Proposal for a Council Regulation (EC) amending Regulation (EC) No 2236/95 laying down general rules for the granting of Community financial aid in the field of trans-European networks
Date: 1998-03-18
Institutions: European Commission
Subjects: EU aid, balance of payments assistance, private sector, public sector, trans-European network

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.03.1998 
COM(1998) 172  final 

98/0101 (SYN) 

Proposal for a 
COUNCIL REGULATION (EC) 

amending Regulation (EC) No 2236/95 laying down general rules 
for the granting of Community financial aid in the field of 
trans-European networks 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

2.  WHY REVISE NOW? 

3.  LEGISLATIVE  ADOPTION  PROCEDURE: 

IMPLICATIONS  OF 

AMSTERDAM TREATY 

3.1.  Co-decision 

. 

._ 

3.2.  Public/private partnerships 

3.3.  Financial aspects 

4.  PROPOSED CHANGES 

4.1. 

Indicative multiannual planning 

4.2.  Forms and amount of Community assistance 

4.3.  Other changes 

5.  COORDINATION OF THE FINANCIAL INSTRUMENTS 

6.  EVALUATION 

7.  ENLARGEMENT 

PROPOSAL FOR A COUNCIL REGULATION (EC) 

FINANCIAL STATEMENT 

3 

3 

3 

4 

4 

4 

5 

6 

6 

7 

8 

9 

9 

10 

11 

11 

EXPLANATORY  MEMORANDUM 

1. 

INTRODUCTION 

The  development  of  trans-European  networks  (TEN)  remains  a  priority  for  the 
Union.  Their  importance  was  first  acknowledged  in  the  Maastricht  Treaty  by 
the insertion  of  a  specific 
the 
section  devoted 
Commission identified  them  in  its  1993  "White  Paper"  as  one  of  the  key 
instruments for  encouraging  growth,  competitiveness  and  employment.  More 
recently, "Agenda 2000" has reaffirmed  their importance and their priority: 

the  subject.  Then 

to 

"The continued development of the Trans-European networks will serve to enhance 
both  sustainable  development  and  the  internal  cohesion  of  the  Union  by  tying 
regions  closer  together.  (...)  TEN  also  have  a  particularly  important  role  to  play 
in creating  new  links  with  the  Central  and  Eastern  European  candidate  countries. 
It is  precisely  the  trans-European  nature  of  the  benefits  from  [TEN]  projects 
which justifies  continued  substantial  contributions  at  the  Union  level  towards 
their realization"1. 

"... certain programmes, which have been given priority because of the value-added 
they  derive  from  Community-level  action,  for  example  in  terms  of  growth, 
employment  and  the  development  and  dissemination  of  new  technologies.  This 
would  essentially  mean  the  trans-European  networks,  research,  education  and 
training,  the  introduction  of  environment-friendly  technologies  and  measures  to 
support SMEs"2. 

In  1995  the  Council  adopted  Regulation  (EC)  No  2236/95  for  the  granting  of 
financial  assistance  to  TEN projects.  The  Regulation  set  out  a financial envelope 
of ECU 2 345 million  for the period  1995 - 1999. 

In the light of the experience gained  so far (cf.  section 6 on evaluation below), the 
Regulation could be improved  in a number of respects. In a preliminary  discussion 
that  the  Commission  had  on  this  subject  with  the  TEN  financial  assistance 
Committee  on  3 November  1997,  the  Member  States  were  broadly  of  the  same 
opinion. The Commission therefore proposes a limited revision. 

2.  WHY REVISE NOW? 

Regulation  (EC)  No  2236/95  for  financial  assistance  for  the  trans-European 
networks (TEN) in the transport, telecommunications  and energy sectors  stipulates 
in  its  Article  19 that  "before  the  end  of  1999,  the  Council,  ...,  decides  if and  in 
which  conditions  the actions  provided  for  by this Regulation  could  be maintained 
beyond  the  period  referred  to  in  Article  18"  (i.e.,  1995-99).  The  Commission 
considers,  for  several  reasons,  that  it  is  appropriate  to  launch  the  revision  of  the 
Regulation now. 

1 
2 

For a stronger  and wider Union,  Part  1, Section  I, sub-section  1, p.  18. 
For a stronger  and wider Union, Part 3, Section II, sub-section  3, p. 64. 

First  of  all,  one  must  take  account  of  the  length  of  the  legislative  procedures. 
A revised  financial  envelope  and  the  multiannual  programming  approach  need  to 
be  in place  in good  time  for  the next  financial  perspectives  period.  This  is all the 
more necessary  as the  election  of the new  European  Parliament  will take place in 
June  1999, with the result that the current Parliament will go into recess in April or 
May  1999  and  that  the  new  Parliament  will  not  be  operational  before 
September 1999. 

Secondly,  bearing  in  mind  the  structural  implications  of  TEN,  there  are  obvious 
advantages in proposing the revision of this Regulation at the same time as those of 
the  Structural  Funds  and  Cohesion  Fund  and  the  creation  of  the  Instrument  for 
Structural  Policies  for Pre-Accession (ISPA). This parallel treatment  should ensure 
consistency  in  a  range  of  areas  and  help  to  strengthen  coordination  between  the 
various financial  instruments which fund TEN. 

3. 

LEGISLATIVE ADOPTION PROCEDURE: IMPLICATIONS OF AMSTERDAM TREATY 

3.1.  Co-decision 

In  accordance  with  Article  129d  of 
European Community,  the  present  proposal 
cooperation procedure. 

the  Treaty  establishing 

the 
is  being  made  under  the 

However,  if  the  Treaty  of  Amsterdam  enters  into  force  before  the  present 
proposal  is adopted,  the co-decision  procedure will  apply (Article  156 of the 
EC Treaty, as renumbered). 

This  would  allow  the  insertion  into  the  Regulation  of  a  privileged financial 
amount on which the Parliament and Council would have agreed. 

3.2.  Public/private partnerships 

The Treaty of Amsterdam amends Article  129c to facilitate  further  the access 
of  the  private  sector  to  Community  funding.  This  will  make  public/private 
partnerships  easier.  This  modification  is  also  of  major  importance  in  the 
telecommunications  and  energy  sectors,  where  the  private  sector  plays 
an  increasingly 
implementation  of  projects  of 
in  the 
common interest. 

important  role 

Clearly, it is not possible to anticipate at this stage the entry into force of the 
Amsterdam Treaty. However,  it is the Commission's intention, as soon as the 
new  Treaty  does  becomes  binding,  to  table  the  necessary  additional 
amendments  which  could  concern 
in  particular  deleting  Article  2.2 
(which would  become redundant) and  amending Articles 8,  12 and  15 to take 
account  of  situations  where  Community  aid  is granted  to  private  companies 
without their requests being processed by the Member States. 

However,  such  modifications  should  not  delay  unduly  the  adoption  of  the 
Regulation,  since  it  is anticipated  that  appropriate  general  arrangements  will 
be made to ensure  an efficient  changeover  to the procedural  requirements  of 
the new Amsterdam  Treaty. The overall  aim should be, as  for  the rest  of the 
Agenda 2000 package, adoption in good time for the new financing period. 

3.3.  Financial aspects 

The TEN financial regulation, as revised by this proposal, will also constitute 
the legal basis for expenditure on TENs in the period 2000-2006. The attached 
financial  statement  provides  an  appraisal  of  financing  requirements  on  the 
TENs in the forthcoming  period. 

As  "Agenda  2000" argues3,  Community  funds  play  a  crucial  role  in  getting 
TEN  projects  off  the  ground  and  resolving  financing  problems.  The  next 
financial period will  see the main  construction phase on many of the priority 
projects  in the transport  sector,  involving  higher overall  spending than in the 
the  Community  essentially  financed 
period  1994-99,  during  which 
preparatory  works.  With  greater  geographical  concentration  of 
the 
Structural Funds (from  50% to 35-40% of population  coverage)  a  significant 
additional burden will fall on the TEN budget line. 

In  the  telecommunications  sector,  the  next  financial  period  will  see  the 
development  of  new  types  of  services  and  applications,  e.g.,  Internet-based 
applications,  satellite-based  systems  and  broadband  mobile  communications. 
These will  also accelerate the development  of new markets and  stimulate the 
in  1997, 
climate  for 
TEN-Telecoms projects can now be started on a larger scale which assures the 
necessary impact. 

the  new  guidelines  adopted 

investment.  With 

In the energy sector also, the next  financial  period will see the completion of 
the  studies  and  the  main  construction  phase  of  most  of  the  projects 
of common  interest  so  far  identified.  At  the  same  time,  new  projects  will 
be launched. 

With  regard  to  the  new  financial  perspective,  "Agenda  2000" proposes  that 
TEN  be  considered  as  one  of  the  priority  programmes  for  which  allocation 
may be increased faster than GNP growth. 

The inter-institutional  declaration of 6 March  1995 foresees  the inclusion of a 
financial  envelope in a regulation only in cases of co-decision procedure. This 
proposed regulation, which begins  under the cooperation  procedure, does not 
therefore  include  a  financial  envelope.  The  Commission  will  propose  the 
inclusion  of  one  as  soon  as  the  Amsterdam  Treaty  is  ratified,  based  on  the 
figures set out in the attached financial  statement. 

For a stronger and wider Union, Part  1, Section I, sub-section  1, p. 18. 

5 

4. 

P R O P O S ED  C H A N G ES 

One  of  the  major  aims  of  this  revision  is  to  profit  from  the  experience  that  the 
Commission, the Member  States and the private operators have gained to improve, 
simplify  and adapt the operation of the Regulation where necessary. 

4.1.  Indicative multiannual planning 

In the light of this experience the Commission  considers that there is a good 
case for developing a more multiannual  approach, notably by introducing the 
concept  of  indicative  multiannual  programmes.  This  possibility  would  be 
additional to that of financing  individual projects. 

The projects  financed  by the TENs budget, especially for transport, tend to be 
large  scale  and  long-term.  In  contrast,  the  procedures  for  allocating  funding 
under  the  TENs  budget  are  essentially  annual  in  character.  National 
authorities  in  charge  of  infrastructure  planning  have  regularly  expressed  the 
wish to have a medium-term view of Community financing. This is even more 
important for projects financed by the private sector, or through public-private 
partnerships,  since  establishing  financial  packages  for  such  projects  requires 
firm undertakings  from  all  participants.  The  level  of  Community  budgetary 
appropriations  is decided  on an annual  basis. This makes it more difficult  for 
the  Community  to play  a more  active role,  alongside  the  EIB,  in  innovative 
financing  arrangements for TENs projects, involving the private sector. 

Against  this  background,  some  changes  to  the  Regulation  are  proposed  in 
order  to  facilitate  a  more  genuine  multiannual  approach  to  financing 
decisions, while respecting the annual budgetary procedures: 

(1) 

(2) 

(3) 

It  is  proposed  to  include  provisions  for  a  "multiannual  indicative 
programme", the purpose of which would be to give a clear indication 
of  planned  spending  on  major  projects,  and  on  other  significant 
categories  of  projects  (e.g.  traffic  management,  global  navigation 
systems  etc.).  The  programme  would  be  approved  by  the  TEN 
Committee  under  Article  17,  and  would  provide  authority  for  the 
Commission  to  take  decisions  on  proposals  in  respect  of  the  major 
projects  for  which  there  is  an  allocation  in  the  programme.  It  would 
thus  be  possible  to  manage  the  Community  financial  support  for  a 
project  as  a  single  multiannual  allocation,  rather  than  as  a  series  of 
annual  project  proposals. All  other financing requests  would  continue 
to be approved by the TEN Committee as at present. 

In  appropriate  cases,  it  should  be  possible  to  treat  budgetary 
commitments  for  long-term  projects  with high  financing  requirements 
in  the  same  way  as  under  the  Structural  Funds,  which  means  annual 
tranches of commitments, based on the initial Commission decision to 
finance  the project. 

As already explained in points 3.1 and 3.2 above, it is possible that this 
proposal  will  be  adopted  by  co-decision  in  the  final  stage  of  the 
procedure.  In  this  case  the  revised  Regulation  would,  when  adopted, 

include  a privileged financial envelope,  endorsed  by  the two  arms of 
the budget  authority.  This would provide  essential  reassurance  on the 
availability  of  finance  over  the  time  period  of  the  new  financial 
perspective, and thus facilitate multiannual programming. 

of 

Taken  together,  these  changes  should  improve  the  efficiency  of  the 
functioning 
a  coherent 
multiannual approach to planning, and by making it easier for the Community 
to  take  an active  role  in  the  development  of  financial  packages  for 
public-private partnerships. 

the  TENs  programme,  by 

allowing 

introduce  multiannual  programming, 

To 
the  Commission  proposes 
introducing  a new  Article  5(a)  into  the  current  Regulation  (see Article  1.4). 
This  in  turn  requires  amending  a  certain  number  of  other  related  Articles: 
Article  1.6  (Article  10: granting  of  financial  aid),  Article  1.7  (Articles  11.3 
and  11.4:  financial  provisions),  Article  1.10  (Article  14:  coordination)  and 
Article 1.11 (Article  15.4: appraisal, monitoring and evaluation). 

4.2.  Forms and amount of Community assistance 

The Commission, the Member States and private-sector promoters have, since 
September  1995,  been  involved  with  1 145  requests  for  support  totalling 
ECU 3 232  million.  The  Commission  and  the  Committee  have  approved 
448 grants for  ECU 982.5 million4. In the light of this experience, and in the 
light  of  the  recommendations  of  the  High-level  Working  Group,  under  the 
chairmanship  of  Mr.  Kinnock,  on  public/private  partnerships  and  of 
"Agenda 2000",  the  Commission  proposes  the  following  changes  as regards 
the form of financial  assistance to be given under this Regulation: 

(1)  Article 4.1.a: this would allow the Commission to undertake studies of 
an overall  strategic  nature  and  therefore  not  connected  with  a  specific 
project  and  to  finance  100% studies  undertaken  on  its  own  initiative 
(Article  1.7). 

(2)  Article 4.1.b: this would remove the five-year limitation with regard to 
interest rate subsidies. Projects'  cash flow  problems can go beyond the 
construction  period,  when  debt  builds  up  extending  into  the  early 
operation  stage  when  traffic  and  revenues  slowly  start  to  grow.  This 
was highlighted by the High-level Group on public/private  partnerships 
in transport. As this period, together with the construction  period, may 
easily  last more than seven years, it  is desirable to delete the five-year 
limit  to  interest  rate  subsidies  in  order  to  allow  such  subsidies  in  the 
period  when  they  are  most  needed,  thus  helping  establish  appropriate 
financial packages for specific projects (Article 1.2). 

It  should  be  recalled  that  in  the  energy  anH  telecommunication  sectors  Community  aid  has  been 
limited until now to studies. 

7 

(3)  Article  4.1.(e)  and  11.8:  this  would  allow  Community  support  in  the 
form  of  grants  or  risk-capital  participation  in  investment  funds  or 
comparable  financial  undertakings  with  a  priority  focus  on  providing 
risk capital  for TEN projects. This need was highlighted by the work of 
the  High-level  Working  Group  on  public/private  partnerships  in 
transport, whose conclusions were fully  endorsed by the Commission in 
a  Communication  in  September  19975 and  were then  approved  by the 
Transport  Council  of  Ministers  in  October  1997.  The  availability  of 
such  funds  in  Europe  is  at  present  very  limited  and  their  emergence 
needs  to be  encouraged  if TEN  projects  are to be  developed  as PPPs. 
The aim  would  be  to  use  limited  amounts  of public  resources  to help 
stimulate  development  of  such  risk-capital  investments  which have an 
important role to play in allowing PPPs to tap the considerable pool of 
long-term  private  investment  funds.  For  reasons  of  efficiency  and 
cost-effectiveness»  it  is  best  to  use  investment  funds  or  comparable 
financial  undertakings  with  a  focus  on  providing  risk  capital  for 
TEN projects (Articles 1.2 and 1.7(d)). 

(4)  A  new  Article  4.3  is  introduced,  setting  out  the  principle  that  in  a 
situation  where  public  funding  will  be  limited,  it  is  necessary  to 
increase the multiplier effect  of the Community's  financial  instruments, 
in particular by recourse to public/private partnerships (Article  1.2). 

(5)  Article  5.3: At present the Regulation  limits Community  aid under the 
Regulation to  10% of the total investment cost. Such a limit is normally 
appropriate  given  the  catalytic  role  of  the  TEN  budget.  However,  in 
some  cases  -  cross-border  missing-links  are  an  example  -  the  broad 
trans-European  interest  and  network  advantage  could  be  demonstrably 
so high as to justify  a maximum  rate of Community  aid of 20% of the 
total  investment  cost.  This  would  cover projects  in  one Member  State 
the benefits  of  which  accrue  mainly  to  other  Member States.  Projects 
with  an  important  environmental  dimension  should  also  benefit  from 
this  higher  rate  of  Community  aid.  The  Commission  proposes  to 
modify Article 5.3 accordingly (Article  1.3). 

4.3.  Other changes 

The  current  TEN  Regulation  was  adopted  before  the  implementation  of  the 
"SEM  (Sound  and  Efficient  Management)  2000" programme.  It is necessary 
therefore  to  amend  certain  Articles  on  financial  provisions,  evaluation, 
monitoring,  follow-up,  etc.,  all  the  while  taking  into  account  the  specific 
nature of TEN. 

The  transitional  clause  in  Article  3  is  no  longer  necessary  and  is  deleted 
(Article  1.1). 

COM(97) 453. 

Article  16 relating to information  and to publicity is amended to align it with 
practice  in  the  Structural  Funds  and  the  Cohesion  Fund  (Article  1.12)  by 
specifying the need to erect display panels, use the Community logo, etc. 

Article  8  (Submission  of  applications  for  financial  aid)  is  amended 
concerning  the  agreement  of  Member  States  in  relation  to  applications 
introduced by the private sector (Article 1.5). 

5. 

COORDINATION OF THE FINANCIAL  INSTRUMENTS 

"Agenda 2000" stressed  the need  for  greater coordination  between  the TEN 
financial  instruments.  The  Commission  considers  that  the  introduction  of 
indicative  multiannual  programmes  into this  Regulation,  in connection  with 
the  overall  strategies  which  will  be  developed  within  the framework of the 
inter  alia,  Articles  14  and  15  of  the  draft 
Structural  Funds  (cf., 
General Provisions),  of  the  Cohesion Fund  (cf.  Article  1.3)  and  of  ISPA 
(cf.  Article 1.3) constitutes an useful  step in this direction. Further progress in 
improving coordination  is in part  a matter  for the  internal  procedures  of the 
Commission,  but  also  requires  the  cooperation  of  Member  States,  since 
infrastructure  planning remains primarily a national  responsibility. 

One particular area where there is a parallel  is the application of the polluter 
pays principle to transport, where, as with the Cohesion Fund, this principle 
can  only  be  applied  in  the  context  of  a  Community  framework  setting 
out guidelines. 

6. 

EVALUATION 

SEM  2000  underlines  the  importance  of  evaluation  of  all  Commission 
proposals.  As far  as  TEN  are  concerned,  individual  projects  funded  by  the 
Community  under Regulation  (EC)  No  2236/95  are  subject  to  on-going 
monitoring  and  evaluation.  The evaluation  of  the  impact  of  the  TEN 
programme  as  a  whole,  however,  will  not  be  possible  for  some  time,  the 
Regulation having been adopted only in September 1995. 

A first series of mid-term  evaluation  studies at the level of the actual projects 
are  being  undertaken;  the  scale  of  this  work  varies  from  one  sector  to  the 
other.  Initial  results  will  be  known  by  the  end  of  1998.  The  Commission 
hopes  that  these  results,  combined  with  the  findings  of  more  detailed 
on-going evaluation studies, will make it possible to set up specific  indicators 
to evaluate the programmes' impact. 

In addition, with  a view to the revision  of Regulation  (EC) No 2236/95, the 
Commission  services  have  produced  a  short  assessment  report  of  how  the 
Regulation has worked  so far,  in particular at the level of procedures6. These 
assessments draw on the practical  experience gained by the Commission, the 
Member States and private operators over the past three years. 

"Report  on the functioning  of the TEN financial  regulation  1995-97' 

9 

It  should  also  be  remembered  that  the  adequacy  of  the  existing  financial 
instruments  and  the  problems  holding  back  the  emergence  of  public/private 
partnerships in the transport sector were the subject  of detailed discussions in 
1996-97 by the Kinnock High-level  Group, comprising representatives of the 
Ministers  of  Transport  of  the  Member  States  plus  representatives  of  the 
private  sector  (financial  institutions, construction  companies, railways, etc.)7 
as well as the Commission, the EIB and the EIF. 

7. 

ENLARGEMENT 

Enlargement  of  the  Union  will  entail  a  further  revision  of  the  Regulation. 
This however cannot be anticipated at this stage. 

The  current  Regulation  already  permits  the  financing  of  links  with  third 
countries. With  a view  to enlargement  these provisions  should  now be used 
more  fully,  in  close  collaboration  with  PJriARE  and  ISPA.  Some  of  these 
links  of  particularly  clear  trans-European  importance  could  be  eligible  for 
financial  support of up to 20% of their total investment costs. 

7  VII/321/97, May  1997. 

10 

Proposal for a 
COUNCIL REGULATION (EC) 

amending Regulation (EC) No 2236/95 laying down general rules 
for the granting of Community financial aid in the field of 
trans-European  networks 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing  the European  Community,  and in particular the 
third paragraph of Article  129d thereof, 

Having regard to the proposal from the Commission8, 

Having regard to the opinion of the Economical and Social Committee9, 

Having regard to the opinion of the Committee of the Regions10, 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty,  in 
cooperation with the European Parliament1 ', 

(1)  Whereas experience with the application  of Council Regulation  (EC) No 2236/9512 

has demonstrated that a number of amendments need to be made thereto; 

(2)  Whereas  Community  financial  participation  provided  for  under  that  Regulation 
may  exceed  the  limit  of  50%  for  studies  undertaken  on  the  initiative  of  the 
Commission;  whereas  it  is necessary  to  facilitate  the financing of certain  projects 
by  including,  among  the  possible  forms  of  aid,  contributions  to  the  formation 
of risk capital;  whereas  it  is  desirable  to  use  the  financial  resources  provided 
under Regulation  (EC)  No  2236/95  in  order  to  maximize  the  contribution  from 
private finance; 

(3)  Whereas provision should be made so that certain projects related to more than one 
Member  State,  or  contributing  strongly  to  the  broader  trans-European  interest, 
including  those  with  an  important  environmental  dimension,  may  receive  an 
increased level of support; 

8  OJ 
9  OJ 
10  OJ 
11  OJ 
12  OJ L 228, 23.9.1995, p.  1. 

11 

(4)  Whereas  it  is desirable,  in order to increase transparency  and to meet  expectations 
for  projects  or  groups  of  projects  having  important  financial  needs  for  a  long 
period, that indicative multiannual  programmes in  specific  sectors or fields  should 
be  drawn  up;  whereas  those  programmes  should  indicate  the  total  amount  of 
support  which  could  be allocated  for  a given period  to  such projects  or  groups of 
projects, and decisions should be taken to grant financial  aid when they conform to 
the relevant indicative multiannual programmes; 

(5)  Whereas  it is  necessary  to  specify  that  bodies  directly  concerned  with  projects  or 
groups  of  projects  and  submitting  applications  for  financial  aid,  if  they  are 
enterprises,  may  be either  public  or private; whereas  it  is necessary  to specify  the 
date by which  the agreement  of  the  Member  State(s)  concerned  on an  application 
submitted under the Regulation is to reach the Commission; 

(6)  Whereas  projects  or  groups  of  projects  should  be  able to  benefit  from  successive 

financial  assistance decisions; 

(7)  Whereas financial aids  granted  should  be  cancelled  if the  actions  concerned  have 

not been started by a given date; 

(8)  Whereas it is necessary  to  include the activities  of the European  Investment  Fund 
instruments  with  which  action  under 

among 
Regulation (EC) No 2236/95 is required to he coordinated; 

the  Community 

financial 

(9)  Whereas  the  Commission  should  be  able  to  require  beneficiaries  to  provide 
evaluations  of  projects  supported  under  Regulation  (EC)  No  2236/95  or  the 
necessary information  to allow the Commission to undertake its own evaluation; 

(10)  Whereas  it  is  necessary  to  specify  the  manner  in  which  beneficiaries  should 

publicize Community contributions; 

(11)  Whereas, 

throughout 

to 
31 December 2001,  all  references  to  the  euro  should  be  read  as  references  to  the 
euro  as  a  monetary  unit  as  referred  to  in  Council  Regulation  (EC)  No  .../98  of 

from  1  January  1999 

transitional  period 

the 

1998 [on the introduction of the euro] '3, 

(12)  Whereas Regulation (EC) No 2236/95 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 2236/95 is hereby amended as follows: 

1.  Article 3 is deleted. 

2.  Article 4 is replaced by the following: 

13  OJL 

12 

"Article 4 
Forms of aid 

1.  Community aid for projects may take one or several of the following  forms: 

(a) 

co-financing  of  studies  related  to  projects,  including  preparatory, 
feasibility  and evaluation  studies, and other technical  support measures 
for these studies. 

Community  participation  may  in  general  not  exceed  50% of  the  total 
cost of a study. 

In exceptional,  cases, at the  initiative of the Commission  and with the 
consent of the Member States concerned, Community participation may 
exceed  the  limit  of  50%,  in  particular  for  studies  undertaken  at  the 
initiative of the Commission; 

subsidies  of the  interest  on  loans  granted  by the  European  Investment 
Bank or other public or private financial bodies; 

contributions 
European Investment Fund or other financial  institutions; 

for  guarantees  for 

towards  fees 

loans  from 

the 

(b) 

(c) 

(d)  direct grants to investments in duly justified cases; 

(e)  grants or risk-capital  participation,  for  investment  funds  or comparable 
financial  undertakings with a priority  focus on providing risk capital for 
trans-European network  projects; 

(f)  Community  assistance under points (a) to (d) shall be combined where 
appropriate,  in  order  to  maximize  the  stimulus  provided  by  the 
budgetary  resources  deployed,  which  shall  be  used  in  the  most 
economical way. 

The forms of Community  aid referred  to under points (a) to (e) shall be used 
selectively to take account of the specific  characteristics  of the various types 
of network involved  and to ensure that such aid does not cause distortions of 
competition between undertakings in the sector concerned. 

The Commission  shall seek to maximize the multiplier effect  of the  financial 
resources  provided  for  by  this  Regulation  by  promoting  recourse  to  private 
sources of financing." 

2. 

3. 

The following subparagraph  is added to Article 5(3): 

"However  in  the  case  of  projects  related  to  more  than  one  Member  State,  or 
contributing strongly to the broader trans-European  interest, including those having 
an important  environmental  dimension,  the total  amount  of Community  aid  under 
this Regulation may reach 20% of the total investment cost". 

13 

4. 

The following Article 5a is inserted: 

"Article 5a 
Indicative multiannual programme 

1.  Without prejudice  to the application  of Article 6 and in order to improve the 
efficiency  of  the  Community's  action,  the  Commission  may,  in  accordance 
with  the  procedure  set  out  in  Article  17,  elaborate  by  sector  an indicative 
multiannual  programme  for  granting  financial  resources  (hereinafter  called 
"programme") on the basis of the guidelines referred  to in Article 129c of the 
Treaty.  The  programme  shall  reflect  inter  alia  information  provided  by 
Member States. 

2.  A  programme  may  be  composed  of  projects  of  common  interest  and/or 
coherent  groups  of  projects  of  common  interest  in  specific  fields  having 
substantial financial needs over a long period. 

3. 

4. 

For  each  project  or  group  of  projects  referred  to  in  paragraph  2  the 
Commission  shall establish the indicative global amounts  for the granting of 
financial  aid for the programme's time-period. 

The programme shall  serve as a reference  for the annual decisions  allocating 
the  Community  financial  resources  set  out  in  this  Regulation.  It  shall  be 
revised at mid-term or in the light of the effective  progress of the project(s) or 
group(s)  of projects,  in  accordance  with  the procedure  set  out  in  Article  17. 
The programme shall also give an indication of other sources of financing  for 
the projects  concerned,  in particular  from  other Community  instruments and 
the European Investment Bank." 

5.  Article 8 is replaced by the following: 

"Article 8 
Submission of applications for financial aid 

Applications  for  financial  aid  shall  be  submitted  to  the  Commission  by  the 
Member State(s) concerned  or, with the agreement  of the Member  State(s), by the 
public  or private  undertakings  or body  directly  concerned.  The  Commission  shall 
take note  of the  agreement  of the Member  State(s)  concerned  no  later than in the 
course of the procedure set out in Article  17". 

6.  Article 10 is replaced by the following: 

"Article 10 
Grant of financial aid 

The Commission shall decide to grant financial  aid under this Regulation  according 
to its assessment  of the application  in accordance  with  the selection  criteria. With 
the exception  of decisions concerning  projects  identified  in the relevant  indicative 
multiannual  programme  established  pursuant  to  Article  5a,  and  within  the 
indicative  financial  allocations  provided  for  in that programme,  decisions to grant 

14 

aid  shall  be  taken  in  accordance  with  the  procedure  specified  in  Article  17.  The 
Commission  shall  notify  its  decision  directly  to  the  beneficiaries  and  to  the 
Member States". 

7. 

Article  11 is amended as  follows: 

(a)  Paragraph 3 is replaced by the  following: 

"3.  Budgetary commitments shall be carried out on the basis of decisions to 
grant  aid  taken  by  the  Commission.  The  commitment  of  the  total 
amount of aid shall  be made when the Commission  adopts the decision 
to grant aid". 

(b)  A new paragraph 3a is inserted as follows: 

"3a.  Notwithstanding  the  provisions  of  paragraph  3,  for  interventions  for 
which  the  responsible  authority  is  a  Member  State,  whose  duration  is 
equal  to  or  greater  than  two  years  and  for  which  Community  aid 
exceeds  ECU  25  million,  commitments  shall  be  made  annually.  The 
first  commitment  shall  be  made  when  the  Commission  adopts  the 
decision  granting  financial  aid.  Commitments  in respect  of  subsequent 
annual  instalments  shall  be  based  on  the  initial  or  revised  financing 
plan for the project and shall normally be made at the beginning of each 
budget year and no  later than  1 March of the current year, based on the 
expenditure forecasts  for the project for that year." 

(c)  Paragraph 7 is replaced by the  following: 

"7.  The  Commission  shall  determine,  following  the  procedures  set  out  in 
Article  17,  the  procedures,  timetable  and  amounts  for  payments  of 
interest-rate  subsidies,  guarantee  premium  subsidies  and support  in the 
form  of  grants  or  risk  capital  participation,  for  investment  funds  or 
comparable  financial  undertakings  with  a  priority  focus  on  providing 
risk capital for trans-European network projects". 

8. 

The introductory phrase to Article  12(1 ) is replaced by the  following: 

"In  order  to  guarantee  successful  completion  of  projects  financed  by  this 
Regulation,  Member  States  and  the  Commission,  each  in  its  field  of  competence, 
shall take the necessary measures to:"; 

9. 

In Article  13, the following  paragraph 2a is inserted: 

"2a.  Except  in  cases  duly  justified  to  the  Commission,  aids  granted  to  projects 
which  have  not  started  within  two  years  following  the  date  of their expected 
start,  as  indicated  in  the  decision  granting  assistance,  will  be  cancelled  by 
the Commission". 

10.  Article  14 is replaced by the  following: 

15 

"Article 14 
Coordination 

The Commission  shall  be responsible  for  coordination  and  coherence between the 
projects  and,  where  necessary,  the  programmes  referred  to  in  Article  5a(l), 
undertaken  under  this  Regulation  and  projects  undertaken  with  the  help  of 
contributions  from  the  Community  budget,  the  European  Investment  Bank,  the 
European Investment Fund and other Community financial instruments". 

11.  Article  15 is replaced by the following: 

"Article 15 
Appraisal, monitoring and evaluation 

1. 

2. 

The Member States and the Commission  shall ensure that the implementation 
of  projects  under  this  Regulation  is  subject  to  effective  monitoring  and 
evaluation.  Projects  may  be  adapted  according 
to  monitoring  and 
evaluation results. 

to  ensure 

that  Community  aid 

the 
In  order 
Commission and  the Member  States  concerned  shall  systematically  monitor 
progress  with projects,  where  appropriate  with  the  cooperation  of  the 
European Investment Bank or other appropriate bodies. 

is  used  efficiently, 

3.  On receipt of an application for aid, and before approving it, the Commission 
shall carry out an appraisal in order to assess the project's conformity with the 
conditions  and  criteria  laid  down  in  Articles  5 and  6.  Where  necessary,  the 
Commission  shall invite the European  Investment Bank or other  appropriate 
bodies to contribute to this appraisal. 

4. 

The Commission and the Member States shall assess the manner in which the 
projects and the programmes have been carried out and evaluate the impact of 
their  implementation,  in  order  to  assess  whether  the  original  objectives  can 
be, or have been, achieved. This evaluation shall, inter alia, cover the impact 
of projects  on the environment,  regard  being  had to the Community  laws in 
force. The Commission may also require the beneficiary  to provide a specific 
evaluation on projects or groups of projects  supported under this Regulation, 
or to provide  it with  the information  and  the assistance required  to  evaluate 
such projects. 

5.  Monitoring  shall be carried  out, where  appropriate, by  reference  to  physical 
and financial  indicators. The indicators shall relate to the specific character of 
the  projects  and  its  objectives.  They  shall  be  arranged  in  such  a  way  as 
to show: 

the  stage  of  the  project  reached  in  relation  to  the  plan  and  the 
operational objectives originally laid down, 

the  progress  achieved  on 
related problems. 

16 

the  management 

side  and  any 

6. 

7. 

In  vetting  individual  applications  for  assistance,  the  Commission  shall  take 
into  account  the  findings  of  appraisals  and  evaluations  made  in  accordance 
with this Article. 

Procedures  for evaluation  and monitoring,  as provided  in paragraphs 4  and 5, 
shall  be  established  in  the  Decisions  approving  the  projects  and/or  in  the 
contractual provisions relating to the financial aid. 

12.  The second sentence of Article  16(2) is replaced by the  following: 

"They  shall  ensure,  in  particular  in  the  case  of  infrastructure  works,  that  directly 
visible  display  panels  are erected  bearing  the  Community  logo  and the  expression 
"Trans-European  networks".  In  the  case  of  studies  and/or  any  other  documents 
concerning a project, they shall ensure that they carry the Community logo". 

13.  Throughout the text, "ecu" is replaced by "euro". 

This  Regulation  shall  enter  into  force  on  the  twentieth  day  following  that  of  its 
publication in the Official Journal of the European  Communities. 

Article 2 

Point 13 of Article  1 shall apply from  1 January  1999. 

This  Regulation  shall  be  binding 
Member States. 

in  its  entirety  and  directly  applicable 

in  all 

Done at Brussels, 

For the Council 
The President 

17 

FINANCIAL STATEMENT 

18 

21 

21 

21 

21 

21 

.22 

22 

22 

22 

22 

23 

23 

23 

24 

24 

...25 

25 

25 

26 

26 

26 

1.  TITLE OF OPERATION 

2.  BUDGET HEADINGS CONCERNED 

3.  LEGAL BASIS 

4.  BUDGETARY CHARACTERISTICS 

4.1.  Classification of Expenditure, FP Heading 

4.2.  Period covered by the Operation and Arrangements for Renewal 

5.  NEED  FOR  COMMUNITY  INTERVENTION  AND  OBJECTIVES 

PURSUED 

5.1.  General..... 

'...*... 

5.1.1.  Justification 

5.1.2.  Objectives 

5.2.  Transport 

5.2.1.  Justification 

5.2.2.  Objectives 

5.3.  Telecommunications 

5.3.1.  Justification 

5.3.2.  Objectives 

5.4.  Energy 

5.4.1.  Justification 

5.4.2.  Objectives 

6.  ACTIVITIES ENVISAGED AND BUDGETARY ARRANGEMENTS.... 

6.1  General 

19 

6.1.1.  Regulation (EC) No 2236/95 

6.1.2.  Main Features of the new Proposal for a Regulation 

6.2.  Transport 

6.2.1.  Activities 

6.2.2.  Budgetary Arrangements 

6.3.  Telecommunications 

6.3.1.  Activities 

6.3.2.  Budgetary Arrangements 

6.4.  Energy 

6.4.1.  Activities 

6.4.2.  Budgetary Arrangements 

7.  FINANCIAL IMPLICATIONS 

7.1. 

Indicative Planning of TEN Appropriations 

7.2.  B5-700: TEN - Transport 

7.3.  B5-710: TEN-Energy... 

7.4.  B5-720: TEN - Telecommunications 

8.  MONITORING AND EVALUATION 

8.1.  Monitoring and Evaluation: General 

8.2.  Monitoring and Evaluation: Transport 

8.3.  Monitoring and Evaluation: Telecommunications 

8.4.  Monitoring and Evaluation: Energy 

9.  FRAUD-CONTROL MEASURES 

10.  ADMINISTRATIVE EXPENDITURE 

10.1.  Transport 

10.2.  Telecommunications 

10.3  Energy 

20 

26 

27 

27 

27 

28 

29 

29 

30 

31 

31 

32 

33 

33 

34 

35 

36 

37 

37 

37 

39 

40 

41 

42 

42 

43 

44 

1.  TITLE OF OPERATION 

Trans-European Networks (TENs). 

2. 

BUDGET HEADINGS CONCERNED 

B5-700: TEN - Transport 

B5-710: TEN-Energy 

B5-720: TEN - Telecommunications 

3. 

LEGAL BASIS 

Articles 129b, c and d of the Treaty on European Union. 

Parliament  and  Council  Decision  No  1254/96/EC  of  5  June  1996  laying  down  a 
series  of  guidelines  for  trans-European  energy  networks  (OJ  L  161,  29.6.1996 
p.  147),  as  last  amended  by  Parliament  and  Council  Decision  No  1047/97/EC  of 
29 May 1997. 

Parliament  and  Council  Decision  No  1692/96/EC of  23 July  1996 on  Community 
guidelines for the development of the trans- European transport network. 

Parliament  and Council  Decision  No 2717/95/EC of 9 November  1995 on  a set of 
guidelines  for  the  development  of  the  Euro-ISDN  (Integrated  Services  Digital 
Network) as a trans-European  network. 

Parliament  and  Council  Decision  No  1336/97/EC  of  17 June  1997  on  a  series  of 
guidelines for trans-European telecommunications networks. 

Council  Regulation  (EC) No  2236/95  of  18 September  1995  laying  down  general 
rules  for  the  granting  of  Community  financial  aid  in  the  field  of  trans-European 
networks. 

Proposal  for  a Regulation  (EC) amending  Council  Regulation  (EC) No  2236/95 of 
18  September  1995  laying  down  general  rules  for  the  granting  of  Community 
financial aid in the field of trans-European networks. 

4. 

BUDGETARY  CHARACTERISTICS 

4.1.  Classification  of Expenditure, FP Heading 

NCE, DA, FP Heading: 3 

21 

4.2.  Period covered by the Operation and Arrangements for Renewal: 

The budgetary resources proposed  for the implementation  of this proposal  for 
a Regulation cover the period 2000-2006. 

The Commission will submit an evaluation of the results in good time so as to 
establish the financial  implications of a possible extension beyond 2006. 

5.  NEED FOR COMMUNITY INTERVENTION AND OBJECTIVES PURSUED 

5.1.  General 

5.1.1.  Justification 

The  effective  and  harmonious  operation  of  the  internal  market,  the 
strengthening of economic and social cohesion, and the development 
of  communications  and  trade  with  neighbouring  countries,  in 
particular  the  applicant  countries,  are  hindered  by  the  lack  of 
interconnection  and  interoperability  between  the  national  transport, 
telecommunications and energy networks. 

In  order  to  realize  transport, 
telecommunications  and  energy 
networks on a continental scale that are adapted to the internal market 
and  the  needs  of  European  industry,  it  is  necessary,  at  Community 
level, to enhance and coordinate the efforts  of the Member States and 
the  private  sector.  There  is  no  alternative  which  would  make  it 
possible  to  achieve  the  same  objectives  at  another 
level  of 
responsibility. 

As  indicated  in  the  communication  on  "Community  policies  in 
support  of  employment"14,  Tl:Ns  have  an  important  role  to  play  in 
medium-term  employment  strategy  since  they  are  essential  for  the 
EU's  competitiveness  and  hence  for  long-term  growth  and  the 
creation of lasting jobs. 

Last but not least, "Agenda 2000" indicates that TENs have a priority 
role  in  the  context  of  the  internal  policies  on  account  of  their 
value added  in  terms  of  growth,  employment  and  the  dissemination 
of technologies. 

5.1.2.  Objectives 

Action  by  the  Union  with  regard  TENs  is  aimed  at  promoting  the 
interconnection  and  interoperability  of  national  networks  as  well  as 
access to such networks. It takes account in particular  of the need to 
link island, landlocked and peripheral regions with the central regions 
of the Union. To achieve these objectives,  the Union  has  established 
guidelines identifying  projects of common interest. 

14  SGC(97)2I68. 

22 

5.2.  Transport 

5.2.1.  Justification 

1. 

The  benefits  deriving  from  the  realization  of  an  efficient  and  safe  transport 
network  are greater  than just  the benefits  for  the transport  sector  alone, since 
they contribute to the achievement of the objectives of the internal market and 
economic  and  social  cohesion.  In  addition,  as  indicated  in  Agenda  2000, the 
role of TEN-transport is important for the creation of new links with the Central 
and Eastern European applicant countries. 

2.  Action  by  the  Community  is justified  mainly  in  the  case  of projects  that  are 
potentially  economically  viable  but  for  which  the  financial  profitability  is 
deemed  insufficient  (Article 6(2).  It  is  also  based  on  the  need  to  act  as  a 
springboard to other funds, such as EIB loans. 

3. 

The prior definition  and identification of the risks of a project remain one of the 
main  activities:  that  is  the  purpose  of  the  feasibility  studies  and  support 
measures  (e.g. excavation  of an  exploration  level  for  a tunnel).  However,  the 
Community  also does  a great  deal  to  coordinate  and  stimulate  Euro-regional 
projects that are the responsibility of several Member States. 

4.  As indicated  by the October  1997 Transport  Council,  and  following  the final 
report  of  the  high-level  group  on  public-private  partnership  financing  of 
trans-European transport network projects, the priority for the Member States is 
to identify  suitable  projects  for  public-private  partnerships  (PPPs)  in order to 
speed up the completion of the network. The Commission, the EIB and the EIF 
will,  in  this  connection,  help  the  Member  States  set  up  such  PPPs  as  soon 
as possible. 

5.2.2.  Objectives 

In  accordance  with  the  Community  guidelines  for  the  development  of  the 
trans-European  transport  network,  financial  support  will  be  channelled  in 
particular to specific projects pursuing the following  objectives: 

(i) 

development  of connections,  key  links  and  interconnections  needed  to 
eliminate  bottlenecks,  fill  in  missing  sections  and  complete  major 
routes. Example - HST Rhine-Rhone, high-speed train in Denmark, rail 
link Verona-Florence; 

(ii)  development of access to the network making it possible to link island, 
landlocked  and  peripheral  regions  with  the  central  regions  of  the 
Community.  Example -  measures  to  improve  air  traffic  management 
systems, Madeira/Azores; 

(iii)  optimum  combination  and  integration  of  the  various  modes  of 
transport. Example - new Berlin Airport (including access roads); 

23 

(iv)  gradual  achievement  of  interoperability  of  network  components; 
Example - HST - South of France - Spain (introduction of the European 
Rail Traffic  Management System (ERTMS) on the Spanish network); 

(v)  optimization  of  the  capacity  and  efficiency  of  existing  infrastructure. 
Example  -  various  road  traffic  management  measures  in  order  to 
improve  traffic; 

(vi)  establishment  and 

interconnection  points  and 
intermodal platforms.  Example - feasibility  studies  for  the new port of 
Vuosaari (Finland); 

improvement  of 

(vii)  improved  safety  and  network  reliability.  Example-  measures  to 

improve shipping; 

(viii)  taking  the  environment  into  account  in  the  implementation  and 
link 

the  network.  Example-  ôresund 

fixed 

development  of 
(Denmark, Sweden); 

(ix) 

the development and establishment  of systems  for the management and 
control  of  network  traffic  and  user  information  with  a  view  to 
optimizing use of the  infrastructures; 

(x) 

studies  contributing  to  improved  design  and  better  implementation  of 
the trans-European transport network. 

5.3.  Telecommunications 

5.3.1.  Justification 

TEN-Telecom  is  a  deployment  programme.  It  provides  selective 
the  continuous 
financial  support 
development  of  the  telecommunications  sector  with  a  view  to 
offering  new  telecommunications  services  and  applications  meeting 
the needs of professional  and private users. 

to  promote 

initiatives 

for 

Similar  initiatives  to promote  the information  society  are under way 
in  the  United  States  and  Japan  with  the  same  aim.  However,  in 
Europe  in particular,  where the markets  are still  fragmented,  private 
enterprise - which  should  remain  the main  vehicle  for  investment  in 
this area - often has difficulties  with launching new services. 

The  Community's  role  is  to  give  political  backing  and  contribute 
financially 
the  development  of 
fashion 
telecommunications TENs. 

targeted 

in  a 

to 

The  Community  plays  a  catalytic  role  to  ensure  that  projects  of 
common  interest  can  achieve  a  critical  size.  By  giving  a  boost  at 
European  level, it makes  it possible  to reduce the  risks, in  particular 
the  financial  and  political  risks,  attaching  to  the  deployment  of 

24 

applications  and  services  which  can  only  be  economic  with  the  full 
scale of the single market. 

Action by the Community  also enables consortiums  to start up more 
quickly, in particular by assuming part of the costs of feasibility and 
validation  studies  for  applications  at  trans-European  level.  Last  but 
not 
the 
deployment  of innovative applications of public  interest which  often 
have uncertain commercial prospects despite obvious socio-economic 
benefits. 

the  Community  supports  actions 

to  facilitate 

least, 

Their  deployment  requires  the  establishment  of  public-private 
partnerships to make optimum  use of the resources of each party and 
generate the revenue needed. 

5.3.2.  Objectives 

In the telecommunication  TENs sector, the guidelines are based on a 
three-layer  structure  (networks  -  services  -  applications)  reflecting 
the convergence of telecommunications,  information  technology  and 
content. The projects of common  interest identified  by the guidelines 
contribute to the following general objectives: 

(1)  demonstrating  the  transition  towards  the  information  society  by 

means of concrete examples of new services and applications; 

(2) 

strengthening  the  internal  market  by  means  of  the  development  and 
interoperability of telecommunications  infrastructure; 

(3) 

(4) 

improving  industrial competitiveness by means of services tailored to 
the needs of firms 

social 

strengthening 
telecommunications 
education, health telematics, etc.). 

cohesion 
in 

services 

by 
expanding 
societal  applications 

the  use  of 
(distance 

5.4.  Energy 

5.4.1.  Justification 

Energy  transmission  systems  are  infrastructures  which  ensure  the 
continuity  of  energy  supply  and,  hence,  the  operation  of  the 
economy and the carrying-out of many activities. 

The  establishment,  interconnection  and  interoperability  of  energy 
TENs  in  the  Community  and,  gradually,  throughout  the  European 
continent,  contribute 
the 
establishment  of the internal  market  in energy, and the  strengthening 
of cohesion  through the connection  of peripheral  and isolated zones. 
The  energy  TENs  guidelines  identified  projects  of  common  interest 
which meet these objectives. 

the  security  of  energy  supply, 

to 

25 

The  completion  of  energy  TENs  also  contributes  to  job  creation 
(cf: study  "The  employment  effects  of  building  the  trans-European 
energy  networks"),  economic  development  and  the  consolidation  of 
international cooperation which are also important general  objectives 
of the European Union. 

In  addition,  the  TENs  contribute  towards  optimizing  supply  in 
relation  to  energy  demand  at  European  Community  level  and  to 
sustainable  development,  to  the  extent  that  energy  carried  by  TENs 
has  less  impact  in  terms  of  the greenhouse  effect  (cf.  C02  emission 
reduction commitments entered into in Kyoto). 

The  financial  resources  available  in  the  context  of  the  TEN-energy 
programme  are  used  exclusively  with  a  view  to  accelerating 
the carrying-out  of  projects  of  common  interest  identified  in  the 
energy sector. 

With  regard  to  energy  TENs,  the  European  Community  plays  a 
catalytic role in relation  to the efforts  of the Member States and the 
electricity and gas companies. 

5.4.2.  Objectives 

The  specific  objectives  of  the  TEN-energy  programme  are  to 
encourage, coordinate and accelerate the study of projects of common 
interest and their realization. 

Taking  into  account  the  specific  features  of  the  energy  sector 
(revenue-generating  projects,  possibilities  of  funding  existing  in the 
sector),  the  general  focus  is  on  the  definition  and  preparation  of 
through  co-financing,  where  appropriate,  preliminary 
projects, 
studies,  detailed 
studies, 
environmental  impact studies and route studies, etc. 

technical  and  economic 

feasibility 

It  is  necessary  to  expedite  these  initial  stages,  up  to  and  including 
administrative authorisations, if concrete progress is to be made. 

Where  appropriate,  a  contribution  may  be  made  to  investment 
financing  for some projects of common interest, if this contribution is 
necessary and if it may have a decisive influence on their realization. 

6.  ACTIVITIES ENVISAGED AND BUDGETARY  ARRANGEMENTS 

6.1  General 

6.1.1.  Regulation (EC) No 2236/95 

The Union's financial support  for TENs since  1995 under Regulation 
(EC)  No  2236/95  has  mainly  been  intended  for  the  definition  and 
launching  of  projects  of  common  interest  through  the  realization  of 
feasibility  studies  for  such  projects  and/or  where  appropriate,  while 

26 

the projects  are being  implemented,  interest  subsidies,  contributions 
towards  fees  for  guarantees  for  loans  and,  in  duly  justified  cases, 
direct grants. 

As  a  general  rule,  feasibility  studies  are  co-financed  up  to  50% of 
their  total  cost,  but  in  exceptional,  duly  substantiated  cases,  at  the 
initiative  of  the  Community,  the  Community  contribution  may 
exceed 50%. The maximum rate of aid in the case of projects is 10% 
of the total cost of eligible investments. 

6.1.2.  Main Features of the new Proposal for  a Regulation 

The new proposal for a Regulation differs from Regulation (EC) No 
2236/95 in the following ways: 

( 1 ) 

introduction of the concept of indicative multiannual planning; 

(2) 

raising  of  the  maximum  rate  of  aid  to  20%  in  the  case  of 
projects of particularly significant Community interest; 

(3)  greater  use  of  private 

financing 

and  public-private 

partnerships; 

(4)  possibility  of  contributing 

to  funds  specialising  in  the 

provision of risk capital for TEN projects. 

6.2.  Transport 

6.2.1.  Activities 

For the period 2000-2006, the TEN-transport budget will be devoted 
mainly to: 

- 

the completion  of the  14 priority projects  identified  at the Essen 
European Council (new projects may also be identified); 

the strengthening of public-private partnerships; 

the introduction of new technologies in transport. 

In  terms  of  operational  objectives,  the  main  priorities  will  be 
as follows: 

(i)  to  provide  appropriate  support  for  the  Essen  projects  in  their 
main  construction  phase,  e.g.  -  "HST-South"  (France/Spain), 
"West  Coast  Main  Line"  (railway,  United  Kingdom),  "Nordic 
Triangle  Multimodal  Corridor"  (Finland/Sweden),  HST-East 
(France/Germany); 

(ii) to support other major projects  such as those identified  in Part II 
of  Annex A  to  the  report  by  Christophersen  Group  (Personal 
Representatives  of  the  Heads  of  Government -1994).  Examples 

27 

of  the  projects  which  should  be  carried  out  (construction 
investment needed) are the A20 motorway (Germany), the Dutch 
sections  of  the  HST  Rhine-Ruhr",  the  Berlin  International 
Airport, and the high-speed rail network in Denmark; 

(iii)to support the implementation  phase of major traffic  management 
projects  aimed  at  improving  shipping,  safety  and  efficiency  and 
reducing the risk of adverse environmental  impacts as a result of 
collisions,  etc. The  following  are examples  of  specific  measures 
in this connection: 

European Rail Traffic  Management System (ERTMS); 

Global Navigation Satellite System (GNSS); 

Air Traffic  Management; 

Vessel Traffic  Management  Information  System; 

Road  Transport  Telematics,  including  a  number  of  'Euro-
regional'  initiatives  to improve the safety  and efficiency  of 
road infrastructure  in the European Union. 

6.2.2.  Budgetary Arrangements 

The type of intervention  depends primarily on the status and degree 
of maturity of each project. 

their  design 

Feasibility  studies  are  appropriate  to  guarantee  that  projects  are 
properly  defined  from 
launching.  This 
instrument  should  be  used  to  a  lesser  extent  for  the  14  priority 
projects  which  are  due  to  begin  or  continue  their  implementation 
phase,  but  represents  an  appropriate  form  for  other  major  projects 
such  as the  HST  Rhine-Rhone,  for  example,  which  will  necessitate 
preparatory and feasibility  studies before the launching of work. 

to  their 

to 

types  of 

intervention, 
loan  guarantee 

subsidies, 
The  other 
contributions 
risk-capital 
participation,  have been  chosen  to  ensure that  the type  of  funding 
selected is the most appropriate for the project  in question. This also 
applies to grants which  make it possible to speed up projects where 
this had hitherto been impossible because of shortage of funds. 

i.e. 
fees,  and 

interest 

These types of  intervention  will be particularly  important  for the 14 
priority  projects  and  for  certain 
traffic  management  projects 
(ERTMS, GNSS, for example). 

Interest  subsidies  and  risk  capital  participation  will  be the  preferred 
instruments  in the case of projects carried out in the  form  of public-
private  partnerships,  provided  that  the  projects'  financial  structure 
allows this. 

28 

6.3.  Telecommunications 

6.3.1.  Activities 

TEN-Telecom began  in  1995 on the basis of guidelines limited to 
the  development  of  Euro-ISDN  as  a  universal  network  for  trans-
European  multimedia  services.  In the  meantime  two major  network 
revolutions  that  have  taken  place  -  the  Internet  as  a  universal 
platform  for  services,  and  mobile  and  satellite  networks  -  have 
considerably reduced the scope of ISDN. 

The  Commission  therefore  wanted  to  establish  new  guidelines 
taking  these changes  into account  and  placing  our  efforts  in  a new 
and  much  wider  framework, 
including  the  development  and 
integration  of  broadband  networks  -  in  particular  satellites  and 
mobiles  -  and. multimedia  applications  using  the  new  Internet 
facilities.  Parliament  supported  these  guidelines  which  were 
adopted,  following  conciliation,  in  June  1997,  and  has  shown 
its  support  for  the 
growing  interest  in  this  subject 
the 
development  of  a  user-friendly 
deployment of trans-European  applications. 

through 
information  society  and 

Where  the  projects  of  common  interest  are  concerned,  the 
operational  priorities  envisaged  for  the new budget  planning  period 
are defined  by the work  programme (a document  of the rolling plan 
type that can be revised depending on needs, and which was adopted 
for the first time on 7 January  1998) and explained  in the contents of 
calls for proposals decided  upon by the Commission  and  published 
in  the  OJ.  The  main  objectives  as  regards  the  projects  of  common 
interest defined  by the guidelines are as follows: 

(1)  The  development  of  an  interoperable  state-of-the-art  global  telecommunications 

infrastructure  capable of stimulating new uses 

• 

• 

• 

satellite  communication  systems  for  broadband  multimedia  services:  in  line 
with  the first low-budget  call  for  proposals  launched  in January  1998, to  validate 
new  services  and  facilitate  the  integration  of the satellite component  in  the global 
telecommunications  infrastructure. 

mobile  networks:  to  prepare  for  the  evolution  of  applications  towards  high 
performances  (data  applications)  and  support  the  development  of  the  next 
generation of mobile communications on the basis of a common standard. 

to  meet  the challenge  of  global  interoperation  and  interconnection,  taking  into 
account  the  evolution  of  networks  towards  greater  fragmentation  between 
components (IP, ATM, ISDN, satellites, GSM, etc.). 

Target  population: 
licence  holders,  equipment 
manufacturers, suppliers of satellite and mobile systems, suppliers of services  specifically 

telecommunications  operators, 

29 

exploiting satellite and mobile networks, standardisation  and specification  bodies, bodies 
promoting the interoperability of telecommunications networks. 

(2)  The  promotion  of  telecommunications  services  for  the  greatest  possible  number 

ofSMEs 

• 

• 

• 

improve 

the  quality  of  Internet-type  services,  and 

the  potential  of 
to 
Intranets/Extranets  for  SMEs,  and  encourage  the  mobility  of  these  services 
through appropriate agreements between suppliers of Internet services 

to prepare for the generic telecommunications  services needed  for the development 
of electronic commerce: electronic signature, authentication, security, catalogues 

to promote the  evolution  towards  a more standardised  supply  of  services tailored 
both the needs of SMEs and the requirements  of product  distribution  channels  for 
this market (teleservice packages for SMEs). 

Target  population:  telecommunications  operators,  suppliers  of Internet/Intranet  services 
for  SMEs, SME organisations,  software  suppliers  in the field of  services  in  support  of 
electronic commerce; 

(3)  Deployment and perpetuation of telematics services in areas of general interest 

• 

• 

to stimulate investment in new telecommunications services for areas of general 
interest: to provide  value  added  in  these  areas  (distance  education,  telemedicine, 
access to the cultural heritage, environmental  applications, etc.), by contributing to 
economic development and social dynamism 

to  promote  example-setting  projects  encouraging  the  participation  of  private 
sector partners, in particular where drawing up the "business plan" requires initial 
validation in a real commercial  environment. 

Target  population:  public  entities,  in  particular  regional  or  local  entities,  network 
operators, final users, schools, universities, hospitals, museums, environmental  agencies, 
bodies in the transport and tourism sector, content suppliers in areas of public interest. 

Apart from the projects  of common  interest,  the  17 June  1997 guidelines  and the work 
programme  provide  for  support  and  coordination  actions 
in  relation  to  the 
development  of  telecommunications  TENs,  for  which  specific  calls  for  proposals  are 
organised:  market  analyses  and  technology  watch,  sectoral  preparatory  measures  and 
analyses (e.g. in the distance training  sector), cooperation  and standardisation  measures, 
networking of-correspondents,  and dissemination  measures. These actions are funded  to 
the extent of 50% or 100% depending on their type. 

6.3.2.  Budgetary Arrangements 

6.3.2.1.  100% grants:  for  studies  carried  out  at  the  Commission's 

initiative. 

6.3.2.2.  Grants  for  co-financing  (in  general  not  exceeding  50%) 
with other public  or private  sector  sources  for  preparatory 

30 

studies, feasibility  studies, validation studies, and technical 
support measures. 

6.3.2.3.  In the case of projects  involving innovative applications of 
public interest, the desire to ensure maximum  effectiveness 
for  the  Community  assistance  designed  to  promote  the 
start-up of a project may necessitate recourse to other forms 
of  aid  provided  for  in  Article  4  of  Regulation  (EC)  No 
2236/95, namely: 

(1) 

Interest subsidies, and contributions to loan guarantee 
fees:  methods  of  support  for  the  deployment  of 
projects of common interest. 

(2)  Direct grants for projects of common interest: in duly 

justified cases. 

(3)  Risk-capital participation: support to facilitate PPPs. 

Aid  under  this  budget  heading  could  be  combined 
with aid from other Community financial instruments 
in  accordance  with  conditions  laid  down  in  the 
Financial Regulation. 

6.4.  Energy 

6.4.1.  Activities 

The  TEN-energy  programme  concerns  two  areas:  electricity  and 
natural gas. 

In the case of electricity networks, the specific activities concern: 

(1)  connection  of 

isolated  electricity  networks 

to  European 

interconnected networks; 

(2)  development of interconnections between Member States; 

(3)  development  of  internal  connection  necessary  to  make  the  best 

use of interconnections between Member States; 

(4)  development  of  interconnections  with  third  countries  in  Europe 
and the Mediterranean region helping to improve the reliability, 
security and supply of Community electricity networks. 

In the case of natural gas networks, the specific activities concern: 

(1) 

introduction of natural gas into new regions ; 

31 

(2) 

connection  of  isolated  gas  networks  to  the  interconnected 
European networks, including  the  necessary  improvement  of 
existing networks; 

(3) 

increasing  natural  gas  transmission,  reception  and  storage 
capacity, including underground storage capacity; 

(4) 

increasing gas pipeline transmission capacity. 

Target  population:  public,  private  or  joint  entities  or  undertakings 
with  the  capacity  to  design,  study,  construct,  maintain,  operate  or 
administer the trans-European networks defined  and identified by the 
TEN-energy guidelines. 

6.4.2.  Budgetary Arrangements 

(1) 

Co-financing of preparatory and feasibility studies 

In  accordance  with  the  statement  entered  in  the  minutes  of  the  meeting  at which 
Regulation  (EC)  No 2236/95  was  adopted,  Community  assistance  under  the 
TEN-energy programme is normally granted in the form of co-financing  of studies 
in the energy sector. 

In view of the risks inherent  in the initial project  definition  and preparation  stages 
and  authorisation  procedures  involving  deadlines  which  are  in  many  cases 
problematic,  the  level  of  assistance  needs  to  be  particularly  significant  for 
preparatory and feasibility studies. 

Experience  with  the  operation  of  the  Regulation  in  the  first  three  years  indicates 
that a level of aid of 50% of the cost of studies is appropriate, taking into account 
also the underlying aim of encouraging the development of energy TENS. 

(2) 

Investment  financing 

Regulation (EC) No 2236/95 does not rule out any other forms of assistance for the 
energy sector. 

Recourse to one of the other forms of assistance (interest subsidies, contributions to 
loan  guarantee  fees,  direct  grants)  provided  for  in  the  Regulation  must  be  duly 
justified  and  substantiated;  in  particular,  it  must  not  cause  distortions  of 
competition between undertakings in the sector. 

During  the  first  three  years  of  operation  of  the  Regulation  the  Commission  has 
received half a dozen applications for investment financing in the energy sector that 
it has considered to be unjustified  or unsubstantiated. 

Financial  support  for  investment  under  the  TEN-energy  programme  may  be 
justified  in the following cases: 

• 

to make attractive a project  of common interest that is economically  viable but  for 
which the financial profitability  is  insufficient; 

32 

to  ensure  the  continuation  of  a  project  of  common  interest  that  is  economically 
viable but confronted  with unforeseen costs which jeopardise its financing. 

7. 

FINANCIAL IMPLICATIONS 

7.1.  Indicative Planning of TEN Appropriations 

(ECU million in current prices) 

B5-700 Transport 

B5-710 Energy 

B5-720 Telecoms 

2000 
562 

2001 
601 

2002 
650 

2003 
700 

2004 
760 

2005 
831 

2006 
888 

TOTAL 
4 992 

25 

38 

25 

41 

26 

44 

26 

46 

26 

50 

26 

53 

26 

56 

180 

328 

TOTAL PER ANNUM 

625 

667 

720 

772 

836 

910 

970 | 

5500) 

According to this schedule, the share of TENs in heading 3 of the Financial  Perspective 
would increase from 9% of the ceiling for the heading in  1999, the last year of the current 
financial  period  1993-99, to  11.2% of the ceiling  for the heading in 2006, the last year of 
the new financial period 2000-2006 proposed by the Commission in Agenda 2000. 

33 

7.2.  B5-700: TEN - Transport 

(ECU million in current prices) 

and  New 

14 Specific Projects 
Other 
Projects 
Traffic  Management 
Projects 

2000 
423 
93 

2001 
442 
104 

2002 
462 
117 

2003 
415 
195 

2004 
400 
260 

2005 
400 
331 

2006 
400 
388 

TOTAL 
2942 
1488 

46 

55 

71 

90 

100 

100 

100 

562 

TOTAL 

562 

601 

650 

700 

760 

831 

888 

4992 

(1)  With regard  to quantification  in budgetary  terms, it  should  be noted  that  the total 
cost of the investment proposed for the Essen priority projects is at present roughly 
ECU 54 billion  for  the  programme  period  (2000-2006),  compared  with  some 
ECU 25 billion during the period of the Edinburgh financial perspective (1995-99). 
This  reflects  the  fact  that  the  majority  of  the  main  projects  will  enter  the 
construction phase after the year 2000. 

(2)  The desire to ensure  a reasonable  rate  of  Community  intervention  (closer  to  10% 
than is at present the case) for these projects, and the need to preserve a margin  for 
manoeuvre  for  the  other  major  projects,  including  traffic  management  activities, 
suggests that a figure between ECU 5 billion and ECU 6.3 billion would be needed 
in the period 2000-2006. 

(3)  From  2002  onwards,  the  amounts  proposed  for  the  14  specific  projects  are 
decreasing  and  will  stabilize  at  around  ECU  400  million  because  many  of  the 
projects will be finalised  during the period  and the investments therefore  gradually 
decline. With an increasing TEN-Transport  budget  over the period this means that 
the share for the  14 specific projects will decrease from 75% to approx. 45% of the 
TEN-Transport budget, with an average of 59%. The intervention rate per project is 
intended  to  increase  from  approx.  3-5%  of  investments  for  the  current  financial 
perspective to an average 7% for the specific projects for the period 2000-2006. 

(4)  The support proposed  for  other and  new projects  that will  be identified  during the 
revision of the TEN guidelines will increase both  in real terms and as a percentage 
of  the  TEN-Transport  budget.  It  is  anticipated  that  the  current  priorities  will  be 
revised  in  the  coming  years  and  several  new  projects  will  be  identified.  For 
example,  projects 
the 
Christophersen  Report  are  relevant  (for  example,  based  on  the  investment  costs, 
Berlin  airport: ECU  4.1  billion;  HST  in  Denmark:  ECU  1.8  billion;  Dutch  HST 
Rhine-Ruhr: ECU  1.56 billion, etc.) 

the  second  group  of  projects 

identified 

from 

in 

34 

(5)  Concerning  the  traffic  management  projects  the  yearly  support  is  proposed  to 
double,  after  which  the  amount  will  be  stabilized  at  around  ECU 100  million  a 
year.  The  study  period  is  coming  to  an  end  and  the  actual  construction  of  the 
projects will  begin.  The  indicative  investment  costs  related to  some  of  the more 
important  projects  are  as  follows,  road  traffic  management  ECU  320  million; 
GNSS (satellites) ECU 490 million; ERTMS (rail management) ECU 154 million. 

7.3.  B5-710: TEN -  Energy 

(ECU million in current prices) 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

TOTAL 

Electricity Networks 

10 

10 

10 

10 

10 

10 

10 

70 

Natural Gas Networks 

TOTAL 

15 

25 

15 

25 

16 

26 

16 

26 

16 

26 

16 

26 

16 

26 

110 

180 

The total cost  of the investment  proposed  for the  74 projects  of  common interest 
(PCIs)  identified  by  the  TEN-energy  guidelines  is  estimated  at  approximately 
ECU 15 billion over the period 2000-2006, compared with some ECU 11 billion of 
proposed investment during the period 1995-1999 for these projects. 

The distribution by area over the period 2000-2006  indicates proposed investments 
of  around  ECU 4.5 billion  for  the  electricity  PCIs  and  ECU 10.5 billion  for  the 
natural  gas  PCIs.  In  view  of  the  rapid  developments  in  the  energy  sector,  it  is 
foreseeable  that the list of PCIs will  be supplemented over the period 2000-2006, 
mainly  as  a result  of  the  introduction  of new  projects  concerning  the  natural gas 
networks. This updating would increase the total cost of investment for TEN-energy 
projects and would increase the relative weight of the area "natural gas networks". 

The estimate of financial support requirements indicated in the table above is based 
on  an  analysis  of  the  state  of  progress  and  the  information  available  about  the 
financial  profitability of the 74 current PCIs and the forecast for the new PCIs. 

On these bases, during the period 2000-2006  some 50 PCIs would need support for 
the co-financing  of studies (20 electricity PCIs and 30 natural gas PCIs) and some 
10  PCIs  would  need financial support  for  investment  (4  electricity  PCIs  and  6 
natural gas PCIs). 

The estimates resulting from the financial support requirements are: 

• 

• 

in the area "electricity networks" ECU 25 million  for the co-financing  of studies and 
ECU 45 million for investment support; 

in the area "natural gas networks" ECU 45 million for the co-financing  of studies and 
ECU 65 million for investment support. 

35 

7.4.  B5-720 : TEN - Telecommunications 

(ECU million in current prices) 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

TOTAL 

BASIC NETWORKS 

GENERIC 
SERVICES/INTERNET 

APPLICATIONS 

ACCOMPANYING MEASURES 

TOTAL 

12 

13 

10 

3 

38 

14 

13 

11 

3 

41 

16 

13 

12 

3 

44 

18 

13 

12 

3 

46 

22 

13 

12 

3 

50 

25 

13 

12 

3 

53 

28 

13 

12 

3 

56 

135 

91 

81 

21 

328 

An  analysis  of  the  markets  for  each  of  these  three  layers  gives  rise  to  the  following 
budget estimate for the period in question, which incorporates the new priorities for the 
basic  networks  (46%  of  the  overall  "envelope")  and  maintains  our  support  vis-à-vis 
applications and Internet services: 

•  The envelope for the basic networks is evaluated at ECU 135 million. There are no 
concrete  results  so  far  because  the first call  for  proposals  ends  on  15 April 1998. 
The priorities  set  out  in  the  work  programme  as  part  of  our  market  research 
efforts concern: 

-  navigation  satellites,  with  aid  for  market  launch,  essentially  from  2004,  and 

interoperation with terrestrial networks 

-  multimedia  communication  satellites,  in order to  encourage  a mass  effect  in new 
markets  (evaluated  at  ECU 15-30 billion  in  2005)  such  as  distance  education, 
telemedicine and intelligent transport 

-  mobile  networks  supporting  a  new  generation  of  integrated  broadband  services 

(UMTS) from 2004. 

•  The  envelope  for  the  generic  services 

is  evaluated  at  ECU 91 million. 
TEN Telecom  aid,  which  is  due  to  start  now,  concerns  high-quality  secure  support 
services for electronic commerce and the new Internet facilities. 

•  The  envelope  for  applications  in  areas  of  general  interest  is  evaluated  at 
increase  as  from  the  last  three  years  for 

ECU 81 million  with  a  significant 
investment projects. 

•  The  envelope  for  accompanying  measures  is  evaluated  at ECU 21 million. Apart 
from  the  projects  of  common  interest,  the  17  June  1997  guidelines  and  the  work 
programme  provide  for  support  and  coordination  actions  in  relation  to  the 
development  of telecommunications  TENs, for  which  specific  calls  for proposals  are 
organised:  market  analyses  and technology  watch,  sectoral  preparatory  measures  and 
analyses  (e.g.  in  the  distance  training  sector),  cooperation  and  standardisation 

36 

measures, networking  of correspondents,  and  dissemination  measures.  These  actions 
are funded  to the extent of 50% or 100% depending on their type. 

These  figures  correspond  to  targeted  actions  and  are  quite  modest  compared  with  the 
investment which the private sector will be called upon to provide. However, Community 
intervention  is needed  in order to reduce the risk attaching  to this  investment,  promote 
the development  and interoperation of the global infrastructure,  ensure the dissemination 
of telecommunications  services for SMEs, and encourage the use of new  applications in 
areas of general interest. 

As  indicated  in  Agenda  2000,  the  value  added  in  terms  of  growth,  employment  and 
dissemination  of  technologies  gives  TEN-Telecom  a  priority  role  among  all  the 
internal policies. 

8.  MONITORING AND EVALUATION 

8.1.  Monitoring and Evaluation: General 

The new proposal for a Regulation provides for boosting the monitoring and 
evaluation activities by: 

(1) 

(2) 

clarifying  the  strict  obligation  on  beneficiaries  of  Community  aid  to 
supply data regularly for monitoring purposes; 

enabling  the  Commission  to  require  beneficiaries  to  make  a  specific 
evaluation of projects, or 

(3)  where appropriate, enabling the Commission to carry out evaluations of 
projects  or  groups  of  projects  jointly  with  the  Member  States;  to  do 
this, it will be able to require beneficiaries of Community aid to provide 
the necessary information  and assistance; 

(4) 

enabling the Commission to invite the EIB and other appropriate bodies 
to take part in monitoring and evaluation activities. 

8.2.  Monitoring and Evaluation: Transport 

(a)  Article  15 of Regulation (EC) No 2236/95 provides for monitoring and 
evaluation  of  each  project.  In  this  connection,  it  is  laid  down  that 
Commission  decisions  will  include,  where  appropriate,  physical 
indicators drawn up in agreement with the Member States. 

In  addition,  in  accordance  with  the  standard  Commission  decisions, 
beneficiaries  must  provide  each  year  information  about  progress  with 
the projects to be used as the basis for the analyses underlying the joint 
evaluation  with 
the  project 
implementation procedures. 

the  Member  States  concerning 

The priority projects will be monitored more closely and systematically 
during seminars and bilateral meetings. 

37 

(b) 

studies,  for  which  indicators  cannot  be  drawn  up,  will  be  evaluated 
jointly with the Member States, according to the objectives pursued. 

An annual  activity report to be submitted to the European Parliament, 
the Council, the Economic and Social Committee and the Committee of 
the  Regions  is  provided  for  in  Article 16(1)  of  the  Regulation.  This 
report  must  contain  an  evaluation  of  the  results  achieved  with 
Community aid in different fields of application in terms of the original 
objectives. Given the annual nature of the Community budget for TENs 
and  the  multiannual  nature  of  the  budget  for  major  transport 
infrastructures, an adequate time horizon will, however, be necessary in 
order to judge the activities extensively. 

Each year individual projects will be monitored in detail, according to 
the  financial  commitments  and  implementation  schedules.  This 
monitoring will also relate to technical and financial aspects. 

Ad hoc evaluation 

For  a  limited  number  of  activities,  it  is  possible  to  carry  out  more 
conventional  "mid-term" or  "ex-post " impact evaluations given that it 
is  easier  to  quantify  the  results  achieved  in  a  short  or medium-term 
perspective.  By way of example, in  1997 the Commission carried out 
an evaluation  of  the  impact  of  Community  support  on certain  traffic 
management projects and the "ERTMS" rail project. 

Mid-term overall evaluation 

With  regard  to  the  overall  evaluation  of  budgetary  assistance  under 
Regulation  (EC)  No  2236/95,  at  the  end  of  1997  the  Commission 
launched  a call  for expressions  of  interest,  so that a mid-term overall 
evaluation  can  be  carried  out  in  the  course  of  1998.  This  formative 
evaluation, conceived in the context of the SEM 2000 initiative and the 
Commission's communication on the evaluation, seeks to take stock of 
the  situation  and assess  the  project  evaluation  procedures  at national 
level, 
the  application  and  decision-making  procedures  at  the 
Commission and the monitoring  systems  for projects and studies. The 
evaluation will also address the following questions: 

(i) 

the  advantages  and  disadvantages  of  the  various  financial 
instruments  (direct  grant,  interest  subsidy,  feasibility  study, 
guarantee); 

(ii)  rates of Community aid, including the "value added" effect; 

(iii)  coordination  of TEN budget  assistance with aid under the ERDF 

programmes and the Cohesion Fund. 

38 

The mid-term  formative  evaluation  will  be  administered  by  a  steering 
group  consisting  of  various  Commission  services  and  the  ED3.  This 
group has already been consulted  in connection with the preparation of 
the specifications. 

Appraisal of results 

The  appraisal  of  the results  of  the  evaluations  must  take  into  account 
the  provisions  set  out  in  the  "SEM  2000"  initiative,  in  particular  as 
regards a procedure for  feedback  between the conclusions  to be drawn 
and the setting of new objectives (e.g. for the continuation of the action 
provided  for  in Regulation  (EC) No 2236/95  and  for  the report  before 
1 July 1999 indicating whether the guidelines should be adapted to take 
account of economic developments  and technological  developments in 
the transport field). 

8.3.  Monitoring and Evaluation: Telecommunications 

The entire monitoring  system  is provided  for  in the contractual  provisions: 
work  programme  for  the  study,  technical  measure  or  project,  reports, 
deliverables, technical  and financial audit, cancellation  of the contract  in the 
event of non-performance. 

Monitoring  is  ensured  by  the  Commission  services:  examination  of  the 
periodical  reports,  deliverables  and  examination  of  statements  of  costs 
charged to the project before payment. 

A  project  is  designed  as  a  succession  of  stages  leading  to  deployment 
(preparation,  feasibility,  including  validation  and  deployment).  A  project  is 
therefore multiannual with clear results at the end of each stage. It must result 
in a credible business plan prepared  and adjusted  throughout  the project.  The 
project  promoters  identify  the development  stages  and  the  criteria  on which 
"they will decide to continue  the actions. These stages will give rise to status 
reports, which will include physical and financial indicators. 

An  annual  evaluation  of  the  projects  in  progress  is  provided  for  in  the 
contract.  This  evaluation  entails  presenting  the project  to  a board  of  outside 
evaluators  recruited  in  the  context  of  a  call  for  expressions  of  interest 
published in the OJ (OJ 97/S  14-153147 of 21 January  1997). Following this 
evaluation, projects  are confirmed,  modified  or,  in the event  of doubts about 
the  chances  of  the project  succeeding,  subjected  to  a  thorough  examination 
procedure, internal to begin with and then external (Red Flag Procedure). This 
in-depth  examination  may,  where  appropriate,  lead  to  cancellation  of  the 
contract by the Commission services. 

An  intermediate  evaluation  under  the  guidelines  for  Euro-ISDN  will  be 
carried out in the course of  1998. While strict reference to the objectives  and 
priorities  of  the  new  guidelines  will  be  impossible,  it  should  nevertheless 
provide useful  assessment  information  on account of the similarity  of certain 
types of projects of common interest. 

39 

8.4.  Monitoring and Evaluation: Energy 

together 

(a)  All  the programmes  administered  by  DG  XVII, with  the  exception  of 
THERMIE  which  is  covered  by  the  RDFP  and  TEN-Energy,  will  be 
grouped 
from  1998  within  an  "Energy"  framework 
programme.  Along  the  lines  of  the  provisions  for  this  "Energy" 
framework  programme, and in order to take advantage of the structures 
in place and the experience acquired, TEN-Energy activities will be the 
subject  of  similar  treatment  based  on  monitoring  and  evaluation 
activities. 

(b)  The "TEN-Energy" activity will be the  subject  of  annual  monitoring 
which is neither an evaluation nor an audit but essentially seeks to give 
an  independent  and  rapid  analysis  of  the  establishment  of  the 
programme  in order to be able to correct  any slippages or weaknesses. 
Are  the  objectives  and  priorities  being  respected?  What  about  the 
utilization of resources? 

It  must  be  a  factual  analysis  which,  at  the  beginning  of  the  period 
2000-2006, will concentrate on the actions  launched  and which, as the 
years  go  by,  may  also  relate  to  the  results  and  impacts.  Part  of  the 
analysis  will  be  devoted  to  the  European  value  added  (value  added 
deriving from the European rather than national direction of activities). 

The  monitoring  reports  should  be  brief,  comprehensible  and  set  out 
clear  and  practical  recommendations.  The  independence,  clarity  and 
factual  nature  of  the  monitoring  reports  should  make  it  possible  to 
facilitate and accelerate the evaluation activities. 

The 
teams 
following aspects: 

in  charge  of  monitoring 

should 

examine 

the 

effectiveness  and  transparency  of  the  carrying  out  of  the 
programme  (in  particular  calls  for  proposals,  information  for 
selection  procedure, 
proposers,  proposal  evaluation  and 
contractual aspects) and internal coordination at the Commission; 

consistency  of  the  projects  selected  with  the  objectives  of  the 
programme,  the  work  programme  and  other  European  Union 
policy objectives; 

balanced  geographical  distribution  of  the  organisations  and 
undertakings  selected  in  the  calls  for  proposals,  taking  into 
account the needs identified by the TEN-Energy guidelines; 

compliance  with 
monitoring for the preceding year. 

the  recommendations  resulting  from 

the 

40 

The  monitoring  reports  will  be  addressed  to  the  Secretariat-General, 
DG XIX, DG XX  and, where  appropriate,  other  Commission  services 
concerned. 

(c)  An evaluation of results will be carried out before the end of 2006, as 

provided for in the Regulation. 

In  addition  to  this  evaluation  of  results,  an  intermediate  formative 
evaluation will be carried out in the second half of 1998. 

Launched  in  the  context  of  SEM  2000,  the  aim  of  this  intermediate 
evaluation  is to measure not only the results of the actions financed in 
the  context  of  the  energy  TENs  but  especially  to  see  to  what  extent 
these actions have contributed, by their impact, to achieving or getting 
close to the political objectives of the energy TENs. It will also make it 
possible  to  adapt  the  guidelines  to  take  account  of  technological 
developments  and  changes  in  the  structure  of  energy  production  and 
consumption in Europe and in neighbouring countries concerned by the 
energy TENs. 

The evaluation reports will be addressed to the Secretariat-General, DG 
XIX,  DGXX  and,  where  appropriate,  other  Commission  services 
concerned.  They  will  also  be  submitted  to  the  other  Community 
institutions. 

(d) 

The annual  monitoring  and the evaluation will be carried  out in  close 
liaison  with  a  steering  group  comprising  representatives  of  the 
Commission 
the  energy  TENs  and 
EIB representatives. 

services  concerned  by 

9. 

FRAUD-CONTROL MEASURES 

The  fraud-control  provisions  are  set  out  in  Article 12  of  Regulation  (EC) 
No 2236/95. The proposal  to  amend  that  Article  of  the Regulation  is  intended  to 
strengthen  the  Commission's  role  in  these  activities  by  providing  that  the 
Member States and the Commission, each in its field of competence, shall take the 
necessary measures in order to verify that projects have been carried out, to prevent 
irregularities  and  take  action  against  them,  and  to  recover  any  amounts  lost  as  a 
result of irregularity. 

The  Member  States  are  required  to  give  the  Commission  a  description  of  the 
management  and  control  systems  established  to  ensure  efficient  implementation 
of projects. 

In  addition, in  accordance with  Article  12(4) and  (5), the  Commission  may  carry 
out on-the-spot inspections. 

41 

10.  ADMINISTRATIVE  EXPENDITURE 

Actual  mobilisation  of  the  necessary  administrative  resources  will  depend  on  the 
Commission's  annual  decision  on  the  allocation  of resources, taking  into  account 
the number of staff and additional amounts authorised by the budgetary authority. 

10.1  Transport 

Effect on the number of posts 

Type of post 

Staff  to  be  assigned  to 
managing the operation 
Temporary 
Permanent 
posts 
posts 

A 
B 
C 

Officials  or 
temporary 
staff 
Other 
(A-7003 END) 
Total 

resources 

13 
7 
4 

24 

2 

2 

Source 

Duration 

Existing 
resources  in 
the  DG  or 
department 
concerned 
12 
6 
4 
2 

24 

Additional 
resources 

7 years' 

7 years 

1 
1 

2 

Overall financial impact of human resources 

Officials1 

Officials  (additional)) 

Temporary  staff 

Amounts 
ECU 18 144 000 

Method of calculation 
22 x ECU 108 000 x 7 years = 
ECU16 632 0001 

ECU 

2 x ECU 108.000 x 7 years = 
ECU 1512 000 

Other resources (A-7003 END)(1)  ECU  518 000 

2 x ECU 37 000 x 7 years = 
ECU 518 0001 

Total 

ECU 18 662 000"" 

By using existing resources assigned to manage the operation (calculation for  the officials  is based 
on titles A-l, A-2, A-4, A-5, A-7). 

42 

Other administrative expenditure as a result of the operation 

Budget heading 
A-7031 (Compuls. Committees)1  ECU 136 500 

Amounts 

A-701 (Missions)1 

ECU 525 000 

Method of calculation 
15  repres.  Member  States 
x ECU 650 x 2 meetings x 
7 years = ECU 136 500 
ECU  750x100x7  years = 
ECU  525 000 
the 
(within 
European Community)1 

Total 

"ECU 661 500 

| 

The appropriations will be found  in the existing DG VII envelope. 

10.2  Telecommunications 

Effect on the number of posts 

Type of post 

Staff  to  be  assigned  to 
managing the operation 
Temporary 
Permanent 
posts 
posts 

A 
B 
C 

Officials  or 
temporary 
staff 
Other 
resources 
(A-7002:  technical 
assistance) 
Total 

9 
2 
3 

14 

1 

3 

4 

Source 

Duration 

Existing 
resources  in 
the  DG  or 
department 
concerned 
8* 
1 
2 
3 

14 

Additional 
resources 
** 

2 
1 
1 

4 

7 years 

7 years 

including  1  temporary post 
The  allocation  of  additional  staff  will  be  decided  in  the  course  of  die  annual  procedure  for  the 
allocation of human resources. 

43 

Overall financial impact of human resources 

Officials' 

Amounts 
ECU 7 560 000 

Officials (additional) 

ECU 3 024 000 

Temporary staff 

ECU  756 000 

Method of calculation 
10 x ECU 108.000 x 7 years = 
ECU 7 560 0001 
4xECU 

108 000x7 

years = 

ECU 3 024 000 
1  x ECU 108.000 x 7 years = 
ECU 756 0001 

Other resources (A-7002) 

ECU 2 100 000 

3 x ECU 100 000 x 7 years = 

ECU 2 100 000 

Total 

ECU 13 440 000 

1 

By  using  existing  resources  assigned  to  manage  the  operation  (calculation  for  the  officials  and 
temporary staff is based on titles A-l, A-2, A-4, A-5, A-7) 

Other administrative expenditure as a result of the operation 

Budget heading 
A-701 (Missions)1 

Amounts 

Method of calculation 

"~  ECU 525 000  ECU 750 x 100 x 7 years = 

A-7031 (Compuls. Committees)1  ECU 546 000 

ECU 525 000 (within the 
European Community)' 
2repres. x 15 
Member States x ECU 650 * 
4 meetings x 7 years = 
ECU 546 0001 

Total 

1  ECU 1 071 000  | 

The appropriations will be found in the existing DG XIII envelope. 

10.3  Energy 

Effect on the number of posts 

Type of post 

Staff  to  be  assigned  to 
managing the operation 
Temporary 
Permanent 
posts 
posts 

A 
B 
C 

Officials  or 
temporary 
staff 
Other 
(A-7003 END) 
Total 

resources 

5 
1 
3 

9 

2 

2 

11 

44 

Source 

Duration 

Additional 
resources 

Existing 
resources  in 
the  DG  or 
department 
concerned 
5 
1 
3 
2 

7 years 

7 years 

Overall financial impact of human resources 

Officials1 

Temporary staff 

Amounts 
ECU 6 804 000 

Method of calculation 

9 x ECU 108.000 x 7 years = 
ECU 6 804 0001 

Other resources (A-7003 END)1 

ECU  518 000 

2 x ECU 37 000 x 7 years = 

ECU 518 000' 

Total 

J  ECU 7 322 000 

| 

1 

By using existing resources assigned to manage the operation (calculation  for the officials  is based 
on titles A-l, A-2, A-4, A-5, A-7) 

Other administrative expenditure as a result of the operation 

Budget heading 

Amounts 
(ECU) 

Method of calculation 

A-7031 (Compuls. Committees)1  ECU 205 000 

15  repres.  Member  States x ECU 650 
x 3 meetings x 7 years = 
ECU204 7501 

Total 

1  ECU 205 000  | 

The appropriations will be found in the existing DG XVII envelope. 

45 

ISSN 0254-1475 

COM(98) 172 final 

DOCUMENTS 

EN 

01  11  06  08 

Catalogue number  : CB-CO-98-192-EN-C 

ISBN 92-78-32489-2 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

46