Opinion of the Committee of the Regions on the '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: 1999-01-14
Institutions: European Committee of the Regions
Subjects: EU aid, EU financing, enlargement of the Union, information network, trans-European network, transport network

6.4.1999

EN

Official Journal of the European Communities

C 93/29

Opinion of the Committee of the Regions on the ‘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’

(1999/C 93/05)

THE COMMITTEE OF THE REGIONS,

having regard to the 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 (COM(1998) 172 final — 98/0101 SYN) (1);

having regard to the decision taken by the Council on 19 May 1998 to consult the Committee
of the Regions on this matter in accordance with Articles 129d and 198c, first paragraph, of
the Treaty establishing the European Community;

having regard to the decision taken by its Bureau on 15 July 1998 to entrust the preparation
of the opinion to Commission 3 for Trans-European Networks, Transport and Information
Society;

having regard to the draft opinion (CdR 217/98 rev.) adopted by Commission 3 on 27 November
1998 (rapporteurs: Mr Gustâv and Mr Valca´rcel Siso),

adopted the following opinion unanimously at its 27th plenary session (meeting of 14 January).

1.

Introduction

1.1.
The development of the trans-European net-
works is of high priority for the Union. This was stated
in the Maastricht Treaty and in the 1993 Commission
white paper, which pinpointed the development of the
TENs as one of the key instruments for growth,
competitiveness and employment. In Agenda 2000 the
importance of the networks is once again stressed.

With the experience acquired so far, the Regulation
could be improved in several ways. The Commission
therefore proposes limited revision.

According to the current regulation, the Council
1.6.
should decide before the end of 1999 whether and under
what circumstances measures can continue after 1999.
The legal procedure takes a long time and this is one
reason why the proposal is presented now.

1.2.
The further expansion of the trans-European
networks contributes to sustainable development and
the creation of stronger links between the different
regions. The networks also create links with the candi-
date countries in central and eastern Europe.

1.7.
It is also considered appropriate that the revision
be coordinated and implemented at the same time as the
revision of the Structural Funds and the Cohesion Fund.
This will enable TENs to benefit
from improved
coordination between the financial instruments.

The trans-European advantages of the project
1.3.
are the reason why the Union should continue to support
its realization.

The programmes chosen should be given
1.4.
increased resources where they contribute in a significant
way to growth, employment and the spread of new
technology. This applies especially to trans-European
networks, research and innovation, education, develop-
ment of environmentally-friendly technology and sup-
port to big and small companies.

1.5.
In 1995 the Council adopted Regulation (EC)
No 2236/95 laying down general rules for Community
financial support in the field of trans-European net-
works.

The COR believes that the development of the
1.8.
trans-European networks is one of the most obvious
and active ways of tying the regions of the Community
closer together. Insofar as it is based on national,
regional and local networks, it creates a climate for
favourable economic development in all parts of the
Union and contributes therefore to a high and evenly
distributed prosperity in all Member States.

The COR also considers that it is important that
1.9.
the current revision of the Regulation will be carried
out in coordination with the revision of the Structural
Funds and the Cohesion Fund.

2. Experience with the functioning of the Regulation

(1) OJ C 175, 8.6.1998, p. 7.

Prior to revision, the Commission has prepared
2.1.
a short report on how the Regulation has worked so

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far. The evaluation is based on the practical experience
of the Commission, the Member States and private
operators during the last three years.

2.8.
Indicative multiannual planning is a tried and
tested instrument in many Member States. The COR
welcomes the inclusion of a provision on multi-annual
planning in the Regulation.

2.2.
The usefulness of the existing financial instru-
ments and the problems that create obstacles for
PPP within the transport sector were also discussed
thoroughly in 1996 and 1997 by Neil Kinnock’s ‘high
level group’.

2.9.
The COR considers it justified, in certain cases,
to increase the level of subsidies for preparing studies
and carrying out projects, as provided for in Article 4 of
the proposed regulation.

Experiences with the Regulation has been very
2.3.
good. There is still scope for improvement in some
aspects. The results of the evaluation can be summarised
in five points. The report concludes that facts and figures
would seem to:

The COR considers that the PPP-principle has
2.10.
not been developed satisfactorily and that for various
reasons it is justified to increase the number of projects
co-financed by public and private operators.

(1) justify, in the light of expected future investment,
a corresponding increase in the future reference
amount of the revised Regulation;

3. Suggested revision

(2) point to the need to verify the cost-effectiveness
of granting relatively small amounts of financial
support to a large number of projects;

(3) bring out the administrative drawbacks of the
annual programming approach laid down by the
Regulation, and suggest the introduction of multian-
nual planning;

(4) justify a higher rate of Community aid for projects
where broad trans-European interest and network
advantage are demonstrably very high;

(5) draw attention to the need to further facilitate and
encourage PPPs, in particular by extending the range
of aids to cover contributions to risk-capital funds.

2.4.
The report goes on to give details of expenditure
and activity, the various methods of financial inter-
vention, and criteria for the selection and evaluation of
projects in the three areas of transport, energy and
telecommunications TENs.

2.5.
The COR believes that enlarged budget frames
are fully justified by the great importance of the TENs
for cohesion within the Union and for increasing
competitiveness and creating employment.

The COR also appreciates the fact that the large
2.6.
number of applications means a heavy workload for the
administration of financial support under the Regu-
lation.

2.7.
Judging from experience, relatively small projects
may also be justified from a socio-economic point of
view. When evaluating the cost-efficiency of adminis-
tering a large number of small projects, the beneficial
effects and costs of the projects should be the determining
factor.

3.1. One of the most important purposes of the
revision is to take advantage of the experience acquired
by the Commission, the Member States and the private
operators in order to improve, simplify and adjust the
application of the Regulation where justified.

3.2.

Indicative multiannual planning

3.2.1.
Based on its experience, the Commission thinks
that there are reasons to develop a new strategy that
stretches over several years. It is suggested that this be
achieved by developing indicative multiannual pro-
grammes for certain sectors (Article 5a).

3.2.2.
The projects being financed within the TENs
budget, especially in the transport sector, are in general
large-scale and long-term. National authorities respon-
sible for infrastructure planning have regularly expressed
the wish to have a medium-term projection of Com-
munity financing.

This can be even more important for projects
3.2.3.
financed by the private sector or through public-private
partnerships, since establishing financing packages for
such projects requires firm long-term undertakings from
all participants.

3.2.4.
The proposal implies that it would be possible
to manage the Community financial support of a project
as a single multiannual allocation, rather than as a series
of annual project proposals.

3.2.5.
In appropriate cases it would be possible to
treat budget commitments for long-term projects 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.

It is the opinion of the COR that implemen-
3.2.6.
tation of an ‘indicative multiannual programme’ is the

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most important revision and will bring big advantages
for the applicants and at the same time facilitate
administration of the applications.

3.2.7.
The COR would also point out that it is
important for the Commission to take into consideration
how local and regional interests should be consulted
during the planning process.

3.3. Forms and amount of Community assistance

3.3.1.
Since 1995 the Commission, the Member States
and private-sector promoters have been involved with
1 145 applications for support totalling ECU 3 232
million. The Commission and the TEN Committee have
approved 448 grants for a total of ECU 983 million. The
support to the energy and telecom sectors has so far
been limited to studies.

3.3.2.
Against the background of these activities, the
Commission proposes: that the Community financial
participation provided for under the Regulation may
exceed the limit of 50 % for studies undertaken on the
initiative of the Commission (Article 4.1a);

3.3.3.
interest rate subsidies be removed;

that the five-year limitation with regard to

3.3.4.
that support can be given in the form of grants
or risk-capital participation in investment funds or
financial undertakings with a priority focus on providing
risk capital for TEN projects (Article 4.1 e);

traffic is stuck in queues, caused by regional traffic. In
these regions measures have to be taken to separate the
through-traffic from the local traffic. This can be done
with new by-passes or regulatory measures. New links
in densely exploited areas where the competition for
land is keen tend to become more and more expensive.
These exclusive links are often difficult to finance with
ordinary means available at national and local level.
Extra incentives in the form of increased subsidies from
the Union would make it easier to find regional
co-financing solutions for such projects. The COR
assumes that this type of project could be covered by
the expression: of significant trans-European interest.

3.3.9.
TENs infrastructure must complement the
development of regional and local infrastructure and
transport systems which connect with it; this will
promote intermodality and public transport systems
which are sustainable, efficient and environmentally
friendly.

3.3.10.
It should be stressed that the Commission is
justifiably concerned to establish the best possible
conditions for attracting private capital to finance TENs.

The economic and financial situation of the
3.3.11.
Member States has meant that the rate of public
investment has fallen, with transport infrastructure
being one of the worst affected sectors. At the same time
as this fall in public investment, traffic and vehicle
numbers have continued to rocket.

3.3.5.
that the Commission seek to maximize the
multiplier effect of the financial resources provided for
by the Regulation by promoting recourse to private
sources of financing [Article 4 (3)];

3.3.12.
This imbalance between supply and demand
has highlighted and intensified the externalities in the
transport sector, especially the social cost of congestion,
the environmental impact and accidents.

that the ceiling on investment support be raised
3.3.6.
from 10 to 20 % of the total investment cost for projects
involving more than one Member State or which
contribute strongly to the broader trans-European
interest, including projects which have an important
environmental dimension [addition to Article 5(3)].

3.3.7.
The COR also wants to stress that different
parts of the network have different characteristics and
are therefore of varying relevance for the Union, for the
Member States and especially for local and regional
interests. It seems fully justified, in certain cases where
the interests of the Union are particularly strong, to
increase the level of subsidy up to 20 % of the total
investment cost. One example of this is the ‘missing
links’, often cross-border projects.

3.3.13.
The parameters of the current debate are
therefore: (i) European competitiveness and cohesion
require more interlinked and better transport networks
to absorb the growth in traffic and facilitate mobility;
(ii) environmental protection imposes limits on this and
makes investment more expensive.

In view of these circumstances and the need
3.3.14.
to tap new financial resources to make good the
infrastructure deficit, we must seek new and more
flexible financing formulas and schemes, creating con-
ditions which will attract the participation of the private
sector and mobilize capital.

3.3.8. Other weak links in the TENs are the ‘overheat-
ed links’ in congested regions, where trans-European

The COR would also like to point out that
3.3.15.
the explanatory memorandum to Regulation 2236/95

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repeatedly refers to the objectives listed in Article 129b
and to the guidelines mentioned in Article 129c for
achieving the objectives set out in Articles 7a and 130a.
Some of these references are removed in the draft
Regulation; the regions — especially remote, rural and
less developed regions — would not want to see these
guidelines overlooked as they are a means of gauging
whether the proposed revision of the Regulation is
consistent with the targets established in the Treaty.

3.3.16.
The Committee considers that TENs can
make a vital contribution to cohesion and harmonious
and balanced development in the regions. Hence the
aim of the proposed Regulation should remain to
promote not only interconnection and interoperability
between national networks, but also access to these
networks and links between island, land-bound, remote
and less developed regions in general.

4. Other changes

4.1.
The rest of the changes proposed by the Com-
mission are of a complementary and technical nature
and basically introduce specific provisions concerning
finance, procedure, evaluation, monitoring, information
and publicity, including the approval by the Member
States of private sector applications for financial aid.

concerned to ask the Commission for financial aid with
the agreement of the Member State(s).

The Committee thinks that a second paragraph
4.3.
should be added to this article enabling local and
regional bodies to apply directly to the Commission for
financial aid for studies without requiring the prior
agreement of the Member State. This would establish
separate treatment for applications for studies and for
projects. While the agreement of the Member State to
the local or regional authority’s application is thought
necessary in the case of projects, the Committee thinks
that such authorities should have greater autonomy
in encouraging studies. Since (i) much infrastructure
planning is the responsibility of local and regional
authorities, and (ii) a boost needs to be given to the role
and initiative of the regions in encouraging studies which
can affect TENs, it is logical that these authorities
should be able to address their requests for studies aid
directly to the Commission.

4.4.
At all events the Member States will know
about the applications submitted by local and regional
authorities through their representatives on the com-
mittee set up under Article 17 of the present Regulation
and can express their views on these applications by
means of the opinion provided for in Article 17(3).

5. Enlargement of the Union

5.1.
Enlargement of the Union will require a further
revision of the Regulation. According to the Com-
mission, however, this cannot be anticipated at this
stage.

4.2.
Thus Article 8 of the proposed Regulation makes
it possible for public or private undertakings directly

The current Regulation already permits the

5.2.
financing of links with third countries.

Brussels, 14 January 1999.

The President

of the Committee of the Regions

Manfred DAMMEYER