  sound  management  of  the  country's  water 
resources. 

The Cohesion  Fund  has continued  its  integrated  approach  to water  supply  to  other  Greek  cities 
by  financing  projects  intended  to  solve the  problems  of water  supply  and  disposal,  particularly 
in Rethymno, Naoussa,  Larissa, "Nafplion, Chalkida, Fiorina, Lamia and Katerini. 

*  Treatment  of waste  water 

A  large  number  of  projects  concerned  with  the  treatment  of  waste  water  and  the  treatment  of 
effluent,  mainly  from  urban  areas,  were  part-financed  in  a number  of  large  and  medium-sized 
regional  towns. 

These  projects  include  the  second  stage  of  the  major  project  for  the  biological  treatment  of 
waste  water  in  Thessaloniki.  This  project  is of  the  utmost  importance  for  water  quality  in  the 
Gulf  of  Thessaloniki  and  will  serve  the  second  largest  city  in  Greece.  With  regard  to  water 
quality  in  the  Gulf  of  Thessaloniki,  the  Cohesion  Fund  approved  a  project  for  the  biological 
treatment  of  waste  water  in  the  tourist  area  of  Thessaloniki,  whose  treated  effluent  is  also 
discharged  into the Gulf. This  work,  together  with  the  Kalochori  drainage  project,  constitutes a 
series of measures to improve the environment  in the region. 

The Cohesion  Fund  also  helped  part-finance  the second  stages of two-stage  projects.  Those  for 
which  part-financing  is now  in place  include: 

*  Kalamata. Argos. Pylos, Nafplion  and  Sparti  in the Péloponnèse; 
*  Rethymno and  Chania  in Crete; 
*  Chios and  Mythilini  in the Aegean  Sea; 
*  Komotini. Orestiada  and  Alexandroupolis  in Thrace; 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

55 

*  Ioannina and Arta  in Ipiros; 
*  Chalkida on the island of Evia; 
*  Volos, Larissa,  Kalambaka-Meteora  and Trikala  in Thessalia; 
*  Katerini, Kolyndros, Serres, Fiorina, Kria Vrissi  in Macedonia, and 
*  Villia,  Lavrio. Markopoulo,  Kalivia and  Kouvara in Attica. 

The Cohesion  Fund  continued  to monitor  projects  approved  in  1995, including the  construction 
of  biological  treatment  stations  in  certain  large  cities:  Agrinio,  Yiannitsa,  Pyrgos,  Thiva  and 
Naoussa. 

All  finance  was  based  on  complete  applications  and  a thorough  study  was  carried  out  on  each 
project.  The projects  were subjected  to prior appraisal  and on-going assessments. 

*  Waste  management 

Waste management  has not aroused  the  interest the Commission  hoped. The projects  submitted 
to the  Cohesion  Fund  by the  Greek  authorities  are  few  in number  and  involve  mainly  cleaning 
up and  the  provision  of  tips  at  Schisto,  Liossia,  Zante, Thessaloniki  and  Patras.  The  Cohesion 
Fund  cannot  approve  the  projects  in  Thessaloniki,  Schisto  and  Liossia  until  the  competent 
authorities  incorporate  the  results  of  the  expert  studies  carried  out  by  the  Fund  into  their 
specifications,  the  environmental  impact  procedure  is  completed  and  a  plan  for  waste  in  the 
regions concerned  is officially  notified  to the  Commission. 

The  Cohesion  Fund,  in  cooperation  with  the  Greek  authorities,  hopes  to  extend  and  diversify 
measures  in this field  in accordance with the Community  strategy so that  it can become  eligible 
for  Fund  finance. 

A  study  on  a  pilot  project  on  an  integrated  solution  for  the  islands  of  Santorini  and  Thirassia 
began  in  1996. 

A  study  on  a  pilot  project  on  the  disposal  of  solid  urban  waste  on  the  islands  of  Egine, 
Mykonos  and  Tinos  has  recently  been  completed.  It  advocates  the  use  of  modern  technology, 
thermolysis.  Discussions  with  the  Greek  authorities  to  decide  what  should  be  done  next  have 
begun. 

*  Nature  protection 

During  this  period,  the  Cohesion  Fund  supplemented  its  assistance  through  research  and 
information  on the environment.  This  included  approval  of supplementary  work on cleaning  up 
the river and  its banks and protection  of the site at Krya Livadia. 

A number of projects to combat forest  fires  and water pollution were also continued. 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

56 

GREECE 
Big Projects  ——• 

^  Wastewater Proj ects 
financed  by the 
Cohesion Fund 

Water Supply  Projects 

Corfu 

hios 

Rhodos 

Kriti 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

57 

Transport 

The transport  strategy  for Greece followed  by the Cohesion  Fund  comprises: 

0  completion  of  the  country's  two  main  road  routes,  the  Via  Egnatia  and  the  Pathe  (Patras-

Athens-Thessaloniki-Evzoni) motorway; 

0  completion  of the rail  network: 

*  by  constructing  the  railway  station  complex  at  Thriassio  where  a  group  of  converging 
sidings  will  be built  to shunt trucks and  a line built to connect  the complex  with  existing 
track. There will  be provision  for a future  link with the Port of Piraeus; 

*  by constructing a line to link Thriassio station  to the city of Corinth; 

0  construction  of  a  major  international  airport  for  Athens  at  Spata  and  modernisation  of  air 

traffic: 

0  continuing  development  of  the  combined  transport  strategy  through  investment  in  three 
major  Greek  ports,  Igoumenitsa,  Iraklion  and  Pireaus,  together  with  the  Thriassio  rail 
complex. 

The success of this strategy depends on the mobilisation  of funds  from  the private sector,  which 
will benefit  from  the future  revenue generated  by these  investments. 

The calculation  of assistance  to the  major  rail  projects  and  the  project  to  build  the  new  Athens 
airport  at  Spata. 

The  projects  and  the  corresponding  amount  of  assistance  committed  in  1996  are  shown  in  the 
table below. The breakdown  of assistance  by sector  is as follows: 

0  roads: financial  commitments  for  ECU  124 070 006, or 61.3%, 

0  airports: financial  commitments  for  ECU  15 651  597, or 7.7%, 

0  rail: financial  commitments  for  ECU 62 720 007, or  31%. 

•  Roads 

The strategy  followed  by the Cohesion  Fund defined  the following  priorities for  1996: 

0 

the  Pathe  motorway: 

Construction  work  on  the  Pathe  motorway  is  progressing  and  ten  projects  costing  a  total  of 
ECU  270  million  were  adopted  by  the  Commission  at  the  end  of  the  year  in  a  single 
commitment. 

The  Project  Managers  for  the  Pathe  motorway  have  been  appointed,  Mott  McDonald  -  Louis 
Berger  for the northern  part and  Sogelerg - Lamayer for the southern  part. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

58 

The  problem  of  the  large  discounts  has  been  overcome  by  intensive  work  on  the  reform  of 
public  contracts  and  the  decision  of  the  Cohesion  Fund  to  adjust  financing  for  the  projects  in 
line with the prices agreed. 

The problem  of the  increase  in the  initial  cost has also been  overcome as a result of the  drafting 
by  the  Greek  authorities  of  a  circular  permitting  rigorous  management  of  the  cost  of  each 
contract. 

0  The agency  for  Egnatia  began to operate this year and has rented  offices  in Thessaloniki  and 
organised  the  three  regional  departments,  at  Ioannina,  Kozani  and  Komotini.  It  has  hired  a 
staff  of  almost  120,  30  for  the  Project  Manager  and  90  for  the  Agency  itself.  The  Project 
Manager's  staff  form  part  of  the  Agency's  organisation  chart  and  have  received  delegated 
authority,  in  accordance  with  Annex  VII  to  the  decisions  in  question,  following  repeated 
requests  from  the  Cohesion  Fund.  The  international  competition  has  been  completed  and 
three "Construction  Managers" have  been  appointed.  They will  begin  work  in the new  year. 
However,  no projects  were submitted  in  1996. 

•  Railways 

The multi-annual  projects  adopted  in  1996 are: 

0 

the  Thriassio  railway  station,  where  a group of converging  sidings  will  built to  shunt  trucks 
and  a  line  built  to  connect  the  complex  with  existing  track,  so  making  provision  for 
combined  transport; 

0  construction  of the  line linking Thriassio station to the city of Corinth. 

•  Airports 

In  the  airport  sector,  the  largest  transport  infrastructure  project  in  Greece,  the  New  Athens 
International  Airport  at  Spata, was adopted  in  1996. This airport  is an  example  of how  a  major 
project  can  be financed  from  a number of sources, both public and private. It was financed  by a 
grant  from  the Cohesion  Fund, an EIB  loan and  public and private capital. The total  cost of the 
airport  is  ECU  2  150  million.  The  Community  will  contribute  ECU  250  million  from  the 
Cohesion  Fund  and the  EIB will provide over  ECU  1 000 million. The commitment  for  1996 is 
ECU  15.6  million.  This  project,  which  forms  part  of the  trans-European  networks,  will  have a 
major  impact  on air transport  within  Europe, within  Greece and with  non-member  countries. 

Annual report of the Cohesion Fund 1996 

CHAPTER  2 - Financial assistance committed and paid by the Fund 

59 

GREECE 

Trans-European 

Road  network 

Cohesion  Fund 

Igoumenitsa 

Alexan 
droupolis 

Patra 

AthEna 

Annual  ;nort  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

60 

GREECE 

Trans-European 

Rail  network 

Cohesion  Fund 

i Igoumenitsa 

Annual report of the Cohesion  Fund  1996 

Alexan 
droupolis 

Athina 

CHAPTER  2 - Financial  assistance committed  and paid by the Fund 

61 

2.3.4 

I R E L A ND 

In  1996,  the  Cohesion  Fund  granted  ECU  221.7  million  in  assistance  to  Ireland,  of  which  ECU 
1 19.8 million  (54%  of the  total  budget)  was  for  transport  projects  and  ECU  101.9  million  (46% 
of the  total)  was  for  environment  projects. 

The  table  below  gives  a breakdown  by  category  of the  projects  assisted  : 

COMMITMENTS  OF AID TO PROJECTS IN IRELAND (1996) 

Environment 

Assistance granted 

%  of total 

(ECU  million) 

52.7 

45.9 

1.3 

2.0 

101.9 

23.8 

20.7 

0.6 

0.9 

46 

Assistance granted 
(ECU  million) 

%  of total 

100.9 

8.4 

8.5 

2.0 

119.8 

221.7 

45.5 

3.8 

3.8 

0.9 

54 

100 

1. Water treatment 

2. Water supply 

3.  Habitat 

4. Vessel  Traffic  System  (half) 

Totall 

Transport 

1. Roads 

2. Rail 

3.  Ports 

4. Vessel  Traffic  System  (half) 

Total  2 

Total  1 +2 

General 

Strategy 

The  priorities  for  assistance  in  1996  remained  the  same  as  in the  previous  years.  In  transport,  the 
largest  part  of  the  budget  continued  to  go  to  road  projects  forming  part  of  the  trans-European 
network  with  two  important  major  projects,  the  Kildare  Bypass  on  the  Dublin-Cork/Limerick 
route  and  the  Dunleer-Dundalk  section  of  the  Dublin-Belfast  route,  being  added  to  the  list  of 
major  projects  being  assisted  by means  of annual  instalments  of  aid. 

In  the  rail  sector,  it  was  decided  to  assist  the  most  economically  advantageous  parts  of  a  number 
of  railway  lines  on  the  trans-European  Network.  These  are  the  Dublin-Galway,  Dublin-Sligo, 
Dublin-Waterford  and  Mallow-Tralee  lines.  (Major  investment  in  the  Dublin-Cork  and  Dublin-
Belfast  lines  had  been  committed  in  earlier  years).  The  extension  of  the  DART  electrified  outer 
suburban  line  in  Dublin  was  also  approved. 

As  before,  assistance  to  ports  remained  in  line with  the  policy  of  concentrating  on  the  four  largest 
ports  of  Dublin,  Cork,  Rosslare  and  Waterford.  A  maritime  control  system  for  these  four  ports 

Annual report of the C  aesion  Fund 

CHAPTER  2 - Financial  assistance  committed  and paid  by the Fund 

62 

plus  the  Shannon  estuary  was  also  approved.  The  aid  granted  to  these  latter  projects  is  shown  in 
the  table  above,  divided  between  the  transport  and  environment  sectors  to  reflect  the  importance 
of  improved  maritime  safety  for  protecting  vulnerable  coasts and  estuaries  from  possible  pollution 
caused  by  maritime  accidents. 

Within  the  environment  sector,  the  main  priorities  continued  to  be  waste  water  treatment  and 
upgrading  drinking  water  supplies.  Waste  water  treatment  projects  within  the  largest  urban  areas 
and  in  environmentally  sensitive  areas  which  are  required  by  Community  Directives  to  be 
completed  not  later  than  the  end  of  the  decade  were  once  again  the  priorities  for  assistance.  The 
Commission  continued  to  target  for  assistance  groups  of  related  water  treatment  projects  in  lake 
and  river  catchments  with  the  aim  of  maximising  the  impact  of  the  aid  granted  on  the 
environmental  protection  of  these  areas.  The  projects  assisted  are  in  the  Lough  Derg  and  Lough 
Ree  lake  areas  and  the  River  Suir  and  River  Liffey  basins.  Assistance  to  water  supply  projects 
continued  to  be  concentrated  on  large  urban  areas  and  areas  where  drinking  water  quality  is 
particularly  poor.  One  important  innovation  in  1996,  arising  from  consideration  of  studies  by 
consultants,  was the  emphasis  on  water  conservation  which,  in Irish  conditions,  is frequently  more 
cost-effective  than  the construction  of new  primary  infrastructure.  This  emphasis  on  making  better 
use  of  existing  water  sources  and  distribution  systems  will  be  a  key  feature  of  policy  in  1997  and 
later years. 

Environment 

•  Waste-water  treatment 

A total  of eight  new  projects  were  approved  in  1996. Together  with  amounts  committed  to  modify 
projects  already  approved  in  earlier  years,  a  total  of  ECU  52.7  million  was  committed  to  this 
sector.  The  projects  assisted  were the  following  : 

Project  Name 

New project  or stage or  modification  of existing 
project 

Aid  granted 
(in  1996 
ECU  million) 

Clonmel (Stage  11) 

Annual  instalment to new project 

Killarney 

Wexford 

New project 

Annual  instalment to continuing project 

Dublin (Stage 11) 

Annual  instalment to continuing project 

Dundalk 

Drogheda 

Limerick 

Lough  Ree 

River Liffey 

River Suir 

Lough  Derg 

TOTAL 

Annual  instalment to new project 

Annual  instalment to new project 

New project 

Annual  instalment to new group of projects 

New group of projects: planning stage 

Annual  instalment to new group of projects 

Modification  of existing group of projects 

Annual  report of the Cohesion  Fund  19% 

5.9 

7.1 

0.1 

6.3 

0.5 

6.5 

7.2 

1.9 

3.0 

6.3 

7.8 

52.7 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

•  Water supply projects 

The following  projects received  ECU 45.9 million  in assistance: 

Project name 

New project or stage or modification  of existing 
project 

^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^^ 

Aid granted in 
1996 
(ECU million) 

Lough Mask (Stage II) 

Annual instalment to continuing project 

Tuam (Stage II) 

New second stage with annual instalments 

Lough Gill (Sligo and environs)  New project 

Roscrea/Nenagh 

New project 

Dublin Water Conservation 

New project with annual instalments of aid 

TOTAL 

•  Habitat protection 

4.8 

18.7 

12.0 

7.8 

2.7 

46.00 

An additional  ECU  1.3  million was granted to continue preservation and monitoring work 
intended to conserve the best remaining example of the Raised Bog wetland habitat in the 
midlands of Ireland. 

Annual report of the Cohesion Fund 1996 

CHAPTER  2 - Financial assistance committed  and paid by the Fund 

64 

IRELAND 

Water Treatment Projects 

Rosslare 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  2 - Financial assistance committed  and paid  by the Fund 

65 

IRELAND 

Water Supply Projects 

Rosslare 

Annual  report of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

66 

Transport 

•  Roads 

In  1996, ECU  100.9 million  was committed  to new  road  projects  or to  modifications  of  projects 
approved  in  previous  years.  All  of the  projects  approved  or  modified  received  85% of the  total 
cost in aid. 

The  table  below  shows  the  projects  to  which  aid  was  committed  in  1996.  The  word  "project" 
refers  to  a  new  project  where  all  of  the  aid  was  committed  from  the  1996  budget.  "Annual 
instalment"  identifies  large  projects  where  aid  is committed  each  year  in  annual  amounts  while 
"modification"  indicates  the  addition  of  funds  from  the  1996  budget  to  projects  previously 
approved  by the Commission. 

ROADS 

PROJECT  NAME 

NI  Dublin-Belfast 

Balbriggan By-pass 
Cloghran-Lissenhall 
Dublin Port Access Road 
Dunleer-Dundalk 

Dublin  Ring Road 

South-East  Motorway 

Nl  I  Dublin-Rosslare 

Southern  Cross 

Kilmacanogue-GIen of Downs 
Arklow  By-pass 

N7  Dublin-
Cork/Limerick 

N4 Dublin - Sligo 

Kildare  By-pass 

Portlaoise  By-pass 
Rathcoole  interchange 

Curlews  By-pass 

Collooney-Sligo 

PROJECT OR 
STAGE 

Annual instalment 
Modification 
Modification 
Annual instalment 

Modification 
Annual  instalment 

Annual  instalment 
Annual  instalment 

Annual  instalment 
Annual  instalment 
Project 

Annual  instalment 
Annual  instalment 

N18 Limerick  - Galway 

Limerick  Inner Relief Road 

Project 

Newmarket  By-pass 

N25  Rosslare-Cork 

Dunkettle  Bypass 

Barntown-New  Ross 

TOTAL 

Modification 

Project 

Project 

AID GRANTED 
FROM  1996 
BUDGET (ECU 
million) 

4.5 
1.4 
2.7 
4.3 

1.8 
5.1 

1.7 
3.6 

1.1 

9.1 
9.8 

7.0 

6.5 

11.1 

0.2 

23.2 

7.9 

100.9 

Annual report of the  Cohesion Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

67 

Rail 

The  projects  assisted  in  1996  were  the  following: 

NAME 

TYPE  OF PROJECT 

First annual  instalment for track and 
signalling upgrading on parts of the TEN 
rail  network 

Extension  of Dublin outer suburban 
electrified  line 

Dublin  - Galway 
Dublin  -Waterford 
Dublin-Sligo 
Mallow-Tralee 
Network  Signalling 

DART extensions 

TOTAL 

Ports 

The  following  projects  were  assisted  in  1996: 

PORT 

TYPE  OF  PROJECT 

PROJECT  OR  STAGE 

Dublin 

Waterford 

Cork 

VTS 

TOTAL 

Dredging at Lo-Lo 
container terminal and 
additional  equipment 

Project 

New berth  at Belview 

Project 

Dredging of approach 
channel 

Modification  to 
complete  project 

Improvement  of Lo-Lo 
container  terminal 

Project 

Group of  projects 

Vessel traffic  control 
system  at Dublin, Cork, 
Rosslare and  Waterford 
ports and  Shannon 
estuary 

ASSISTANCE 
GRANTED 
(ECU  Million) 

5.2 

3.2 

8.4 

ASSISTANCE 
GRANTED 
(ECU  million) 

1.7 

3.4 

0.1 

3.3 

4.0 

12.5 

Annual  report  of the Cohesion  \7U\K\ 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

68 

IRELAND 

Trans-European 

Road network 

Cohesion 

Rosslare 

Annual  report  of ihc Cohesion  VuuA  !°<>o 

CHAPTER  2  -  Financial  assistance  committed  and  paid  by  the  Fund 

69 

IRELAND 

Trans-European 

Rail  network 

Cohesion Fund 

Rosslare 

Annual  report  of  the  Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

70 

2.3.5  MOST REMOTE  REGIONS 

The  Cohesion  Fund  attached  particular  importance  to  financing  projects  in  the  regions  of  the 
Cohesion  countries  regarded  as most remote. In the case of Spain, these  are the Canary  Islands 
and  in that of Portugal  Madeira and the Azores. 

Portugal  applied  for  Cohesion  Fund  finance  only  for  projects  on  Madeira,  where  the  Fund  has 
already  contributed  substantially  and  will  do  so  to  a  still  greater  extent  in  the  future.  In  the 
Azores, projects  are financed  by other  instruments. 

The  Cohesion  Fund  is  very  active  in  financing  projects  in  these  regions  and  pays  particular 
attention  to  the  environment.  In  the  field  of  transport,  the  objective  of  better  access  to  the 
remotest  regions  from  the  central  regions  was  expressly  mentioned  in  Article  2(2)(g)  of  the 
Community  guidelines  for the development  of the trans-European  networks of 23 July  1996. 

Canary  Islands 

•  Environment 

Nature on the Canary  Islands  is extremely  rich,  including some unique and very fragile  habitats 
and  over  600  vascular  plants  in a  limited  area  which  is home  to  some  1 500  000  people.  They 
also  receive  some  10 million  tourists  per year. The  impact  of socio-economic  development  has 
caused  damage to some habitats and very fragile  species and a number of sites. 

The Canary  Islands contain  four  National  Parks: the Canal  Reserve,  Los Tiles  on the  island  of 
Las Palmas and  the  island  of  Lanzarote  (both  of which  have  been  declared  Biosphere  reserves) 
and the Garajonay  National  Park, which  has been declared  Heritage of Humanity. 

Against  this  background,  the  region  of  the  Canary  Islands  devised  an  environmental  Plan  for 
1994-99  to  define  its  priorities  and  action  to  be  taken.  The  Plan  includes  the  following 
programmes:  territorial  planning,  quality  of  the  environment,  planning  of  natural  areas, 
environmental  education  and  information  and a supporting  legislative  programme. 

The  projects  comprising  the  Plan  have  been  financed  mainly  by  the  cohesion  financial 
instrument  and  the  Cohesion  Fund  since  1993.  The  sectors  principally  involved  are  water 
supply, waste management, the restoration  of the coast  line and  afforestation. 

0  Water supply 

-  96/11/61/004:  Water  supply  works:  desalination  plants  in  the  Canary  Islands.  Assistance: 
ECU 27 266  911. 

This a group of  four  projects,  three  of which  are concerned  with  the construction  and  extension 
of plants for  the  desalination  of sea  water: at Santa  Cruz de Tenerife;  Arrecife  ("Lanzarote  111"' 
third  line)  and  "Lanzarote  I lf  fourth  line,  while  the  fourth  concerns  construction  of  a  head 
reservoir  to  supply  Santa  Cruz  de  Tenerife.  The  main  aims  are  to  secure  supplies  of  drinking 
water  (30  000  mVday)  to  325  000  people  who  are  suffering  from  drought  and  its  effects;  to 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

71 

construct  a  reliable  water  supply  system  comprising  5 552  m of  piping,  a number  of  pumping 
stations, reservoirs  and  auxiliary  plant; to improve urban  supplies; to  improve  water quality;  to 
improve  sanitary  conditions  and  the  quality  of  life  of  the  people  concerned;  to  increase  the 
amount  of  water  available  through  savings  in  use  and  to  improve  the  management  and  use  of 
water. 

- 94/11/61/014: Stations for the'production of drinking water 

*  Tenerife:  Adeje-Arona.  Assistance ECU 5 892 000. The project  includes provision  of a plant 
for the desalination  of sea water using the reverse osmosis process at Granadilla de Aborna. 

*  Gran  Canaria: 

.  Las  Palmas.  Assistance  ECU  6 982  926. The  project  involves  construction  of  a  reservoir 
with  a capacity of 250 000 m  near the desalination  plant. 
.  Galda-Agaete.  Assistance  ECU  3 824  520. The  project  provides  for  the  installation  of two 
lines, each  capable of desalinating  1  500 m  of water. 

The  main  aims  of  the  project  are  to  supply  high-quality  drinking  water  to  a  population  of 
865 000; to construct  infrastructure  which  will  ensure water supplies and the durable  growth  of 
the  region;  to  improve  water  quality,  sanitary  conditions  and  the  quality  of  life  of  the  people 
concerned;  to preserve  underground  water  supplies  by reducing the over-exploitation  of ground 
water;  to  promote  the  sustainable  development  of  the  regions  concerned,  particularly  in 
tourism,  and  to  increase  the  amount  of  water  available  through  measures  to  save  water  and 
coordinate  its use. 

0  Coastal  improvements 

- 96/11/61/015-017: Coastal  improvements  1996. 

*  Beach  at Monis-Icad de Los Vinos (Tenerife).  Assistance: ECU 2 316 748. 
*  Beach at  Los  Pocillos and  Matagorda-Tias, (Lanzarote). Assistance: ECU 5 854 024. 
*  Improvements  to  the  sea-shore  between  El  Fraile  and  Las  Arenas  at  Buenavista  del  Norte-

(Tenerife).  Assistance:  ECU  1  256  831. 

A group of  14 broken  down  into three categories: 

-  Reclamation  and  regeneration  of  beaches: three  measures to counter  the  erosion  of  beaches 
caused  by  the  greenhouse  effect,  the consequent  increase  in sea  level  and  the  change  in  the 
direction  of currents. 

-  Coastal  improvements:  ten  measures  to  restore  the  natural  beauty  of  the  area  by  reducing 

human  pressure  on the coastline and  improving the  environment. 

-  Environmental  reclamation  of the coastline: a measure to protect and  conserve areas of great 

environmental  value and  natural  beauty, returning them to their original  natural  state. 

-95/11/61/003: Coastal  improvements  1995. 

Beach at Las Canteras - Las Palmas de Gran Canaria. Assistance: ECU  10 472 946. 
The  main  aims of the projects  are: 

Annual report of the Cohesion  Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

72 

* 
* 

* 
* 
* 

to  facilitate  pedestrian  use  of 4.9  km  of  seafront; 
rational  utilisation  of  the  beach  through  construction  of  1 677  deterrent  parking  places  and 
8.705  m  of  walkways; 
restoration  of  1.9 km  of  beach; 
to  improve  access  to  beaches  to  protect  sensitive  areas; 
to  improve  the  coastal  environment  by  planting  indigenous  vegetation. 

-  94/11/61/028:  Coastal  recovery  project.  Charco  de  Los  Clicos.  Restoration  of  run-down  areas 
of the  Spanish  coastline.  Assistance:  ECU  460  438. 

Restoration  of the  Clicos-Yaiza  lake  (Lanzarote). 
Measures  planned  to  restore  the  coast  and  lagoon  complex:  tipping  of  sand  along  30  m  of 
beach;  closure  of  the  tombolo  area  by  a  rock  break-water  to  avoid  the  beach  being  submerged; 
construction  of  a  55  m  underwater  dyke  in  the  tombolo  area;  construction  of  a  partly 
submerged  dyke  to  act  as  a  breakwater. 

0  Afforestation 

-  95/11/61/010-2:  Afforestation  and  combating  erosion.  Assistance:  ECU  4  213  000 

The  project  comprises  two  categories  of  measures  in  woodlands: 

The  first  is  intended  to  halt  erosion  and  desertification,  which  is  directly  affecting  the  natural 
environment  of  the  water  system  of  the  Canary  Islands  by  damaging  three  of  its  basic 
resources:  vegetation,  soil  and  water. 

The  individual  measures  to  be taken  to  this  end  are: 

*  biological  action  to  improve  plant  cover  in order  to  protect  the  soil: 
=>  reafforestation  with  species  suited  to  the  environment; 
=>  forestry  operations  to  preserve  and  improve  existing  stands  in  order  to  maintain  the  balance 

between  soil  protection  and  the  progression  of  vegetation; 

*  corrective  infrastructures:  stabilisation  of  slopes  and  river  beds  in  order  to  prevent  recurrent 

Hooding,  by  means  of  small-scale  one-off  hydro-technical  operations. 

The  second  category  concerns  the  regeneration  of  woodlands  damaged  by  fire.  It  includes 
biological  action  designed  to  encourage  natural  regeneration  and  establish  protective  plant 
cover: 

intensifying  reafforestation  and  regeneration  of  woodland; 

* 
*  stepping  up  forestry  operations  in  existing  stands  to  prevent  forest  fires. 
*  creating  firebreaks  and  safety  strips  in  high-risk  areas  or  where  plant  cover  is  particularly 

dense 

-  93/11/61/012-023:  including  erosion  control  in  badly  affected  areas  of  the  Canary  Islands  and 
protection  of  natural  resources,  which  are  essential  for  the  environment.  Assistance:  ECU 
827  270. 

Annual  report  of  (he  Cohesion  l'niul  1996 

CHAPTER  2 - Financial  assistance  committed  and paid  by the Fund 

73 

0 

Improvements  to  national  parks 

The  main  aims  of  the  following  group  of  projects  are:  to  meet  demand  for  public  use  of  the 
National  Parks  and  minimise  the  negative  impact  of  visitors.  The  projects  include  a  number  of 
improvements  to  infrastructure  in the  service  areas  and  access  to  the  parks. 

-  93/11/61/031-039: 

Caldera  de  Taburiente  Natural  Park.  Assistance:  ECU  1 441  800 
Garajonay  Natural  Park.  Assistance:  ECU  514  500 
Teide  Natural  Park.  Assistance:  ECU  1 189  900 
Timanfaya  Natural  Park.  Assistance:  ECU  1 045  200 

0  Waste 

-  95/11/61/042:  Facilities  to  treat  special  waste,  ECU  11 379  780. 
El  Hierro,  La  Palma,  La Gomera,  Tenerife,  Gran  Canaria,  Fuerteventura  and  Lanzarote. 

The  construction  of  selective  collection  centres  will  facilitate  the  removal  from  the  normal  flow 
of  solid  urban  waste  for  disposal  of  special,  toxic  and  dangerous  waste  from  urban  areas  and 
small  industries.  This  measure  will  also  permit  the  recovery  and  recycling  of  materials  hitherto 
disposed  of  with  other  urban  waste  and  eliminate  small-scale  fly-tipping. 

Each  collection  centre  will  have  a  covered  hangar  to  store  refrigerators,  batteries  and  other 
waste  which  has  to  be  kept  indoors,  a  series  of  large  containers  (30  to  34  mJ)  for  metal,  wood, 
paper,  cardboard  and  building  rubble  and  smaller  containers  for  glass,  batteries,  oil  and  tins. 

The  plan  under  this  project  is  to  establish  three  types  of  collection  centres  differing  in  size  and 
structure  depending  on  the  number  of  users. 

0  Treatment  station 

-  94/11/61/015:  Treatment  stations  for  waste  water  at  Adeje-Arona  (Tenerife).  Assistance:  ECU 
13 780  563 

The  main  aim  of  this  project  is  to  upgrade  the  drainage  system  to  reduce  the  level  of  pollution 
in  the  waste  water  from  the  municipalities  of  Adeje  and  Arona  (population  concerned:  95  000) 
and  permit  reuse  of  the  treated  water,  amounting  to  1  1 680  000  irfVyear.  After  treatment,  the 
levels  of  contaminants  will  meet  the  requirements  of  Directive  91/271/EEC.  The  works  to  be 
carried  out  include  the  installation  of  collectors  and  outlet  facilities,  the  construction  of 
pumping  stations,  the  provision  of  a  channel  to  the  underwater  discharge  and  the  installation  of 
systems  to  treat  the  run-off  water. 

0  Environmental  restoration 

-  94/11/61/025 

:  Installation  of  a  radar  on  Gran  Canaria 

Climate  monitoring,  detection  of  variations  in  climate  and  their  impact  in  the  environment. 

Annual  report  of the Cohesion  \\\n(\ 1906 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

74 

The project  has two  objectives: 

* 
* 

the collection, treatment and  storage of data on the climate  system; 
the  use  of  these  data  in  studies  on  the  meteorological  phenomena  underlying  natural 
catastrophes,  variations and  changes  in climate, climate  modelling and  the consequences  for 
human  activities  and natural  resources. 

•  Transport 

- 93/11/65/031: The  Hierro airport 

The  project  concerns  construction  of  a  new  roadway  parallel  to  the  existing  roadways  to 
provide  access  to the apron  nearest to pier  16 and  a car  park  at the entrance to the airport,  near 
to the power  plant. 

The  aim  of  the  project  is to  improve  air  communications  between  the  Spanish  islands  and  the 
centre of the  Community. 

- 93/11/65/032: The Tenerife  Norte  airport. 

Resurfacing  of the aprons at piers  12 and 20, the holding areas and the runway. 

About  100  m"  of  the  concrete  surface  of  the  runways  is  cracked  and  has  to  be  removed  and 
replaced. 

The cracked  parts of the waiting areas also have to be dug out and repaired.  Puddles form  along 
1  100  m  of  the  centre  of  the  runway  because  it  is  too  uneven.  It  needs  to  be  levelled  and 
recovered  by an extra  layer of hot-rolled  asphalt across the whole width. 

The main  aims of the project  are to  improve the runway to increase  safety  during  landing, take 
off  and  taxiing. 

- 96/11/65/001: Road: Gran  Canaria  - Olla de La Plata. Assistance: ECU  15 535 089. 

The  project  is designed  to  provide  a  route  to  solve  the  problems  on  GC1  - the  busiest  road  on 
the  island  -  while  taking  account  of  the  development  of  the  beach  at  Laja  and  urban 
development  in  the  south  of  Las  Palmas.  A 4 km  long  section  of  the  CGI  will  be  widened  to 
two  three-lane  carriageways  each  3.5  m  wide  with  inside  shoulders  of  1  m  and  outside 
shoulders of 2.5  m. 

The  secondary  objectives  of  the  project  are  to  improve  traffic  flow;  reduce  dangers  to  vehicle 
and  pedestrian  users;  improve  the  appearance  of  the  entry  to  the  town  and  apply  the  general 
system  governing  urban  planning  in the area. 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

75 

Madeira 

In addition  to the  water  supply  project  for  Madeira  already  approved,  the  national  and  regional 
authorities have begun  in-depth discussions with the Cohesion  Fund on other possible works: in 
the transport  field,  with  particular  reference  to the extension  over the sea of runway  of  Funchal 
airport,  which  has already  received  finance  under  Regis; and  in that of the  environment,  where 
the  Cohesion  Fund  could  contribute  to  a  general  project  to  rationalise  the  waste  treatment 
system,  based  on a new incinerator for  urban waste. 

•  Environment 

0  Water supply 

-  94/10/61/014  - Group  of  stages  of  projects  to connect  the  main  sources  of  drinking  water  on 
Madeira.  Assistance:  ECU  18 215 502. 

The main  features  of this project  are the construction  of pumping and treatment  stations and  the 
laying of pipes to connect them, to make the management of water resources more  efficient. 

The  project  will  have  a  favourable  impact  on  the  environment  since  it  will  permit  the 
development  of under-used  water resources and improve water  management. 

2.4 

ASSISTANCE  FOR STUDIES AND TECHNICAL SUPPORT  MEASURES 

2.4.1 

GENERAL 

To  carry  out  its  management  duties  successfully  and  make  the  assistance  granted  more 
effective,  the  Cohesion  Fund  Directorate  seeks  the  assistance  of  a  number  of  experts  and 
consultants  in the various sectors to which  it provides assistance. 

Consultants  play  a  very  important  role  in  assessing,  analysing  and  monitoring  the  projects 
submitted  for  part-financing  in  the  various  sectors  to  which  the  Fund  provides  assistance. 
Experts  supplement  the  Commission's  technical  expertise  with  their  practical  and  up-to-date 
knowledge of a variety of subjects  and  so help it meet  its obligations  better. 

As  in  previous  years,  contacts  with  the  EIB continued  during  1996, principally  with  regard  to 
evaluation  of  the  largest  projects.  More  details  on  the  Bank's  important  role  may  be  found  in 
Chapter 4.8 of this  Report. 

A  number  of  studies  were  undertaken  to  guide  the  selection  of  the  projects  to  be  financed  by 
the  Fund:  studies  on 
international  River  Guadiana 
(Spain/Portugal)  and  the  estuaries  prior  to  a  decision  on  possible  finance  for  a  dam  on  this 
river;  an  feasibility  study  on  a thermolysis  plant  to  solve  the  problems  of  waste  on  the  Greek 
islands (Mykonos.  Aegina,  Tinos); a study on the feasibility  and  location  of a number  of  multi-

the  availability  of  water 

in  the 

Annual report of the Cohesion  \\md 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the  Fund 

76 

modal  <Toods centres  in  Greece  and  a  study  on  coordinated  environmental  measures  on  a  Greek 
island  (Santorini). 

The  study  by  the  London  School  of  Economics  on  the  socio-economic  impact  of  the  Cohesion 
Fund  on  the  regions  was  completed  during  1996  with  the  construction  of  three  models,  which 
were  tested  with  quite  interesting  results,  on  the  effect  of  the  Fund's  investment  on  local 
economies.  Following  these  positive  results, the  Fund  enlisted  the  help  of  the  London  School  of 
Economics  in  applying  more  systematically  developed  models  to  projects  in  progress  or  to  be 
financed  in the  future. 

2.4.2 

AT  THE  INITIATIVE  OF  THE  COMMISSION 

Invitations  to  tender 

During  1996, the  Cohesion  Fund  issued  a  number  of  invitations  to tender  relating  to  studies  and 
technical  assistance.  Both  the  invitations  and  the  award  of  contracts  complied  with  the  rules  on 
public  procurement.  The  various  consultants  selected  came  from  a  number  of  Member  States, 
most  of them  from  countries  other  than  those  eligible  under  the  Cohesion  Fund. 

The  share  of  the  total  budget  allocated  to  technical  assistance  and  studies  undertaken  at  the 
initiative  of  the  Commission  was  greater  than  in  1995,  but  is  still  comparatively  small.  The 
total  amount  committed  for  this  purpose  was  ECU  2.2  million,  less  than  0.1% of  the  resources 
committed  by  the  Fund. 

to 

issue 

Since  a  number  of  contracts  with  outside  consultants  expired  in  1996,  the  Fund  Directorate 
technical 
decided 
assistance;  these'were  published 
framework 
contracts,  which  will  run  for  three  years,  covers  the  environment  and  the  other  transport 
infrastructure. 

invitations  for  multiple  framework  contracts  for 
in  the  Official  Journal.  One  of  these  general 

two  major 

The  consultants  selected  are  among  the  best  in  Europe.  Their  qualifications  and  independence 
guarantee  the  quality  of  the  analyses,  verification  or  evaluation  which  they  will  be  asked  to 
carry  out  from  time  to  time  and  on  a  case-by-case  basis. 

Types  of  measures  chosen 

The  Commission  has  financed  three  types  of  measures: 

*  general  studies  including  the  conclusions  of the  study  analysing  the  hydrological  situation  of 
the  Iberian  Peninsula,  which  helped  define  a  frame  of  reference  to  assess  the  projects  for  the 
supply  of  drinking  water  submitted  by  Spain  and  Portugal.  The  Cohesion  Fund  also  financed 
a  study  on  the  availability  of  water  in  the  Guadiana  basin  to  define  the  conditions 
required 
for  carrying  out  the  major  water  supply  projects  which  are  being  prepared  there  and  a  study 
on  application  of  the  polluter-pays  principle,  of  which  more  details  are  given  below; 

*  economic  or  technical  analyses  of  individual  projects  submitted  to  the  Cohesion  Fund 

relating  to  ports,  waste,  water  supply  systems  and  measures  to check  erosion; 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

77 

technical  audits  of  projects  already  approved  by  the  Fund  to  ensure  that  the  conditions  of 
their  implementation  comply with the objectives  laid down. 

Study of the application  of the polluter-pays  principle 

During  1996  a  study  was  undertaken  for  the  Cohesion  Fund  by  ECOTEC  Research  and 
Consulting  into  the  application  of  the  polluter-pays  principle  in  the  environmental  sectors  in 
which  the  Fund  primarily  intervenes,  namely:  water  supply,  waste-water  management  and 
urban  solid  waste disposal. The study established  a methodological  framework  for  assessing the 
tariff  setting  process  and  application  of  the  polluter-pays  principle;  examined  the  costs  of 
service  provision  for  different  end  users  and  the  extent  of  cost  recovery  in  the  services 
concerned;  and  provided  an  assessment  of  the  potential  economic,  social  and  environmental 
impact  of  moves  towards  greater  cost  recovery.  The  study  looked  primarily  at  the  situation  in 
in  the  EU 
the  Cohesion  countries  but  also  drew  parallels  with  experience  elsewhere 
(specifically  in Denmark, Germany,  France and the UK). 

The  final  report  on  the  study,  which  was  submitted  in  December  1996,  contains  profiles  on 
each  of  the  Cohesion  countries,  giving  an  account  of  the  legal  and  institutional  background  to 
cost recovery  for  environmental  services and provides regional  case study  profiles. 

2.4.3 

AT THE  INITIATIVE  OF THE MEMBER  STATES 

In July  1996 the  Spanish  authorities  submitted  a request  for  assistance  from  the  Cohesion  Fund 
towards  the  financing  of  technical  feasibility  and  design  studies  relating  to  the  Salamanca  -
Fuentes  de  Onoro  section  of  the  Castilla  motorway.  This  section,  some  103.5  km  in  length, 
links  Salamanca  to  the  Spanish/Portuguese  border  at  Fuentes  de  Oiioro  and  forms  part  of  the 
Lisbon  -Valladolid  road  corridor  which  is one  of the  high  priority  TENs  projects  agreed  at  the 
Essen  European  Council  in December  1994. The project  will provide an  important  link  between 
Portugal,  Spain  and  the  rest  of  the  EU.  In  view  of  the  priority  nature  of  this  corridor,  the 
Cohesion  Fund  will  be  financing  these  technical  studies,  exceptionally,  at  100%.  Total 
assistance  for  the  project,  which  is expected  to  be  formally  adopted  early  in  1997, amounts  to 
ECU 4.9  million. 

2.5 

PAYMENTS  BY  MEMBER  STATE:  PAYMENTS  IN  1996 

ECU 

Member State 

Advances 

Interim 
payments 

Balances 

Total 

% 

ES 

GR 

IRL 

PO 

Tech.Ass. 

T O T AL 

202 849 266 

821 347 508 

87 860 630 

1 112 057 404 

59.4 

50 332 579 

157967 181 ' 

36 452 527 

244 752 287 

13.07 

38 388 872 

134 769 559 

15 961 805 

189 120 236 

10.1 

83 925 480 

219 500 435 

21 469 762 

324 895 677 

17.36 

-

1 156 625 

0.02 

375 496 197 

I 333 584 683 

161 744 724 

1 871 982 229 

100 

Annual report of the Cohe  on Fund \(K\ 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

78 

As the table  of payments  shows, the distribution  by type of payment  shows a  relatively 
high  percentage  (18.64%) of  advances,  in order  to make  available  immediately  part  of 
the  assistance  from  the  Cohesion  Fund  and  so  provide  the  financial  boost  required  for 
the studies needed  and the start of work. 

2.6 

PROJECTS  CLOSED 

All the projects  part-financed  by the cohesion  financial  instrument or the Cohesion  Fund 
undergo an ex post  evaluation. 

The projects  closed  at the end of  1996 are: 

•  SPAIN 

0  ENVIRONMENT 

Project No 93/11/61/012-023 : 

Decision C(93) 3814 final  of  16.12.1993 

Erosion  control  and  reconstitution  of vegetation  cover. 

Work  included:  reafforestation  of  areas  with  insufficient  vegetation  cover,  improvement  of 
the  quality  and  quantity  of  natural  stands  and  regulation  of  torrential  water  courses  in  the 
twelve water  systems. 

Assistance  granted: 

ECU 50 882 418 

Project No 93/11/61/041  : 

Decision C(93) 2797/2 of 6.10.1993 

LINDE (1st  stage) 

Study  to  identify  on-the-spot,  analyse  and  classify  the  sections  of  water  courses  which 
should  be incorporated  into the sphere of public water supplies. 

Assistance  granted: 

ECU  1  071 960 

Project No 93/11/61/042-050 : 

Decision  C(94) 2683/final  of  13.10.1994 

Work  to  improve  the beds, banks and shores of water courses  in nine catchment  areas. 

The works  involve consolidation  and  strengthening  of banks and  shores, providing access to 
watercourses;  restoring run-down  areas and overhauling  water equipment  in nine  catchment 
areas. 

Assistance  eranted: 

ECU  10 878 674 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

79 

Project No 93/11/61/052-053.055.057-059  :  Decision C(94) 3014 of  16.11.1994 

Restoration  of beaches  in Spain. 

Work  to  restore  six  seriously  eroded  beaches  by  adding  sand  and  constructing  breakwater 
dykes. 

Assistance granted: 

ECU 23 643  186 

Project No 93/11/61/056  : 

Decision C(94) 3094/final  of  18.11.1994 

Reconstruction  of the Orillamar seaside walk around the tower of Hercules  in La Coruna. 

Work to  improve the area around  the Tower of  Hercules and  Saint Amaro  bay by creating  a 
46  ha open  space,  so facilitating  restoration  of the  natural  environment,  work  to enlarge  the 
pedestrian  area and creation  of an archaeological  park. 

Assistance granted: 

ECU 3 616 599 

Project No 93/11/61/063  : 

Decision  C(93) 3979/4 of  16.12.1993 

Canalisation  of  the  waters  in  the  retaining  lake  from  Picadas  to  the  Valdemayor  lake  to 
supply  Madrid. 

The project  will  guarantee  water supplies to the population  of Madrid  and  ensure the  supply 
of  100 million  mJ of water per year via a pipe 32.5 km long. 

Assistance  granted: 

ECU 44 096 571 

Project No 93/11/61/064-068. 076  : 

Decision C(93) 3979/5 of  16.12.1993 

Improved  management  of water resources  in four Autonomous  Communities. 

Work  to  increase  the  capacity  of the  water  supply  system  in the  Autonomous  Communities 
of  Madrid,  Andalusia,  Castille  and  Navarre.  The  work  includes  canalisation,  connections 
with  reservoirs, sampling and a station  to treat the water to be supplied. 

Assistance  granted: 

ECU 26 233 568 

Project No 93/11/61/071. 074 : 

Decision C(94) 3284 of 30.11.1994. 

Canalisation  of the  Miraflores  at Seville and protection  of parts of the Nalôn  in Asturias. 

(a) Canalisation  of 3 295 m of the  River Miraflores  and  improvement  of 300 m of the bed by 
rock  fil lin» at source. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

80 

(b)  Dredging  the  bed  of  the  Nalôn  and  protection  of  banks  by  means  of  a  rock  dyke  and 
concrete walls. 
(c) Alterations to 562 m of road and construction  of a pedestrian  overpass. 

Assistance granted: 

ECU 2  119 550. 

Project No 93/11/61/079-080 : 

Decision  C(93) 3979/6 of  16.12.1993. 

Water supply to Seville. 

The aim of the project  was to increase the water resources available to Seville by connecting 
the  Viar to  its supply  system, the other part of which  could  be  linked  to the  connector  to the 
Pintado retaining dam via pumping stations and canals. 

Assistance granted: 

ECU  15 433 800 

Project No 95/1 l/61/043-7a  : 

Decision  C(96) 586 of  4.3.1996. 

Construction  of an advanced  recycling centre  in the Basque Country. 

The  centre  comprises  three  units  for  waste  used  oil,  solvents  and  drilling  lubricants,  and  a 
laboratory  to  analyse  waste  used  oil  from  the  Autonomous  Community  of  the  Basque 
Country. 

Assistance granted: 

ECU 3 716 048. 

Studies 

94/11/61/007 

Decision  C(94) 2127 of 27.7.1994 

Preparatory  study  on  technical  assistance  to  prepare  strategic  frameworks  for  groups  of 
projects  relating  to the coast and water courses. 

Assistance granted: 

ECU 39 658 

94/11/61/008 

Decision  C(94) 2686/final  of  13.10.1994 

Group  of  preparatory  studies  on  technical  assistance  for  the  evaluation  and  cost-benefit 
analysis of assisted  environmental  projects. 

Assistance  manted: 

ECU 363 497 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

,81 

94/11/61/009 

Decision C(94) 2678/final  of  13.10.1994 

Preparatory  study  on  technical  assistance  for  the  macro-economic  evaluation  of  projects 
assisted  by the Cohesion  Fund. 

Assistance granted: 

ECU 30 000 

0  TRANSPORT 

Project No 93/11/65/001 

Decision  (93) 2799/1 of  6.10.1993 

Madrid-Valencia motorway (1st stage) 

Technical  feasibility  and  design  studies  relating  to  a  high  capacity  motorway  linking 
Valencia to the  Levante motorway and, hence,  Madrid. 

Assistance  granted: 

ECU 4 960 494 

Project No 93/11/65/002 

Decision  C(93) 2799/2 of 6.10.1993 

Rias  Bajas  motorway (1st  stage) 

Technical  feasibility  and design  studies relating to a high capacity  motorway which  will  link 
Galicia and Northern  Portugal  with  the trans-European  network 

Assistance granted: 

ECU  19 920 769 

Project No 93/11/65/003 

Decision  C(93) 2799/3 of 6.10.1993 

Bailén-Granada  motorway (1st stage) 

Technical  feasibility  and  design  studies  relating  to the  construction  of a motorway  between 
Bailén  and  Granada  which  will  improve  communications  between  Eastern  Andalusia  and 
the  Madrid-Seville  corridor 

Assistance  granted: 

ECU 6 731 372 

Project No 93/11/65/006 

Decision C(93) 3746 of  13.12.1993 

N-340 Adra  by-pass 

Dualling  of  a  10.02  km  section  of  the  Adra  by-pass  which  lies  on  the  N-340  highway 
between  Malaga and  Ahneria 

Assistance  manted: 

ECU  I  I 086 953 

Annual report of the Cohesion  fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

82 

Project No 93/11/65/011 

Decision C(93) 2378/2 of  2.9.1993 

M40 Madrid  ring road - Northern  distributor,  section 3 

New  section  7.715 km  in  length  of the  M40 Madrid  ring  road,  including the construction  of 
49 structures  and  8 under-passes 

Assistance granted: 

ECU 63 045 000 

Project No 93/11/65/012 

Decision C(93) 3258/1 of  15.11.1993 

Valladolid  ring  road-East 

Construction  of new section  of some 7 kms in length of the Valladolid  ring road between  the 
Northern  ring and the N601  highway  linking Valladolid  and  Toledo 

Assistance  granted: 

ECU 22 041 228 

Project No 93/11/65/013 

Decision  C(93) 3258/2 of  15.11.1993 

Access to Santiago de Compostela 

New  dual  carriageway  road  of  some  1.9  kms  which  will  relieve  Santiago  of through  traffic 
originating  in Northern  Galicia and Orense province 

Assistance  granted: 

ECU 6  165 706 

Project No 93/11/65/014 

Decision  C(94)  1179 of  17.5.1994 

Lardero  by-pass 

Construction  of the  Lardero  by-pass of some 4.62  kms  in  length  on  the Nl  19 highway  from 
Medinaceli  to  Pamplona and  San Sebastian 

Assistance  granted: 

ECU 6 842 028 

Project No 93/11/65/018 

Decision  C(93) 2799/5 of 6.10.1993 

Trinidad-Montgat  motorway 

Consisting  of a 4.4  km  section  between  Comeria  and  Montgat. this  project  forms  part  of the 
second  Barcelona  ring  road  and  develops  the  second  section  of  the  Barcclona-Montgat 
motorwav 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

83 

Assistance granted: 

ECU 31 605 733 

Project No 93/11/65/020 

Decision C(93) 2244/3 of 29.7.1993 

TGV Madrid-Seville:  Majarabique  interchange 

Railway  gauge  interchanger  at  Majarabique  (Seville),  including  links  with  the  lines  to 
Huelva and  Cadiz so as to allow  rolling stock using an  international  gauge to change  over to 
the  Renfe  gauge and continue to those cities 

Assistance granted: 

ECU 3  152 353 

Project No 93/11/65/022 

Decision C(93) 2244/5 of 29.7.1993 

Madrid-Barcelona  HST (first  stage) 

Technical  studies  relating  to  the  Zaragoza-Lérida  and  Calatayud-Ricia  sections  of  the 
proposed  high-speed  line between  Madrid and  Barcelona 

Assistance granted: 

ECU 7 696 017 

Project No 93/11/65/023 

Decision C(93) 3258/4 of  15.11.1993 

N-632: duplication  of section  from  Las Duefias toNovellana 

Construction  of  a  section  of  6.389  kms  to  provide  an  alternative  to  the  N632  between 
kilometre  points  124.7 and  133.6. 

Assistance granted: 

ECU  16 531 743 

Project No 93/11/65/025 

Decision  C(93) 3592/2 

Valencia-Tarragona  railway 

Widening  of  existing  bed  to  permit  the  doubling  of  the  line  and  raise  the  design  speeds  to 
200/220  km/lir. over a 37 km section  between  Alcanar and Camarles. 

Assistance  granted: 

ECU 24 387 730 

Project No 93/11/65/031 

Decision  C(93) 3592/4 of  10.12.1993 

Hierro airport 

Construction  of  new  road  link  providing  access  to  the  apron  and  car  parking  area  at  the 
airport of  Hierro (Canary  Islands). 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

84 

Assistance granted: 

ECU 363 796 

Project No 93/11/65/032 

Decision  C(93) 3592/5 of  10.12.1993 

Tenerife  North  airport 

Repairs  to  road  surface  at  piers  12 and  20, and  to the  runway  and  holding  areas  at  Tenerife 
North  airport  (Canary  Islands). 

Assistance  granted: 

ECU 323 977 

Project  No 93/11/65/033-034 

Decision  C(93) 3592/6 of  10.12.1993 

Palma de  Mallorca airport 

Extension  of  the  apron  and  construction  of  a  passageway  under  the  taxi  way  to  provide 
access to a planned  industrial  zone. 

Assistance  granted: 

ECU 4 300 489 

Project No 93/11/65/009 

Decision  C(93)3680 of  14.12.1993 

Madrid-Valencia  motorway-Requena-Chiva 

Upgrading to motorway of Nl  1  1  between  Requena and Chiva, a total  length of 29.3 kms. 

Assistance  granted: 

ECU  83 783 968 

Project  No 93/11/65/017 

Decision  C(93) 2770 of 8.10.1993 

M40 Madrid  ring road-Northern  distributor,  section 2 

New section  of the northern  loop of the  M40  Madrid  ring road  of 7.1  kms  in  length  between 
the NVI  and  the  Via  Borde de  Hortaleza. 

Assistance  granted: 

ECU  79  169 761 

Project  No 94/11/65/011 

Decision  C(94) 3757/8 of 21.12.1994 

Highway  N632. Novellana-Cadavedo 

Construction  of  an  alternative  to  the  N632  highway  of  12.8  kms.  between  Novellana  and 
Cadavedo. 

Annual report of the Cohesion  fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

85 

Assistance  granted: 

ECU 28 343 275 

Project  No 94/11/65/004 

Decision C(94) 3757/3 of  21.12.1994 

Lérida  by-pass 

Construction  of the  Lérida by-pass on the Nl  1  from  Madrid to France via  Barcelona. 

Assistance  granted: 

' 

ECU 80 341 241 

Project No 95/11/65/009 

Decision  C(95) 3647 of  12.1.1996 

Motorway  connection  Guipuzcoa-Navarra 

Construction  of new motorway  A15  linking Guipuzcoa and Navarra  including  works  related 
to  sections  11(a)  and  11(b)  and  equipment  for  tunnels  on  the  section  in  Guipuzcoa  (San 
Lorenzo and  Belabieta). 

Assistance  granted: 

ECU 8 452 365. 

•  PORTUGAL 

0  ENVIRONMENT 

Project  No 93/10/61/001  : 

Decision  C(93) 3287/4 of 22.11.1993 
Decision C(96) 339 of  9.2.1996 

Water distribution  system  for  Lisbon 

Extension  of  the  distribution  system  for  Lisbon  by  15  km  to  cope  with  the  growth  of  the 
city.  Replacement  and overhaul  of 50 km of pipes, branches and other  parts of the system. 

Assistance  granted  : 
Assistance  paid: 

ECU 7 817 600 
ECU  7 817 600 

Project  No 93/10/61/011  : 

Decision  C(93) 3287/5 of 22.1 1.1993 

Overhaul  of Vila  Franca de Xira-airport  supply  pipe 

The  project  includes  a range of  work:  overhaul  of the Trancào  crossing,  stabilisation  of  the 
banks  at  Bom  Retiro. Sao  Joào  dos  Montes  and  Bairro  da  Mata  and  overhaul  of  the  supply 
pipe  in the Tunnel  d'Alhandra  area. They  will  be carried  out at various  points along the  Vila 
Franca  de  Xira-airport  supply  pipe. 

Assistance  uranted: 

ECU  I 029 350 

Annual  renort  of  the  Cohesion  fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

86 

Assistance paid 

ECU 933 257 

Project No 93/10/61/012  : 

Decision C(93) 3287/6 of 22.11.1993 

Increasing the capacity of the Castelo de Bode supply pipe 

This  is  the  first  stage  of  the  increase  in  the  capacity  of  the  intermediate  section  of  the 
Castelo de  Bode supply  pipe, which  involves doubling three  sections over  9.2  km. This  first 
stage also  includes the studies and technical  plans required  to carry out the whole  project. 

Assistance granted: 
Assistance paid: 

ECU  10 471  151 
ECU 9 663 772 

Project No 93/10/61/017: 

Decision C(93) 3347/4 of 7.12.1993 

System  for  the  treatment  of  solid  waste  from  the  greater  Oporto  area:  study  on  the 
assessment  of submissions  in response to the invitation to tender. 

An  international  public  invitation  to tender  was  issued  for  the  construction  of the  station  to 
treat  solid  waste  from  the  greater  Oporto  area;  this  study  is a preliminary  step  in  selecting 
the future  contractor. 

Assistance granted: 
Assistance  paid: 

ECU 272 000 
ECU 234 709 

0  TRANSPORT 

Project No 93/10/65/003  : 

IP3 Figueira  da  Foz-Santa  Eulélia 

Decision C(93) 2931/1 of 21.10.1993 
Decision C(95) 2918 of 24.11.1995 

Construction  of  a  12.3  km  section  of  road  forming  part  of  the  IP3  main  road.  This  section 
includes  11 structures (1 viaduct,  5 over-passes and 5 under-passes). 

Assistance granted: 
Assistance  paid: 

ECU  13 127 400 
ECU  12 282 965 

Project No 93/10/65/004: 

Decision  C(93) 2931/2 of  21.10.1993 
Decision C(95) 2918 of 24.11.1995 

IP6  Alcanena-Atalaia 

Construction  of  a  17.5  km  section  of  road  forming  part  of  the  IP6  main  road.  This  section 
includes 3 I structures (2 bridges,  1  viaduct, 25 over-passes and 3 under-passes). 

Annual report of the Cohesion Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

87 

Assistance  granted: 
Assistance  paid: 

ECU 23 821 250 
ECU 23 821 250 

Project No 93/10/65/005: 

Decision  C(93) 3287/1 of 22.11.1993 

A2  Palmela-Marateca 

Construction  of  a  19.3  km  section  of  motorway  forming  part  of  the  A2  -  Lisbon/Algarve 
motorway.  This  section  includes  34  structures  (1  viaduct,  14  over-passes  and  14  under 
passes). 

Assistance  granted: 
Assistance  paid: 

ECU  13 217 500 
ECU  12 217 500 

Project No 93/10/65/008  : 

Al  Alverca-Vila  Franca de Xira 

Decision C(93) 2245/5 of 29.7.1993 
Decision  C(94) 3726/1 of 21.12.1994 
Decision  C(95) 2918 of 24.11.1995 

Widening  of  a  9.1  km  section  of  the  Nord  motorway  between  Alverez  and  Vila  Franca  de 
Xira (from  2x2  lanes to 2x3  lanes). 

Assistance  granted: 
Assistance  paid: 

ECU 32 327 800 
ECU 32 327 800 

Project No 93/10/65/009  : 

Decision  C(93) 2245/6 of 29.7.1993 
Decision  C(94) 3726/1  of 21.12.1994 
Decision C(95) 2918 of 24.11.1995 

AI  Vila  Franca de Xira-Carresado 

Widening  of  a  6.2  km  section  of  the  Nord  motorway  between  Vila  Franca  de  Xira  and 
Corregado (from  2x2  lanes to 2x3 lanes). 

Assistance  granted: 
Assistance  paid: 

ECU 6 296 800 
ECU 6 296 800 

Project No 93/10/65/012: 

Decision C(93) 3813 of  16.12.1993 

Eastern  road  for the port of Sines and  link to terminals  in the western  part 

Construction  of  a  road  to  link  the  terminals  in  the  eastern  part  of  the  port  to  the  national 
network  and  link with  the terminals  in the western  area plus related  landscaping. 

Assistance  «ranted: 

ECU  1  998 096 

Annual report of the Cohesion  Fund 1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the  Fund 

88 

Assistance  paid: 

ECU  I 998  096 

Project  No  93/10/65/024  : 

Decision  C(93)  3287/3  of  22.11.1993 
Decision  C(94)  3073/2  of  18.11.1994 

System  to  prevent  accidents  involving  dangerous  substances  -  Sines 

Modernisation  and  installation  of  systems  and  equipment  to  monitor  operations  in  the  port 
of  Sines  involving  dangerous  substances,  including  the  prevention  of  accidents. 

Assistance  granted: 
Assistance  paid: 

ECU  2  095  672 
ECU  2  095  672 

Project  No  93/10/65/026  : 

Decision  C(94)  952/2  of  28.4.1994 
Decision  C(95)  2918  of  24.11.1995 

Rail  access  to  the  general  loading  terminal  in the  port  of  Sines 

Extension  of  the  track  from  the  multi-modal  terminal  to  the  general  loading  terminal, 
construction  of  the  auxiliary  park  for  that  terminal,  including  a  shunting  yard  and  covered 
warehouse,  and  purchase  of  equipment  for  vertical  and  horizontal  handling. 

Assistance  granted: 
Assistance  paid: 

ECU  3  169  227 
ECU  3  169  227 

Project  No  93/10/65/030: 

Decision  C(94)  952/3  of  28.4.1994 
Decision  C(95)  2918  of  24.11.1995 

Studies  and  plans  to  extend  the  multipurpose  terminal  in the  port  of  Sines 

Economic  and  tlnancial  assessment  and  technical  plans  to  extend  the  multipurpose  terminal 
in  the  port  of  Sines  by  extending  the  quays  to  provide  an  extra  berth. 

Assistance  granted: 
Assistance  paid: 

ECU  152  639 
ECU  152  639 

Project  No  94/10/65/003  : 

Decision  C(94)  2128/1  of27.7.!994 

Environmental  impact  study  concerning  construction  of  the  Lisbon  inner  (CRIL)  and  outer 
(CREL)  ring  roads 

Study  to  identify  and  evaluate  the  positive  impact  of  this  infrastructure  on  the  environment. 

Assistance  granted: 
Assistance  paid: 

ECU  53  890 
ECU  53  890 

Annual  report  of the Cohesion  FIIIKI  1996 

CHAPTER  2 - Financial  assistance committed  and paid  by the Fund 

89 

•  GREECE 

0  ENVIRONMENT 

Project  No  93.09.61.012 
93.09.61.013 
93.09.61.014 

-  Soil  protection 
-  Reafforestation 
-  Forest  protection-fire  protection 

The  work  carried  out  comprises: 

Decision  C(94)  3674  of  20.12.1994 

(a) technical  and  forestry  work  to  protect  mountain  soil  against  erosion; 
(b)  afforestation,  the  construction  of  firebreaks,  reservoirs  and  water  points; 
(c)  the  prevention  of  forest  fires  (roads,  firebreaks,  fire  points,  observation  posts,  supplies 

and  equipment,  reservoirs) 

Assistance  granted  (85%) 

ECU  12 081  631 

Project  No  93/09/61/019 

Decision  C(96)  553  of  1.3.1996  amending 
Decision  C(93)  3512/2 

• 

Disposal  of  waste  water  at  Fili 

The  work  comprises  provision  of  630  m  of  conduits  for  waste  water  and  19 well  units 

Assistance  granted  (85%) 

ECU  1 408  939 

Project  No  93/09/61/037  (A'stage) 

Decision  C(96)  553  of  1.3.1996  amending 
Decision  C(93)  3512/2 

Disposal  of  waste  water  at  Xanthi 

Assistance  mauled  (85%) 

ECU 2 794 459 

Project  No  94/09/61/037-2  (B'stage) 

Decision  C(95)3 141 /10  of  14.12.1995 

Disposal  of  waste  water  at  Xanthi 

Assistance  granted  (85%) 

ECU  I 694  352 

The  work  contributes  to  completing  the  network  for  disposing  of  waste  water  from  the  town. 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

90 

Project  No 93/09/61/055-1 

Decision C(94) 672/3 of  12.4.1994 amended 
by Decision C(95)  1719 

Biological  treatment  station  at Veria 

Assistance granted  (80%) 

ECU  5 405 904 

The  work  contributes  to  completing  construction  of  the  biological  treatment  station 
to  serve  a population  equivalent  to  70 000. 

Project  No 94/09/61/011 

Decision  (94) 3560/2 final  of  16.12.1994 

Study  on  the  management  of  the  Evinos  catchment  area  and  hydrological  study  of  the 
Evinos karstik  system. 

Assistance granted: 

ECU 93 500 

0  FRANSPORT 

Project  No 93/09/65/002: 

Decision  C(93) 3682 of  14.12.1993 

Improvement  of runway - A at Athens  airport. 

Changes  to  the  geometry  (longitudinal  and  latitudinal)  of  runway  -  A;  improvement  of  the 
non-slip surface  coating, asphalting and improvement of electronic  facilities. 

Assistance granted: 

ECU  1  038 370 

• 

IRELAND 

0  ENVIRONMENT 

Project  No 93/07/61/042 

Amended  Decision  C(95)  3008  final/1  of 
6.12.1995 

Industrial contributions to waste water treatment 

The  project  comprises  a study  commissioned  by the  Irish  authorities  in order  to develop  an 
approach  to financial  contributions  from  the industrial  sector to waste water  management. 

Assistance  «granted: 

ECU 24 029 

Annual report of the Cohesion  Fund 1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

0  TRANSPORT 

Project No 93/07/65/001 

N4  Longford  Town  by-pass" 

Amended  decision  C(95)  1874  final/3  of 
25.7.1995 

The  project  involves  construction  of  5.4  km  of  single  carriageway  to  by-pass  Longford,  so 
relieving  the  town  of  considerable  traffic,  particularly  heavy  commercial  vehicles,  and 
reducing  pollution, visual  intrusion  and noise. 

Assistance  sranted: 

ECU 7 803 850 

Project No 93/07/65/002 

KiHarney Road  Interchange 

Amended  Decision  C(95)  2978  final/5  of 
4.12.1995 

The  provision  of  the  Killarney  interchange  (together  with  other  improvements  on  the  Nl 1 
route)  will  provide  for  economic  development  by  improving  the  major  Dublin  -  Rosslare 
road  and  remove  a major  accident hazard on the route. 

Assistance  granted: 

ECU 4 684 350 

Project No 93/07/65/006 

Road  network  improvement 

Amended  Decision  C(95) 
4.12.1995 

2978/5 

of 

This  is a group  of  12 related  projects, all on TEN  roads,  intended  to  improve the standard  of 
the  carriageway  by  providing  new  pavement,  improving  existing  drainage,  widening  the 
carriageway  and  improving  safety  measures. 

Assistance  granted: 

ECU 31 332 700 

Project  No 93/07/65/008 

N I Balbriggan  by-pass 

Amended  Decision  C(95)  3008  final/6  of 
6.12.1995 

The  project  provides  11.5  km  of  dual  two-lane  motorway  by-pass.  This  will  reduce  travel 
times  and  will  improve  travel  between  Dublin  and  Belfast  and  access  to  sub-regions,  so 
enhancing  their attractiveness  as  locations for  investment and economic  development. 

Assistance  granted : 

ECU 2 706 400 

Annual report of the Cohesion  Vund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

92 

Project No 93/07/65/009 

Nl  Dunleer/Dundalk  Road 

Amended  decision  C(95)  3008  final/6  of 
6.12.1995 

The  project  provides  15.6 km  of dual  two  lane  motorway  from  Dunleer  by-pass  to  south  of 
Dundalk.  This  will  reduce  travel  times  and  will  improve  travel  between  Dublin  and  Belfast 
and  access  to  sub-regions,  so enhancing  their  attractiveness  as  locations  for  investment  and 
economic  development. 

Assistance  granted: 

ECU 3 081 250 

Project No 93/07/65/010 

Amended  Decision  C(95)  3250  final/1  of 
18.12.1995 

N8  Downstream  crossing of River Lee 

The  provision  of  a new downstream  crossing  of the  river  will  significantly  reduce  the  level 
of congestion  in the city centre area, facilitate  traffic  flow  and  relieve the existing  pressures 
on the  urban  communities, so improving the  environment. 

Assistance  granted: 

ECU 6 094 500 

Project No 93/07/65/022 

Amended  Decision  C(95)  3008  final/7  of 
6.12.1995 

Dublin  - Galway  Rail  Link  Upgrade 

The  project  involves  upgrading  the  basic  infrastructure  of the  Dublin  - Galway  railway  line 
to  achieve  safer  and  more  efficient  passenger  and  freight  services  and  enhance  the 
competitive  position  of the rail  route relative to the road  link. 

Assistance  granted: 

ECU  1  694 370 

Project No 94/07/65/001 

Waterford  Port  Dredging 

Amended  Decision  C(96)  2113  final/14  of 
29.7.1996 

The  dredging  of  the  port  to  achieve  6  metres  minimum  depth  of  water  and  to  provide  a 
turning  basin  will  improve  access  to  the  Belview  Port,  reduce  delays  caused  by  tidal 
conditions, allow  larger vessels to use the port and  improve  safety. 

Assistance  granted: 

ECU  1  330 250 

Annual  report of the Cohesion  Fund  1996 

CHAPTER 2 - Financial assistance committed and paid by the Fund 

Project No 94/07/65/011 

Amended  decision  C(95)1874 
25.07.1995 

final/3  of 

Main  Road Corridor  Improvement  Programme  1994 

The  project  covers  seven  similar  road  improvement  projects  on  major  road  corridors  . This 
is intended  to raise the standard  of the carriageway  by providing  new pavement,  improving 
existing drainage and widening the carriageway. 

Assistance  granted: 

ECU  11 416 350 

Annual report of the Cohesion  Fund  1°°' 

CHAPTER 3 - Convergence and conditionality 

94 

CHAPTER  3 

CONVERGENCE  AND  CONDITIONALITY 

3.1 

BACKGROUND 

Cohesion  Fund  assistance  is  conditional  upon  the  Member  States  meeting  certain  criteria 
related  to  the  excessive  deficit  procedure  of  the  Treaty.  Article  6(3)  of  the  Cohesion  Fund 
Regulation  provides that suspension  of finance  shall  not take effect  less than  two years after  the 
entry  into  force  of  the  Maastricht  Treaty,  i.e.  on  1  November  1995.  The  principle  of 
conditionality  therefore  applied  throughout  1996, as  described  in  Chapter  1. The  convergence 
programmes  of the Member  States are described  below. 

In  this  Chapter,  the  figures  given  as  estimates  are  those  which  appeared  in  the  Commission's 
autumn  1996  Economic  Forecasts,  although  certain  later  developments  have  also  been 
included. 

3.2 

CONVERGENCE  PROGRAMMES 

3.2.1 

SPAIN 

In  1996  Spain's  economic  policy  continued  to  be  guided  by  the  convergence  programme 
approved  in July  1994, as revised  for  1995-97. This  is intended  to help  Spain  progress  towards 
real  and  nominal  convergence  and,  in particular, to meet the criteria for the third  stage of  EMU. 

Economic  activity  increased  substantially  at the  beginning  of  1996 and  the  situation  improved 
still  further  during  the  second  half  of  the  year.  GDP  is  estimated  to  have  grown  by  2.1%> in 
1996, above  the  EU  average  of  1.6%.  Spain  has also  been  successful  recently  in  creating jobs, 
reducing  unemployment  from  22.9%  to  21.9%)  between  the  first  and  third  quarter  of  1996, a 
reduction  which  would  have  been  still  greater  if  the  labour  force  had  not  also  grown 
substantially. 

During  1996. the Government  adopted  new structural  reforms  including an  increased  supply  of 
urban  land,  the  opening  up  of  the  telephone  service  to  competition,  access  by  third  parties  to 
the basic  telecommunications  network  and the  launch  of a large-scale  privatisation  programme. 
Complete  liberalisation  of  the  telecommunications  sector  is planned  for  1998. These  measures 
will  permit the more efficient  allocation  of resources on a permanent  basis. 

Inflation  fell  sharply  in  1996:  as  an  annual  average,  from  4.7%  in  1995  to  3.6%  in  1996  and 
from  4.3% in  December  1995 to 3.2%  in  December  1996. Interest  rates also dropped  steeply  in 
1996. The  yield  on  ten-year  government  bonds dropped  from  9.9%)  in  December  1995 to  6.9% 
at  the end  of  1996 and  the gap compared  with  German  bonds  fell  to an  historic  low (about  100 
basis points) at the end of  1996, as compared  with  350 basis points at the beginning of the year. 

Annual report of the Cohesion  Fund 1996 

CHAPTER 3 - Convergence and conditionality 

95 

The  total  deficit  of  the  public  administrations  was  6.6%  of  GDP  in  1995, as  compared  with  a 
target of 5.9%)  in the revised  convergence  programme. This was due to the discovery  of a  items 
of  expenditure  which  had  not  been  recorded  before.  Under  the  Cohesion  Fund  procedure,  the 
Spanish  authorities  gave  a  firm  commitment  to  comply  strictly  with  the  target  deficit  in  the 
1996 convergence  programme. The data available suggest that this target of a deficit  of 4.4% of 
GDP  in  1996  has  been  achieved.  The  1997 budget  seeks to  reduce  the  public  deficit  to  3%> of 
GDP  in  1997, as required  by the convergence  programme. 

Spain  is considered  by the Council  to  be a country  whose  deficit  has been  excessive  within  the 
meaning  of Article  104c(6) of the  Treaty  since  1994. Under that  Article, the Council  has  made 
annual  recommendations  to Spain that  it should  put an end to that  situation. 

3.2.2 

PORTUGAL 

The  revised  Portuguese  convergence  programme,  which  covers  the  period  1994-97,  was 
approved  by  the  national  authorities  in  November  1995.  It  aims  at  ensuring  the  full 
participation  of  Portugal  in the  third  stage  of  EMU,  in  particular  via  a reduction  of  both  fiscal 
imbalances  and  the  inflation  differential  vis-à-vis  the  best  performing  countries  in  the  Union. 
Another  objective  is  the  gradual  convergence  of  Portuguese  per  capita  income  with  the 
European  average. 

After  the  deep  recession  in  1993, the  Portuguese  economy  resumed  growth  by  mid-94,  driven 
by exports. However, against the background  of continued  weakness of private  internal  demand 
only  in  1996 did  real GDP  increase at a faster  pace than  for the  EU as whole, at a still  moderate 
rate  of  2.5%.  Despite  the  sluggish  recovery,  the  objectives  of  the  revised  convergence 
programme  could  be  met  in  1996, and  the  targetted  decline  in  the  general  government  deficit 
was even  surpassed. 

Portuguese  public  finances  have recorded  a substantial  and continued  improvement  since  1993. 
Benefiting  in particular  from  noticeable  gains  in the efficiency  of the tax collection  process and 
the  reduction  of  domestic  interest  rates,  the  public  deficit  fell  from  6.9%  of  GDP  in  1993  to 
5.1%)  in  1995  and  4.0%  in  1996.  As  regards  public  debt,  the  increase  in  the  debt/GDP  ratio 
slowed  down  considerably  in  1994  and  1995,  before  returning  to  a  downwards  path  in  1996, 
when  it  amounted  to  some  71%).  This  favourable  development  was  a  result  not  only  of  the 
declining  primary  deficit  but  also  of  the  reduction  in  interest  rates  on  public  debt.  Portugal 
remains,  however,  a country  where  the  public  deficit  is considered  to  be  excessive,  within  the 
meaning of Article  104c of the Treaty. 

A restrictive  stance on  both  monetary  and exchange  rate policies, coupled  with the weakness of 
internal  demand,  allowed  for  a  marked  slowdown  of  inflation,  from  6.8%  in  1993  to  4.2%  in 
1995  and  3.1%>  in  1996.  The  favourable  trend  of  inflation,  combined  with  the  progressive 
increase  in  the  credibility  of  the  policy  mix,  led  to  successive  reductions  in  interest  rates  and, 
above  all,  in  the  interest  differential  vis-à-vis  other  EU  member  countries.  Particularly 
impressive  has  been  the decline  in the  long-term  differential  vis-à-vis  the German  mark, which 
at the end of  1996 was below  1  percentage  point. 

3.2.3 

GREECE 

Annual report of the Cohesion  Fund 1996 

CHAPTER  3 - Convergence  and conditionality 

96 

Greece's  revised  convergence  programme  was  examined  by  the  Ecofm  Council  on  19 
September  1994.  The  programme's  key  objective  is  to  prepare  Greece's  full  participation  in 
stage  III  of  EMU 
the 
fundamental  challenges  confronting  the  economy:  inflation,  fiscal  imbalances  and  slow  growth. 
The  adjustment  strategy  consists  of  measures  aimed  at  reducing  the  budget  deficit,  reducing 
inflation  through  a  restrictive  monetary  and  exchange  rate  policy  and  supporting  economic 
growth  through,  inter  alia,  rational  gse  of  structural  funding. 

in  1999.  The  programme  proposes  to  achieve  this  by  addressing 

When  judged  against  the  objectives  of  the  convergence  programme,  developments  since  1994 
have  been  mixed.  On  the  one  hand,  Greece's  inflation,  while  declining,  has  breached  the 
programme's  objective;  on  the  other  hand,  progress  in  redressing  budgetary  disequilibrium  has 
been  consistent  with  the  programme's  targets. 

The  reductions  in  the  deficit,  inflation  and  interest  rates  have  provided  the  conditions  for  a 
recovery  of  economic  growth.  Growth  since  1995  has  been  stronger  than  predicted  in  the 
convergence  programme,  rising  to  2%  in  1995  and  to  an  estimated  2.4%  in  1996.  Factors 
contributing  to  this  have  been  a  recovery 
in  private 
consumption  and  in  exports.  Strengthening  household  spending  has  been  partly  associated  with 
positive  real  incomes  growth,  declines  in  real  interest  rates  and  diminishing  tax  uncertainty. 

in  investment,  followed  by  growth 

The  acceleration  of  growth,  together  with  rapid  liquidity  growth  related  to  large  net  capital 
inflows,  has  prevented 
in  the  convergence 
programme.  In  1995  consumer  price  inflation  averaged  9.3%,  and  in  1996  8.5%.  While 
imported  inflation  has  been  reduced  to  insignificance,  reflecting  the  successful  exchange  rate 
policy  pursued,  inflation  in the  sheltered  sectors  of the  economy  has  been  persistently  high. 

falling  at  the  rate  predicted 

inflation 

from 

to 

the 

to  widen 

tax  base  and  modernise 

this  have  been  measures 

In  the  three  years  1994-96  the  budgetary  targets  of  the  convergence  programme  were  fulfilled. 
tax 
Contributing 
administration.  In  1995,  steps  to  improve  transparency  revealed  unaccounted  for  surpluses  in 
the  social  security  system  which  resulted  in  a  reduction  of  the  general  government  deficit  to 
9.1%  of  GDP,  some  1.6  points  below  the  convergence  programme  target.  In  1996,  the  general 
government  deficit,  estimated  at  7.6%  of  GDP,  was  identical  to  the  convergence  programme 
target.  Underlying  this  development,  however,  was  an  overshooting  of  the  central  government 
deficit  by  1 percentage  point  of  GDP,  reflecting  revenue  shortfalls  and  expenditure  overruns 
partly  offset  by  reductions  in  capital  spending.  The  general  government  debt  ratio  declined  by 
1.2  points  to  1  10.6%  of  GDP  in  1996;  the  convergence  programme  had  projected  no  change 
between  1995  and  1996. 

Greece  was  found  to  have  an  excessive  deficit  in  1994,  within  the  meaning  of  Article  104c(6) 
of  the  Union  Treaty.  Since  then,  the  Council  has  made  annual  recommendations  to  Greece  that 
it should  put  an  end  to  this  situation. 

3.2.4 

IRELAND 

The  most  recent  programme  for  Ireland,  covered  the  period  1994  to  1996,  and  was  examined 
in 
by  the  Ecofin  Council  on  19  September  1994.  The  programme  was  largely  successful 
continuing  the  stability-oriented  policies  of  the  earlier  programme.  A  successor  programme  is 
still  awaited,  although  the  recent  agreement  between  the  social  partners  covering  the  period 
1997  to  2001  could  provide  a  basis  for  such  a  programme. 

Annual  report of the Cohesion  Fund  1996 

CFIAPTER 3 - Convergence and conditionality 

97 

The  programme  for  1994 to  1996 envisaged  a relatively  modest  annual  growth  rate  for  GDP  of 
4.0%). Inflation  was expected  to remain  relatively  subdued  at about  2.5%) per annum,  helped  by 
the  wage  moderation  inherent  in the agreements  between  the  social  partners.  Fiscal  policy  was 
aimed  at  maintaining  the  budget  deficit  within  3%  of  GDP,  which  was  consistent  with  a 
planned  reduction  in the debt ratio by 3 to 4 percentage  points each  year. 

The  performance  of  the  economy  during  1996  was  comfortably  within  the  targets  set  in  the 
programme.  GDP  growth  is  expected  to  have  been  7.8%,  easily  surpassing  the  quite  modest 
target  of 4.0%>. The  budgetary  targets  have  also  been  achieved  with  a comfortable  margin.  The 
recent  period  of  strong  growth  has had  a favourable  impact  on  the  public  finances,  resulting  in 
net  borrowing  falling  to  an  estimated  \%  of  GDP  in  1996  while  the  debt  ratio  is  estimated  to 
have  declined  by  6.5  percentage  points  to  75.1% of GDP. Annual  inflation  in  1996  amounted 
to 2.0% ensuring that the average for the three years  1994-96 was within  the 2.5%) target  set out 
in the  programme. 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment of the projects and measures adopted 

98  p^ 

CHAPTER  4 

ASSESSMENT  OF  THE  PROJECTS  AND  MEASURES  ADOPTED 

4.1 

GENERAL 

4.1.1 

ASSESSMENT  OF PROJECTS 

When  the  projects  submitted  by the  Member  States are considered,  particular  attention  is paid  to 
demonstrating  that  the  resources  deployed  are  commensurate  with  the  economic  benefits 
expected. 

This  prior  appraisal  is  based  on  a cost/benefit  analysis  by the  Member  States  and  submitted  for 
each  project  or  group  of  projects.  In the  case of certain  environmental  projects,  the  difficulty  of 
quantifying  the  expected  benefits  has  led  the  Member  States  to  use  other,  more  qualitative, 
methods. 

Using  the  information  provided  by  the  Member  States, the  Commission  has  assessed  the  socio 
economic  justification  for the projects, where necessary using additional analyses. 

In  some  cases,  on  the  basis  of  those  analyses,  the  Cohesion  Fund  asked  the  Member  States  to 
redefine  the  projects  concerned  and  even  refused  to  finance  certain  projects.  In  Greece,  for 
example, the  projects  concerning  the  ports of Alexandroupoli, Volos and  Mykonos  were  refused. 
Another  example  is the  Enxoe  dam  in  Portugal,  which  was  rescaled  before  approval,  to  prevent 
water being used  for agricultural  irrigation. The project to supply drinking water to greater Oporto 
south  was also rescaled. 

Ex post  evaluation  programme 

In  1996 the  Cohesion  Fund  has  been  operating  for  four  years, the first  projects  financed  by the 
Fund  have  been  completed  and  a  number  of  projects  are  close  to  completion,  with  the  final 
reports  and  accounts  awaited  by  the  Commission.  From  now  on  the  number  of  completed 
projects  will  steadily  increase. 

It  is therefore  appropriate  for the Commission  to set up a programme of ex post  evaluation.  The 
Cohesion  Fund  management  has started  a discussion  on the design  of a possible  programme  for 
the ex post  evaluation  of assisted  projects. 

The objectives  of  the  mandate  for  ex post  evaluation  of  projects  are defined  in  Article  13(4) of 
the Cohesion  Fund  Regulation  which  stipulates that  "during the  implementation  of  projects  and 
after  their  completion,  the  Commission  and  the  beneficiary  Member  States  shall  evaluate  the 
manner  in  which  they  have  been  carried  out  and  the  potential  and  actual  impact  of  their 
implementation  in  order  to  assess  whether  the  original  objectives  can  be,  or  have  been, 
achieved." 

In  addition,  the  existing  Community  rules  require  ex  post  evaluation 
environmental  impact. 

to  consider  the 

Annual report of the Cohesion  \:\\nd  1996 

Chapter 4 - Assessment of the projects and measures adopted 

100 

4.1.2 

INCOME-GENERATING  PROJECTS 

Where  projects  generate  income, the  Cohesion  Fund  assistance  must  take this  into  account.  The 
approach  adopted  is  that  the  assistance  granted  will  be  equal  to  80/85%>  of  the  part  of  the 
investment  not  supported  by  income.  This  reduction  in  assistance  has  been  applied  wherever 
investment financed  by the Cohesion  Fund was found  to give rise to substantial  net income. 

Income-generating  projects  include: 

• 

In Spain  : 

Environment 

• 

In Portugal : 

O 

Environment 

Transport 

In Greece 

Transport 

In Ireland 

Transport 

Reafforestation  and erosion control  in the Norte river basins. Decision 
C(96) 2788 of  10.10.1996. Grant approved: ECU  12 847 306. 
Reafforestation  and  erosion  control  in  the  Ebro  river  basin.  Decision  No 
C(96) 595 of 7.3.1996. Grant approved: ECU  15 352 436. 
Reafforestation  and  erosion  control  in the  Duero  river  basin.  Decision  No 
C(96) 617 of 7.3.1996. Grant approved: ECU 5 113 726. 

A  method  for  establishing  the  potential  profitability  of  reforestation 
projects  has  been  developed  in  co-operation  with  the  Spanish  authorities 
and  was applied  to projects  submitted  for  assistance  in  1996. The  method 
takes  account  of  the  revenue-generating  potential  of  particular  species  of 
tree and of the ground conditions on which planting is to take place. 

LIPOR  II incinerator for solid waste 
Treatment of solid urban waste in Lisbon-north  Valorsul 
A3 motorw ay Braga Oeste/Ponte de Lima 

New international  airport for Athens at Spata 
Rail complex at Thriassio Pedio 
Athens-Corinth  railway line 
Port of Piraeus, Ikonion Quay II 

Improvements to the container terminal  in the port of Cork 
Quay extension  in the Port of  Waterford 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment of the projects  and  measures adopted 

4.2 

T R A N S - E U R O P E AN  T R A N S P O RT  N E T W O R KS 

4.2.1 

GENERAL  STRATEGY 

In  the  transport  sector  the  Cohesion  Fund  finances  only  infrastructure  projects  of  common  interest 
identified  under  the  guidelines  referred  to  in  Article  129c  of  the  Treaty.  During  1996  the  multi 
modal  guidelines  for  the transport  TENs  were  finally  adopted  by the  European  Parliament  and  the 

Council'.  These  guidelines thus  provide  the  basis  for  the  selection  of projects  to  be assisted  by  the 
Fund.  They  define  the  objectives  of  the  TENs,  identify  the  networks,  and  set  out  the  criteria  and 
specifications  for  identifying  projects  of common  interest. 

Given  its  specific  objectives  and  the  significant  resources  at  its disposal,  the  Cohesion  Fund  has  a 
key  role  to  play  in  the  development  of  the  trans-European  networks  within  the  four  beneficiary 
Member  States:  approximately  half  the  Fund's  ECU  16  billion  budget  for  the  period  1993-99  is 
to  be allocated  to transport  projects. 

Nevertheless,  it  is  clear  that  the  size  of  the  task  involved  in  fully  implementing  the  TENs  means 
targeting  of  resources  and  co-ordination  with  the  Community's  other  financial 
that  careful 
instruments  are  essential  if the  benefits  of Community  support  are to  be  maximised.  The  Cohesion 
Fund  has  therefore  worked  closely  with  the  Member  States  concerned  to  determine  priorities  for 
action,  and  co-ordinates  its  assistance  with  that  of  the  EIB,  the  ERDF  and  the  TENs  budget  to 
ensure  that  resources  are deployed  as effectively  as  possible. 

Within  the  planned  transport  networks,  priority  has  generally  been  given  to  key  road,  rail  and 
maritime  routes  which  provide  or  upgrade  the  main  links  between  the  Cohesion  Member  States 
and  the  rest  of  the  EU.  Other  assisted  projects  are  intended  to  improve  communications  and  trade 
between  peripheral  regions  and  the  main  centres  of  economic  activity  within  the  countries 
concerned,  and  to  improve  the  continuity  of  the  networks  close  to  urban  centres.  The  many  town 
and  city  by-passes  or  ring  roads  financed  by  the  Cohesion  Fund  serve  the  dual  function  of 
improving  network  links  and  mitigating  the  adverse  environmental  effects  of  traffic  in  towns  and 
city  centres. 

The  Cohesion  Fund  has  given  particular  emphasis  to  the  implementation  of  the  high  priority 
projects  which  were  endorsed  by the  Essen  European  Council  in  December  1994 (listed  in  Annex 
III  of  the  approved  TENs  guidelines).  Of  the  fourteen  priority  projects  identified,  five  lie  wholly 
or  partly  within  the  territories  of  the  Cohesion  Member  States:  high  speed  train  South;  the  Greek 
motorways  (Pathe  and  Via  Egnatia);  the  Lisbon-Valladolid  road  corridor;  Cork-Dublin-Belfast 
rail  link:  and  the  Ireland-UK-Benelux  road  link.  Further  details  on  progress  are  given  in  Section 
4.2.3  below. 

With  the  aim  of  maximising  the  impact  of Cohesion  Fund  resources, the  following  are  three  main 
areas  in which  it  is considered  that  assistance  can  be deployed  to  best  advantage: 

0 

financing  technical,  economic  and  financial  feasibility  studies  which  pave  the  way  for  public 
or  mixed  projects:  such  studies  are costly  and  risky,  given  the  uncertainty  about  whether  or  not 
the  full  project  will  go  ahead,  so  that  grant  assistance  serves  the  useful  function  of  reducing 
risk; 

Decision  1692,96/EC of 23 July  1996. 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

102 

0  assisting  the  completion  of  key  sections  of  transport  corridors  which  may  in  themselves  be 
unprofitable,  but  which  ensure the completion  of such  corridors  and thus  guarantee  or  sustain 
their overall  economic or financial  viability: cross-frontier  sections through  sparsely  populated 
areas are classic examples of this type of support; 

0  financing  sections  of a route-which  lead  to  "captured  traffic"  on  which  the  private  sector 
then  capitalise: access  roads  to  bridges  or  tunnels  on  which  user  tolls  may  be  charged 
examples here. 

can 
are 

4.2.2 

REINFORCEMENT  OF THE TRANSPORT NETWORK  IN 1996 

In  1996 the Cohesion  Fund  committed  a total  of  ECU  1 222.1  million  to transport  projects.  This 
includes  commitments  to  new  projects,  or  new  stages  of  existing  projects,  as  well  as  additional 
commitments  to  projects  approved  in  previous  years  (new  annual  instalments  or  amendments  to 
earlier  decisions).  This  means  that  total  assistance  committed  since  1993  to  transport  TENs 
projects  by the  Cohesion  Fund,  and  its  predecessor,  the  financial  instrument,  amounts  to  ECU 4 
219 million,  representing  a very  significant  contribution  to the further  development  of the  TENs 
within the four  Cohesion countries. 

Road  and  motorway  projects  have continued  to account  for  the  major  share  of assistance  - ECU 
959.5  million,  or  78.4%  in  1996 - as  shown  in the table  below.  This  share  varies  from  61.3%  in 
Greece  to  83.6%  in  Spain.  Railway  projects  were the next most  important  recipients, with  a total 
of  ECU  222  million  of  assistance  committed,  representing  18.1% of  the  total.  Other  modes  of 
transport took somewhat smaller shares of assistance than  in previous years, although  the situation 
varies from  country to country depending on the specific  opportunities  presented. 

Commitments to TENs  projects by transport sector 

Sector 

Commitments  1993-95 

Commitments  1996 

Total Commitments  1993-96 

Roads 
Railways 

Ports 

A irports 

VTS* 

Total 

ECU  million 

%  of  total 

ECU  million 

%  of  total 

ECU  million 

%  of total 

2  124.7 

619.1 

114.6 

1  15.5 

21.1 

70.9 

20.7 
3.8 

3.9 

0.7 

959.5 

222.0 
23.0 

15.6 

4.0 

78.4 

18.1 

1.9 

1.3 
0.3 

3 084.3 
841.1 

137.5 

131.1 
25.1 

73.1 
19.9 

3.1 
0.6 

2 995.0 

100.0 

1  224.1 

100.0 

4 219.1 

100.0 

i 

*VTS - vessel traffic systems for maritime surveillance 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

Commitments  to TENs  transport  projects 
by Member  State and  sector 

Member 
State 

Transport 
Sector 

Spain 

Portugal 

Greece 

Ireland 

roads 
railways 
ports 
airports 
VTS* 

Total 
roads 
railways 
ports 
airports 

Total 
roads 
railways 
ports 
airports 

Total 
roads 
railways 
ports 
airports 
VTS* 

Commitments 
1993-95 
- 

% 

ECU 
million 

1218.7 
402.4 
0.0 
73.2 
21.1 

1 715.5 
509.4 
73.1 
18.9 
0.0 

601.4 
207.7 
81.1 
71.0 
39.1 

398.9 
188.8 
62.5 
24.6 
3.3 
0.0 

71.0 
23.5 
0.0 
4.3 
1.2 

100.0 
84.7 
12.2 
3.1 
0.0 

100.0 
52.1 
20.3 
17.8 
9.8 

100.0 
67.6 
22.4 
8.8 
1.2 
0.0 

Commitments 
1996 

Total  commitments 
1993-96 

ECU 
million 
567.4 
111.0 
0.0 
0.0 
0.0 

678.4 
167.2 
39.9 
14.5 
0.0 

221.5 
124.1 
62.7 
0.0 
15.7 

202.4 
100.9 
8.4 
8.5 
0.0 
4.0 

- 

% 

83.6 
16.4 
0.0 
0.0 
0.0 

100.0 
75.5 
18.0 
6.5 
0.0 

100.0 
61.3 
31.0 
0.0 
7.7 

100.0 
82.9 
6.9 
7.0 
0.0 
3.3 

ECU 
million 
1 786.i 
513.4 
0.0 
73.2 
21.1 

2 393.9 
676.6 
113.0 
33.4 
0.0 

823.0 
331.8 
143.8 
71.0 
54.7 

601.4 
289.7 
70.9 
33.1 
3.3 
4.0 

% 

74.6 
21.4 
0.0 
3.1 
0.9 

100.0 
82.2 
13.7 
4.1 
0.0 

100.0 
55.2 
23.9 
11.8 
9.1 

100.0 
72.3 
17.7 
8.3 
0.8 
1.0 

Total 

279.2 

100.0 

121.8 

100.0 

401.0 

100.0 

*  VTS : vessel traffic systems for  maritime  swveillance 
Figures for  the period  1993-95 include commitments under the interim cohesion financial  instrument 

•  Roads  and  motorways 

The  large  share  of  assistance  granted  taken  by  road  and  motorway  projects  is  unsurprising 
given  the  disparities  which  remain  between  the  road  systems  in  the  Cohesion  countries  and 
those  in  the  rest  of  the  EU,  and  the  corresponding  pressures  imposed  by  the  continued  growth 
these 
of  road  traffic.  The  completion  or  improvement  of  the  key  road  corridors  linking 
countries  with  their  EU  neighbours,  the  linking  of  outlying  regions  with  main  centres  of 
economic  activity  and  the  relief  of  bottlenecks  and  congestion  around  main  urban  centres 
continue  to  be  priorities  for  action  at  both  national  and  Community  levels. 

In  1996  the  share  of  roads  was  especially  high  in  Spain  (83.6%),  where  the  situation  in  part 
reflects  the  approval  during  the  year  of  two  new  sections  of  the  Rias  Bajas  motorway  which 
links  Galicia  to  the  central  Spanish  road  system  and,  thereby,  to  France  and  the  rest  of  the  EU, 
and  also  provides  an  outlet  for  traffic  from  northern  Portugal.  Other  new  roads  were  approved 
in  1996  and  additional  assistance  was  committed  to  major  road  corridors  such  as  the  trans-

Annual  report of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

104 

Catalonia  highway,  the  Bailén-Granada  motorway,  the  Zaragoza-Huesca  motorway,  the 
Somport  tunnel,  and  the  Seville-Granada-AImeria  motorway.  In  total,  commitments  to  road 
projects  in  Spain  amounted  to  ECU  567.4  million  in  1996, or  almost  60%  of  the  total  for  all 
such  projects  in the four countries. 

The  share  of  roads  was  also  high  in  Ireland  (82.9%>,  or  ECU  100.9  million),  reflecting  t.he 
approval  of a series of projects,-including new sections of the main North-South  highway  and a 
number  of 
town  by-passes  and  relief  roads  (N7  Limerick,  N25  Dunkettle/Carrigtwohill, 
Kildare by-pass and Newmarket-on-Fergus by-pass). 

In Portugal  the share of road projects was somewhat  lower than  in previous years (75.5%). Two 
of  the  1996  decisions  relate  to  a  new  section  of  the  CREL  ring  road  of  Lisbon,  and  a  new 
section  of the A3, Braga-Ponte de Lima. Additional  assistance was, moreover, committed  to the 
Tagus bridge during the year. 

In  Greece,  where  the  share  of  road  projects  was the  lowest  in  1996 (61.3%),  the  main  feature 
was  the  approval  towards  the  end  of  the  year  of  ten  decisions  relating  to  new  sections  of  the 
Pathe  motorway  (the  main  North-South  corridor)  following  the  resolution  of  long-standing 
difficulties  relating to public procurement  and project  management. Assistance committed  from 
the  1996 budget  for this project was ECU  124.1 million, thus permitting  progress to be made on 
completing  priority  sections. 

•  Railways 

Rail  projects  attracted  ECU  222  million  of  assistance  from  the  1996  budget,  or  18.1%> of  the 
transport  total.  The  main  projects  approved  were  the  upgrading  of  the  Nord  line  in  Portugal 
(grant  of  ECU  104.9 million, of which  ECU 33.1  million  committed  from  the  1996 budget,  for 
the  introduction  of a four-way  track  system  on one of the busiest  sections); the doubling  of  the 
track  on  the  Thriassio  Pedio-Elefsis-Corinth  line  in  Greece  (grant  of  ECU  160  million 
approved,  of  which  ECU  4  million  committed  in  1996);  and  the  new  DART  extension  in 
Dublin  (grant of  ECU  16.9 million  approved). 

Additional  commitments  of  assistance  were  also  made  in  favour  of  certain  major  projects 
approved  in  earlier  years,  including  the  upgrading  to  200/220  km/h  of  the  Mediterranean 
corridor  in  Spain  (ECU  81.7  million),  general  modernisation  of  the  Spanish  conventional  rail 
network  (ECU  29.3  million),  and  the  doubling  of  the  Evangelismos-Leptokarya  section  of 
Greece's  main North-South  rail axis. 

•  Ports  and  airports 

Port projects  accounted  for  ECU 23 million  of assistance committed  in  1996 (1.9% of  transport 
total), while airports  accounted  for  ECU  15.6 million (1.3%). 

As  regards  ports, the  main  projects  approved  were  in  Ireland  (Waterford  port  dredging,  Dublin 
port  access,  Tivoli  container  terminal  in  Cork,  Dublin  Lo-Lo  terminal  and  Belview  quay 
extension), and  in  Portugal  (repair and  improvements  in Lisbon  and  Leixôes  ports). In  Portugal 
a  number of applications  for  assistance  for the development  of port  infrastructure  remain  under 
consideration. 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

105 

It  may  also  be  noted  that  approval  was  given  during  the  year  for  assistance  towards  the 
introduction  of  a  vessel  traffic  and  information  system  in  the  four  main  ports  of  Ireland  plus  the 
Shannon  estuary. 

As  regards  airports,  assistance  committed  in  1996  reflects  the  annual  instalment  relating  to  the 
new  Spata  airport  for  Athens,  for  which  a  total  of  ECU  250  million  of  Cohesion  Fund  finance 
was  approved  in  1995. 

4.2.3 

ESSEN  PRIORITY  PROJECTS 

The  14  high  priority  TENs  projects  which  were  adopted  by  the  Essen  European  Council  of 
December  1994  have  been  included  in  the  newly  approved  guidelines  for  the  development  of 
the  TEN  network  (Annex  III).  Of  these  projects,  five  are  located  wholly  or  partly  in  the 
Cohesion  countries.  The  Cohesion  Fund 
their 
is  thus 
advancement.  The  scale  of  the  task  is  well  illustrated  by  the  enormous  development  costs 
involved:  for  the  five  projects  alone  these  have  been  estimated  at  a  total  of  over  ECU  23 
billion,  of  which  some  ECU  12 billion  is planned  to  be  spent  by the  year  2000. 

in  a  good  position 

to  help  with 

The  following  summarises  the  Cohesion  Fund's  involvement  with  these  projects  and  their 
current  state  of  play: 

•  HST  South 

0 

Madrid-Barcelona-Perpignan 

The  Cohesion  Fund  has  financed  technical  feasibility  studies  for  a total  of  ECU  8.02  million 
on  two  sections  of  this  line  (Zaragoza-Lérida  and  Calatayud-Ricia).  An  application  for 
assistance  towards  the  construction  of  the  same  sections  (ECU  351  million)  is  at  present 
under  consideration. 

0  Madrid-  Vitoria-Dax 

No  requests  for  Cohesion  Fund  assistance  have  been  received  for  this  line. 

The  HST  South  project  is  being  considered  within  the  ambit  of  one  of  the  sub-groups  of  the 
Kinnock  high-level  group  on  public-private  partnerships  (see  4.2.4). 

•  Greek  motorways 

0  Patras-Athens-Thessaloniki-Bulgarian 

border  (Pathe) 

Construction  of  this  motorway,  which  provides  the  main  North-South  road  corridor  for 
Greece,  has  been  underway  since  1990.  The  Cohesion  Fund  approved  several  sections  of  the 
motorway  for  assistance 
in  1993  and  1994  with  a  total  grant  of  ECU  58.4  million. 
Difficulties  concerning  public  procurement  and  project  management  held  up  progress  in 
1995  but.  following  their  resolution.  10  decisions  relating  to  key  sections  of  this  corridor 
were  approved  towards  the  end  of  1996 (total  assistance  of  ECU  124.1  million). 

0  Via  Egnatia  (Igoumenitsa-Thessaloniki-•Alexandroupo/is-Turkish 

border) 

Annual  report  of  the  Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

106 

Work  on  the  200  km  Igoumenitsa-Panagia  section  started  in  1995.  In  total  the  Cohesion 
Fund  has  approved  ECU  76.4  million  towards  various  sections  of  this  project,  of  which 
ECU 40.7  million  was  approved  in  1995.  No  additional  requests  for  assistance  from  the 
Cohesion  Fund were received  in  1996. 

•  Lisbon-Valladolid  road  corridor 

Two  sections  of  the  Portuguese  part  of this  corridor  received  assistance  from  the  Cohesion 
Fund  totalling  ECU  52.6  million  in  1993/94  (Alcanena-Atalaia  and  Atalaia-Abrantes). 
However,  no applications  were received  and no further  assistance was approved  in  1996. 

Following  a  seminar  on  this  project  organised  by  the  Cohesion  Fund  in  October  1994,  the 
Commission  invited  the  Portuguese and  Spanish  authorities to submit  preparatory  studies on 
the  cross-border  sections  of  the  route  for  financing  by  the  Cohesion  Fund.  In  July  1996 an 
application  for  assistance  was received  for the preparation  of technical  feasibility  studies  for 
the Spanish  section: Salamanca-Fuentes  de Oiioro (to be approved  early  in  1997). 

The  Portuguese  authorities  have  proposed  to  widen  the  scope  of  this  priority  project  to 
create  a  multi-modal  link  with  Spain  and  the  rest  of  Europe.  The  Commission  welcomed 
this proposal  and  held  a seminar  in October  1996 to consider  its  implications. The  proposed 
changes  to  the  priority  project  were  adopted  at  the  Dublin  European  Council  in  December 
1996. 

•  Cork-Dublin-Belfast-Larne  rail link 

No further  assistance  was  granted  to the  project  in  1996 since the expected  completion  date 
for the  project  in the  Republic  of  Ireland  is in the first  quarter of  1997. The definition  of this 
priority  project  has been  extended  to  include two  important  feeder  lines to  Londonderry  and 
Limerick. 

•  Ireland/UK/Benelux road  corridor 

Priority  has  been  given  to  this  project  in  Ireland  and  a  further  ECU  30.2  million  was 
committed  to  it  from  the  Cohesion  Fund's  1996  budget.  Since  1993  Cohesion  Fund 
assistance  for  the  Republic  of  Ireland's  section  of  the  project  has  totalled  ECU  108.0 
million.  Substantial  additional  assistance  is  foreseen  in  future  years  to  complete  projects 
under construction  or under  consideration. 

The table  below  summarises  information  on the  Essen  high  priority  projects  which  are of direct 
interest to the Cohesion  Fund: 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment of the projects  and measures adopted 

107 

Estimated  total 
cost 

.  Estimated  cost 

Cohesion  Fund 

1995-99 

1993-96 

12 870 

6 367 

1 072 

238 

2 680 

23 227 

4 380 

5 065 

717 

145 

1 540 

11 847 

8.0 

258.9 

52.6 

53.9 

108.0 

481.4 

HST South 

Greek motorways 

Lisbon- Valladolid motorway 

Cork-Dublin-  Belfast rail link* 

Ireland/UK/ Benelux road link* 

Total 

* Republic of Ireland only 

In  addition  to  the  fourteen  high  priority  projects  identified  in  the  Christophersen  Group's  report 
which  were  endorsed  by  the  Essen  European  Council,  a  second  list  of  projects  of  importance 
was  also  highlighted.  The  Cohesion  Fund  has  an  interest  in the  following  projects  which  appear 
in  this  list: 

-  Combined  transport  in  Portugal  and  Spain 
-  The  new  international  airport  for  Athens  at  Spata 
-  The  Marateca-Elvas  motorway  (on  the  Lisbon-Madrid  corridor). 

Financial  assistance  for  combined 
motorway,  and  for  the  new  Spata  airport  has  already  been  approved. 

transport  projects,  for  sections  of  the  Marateca-Elvas 

The  Christophersen  Group  report  also  gave  prominence  to  Europe-wide  projects  relating  to  the 
implementation  of  new  information  technology  and  traffic  management  systems  for  transport 
in  the  EU.  The  Cohesion  Fund  has  helped  to  finance  important  examples  of  such  projects 
(marine  VTS  and  air  traffic  control  systems)  in  Spain,  Portugal,  Greece  and  Ireland. 

4.2.4 

GROUP  OF  COMMISSIONERS  (TENs)  /  KINNOCK  HIGH  LEVEL  GROUP 

The  Cohesion  Fund  has  continued  to  follow  the  work  of  the  group  of  Commissioners  which 
was  set  up  early  in  1995,  under  the  chairmanship  of  Mr  Kinnock,  Commissioner  for  Transport, 
to  co-ordinate  and  give  impetus  to  the 
implementation  of  the  trans-European  networks.  The 
group  has  concerned 
itself  with  the  legislative  framework  for  the  TENs,  monitoring  the 
progress  of  projects  of  common  interest,  and  exploring  ways  in  which  the  problem  of  financing 
the  TENs  might  be  resolved. 

Following  the  informal  transport  Council  in  Rome  in  April  1996, a "High  Level  Group"  was  set 
up  under  the  chairmanship  of  Mr  Kinnock,  comprising  representatives  of  Ministries  of 
Transport  and  Finance,  the  private  sector  and  the  EIB,  with  the  aim  of  accelerating  the 
implementation  of  public-private  partnerships  (PPPs)  in  the  context  of  the  TENs  and,  in 
particular,  the  priority  projects.  The  Cohesion  Fund  has  participated  in  meetings  of  this  group 
and  in  the  sub-group  responsible  for  the  FIST  South.  A  final  report  will  be  submitted  by  the 
Kinnock  group  to  the  European  Council  in  June. 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

08 

It may be noted that, following  the adoption of the TENs transport guidelines  in July  1996, new 
advisory  committees  have  been  set  up for each  of  the  TENs  sectors.  The  Cohesion  Fund  also 
participated  in the first meeting of the transport committee, which took place  in November. 

4.3 

TRANSPORT/ENVIRONMENT  BALANCE 

The Cohesion  Fund  Regulation  requires  a suitable  balance to  be struck  between  projects  in  the 
field  of the environment  and those relating to transport  infrastructure. 

The Commission's  position  in this regard  is that, over the period  as a whole, 50%> of  assistance 
should  go  to  projects  in  the  field  of  the  environment  although  that  objective  should  not  be 
considered  rigid: some flexibility  has to be retained  to deal with  special  situations. 

In  1996, further  progress  was  made  towards  that  target  and  commitments  under  the  budget  for 
that year were  50.1 % for transport projects  and 49.9%> for environmental  projects. 

The  breakdown  of  commitment  appropriations  between  the  two  fields,  environment  and 
transport,  followed  the trend  of the period  1993-96 in all the Member States: 

Period 

E n v i r o n m e nt 

Transport 

1993 
1994 
1995 
1996 
1993-96 

ECU 
606 016 992 
923 430  183 
1 036 709 677 
1 219282  135 
3 785 438 987 

% 
38.7 
49.8 
48.2 
49.9 
47.3 

ECU 
958253  511 
929  157 266 
1  1.13  119 907 
1 222  140 391 
4 222 671  075 

% 
61.3 
50.2 
51.8 
50.1 
52.7 

In  1996. the  breakdown,  as  a  percentage  of the  appropriations  by  Member  State  was  as  follows: 

M e m b er  State 

Environment  % 

T r a n s p o rt  % 

Spain 
Portugal 
Greece 
Ireland 

49.4 
49.6 
53.8 
46.0 

50.6 
50.4 
46.2 
54.0 

4.4 

ASSESSMENT  OF  COMPATIBILITY  WITH  THE  OTHER  POLICIES 

4.4.1 

ENVIRONMENTAL  PROTECTION 

Article  8  of  Council  Regulation  (EC)  No  1164/94  establishing  a  Cohesion  Fund  states  that 
projects  arc 
those  concerning 
environmental  protection. 

in  keeping  with  Community  policies, 

including 

to  be 

The  objectives  of  Community  policy  on  the  environment  are  set  out  in  Article  130r  of  the 
Treatv.  Thev  include: 

Annual report of the Cohesion  \'und  1996 

Chapter 4 - Assessment of the projects and measures adopted 

109 

-  preserving and  improving the  environment; 
-  protecting  human  health; and, 
- 

the rational  utilisation  of natural  resources. 

The  Community  programme  of  policy  and  measure  in  relation  to environment  and  sustainable 
development  (the  Fifth  Action-Programme)  - adopted  by  Resolution  of  the  Council  in  1993  -
provided  for  the  Cohesion  Fund  to  assist  in  the  achievement  of  the  Treaty  objectives  and  in 
particular,  key  Community  environmental  issues  such  as  the  reduction  of  water  pollution  and 
appropriate  waste  management.  In  addition  to  focusing  on  key  environmental  themes,  the 
Programme  also  concentrated  on  the  need  to  integrate  the  environmental  dimension  into  other 
Community  policies  in  order  to  change  and  influence  the  undesirable  side  effects  of  certain 
economic  sectors. 

This  latter  aspect  is  of  concern  to  the  Cohesion  Fund  in  that  transport  infrastructures  are  the 
other  key investment  priorities to which  funding  is channelled. 

The  Commission  has  developed  a careful  prior  appraisal  procedure  for  investment  in  both  the 
environment  and  transport  sectors. For environmental  projects the application  information  must 
include: 

the environmental  objectives  of the  project; 

- 
-  details on  how  the project  relates to the application  of Community  environmental  legislation 

on the environment;  and, 

-  details  on  whether  or  not  the  project  forms  part  of a plan  or programme  concerned  with  the 

implementation  of Community  environmental  policy or  legislation. 

In  addition,  and  where  appropriate,  information  must  also  be  supplied  in  regard  to  the 
environmental  impact as required  under  Directive  85/337/EEC. 

In the case of transport  projects,  where appropriate, an environmental  impact  assessment  under 
Directive  85/33 7/EEC  must  also  be  supplied  with  the  project  application.  In  addition,  careful 
attention  is  paid  to  any  likely  consequences  for  important  bird  areas  (Directive  79/409/EEC) 
and  habitats/species  (Directive 92/43/EEC) that may be affected  by such  projects. 

Checks  are  also  carried  out  on  projects  in other  fields,  such  as  waste  management,  restoration 
of coastal  areas, etc.. to ensure that they too are in line with Community  environmental  policy. 

Following  appraisal,  and  before  taking  a final  decision  on  a project,  the  Commission  may  add 
conditions  relating to attainment  of particular environmental  objectives  or to ensure  compliance 
with  certain  technical  requirements  specified  by Community  legislation.  Examples  include  the 
urban  waste-water directive (91/271/EEC). 

The question  of compatibility  does not arise solely before  the decision  is taken. The  Monitoring 
Committees  also  ensure  compliance  with  environmental  policy  by  verifying 
the 
requirements  or  conditions  laid  down  in  the  decision  are  respected.  In  cases  where  this  is  not 
so, payments  may  be suspended  and assistance  reduced  or even  cancelled. 

that 

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Chapter 4 - Assessment  of the projects  and  measures  adopted 

4.4.2 

COMMON  TRANSPORT  POLICY 

The  vision  of  the  common  transport  policy  is  set  out  in  the  Commission's  communication  "The 
future  development  of  the  common  transport  policy"  (COM(92)  494),  one  of  the  key  features  of 
which,  alongside  the  need  to  take  account  of the  environment  in  the  approach  to  transport,  is  the 
policy  on  the trans-European  networks  set out  in Title  XII  of the  Treaty. 

The  common  transport  policy  also  takes  account  of  the  growing  need  for  operational  transport 
infrastructure  within  a  Community  without  frontiers  stemming  from  the  congestion,of  a  large 
proportion  of  the  existing  networks,  particularly  those  at  the  centre  of  the  Community,  and  the 
shortcomings  in  infrastructure  around  the  edges  of  the  Community  and  in  links  between  the 
outlying  regions  and  the  centre. 

The  development  of  trans-European  transport  networks  provides  certain  solutions  to  these 
problems  and  is closely  linked  to the  common  transport  policy.  The  Community's  contribution  in 
this  area  takes  the  form  of  guidelines  which  will  give  a  genuine  boost  to  the  achievement  of  the 
two  basic  objectives  of  the  single  market  and  economic  and  social  cohesion.  One  of  the  main 
goals  of  the  networks  is  to  link  isolated,  island  and  outlying  regions  to  the  centre  of  the 
Community.  The  guidelines  define  objectives,  priorities  and  identify  projects  of  common  interest. 
The  outlying  regions  will  require  particular  attention. 

All  this  is reflected  in  Decision  1692/96/EC adopted  by  the  European  Parliament  and  the  Council 
on  23  July  1996.  which  sets  out  Community  guidelines  for  the  development  of  the  trans-
European  transport  network.  It  sees  multi-modal  transport  as  one  of  the  responses  to  increase 
efficiency,  network  safety  and  environmental  protection.  The  various  modes  of  transport  and  the 
projects  relating  to  them  are  included  in  these  guidelines  as  part  of  the  implementation  of  a 
process  based  on  complementarity  and  gradual  integration.  The  "multi-mode"  objective  of  the 
guidelines  is an  important  criterion  for  the establishment  of  priorities. 

The  guidelines  define  the  various  components  relating to the trans-European  transport  network: 

0  The  trans-European  road  network,  with  its  major  routes  and  links,  as  the  keystone  of  surface 

transport. 

0  The  trans-European  rail  network  composed  of  high-speed  and  conventional  rail  networks  and 

combined  transport  corridors. 

0  The  ports  play  an  important  role as  links  between  land  and  sea  transport. 

0  The  maritime  traffic  information  and  management  system  is of direct  concern  to  sea  transport 
since  it  is a tool  for  the  control, organisation  and  direction  of this traffic  in Community  waters, 
thereby  helping 
in 
ecologically  sensitive  areas.  It  is of  direct  concern  for  the  future  development  of  the  outlying 
countries  in the  south  of the Community  (Greece,  Spain  and  Portugal). 

improve  safety  and  efficiency,  while  protecting 

the  environment 

0  The  trans-European  airport  network  covers  some  250  airports  selected  on  the  basis  of 
quantitative  criteria  and  their  roles  in  linking  the  Union  and  the  rest  of  the  world  and  the 
Union  with  its  most  remote  regions.  So  that  it can  operate  as  intended,  the  guidelines  suggest 
that  priority  should  be given  to: 

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Chapter 4 - Assessment  of the projects  and  measures adopted 

I I | 

making  optimal  use of and  increasing  airport  capacity; 
improving  the environmental  impact  (compatibility  with  the  environment); 
links with  other  networks.  • 

Airports  have  a special  role  in providing  access, particularly  to outlying  regions. 

0  Turning  to  air  traffic  control,  the  gradual  introduction  of  an  air  traffic  management  network 
(navigation  plan,  traffic  control  and  management  facilities)  should  improve  the  safety  and 
efficiency  of air transport  in  future. 

The  Treaty  provides  for  projects  which  meet  these  criteria  to  receive  Community  assistance  in 
the  form  of  the  part-financing  of  work  undertaken  by  the  Member  States.  The  bulk  of  this 
assistance  will  come  from  the  Cohesion  Fund  which,  in  the  four  countries  where  it  operates, 
supports  transport  projects  regarded  as being of common  interest to the  networks. 

The  Cohesion  Fund  accordingly  makes  a  very  substantial  contribution  to  carrying  out  transport 
projects,  irrespective  of  mode,  so  helping  compensate  for  the  lack  of  infrastructure  which  is 
regarded  as  one  of  the  barriers  to  the  free  movement  of  people  and  goods  into  or  out  of  the 
outlying  regions.  It  has  become  one  of  the  Community's  basic  tools  for  developing  the  trans-
European  network  and  achieving  its  objective  of  introducing  sustainable  mobility  in  accordance 
with  Community  environment  policy  through  support  for  projects  involving  different  modes  of 
transport. 

4.4.3 

PUBLIC  P R O C U R E M E NT 

In  its  1994/95  report,  the  Commission  stressed  that  it  very  often  felt  the  need  to  be  physically 
closer  to  those  taking  decisions  on  projects,  in  order  to  prepare  and  monitor  applications  better 
and  speed  up  implementation  and  understanding  of  Community  texts.  It  found  that,  since 
information  on  public  procurement  could  be  found  at  national,  regional  or  local  level,  checks 
ought  also  to  be  designed  to  assist  those  taking  decisions,  and  so  be  carried  out  at  an 
appropriate  level.  As  it stated  in  its  1994/95  report,  the  Commission  had  given  this  considerable 
"Public 
thought,  which 
procurement 
In  1997  the  comments 
made  on  this  document  by  those  engaged  in  the  economy  will  be  assembled  to  a  framework  for 
the  actual  implementation  of  the  paths  proposed.  Some  innovations  regarding  checks  on  the 
Structural  Funds  and  the  Cohesion  Fund  were  put  forward  and  it will  be  useful  to  mention  them 
briefly  in this  Report. 

led  to  the  adoption  on  27  November  1996  of  the  Green  Paper 

in  the  European  Union:  exploring 

the  way  forward". 

Of  the  six  chapters  of  the  Green  Paper,  two  have  direct  relevance  to  contracts  receiving 
Community  finance:  point  IV-D  "Attestation"  of  Chapter  3 "Application  of  public  procurement 
law  -  current  state  of  play  and  trends"  and  point  IV  "Procurement  involving  Union  funds"'  of 
Chapter  5  "Public  procurement  and  other  Community  policies".  The  ideas  put  forward  concern 
the  creation,  at  national  level,  of  independent  bodies  to  monitor  the  "public  procurement"  rules, 
greater  use  of  the  procedure  attesting  compliance  with  the  Community  rules  on  public 
procurement  already  laid  down  by  the  "special  sectors"  Directive  and  making  those  taking 
decisions  on  public  contracts  assume  their  responsibilities.  However,  the  development  planned 
does  not  entail  the  Commission  giving  up  its  prerogatives;  it  will  continue  to  carry  out  its  role 
as  guardian  of  the  "'procurement  rules"  under  the  Treaty  and  the  Directives. 

Annual  report  of  the  Cohesion  fund  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

I  12 

In  1996,  more  attention  was  paid  to  monitoring  applications  for  finance  submitted  in  the  last 
three  years,  which  made  it  possible  to  assess  better  the  state  of  implementation  of  projects 
(over  200  new 
through  contracts  awarded  since 
applications).  It  is  important  to  note  that  many  applications  are  submitted  by  the  Member  States 
before  any  procedures  to  award  contracts  begin,  in  order  to  be  certain  of  Community  financial 
assistance  before  beginning  work.  Information  on  the  contracts  awarded  and  the  records  of 
tender  procedures  are  very  often  not  available  until  the  projects  are  in  progress  or  when 
subsequent  instalments  or  the  balance  are  paid. 

the  adoption  of  financing  decisions 

the  Commission  finds 

In  general, 
that  national  authorities  and  Monitoring  Committees 
cooperate  well  in  response  to  the  questions  raised  by  the  Commission  when  it  is  considering 
projects  it  has  financed,  irrespective  of  stage  (application,  decision,  amendment,  payment, 
balance). 

As  before,  the  examination  of  files  has  resulted  in tlie  following  situations: 

0  agreement  without  reservations,  where  it  was  found  that  an  application  complied  with  the 
rules  on  public  procurement,  all  the  information  relevant  to  that  point  has  been  provided  or 
that  the  project  was  for  an  amount 
lower  that  the  thresholds  set  out  in  the  "public 
procurement"  Directives; 

0  agreement  in  principle,  subject  to  retrospective  checks  to  be  carried  out  in  all  cases  where 
the  contracts  were  awarded  after  finance  had  been  granted  or  where  it  appeared  that  other 
procedures  could  have  been  launched  later; 

0  blocking  of  the  decision  to  grant  finance  or  of  the  amendment  of  a  decision  until  the 

national  authorities  had  clarified  doubtful  points; 

0  suspension  of  payments 

(the  Directorates  concerned  within 

associated)  if  a  complaint  was  received  from  a  firm  which  considered 
damage  and  warning  notice  was  sent  to the  national  authorities; 

the  Commission  being 
it  had  suffered 

0 

refusal  of  finance  where  non-compliance  with  the  "public  procurement"  rules  was  detected 
in the  application  or  where  a complaint  had  already  been  made  by  a  firm  which  considered  it 
has  suffered  damage. 

4.4.4 

C O M P E T I T I ON 

Council  Regulation  (EC)  No  1  164/94  establishing  a  Cohesion  Fund  requires  in  particular  that 
assistance  from  the  Funds  should  comply  with  competition  policy.  The  Commission  therefore 
regularly  checks  the  compatibility  with  the  Treaty  of  the  measures  part-financed  by  the 
Cohesion  Fund  to  verify  that  its work  is  fully  in  line  with  the  Community  competition  rules  and 
especially  those  on  State  aids. 

In  general,  it  appears  that  these  measures  very  rarely  raise  problems  of  compatibility  with 
competition 
infrastructure 
programmes  which,  unless  they  infringe  the  rules  on  the  award  of  public  contracts,  place  no 
particular  firm  at  an  advantage.  As  a  result,  Community  checks  relating  to  competition  usually 

is  mainly  because  they  are  usually  concerned  with 

law.  This 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

concern  aspects  relating  to  free  access  to  infrastructure  for  all  operators  satisfying  the  technical 
and  legal  requirements,  and  the  application  of  the  rules  and  provisions  of  Community  law  on 
aid  to  the  transport  sector. 

4.5 

S O C I O - E C O N O M IC  I M P A CT  OF  T HE  C O H E S I ON  F U ND 

4.5.1 

INTRODUCTION 

The  Commission  is  required  to  assess  the  actual  or  anticipated  economic  impact  of  the  Cohesion 
Fund  both  at the  level  of  individual  projects  and  at the  level  of assistance  as a  whole. 

Cost-benefit  anaKsis  and  other forms  of microeconomic  analysis  are the main  methods  used  at  the 
project  level,  in  particular  in the  context  of the  prior appraisal  of  projects  submitted  for  assistance. 
The  general  procedures  for  assessing  project  applications  have  been  described  earlier  in  this 
report.  Further  details  of  work  undertaken  in  this  area,  including  some  preliminary  results  of 
recent  studies  financed  by the Cohesion  Fund, are given  in section  4.5.2  below. 

At  the  global  level, the  impact  of the  Cohesion  Fund  must  be considered  within  the  context  of  the 
regional  and  national  economies  in  which  its  assistance  is  located.  This  normallv  means  usins; 
economic  models  which  seek  to  mirror  the  real  world  -  albeit  in  a  simplified  form.  In  this  way, 
both  the  spillover  effects  of  such  assistance,  their  longer  term  supply-side  impacts  and  any 
into  the 
feedback  effects 
development  of  economic  models  for  the  assessment  of  the  impact  of  Cohesion  Fund  assistance 
was  commissioned  in  1995  from  the  London  School  of  Economics  and  Political  Science.  The 
LSE's  final  report  was  submitted 
in  December  1996.  The  aims  of  this  study  and  some 
preliminary  results  are  described  in section  4.5.3. 

into  account.  A  major  study 

the  economy  can  be  taken 

from 

That  section  also  reports  on  the  results  of  a  study  of  the  macroeconomic  impact  of  the  Cohesion 
Fund  in  Spain  which  was  undertaken  for  the  Spanish  authorities  in  1995  with  finance  from  the 
Cohesion  Fund. 

Finally,  section  4.5.4  gives  some  indications  of  the  potential  employment  impact  of  the  Cohesion 
Fund. 

4.5.2 

ECONOMIC  APPRAISAL  OF  PROJECTS 

Applications  for  assistance  from  the  Cohesion  Fund  must  be  supported  by  an  economic  analysis 
demonstrating  that  the  project  concerned  is  expected  to  generate  social  and  economic  benefits 
over  the  medium-term  which  are  proportionate  to  the  resources  deployed  -  Articles  10(4)  and 
10(5)  of  Regulation  (EC) No  1164/94.  That  is  to  say,  the  project  must  be  expected  to  produce 
positive  net  benefits  and  thus  add  to  overall  economic  welfare.  As  a  general  rule,  cost-benefit 
analysis  must  be  used  for  this  purpose.  However,  in the  case  of  environmental  projects,  where  the 
results  of  cost-benefit  analysis  may  be  inconclusive,  other  forms  of  quantified  analysis,  such  as 
cost-effectiveness  or  multi-criteria  analysis, may  be  accepted. 

The  preparation  of  cost-benefit  and  other  economic  studies  in  support  of  project  applications  is 
primarily  the  responsibility  of  the  Member  States  concerned.  The  Commission  must  ensure  that 
the  methodologies  used  are  acceptable,  that  assumptions  made  are  appropriate  and  that  the  results 

Annual  report of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

I  14 

are credible. External  consultants or the  European  Investment  Bank may be called  upon to help in 
this process while, at the  Member  State  level, technical  assistance  is available  from  the Cohesion 
Fund to help in the financing  of relevant studies. 

The Member  States have, in general, responded  well to the challenge of producing cost-benefit  or 
other  studies  in  connection  with  projects  submitted  for  assistance.  Both  the  number  of  such 
studies  and  their  quality  have-improved  over  the  life  of  the  Cohesion  Fund.  However,  the 
Commission  is conscious of the need to make additional efforts  in this area and to this end  it has: 

-  proposed  commissioning  a  study  from  a  transport  economist  of  the  appraisal  methods  and 

assumptions  used  in support of applications for transport  projects; 

- 

financed  a  study  commissioned  by  the  Irish  authorities  into  the  economic  appraisal  of 
environmental  projects supported  by the Cohesion  Fund; 

-  approved  technical  assistance  for  certain  Member  States  specifically  to  help  them  undertake 

preparatory studies relating to projects,  including cost-benefit  analyses; 

Moreover, during  1997 the Commission  is planning to undertake a review of economic  appraisal 
methods  used  in  support  of  project  applications  with  a  view  to  identifying  best  practice  and 
issuing additional  sectoral guidelines where required. 

The  economic  evaluation  of  environmental  projects  is  generally  accepted  to  be  a  particularly 
difficult  subject  area.  The  Cohesion  Fund  finances  a  great  variety  of  projects  aimed  at 
environmental  improvement  including water supply schemes, waste water treatment,  urban  waste 
disposal,  erosion  control,  afforestation,  nature  conservation  and  beach  restoration.  A  common 
feature  of such  projects  is that their  direct  "outputs" do not have a market  price  or. where  a price 
exists  (e.g. water  supply)  it may  not  reflect  the true  economic  and  social  value  of those  outputs. 
These  projects,  moreover,  often  have  significant  indirect  effects,  for  example  on  health  and 
amenity, which  are difficult  to quantify  and value. 

The  beneficiary  Member  States  have  made a considerable  effort  to apply  appropriate  methods  in 
their  economic  analyses  of  environment  projects.  Cost-benefit  analysis  has  been  the  most 
commonly  used  approach.  In  some  cases  an  attempt  has  been  made  to  quantify  and  value  the 
direct  benefits  of  environmental  schemes  such  as  improved  water  quality,  improved  amenity  or 
greater opportunities  for  recreational  use, while  in other cases  potential  indirect effects  have  been 
estimated,  for  example,  of  induced  economic  development.  In  many  cases  such  analyses  have 
been supplemented  by a qualitative assessment of benefits. 

A  study  for  the  Irish  authorities  which  was  financed  by  the  Cohesion  Fund  points  to  the 
difficulties  invoked  in  this  area  by  concluding  that,  although  there  is  a  growing  international 
literature  on  the  evaluation  of  environmental  projects,  "no  standard  or  universally  applicable 
methodology  has as yet been agreed  upon". The authors go on to say that there  is a general  lack of 
basic  data  to  be  used  for  such  analyses  and  a  lack  of  experience  in  the  implementation  of 
economic appraisal  techniques. They suggest that  in the short-term  there  is no alternative  to  using 
such  limited  data  as  is  available  and  to  quantifying  benefits  wherever  possible  using  output 
valuations  from  existing  studies.  In the  longer term, they  recommend  that the  use of  contingency 
valuation  methods  (involving  the  valuation  of  benefits  via  surveys  of  user  groups)  should  be 
pursued as these techniques, they argue, have become increasingly accepted  and  "may become the 
standard  tool  for  non-market  benefit  estimation".  Although  this  study  focussed  on  water  supply 

Annual report of the Cohesion  \7und  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

I  15 

and  waste  water  treatment  projects  in  Ireland,  its  basic  conclusions  may  be  more  generally 
applicable. 

The  Commission  is  also  applying  other  quantified  techniques  such  as  multi-criteria  analysis  to 
determine  priorities  for  measure  in the  environmental  field.  Such  techniques  have  been  developed, 
for  example,  in the  case of afforestation  and  erosion  control  projects  in  Spain. 

As  already  mentioned,  a  review  of the  methods  used  by  Member  States  in the  economic  appraisal 
of environmental  projects  will  be  undertaken  during  1997. 

4.5.3 

OVERALL  SOCIO-ECONOMIC  IMPACT 

The  Regulation  establishing  the  Cohesion  Fund  requires  the  Commission  to  report  regularly  on 
"the  economic  and  social  impact  of  the  Fund  in  the  Member  States,  and  on  its  contribution  to 
strengthening  economic  and  social  cohesion  in the  Union". 

This  implies  that  the  project-based  approach  has  to  be  supplemented  with  a  more  global  focus  on 
the  impact  of assisted  operations  on  economic  variables  such  as  growth,  employment  and  trade  in 
the  economies  concerned.  It  also  implies  attempting  to  estimate  both  the  short-term  demand 
effects  of  assistance,  which  occur  during  the  implementation  phase,  and  the  medium  to  longer 
term  supply  side  effects  which  occur  during  the  operational  phase.  In  the  case  of  transport 
investment,  for  example,  a  distinction  can  be  made  between 
income  and 
employment  directly  and  indirectly  created  during  the  period  of  construction,  and  the  subsequent 
impact  on  incomes,  employment  and  trade  of  the  time  savings,  reduced  operating  costs  and 
general  increase  in  competitiveness  induced  by the  improved  transport  infrastructure  concerned. 

increased 

the 

Corresponding  effects  can  also  be  expected  from  environmental  investments  although,  as  already 
noted,  these  are  more  difficult  to  estimate  and  are  not  in  many  cases  picked  up  by  conventional 
measures  of  national  output. 

London  School  of  Economics  Study 

In  order  to  comply  with  the  requirements  of  the  Regulation,  a  study  was  commissioned  in  July 
1995  from  the  London  School  of  Economics  and  Political  Science  (LSE)  with  the  aim  of 
developing  and  testing  systematic  methods  for  quantifying  the  socio-economic  impact  of  the 
Fund.  These  methods  were  intended  to  be applicable  to  both  the  Fund's  main  sectors  of  assistance 
-  transport  and  the  environment  -  and  to  the  four  beneficiary  Member  States.  They  were  also 
intended  to  be  used  to  estimate  the  effects  of  individual  projects,  or  groups  of  projects,  as  well  as 
aggregate  assistance  from 
therefore,  was  to  provide  a  coherent 
framework  for  analysing  the  impact  of Cohesion  Fund  spending  in the  four  countries  concerned. 

the  Fund.  The  objective, 

The  LSE  has  managed  the  project  and  has  been  responsible  for  the  economic  modelling  work 
involved,  but  it  has  worked  closely,  particularly  on  data  collection  and  analysis,  with  study  teams 
in  each  of  the  four  Cohesion  countries:  Instituto  Valenciano  de  Investigaciones  Economicas, 
Universidad  dc  Valencia;  Regional  Development  Institute,  Pantheon  University,  Athens;  Centra 
de  Investigaçào  de  Desenvolvimento  e  Economia  Regional  (CIDER),  Universidade  do  Algarve; 
and  the  Centre  for  European  Economic  and  Public  Affairs,  University College,  Dublin. 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

A steering group, consisting  of representatives  from  the Cohesion  Fund  Directorate  (DG XVI-E), 
DG XVI-A and G, DG II, DG XII, and Eurostat, has closely monitored work on the study. 

A draft  final  report on the study was submitted  in September  1996 and revised  in December  1996. 
This  will  be  finalised  and  published  sometime  in  early  1997.  The  report  contains  a  literature 
survey,  a  full  description  of  the  models  developed  and  the  first  results  of  model  testing  and 
simulation  using data on Cohesion  Fund  projects. A separate volume will  contain  a description  of 
the  dataset  used:  this  covers  key economic variables, down  to the NUTS  3 regional  level,  in  the 
four Cohesion  countries and their immediate geographical  neighbours (France, Italy and UK). 

The  LSE  adopted  an  innovative  approach  based  on  the  application  of  the  latest  econometric 
techniques  by  three  teams  of  economists  to  a  very  detailed  regional  dataset.  The  study 
recommends  three  complementary  methods  for  estimating  Cohesion  Fund  impacts.  The  main 
features of these approaches and some preliminary results can be summarised as follows: 

•  Vector autoregression  (VAR)  models 

These models seek to establish the  impact of Cohesion  Fund spending on regional  labour  markets 
by  estimating  the  dynamic  response  of  economic  variables  such  as  private  investment  and 
employment to changes  in public  investment. The models use the latest econometric techniques to 
trace  the  relationship  between  these  variables  over  a  long  period  of  time  (15-20  years).  Models 
have  been  developed  for  each  of the  Cohesion  countries, although  results  are  most  complete  for 
Spain because of the better availability of data for that country. 

Although  based  on  well  established  methodologies,  the  models  are  innovative  to the  extent  that 
involve a high  level of regional disaggregation, they consider the dynamic impact of  infrastructure 
spending, and they  incorporate spillovers from  one region to another. 

Results  for  all  four  Cohesion  countries  point  to  a  strong,  positive  correlation  between  public 
investment  spending  and  private  business  investment  in the  economies  concerned,  suggesting  a 
very favourable  impact from  new infrastructure  investment.  Figures produced  by the study permit 
estimates to be made of these potential  effects  over the long term based on historical  patterns. The 
VAR  models  can  also  be  used  to  provide  estimates  of  the  long  term  employment  impact  of 
Cohesion  Fund  projects  and of the effect  of such employment changes on the  local  labour  market 
(activity  rates, unemployment  and migration). 

Preliminary  results from  model  simulations for certain  important Cohesion  Fund assisted  projects 
are as follows: 

Rias  Bajas  motorway 

Madrid  ring M40 

Tagus  bridge 

short term  +1.17% 
long term  + 11.0% 
short term  + 0.56% 
+3.3% 
long term 
short term  +5.3% 
+3.1% 
I on "term 

long term  3900 

long term  3400 

long term  16500 

Note: the effects in each case relate to the impact on a  "representative region" 

Annual report of the Cohesion  fund 1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

17 

•  Regional  computable  general  equilibrium  models 

This  approach  involves  building  a  computer  representation  of  the  real  world  in  which  equations 
represent  the  behaviour  of economic  agents  such  as consumers,  producers  and  government.  Three 
computable  general  equilibrium  (CGE)  models  have  been  constructed  during  the  course  of  the 
study:  for  Spain/Portugal,  Greece  and  Ireland.  Each  model  incorporates  a  set  of  regions  in  which 
economic  activity  takes  place  (NUTS  2  regions  in  Spain/Portugal  and  Greece,  and  NUTS  3  in 
Ireland),  linked  by  a  transport  network  through  which  goods  and  services  are  traded.  Along  with 
inter-regional  trading  partners, the  models  allow  for  two  external  trading  partners:  the  EU  and  the 
rest  of  the  world.  The  regions  incorporate  their  own  particular  factor  endowments  and  industrial 
sectors. 

The  CGE  models  can  be  used  to  capture  the  effects  of  transport  infrastructure  investments  on  a 
particular  region  and/or  all  regions  of  a  country  by  tracing  the  likely  reduction  in  transport  costs 
and  consequent  changes  in  trade,  industry  sales  and  profits.  The  analysis  can  be  undertaken  in 
stages  with  progressively  greater  effects  on the  mobility  of workers  and  firms. 

Using  these  stages,  total  welfare  and  labour  income  changes  by  region  resulting  from  specific 
transport  infrastructure  projects  can  be  computed  over  the  short,  medium  and  longer  term.  The 
CGE  analysis  highlights  the  spillover  effects  of  changes  in  transport  networks  which  often  ripple 
through  numerous  regions  of  a  country.  First  results  of  simulations,  shown  in  the  table  below, 
indicate  that  the  total  welfare  benefits  of  some  projects  may  exceed  those  calculated  by  traditional 
cost-benefit  anaKsis,  pointing  to  significant  gains  in  the  medium  and  long  run  from 
induced 
changes  in activity  and  industrial  location: 

Real  income  consequences  of Cohesion  Fund  projects 

Rias  Bajas* 

Madrid  ring  M40 

Pathe# 

North-South 
corridor, 
Ireland 

ECU 
million 
Relative 
ECU 
million 
Relative 
ECU 
million 
Relative 
ECU 
million 
Relative 

121 

1.0 
185 

1.0 
933 

1.0 
163 

1.0 

140 

1.14 
230 

1.24 
1098 

1.17 
165 

1.01 

162 

1.33 
282 

1.52 
1156 

1.24 
184 

164 

1.35 
287 

1.55 
1157 

1.24 
183 

1.12 

* Gaficia-Madrid  motorway,  Spain 
#  Pafras-A/hens-  Thessaloniki/Bulgarian  border  motorway 
"relative  " indicates  the  real  income  effect  in short,  medium  and  long  run  relative  to direct  effect 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

1  18 

The  CGE  approach  is also  one  that  has a  long tradition  in economics  but  the  models  developed  by 
the  LSE  for  the  Cohesion  Fund  are  innovative  in  the  degree  of  regional  disaggregation  involved, 
their  explicit  consideration  of  transport  costs,  and  hence  trade,  between  locations,  and  their 
assumptions  of  imperfect  competition  in the case of some  industries. The  LSE  work  represents  the 
first  attempt  to  apply  regionalised  CGE  models  to  a  large  dataset,  and  to  use  them  for  policy 
analysis. 

•  Models  of  explicit  distribution  dynamics 

These  models  consider  the  dynamics  of  growth  and  convergence  over  the  whole  cross-section  of 
regions  in  the  Cohesion  countries  in  contrast  with  more  traditional  approaches,  such  as  regression 
analysis,  which  only  consider  the  behaviour  of  a  representative  region.  The  models  represent  a 
development  of  standard  distribution  dynamics  approaches  by  including  inputs  on  the  specific 
economic  structure  of  regions  and  on  the  linkages  between  regions.  A  number  of  graphical  and 
statistical  representations  of  the  dynamics  of  regional  income  distributions  are  developed  by  the 
study. 

The  models  can  be  used  to examine  such  questions  as: 

is the  entire  cross-section  of regions tending  over time towards  income  equality  or  inequality? 

0 
0  how  mobile  are  regions  within  the  regional  income  distribution? 
0  how  does  the  changing  structure  of  a  single  region  affect  the  evolution  of  regional  income 

distribution? 

0  how  does  the  changing  relationship  between  regions  affect  the  evolution  of  the  regional 

income  distribution? 

0  what  are  the  effects  of  spillovers  between  regions? 

The  study  presents  a  historical  analysis  of the  trends  in  regional  income  distribution  at  the  NUTS 
3  level  in  the  Cohesion  countries  and  attempts  to  explain  the  observed  patterns  in  terms  of  inter 
regional  linkages  and  of the  distribution  of public  and  private  investment  across  regions. 

It  is  considered  that  these  models  will  be  of  most  use  in  examining  overall  trends  towards 
convergence  in  the  Cohesion  countries  as  well  as  the  impact  of  the  Cohesion  Fund's  aggregate 
spending  on  infrastructure,  for  example  all  transport  or  environmental  investments  in  a  particular 
region. 

The  models  produced  as  a  result  of  the  LSE  study,  which  have  been  described  briefly  in  the 
foregoing,  will  be  applied  to  a  series  of  investments  financed  by  the  Cohesion  Fund  over  the 
coming  years.  The  aim  is  to  provide  important  elements  for  the  analysis  of  individual  projects, 
whether  on  an  ex  ante  or  ex post  basis, and  to  provide  evidence  of the  beneficial,  long  term  socio 
economic  impact  of the  Cohesion  Fund. 

Macroeeonomic  impact  of  the  Cohesion  Fund  in  Spain 

A  final  report  on  a  study  into  the  macroeeonomic  impact  of  the  Cohesion  Fund  in  Spain,  which 
had  been  commissioned  by  the  Spanish  authorities  with  Cohesion  Fund  finance,  was  submitted  in 
November  1995.  The  approach  adopted  by  this  study  was  to  use  existing  economic  models  to 
estimate  the  global  impact  of the  Fund's  assistance  on  the  Spanish  economy. 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

Although  the total  investments supported  by Cohesion  Fund money account for a relatively  small 
share  of  total  Spanish  GDP  or  gross  domestic  fixed-capital  formation,  the  author  of  the  study 
nevertheless  points  to  the  importance  of  the  Cohesion  Fund  in  supporting  public  authorities' 
investment  efforts.  Based  on  figures  for  1993, it  is estimated  that the Cohesion  Fund  accounted 
for  12%) of all spending on transport  infrastructure  by central  and regional  authorities  in that year, 
and  for  11%> of environment  spending. The  figures  rise to  18.5%o and  29.1%» respectively  if only 
the central authorities' expenditure  is counted. These figures understate the present contribution  of 
the Fund given the increases which have occurred  in the allocations to Spain since 1993. 

The  study  used  three  different  modelling  approaches:  an  input-output  model,  the  MOISEES 
macroeconometric  model  and  the  HERMIN  model.  The  input-output  approach  estimated  the 
anticipated  overall  and  sectoral  impact  of  Cohesion  Fund  assisted  investments  in  the  1993-99 
period.  The  results  suggest that  the  maximum  effects  will  be felt  between  1996 and  1999 when 
the  Cohesion  Fund  impact  accounts  for  around  0.4%>  of  the  Spanish  economy's  GDP  and  total 
employment.  In this  period  it  is estimated  that  it supports  an  average  of  50 000  of  man  years  of 
work.  The  author  estimates  that  on  average  one  man  year  of  work  is  created  by  each  PTA  4 
million of spending. The usual reservations about input-output models are made and, in particular, 
it  is  pointed  out  that  the  approach  can  only  measure  the  temporary  effects  of  Cohesion  Fund 
spending. 

Simulations  based  on  the  HERMIN  model  undertaken  for  this  study  suggest  that  for  the  period 
1993  to  1999 the  Cohesion  Fund  could  have  an  impact  of just  under  l%o of  Spanish  GDP, with 
over  70  000  jobs  dependent  on  its  spending  in  1999. The  MOISEES  model,  on  the  other  hand, 
suggests a considerably  smaller  impact. 

4.5.4 

EMPLOYMENT 

The  Cohesion  Fund  does  not  have  an  explicit  remit  to  create  jobs,  but  it  nevertheless  has  an 
important contribution  to make to employment generation  given  its substantial  resources. 

Infrastructure  investments create employment directly and indirectly: in the short term, direct jobs 
arise  primarily  in  the  construction  industry,  while  indirect jobs  are  generated  by  the  increased 
demand  for  industries  and  services  which  supply  the  construction  sector,  and  which  meet  the 
needs  of the  newly  employed.  In the  longer term,  employment  will  also  be generated  during  the 
operational  phase  of  projects:  direct  employment  in  this  case  will  be  more  limited,  but  longer 
lasting  jobs  will  be  generated  indirectly  to  the  extent  that  the  new  infrastructure  reduces 
production  costs  and  improves  the  attractiveness  and  competitiveness  of  the  economies 
concerned. 

It  is  possible  to  estimate  at  least  some  of  these  effects  with  a degree  of  certainty.  All  Cohesion 
Fund applications  must  indicate at  least the number of direct jobs  likely to arise from  the projects. 
An analysis  undertaken  of applications  in  1993 and  1994 indicates that on average around  21 jobs 
are generated  directly  per ECU million  of grant  in transport  projects  and 26 jobs  per ECU  million 
in environment  projects. 

If  the  above  averages  are  applied  to  the  grant  assistance  approved  by  the  Cohesion  Fund  since 
1993 the following  preliminary  results are obtained: 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment of the projects and measures adopted 

20 

Estimated  employment  dependent  on  Cohesion  Fund 

1993 

1994 

1995 

1996 

36 000 

44 000 

50 000 

TOTAL 

57 000 
mm 
based on estimated multiplier of 1.3. 

: 

10 800 

13 200 

15 000 

17 100 

-

. 

' 

* 
46 800 

57 200 

65 000 

74  100 

$€ 100  ^ 

243 100  * 

These estimates  should  be interpreted  with caution. They are not  intended to show the  long term, 
net  employment  impact  of  the  Cohesion  Fund,  to  derive  which  it  would  be  necessary  to  make 
assumptions  about  the  extent  to  which  the  projects  might  have  been  implemented  without 
Cohesion  Fund assistance and the extent to which other activities within the economies concerned 
have  been  displaced.  The  figures  are  therefore  simply  an  indication  of  the  gross  employment 
which  is  estimated  to  be  dependent  on  the  financed  projects  over  the  short  term,  i.e.  the 
construction  period. 

In  the  above  table  a  standard  multiplier  of  1.3 has  been  used  for  illustration.  This  estimate  is a 
cautious  one  and  it  may  be  noted  that  the  responses  in  the  Member  States'  applications  for 
assistance  imply almost a 1:1 ratio between direct and indirect employment. 

This  approach  to  employment  estimation  using  project  applications  is  clearly  inadequate  to 
estimate  the  long-term  employment  effects  of  investment  projects.  For this  purpose  the  projects 
have  to  be  put  into  their  specific  economic  context  and  considered  alongside  the  range  of  other 
factors  influencing  economic development.  The study at present  being carried  out by the  London 
School  of  Economics,  referred  to  earlier,  is  intended  to  fulfil  this  function  and  provide  overall 
employment  estimates  from  a sound theoretical  base. Some  initial  estimates  relating to  particular 
projects are given  in Section 4.5.3.1. 

In  parallel,  however,  the  information  derived  from  Cohesion  Fund  applications  will  continue  to 
provide  limited  but useful  indications of employment  effects. 

46 

CO-ORDINATION  AND  CONSISTENCY  WITH  OTHER  COMMUNITY 
FINANCIAL  INSTRUMENTS 

The  need  to  co-ordinate  the  financial  support  measures  undertaken  in  the  fields  of  the 
environment and the trans-European  transport networks through the Cohesion  Fund, the Structural 
Funds,  the  EIB  and  the  other  financial  instruments  is  stated  in  the  motives  expressed  by  the 
Council  when  it established  the Cohesion  Fund. Therefore  the Commission,  in  implementing  the 
objectives  of  the  Structural  Funds  has  to  ensure  the  co-ordination  and  consistency  between  the 
assistance  from  the  Funds  and  the  assistance  provided  from  the  other  financial  instruments,  in 
particular  the  resources  provided  by  the  Cohesion  Fund.  At  the  same  time,  however,  the 
Commission  has  to  pay  due  regard  to  the  principle  of  subsidiarity  that  makes  the  design  of  the 
national  strategy  and  its  objectives,  the  selection  of  suitable  projects  and  their  implementation 
primarily the responsibility of the Member States. 

Annual report of the Cohesion Fund 1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

121 

A  number  of  provisions  and  procedures  have  been  introduced  to  ensure  compliance  with  this 
obligation. 

4.6.1 

STRUCTURAL  FUNDS 

The  Structural  Funds,  particularly  the  ERDF  and  to  a  lesser  extent  the  EAGGF  Guidance  Section, 
may  also  be  asked  to  provide  assistance  for  projects  in  the  field  of  environment  and  trans-
European  transport  infrastructure.  Adequate  steps  have  therefore  been  taken  to  co-ordinate  the 
measures  of  the  Cohesion  Fund  with  the  other  Community  financial  jnstruments  for  coherence 
and  in order to avoid  the  risk  of double  financing. 

An  obligation  to  co-ordinate  is  stipulated  in  Council  Regulation  (EC)  No  1164/94  establishing  a 
Cohesion  Fund,  Article  9  of  which  states  that  no  item  of  expenditure  may  benefit  from  both  the 
Cohesion  Fund  and  from 
the 
Cohesion  Fund  and  other  Community  aid  - that  is  not  Structural  Fund  aid  -  for  a  project  must  not 
exceed  90% of the total  expenditure  relating to the  project. 

the  Structural  Funds.  In  addition,  combined  assistance  from 

As  far  as  the  relation  with  the  Structural  Funds,  in  particular  where  the  ERDF  is  concerned,  this 
provision  does  not  prohibit  a  combination  of  different  instruments  making  separate  contributions 
to  different  stages  of  a  major  undertaking,  as  long  as  it  is  assured  that  expenditure  relating  to  a 
stage  of a project  can  be clearly  identified  in time or  in  nature. 

A  number  of  measures  have  been  taken  with  regard  to  the  procedures  to  implement  the  required 
co-ordination. 

Firstly,  the  Commission's  objective  has  been  to ensure  overall  co-ordination  during  preparation  of 
the  Community  Support  Frameworks  (CSFs)  for  the  beneficiaries  of  the  Cohesion  Fund  in  order 
to  reach  the  real  doubling  of  the  commitment  appropriations  under  Objective  1, as  decided  at  the 
Edinburgh  European  Council.  The  financing  plans  of  the  CSFs  make  explicit  mention  of  the 
resources  allocated  by  the  Cohesion  Fund.  For  Spain,  where  only  part  of  the  country  is  eligible 
under  Objective  1.  ECU  7 950  million  of  the  Cohesion  Fund  allocation  for  the  period  1993-99. 
calculated  in  order  to  match  the  Edinburgh  target,  was  entered  in  the  CSF  for  its  Objective  1 
regions.  Following  the  principles  of  subsidiarity  and  partnership,  the  presentation  of  appropriate 
projects  to ensure  the  doubling  in  real  terms  in Spain's  least  prosperous  regions  lies  in the  hands  of 
the  national  government  and  the  Monitoring  Committee  for  the  Objective  1  CSF.  As  a  "non-
regional"  fund,  the  Cohesion  Fund  does  not  normally  record  its assistance  under  a regional  type  of 
classification. 

Secondly,  co-ordination  at  the  level  of  concrete  projects  requires  still  greater  attention  in  that  the 
Structural  Funds  operate  primarily  through  operational  programmes  while  the  Cohesion  Fund 
contributes  to  individual  projects  or  groups  of  projects.  Appropriate  co-ordination  procedures 
have  been  put  in  place  to  make  sure  that  projects  or  stages  of  projects  submitted  had  not  already 
been  presented  to  the  Structural  Funds.  These  include  mandatory  consultation  of  the  departments 
managing  the  Structural  Funds  before  the  Commission  takes  any  decision  to  grant  assistance  from 
the  Cohesion  Fund.  The  departments  involved  have  introduced  checks  to  ensure  that  no  item  of 
expenditure  can  be  financed  simultaneously  by the  Structural  Funds  and  the  Cohesion  Fund. 

Annual  report  of the Cohesion  Vund 1996 

Chapter 4 - Assessment  of the projects  and  measures adopted 

122 

These  procedures  have  worked  well  so  far.  Since  in the  framework  of the  multi-annual  operational 
programmes  the  selection  of  individual  projects  normally  takes  place  at the  regional  programming 
level,  the  ERDF  and  Cohesion  Fund  have  started  to  participate  together  on  a  random  basis  in 
Monitoring  Committees  in order to  increase  their  knowledge  of each  other's  procedures. 

The  above  administrative  arrangements  have  ensured  that  no  case  of  double  financing  has  arisen. 
Member  States  have,  on  occasion,  submitted  different  stages  of  the  same  project  to  two  different 
instruments,  but this  is in  perfect  accordance  with  the  underlying  legal  provisions. 

As  a  Directorate  of  DG  XVI  -  Directorate-General  for  Regional  Policy  and  Cohesion  -  the 
Cohesion  Fund  is  in  close  contact  with  the  administrative  units  dealing  with  ERDF  programmes 
in  the  four  Member  States  concerned.  The  measures  taken  by the  Cohesion  Fund  and  those  of  the 
Structural  Funds  are  complementary  in  management  and  implementation.  The  objectives  pursued 
in  achieving  efficient  and  financially  sound  measures  are  therefore  also  complementary  i.e.  in  the 
field  of  public-private-partnerships,  on  revenue-generating  projects,  project  management,  public 
procurement  and  competition  policy. 

4.6.2 

TENs  TRANSPORT  BUDGET  LINE 

The  financial  regulation  laying  down  the  ground  rules  for  support  to  the  TENs  was  formally 

adopted  by  the  Council  in  September  1995°.  This  Regulation  provides  the  legal  basis  for  the 
disbursement  of  EU  funds  to  the  TENs  over  the  period  1995-99.  Unlike  the  Cohesion  Fund,  the 
TENs  regulation  applies  throughout  the  Community  and  covers  all  three  TENs  networks: 
transport,  energy  and  telecommunications.  The  transport  networks,  however,  will  account  for 
the  major  share  of  the  total  budget  -  ECU  1 785  million  out  of  ECU  2  345  million.  In  view  of 
the  fact  that  transport  projects  supported  under  this  Regulation  may  be  similar  to  those  financed 
by  the  Cohesion  Fund,  the  Cohesion  Fund  Directorate  has  had  a  direct  interest  in  the  content  of 
the  new  regulation  and  kept  in  close  touch  with  the  discussions  leading  up to  its  adoption. 

The  Regulation  allows  the  Community  to  provide  financial  support  to  the  TENs  through 
feasibility  studies,  interest  rebates,  subsidies  for  guarantee  fees  and,  exceptionally,  through 
straight  grants.  Only  projects  of  common  interest  identified  in  the  TENs  guidelines  are  eligible 
for  support,  up  to  a  total  of  10%> of  total  investment  costs  (50%  in  the  case  of  feasibility  and 
other  studies). 

The  Cohesion  Fund  has,  since  its  inception,  maintained  close  contact  with  DG  VII  in  order  to 
ensure  a  consistent  approach  to  TENs  projects  and  to  ensure  compliance  with  the  requirements 
of  the  respective  regulations.  In  addition  to  regular  inter-departmental  discussions,  all  projects 
submitted  for  Cohesion  Fund  assistance  are  sent  to  DG  VII  for  comment,  and  all  draft  decisions 
relating  to  the  granting  of  financial  assistance  are  circulated  for  agreement.  DG  VII,  in  turn, 
informs  the  Cohesion  Fund  of all  applications  received  for  assistance  from  their  budget  line  and 
of  their  proposed  programme  for  spending  from  this  line. 

financial  assistance 
The  Cohesion  Fund  has  also  participated 
committee  which  has  been  set  up  to  help  the  Commission  in  preparing  the  annual  programme 
of  projects  to  be  supported  from  the  transport  budget  line. 

in  meetings  of  the  TEN 

Council  Regulation  (EC) No 2236/95 of  15 September  1995. 

Annual  report  of the Cohesion  Fund  I99d 

Chapter 4 - Assessment of the projects and measures adopted 

123 

The  different  scale  of the  resources  available  to the Cohesion  Fund  as compared  with  those  of 
the  TENs  financial  regulation  is  well  illustrated  by  the  fact  that  the  latter's  budget  for  TENs 
transport  projects  throughout  the  EU  was  ECU 280 million  in  1996,  whereas  the  Cohesion 
Fund's  total  commitments  to  TENs  projects  in  the  four  Cohesion  countries  was  ECU 1 
224  million. 

4.6.3 

LIFE  PROGRAMME 

Set  up  in  1992,  LIFE  is a Community  financial  instrument  to  support  environmental  measures 
throughout  the  European  Union  and  neighbouring  regions.  Its  general  is  to  contribute  to  the 
development  and  implementation  of the  Community's  environmental  policy  and  legislation  by 
financing  specific  measures,. 

A  LIFE  II  programme  was  set  up  in  1996  by  Regulation  (EC)  No  1404/96  (OJ  No  L  181  of 
20.7.1996). It covers the period  1996-99 and has a total budget of ECU 450 million. 

Some environmental  projects  or measures  in the cohesion  countries would  be eligible  under the 
Cohesion  Fund  and the LIFE Programme. 

To  avoid  the  risk  of  double  financing  of  certain  measures,  the  Cohesion  Fund  has  regularly 
attended  meetings  of  the  LIFE  Management  Committee,  so  verifying  that  none  of  the  104 
projects  financed  by this Programme  in  1996 received  assistance from  the Cohesion  Fund. 

4.6.4 

EUROPEAN  INVESTMENT  BANK 

The  EIB  sometimes  provides  substantial  assistance  to  the  Cohesion  countries  to  finance 
projects  in  areas  similar  to  those  covered  by  the  Cohesion  Fund.  The  ad  hoc  system  for  the 
exchange  of  information  on  applications  for  assistance  submitted  by  the  Member  States 
between  the Commission  and the Bank established  in  1993 is continuing to work  effectively. 

The  EIB  routinely  consults  the  Commission  and  the  Cohesion  Fund  when  it  receives  a  loan 
application. 

These  regular  exchanges  of  information  first  of all  establish  that  the ceilings  for  EIB  loans  are 
not  exceeded  and  secondly  ensure  a  sound  combination  of  grants  and  loans  for  the  projects 
being  part-financed. 

A series of major  projects  has now been  approved  by the Commission  under the Cohesion  Fund 
and, during the same year, granted  a loan by decision  of the Bank's  Board of  Directors. 

The financing  arrangements  and the economic, technical  and  financial  evaluation  of the  project 
are carried  out with  full  cooperation  between  the Commission  and the EIB. 

This  category  of  projects  includes  several  examples  of joint  large-scale  operations.  In  Greece 
examples  include  the  part-financing  of Spata airport, to which  the Cohesion  Fund  granted  ECU 
250  million,  part-financing  of  the  Port  of  Pireaus,  which  received  grants  from  the  Cohesion 
Fund  and  the  EEA  financial  mechanism  and  a loan  from  the  EIB, and  improvements  to certain 
motorway  sections of the  PATHE  road. 

Annual report of the Cohesion  Fund 1996 

Chapter 4 - Assessment  of the projects  and measures adopted 

124 

in  Spain  usually  takes  the  form  of  individual 

Part-financing 
the  EIB  to  the 
Autonomous  Communities  accompanied  by  Cohesion  Fund  grants  for  environmental  measures. 
Loans  and  grants  for  roads  and  rail  projects  are  paid  to  the  Ministry  for  certain  main  routes 
financed  by  the  Cohesion  Fund. 

loans  from 

In  Portugal,  during  1996  three-large-scale  investments  were  financed  jointly  by  the  Cohesion 
Fund  and  the  EIB,  the  incinerator  project  in  Oporto  (LIPOR),  the  incinerator  project  in  Lisbon 
(VALORSUL)  and  the Nord  railway  line. 

The  situation  in  Ireland  is  different  because  few  EIB  loans  are  made  there  (see  the  Bank's 
Annual  Report)  and  loans  are  made  to  finance  a series  of  projects  in the  form  of a  global  loan  to 
the  Ministry  responsible. 

The  EIB  has  made  individual  loans  for  the  modernisation  of  signalling  on  the  Dublin-Belfast 
line. 

4.6.5 

EEA  FINANCIAL  M E C H A N I SM 

Set  up  under  the  agreement  on  the  European  Economic  Area  (EEA)",  this  financial  mechanism 
closely  parallels  the  Cohesion  Fund  in  its  scope  and  geographical  coverage,  although  it  is 
considerably  smaller  in  terms  of  resources.  The  mechanism  is  financed  by  the  former  EFTA 
member  countries  of  the  EEA  (Austria,  Sweden,  Finland  -  which  have  in  the  meantime  joined 
the  EU  -  and  Norway,  Iceland  and  Liechtenstein),  and  is  managed  on  their  behalf  by  the  EIB. 
Assistance  from  the  mechanism  is  available  for  eligible  schemes  which  promote  economic  and 
social  cohesion  in  Portugal,  Greece,  the  Republic  of  Ireland, Northern  Ireland  and  the  Objective 
1 regions  of  Spain. 

The  EEA  financial  mechanism  runs  for  a  period  of  five  years  (1994-99)  and  can  provide  direct 
grants  and 
interest  rebates  on  loans.  Priority  is  given  to  projects  which  place  particular 
emphasis  on  the  environment,  transport  (including  transport  infrastructure)  and  education  and 
training.  Both  public  and  privately  financed  projects  are  eligible,  with  preference  among  the 
latter  given  to  those  promoted  by  small  and  medium-sized  enterprises.  The  mechanism's  budget 
amounts  to  ECU  500  million  in  the  form  of  grants,  and  interest  rebates  on  EIB  loans  of  up  to 
ECU  1.5  billion. 

The  EEA  financial  mechanism  clearly  presents  a  potential  source  of  overlap  with  the  Cohesion 
Fund  given  its  sectoral  and  geographical  coverage.  In  geographical  terms  the  main  differences 
are  that  the  mechanism  applies  in  Northern  Ireland,  whereas  it  does  not  apply  in  the  non-
Objective  1 areas  of  Spain.  In  sectoral  terms  the  EEA  mechanism  has  a  wider  coverage,  but  it 
can  also  finance  transport  infrastructure  projects  and  environmental  projects  similar  to  those 
assisted  by  the  Cohesion  Fund. 

In  practice,  however,  the  small  size  of  the  mechanism  limits  the  risks  of  overlap.  Moreover,  the 
arrangements  which  have  been  put  in  place  for  its  management  by  the  EIB  are  intended 
specifically  to  ensure  that  projects  supported  are  compatible  with  other  Community  policies 

Article  1  16 of the  LEA agreement and  Protocol 38 

Annual  report  of the Cohesion  Fund  1996 

Chapter 4 - Assessment of the projects and measures adopted 

125 

and  are  consistent  with  other  financial  instruments. The Cohesion  Fund  has  an  agreement  with 
the  EIB  for  the  exchange  of  information  on  projects  submitted  for  assistance,  as  well  as  for 
providing  advice  on  projects  proposed  to  be  part-financed  by  means  of  loans  and  grants.  The 
Cohesion  Fund  is  thus  informed  of  any  project  submitted  to  the  EIB  which  might  also  be 
proposed  for Cohesion  Fund  finance. 

4.7 

THE  ROLE  OF  THE  EIB  IN  EVALUATING  PROJECTS 

4.7.1 

ON-GOING INSTITUTIONAL  COOPERATION 

The  cooperation  agreement  signed  on  23  September  1993  under  the  cohesion  financial 
instrument  was  extended  by  the  Commission  and  the  EIB  to  the  Cohesion  Fund.  A  new 
framework  agreement  for  this  purpose  was  signed  on  15 December  1994  to  apply  throughout 
the  life of the Cohesion  Fund Regulation  (until  1999). 

This  framework  agreement  is  based  on  the  following  principles:  on-going  exchanges  of 
information,  regular  meetings  with  the  EIB,  use  of  the  EIB's  expertise  to  assess  projects  for 
which  EIB/Cohesion  Fund  part-financing  is  requested  by  the  promoter  or  the  national 
authorities  and  the  possibility  of  assessing  projects  for  which  no application  for  assistance  has 
been  made to the Cohesion  Fund. 

After  over  three  years'  operation,'  the  importance  and  quality  of  this  cooperation  are  still 
essential  to the Cohesion  Fund  in the process of evaluating operations  and the best  combination 
of sources de finance  (grants and  loans). 

4.7.2 

THE  RESULTS  OF COOPERATION  IN  1996 

In  1996  cooperation  with  the  EIB  concentrated  on  36  projects,  22  of  which  were  sent  to  the 
Bank  for  an  initial  reaction.  Two  major  projects  were  subjected  to  an  in-depth  evaluation  and 
12 projects  are  being  part-financed. 

Of  the  projects  evaluated,  27  concern  measures  in  the  field  of  the  environment,  mainly 
measures to do with  waste water and the treatment of urban waste. 

Eight  projects  in  the  field  of  transport  infrastructure  under  the  trans-European  networks  were 
evaluated; they concern  mainly  ports, airports and railways. 

Annual report of the Cohesion  Fund 1996 

CHAPTER  5 -  Monitoring  and checks 

126 

CHAPTER  5 

MONITORING  AND  CHECKS 

5.1 

MONITORING  COMMITTEES 

5.1.1 

SPAIN 

Two meetings of the Monitoring Committee were held  in Madrid  in  1996: on 24 April  and 30 and 
31 October. 

The  meetings  were  conducted  in  accordance  with  the  Committee's  rules  of  procedure.  As  the 
Commission  had  requested,  the  Monitoring  Committee  was  divided  into  separate  committees 
depending  on  the  body  responsible  for  implementation  of the projects  concerned  or the  sector  of 
assistance. 

Fifth  meeting of the Monitoring Committee (24 April) 

This  Monitoring  Committee  was  divided  into  three  Committees:  for  water  projects,  for  Central 
Administration  projects and for territorial  administrations. 

The  committee  was  chaired  by  Mr  Angel  Torres,  Director-General  of  Planning,  and  attended  by 
the  Ministry  of  Public  Works,  Transport  and  the  Environment  (MOPTMA),  the  Directorate  for 
Water Quality, the  Directorate-General  for  Economic  Programming  and the  Budget, the  Planning 
Committee and  bodies such as ICONA, MINER and AENA. 

The  Commission  Delegation,  led  by the  Director  of the  Cohesion  Fund,  comprised  the  Head  of 
Unit,  those  concerned  with  projects  in  Spain  within  the  Cohesion  Fund  Directorate  and 
representatives of DG XI and DG XVI-C. 

To establish  the  criteria  for  including  projects  in the Committee  for  water  projects,  it was  agreed 
that  this  concept  should  be  restricted  to  projects  concerned  with  the  water  cycle,  plus  those  for 
drainage and water treatment. The projects  selected are therefore  those concerned  with the control 
networks and the L1NDE and  PICHRA programmes. 

The  agenda  of  these  committees  included  consideration  of  the  state  of  implementation  of  each 
project  at 31  December  1995. At a general  level, the Commission  raised the problem  of the delay 
since  inception  in  implementing  environmental  and  transport  projects.  It  also  noted  that  a  large 
number  of  projects  had  been  amended  from  the  original  forecasts,  with  regard  either  to  the 
eligible cost, the schedule or the financing plan. 

The  meeting  dealt  with  some  aspects  of  the  rules  governing  participation  by  the  local 
administrations  and clarification  of the relationship of Cohesion  Fund projects to ERDF projects. 

On  this  occasion,  other  aspects  concerning  the  examination,  monitoring  and  management  of  the 
projects  were also raised: 

0 

the  physical  and  financial  indicators  on  the  monitoring  reports  and  applications  for  payment 
should  in future  include all expenditure shown on the breakdown of the costs of projects; 

Annual report of the Cohesion Fund  19°' 

CFIAPTER  5 - Monitoring and checks 

127 

0 

the  final  report  on  the  implementation  of  a  group  of  projects  should  be  drawn  up  for  each 
separate  project,  while  the  conclusions  on  the  operational  link  or  visible  strategy  might  be 
combined; 

0  appropriate  publicity  for  Cohesion  Fund  assistance.  It  was  stated  that  the  Commission  would 
shortly  approve  a  decision  on  information  and  publicity  measures  to  be  implemented  by  the 
Member  States; 

0  an  updated  interpretation  of  the  rules  on  payment:  the  work  carried  out  and  paid  by  the  body 

responsible  is still  the  basis  for  payments of expenditure  by the Cohesion  Fund. 

The  Commission  also  expressed  its  satisfaction  with  the  ad  hoc  Monitoring  Committee  attended 
by  the  administrations  of  the  Autonomous  Communities  and  local  authorities  and  requested 
for 
establishment  of  an  ad  hoc  Afforestation  Committee  and  separate  committees 
the 
Autonomous  Communities  and 
transparent 
management  of the  projects  concerned. 

local  administrations 

interests  of  more 

in  the 

Sixth  meeting  of  the  Monitoring  Committee  (30 and  31  October  ) 

The  Monitoring  Committee  was  divided  into  five  sub-Committees  depending  on  the  body 
responsible  for  implementation  of  the  projects  concerned  or  the  sector  of  assistance.  As  the 
Commission  had 
local 
administrations  was  separated:  Committee  for  water  projects,  Committee  for  afforestation 
projects.  Committee 
the  Autonomous 
Communities  and  Committee  for  local  administrations. 

for  central  administration  projects,  Committee  for 

the  Autonomous  Communities  and 

requested,  participation  by 

The  Committees  were  chaired  by  Mr  Pascual  Fernandez,  Director-General  for  Analysis  and 
the 
Budgetary  Programming;  attendance  varied  depending  on  the  committee  but  included 
Ministry  of  Public  Works,  Transport  and  the  Environment  (MOPTMA),  the  Water  Quality 
Directorate  and  the  Directorate-General  for  Economic  Programming,  the  Budget  and  the  Planning 
Committee,  bodies  such  as  ICONA,  MINER  and  AENA  and  representatives  of  the 
local 
administrations. 

The  Commission  Delegation,  led  by  the  Director  of  the  Cohesion  Fund,  comprised  the  Head  of 
Unit,  those  responsible  for  projects 
the  Cohesion  Fund  Directorate  and 
in  Spain  within 
representatives  of  DG  XI.  DG  XVI-C-A  and  DG  XX. 

The  agenda  of  these  Committees  included  consideration  of  the  state  of  implementation  of  each 
project  at  30 June  1996. 

•  Committee  for  projects  submitted  by the  Central  Administration 

Within  this  Committee  the  sectors  considered  are,  in  transport,  most  of  the  road  and  rail  projects, 
and 
the 
in  environment,  principally  drainage  and  water  treatment,  waste  management  and 
restoration  for  the  coast  line.  The  Commission  found  that  most  projects  were  progressing  well 
with  the  exception  of some  concerned  with  the  restoration  of the  coastline. 

•  Committee 

for  projects 

submitted  by 

the  administrations  of 

the  Autonomous 

Communities 

The  projects  submitted  by  the  Autonomous  Communities  cover  roads,  drainage  and  water 
project 
treatment,  waste  management 

environment.  Consideration  of 

the  urban 

and 

Annual  report  of the Cohesion  \'u\id  1996 

CHAPTER  5 -  Monitoring  and checks 

128 

implementation  gave rise to an exchange of information  among those responsible for  management 
at national, regional and Community  level. 

The Commission  found  that in general  project  implementation  was rather slow, mainly because of 
delays in the tender procedure and the award of contracts. 

•  Committee for  projects submitted  by the local authorities 

The  projects  submitted  by  the  local  authorities  cover  drainage  and  water  treatment,  waste 
management  and  the  urban  environment.  Consideration  of  project  implementation  included  the 
many projects whose deadlines had been amended. 

The Commission  stressed  the  need  to  speed  up  implementation  as much  as  possible,  despite  the 
problems  attendant  on  launching  an  invitation  to  tender  and  on  management  where  projects  in 
different  municipalities were grouped together. 

•  Committee  for  water  projects 

The main comments arising from  consideration  of the implementation  of these projects  concerned 
changes to the date for the end of the works in some decisions. 

At  the  Monitoring  Committees,  the  Commission  recalled  the  need  for  precise  and  detailed 
information  on  the  projects  financed  in  this  sector,  the  swifter  submission  of  applications  for 
payment  of  the  balance  for  completed  projects  and  the  inclusion  of  the  environmental  impact 
statement  in applications for aid  in this sector to speed up adoption. 

•  Afforestation  Committee 

The  projects,  which  are  submitted  by  the  central  administration  when  they  include  a  series  of 
measures, are grouped  by water system. 

Consideration  of project  implementation  showed that the projects  adopted  in this  sector will  need 
an  extra  year  because  the  measures  in  these  decisions  include  works  which,  because  of  the 
climatic conditions, can be carried out only at certain periods of the year (October to April). 

The seventh  Monitoring Committee meeting will be held  in the third week of May  1997 (about 21 
and  22 May).  It too  will  be organised  in five  meetings  on  the  basis either  of  the  sector  or  of the 
body responsible  for  implementation. 

5.1.2 

PORTUGAL 

During  1996, the  Monitoring Committee  for Cohesion  Fund projects  met on three occasions, on 
26 January,  18 June and  8 October. 

At  these  meetings,  thorough  discussions  concentrated  on.future  programming  in  the  transport 
and  environment  sectors  to  ensure  that  a  balance  between  these  sectors  is  maintained 
throughout  the  period  of  application  of  the  Fund.  This  programming  is  also  of  very  great 
importance  for  the  management  of  resources  over the  next three years  since  total  commitments 

Annual  report  of  the  Cohesion  Fund  1996 

CHAPTER 5 - Monitoring and checks 

129 

cannot  jeopardise  the  retention  of  a  reserve  of  appropriations  required  for  the  application,  if 
necessary, of  conditionality. 

There  is regular  case-by-case  analysis of the physical  and  financial  implementation  of  projects, 
and  some reprogramming decisions were taken. 

The  data  provided  by the  Portuguese  authorities  (held  over to 30  September)  showed  financial 
implementation  in the transport  sector for  1993/96 to be quite satisfactory  (98%). By the end  of 
1996,  18 projects  had  been  completed.  In  14 cases the final  reports  had  been  submitted  and  the 
balance applied  for. 

During  that  period,  the  pace  of  financial  implementation  for  environment  projects  was  slower 
(51%).  By  the  end  of  1996,  five  projects  had  been  completed  of  which  the  Commission  had 
closed  three. 

The ad hoc Committee  set  up to monitor the  new Tagus  Bridge  met  in Lisbon  on  26  February, 
18 July and 26 November  1996. 

The  subjects  covered  included  physical  implementation  of  the  project  and  environmental 
matters. 

Delays  in work  on  land  caused  by the  particularly  severe  weather  conditions  during  the  winter 
of  1995/96  were  retrieved  as  a  result  of  the  very  high  rates  of  implementation  recorded, 
particularly  from  May  1996.  The  latest  estimates  suggest  that  the  work  could  even  be 
completed  by January  1998, a little earlier than  expected. 

in  the  memorandum  on  environmental  matters  signed  by  the 
As  specifically  agreed 
Commission  and  the  Portuguese  Government  on  15  July  1996,  implementation  of  the 
agreement  will  be  monitored  regularly  by  the  Monitoring  Committee  responsible  for  the 
project. 

the 

last  meeting  of  this  Committee,  the  Commission  held  a  discussion  on 

At 
the 
implementation  of  the  conditions  laid  down  in  this  memorandum  on  the  basis  of  documents 
submitted  earlier  by the  Portuguese  authorities. 

This joint  examination  showed  that  the  Portuguese  Government  had  fully  complied  with  the 
conditions of the  memorandum, the deadline for which  was  15 October  1996. 

5.1.3 

GREECE 

The  Monitoring  Committee  for  Cohesion  Fund  projects  met four times  in  1996, that  for  transport 
and  the  environment  on  27/28  March  and  3/4  October  and  the ad hoc Committee  for  the  Evinos 
project  on 29 February and  21 October. 

The  Monitoring  Committee  was chaired  by the Secretary-General  of the Ministry  of the National 
Economy  and  comprised  the  Secretaries-General  of  the  other  seven  Ministries  involved  in 
Cohesion  Fund  assistance,  Commission  representatives  from  the  Cohesion  Fund  and  the  other 
Directorates-General  concerned,  representatives of the EIB, the Greek  Ministries, the associations 
of local authorities and a large number of mayors in their capacity as contracting authorities. 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  5 - Monitoring and checks 

130 

The  rules of  procedure  of the Cohesion  Fund  Monitoring  Committee  were  amended  to  provide  for 
representation  of  the  regional  and  local  authorities  (two  places)  and  a  representative  of  the  social 
partners. 

The  Committee  considered  the  summary  tables  by decision  and  by  project  and  the  reports  on  each 
project.  The  Commission  carefully  checked  compliance  with  Community  policies.  In  the  specific 
case  of  major  projects, 
the  horizontal  guidelines  on  public 
procurement  agreed  with  the  Greek  authorities,  i.e.  control  on  the  large  discounts  offered  by 
promoters  and  maintenance  of the total  initial  cost without  unjustified  increases. 

the  Cohesion  Fund  applied 

The  Cohesion  Fund  required  compliance  with  Community  environmental  policy  and  made  this  a 
condition  for  the  granting  of financial  assistance. 

The  various  meetings  of the  Monitoring  Committee  also provided  an opportunity  to: 

0 

0 

transmit  to  the  authority  designated  by  the  Member  State,  the  supervisory  Ministries  and  the 
final  beneficiaries  the  results  of consideration  of the  new applications  for  assistance: 

report  the  amounts  of  commitments  and  payments  made  in  1996  for  Greek  projects  for 
transport  and  the  environment; 

0  hear  directly  the  problems  encountered  by  final  beneficiaries  while  work  was  being  carried 

out: 

0  state  the  respective  positions  of  the  Member  State  and  the  Commission  on  the  continuation  of 
the 

the  eligibility  of  expenditure  and  the 

to  be  supplied 

information 

to 

the  projects, 
Commission: 

0 

report  to  the  Greek  authorities  possible  amendments  to  be  made  during  1996  to  the  projects 
already  approved  and  on  which  the Commission  was to take a  decision. 

Physical  and  financial  implementation  of environmental  projects  during  1996 was  satisfactory. 

Implementation  of  transport  projects  was  satisfactory  as  far  as the  PATHE  project  was  concerned 
but  unsatisfactory  from  the  point  of view  of commitments  and  construction  for  Egnatia,  since  this 
was  a  decisive  year  for  the  start  of the  agency.  The  figures  from  the  latest  Monitoring  Committee 
(October)  show  implementation  in the  field  of transport  for  PATHE  and  Egnatia  at 67%. Now  that 
the  appointment  of  a  Project  Manager  for  Pathe  means  that  payments  have  been  unblocked,  the 
rate  of absorption  will  increase  substantially. 

•  Ad  hoc  Monitoring  Committee 

The  ad  hoc  Monitoring  Committee  for  the  Evinos  project  met  twice  during  1996,  on  29  February 
and  21/22  October. 

This  project  was  monitored  from  a  physical,  financial  and  technical  point  of  view.  The  advisory 
and  coordinating  Council,  comprising  internationally  renowned  experts,  was  set  up  to  advise  at 
regular  intervals  on  options  and  ensure  continuation  of  the  work  and  the  implementation  of  the 
project.  It  was  also  to  keep  the  Cohesion  Fund  informed.  Preparation  of  the  systematic  enlarged 
final  study  was  entrusted  to  the  contractor.  Finance  was  granted  for  measures  to  stabilise  land 
slips  definitively.  A  key  part  of  the  project  financed  by  the  Cohesion  Fund  was  completed. 
However,  the  Fund  refused  to  continue  financing  this  project  until  the  complementary  studies, 

Annual  report  of the Cohesion  Fund  1996 

CHAPTER  5 - Monitoring  and  checks 

13 I 

particularly  those  on  the  risk  of  earthquakes  and  land  slips,  had  been  completed  and  their  impact 
on  the  final  design  of the  project  approved. 

A  preparatory  meeting  of  the  ad  hoc  Monitoring  Committee  for  Spata,  the  new  international 
airport  at Athens,  was  held  in  October. 

5.1.4 

IRELAND 

The  Monitoring  Committee  for  Ireland  met  three  times  in  1996,  on  30  January,  on  3  July  and 
on  10  December. 

As  before,  the  Commission  was  represented  by the  Cohesion  Fund  Directorate  and  members  of 
other  departments  concerned  and  the  Irish  authorities  by  the  Department  of  Finance,  who 
provide  the  chairman  and  secretariat  for  the  committee,  and  representatives  of  the  Irish 
government  departments 
assistance. 
Representatives  of  the  public  agencies  responsible  for  the  implementation  of  projects  (e.g.  Irish 
Rail,  the  state  rail  company,  the  port  authorities,  Air  Rianta,  the  state  airport  company)  also 
attended. 

the  economic 

responsible 

receiving 

sectors 

for 

One  important  innovation  in  1996  was  the  presence  on  the  Committee  of  members  of  the  local 
authorities  who  are  responsible  for  the  design,  implementation  and  management  of  road,  water 
treatment  and  water  supply  projects. 

in  1995  and 

The  format  and  content  of  the  information  available  to  the  committee  had  been  substantially 
to  be 
improved 
satisfactory  for  the  purposes  of  assessing  the  financial  and  physical  implementation  of  projects 
although  it was  necessary  on  occasion  to  look  for  additional  information  and  clarification  in  the 
case  of  some  of  the  port  and  solid  waste  projects. 

in  general  the  Commission  found 

the  documents  supplied 

The  Commission  is  generally  satisfied  with  the  progress  of  the  projects  and  it  has  not  been 
necessary  to  suspend  assistance  in any  case. 

Nonetheless,  the  Commission  repeatedly  indicated  its  concern  about  the  increase  in  cost  in 
many  projects  reported  by  the  authorities  and  stated  that  major  modifications  of  projects  would 
only  be  granted  if  detailed  justification  was  provided  for  the  cost  increases  and  only  in  certain 
limits. 

5.2 

INSPECTION  MISSIONS 

Acting  under  Article  12 of  Council  Regulation  (EC) No  1164/94  the  Commission  carried  out  a  series 
of  measures  to  check  the  accuracy  of  the  statements  by  the  Member  States  in  support  of  their 
applications  for  assistance  and  the  existence  of  the  administrative  and  accounting  documents  relating 
to  projects  which  had  received  financial  assistance  from  the Cohesion  Fund. 

The  audit  missions  carried  out  by  the  Commission  during  1996  to  monitor  the  management  and 
sound  implementation  of the  projects  approved  are  summarised  below: 

Annual  report of the Cohesion  Fund  I99( 

CHAPTER 5 - Monitoring and checks 

132 

5.2.1 

SPAIN 

•  Transport 

Missions  by DG  X\;I 

From  18 to 22 mars : 
*  Bailén-Granada motorway (4 sections) Andalusia. No CF 94/11/65/003 

From  24 to 28 June : 

*  OR1 - Rias Bajas  expressway.  Orense-Porriiio section. Galicia. No CF 94/11/65/002 

Missions  by DG XVI  accompanied  by DG XX 

From  21 to 25 October : 
*  Access to Santiago. No CF 93/11/65/013 
*  OR1 - Rias  Bajas  expressway. Orense-Porriiïo section. No CF 94/11/65/002 

•  Environment 

Missions  by DG  XTI 

From  6 to 9 February : 
*  Water  supply  to  Algodor  de  Tarancôn  and  southern  Madrid.  Castille-La  Mancha  and 

Madrid. No CF 94/1T/61/013. 

*  Lorca water  station.  Murcia. No CF 95/11/61/037. 
*  Environmental  restoration.  Portman  Bay. Murcia. No CF 94/11/61/022. 

From  24 to 28 June : 
*  Waste-water  treatment  in Renteria.  Basque Country. No CF 93/11/61/024 
*  Treatment of waste and contaminated  soil  in the Basque Country. No CF 95/11/61/043-7 
*  Lourido coast,  Portonovo and  La Lanzada. Galicia. No CF 94/11/61/027-028 

From  7 to 8 October : 
*  Cleaning  up of River  Besos. Catalonia. No CF 96/11/61/027 

From  28 to 29 October : 
*  Bagès  inter-municipal  urban  waste  management.  Catalonia.  No  CF  95/1 1/61/025-1  and 

96/1 1/61/026. 

*  Rubi  urban  waste management. Catalonia. No CF 95/11/61/025-6 
*  Gavâ-Viladecans recycling centre. Catalonia. No CF 95/11/61/022-D and 96/1 1/61/051. 

Missions  by DG  XVI accompanied  by DG XX 

From  21 to 25 October : 
*  Donana  National  Park. No CF 93/11/61/034 
*  Restoration  of beaches on  Isfa  Cristina. No CF 93/1 1/65/057 

From  4 to 6 November : 

Annual report of the Cohesion  Fund 1996 

CHAPTER  5 - Monitoring and  checks 

*  Projects  to  check  erosion  in  Andalusia. 

5.2.2 

P O R T U G AL 

•  T r a n s p o rt 

Mission  by  DG  XVI 

1 7 June  and  26 November  : 

*  New  Tagus  bridge  - 94/10/65/005 

Mission  by  the  EIB  accompanied  by  DG  XVI 

22  July  : 

*  Modernisation  of the Nord  II  line  - B. de  Prata/Alhandra  -  96/10/65/002 

Missions  by  DG  XVI  accompanied  by DG  XX 

From  30  September  to  4 October  : 
*  Port  of  Sines  eastern  road  -  93/10/65/012 
*  Road  access  to  the  Port  of  Sines  Terminal  -  93/10/65/026 

•  E n v i r o n m e nt 

Missions  by  DG  XVI  accompanied  by  DG  XY: 

From  30  September  to 4  October  : 
* 

Interceptors  at  the  Beirolas,  Frielas  and  S. Joào  da  Talha  treatment  stations  -
93/10/61/013 

*  Construction  of  Frielas  and  S. Joào da  Talha  treatment  stations  -  94/10/61/006-007 

5.2.3 

G R E E CE 

•  Environment 

Missions  by  DG  XVI 

5  February  : 
*  Waste-water  pipes  in Corinth.  No CF 93/09/61 /053-a 
*  Waste-water 

treatment  station,  collectors  and  drainage  network 

in  Loutraki.  CF  No 

94/09/61/001-2 

26  March: 
*  Waste-water  pipes  in Nea  Makri. No  CF 93/09/61/027-1 
*  Drainage  networks  in  Keratca. No CF  93/09/61/027-2 

3  October  : 

Annual  report  of the Cohesion  \\w\d  1996 

CHAPTER  5 - Monitoring and checks 

134 

*  Protection  of groundwater  Argolikon  Pédion. No  CF  93/09/61/009 

j 

'From  21  to 23  October  : 

•f  *  Waste  management  in Thessaloniki. No CF 93/09/61/035 
W;  Waste  management  in Schisto. No CF 93/09/61/034 

Missions  by  DG XX  accompanied  by DG XVI 

20 May  : 
*  Waste-water  treatment  station  for  the town  of  Rhodes. No CF  93/09/61 /046 

From  25  to 29 November  : 
*  Rain  and  waste-water  network  in  Veria. No CF  93/09/61/032 
*  Rain  and  waste-water  network  in  Veria. No CF 94/09/61/032 ; 
*  Water  supply  pipes  in  Veria and  Yannitsa.  No CF  93/09/61/058 
*  Waste-water  treatment  station  in Yannitsa. No CF  93/09/61/055-3 

*  From  I to  5 April  : 

Mission  to  audit  financial  flows  from  the  Commission  to  the  finance  departments  of  the 
Member  State  for  Cohesion  Fund  projects. 

5.2.4 

IRELAND 

•  Transport 

Missions  by  DG  XVI 

From  24  to  26  July  : 
*  Dublin  port  North  quay  Ro/ro  berth. No  CF  93/07/65/01 7 

*  Ennis,  Main  Drainage.  No  CF  93/07/65/029. 

From  23  to 27  September  : 
*  Portlaoise  by-pass  No CF  94/07/65/007 

Missions  by  DG XX  accompanied  by  DG  XVI 

From  07  to  10 May  : 
*  Rail  network  improvement  I. No CF  93/07/65/019-023-024-025 
*  Cork  Harbour  Tug. No  CF  93/07/65/013 
*  Cork  Passenger  Ferry  Terminal. No  CF  93/07/65/01 5. 

•  E n v i r o n m e nt 

Missions  by  DG AT7 

From 24 to 26 July : 

Annual  report  of  the  Cohesion  Fund  ll)(>6 

CHAPTER 5 - Monitoring and checks 

135 

*  Ballinrobe sewerage. No CF 93/07/61/027 
*  Tuam Regional  water supply (stage I). No CF 93/07/61/028 

From 23 to 27 September : 
*  Dublin  Regional  Water Supply No CF 93/07/61/012 and 94/07/61/015 

Technical verification  missions with the assistance of scientific consultants. 

Consultants  selected  for this purpose using the technical  assistance provided  for  in the  Regulation 
undertook specific  missions for the technical evaluation of projects and the progress of work. 

5.3 

ROLE  OF THE EIB 

The Council  Regulation  makes  specific  provision  for  the  EIB to take  part  in the  monitoring  of 
Cohesion  Fund  projects  by  stating  that  the  Bank  shall  be  represented  on  the  Monitoring 
Committees  set up in each  beneficiary  Member State. 

The  EIB  has  participated  effectively  on  these  Committees,  particularly  the  ad  hoc  Monitoring 
Committees  set  up  for  the  major  projects  part-financed  by  the  EIB  and  the  Cohesion  Fund 
(e.g.: the Tagus  Bridge and  Spata Airport). 

In  addition  to  the  cooperation  provided  for  in  the  Regulation,  the  EIB,  which  has  its  own 
monitoring  procedures  for  the  projects  it  finances,  provides  the  Commission  with  technical 
support  for  projects  for  which  it has already  financed  part of the expenditure  and  for  which  the 
Member  State requests a Cohesion  Fund  grant  in addition  to the loan. 

5.4 

FRAUD  AND  IRREGULARITIES 

Article  12 of Council  Regulation (EC) No  1164/94 requires the beneficiary  Member States to take 
the  necessary  measures  to  prevent  and  take  action  against  irregularities.  In  addition,  they  are 
responsible  for  recovering amounts  lost as a result of irregularity  or negligence. As a general  rule 
Member States are also liable for the reimbursement of any sums unduly paid. 

Member  States  are  also  bound  to  inform  the  Commission  of  measures  taken  for  the  purpose  of 
control  and  fraud  prevention.  In particular they are to notify  the Commission  of the  management 
and  control  systems  established  and  make  available  to  the Commission  any  appropriate  national 
control  reports.  By  adopting  in  1994,  Regulation  (EC)  No  1831/94,  the  Commission  issued 
detailed  implementation  provisions  concerning  the  obligations  of  beneficiary  Member  States  in 
connection  with  financing  of  the  Cohesion  Fund.  This  set  of  rules  concerns,  in  particular,  the 
organisation  of an  information  system  in the area of irregularities. In order to provide an  incentive 
for  Member States not to let go of the reins the Commission  may make a contribution  to the  legal 
cost  incurred  by a Member State for  legal proceedings  in recouping sums wrongly  paid. 

In  1996,  as  in  earlier  years,  the  Commission  has  received  no  reports  of  fraud  or  irregularity  in 
connection  with  projects  approved  under Council  Regulation  (EC) No  1164/94. The Commission, 
did not therefore  need to open detailed  investigations  into projects assisted  by the Cohesion  Fund. 

Annual report of the Cohesion Fund 1996 

CHAPTER 5 - Monitoring and checks 

136 

On  the  other  hand,  the  Commission,  from  its  regular  monitoring  and  control  visits,  is  not  yet 
entirely  convinced  that Member States have fully  grasped  the  importance of tlfeir  responsibilities 
in  the  context  of  the  above  regulations.  It  therefore  continued,  during  1996,  its  information 
seminars  in order to increase awareness of the administrations and to exchange experiences. 

During  its control  and  verification  visits the Commission  services have discovered  some cases of 
negligence  and  irregularities,  in  Greece,  Ireland  and  Portugal,  that  may  arise  partly  from  a 
misinterpretation,  misunderstanding or unfamiliarity  with rules applied by the Commission. 

In the course  of a verification  visit to Greece the Cohesion  Fund discovered  that  payment  claims 
issued  on a particular  project  were not based on payments actually made. The Cohesion  Fund  has 
informed  the Greek  Ministry  for  Economics which  is in charge of  implementation  and  follow  up 
of  Cohesion  Fund  assisted  projects.  In the  meantime the authorities  responsible  have adhered  to 
the  Commission  view,  and  payment  requests  presented  to  the  Commission  are  now  based  on 
payments made. 

In  1996,  the  Commission  gave  the  Portuguese  authorities  warning  notice  as  a  result  of  an 
inspection  of the CRIL (Lisbon outer ring road) project (No 93/10/65/025) carried out in 1995. 

In the  course  of  a verification  visit to Ireland  it became  obvious that,  for  the  project  in  question, 
point 3 of the  Financial  Implementation  Provisions that are appended  to project  decisions  has not 
been fully  respected. The Ministry for the Environment has started an investigation  into the case. 

In a second  case  the Cohesion  Fund  had to interrupt  payment to a waste-water project  as a result 
of  a  request  from  the  Commission  environmental  service.  The  Commission  had  grounds  for 
respected  during 
believing 
implementation  of the project.  Both cases are pending. 

that  Community  environmental 

legislation  had  not  been 

55 

LEGAL  PROCEEDINGS  IN PROGRESS 

The  Commission  is  not  aware  of  any  legal  proceedings  in  progress  in  connection  with  projects 
approved  under Council  Regulation (EEC) No 1164/94. 

5.6 

SOUND AND EFFICIENT MANAGEMENT (SE1VD 

The  Commission,  under  the  SEM  2000  action  programme,  has  intensified  its  dialogue  with 
Member  States  in  order  to  improve  financial  management  of  the  Community  budget.  The 
Cohesion  Fund  management,  in  parallel  with  a  similar  effort  undertaken  for  the  Structural 
Funds,  has  elaborated  a set of  rules  governing  eligibility  of expenditure.  The  objective  was  to 
harmonise  as  far  as  possible  with  the  principles  applied  in  the  Structural  Funds,  while  taking 
account  of  the  particular  features  of  the  Cohesion  Fund.  Once  the  agreement  of  the  financial 
departments  and  the  Commission's  Legal  Service  has  been  obtained,  the  principles  will  be 
notified  to the  beneficiary  Member  States  in early  1997. It is anticipated  that codified  and  clear 
principles  will  further  enhance  transparency  of  operations  administrated  by  the  Fund  and  will 
raise  the  awareness  of  the  national  authorities  of  the  principles  of  eligibility  and  other 
fundamental  issues  relevant  for efficient  management. 

Annual report of the Cohesion  Fund 1996 

CHAPTER  6 - Interinstitutional  dialogue,  information  and publicity 

137 

C H A P T ER  6 

I N T E R I N S T I T U T I O N AL  D I A L O G U E,  I N F O R M A T I ON  A ND  P U B L I C I TY 

6.1 

ANNUAL  REPORT  TO  THE  EUROPEAN  PARLIAMENT.  THE  COUNCIL. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE  AND  THE  COMMITTEE  OF 
THE  REGIONS 

Article  14  of  the  Cohesion  Fund  Regulation  requires  the  Commission  to  present  an  annual 
report  on  the  activities  of the  Fund  for  examination  and  opinion  to  the  European  Parliament,  the 
Council,  the  Economic  and  Social  Committee  and  the  Committee  of  the  Regions.  The  annual 
report  covering  the  year  1995  was  duly  presented  on  4  September  1996 to these  institutions. 

It  should  be  recalled  that  Annex  II  to  the  Cohesion  Fund  regulation  lays  down  detailed 
requirements  concerning  the  information  which  must  be  included  in  the  annual  reports.  Using 
this  framework,  it  has  been  possible  to  develop  a constructive  dialogue  between  the  institutions 
and  the  Commission  has  had  the  opportunity  to  refine  and  adjust  the  presentation  of  the 
information  according  to  the  wishes  and  concerns  expressed  in  the  different  opinions. 

However,  on  a  certain  number  of  proposals  concerning  decision-making  and  Fund  management 
made  in  particular  by  the  Parliament  and  the  Committee  of  the  Regions,  the  Commission  has 
had  to  recall  that  the  implementation  of  the  Cohesion  Fund  must  necessarily  be  in  complete 
conformity  with  the  provisions  of  the  Regulation;  similarly  a  suggestion  from  the  commission 
of  the  Economic  and  Social  Committee  dealing  with  the  annual  report  to  limit  information 
about  projects  has  not  been  pursued  as  the  annual  reports  must  serve  a  multitude  of  purposes 
and  therefore  be  as  complete  as  possible  concerning  information  on  projects. 

On  a  number  of  occasions  during  the  year,  Commission  representatives  have  had  the  possibility 
of  informing  members  of  the  institutions  and  discussing  specific 
items  with  them.  Such 
discussions  concerned  the  conditionality  procedure  and  the  results  of  the  mid-term  review  in 
particular,  as  well  as  fund  management,  information-and  publicity  measures  and  assessment  of 
effects  in  general. 

6.1.1 

THE  EUROPEAN  PARLIAMENT 

The  opinion  drafted  on  the  1995  annual  report  (Novo  report  EP  219.991)  noted  a  series  of 
positive  comments  and  remarks  concerning  the  implementation  of  the  Cohesion  Fund,  and  in 
particular  budgetary  implementation.  The  European  Parliament  expressed  satisfaction  at  the 
near-100% 
the 
budget  year  and  reiterated  the  positive  comments  concerning  the  absence  of  detected  fraud  in 
Cohesion  Fund  projects. 

implementation  rates  for  commitment  and  payment  appropriations  during 

Support  was  given  to  the  objective  of  the  50-50  split  of  budgetary  resources  between  the  two 
sectors  of  investment  for  each  of  the  Member  States  concerned  and  for  the  whole  period 
covered  by  the  Cohesion  Fund  Regulation. 

Concerning  the  allocation  within  the  two  fields  of  assistance.  Parliament  noted  that  the  number 
of  projects  concerning  treatment  of  solid  waste  was  too  low  in  the  environment  sector.  At  the 

Annual  report  of the Cohesion  fund  1996 

CHAPTER  6 - Interinstitiitional dialogue,  information  and  publicity 

138 

same  time  there  was  regret  that  roads  continue  to  account  for  too  much  of  the  transport  sector. 
Parliament  also  called  for  more  attention  to  be  given  to  the  fact  that  air  and  sea  transport  are  of 
great  importance  to  the  more  remote  areas. 

Parliament  welcomed  the  Commission's  attempts  to  assess  the  socio-economic  impact  of  the 
projects  funded.  In  this  respect  it  should  be  recalled  that  the  techniques  developed  for  this 
purpose  for  the  Commission  are  intended  to  help  quantify  job-creation  and  economic  growth 
effects  and  that  the  models  which  are  now  operational  may  also  serve  to  assess  other  major 
investments,  e.g.  those  part-financed  under  Structural  Fund  programmes,  in  particular  by  the 
ERDF. 

Criticism  was  levied  at  the  composition  of  certain  Monitoring  Committees  and  at  some  aspects 
of  the  arrangements  for  cooperation  with  other  financial  bodies  in  assessing  and  monitoring 
projects;  the  Commission  took  note  of  these  remarks  but  reiterates  that  the  Fund  Regulation 
must  be  fully  respected. 

6.1.2 

ECONOMIC  AND  SOCIAL  COMMITTEE  AND  THE  COMMITTEE  OF  THE 
REGIONS 

The  number  of  points  raised  by  the  two  bodies  on  the  1995  report  was  considerably  smaller 
than  in  previous  years.  This  is  no  doubt  due  to  the  fact  that  the  Commission  has  taken  account 
of  many  earlier  suggestions  -  not  least  concerning  the  number  of  Monitoring  Committee 
meetings,  the  selection  of  projects  and  the  balance  between  the  two  sectors  of  assistance  -  as 
well  as  the  better  understanding  of  the  special  characteristics  of  the  Cohesion  Fund  gained  by 
the  two  bodies  during  the  initial  years  of  implementation.  Clearly  there  is  an  excellent  rapport 
between  the  Commission  as  Fund  manager  and  the  bodies  representing  the  social  partners  and 
the  Regions. 

There  is  satisfaction  at  the  increased  involvement  of  the  social  and  local  partners  although 
room  still  exists  for  improvements.  The  analysis  of  the  impact  on  jobs  of  Cohesion  Fund 
projects  was  an  early  request  by  both  bodies  and  the  European  Parliament  as  well;  many 
positive  remarks  and  requests  for  further  development  of these  tools  were  forthcoming. 

The  Economic  and  Social  Committee  expressed  disappointment  that  the  annual  report  had  not 
been  made  available  earlier  due  to  the  large  amount  of  information  on  individual  projects 
contained  in  it.  It  is  hoped  that  future  reports  can  be  more  quickly  transmitted  to  the  other 
institutions. 

6.2 

INFORMATION  TO  THE  MEMBER  STATES 

The  Member  States  are  kept  informed  of  the  activities  of  the  Cohesion  Fund  through  a  series  of 
well-established  information  meetings.  These  normally  take  place  twice  every  year,  in  1996  on 
31  May  and  on  13  December. 

At  the  meeting 
in  May  the  Member  States'  representatives  heard  a  presentation  by  Mr 
Landiiburu.  Director-General  for  Regional  Policy  and  Cohesion,  on  the  current  work  of  the 
Fund  and  its  implementation,  including  the  principle  of  conditionality  and  the  so-called  mid 
term  review  of  the  GNP-critcrion,  i.e.  the  question  of  whether  the  Member  States  continue  to  be 

Annual  report  of  the  Cohesion  Fund  1996 

CHAPTER 6 - Interinstitutional dialogue, information  and publicity 

eligible  for  Cohesion  Fund  support  in  view  of  their  Gross  National  Product  compared  to  the 
Community  average  (see  section  1.1.2  of  this  Report).  An  updated  listing  of  projects  was 
available  at  the  meeting  as  well  as the  first  draft  of the  1995 annual  report  on  the  activities  of 
the  Fund. Attention  was given  in particular to the ongoing efforts  to assure an equal  distribution 
of  the  financial  resources  of the  Fund  between  the  two  sectors  of  assistance  and  the  financial 
implementation  of the budget available. 

To the December  meeting agenda was added - in addition  to the now familiar  points  concerning 
current  activities  and  current  project  financing  -  a  special  point  on  information  and  publicity 
measures,  following  the  Commission  decision  in  this  area  (see  Section  1.1.3  of  this  Report). 
The Member  States were given an audio-visual  presentation  of the salient  points of the decision 
and  a few  examples  of  how the obligations  of the authorities  of the  beneficiary  Member  States 
may respond  to the obligations of publicity and  information  on  investment  projects. 

6.3 

INFORMATION  TO THE SOCIAL PARTNERS 

the 

Two  meetings  were  held  with 
(UNICE,  CES,  CEEP  and 
EUROCHAMBRES)  during  1996:  on  20  February  and  11  September.  On  both  occasions,  the 
projects  adopted  to  date  and  the  perspectives  for  the  rest  of  the  year  were  at  the  centre  of 
discussions;  information  and  data on the Cohesion  Fund  activities  during the entire three  years 
of  operation  also  made  it  possible  to  discuss  general  questions  relating  to  Fund  priorities,  the 
balance  between  sectors, the socio-economic  impact of financing and employment  effects. 

social  partners 

These  meetings  are  a welcome  possibility  for  the  Fund  management  to  hear the  points  of  view 
of those  who  are.  if  not  directly,  then  at  least  indirectly  involved  in the  projects,  often  as  sub 
contractors, suppliers, consumers or representing the two sides of  industry. 

6.4 

OTHER  INFORMATION  EVENTS 

The  Cohesion  Fund  organised  information  measures  in the  four  Cohesion  countries.  These  are 
set out  in detail  below. 

Training  measures  on  the  Fund  were  organised  jointly  with  the  Commission  Offices  in  the 
Member  States. 

These  measures  are  intended  to  provide  information  on  the  Fund,  such  as  access  to grants  and 
the  provisions  concerning  information  and  publicity.  They  are  also  intended  to  help  those 
responsible  for  projects  to  improve  their  preparation  of  applications  for  aid  to  the  Fund, 
improve  the  financial  management  of the  projects  part-financed  and  so  facilitate  and  speed  up 
the management  of  files. 

*  19.3.1996: Cohesion  Fund  presentation  to EU Heads of Office  in the Member  States 
*  20.3.1996:  Information  and  Publicity  presentation  to Parliament's  Regional  Committee 
*  25-26.4.1996:  Madrid; Cohesion  Fund  presentation  to Spanish  Local  Authorities 
*  21-22.5.1996:  Rhodes; Training  Measure  Programme - UCLAF/Cohesion  Fund 
*  14.6.1996:  Eindhoven,  Conference  on  "Innovative  Financing  opportunities  for  European 

Biodiversity" 

*  28.6.1996:  Information  and  Publicity  Measures  information  meeting  for  Member  States 

Annual report of the Cohesion Fund 1996 

CHAPTER 6 - Interinstitutional dialogue, information  and publicity 

140 

3-4.10.1996: Killarney, Ireland; Training Measure  Programme - UCLAF/Cohesion  Fund 
23-24.10.1996:  Lisbon; Training Measure Programme - UCLAF/Cohesion  Fund 
29.10.1996: Madrid;  Seminar on Information  and  Publicity  measures 
5-6.11.1996:  Oslo;  Seminar  on  EU  Regional  Politics  and  Cohesion  -  Presentation  of  the 
Cohesion  Fund  and Cohesion  policy to the Federation  of Norwegian  Industry. 

6.5 

COMMISSION  PUBLICITY AND INFORMATION  MEASURES 

The  Commission  undertook  several  publicity  measures  of  intended  to  fulfil  the  objectives  of 
the  general  decision  (see  Chapter  1).  In  particular  a  photo-folder  was  published  in  English, 
French  and German  with  introductory descriptions of selected  Cohesion  Fund projects  in all  the 
four  Member  States  concerned  and  in  both  sectors  of  activity  (environment  and  transport 
infrastructure).  This  publication  was given  wide distribution  and  is being  used  as the  "business 
card" of the Cohesion  Fund  in seminars, conferences  and other external  presentations. As  more 
and  more  projects  are  inaugurated  this  publication  will  be  updated  with  new  information;  the 
text  will,  however,  remain  short  and  non-technical,  the  main  emphasis  being  on  the 
photographic  images of projects. 

The  Cohesion  Fund  also  contributed  to other  publications  on Regional  Policy  and  Cohesion 
printed  by  DG  XVI.  The  European  Regional  Development  Fund  edits  a series  of  publications, 
some general  and  some on  specific  themes  of importance to cohesion.  With  its particular  range 
of  eligible  sectors  and  Member  States,  the  Cohesion  Fund  is.included  in  these  publications 
whenever  it has a natural  place and contributes to the subject  discussed. 

The  annual  report  was  published  in  a  convenient  format  and  was  also  summarised  in  the 
Inforegio  series of newsletters edited  by DG XVI-ERDF. 

Ad  hoc  material  is  produced  for  specific  events  such  as  presentations  and  conferences  using 
graphic design  by computer,  audio-visual  material  and printed  matter. 

Annual  report  of  the  Cohesion  I unci  1996 

ISSN 0254-1475 

COM(97) 302 final 

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