Report from the Commission - Annual Report of the cohesion fund 2000
Date: 2001-10-22
Institutions: European Commission
Subjects: Cohesion Fund, activity report, dissemination of information, implementation of the budget

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 22.10.2001
COM(2001) 602 final

REPORT FROM THE COMMISSION

ANNUAL REPORT OF THE COHESION FUND 2000

   
REPORT FROM THE COMMISSION

ANNUAL REPORT OF THE COHESION FUND 2000

TABLE OF CONTENTS

SUMMARY ............................................................................................................................... 5

1.

1.1.

General context ............................................................................................................ 7

Convergence and economic development in the beneficiary countries of the
Cohesion Fund ............................................................................................................. 7

1.1.1. Greece ......................................................................................................................... 7

1.1.2.

Spain

......................................................................................................................... 7

1.1.3.

Ireland ......................................................................................................................... 8

1.1.4.

Portugal ........................................................................................................................ 8

1.2.

2.

2.1.

Conditionality............................................................................................................... 9

Implementing principles and assistance granted.......................................................... 9

Coordination with other Community policies.............................................................. 9

2.1.1.

Public procurement ...................................................................................................... 9

2.1.2. Competition................................................................................................................ 10

2.1.3.

Environment............................................................................................................... 10

2.1.4.

Transport .................................................................................................................... 12

2.2.

Coordination with the Structural Funds: the strategic reference frameworks............ 12

2.2.1.

Environment............................................................................................................... 13

2.2.2.

Transport .................................................................................................................... 17

2.3.

Implementation of the budget: commitments and payments ..................................... 21

2.3.1. Budget available......................................................................................................... 21

2.3.2. Budget implementation .............................................................................................. 21

2.3.3.

Implementation of the budget for the previous period (1993-99).............................. 22

3.

3.1.

The projects and measures adopted............................................................................ 23

Assistance from the Fund by beneficiary Member State ........................................... 23

3.1.1. Greece ....................................................................................................................... 23

3.1.2.

Spain........................................................................................................................... 25

3.1.3.

Ireland ....................................................................................................................... 29

3.1.4.

Portugal ...................................................................................................................... 32

3.2.

Technical assistance and studies ................................................................................ 38

3.2.1. General policy of the Fund......................................................................................... 38

2

3.2.2.

Technical assistance at the initiative of the Commission .......................................... 38

4.

4.1.

Monitoring, inspection and irregularities................................................................... 39

Monitoring: Committees and missions ...................................................................... 39

4.1.1. Greece ....................................................................................................................... 39

4.1.2.

Spain

....................................................................................................................... 39

4.1.3.

Ireland ....................................................................................................................... 40

4.1.4.

Portugal ...................................................................................................................... 41

4.2.

Inspections and conclusions....................................................................................... 42

4.2.1. Greece ....................................................................................................................... 42

4.2.2.

Spain

....................................................................................................................... 42

4.2.3.

Ireland ....................................................................................................................... 42

4.2.4.

Portugal ...................................................................................................................... 43

4.3.

5.

5.1.

5.2.

5.3.

5.4.

Irregularities and suspension of aid............................................................................ 43

Assessment and evaluation ........................................................................................ 44

General ....................................................................................................................... 44

Examination and ex-ante appraisal projects............................................................... 44

Cooperation with the EIB when a project is considered ............................................ 44

Economic and social impact of the Fund in the Member States and on economic and
social cohesion, including employment, in the European Union,.............................. 45

5.5.

Ex-post evaluation programme .................................................................................. 45

5.5.1.

Environment............................................................................................................... 45

5.5.2.

Transport .................................................................................................................... 46

6.

6.1.

Inter-institutional dialogue, information and publicity .............................................. 46

Annual report for 1999............................................................................................... 46

6.1.1.

European Parliament .................................................................................................. 46

6.1.2.

Economic and Social Committee (Ecosoc)................................................................ 47

6.2.

6.3.

Information for the Member States ............................................................................ 47

Other events ............................................................................................................... 47

6.3.1.

Information for the social partners............................................................................. 47

6.3.2. Other

....................................................................................................................... 47

6.4.

Commission measures on publicity and information................................................. 48

A N N E X................................................................................................................................ 49

3

FOREWORD

This  annual  report  on  the  activities  of  the  Cohesion  Fund  covers  the  calendar  year  2000.  It
provides information on the first year of the 2000-06 programming period.

The reporting format reflects the requirements of the Cohesion Fund Regulation. It has been
adapted to take into account the comments made by the European Parliament, the Economic
and Social Committee and the Committee of the Regions.

It  is  hoped  that  it  will  also  serve  as  a  useful  reference  document  for  all  interested  in  the
promotion and furtherance of the economic and social cohesion of the Union.

4

Economic environment and conditionality

SUMMARY

In 2000 none of the Member States which are beneficiaries of the Cohesion Fund were in an
excessive  deficit  situation.  Accordingly,  the  Commission  did  not  produce  an  assessment  of
compliance with conditionality for any Member State in 2000.

Budget implementation

The  final  amount,  after  indexation,  of  the  resources  of  the  Cohesion  Fund  for  2000  is
€2 659 million.

The commitments and payments made were as follows (by country and by sector):

Budget implementation of appropriations in 2000 including appropriations carried forward to 2001

Commitment appropriations for 2000 (including appropriations carried forward to 2001)

Country

Environment

Transport

Amount

% Envir.

Amount

% Transp.

Mixed

Amount

Total

Amount

%

Spain

Greece

Ireland

Portugal

749 218 170

163 815 574

136 967 016

176 586 501

46.8%

851 923 302

37.6%

271 716 947

80.7%

32 657 648

39.3%

272 461 436

Technical assistance

0

0.0%

0

Total

1 226 587 261

46.2% 1 428 759 333

53.2%

62.4%

19.3%

60.7%

0.0%

53.8%

164 496

1 601 305 968

0

0

435 532 521

169 624 664

1 722 650

450 770 587

1 677 809

1 677 809

60.3%

16.4%

6.4%

17.0%

n s

3 564 955

2 658 911 549

100.0%

Payment appropriations for 2000

Country

Environment

Transport

Amount

% Envir

Amount

% Transp

Mixed

Amount

Total

Amount

%

Spain

Greece

Ireland

Portugal

Technical assistance

547 028 885

166 619 671

52 271 877

106 916 040

0

48.1%

589 632 725

55.0%

136 208 560

41.1%

93.2%

0.0%

74 988 716

7 777 796

0

51.9%

45.0%

58.9%

6.8%

0.0%

691 333

1 137 352 943

0

302 828 231

195 249

127 455 842

1 773 490

116 467 326

1 119 124

1 119 124

67.5%

18.0%

7.6%

6.9%

n s

Total

872 836 473

51.9%

808 607 797

48.1%

3 779 196

1 685 223 466

100.0%

Coordination with the Structural Funds: the strategic reference frameworks

For  the  2000-06  programming  period  the  Commission  established  a  series  of  guidelines
regarding the Cohesion Fund indicating that its assistance should be subject to a coordinated
strategic  approach  and  framed  within  programmes  identifying  the  main  priorities  for
assistance in the different sectors of  application selected and looking for better coordination
with other financial Community instruments.

Transport

In 2000, the transport sector represented 53.8% of total Cohesion Fund commitments.

5

As in the past, the Commission has insisted that the work of the Fund should concentrate on
the railways, which, in 2000, absorbed about 85% of commitments for transport in Spain and
77% in Portugal.

Environment

The environment accounted for 46.2 % of total Cohesion Fund commitments for 2000.

The  priorities  in  this  sector  remained:  the  supply  of  drinking  water,  the  treatment  of  waste
water and the treatment of solid waste.

Information and publicity

An information meeting with the 15 Member States was held in Brussels on 18 December.

At that meeting, the Commission presented the draft Annual Report of the Cohesion Fund for
1999  and  also  reported  on  the  progress  of  Cohesion  Fund  assistance  en  2000  in  each
beneficiary  Member  State.  The  Member  States  gave  details  of  their  strategic  reference
frameworks (see above).

Evaluation

At the end of 2000, of  the  120  projects  planned,  107  had  already  been  evaluated,  58  in  the
transport sector and 49 in the environment sector.

The initial conclusions to be drawn from the ex-post evaluations of 31 environment projects
suggest  that  their  implementation  and  their  impact  in  environmental,  social  and  economic
terms have been positive and have in general met the targets laid down.

The  provisional  summary  exercise  reviewed  the  ex-post  evaluations  of  some  40  transport
projects  concerning  all  modes.  The  projects  have  resulted  in  considerable  socio-economic
improvements  but  their  implementation  has  sometimes  encountered  unexpected  problems
(sometimes  design  shortcomings  resulting  in  an  upward  general  review  of  costs).  However,
the use made of the projects was very satisfactory.

Irregularities and the suspension of assistance

During  2000,  the  Anti-Fraud  Office  carried  out  no  investigations  concerning  the  Cohesion
Fund.

However, in 2000, the Spanish authorities notified two irregularities to the Commission under
Regulation  (EC)  No  1831/941,  bringing  to  seven  the  number  of  irregularities  notified  under
this Regulation since  its entry into  force.  Despite  this  fairly  small  number,  the  Commission
would draw the attention of the beneficiary Member States to their obligations in this respect.

1 OJ L 191, 27.7.1994.

6

                                                
1.

1.1.

GENERAL CONTEXT

Convergence  and  economic  development  in  the  beneficiary  countries  of  the
Cohesion Fund

1.1.1. G r e e c e

In 2000, economic policy in Greece followed the guidelines of the first update of the
convergence  programme,  which  was  submitted  in  December 1999  under  the
requirements of the Stability and Growth Pact. The main objective of the programme
was  to  satisfy  all  the  convergence  criteria  for  participation  in  the  euro  zone  from
January 2001.  The  Council  issued  an  opinion  on  the  programme  on  31  January
20002.

In 2000, the budgetary position of Greece turned out to be better than projected in the
1999 update of the convergence programme. The general government deficit fell to
0.9%  of  GDP  as  against  1.2%  set  in  the  programme.  This  was  the  result  of  better
budget  revenues,  in  particular  tax  revenues,  which  more  than  offset  an  overrun  in
interest payments and in primary expenditure. The primary surplus reached 6.4% of
GDP. The debt/GDP ratio also fell further, to 103.9% of GDP in 2000. Following the
Council  decision  of  19  June  2000,  Greece  entered  the  euro  zone  from  1  January
20013.  The  conversion  rate  of  the  drachma  against  the  euro  was  fixed  at  GRD
340.75, that is the central rate of the drachma in ERM II, decided in January 2000.

In  December 2000,  Greece  submitted  its  first  stability  programme  covering  the
period 2000-04 in accordance with Article 4 of Regulation (EC) No 1466/97 on the
strengthening  of  the  surveillance  of  budgetary  positions  and  the  surveillance  and
coordination of economic policies4. The programme was assessed by the Council on
12 January  20015.  The  first  stability  programme  aims  at  confirming  the  stability
stance  of  macroeconomic  policy  while  improving  the  functioning  of  the  markets
through  structural  reforms.  Building  on  better  than  expected  budgetary  results  in
2000 and on a high real output growth scenario, the stability programme projects the
general government balance to turn into a surplus of 0.5% of GDP in 2001 and 1.5%
of  GDP  in  2002.  The  general  government  debt  ratio  is  projected  to  decline  below
100%  of  GDP  in  2001.  The  budgetary  strategy  of  the  Greek  stability  programme
consists in maintaining high primary surpluses assisted by a significant reduction in
interest payments, resulting from lower interest rates and a declining debt ratio.

1.1.2.

S p a i n

In  2000,  economic  policy  was  run  under  the  strategy  of  the  Stability  Programme
Update (1999-2003) and was considered by the Council as being in accordance with
the  Stability  and  Growth  Pact6.  The  programme  reaffirmed  the  economic  strategy
followed  in  recent  years  (promoting  healthy  economic  growth  through  fiscal
consolidation  and  structural  reforms).  As  a  result,  GDP  grew  by  4.1%,  higher  than
3.7% assumed in the update. In this framework, budgetary consolidation targets were

2 OJ C 60, 2.3.2000, p.4.
3 OJ L 167, 7.7.2000.
4 OJ L 209, 2.8.1997.
5 OJ C 77, 9.3.2001, p.1.
6 OJ C 98, 6.4.2000.

7

                                                
exceeded: the general government deficit fell from 1.2% of GDP in 1999 to 0.3% in
2000  (lower  than  the  0.8%  envisaged  in  the  update)  and  the  debt/GDP  ratio  fell  to
60.6%  (2.2  percentage  points  lower  than  forecast).  In  contrast  price  developments
were worse than expected, not only because of price rises of the more volatile items,
but also because core inflation deteriorated.

The  second  Stability  Programme  Update,  covering  the  period  2000-04,  was
submitted  to  the  European  Commission  on  23  January  2001  and  assessed  by  the
Council  on  12  March  20017.  A  further  improvement  in  budgetary  targets  is
envisaged, based mainly on primary current expenditure restraint, while giving room
for a reinforcement of government investment and for a reduction in the tax burden
after  2002.  Thus,  the  general  government  sector  is  expected  to  reach  a  balance  in
2001  and  surpluses  in  the  following  years  of  up  to  0.3%  of  GDP  in  2004.  An
additional  downturn  in  the  debt/GDP  ratio  is  expected,  to  below  60%  in  2001  and
just under 50% by the end of the programme period.

1.1.3.

I r e l a n d

The December 1999 update of  Ireland’s stability programme was considered by the
Council as being in conformity with the Stability and Growth Pact8. Implementation
in 2000 again exceeded expectations. In December 2000, the Irish authorities revised
their  original  growth  projection  of  7.4%  for  real  GDP  in  2000  upwards  to  10.7%.
Booming tax revenues in a strongly growing economy more than offset expenditure
overruns  and  the  resulting  general  government  surplus  in  2000  is  estimated  to  be
4.5% of GDP rather than 3.3% as originally projected. The government debt to GDP
ratio continues to fall, to about 39% in 2000 and the value of the newly-established
National Pensions Reserve Fund at end-2000 was over 6% of GDP.

The December 2000 update of the stability programme, covering the period 2001-03,
incorporates  the  budgetary  plans  for  2001  and  was  assessed  by  the  Council  on  12
February  2001.  The  programme  confirms  that  Ireland  will  continue  to  meet  the
objectives of the Stability and Growth Pact. There will be sizeable surpluses on the
general government balance in each of the years to 2003. A further sharp decline in
the debt ratio is projected, to less than one quarter by end-2003.

1.1.4.

Portugal

In  2000,  budgetary  developments  took  place  under  the  framework  of  the  Stability
Programme  Update  (2000-04),  which  was  assessed  by  the  Council  on  13  March
2000. The budgetary outcome for 2000 is currently estimated as a deficit of 1.4% of
GDP  (i.e.  0.1  p.p.  lower  than  the  Stability  Programme  target).  However,  this  was
achieved  including  the  proceeds  from  the  sale  of  UMTS  licences  (0.4%  of  GDP),
because there were overruns in current primary expenditure and a shortfall in indirect
taxes  of  around  ½  of  a  p.p.  of  GDP  that  were  only  partly  offset  by  a  reduction  in
capital expenditure.

The  second  Stability  Programme  Update,  covering  the  period  2000-04,  was
submitted  to  the  European  Commission  on  23  January  2001  and  assessed  by  the

7 OJ C 109, 10.4.2001.
8 OJ C 60, 2.3.2000.

8

                                                
Council on 12 March 20019. It envisages continuation of the budgetary consolidation
process,  reaching  a  balanced  position  in  2004.  The  consolidation  effort  is  spread
more or less evenly over the period 2001-04. Moreover, the reduction in the deficit
ratio  results  from  similar  cumulative  changes  of  ¾  of  a  p.p.  of  GDP  on  both  the
revenue  and  expenditure  side  of  the  budget.  The  Council  considered  that  a  faster
reduction of the deficit would be appropriate.

1.2.

Conditionality

Under  Article  6  of  Council  Regulation  (EC)  No  1164/94,  assistance  from  the
Cohesion Fund is conditional on the sound management of the  general  government
finances.  Assistance  for  new  projects  in  a  beneficiary  Member  State  can  be
suspended if the Council decides that an excessive deficit exists in the Member State
and if that decision is not abrogated in accordance with Article 104 of the Treaty .

Every spring the general government deficits for the previous year are assessed using
the Commission’s spring economic forecasts based on budget data for the past year
reported  by  the  Member  States  before  1  March.  Every  autumn  the  general
government  deficits  for  the  currency  year  are  assessed  using  the  Commission’s
autumn economic forecasts, after verification of their reliability.

In  2000  none  of  the  Member  States  which  are  beneficiaries  of  the  Cohesion  Fund
was in an excessive deficit situation. Accordingly, the Commission did not produce
an assessment of compliance with conditionality for any of those Member States in
2000.

2.

IMPLEMENTING PRINCIPLES AND ASSISTANCE GRANTED

2.1.

Coordination with other Community policies

2.1.1.

Public procurement

Since  the  Cohesion  Fund  was  established,  the  Commission  has  paid  particular
attention to ensuring that Community legislation on public procurement is correctly
transposed into national law and that the Community rules are scrupulously adhered
to in the context of Community financial assistance. This is of particular importance
in the case of assistance from the Cohesion Fund in view of its high rates of financial
participation, which call for particular scrutiny by the Commission to verify open and
fair access to public tenders.

In its inspection missions, the Commission undertakes routine checks on compliance
with the relevant Community directives on public procurement and the correctness of
the  tender  selection  procedures.  Close  monitoring  by  the  Commission  of  projects
approved by the Fund has enabled national administrations to better understand and
apply  Community  procedures  for  the  award  of  public  contracts  and  tendering.  The
Commission  finds  that  national  authorities  and  Monitoring  Committees  cooperate
increasingly well and respond exhaustively to the questions it raises in the course of
its  consideration  of  applications  for  project  finance  and  its  monitoring  of  project
implementation.

9 OJ C 109, 10.4.2001.

9

                                                
2.1.2. Competition

Council  Regulation  (EC)  No  1164/94  establishing  a  Cohesion  Fund  states  that
assistance from the Fund must, in particular, be in keeping with competition policy.
In  this  regard,  consideration  of  applications  for  finance  concerns  mainly  an
assessment of the compatibility with the Treaty of the measures part-financed by the
Fund  in  order  to  ensure  that  assistance  complies  fully  with  the  Community
competition rules, and in particular those on State aids.

As  it  has  in  the  past,  the  Commission  finds  that  these  aids  do  not  generally  raise
problems of incompatibility with competition law, in that they are directed towards
infrastructure  projects  for  transport  or  the  protection  of  the  environment  which,
unless  they  infringe  the  rules  on  public  procurement,  do  not  provide  specific  firms
with  any  special  advantage.  Accordingly,  from  the  competition  point  of  view,
Community  monitoring  continues  to  concern  mainly  the  aspects  regarding  free
access  to  infrastructure  by  all  operators  meeting  the  technical  and  legal  conditions
required.

2.1.3.

Environment

Article  8  of  Council  Regulation  (EC)  No  1164/94  establishing  a  Cohesion  Fund
states  that  projects  are  to  be  in  keeping  with  Community  policies,  including  those
concerning environmental protection.

The objectives of Community policy on the environment are set out in Article 174 of
the Treaty. They cover:

(cid:1)  preserving and improving the environment;

(cid:1)  protecting human health;

(cid:1)  the rational utilisation of natural resources.

The Community programme of policy and action in relation to the environment and
sustainable development provided for the Cohesion Fund to assist in the achievement
of  the  Treaty  objectives  and,  in  particular,  in  resolving  specific  issues  such  as  the
reduction of water pollution and appropriate waste management. As well as focusing
on  these basic problems,  the  programme  also  concentrated  on  the  need  to  integrate
the environmental dimension into other Community policies in order to change and
limit the undesirable side effects of certain economic activities. This latter aspect is
of  concern  to  the  Cohesion  Fund  in  that  transport  infrastructures  are  the  other
investment priorities to which funding is channelled.

Article  3  of  Regulation  (EC)  No  1164/94,  as  amended  by  Regulation  (EC)  No
1264/1999, identifies the measures eligible for assistance from the Cohesion Fund as
those for environmental protection and transport infrastructure.

Furthermore, in July 1997, to improve and strengthen the internal procedures which
it had adopted in 1993, the Commission gave its agreement to  a range of measures
intended  to  ensure  that  greater  account  is  taken  of  environmental  considerations
when policy and administrative decisions are taken.

10

As  regards  the  programming  period  2000-06,  2000  saw  the  entry  into  force  of
Regulation  (EC)  No  1264/1999,  amending  Regulation  (EC)  No  1164/94  which
applied  during  the  1994-99  programming  period.  This  entails  a  change  in  the
procedure to be adopted in managing the aid granted. The procedure takes account of
the directives which now apply and draws on them more systematically:

EIA Directive

Directive  97/11/EC  amending  Directive  85/337/EC  came  into  force  on  14  March
1999. It introduced selection criteria to determine whether Annex II projects should
be  subject  to  an  environmental  impact  assessment  on  the  basis  of  their  significant
impact on the environment. The list of Annex I projects for which an EIA is required
in all circumstances was extended. During 2000, the new programming period 2000-
06  meant  that  that  these  amending  provisions  became  much  more  important.  The
Espoo convention on Environmental Impact Assessment in a Transboundary Context
was transposed by this Directive.

Habitats Directive

Directive 92/43/EEC set 10 June 1998 as the deadline for drawing up the lists of sites
to be protected under Natura 2000. The provisions for checks in the applications for
Cohesion Fund assistance  from  1 January  2000 were stepped  up to  ensure  that,  for
the  sites  in  the  Natura  2000  network  likely  to  be  affected  by  a  project  receiving
finance  from  the Fund,  all  the  protective  measures  required  from  an  environmental
point of view will be taken by the Member States concerned.

Water directives

Directive  91/271/EEC  (waste  water),  as  amended  by  Directive  98/15/EC,  set  31
December 2000 as one of its main deadlines (construction of drainage networks and
treatment  stations  in  accordance  with  the  sensitivity  of  the  area);  that  is  why  the
Cohesion  Fund  continued  during  2000  to  part-finance  infrastructure  which  would
help comply with the principles concerning sensitive areas and major  conurbations,
and will do so during the new programming period for smaller urban areas.

On  23  October  Directive  2000/60/EC  establishing  a  framework  for  Community
action in the field of water policy was approved. Although the deadlines it lays down
for implementation of its legislative and statutory provisions run until 22 December
2003,  some  of  its  principles  -  particularly  integral  management  by  water  basin  -
inspired in 2000 the treatment of projects to be part-financed by the Cohesion Fund.

Waste directives

Implementation of two recently approved directives on waste, Directive 1999/31/EC
on  the  discharge  of  waste  and  Directive  2000/76/EC  on  the  incineration  of  waste,
will have substantial organisational and environmental consequences in the Member
States  which  benefit  from  the  Cohesion  Fund,  since  waste  disposal  there  is  largely
dependent  on  discharge  and 
the
implementation of a strategy to improve recycling.

they  require  more  modern  facilities  and 

In  2000,  a  Cohesion  Fund  contribution  for  projects  concerning  waste  treatment
structures  was  refused  in  regions  which  still  had  no  appropriate  plans  for  waste
management as required by  Directive 75/442/EEC on waste, amended by  Directive

11

91/156/EEC.  This  has  encouraged  these  regions  to  comply  with  this  Community
provision.

2.1.4.

Transport

While  transport  TENs  projects  of  common  interest  are  financed  from  the  TENs
budget  line,  the  Cohesion  Fund  provides  funds  specifically  for  TENs  transport
infrastructure.

Coordination between the trans-European transport networks (TENs) budget and the
Cohesion  Fund  is  important  because  these  Community  financial  instruments  take
into  account  the  need  to  link  to  the  central  regions  of  the  Community  regions
suffering from a structural handicap and from their insular, landlocked or peripheral
status.

The TENs Regulation does not in principle allow the same phase of a single project
to be financed both by the TENs budget and from other Community sources but, in
some  cases,  feasibility  studies  financed  through  the  TENs  budget  may  be  followed
by support from the Cohesion Fund and the EIB for the (part-) financing mainly of
construction works of the actual investment. Frequently, in the area of transport, the
Cohesion  Fund  finances  works  designed  to  give  “access”  to  the  trans-  European
transport network, the components of which are themselves financed from the TENs
budget line.

In 2000  the  TENs budget line  had  €581  million  in  commitment  appropriations  and
€449 million in payment appropriations for transport.

The TENs Financial Regulation (EC) No 2236/95) was amended by Regulation (EC)
No  1655/1999)  to  provide  for  medium-term  planning  via  indicative  multiannual
investment  programmes  (MIP)  and  for  the  encouragement  of  public-private
partnerships,  together  with  the  use  of  a  small  amount  of  the  budget  line  (1-2%)  to
support projects involving risk capital. During the year 2000 the Financial Assistance
Committee,  which  assists  the  Commission  in  implementing  the  TENs  Regulation,
delivered a positive opinion on the MIP for 2000-06 and it will be revised in 2003.
The  current  proposal  that  will  be  adopted  by  the  Commission  in  autumn  2001
includes  about  €2.8  billion  for  11  priority  projects  (Essen  projects),  the  Global
Navigation  Satellite  Systems  project  (“Galileo”)  and  four  groups  of  projects  of
common interest.

2.2.

Coordination with the Structural Funds: the strategic reference frameworks

For  the  programming  period  2000-06  the  Commission  established  a  series  of
guidelines  regarding  the  Cohesion  Fund  indicating  that  its  assistance  should  be
subject  to  a  coordinated  strategic  approach  and  framed  within  programmes
identifying  the  main  priorities  for  assistance  in  the  different  sectors  of  application
selected  and  looking  for  better  coordination  with  other  financial  Community
instruments.

12

2.2.1.

Environment

Spain

The priority sectors for assistance, decided together with the Spanish authorities, are:

(cid:1)  management of municipal, industrial and hazardous waste

(cid:1)  sewerage and waste-water treatment

(cid:1)  water supply

For each of these sectors a strategic framework has been designed which analyses the
current  situation,  identifying  the  existing  problems  and  deficiencies,  indicating  the
objectives to be achieved and specifying the assistance needed for this purpose. The
frameworks  are  designed  taking  into  account  the  areas  of  responsibility  of  the
different  administrations  as  well  as  the  Community  and  national  legislation  to  be
complied with, all within established time frames for their development.

The “Strategic Framework  for Waste Management in Spain” takes into account the
objectives  and  criteria  established  in  the  Community  Waste  Management  Strategy
and it is based on the different waste management plans already adopted at national
and regional level. The document analyses the situation regarding the management of
municipal  and  of  hazardous  wastes  as  well  as  of  other  waste  streams  (end-of-life
vehicles,  used  tyres,  construction  and  demolition  wastes,  waste-water  treatment,
sludges, etc) and of contaminated soils. For each of these types of wastes a series of
objectives is established with specific proposals for the measures required to achieve
them.

The  “Strategic  Framework  for  Sewerage  and  Waste-water  Treatment”  offers  an
overview of the situation in this sector in Spain indicating the strategies to apply and
the  assistance  to  be  carried  out  in  the  period  2000-06  in  order  to  comply  with
Community  requirements  regarding  urban  waste-water  treatment  and  disposal.  The
objectives in this field, which are contained in the “Plan Nacional de Saneamiento y
Depuración  de  Aguas  Residuales  Urbanas”  (National  Sewerage  and  Wastewater
Treatment  Plan),  are  the  improvement  of  the  sewerage  and  of  the  waste-water
treatment systems, a greater control of the quality of discharges with a view to reuse
of treated effluents and improved management and disposal of waste-water sludges.

The “Strategic Framework for Water Supply” has as its main objective to ensure and
guarantee  the  supply  of  water  of  good  quality  in  sufficient  amounts  to  all  the
population,  taking  into  account  the  expected  increase  in  demand  in  the  near  future
and  the  need  to  manage  the  resources  available  properly,  by  improving  their  use,
avoiding their deterioration and seeking new ones. River basins are considered as the
management unit for water resources and each has a “Plan de Cuenca” (Basin Plan),
whose main objectives are to achieve a highly satisfactory level of supply in quantity
and  quality,  best  possible  use  of  the  resources  available  through  savings  and  more
efficient  management,  the  diversification  of  the  resources  in  its  origin  and  reduced
vulnerability  of  water  supply  systems.  For  every  river  basin  there  is  a  specific
management entity, the “Confederacion Hidrográfica”.

13

All  the  strategic frameworks mentioned above  are to  be developed in  an  integrated
manner and taking into account, under different forms of application, the “polluter-
pays principle”.

Portugal

Major  investments  were  carried  out  during  the  1996-99  period,  the  main  objective
being to  increase  water  supply  capacity  and improve quality in the Greater  Lisbon,
Greater  Oporto  and  Algarve  regions,  to  monitor  underground  water  quality,  and  to
renovate  and  build  new  waste-water  treatment  plants  in  the  main  towns  and  more
sensitive areas.

Integrated systems to treat industrial waste water were also built in some of the more
heavily  industrialised  areas  subject  to  particularly  serious  waste  water  pollution
problems due to industrial contamination (Vale do Ave, Águeda, Alcanena).

For  solid  waste  treatment,  integrated  management  systems  allowing  for  a  greater
coverage  in  terms  of  area  and  population  served  created,  each  one  serving  several
municipalities  and  covering  waste  collection  and  recycling  were  introduced.  In
parallel, existing waste dump sites were closed down and the site area renovated.

Portugal’s  environment  strategic  framework  for  2000-06  includes  the  following
priorities:

–  to further develop and complete the basic environmental infrastructure;

–  to  develop  conditions  allowing  for  sustainable  development,  environmental

protection and the management of natural resources.

This  involves  improved  conservation  and  management  of  natural  resources  and
integration  of  environmental  policy  into  overall  regional  and  sectoral  development
policies through better impact assessment and in line with the polluter-pays and user-
pays  principles.  It  will  also  require  strategic  partnerships  to  be  set  up  between  the
public  administration  and  a  whole  range  of  organisations,  including  the  private
sector. Last but not least, a special effort will be made on education and information
activities regarding natural resources and other environmental issues.

Cohesion Fund support is envisaged for the  larger  water supply, urban waste-water
drainage and treatment and urban solid waste treatment infrastructure projects. Both
water  supply  and  treatment  will  be  included  in  the  integrated  systems  approach  in
which intermunicipal systems covering the complete ‘water cycle’, will be managed
by the same entity.

Cohesion  Fund  assistance  will  be  supplemented  at  the  level  of  the  regional
programmes  with  funding  from  the  ERDF  to  build  or  renovate  the  smaller  local
components of these systems.

This  requires  close  coordination  of  priorities  and  schedules  between  the  Cohesion
Fund  and  the  regional  operational  programmes  (Norte,  Centro,  Alentejo,  Lisboa  e
Vale do Tejo, Algarve, Madeira and Azores).

The main objectives for water supply and waste water drainage and treatment are to
increase  significantly  the  population  served  and  in  the  case  of  water  supply,  to

14

improve the quality of drinking water in line with Community directives and increase
reliability of supply.

Supply of drinking water

Waste water drainage and treatment

Solid waste treatment

Ireland

% population affected 2006
(mainland Portugal)
95

90

98

The  Irish  authorities  presented  their  strategic  reference  framework  for  the
environment sector on 29 July 2000. This document presented  a limited number of
projects in the sub-sectors of waste water and solid waste as the main priorities.

In  respect of  waste  water  the  main  objectives  identified  are  presented  as  consistent
with  the  key  priorities  of  national  policy  set  out  in  the  National  Development  Plan
/Community support framework and the Economic and Social Infrastructure OP for
2000-06.  The  two  broad  objectives  of  these  programmes  are  to  ensure  compliance
with  the  EU  policy  framework  and  to  support  economic  and  social  development
while achieving and maintaining high environmental standards.

The overall national strategy for pursuing the objectives is set out with reference to
the NDP/CSF and the Economic and Social Infrastructure OP under which the total
planned investment over the period 2000-06 is €3 853 million.

Early  in  2000  the  Government  approved  a  policy  framework  for  the  application  of
the  polluter-pays  principle  to  water  services  infrastructure  and  operations.  It
provides, inter alia, for full cost recovery  from non-domestic users for public water
services (capital and operating costs). The metering of all non-domestic users is to be
completed  by  2006.  Services  to  domestic  users  will  continue  to  be  financed  from
public funds.  It  was agreed in the  context of  the  CSF  that  progress  in  the  applying
PPP will be reviewed at mid term

Public-private partnerships are to be favoured in the water sector generally with the
design-build/design-build-operate  approach  being  used  for  projects  involving  the
provision  or  upgrading  of  major  water  or  waste  water  treatment  works.  Two  CF
supported projects are pilots for DB-DBO use in water services.

Investment priorities in waste water are driven by the need to ensure compliance with
the  UWWTD.  The  Cohesion  Fund  assisted  projects;  the  three  water  priorities
presented for the CF are the Dublin, Cork and Limerick treatment works.

In relation to the solid waste sub-sector, the broad objectives outlined are to support
economic,  balanced  regional  and  social  development  while  achieving  and
maintaining  high  environmental  standards  and  to  ensure  compliance  with  the  EU
policy  framework.  A  principal  target  is  to  reduce  the  90%  dependence  on  landfill
disposal.

The  key  priorities  in  solid  waste  flow  from  the  national  policy  set  out  in  the
NDP/CSF and the two regional operational programmes for 2000-06.

15

The  strategy  for  developing  regional  waste  management  plans  and  deciding  on
infrastructure  requirements  is  described  along  with  the  details  of  the  total  planned
investment over the period 2000-06 of €825 million.

The  national  waste  management  policy  is  consistent  with  the  application  of  the
polluter-pays principle through the imposition of waste charges. The private sector is
or will shortly be providing and charging for household waste collection services in
16 of the 34 major local authority areas. Only three Dublin County Councils had at
that date still to impose waste charges for their services.

In  respect  of  the  delivery  of  solid  waste  infrastructure  the  reference  framework
identifies  design-build-operate-finance  as  the  preferred  method  for  providing  the
thermal treatment plants proposed under the draft waste management plans.

As  the  delivery  of  solid  waste  projects  in  Ireland  is  not  as  mature  as  in  the  waste-
water sector, the Irish authorities have identified certain categories of projects to be
proposed for CF support. These include the planning, procurement and design costs
of  individual  thermal  treatment  facilities  projects  or  such  costs  in  respect  of  the
implementation  of  an  integrated  approach  to  the  management  of  the  waste  for  a
particular region where such infrastructure is in line with the provisions of the Waste
Management Plan for that region. The projects proposed would either represent the
follow  up  of  feasibility  studies  previously  supported  by  the  Cohesion  Fund  or
encompass such studies.

Greece

By  letter  dated  11  December  2000  Greece  submitted  the  draft  Operational
Programme  for  the  environment,  which  includes  the  strategic  reference  framework
for Greek projects in the field of environmental protection to be part-financed by the
Cohesion Fund.

The framework includes the three main sectors of assistance:

Drinking water and its distribution

Projects which ensure the collection, storage and supply of drinking water.

Waste-water treatment

Projects to separate waste water from rainwater, its channelling and/or storage, flood-
protection works and waste-water treatment and the provision of treated water.

Waste management

Projects  to  treat  domestic  waste  from  selective  separation  and  collection  and  the
treatment of waste.  It should be  noted that the projects to be part-financed must be
included  by  the  Member  State  in  its  national  waste  management  plan  sent  to  the
Commission.

The  financial  forecasts  which  reflect  this  framework  strategy  for  2000-06  in
quantitative  terms  were  confirmed  by  the  Member  State  in  a  table  sent  to  the
Commission listing  the  main projects by name and the amounts  planned for all the

16

other projects in each sector (these have of course not yet been selected but will be
defined as and when this is done).

M.E.N.  circular  No  11924/792  of  5  April  2001  to  the  regions  on  this  subject  lays
down to a certain extent the arrangements for defining these projects.

2.2.2.

Transport

Spain

Following consideration by the Commission and the Spanish authorities on the future
activities  of  the  Cohesion  Fund  in  2000-06,  in  accordance  with  Article  B(2)  of  the
amended  Annex  II  to  the  Cohesion  Fund  Regulation,  the  reference  framework  for
investments in the trans-European transport networks, which defines Spain’s general
strategy in this area for the period of assistance in question, was submitted.

In accordance with the Commission Guidance for programming assistance from the
Structural  Funds  and  their  coordination  with  the  Cohesion  Fund10,  the  strategic
reference framework contains the following objectives:

(cid:1)  to  improve  the  prospects  for  economic  development,  competitiveness  and

employment;

(cid:1)  to contribute to balanced development;

(cid:1)  to encourage sustainable mobility and ensure the availability of transport services
where private means of transport are lacking or suffer from mobility problems.

In  accordance  with  the  Cohesion  Fund  vade-mecum  for  2000-06,  the  reference
framework presented by the Spanish authorities includes the following points:

(cid:1)  definition of long-term objectives;

(cid:1)  specification  of  the  objectives  which  could  be  achieved  during  2006  in  the
development  of  the  trans-European  transport  networks,  the  identification  of
assistance on the main routes and the estimated investment costs;

(cid:1)  the strategy making use of the various Community Funds.

With more specific reference to assistance from the Cohesion Fund for 2000-06, the
strategic  approach  selected  by  the  Spanish  authorities  will  mean  continuing
investment  in  the  development  and  modernisation  of  the  trans-European  rail
transport  network,  particularly  in  the  form  of  high-speed  rail  links,  the  continued
construction  of  roads  to  improve  links  with  France  and  Portugal  and  improving
operating conditions in ports.

Implementation  of  the  overall  strategy  will  be  regularly  monitored  by  the  various
Cohesion  Fund  Monitoring  Committees.  Coordination  with  assistance  from  the
ERDF  will  be  checked  by  a  specialist  working  party  on  transport  set  up  under  the
Community support framework.

10 COM (1999) 344, 1 July 1999.

17

                                                
Portugal

Following  consideration  by  the  Commission  and  the  Portuguese  authorities  on  the
future activities of the Cohesion Fund in 2000-06, in accordance with Article B(2) of
the amended Annex II to the Cohesion  Fund Regulation, the Portuguese  authorities
submitted  the  reference  framework  for  transport,  which  defines  Portugal’s  general
strategy in this area for 2000-06.

During  negotiation  of  the  CSF  for  Portugal  and  the  Operational  Programme  for
transport access, this strategy was analysed, principally to check its compliance with
the  Commission  Guidelines  for  programming  assistance  from  the  Structural  Funds
and their coordination with the Cohesion Fund.11

The document on the reference framework for transport is annexed to the text of the
operational  programme  for  technical  assistance  adopted  by  the  Commission  on  22
August 2000.

This framework is the main instrument for coordination between assistance from the
Cohesion Fund, the  ERDF  (both  its  sectoral  and  its  regionalised  aspects)  and  other
Community sources, including the budget line for the trans-European networks.

The priorities adopted for the next period of assistance from the Fund in Portugal are:

(cid:1)  to  increase  infrastructure  provision  and  the  efficiency  of  the  transport  system  to
ensure  the  integration  of  Portugal  with  the  rest  of  the  world  and  so  to  make
Portuguese firms more competitive;

(cid:1)  to develop and rationalise urban transport systems;

(cid:1)  to  improve  internal  territorial  cohesion  by  improving  regional  accessibility

(between regions and to the main network);

(cid:1)  to  support  logistics,  mainly  through  the  establishment  of  a  coherent  series  of
platforms which should also play a vital role in integrating the various modes of
transport.

Implementation  of  this  strategic  approach  will  require  continuing  work  on  the
modernisation of the  main  rail  network,  speeding  up  construction  of  the  main  road
routes  and  secondary  connections,  building  underground  rail  systems  in  the  main
towns,  providing  equipment  and  improving  operating  conditions  in  the  ports  and
increasing capacity and quality of services in the airports.

Implementation  of  the  overall  strategy  will  be  regularly  monitored  by  a  specialist
working party on transport set up by the Portuguese authorities.

As it always has been, Cohesion Fund assistance will be directed towards completion
of  the  trans-European  networks,  with  aid  being  concentrated  on  the  elements  of
Essen  priority  project  No  8  (Multimodal  links  between  Portugal  and  Spain  and  the
rest  of  Europe).  Because of their  ability  to  contribute  to  the  creation  of  operational

11 COM (1999) 344, 1 July 1999.

18

                                                
systems up to 2006, other key TENs projects should also receive priority in order to
achieve the maximum impact on cohesion.

Ireland

The Irish reference framework for the transport sector recalls that the key objective
of  the  NDP  is  to  promote  sustainable  transport  policies,  which  facilitate  continued
economic  growth  and  regional  development,  while  ensuring  a  high  level  of
environmental  protection.  To  this  end,  the  national  strategy  sets  out  the  following
main priorities :

Road Network

(cid:1)  The development to motorway/high quality dual carriageway standard of the five

key inter-urban routes radiating from Dublin, and

(cid:1)  a programme of major improvements on other national primary routes.

Transport in the Greater Dublin Area

(cid:1)  Completing  the  C  Ring  motorway  around  the  city,  increasing  its  capacity  and

building the Dublin Port Tunnel, and

(cid:1)  enhancing  the  public  transport  system  through  the  provision  of  a  new  light  rail
system,  quadrupling  of  track  on  the  south-west  rail  corridor  to  separate  long-
distance  and  suburban  services,  re-signalling  of  the  city  centre  track  loop  to
provide  additional  peak-time  services,  new  stations,  more  rolling  stock  for  the
existing metro (DART) and suburban rail services and more buses.

National public transport

(cid:1)  Upgrading of bus and commuter rail services in regional cities.

(cid:1)  Improving the capacity and safety of the national rail network.

(cid:1)  The  priorities  for  national  road  and  public  transport  embodied  in  the  reference
framework  are  fully  consistent  with  the  objectives  of  the  priority  projects
proposed for support by the Cohesion Fund.

Other key elements of the framework are as follows:

(cid:1)  It  outlines  the  strategy  for  achieving  the  objectives  for  these  transport  sectors,
with reference to the NDP and the sub-programmes for national roads and public
transport. In 1999 prices, total planned investment over the period 2000-06 is €6
billion  in  national  roads  and  €2.8  billion  in  public  transport.  It  is  expected  that
over 70% of this planned investment will be spent on the development of the key
national road and rail routes forming part of the trans-European transport network.

(cid:1)  As  regards  the  polluter-pays  principle,  the  framework  points  to  the  taxation
regime on vehicles and fuel. Its also notes that there  are two hard-toll bridges in
operation.  The  hard-toll  system  will  be  extended  to  the  national  roads  system
under  the  public-private  partnership  schemes.  Eleven  road  schemes  were
identified by December 2000, some of which had already been put out for tender.

19

(cid:1)  The up-dating of the strategy for road transport in Dublin in 2001 will provide for
the development of a comprehensive demand management strategy for transport.

The  projects  identified  for  Cohesion  Fund  support  during  the  period  2000-06  are
consistent with the broad investment priorities outlined above as well as, in nearly all
cases,  being  the  final  construction  stages  of  projects  already  supported  in  the
previous budgetary period.

Greece

By  letter  dated  6  April  2000  Greece  submitted  a  draft  operational  programme  for
roads, ports and urban development, which includes the strategy for  Greek projects
in  the  ‘roads  -  ports’  sector  and,  by  another  letter  of  the  same  date,  the  draft
operational  programme  for  rail,  airports  and  urban  transport,  which  includes  the
strategy for Greek projects in the ‘rail - airports’ sector.

After a period of negotiation, the two documents were finalised at the end of 2000.
The  two  operational  programmes  approved  included  the  strategic  reference
framework for projects part-financed by the Cohesion Fund in the transport sector for
2000-06.

Strategic approach

The  Cohesion  Fund  will  continue  to  play  a  key  role  in  implementing  the  trans-
European  networks,  particularly  as  regards  the  corridors  and  key  points  in  the
networks  and  the  measures  concerning  the  missing  links  in  the  priority  routes
identified  at  Essen.  To  that  end,  the  reference  framework  provides  an  initial
indication  of  the  costs  of  the  investments  required,  a  provisional  calendar  of
implementation  and  an  indicative  plan  of  sources  of  finance,  including  the  private-
sector  contribution.  It  also  includes  a  fairly  detailed  description  of  the  physical
purpose  of  the  investments.  The  document  demonstrates  consistency  with  the
European Regional Development Fund.

The priorities by mode of transport are as follows:

(cid:1)  Roads

Pathe and Via Egnatia motorways, partly financed during the previous period.

Ionian route and Corinth-Tripoli-Kalamata/Sparti motorway

(cid:1)  Rail

Pathe corridor partly financed during the previous period .

Electrification  of  the  Athens-Thessaloniki-Promachon  (Bulgarian  frontier)  corridor
partly financed during the previous period.

Rail link from the port of Ikonion and the Thriassio complex.

(cid:1)  Ports

Ports of Heraklion and Igoumenitsa

20

(cid:1)  Air transport

Completion of the ‘Modernisation of the Air Traffic Control System’ project

(cid:1)  Combined transport

Thriassio complex and links with the existing rail networks.

2.3.

Implementation of the budget: commitments and payments

2.3.1.

Budget available

In  accordance  with  Article  4  of  Regulation  (EC)  No  1164/94,  as  amended  by
Regulation  (EC)  No  1264/1999  (the  Cohesion  Fund  Regulation),  Cohesion  Fund
resources  available  for  commitment  for  2000  amount  to  €2  615  million  at  1999
prices. The final amount entered in the budget after indexation was €2 659 million.

In accordance with the brackets for the allocation of resources by Member State laid
down in Annex I to the Cohesion Fund Regulation, the indicative allocation of these
appropriations by country is as follows:

Country

Lower limit

Upper limit

Spain
Greece
Ireland
Portugal
Technical assistance
Total

€ mill

1 621
425
53
425
2
2 659

%
61.0%
16.0%
2.0%
16.0%

€ mill

1 687
478
159
478
2
2 659

%
63.5%
18.0%
6.0%
18.0%

The budgetary authority also decided to enter €2.8 billion in payment appropriations
for the Cohesion Fund.

Under  Article  7  of  the  Financial  Regulation,  the  Commission  decided  to  make
available  again  the  €1.7  million  of  appropriations  decommitted  in  1999  and  allow
reutilization of €1 million recovered in 1999.

2.3.2.

Budget implementation

The  tables  showing  the  budgetary  implementation  of  Cohesion  Fund  resources  in
2000 and carryovers to 2001 are as follows:

Summary table of implementation of the CF for 2000 appropriations (en €)

Initial

Movements

Final resources

Implementation

Cancelled

Carryovers to
2001

Commitment
appropriations

Budget 2000
Appropriations carried over
from 1999 (not
implemented)
Appropriations made
available again (decommitted
in 1999)
Repayments of advances
(reimbursements)

2.659.000.000

0

1.699.812

994.593

Totals

2.661.694.405

0

0

0

0

0

2.659.000.000

2.245.364.790

88.451

413.546.759

0

1.699.812

0

0

0

1.699.812

994.593

994.593

0

0

0

0

2.661.694.405

2.246.359.383

1.788.263

413.546.759

21

Payment appropriations

Initial

Movements

Final resources

Implementation

Cancelled

Carryovers to
2001

Budget 2000
Appropriations carried over
from 1999 (not
implemented)
Repayments of advances
(reimbursements)

2.800.000.000

157.691.951

994.593

2.800.000.000

1.685.223.466

814.776.534

300.000.000

157.691.951

994.593

0

0

157.691.951

994.593

0

0

Totals

2.958.686.544

0

2.958.686.544

1.685.223.466

973.463.078

300.000.000

Under Article  7  of the  Financial  Regulation, appropriations not  implemented at  the
end  of  the  year  are  cancelled,  unless  the  Commission  adopts  a  specific  decision  to
carry  them  over.  All  the  commitment  appropriations  carried  over  were  used  by  31
March  2001.  However,  the  payment  appropriations  carried  over  could  not  be  used
until the appropriations under the 2001 budget were exhausted.

The  tables  of  implementation  by  country  and  by  type  of  project,  (environment,
transport or mixed) are as follows:

Budget implementation of appropriations for 2000 including appropriations carried over to 2001

Commitment appropriations for 2000 (including appropriations carried over to 2001)

Country

Environment

Transport

Amount

% Envir

Amount

% Transp

Mixed

Amount

Total

Amount

%

Spain

Greece

Ireland

Portugal

Technical assistance

749 218 170

163 815 574

136 967 016

176 586 501

0

46.8%

37.6%

80.7%

39.3%

0.0%

851 923 302

271 716 947

32 657 648

272 461 436

0

Total

1 226 587 261

46.2% 1 428 759 333

53.2%

62.4%

19.3%

60.7%

0.0%

53.8%

164 496

1 601 305 968

0

0

435 532 521

169 624 664

1 722 650

450 770 587

1 677 809

1 677 809

60.3%

16.4%

6.4%

17.0%

3 564 955

2 658 911 549

100.0%

Payment appropriations 2000

Country

Environment

Transport

Amount

% Envir

Amount

% Transp

Mixed

Amount

Total

Amount

%

Spain

Greece

Ireland

Portugal

Technical assistance

547 028 885

166 619 671

52 271 877

106 916 040

0

48.1%

55.0%

41.1%

93.2%

0.0%

589 632 725

136 208 560

74 988 716

7 777 796

0

51.9%

45.0%

58.9%

6.8%

0.0%

691 333

1 137 352 943

0

302 828 231

195 249

127 455 842

1 773 490

116 467 326

1 119 124

1 119 124

67.5%

18.0%

7.6%

6.9%

Total

872 836 473

51.9%

808 607 797

48.1%

3 779 196

1 685 223 466

100.0%

To reflect implementation of the appropriations allocated in 2000, the appropriations
carried over to 2001 are included in the above table. The appropriations reconstituted
or reused are not included because they come from allocations for earlier years.

To  facilitate  financial  management,  at  the  end  of  2000,  some  over-implementation
was  allowed  for  Ireland  and  Spain.  Balance  will  be  restored  in  2001  by  an  under-
allocation of commitment appropriations equivalent to the over-running as compared
with the indicative allocations adopted by the Commission.

2.3.3.

Implementation of the budget for the previous period (1993-99)

The  period  1993-99  was  fully  committed  as  planned  by  31  December  1999.  As  a
result,  no  commitment  was  made  in  2000  from  appropriations  for  1993-99,  apart

22

from €994 593 representing repayment of an advance which was recommitted for the
country in question, Ireland.

Settlement in 2000 of commitments for the period 1993-99

Country

Initial amount to be
settled

Decommitments

Final amount to be
settled

Spain

Greece

Ireland

Portugal

Technical assistance

Total

3 049 584 234

1 052 540 103

379 381 298

434 168 522

2 734 311

1 039 538

43 690

103 992

321 014

325 348

988 012 034

302 828 231

127 455 842

113 490 966

1 015 445

2 060 532 662

749 668 182

251 821 464

320 356 542

1 393 518

4 918 408 468

1 833 582

1 532 802 518

3 383 772 368

The  size  of  the  amount  to  be  settled  for  1993-99  at  the  end  of  2000  was  roughly
equivalent to the Cohesion Fund budget for one year.

A large part of this amount relates to projects carried over into the new period 2000-
06.  This  means  that  the  amount  to  be  settled  will  be  dealt  with  through  interim
payments rather than closures.

3.

THE PROJECTS AND MEASURES ADOPTED

3.1.

Assistance from the Fund by beneficiary Member State

3.1.1. G r e e c e

3.1.1.1. Environment

As noted above (paragraph 2.2.1), Greece provided its strategic reference framework
for  environmental  projects  very  late  in  2000.  This  delayed  adoption  by  the
Commission  of  these  projects,  for  which  the  application  for  assistance  frequently
arrived after the reference framework had been sent.

Commitments in 2000 for environment projects in Greece totalled €79 792 478 and
in 2001 of the appropriations for 2000 carried  over,  €84  023  096,  giving  a  total  of
€163 815 574 instead of about €252 million (50% of the appropriations planned, i.e.
the mid point of the bracket laid down for 2000-06 by the Berlin European Council).

The projects adopted by the Commission in 2000 fall into two distinct categories:

New projects 

Waste management in Chania (€18 480 000)

Waste-water and waste-water treatment in Almiros (€6 708 835)

Waste-water and waste-water treatment in Agii Theodori (€8 855 400)

Construction of the Gadoura dam and water supply on Rhodes (€14 015 840)

Waste-water and waste-water treatment on Sami (€7 131 600)

23

Waste-water and waste-water treatment in Kassandra (€12 412 800)

Amended projects

These  are  projects  adopted  in  1993-99  and  amended  in  2000,  with  increased
assistance following the adoption of supplementary works:

Waste-water and waste-water treatment on Ioannina (€7 919 610)

Waste-water treatment for Athens at Psyttalia phase B (€46 684 033)

Waste-water and waste-water treatment on Mytilene (€5 780 259)

Construction of dam and water supply at Voïo (€18 288 137)

Studies for the Gadoura dam and water supply on Rhodes (€5 757 735)

Construction of dam at Aposselemi and water supply at Heraklion (€4 396 360)

Water supply to Thessaloniki from the River Aliakmon (€7 384 965).

3.1.1.2. Transport

Commitments  in  2000  for  Greek  projects  in  the  field  of  transport  amounted  to
€126 566 571 and those in 2001 from the appropriations  carried  over  from  2000 to
€145 150 416, a total of €271 716 987 instead of the approximately €223.5 million
which  corresponds  to  50%  of  the  appropriations  planned  (i.e.  the  mid-point  of  the
bracket  laid  down  at  the  Berlin  European  Council  for  the  distribution  of  the
appropriations  allocated  to  each  beneficiary  country  under  the  Cohesion  Fund  for
2000-06).

The  projects  adopted  by  the  Commission  in  2000  (with  the  amounts  of  assistance
committed from the 2000 budget) fall into two distinct categories:

New projects 

Construction of the new Corinth-Kiato railway line and studies for the Corinth-Patras
section (€39 920 000)

Via Egnatia, section: Kouloura-Kleidi (€21 810 040)

Via  Egnatia,  section:  Completion  of  external  ring  road  for  Thessaloniki  from
interchange K1 to interchange K4 (€39 622 000)

Amended projects

These  are  projects  which  were  adopted  during  1993-99  and  amended  in  2000  with
increased assistance following the addition of a new physical object:

Construction of the Thriassio-Elefsina-Corinth railway line, phase B (€17 650 000)

Construction of a double track railway line from Evagelismos to Leptokarya, phase B
(€13 300 000)

24

Construction  of  the  Thriassio  complex  and  connection  to  the  existing  network,
phases A and B (€21 399 661)

Pathe, completion of section: Iliki-Agios Konstantinos (€32 793 416)

Pathe, section: Pathe motorway through the urban area of Katerini (€28 308 428)

Via Egnatia, section: Completion of section from Igoumenitsa to Selles interchange
(€42 682 287).

Some other requests for amendments to earlier decisions resulting in increased cost
which  the  Greek  authorities  submitted  towards  the  end  of  2000  did  not  result  in
decisions because upon examination the Commission felt that the reasons giving rise
to  the  over-running  of  the  initial  costs  and  their  compliance  with  national  and
Community legislation should be studied.

3.1.2.

Spain

The Commission approved assistance from the Cohesion Fund of €2 276 million, of
which  €1  601  million  had  been  committed  in  the  budget  for  2000.  All  the
commitments made corresponded to new decisions adopted that year.

The following table shows the amount for each sector.

Total eligible cost*
(€ million)

Total assistance*
(€ million)

Commitments 2000*
(€ million)

1 375

1 557

2 293

46.9 %

53.1 %

1 125

1 151

2 276

49.4 %

50.6 %

749

852

1 601

46.8 %

53.2 %

Environment

Transport

Total CF

% Environment

% Transport
*rounded figures

3.1.2.1. Environment

The  Cohesion  Fund  continued  to  concentrate  its  financial  support  on  the  three
priority sectors: water supply, drainage and water treatment and the management of
solid  urban,  industrial  and  hazardous  waste.  The  aim  was  to  complete  the  cycle  of
assistance, fill in the gaps remaining in the existing systems and to finance integrated
operating systems.

The Cohesion Fund contribution by sector shows that drainage and water treatment
received over half the resources for the environment.

Total eligible
cost
(€ million)

Total assistance
(€ million)

% of assistance

Commitments
2000
(€ million)

Water supply

Drainage and water treatment

Management of solid waste

Technical assistance

240.92

812.13

321.21

0.24

202.48

665.55

256.97

0.21

Total

1 374.50

1 125.21

17.99 %

59.15 %

22.84 %

0.02 %

100.00

120.00

451.46

168.74

0.16

749.38

25

Water supply

During  2000, Community  assistance for  measures to improve  water  supply  totalled
€202.5 million, 18% of the amount allocated to the environment sector.

The projects financed in this sector will ensure adequate supplies of drinking water
of sufficient quality to consumers, in  accordance  with  Community  directives.  They
will improve the quality of drinking water in a number of towns, such as Zaragoza, to
meet the problems of drought affecting the region of Andalusia (construction of the
Melonares dam in Seville with a storage capacity of 180 Hm³, and a dam to ensure a
minimum flow in a river in León).

Water supply
Projects adopted in 2000

No du project

Name of project

2000 ES 16 C PE 033 Melonares dam

1999 ES 16 C PE 001 Casares de Arbás dam

2000 ES 16 C PE 071 Improved water supply to west Gijón

2000 ES 16 C PE 009 Water supply in the Guadalquivir basin: Jaén

2000 ES 16 C PE 007

Water supply in the Tagus basin: Torrijos, Fuensalida, the P. de
Montalbán

2000 ES 16 C PE 065 Water supply in the Guadalquivir basin: Cadiz area

2000 ES 16 C PE 035 Supplies to Zaragoza and the Ebro corridor

Total cost
(€ million)

CF assistance
(€ million)

33.89

14.86

11.48

33.70

46.29

17.29

83.41

28.81

12.63

9.18

28.64

39.35

12.97

70.90

Waste-water treatment

The efforts in this sector (Directive 91/271/EEC and implementation of the national
plan  for  drainage  and  water  treatment)  continued  in  this  new  period.  The  sector
absorbed  €665.5  million  in  2000,  i.e.  59.15%  or  a  substantial  part  of  the  resources
available for the environment under the Cohesion Fund.

19 decisions were adopted, of which two amended projects already adopted and 16
projects  and  groups  of  projects  presented  by  water  basin.  These  projects  concern
collectors and treatment stations to be built in the various regions and some drainage
infrastructure in the cities of Barcelona, Málaga and Valencia.

Waste-water treatment
Projects adopted in 2000

No of project

Name of project

2000 ES 16 C PE 039 Drainage and water treatment Nord II basin: Asturias

2000 ES 16 C PE 004 Drainage and water treatment Sud basin: phase I

2000 ES 16 C PE 072 Improvement to drainage infrastructure in Murcia. Phase II

2000 ES 16 C PE 060 Drainage in Barcelona: improved treatment of waste water

2000 ES 16 C PE 064 Drainage and water treatment Sud basin: Manilva and Ronda

2000 ES 16 C PE 066

Drainage  and  water  treatment  Guadalquivir  basin:  Guadaira.
Aljarafe and country areas

2000 ES 16 C PE 038 Drainage and water treatment at Lugo, Ourense

2000 ES 16 C PE 001 Drainage and water treatment various areas

2000 ES 16 C PE 036 Drainage and water treatment in the Bierzo

2000 ES 16 C PE 063 Drainage and water treatment Louro basin

2000 ES 16 C PE 037 Drainage and water treatment Galicia

2000 ES 16 C PE 027

2000 ES 16 C PE 032

Drainage and water treatment Ebro basin: Miranda de Ebro, Valle
de Esera
Drainage  and  water  treatment  Tagus  basin:  treatment  station
Arroyo culebro-Getafe

2000 ES 16 C PE 044 Drainage works in Málaga

Total cost
(€ million)

CF assistance
(€ million)

11.42

6.96

18.46

54.09

29.96

40.43

33.56

133.68

41.80

87.28

18.03

22.61

56.86

16.58

9.14

5.56

14.77

43.27

25.46

32.34

28.52

106.94

35.53

74.18

14.42

19.22

48.33

13.26

26

Waste-water treatment
Projects adopted in 2000

No of project

Name of project

2000 ES 16 C PE 062

Drainage  and  water  treatment  Norte  II  -  Cantabria:  Collectors  at
Saja-Besaya

2000 ES 16 C PE 048 Drainage in Valencia

2000 ES 16 C PE 006 Drainage and water treatment Jucar basin

2000 ES 16 C PE 112 Drainage and water treatment Ebro basin

2000 ES 16 C PE 003

Drainage  and  water  treatment  Guadiana  basin:  Ciudad  Real  and
Extremadura

Total cost
(€ million)

CF assistance
(€ million)

44.95

46.65

23.67

110.46

3.42

38.21

37.32

18.94

88.37

2.74

Waste

Spain’s National Plan for waste was approved on 7 January 2000 in agreement with
the Autonomous Communities responsible for waste management in their areas. The
aims  of  the  plan  are  prevention,  selective  collection,  recovery  and  recycling,  the
reuse  of  organic  material  and  disposal  in  controlled  dumps.  Implementation  of  the
plan will be financed by a contribution from the Cohesion Fund.

For  2000, 13  decisions  were  adopted  on  waste  management,  with  projects  grouped
by  Autonomous  Community,  responsible  for  implementing  the  plan  drawn  up  by
region. Assistance totalling €257 million, 23% of the total for the environment, was
granted.

Priority was given to projects for solid urban waste, concerning selective collection,
composting and recycling plants, pneumatic collection and sorting facilities.

Waste
Projects adopted in 2000

No of project

Name of project

2000 ES 16 C PE 016 Measures for waste management in the Canary Islands

2000 ES 16 C PE 017 Measures for waste management in Cantabria

2000 ES 16 C PE 013 Measures for waste management in Aragón

2000 ES 16 C PE 023 Measures for waste management in Navarre

2000 ES 16 C PE 022 Measures for waste management in Madrid

2000 ES 16 C PE 028 Measures for waste management in Castile-Leon

2000 ES 16 C PE 041 Waste treatment in A Coruña

2000 ES 16 C PE 021 Measures for waste management in Galicia

2000 ES 16 C PE 012 Measures for waste management in Andalusia

2000 ES 16 C PE 019 Measures for waste management in Catalonia

2000 ES 16 C PE 024 Measures for waste management in La Rioja

2000 ES 16 C PE 025 Measures for waste management in Valencia

2000 ES 16 C PE 015 Measures for waste management on the Balearic Islands

Total cost
(€ million)

CF assistance
(€ million)

27.04

4.14

7.11

9.50

13.16

56.31

15.34

29.52

90.94

22.82

2.10

30.87

12.37

21.63

3.31

5.69

7.60

10.53

45.05

12.27

23.62

72.75

18.25

1.68

24.69

9.90

Technical assistance

A total  of  €242  000 was  granted for the preparation of  strategic  frameworks  in  the
areas  of  water  supply, drainage and  water treatment, the management  of  waste, the
coastline  and  flood-defences,  the  protection  and  restoration  of  public  areas  and
systems for information and control of water resources in Spain.

27

Outermost regions

The  measures  took  account  of  the  importance  attached  to  the  development  of  the
outermost  regions  (Canary  Islands),  as  stressed  in  the  Commission’s  Report
(COM(2000) 147 final) on the measures to implement Article 299(2) of the Treaty.

Supply of drinking water

The  Cohesion  Fund  regards  this  sector  as  of  particular  importance  on  the  Canary
Islands  because  of  their  specific  difficulties.  Financing  large  desalination  plants,
which are the best solution for the islands, will continue and they will be completed
in 2001. Extensions to these plants are being considered.

Waste-water treatment

The  Canary  Islands  are  lagging  behind  in  this  regard  and  substantial  efforts  are
continuing  to  improve  water  quality  considerably.  A  large  number  of  treatment
stations are being built and will be completed in 2001.

Waste

Because  of  their  island  nature,  the  options  open  to  the  Canary  Islands  as  regards
waste  treatment  are  very  limited.  The  Cohesion  Fund  has  sought  to  remedy  this
situation  and  provide  basic  infrastructure.  A  second  phase  has  begun  to  extend  the
basic  measure  and  in  2000  the  Community  contributed  assistance  worth  €21.6
million for eight environmental complexes and a transfer facility including improved
discharges and classification and biomethanisation plants.

3.1.2.2. Transport

Under  the  aid  decisions  approved  in  2000  by  the  Commission,  the  transport  sector
took 51% of total funding and 53.2% of the commitments made in that year.

The breakdown by mode of transport is as follows:

Type of project

Eligible cost
(€ million)

CF assistance
(€ million)

Roads

Railways

Total

198.7

1 358.7

1 557.4

168.9

981.7

1 150.6

Breakdown of
assistance by mode
14.7%

85.3%

100.0

Commitments 2000

124.0

727.9

851.9

Road network

For this mode of transport, the priority continued to be progress on links with France
and the development of links with road networks forming part of the trans-European
networks.

In 2000, the Commission approved assistance for all the new projects submitted by
the Spanish authorities. The Cohesion Fund granted assistance for several sections of
the Sagunto - Somport road in the provinces de Huesca and Teruel, to links with the
cross-Catalonia road and for completion of the road link between Galicia and central
Spain.

28

No  application  concerning  new  projects  in  the  road  sector  was  being  considered  at
the end of 2000.

The following table shows the projects adopted in 2000 in the roads sub-sector.

ROADS
Projects adopted in 2000

Name of project

Rías Bajas motorway

Levant motorway (a)

Levant motorway (b)

Levant motorway (c)

Lleida - Barcelona motorway (d)

Eligible cost
(€ million)

CF assistance
(€ million)

33.4

23.3

33.2

77.9

30.9

198.7

28.4

19.8

28.2

66.2

26.3

168.9

No of project

95/11/65/004 amendment

1999ES16CPT-002

1999ES16CPT-003

1999ES16CPT-004

1999ES16CPT-005

TOTAL

Rail network

In 2000, the Cohesion Fund made a particularly great effort to assist investments in
the  high-speed  line  from  Madrid  to  Barcelona  and  the  French  frontier,  which  had
been identified by the Essen European Council (9-10 December 1994) as one of the
14 priority projects and declared by the Spanish government as a project of general
interest. Since 1998, all applications for assistance in the rail sector submitted by the
Spanish  authorities  to  the  Cohesion  Fund  have  sought  part-finance  for  this  major
project.  In  this  way,  the  decisions  approved  in  2000  provided  for  financial  support
from the Cohesion Fund for virtually all the technical phases of this project linking
Madrid and Lleida.

Two  applications  for  assistance  for  other  technical  phases  of  this  project  were
submitted at the end of 2000 and were still being considered at the end of the  year.
These applications will be considered with technical support from the EIB and if they
are approved in 2001 this will be in the light of the results of that consideration and
in line with the most recent estimates of costs and revenues for the line as a whole.

No of project

Name of project

RAILWAYS
Projects adopted in 2000

Eligible cost
(€ million)

CF assistance
2000
(€ million)

98/11/65/002

TGV (Madrid – Barcelona) New sections

1999ES16CPT-001

2000ES16CPT-002

2000ES16CPT-003

TGV (Madrid – Barcelona) Materials and track laying
TGV (Madrid – Barcelona) Electrification, signalling and
communications
TGV (Madrid – Barcelona) Access network to Zaragoza

Total

76.2

642.2

562.0

77.8

1 542.7

55.1

302.8

325.1

44.9

727.9

3.1.3.

I r e l a n d

During  2000  the  Commission  approved  Cohesion  Fund  grants  to  Ireland  totalling
€425 million, of which €169.6 million was committed from that year’s budget.

29

Environment

Transport

Total CF

% Environment

% Transport

Total eligible cost*
(€ million)

Total CF assistance*
(€ million)

Commitments 2000*
(€ million)

318.0

172.7

490.7

64.8%

35.2%

254.4

146.9

401.3

63.4%

36.6%

137.0

32.6

169.6

80.8%

19.2%

3.1.3.1. Environment

The two priorities for the environment sector for the current period are the collection
and treatment of waste water and the management of solid urban waste.

Waste-water collection and treatment

During 2000 the projects supported all related to waste water treatment.

Waste-water collection and treatment
Projects adopted in 2000

Project reference

Name

1999/IE/16/C/PE/003

1999/IE/16/C/PE/001

Dublin region Waste-water scheme
(Stage V - treatment plant)
Cork Main Drainage (Stage III)

1999/IE/16/C/PE/002

Limerick Main Drainage (Stage III)

Total

Total eligible
cost*
(millions €)

CF assistance*
(millions €)

166.7

55.8

95.5

318.0

133..4

44.7

76.4

254.4

The  selected  projects  are  priority  projects  serving  three  of  the  largest  Irish  cities.
Cork  and  Limerick  currently  have  no  waste-water  treatment  while  the  existing
system in Dublin provides only primary treatment.

Dublin  Region  Waste-water  Treatment  Scheme  (Stage  V  -  Treatment  Works):  The
overall scheme covers the greater Dublin area. The four previous stages have covered
planning elements and construction contracts related to the interim sludge plant, the
transmarine  pipeline  and  pumping  and  sewage  collection  works.  Stage  V  of  the
Dublin Bay Scheme sees the construction of the Ringsend treatment plant, upgrading
the existing primary treatment plant to provide secondary treatment for a population
equivalent  to  1.64  million.  The  Commission  is  also  assisting  the  construction  of
Sutton pumping station and the Northern Fringe interceptor sewer.

Limerick  City  and  environs  Main  Drainage  Scheme  (Stage  III):  The  two  previous
stages  covered  planning  elements  and  advance  construction  work  on  the  collection
network This stage includes the construction of the waste-water secondary treatment
and sludge plants (serving a population  equivalent to 130 000), the major pumping
stations and the tunnelled interceptor sewer linking  the  City centre to the treatment
plant.

Cork Main Drainage (Stage III): The two previous stages covered planning elements
and  the  construction  of  the  collection  network  in  the  City  centre  and  surrounding
suburbs and a major pumping station. Stage III covers the construction of the waste
water  secondary  treatment  and  sludge  treatment  plants  (population  equivalent  of
413,000)  and  the  transmission  network  (including  further  pumping  stations  and  a
transmarine pipeline),.

30

Solid Waste

No projects were assisted in 2000 in the area of solid waste.

3.1.3.2. Transport

As  with  the  Environment  sector  there  are  only  two  priority  sectors  for  this  period;
roads and public transport

Roads

During 2000 two grant decisions were made. One related to the construction stage of
a previously supported motorway project and the other to the construction phase of a
new project physically linked to the former. These project are situated on the M1, a
priority route under the trans-European network - Transport initiative.

Roads
Projects adopted in 2000

Project reference

Name

2000/IE/16/C/PE/002

M1 Cloghran -Lissenhall (Stage II)

2000/IE/16/C/PE/003

M1 Lissenhall -Balbriggan

Total:

Total eligible cost*
(€ million)

CF assistance*
(€ million)

74.1

41.5

115.6

63.0

35.3

98.3

A  commitment  to  the  M1  Lissenhall-Balbriggan  project  in  2000  was  not  made  as
sufficient commitment appropriations were not available. The relevant  commitment
was made subsequently in 2001.

The objectives of the two projects can be summarised as follows:

M1  Cloghran-Lissenhall  (Stage  II):  The  project  is  a  ‘missing  link’  in  the  chain  of
projects  that  will  complete  the  M1,  a  continuous  motorway  from  the  M50  Dublin
Ring road to the border with Northern Ireland. The planning phase of the project was
previously assisted by the Cohesion Fund. The Commission is assisting the provision
of a 6.5 km two-lane carriageway motorway and related structures.

M1 Lissenhall-Balbriggan: The project is another ‘missing link’ in the M1 motorway
and the continuation of the M1 Cloghran-Lissenhall. The Commission is assisting the
provision of a 9.8 km two-lane motorway.

In view of the volume of construction work involved in these and other priority road
projects  compared  to  the  limited  volume  of  Cohesion  Fund  support  available,  the
Commission  and  the  Irish  authorities  agreed  that  the  relevant  grant  decisions  will
target funding towards the construction costs of these projects.

Rail

One rail project was supported in 2000.

Rail
Projects adopted in 2000

Project reference

Name

1999/IE/16/C/PE/001

Heuston  Terminal  and  South  West  Rail
Corridor Development (Stage I)

Total eligible cost*
(€ million)

CF assistance*
(€ million)

57.1

48.6

31

Heuston  Terminal  and  South  West  Rail  Corridor  Development  project  is  one  of  a
number of priority rail projects that have been identified to upgrade the rail network
around  Dublin  thereby  improving  the  inter  city  and  suburban  services.  The  project
stage  supported  in  2000  comprises  construction  and  planning  elements.  The
construction relates to the upgrading of Heuston Station - the terminus for all inter-
city  services  to  Dublin  from  Waterford,  Cork,  Tralee,  Limerick,  Galway  and
Westport and intermediate stops. This work involves new track layout, signalling and
the doubling of the number of platforms from 5 to 10. The planning aspects relate to
the design and project planning for the second stage (to provide two extra tracks on
the approaches to Heuston Station from Kildare).

3.1.4.

Portugal

During 2000 the Commission approved Cohesion Fond grants totalling almost €822
million, of which €432.6 million were committed in that year’s budget.

Taking  into  account  commitments  made  as  a  result  of  decisions  taken  in  previous
years, the total amount committed during 2000 reached €450.8 million:

Total eligible costs*
(€ million)

Total CF assistance*
(€ million)

Commitments 2000*
(€ million)

263.5

800.4

1 063.9

25%

75%

200.7

621.1

821.7

24%

76%

178.3

272.5

450.8

Environment

Transport

Total CF

% Environment

% Transport

* round figures

3.1.4.1. Environment

For 2000-06 the main priorities for this sector remain the supply of drinking water,
the  collection  and  treatment  of  waste  water  and  the  management  of  solid  urban
waste.

During  2000,  the  environment  sector  accounted  for  24%  (€200.7  million)  of
Cohesion Fund assistance to Portugal and 25% of the total eligible costs.

Over  this  period  the  breakdown  by  area  of  assistance  shows  that  waste  water
accounted  for  the  largest  share  of  commitments  (41%),  followed  by  treatment  of
solid waste (31%) and supply of drinking water (27%).

Total eligible
costs*

Financial
assistance*
(€ million)

% of total
environment
assistance

Commitments
2000*
(€ million)

81.9

54.2

62.4

2.2

----

200.7

41%

27%

31%

1%

----

100

65.1

43.4

50

1.7

18.2

178.3

Waste-water treatment

Supply of drinking water

Solid waste management

Technical assistance

Projects adopted in previous years

Total

* round figures

102.2

73.5

85.2

2.5

----

263.5

32

Supply of drinking water

Cohesion  Fund  assistance  during  the  previous  programming  period  concentrated
heavily on the Greater Lisbon, Greater Oporto and Algarve regions, in an attempt to
clear the backlog in these more heavily populated areas and comply with Community
Directives 80/778/EEC and 98/83/EC. For the 2000-06 period the focus is now also
on the sparsely populated hinterland part of the country.

The introduction of the concept of inter-municipal management systems has helped
to launch and complete large-scale projects which are ideally suited to the assistance
strategy  selected.  They  offer  substantial  economies  of  scale  in  the  use  of  reliable
technical and management resources.

This approach will continue to be followed during the 2000-06 period during which
the  concept  of  inter-municipal  integrated  systems  under  a  single  management  and
covering both water supply and waste water treatment will be implemented covering
a large part of mainland Portugal.

Two new drinking water supply projects were adopted during 2000:

(cid:1)  Project  2000/PT/16/C/PE/006  –  Interconnection  of  the  inter-municipal  water

supply systems to the Barlavento and Sotavento regions of Algarve

The  overall  objective  is  to  provide  a  solution  to  the  existing  water  supply
problems in the Algarve region. It involves linking the two existing sub-regional
water  supply  systems,  enlarging  the  existing  distribution  network  to  cater  for  a
larger population, improving some of the existing water treatment plants to ensure
higher water quality, build a water desalinisation plant to supply fresh water to the
Island  of  Culatra  and  building  additional  reservoirs  and  installing  a  distance-
management system to  improve  the  operational  flexibility  of  the  overall  system.
This  flexibility  is  essential  in  order  to  deal  effectively  with  the  very  significant
population variation during the holiday season.

As  a  result  the  reliability  ,  quality  and  quantity  of  water  supply  in  this  southern
region  of  Portugal  will  be  greatly  improved  in  line  with  the  objectives  of  the
Community Directives 80/778/EEC and 98/83/EC.

(cid:1)  Project 1999/PT/16/C/PE/002 Inter-municipal water supply system for the Greater

Oporto southern area - 2nd phase – Sousa river valley expansion

This project is a second phase of a previously funded project and it will extend the
existing multi-municipal system into further five municipalities situated within the
Sousa river valley region. It includes upgrading and building new water treatment
stations,  new  reservoirs  and  upgrading  existing  supply  systems  as  well  as
installing a new remote management system.

33

Water supply
Projects adopted in 2000

Project reference

Name

2000/PT/16/C/PE/006

2000/PT/16/C/PE/001

Interconnection of the inter-municipal water
supply systems of the Barlavento and
Sotavento regions of Algarve
Inter-municipal water supply system for the
Greater Oporto southern area - 2nd phase –
Sousa river valley expansion

Total eligible
cost*
(€ million)

CF assistance*
(€ million)

23.6

49.9

11.8

42.4

* round figures

Waste-water treatment

As  regards  waste  water,  in  2000  the  Cohesion  Fund  continued  its  assistance  to  the
most densely populated urban areas of Portugal, its coastal areas.

During the year the Cohesion Fund provided this sector with €81.9 million, 40.8% of
the resources allocated to environmental projects.

Despite this effort, the situation as regards waste-water treatment is still unlikely to
meet  the  deadlines  laid  down  by  Directive  91/271/EEC  for  the  establishment  of
treatment systems.

In 2000, the Commission and the Portuguese authorities stepped up efforts as regards
waste water by providing the sector with the largest proportion of investment for the
environment.  This  permitted  considerable  progress  in  the  implementation  of  the
relevant  Community  directives,  in  particular  Council  Directive  91/271/EEC  of  21
May 1991, as amended by Commission Directive 98/15/EC of 27 February 1998.

In  2000  new  decisions  were  taken  to  grant  assistance  to  three  new  projects  in  this
sector:

(cid:1)  project 96/10/61/03 is the second phase of a waste-water collection and treatment
system  for  the  Ria  de  Aveiro.  This  integrated  system,  which  serves  a  series  of
municipalities with a population of 700 000 inhabitants, will treat and discharge
into  the  sea  waste  water  which  was  discharged  into  the  Ria  de  Aveiro  Special
protection area.

The  second  phase,  approved  in  2000,  comprises  a  treatment  station  and
interceptors with a total length of 104 km;

(cid:1)  project 2000/PT/16/C/PE/008: second phase of the integrated project to clean up
the water basins of the Rio Lis and the Ribeira de Seiça. This integrated system to
clean  up  and  treat  waste  water  from  urban  areas  discharged  into  these  basins
includes solutions for the treatment of waste water from pig farms, which is very
polluting, in the same basins. The solutions planned take account of the polluter-
pays  principle  and  include  the  participation  of  the  Ministry  of  Agriculture  and
farmers  represented  by  their  associations.  The  solution  adopted,  whose  general
aim is to improve the quality of the environment in the Lis basin, will provide an
example for similar cases in other water basins in Portugal. This phase includes in
particular the  construction or renovation  of  seven  waste-water  treatment  stations
at secondary level and the construction of 200 km of discharges;

34

(cid:1)  project 96/10/61/021 - drainage system for Vila Real de Santo António - adopted
in  1997,  was  extended  with  increased  finance  to  include  waste  water  from  the
nearby municipality of Castro Marim. Integration of the Castro Marim sub-system
into  the  Vila  Real  de  Santo  António  system  will  improve  protection  of  the
sensitive  area  of  Sapal  de  Castro  Marim  -  Vila  Real  de  Santo  António  where
treated waste water from Castro Marim is discharged.

Waste-water treatment
Projects adopted in 2000

No of project

Name of project

1996/PT/16/C/PE/003

2000/PT/16/C/PE/008

96/10/61/021

II phase of Inter-municipal drainage system for
the Ria de Aveiro
Integrated clean up of the basins of the Rio Lis
and Ribeira de Seiça
Collection and treatment of waste water from V.
Real de Santo António (Renfort)

Total cost
(€ million)

CF assistance
(€ million)

50

41.2

14.6

42.5

33

6.4

Waste

As  in  earlier  years,  Portugal  and  the  Commission  paid  great  attention  to  the
management of urban waste in order to meet the targets set in the Strategic Plan for
solid urban waste (PERSU), adopted in 1996.

During  the  year,  the  Cohesion  Fund  approved  six  new  projects  to  implement
strategies defined in the PERSU, including the construction of a national network of
primary  infrastructure  for  the  collection,  treatment  and  disposal  of  waste  and  the
closure  of  uncontrolled  tips  (lixeiras)  where  most  urban  waste  was  disposed  of  in
environmentally unacceptable conditions.

While  in  the  past  such  infrastructure  was  built  mainly  in  the  coastal  regions  of
Portugal  -  the  most  densely  populated  -,  the  Cohesion  Fund  is  now  providing
assistance in inland areas of Portugal so that soon the whole country will be covered.

With  this  end  in  mind,  in  2000  the  Commission  approved  three  projects  (see  table
below)  establishing  systems  for  the  treatment  of  waste  produced  in  three  inland
regions  of  continental  Portugal  and  also  adopted  the  first  project  for  the  Azores,
providing investment in waste on the islands of S. Miguel Pico and Terceira.

The other two projects approved were designed to extend or improve the conditions
for  the  treatment  and  exploitation  of  two  systems  already  financed  by  the  Fund  -
LIPOR  (where  construction  of  a  tip  for  the  disposal  of  ashes  from  incineration,
among  other  things  had  been  financed)  and  VALORSUL  (financing  of  an  organic
and composting facility).

The  six  projects  approved  represent  investment  of  €85  million,  of  which  the
Cohesion Fund will provide €62 million. This is about 31% of the assistance granted
in 2000 to environmental projects in Portugal.

35

Treatment of urban waste
Projects adopted in 2000

No of project

Name of project

1998/PT/16/C/PE/001

Treatment and final disposal of solid urban waste on the
islands of S. Miguel, Pico and Terceira – Azores

1999/PT/16/C/PE/005 VALORSUL –organic facility

2000/PT/16/C/PE/003

2000/PT/16/C/PE/011

2000/PT/16/C/PE/012

2000/PT/16/C/PE/013

LIPOR – Tip
Intermunicipal system for solid urban waste in the Baixo
Tâmega
Intermunicipal system for solid urban waste in the Alto
Tâmega
Intermunicipal system for solid urban waste in the Norte
Alentejano

Total cost
(€ million)

CF assistance
(€ million)

17.5

20.7

7.8

14.6

13.5

10.9

14.9

10.3

3.8

12.4

11.4

9.3

3.1.4.2. Transport

The  transport  sector  absorbed  76%  of  the  assistance  from  the  Fund  decided  on  in
2000, an average rate of assistance of about 77% of the eligible costs.

The breakdown by mode of transport was as follows:

Type of project

Total eligible cost
(€ million)

CF assistance
(€ million)

Breakdown of
assistance by mode
(Transport)

Commitment 2000

73.5

697.4

29.4

800.3

62.5

543.6

14.9

621.0

10%

88%

2%

50.0

210.5

11.9

272.4

Roads

Railways

Ports

Total

Roads

The  priority  continued  to  be  completion  of  the  main  links  with  the  rest  of  Europe
(multimodal  corridors  incorporating  the  Essen  priority  project  and  the  TENs  road
corridors)  and  the  links  facilitating  access  to  the  TENs  and  providing  connections
with  the  rest  of  the  network.  In  2000,  the  Fund  provided  assistance  to  several
sections of the three main routes (IP) making up the basic road network in Portugal,
two  of  which  form  part  of  that  project.  These  are  the  north/south  road  IP2
(Portelo/Faro),  and  the  cross-Portugal  roads  IP3  (Vila  Real/Chaves)  and  IP6
(Guardete/Guarda).

ROADS
Projects adopted in 2000

No of project

Name of project

2000/PT/16/C/PT/005

IP2- section EN 216/EN 102

2000/PT/16/C/PT/006

IP3- Link to IP5

2000/PT/16/C/PT/007

IP6 Abrantes/Mouriscas

2000/PT/16/C/PT/008

IP3 Castro d’Aire bypass

TOTAL

Rail

Total eligible cost
(€ million)

CF assistance
(€ million)

14.7

29.2

15.2

14.4

73.5

12.5

24.9

12.9

12.2

62.5

In 2000, the Fund made a particularly substantial effort to support investment in the
Portuguese rail system, which received 88% of the assistance allocated to transport.

36

This  assistance  was  concentrated  on  two  lines  of  major  strategic  importance  (Nord
and  Algarve)  which  form  part  of  the  ‘Mediterranean’  and  ‘Galicia/Portugal’
corridors respectively in priority project 8.

During the year, the Commission, with technical support from the EIB, continued to
consider the overall project to modernise the Nord line in the light of the objectives
as  revised  in  terms  of  the  original  project.  The  Portuguese  authorities  announced
their intention of beginning work on a high-speed line from Lisbon to Oporto, which
would  result  in  a  substantial  reduction  in  journey  times.  In  view  of  the  vital
importance of this corridor, the backbone of the country’s rail system, they pointed
out  the  improvements  in  safety,  capacity  and  regularity  of  links  which  would  be
achieved.  This  also  enabled  the  Commission  to  continue  its  support  for  efforts  to
modernise  the  Nord  line  by  part-financing  two  new  projects  costing  almost  €214
million.

Two projects concerning the Algarve line were also approved and €177.1 million in
assistance provided. This line from Lisbon to Faro forms part of the ‘Mediterranean
corridor’ of priority 8 to provide a land link from Lisbon to Seville. It will also serve
the  port  de  Sines  and  meet  future  needs  for  freight  distribution.  Specifically,
construction  of  the  Coina/Pinhal  Novo  section  will  link  the  Nord  and  the  Algarve
lines, so filling in a missing link in north/south passenger and goods traffic.

Aid was also provided for a section of the Lisbon underground which, by linking the
country’s  main  railway  station  with  the  intermodal  terminus  for  the  Lisbon  region,
forms part of the TENs. Since this is infrastructure in a major urban area, it cannot
fail to help relieve congestion and have a positive environmental impact.

RAILWAYS
Projects adopted in 2000

No of project

Name of project

2000/PT/16/C/PT/001

2000/PT/16/C/PT/002

Modernisation Nord line Entroncamento -
Albergaria
Modernisation Nord line Quintãs - Ovar

2000/PT/16/C/PT/013

 Entrecampos - Chelas

2000/PT/16/C/PT/003

Algarve railway line

2000/PT/16/C/PT/012

Algarve III railway line Coina - Pinhal Novo

2000/PT/16/C/PT/009

Lisbon underground

TOTAL

Total cost
(€ million)

CF assistance
(€ million)

142.1

125.6

48.0

140.9

107.9

132.9

697.4

113.7

100.6

39.2

91.0

86.1

113.0

543.6

Sea transport

Only one project was adopted, for which the application had been submitted during
the  previous  period.  Following  a  long  and  detailed  examination,  the  Commission
decided  to  grant  aid  to  a  project  for  a  multimodal  terminal  in  Setúbal  which,  by
providing extra capacity for short-distance navigation in this port, would enable it in
due course to make an important contribution to reducing  congestion  in  the port of
Lisbon.

37

3.2.

Technical assistance and studies

3.2.1. General policy of the Fund

To  carry  out  its  management  duties  correctly  and  make  the  aid  granted  more
effective,  the  Cohesion  Fund  Directorate  seeks  assistance  from  a  number  of
specialists and consultants in the area where the Fund provides assistance.

The consultants play a very important role in assessing, analysing and monitoring the
projects  submitted  to  the  Cohesion  Fund  for  part-financing.  The  use  of  specialists
supplements the technical skills of the Commission through practical and up-to-date
knowledge on various subjects, so helping it meet its obligations better.

3.2.2.

Technical assistance at the initiative of the Commission

Portugal

None

Ireland

None

Spain

None

Greece

Technical assistance at the initiative of the Commission was used for the missions to
monitor the following projects (environmental protection):

(cid:1)  Water supply to Thessaloniki from the River Aliakmon

(cid:1)  Waste water and treatment of waste water from Ioannina

(cid:1)  Preparation of March 2000 Monitoring Committee

(cid:1)  Projects from municipalities in the drinking water and drainage sectors

(cid:1)  Restoration of the former tip for household rubbish from Athens, at Ano Liossia.

38

4.

MONITORING, INSPECTION AND IRREGULARITIES

4.1.

Monitoring: Committees and missions

4.1.1. G r e e c e

4.1.1.1. Monitoring Committees

Environment

Meetings of the Monitoring Committee and the special Committees for the Psyttalia,
Evinos and EYDAP major projects were held in Athens in March. The work of these
Monitoring Committees is recorded in the relevant minutes.

Transport

Meetings  of  the  Monitoring  Committee  and  the  special  Committee  for  the  Spata
airport major project  were held  in Athens in March.  The work of these  Monitoring
Committees is recorded in the relevant minutes..

4.1.1.2. Monitoring missions

The monitoring missions carried out by the geographical unit are listed in the Annex.

4.1.2.

S p a i n

4.1.2.1. Monitoring Committees

In  2000,  two  Monitoring  Committees  met  in  Spain. The  thirteenth  meeting  of  the
Monitoring Committee was  held  in  Madrid  from  26  to  28  April  and  the  fourteenth
from 23 to 25 October.

The  Committee  is  subdivided  into  seven  specific  Committees  by  sector  and  by
managing authority:

(cid:1)  Committee for the HST South project: Madrid-Barcelona line

(cid:1)  Committee for transport projects submitted by the national government

(cid:1)  Committee for reafforestation projects

(cid:1)  Committee for projects submitted by local authorities

(cid:1)  Committee for environmental (including water) projects submitted by the national

government

(cid:1)  Committee for projects submitted by the Autonomous Communities

(cid:1)  Committee for public-private partnership projects

Some  200  monitoring  reports  on  the  situation  of  projects  or  groups  of  projects  were
considered and 31 decisions were taken.

39

The general position of the projects as a whole is quite satisfactory from the point of
view  of  implementation.  The  balance  is  being  paid  for  several  projects  but
administrative concerns relating to the closure of contracts is delaying dispatch of the
final  reports.  Furthermore,  requests  for  amendments  to  some  projects  (financing  plan
and schedule) have been made.

All the reafforestation projects should be completed this year and a single report on all
the decisions has been requested.

The Commission has asked for dispatch of the final reports on completed projects to be
speeded up so that the corresponding commitments can be settled.

A request has been made to speed up dispatch of the environmental certificates for new
projects  for  2000-06  and  for  answers  to  the  questions  posed  to  be  sent  as  soon  as
possible so that the adoption procedure can be continued.

To  reduce  the  number  of  amendments  in  the  future,  the  Commission  is  asking  for
programming to be more realistic from the start. Changes of date and alterations to the
schedule  should  be  limited  to  special  cases  instead  of  being  the  rule  as  in  the  past.
Projects adopted should be fully ready in order to rationalise work.

The  Commission,  in  partnership  with those  responsible  for  the Cohesion  Fund  in  the
Ministry, is considering whether the Monitoring Committee should be amended for the
new period to make it more effective from a  technical point of  view  by  reducing  the
number  of  specific  Committees  and  concentrating  on  strategy  and  projects  posing
problems.

4.1.2.2. Monitoring missions

The  missions  were  carried  out  to  assess  and  check  the  progress  of  projects  being
implemented and to clarify the difficulties encountered in their implementation.

Monitoring missions carried out by the geographical unit are listed in the Annex.

4.1.3.

I r e l a n d

4.1.3.1. Monitoring Committees

In  2000  there  were  two  meetings  of  the  Monitoring  Committee,  on  5  May  and  27
October. At these meetings the Committee examined written progress reports on up
to 57 open projects from the period 1993-99.

The Commission was generally satisfied with the quality of the information supplied
on the  management  of  projects.  However  in  a  number  of  cases  it  was  necessary  to
request  additional  explanations  and  information  on  certain  subjects  in  order  to
establish  an  accurate  picture  of  progress  or  the  reasons  for  delays  in  project
completion.

There  was  progress  with  the  successful  completion  of  ten  further  projects  in  2000
though nearly half of these projects were small technical assistance measures or pilot
projects. The outstanding projects to be completed at end-2000 represent around 40%
of the project supported  from the  period  1993-99.  The  Commission  was  concerned
during  1999  about  the  number  of  projects  for  which  extensions  of  the  completion

40

date  were  requested  and  the  scale  of  cost  increases  reported  for  some  projects.  In
respect  of  30  or  so  projects  amendment  and/or  extension  requests  were  presented.
The  Commission  sought  justifications  from  the  implementing  authorities  for  these
delays and tried to establish reliable revised completion dates to allow a timely and
orderly closure of those outstanding. In certain cases the Commission indicated that
further extensions would be considered only in very exceptional circumstances.

In respect of cost increases the Commission maintained its position that increases in
grant  aid  would  be  accepted  only  if  detailed  justification  were  provided  to  explain
these increases. Any increases would be subject to the availability of resources. This
position  has  been  accepted  by  the  Irish  authorities  and  no  specific  requests  were
made for cost increases to be met.

4.1.3.2. Monitoring missions

The project visits undertaken in 2000 had the following objectives

(cid:1)  to verify the progress in the construction or completion of the relevant projects,

(cid:1)  to clarify the difficulties reported to the Monitoring Committee previously and

(cid:1)  to  better  understand  the  relationship  between  earlier  project  stages  and  new
project  stages  proposed  for  assistance  with  a  view  to  preparing  new  grant
decisions.

The project visits undertaken are listed in Annex.

Other discussions were pursued with the Irish authorities during the year in particular
in relation to the material required for the strategic reference framework documents
and the development of solid waste infrastructure.

4.1.4.

Portugal

4.1.4.1. Monitoring Committees

The twice-yearly meetings of the Monitoring Committee are one of the key elements
in ensuring proper monitoring of the Fund’s assistance to Portugal. Many monitoring
missions  and  inspections  are  decided  on  using  information  exchanged  at  those
meetings.

In 2000, meetings were held on 4-5 May and 20-21 November. They looked at each
project individually and also discussed general topics such as publicity, inspections,
public  procurement,  the  implementing  rules  and  other  information.  Naturally,  the
meetings  during  the  year  were  dominated  by  the  implementation  of  new  rules  and
agreements because of the revision of the Fund Regulation.

From  now  on  in  Portugal,  the  general  Monitoring  Committee,  which  looks  at
transport  and  environmental  projects,  will  be  joined  by  specific  Monitoring
Committees  for  the  extension  of  Madeira  airport  and  for  solid  waste  projects.
Although  the  project  for  the  construction  of  the  Alqueva  hydroelectric  station  has
been monitored by the general Committee, it has also been monitored in the broader
framework of the Structural Funds Monitoring Committee for the specific integrated
development programme for the Alqueva (PEDIZA).

41

4.1.4.2. Monitoring missions

Besides attending meetings of the Monitoring Committee, in 2000 the Portugal unit
of the Regional Policy DG carried out a number of monitoring missions to check on
the  progress  of  projects,  to  acquire  on-the-spot  knowledge  of  the  problems
encountered  in  implementation  and  to  find  the  best  solutions  for  the  normal
implementation of the projects.

On 16 October the Portugal unit also took part in an inspection by the Financial and
Budgetary  Management  unit  of  the  Regional  Policy  DG  of  the  project  for  the
treatment of solid waste in Oeiras, Sintra and Cascais.

Other technical missions relating to consideration of certain applications were carried
out  during  the  year,  in  particular  on  the  Minho-Lima  and  Zêzere-Côa  integrated
intermunicipal water systems and on rail projects concerning the Nord and Algarve
lines.  In  these  cases,  the  Commission  mission  received  technical  support  from  the
EIB.

The monitoring missions carried out by the Portugal unit of the Regional Policy DG
are listed in the Annex.

4.2.

Inspections and conclusions

4.2.1. G r e e c e

No inspections were undertaken.

4.2.2.

S p a i n

The  two  projects  “Management  de  residuos  en  canarias”  Fase  I  /  Promoter:
Consejería de  Política Territorial. Viceconsejería  de  Medio  Ambiente  del  Gobierno
de  Canarias  (F.C.97.11.61.038)  and  “Depuración  Aguas  residuales  de  Canarias”  /
Promoter:  Consejería  de  Obras  Publicas,  Vivienda  y  Aguas  de  Canarias  (F.C.
96.11.61.039)  were  still  not  finished  at  the  time  of  the  inspection.  The  rate  of
progress suggests that the they not be finished in time.

As far  as the project  “Carretera GC-1.Hoya de the Plata – Enlace  Potabilizadora” /
Promoteur: Dirección General de Obras Publicas, Vivienda y Aguas de Canarias (FC
96.11.65.001)  is  concerned,  the  national  authorities  (Ministry  of  the  Economy)
should  assure  that  the  projects  part-financed  are  eligible  in  their  totality  and  not
include projects which can only partly profit from Cohesion Fund assistance.

4.2.3.

I r e l a n d

Unit  G.3.  carried  out  one  check  on  a  Cohesion  Fund  project,  “Cork  City  Main
Drainage” (Cohesion fund No. 96.07.61.010), in Ireland in 2000.

The main conclusions of the inspection concerned a wrong exchange rate used for a
payment request, an imperfect audit trail and payment declarations not always based
on expenditure actually incurred and including ineligible items.

42

A detailed reply from the Irish authorities was received on 12 February 2001 on the
basis  of  which  the  temporary  suspension  of  payments  to  the  projects  was  lifted.
Some expenditure still remain to be clarified.

4.2.4.

Portugal

Two projects were checked in 2000:

The project “Estaçao de Tratamento de residuos solidos de Cascais, Oeiras e Sintra:
the  land  necessary  for  the  project  was  apparently  not  purchased  at  the  time  of  the
inspection  even  if  the  project  was  finished.  In  January  2001  the  Portuguese
authorities showed that the purchase is now legally concluded.

The  project  “Drenagem  e  Tratamento  de  aguas  residuais  do  grande  Porto  Sul  e
Despoluiçao do troço da Bacia do Douro (V.N. de Gaia) e Despoluiçao da Bacia do
Oceano  Atlântico,  Bacia  do  Douro  Norte  e  Bacia  do  Douro  Nordeste  de  V.N.  de
Gaia”.  No  problems  were  found  in  respect  of  this  project,  which  is  expected  to  be
finished by the end of 2001.

4.3.

Irregularities and suspension of aid

During 2000, the Anti-Fraud Office carried out no investigations into areas covered
by the Cohesion Fund.

However, during 2000, the Spanish authorities notified the Commission, pursuant to
Regulation  (EC)  No  1831/9412,  of  two  irregularities.  This  Regulation  requires
beneficiary Member States to notify the Commission of irregularities where an initial
administrative or legal finding has been entered.

There have now been seven notifications since Regulation (EC) No 1831/94 entered
into force. They are:

–  one  case  notified  by  the  Greek  authorities  of  non-compliance  with  the  rules  on

public procurement;

–  two cases notified by the Irish authorities concerning ineligible expenditure;

–  four  cases  notified  by  the  Spanish  authorities  concerning  ineligible  expenditure

and irregularities in documents submitted.

It follows from these notifications that the number of irregularities detected and the
amounts involved are quite small. This  situation may derive from the  nature  of  the
projects  financed  by  the  Cohesion  Fund  (projects  of  a  certain  size,  monitoring  of
physical and financial indicators for each project).

However,  the  Anti-Fraud  Office  would  draw  the  attention  of  beneficiary  Member
States to their obligations under this Regulation.

12 OJ L 191, 27 July 1994.

43

                                                
5.

ASSESSMENT AND EVALUATION

5.1.

General

To  ensure  the  effectiveness  of  Community  aid  and  assess  the  quality  of  the
assistance, the projects submitted for Cohesion Fund assistance are subject to ex-ante
evaluation,  before  approval  by  the  Commission,  and  ex-post  evaluation  after
completion.

To  allow  accurate  evaluation  of  projects  before  adoption,  every  application  for
assistance must be accompanied by appropriate documentation and a socio-economic
analysis  based  on  a  cost/benefit  analysis  which  shows  that  in  the  medium-term  the
project  will  generate  social  and  economic  benefits  in  keeping  with  the  resources
deployed. This analysis is normally the task of the beneficiary Member State but the
Commission may contribute to the  ex-ante  evaluation  of  projects  through  technical
assistance  or  in  the  first  phase  of  financing.  Where  it  considers  it  necessary,  the
Commission may call on the European Investment Bank or technical assistance from
outside consultants.

Ex post evaluation allows assessment of the ways in which projects are implemented
and the impact of implementation through comparison with the targets initially set. It
also looks at the effect of the projects on the environment.

5.2.

Examination and ex-ante appraisal projects

Cost/benefit analyses or other forms of quantified analysis must be carried out for all
the  projects  for  which  assistance  from  the  Cohesion  Fund  is  sought.  The  Member
States  have  made  considerable  efforts  to  comply  with  this  requirement  and  the
quality  of  the  economic  analyses  which  accompany  the  applications  for  assistance
has  improved,  although  there  is  still  some  distance  to  go,  especially  as  regards
environmental projects. Greater consistency between the various sectors of assistance
and between the approaches adopted by different countries would also be desirable.

5.3.

Cooperation with the EIB when a project is considered

In  January  2000,  the  Commission  and  the  EIB  signed  a  new  Agreement  on
Community  structural  action  covering  the  period  2000-06.  The  arrangements  for
implementing  this  Cooperation  Agreement  as  regards  the  analysis  of  projects  were
set out in a framework contract signed in June 2000.

Cooperation with the EIB has proved fruitful. Besides receiving information on the
projects part-financed by the EIB, the Commission has asked the Bank for 18 studies
on Cohesion Fund projects between the date the framework contract was signed and
the end of the year. As a result of these studies, the Commission asked the Member
States to amend the projects submitted or to undertake further preliminary studies.

The  Cooperation  Agreement  on  Community  structural  action  concerns  not  only
Cohesion Fund projects, but also those under the PASI and ERDF major projects.

44

5.4.

Economic and social impact of the Fund in the Member States and on economic
and social cohesion, including employment, in the European Union,

The Regulation establishing a Cohesion Fund requires the Commission to assess the
economic  impact  of  the  Fund,  both  in  terms  of  each  project  and  in  terms  of
Community  aid  as  a  whole.  Article  10(5)  requires  the  medium-term  economic  and
social  benefits  of  projects  to  be  “commensurate  with  the  resources  deployed”  and
Article 13(2)  reads: “In order  to  ensure the effectiveness of Community  assistance,
the  Commission  and  the  beneficiary  Member  States  shall,  in  cooperation  with  the
EIB where appropriate, carry out a systematic appraisal and evaluation of projects.”
In addition, Annex II requires the Commission to take account of “the economic and
social impact of the Fund in the Member States and on economic and social cohesion
in the Union, including the impact on employment.”

As regards the ex-ante evaluation of projects, in  2000  the  Commission  began  work
on updating methods of economic analysis of projects. This should be completed in
2001 through the updating of the Guide to cost/benefit analysis. Based on the results
of research  financed  by the PCRD, this  exercise will  constitute  a stage  towards  the
harmonisation  of  the  methods  and  parameters  used  by  the  Member  States  and
facilitate estimates of the aggregate effects of projects.

For ex-post analysis, an exercise to examine all the projects for which Cohesion Fund
assistance  has  been  granted  is  in  progress  (see  point  5.5).  It  will  look  at  all  the
aspects  of  the  implementation  of  projects  and  decide  to  what  extent  the  effects
initially  expected  were  achieved,  including 
the  environment  and
employment.

those  on 

5.5.

Ex-post evaluation programme

The ex-post evaluation programme was established for a three-year period from mid-
1998. A total of 120 projects will be evaluated during that period, 60 in each of the
two  fields  for  which  the  Cohesion  Fund  is  responsible.  At  the  end  of  2000,  107
projects had been evaluated, 58 in the transport and 49 in the environment sector.

5.5.1.

Environment

The initial conclusions of the ex-post evaluations of 31 infrastructure projects in the
environment sector are that their implementation and impact in environmental, social
and economic terms were positive and in general in line with the objectives set.

The  implementation  of  projects  was  satisfactory  as  regards  both  design  and
implementation.  The  quality  differed  a  little  depending  on  country,  as  did  the  unit
costs of construction.

Operation has generally achieved the expected level of performance although  some
drainage  projects  will  have  to  be  improved  through  the  construction  of  further
infrastructure or better control systems. Plants for recycling household waste are at a
disadvantage  because  of  the  time  taken  for  households  to  adapt  to  selective
collection.

All the projects have had a satisfactory impact on the environment. Drainage projects
have produced the most immediate and obvious environmental benefits, although, in
some  cases,  delays  in  carrying  out  works  have  also  delayed  the  environmental

45

impact.  In  general,  water  supply  projects  have  helped  improve  water  management
and  improve  the  conservation  of  water  resources.  Projects  to  improve  the  coastal,
urban and natural environment have made a substantial contribution to preserving the
flora and fauna and creating links between the natural and urban environments.

The  social impact of projects  takes the  form  of  improved  living  conditions  and  the
creation of temporary jobs during the construction phase and permanent jobs during
the operating phase.

Some projects have also had the indirect effect of increasing the value of land in the
area  affected  by  the  project  or  of  permitting  the  development  of  new  economic
activities, such as tourism.

5.5.2.

Transport

The  provisional  summary  exercise  reviewed  the  ex-post  evaluations  of  about  40
transport  projects  covering  all  modes.  The  projects  generated  considerable  socio-
economic  benefits  but  implementation  was  sometimes  hindered  by  unexpected
difficulties.

In  most  cases  project  design  was  good  although  it  was  deficient  for  some  projects
and  required  changes  during  construction  causing  delays  in  the  works  caused  by
technical problems such as unexpected geological difficulties. The overall cost of the
projects  often  rose  during  the  construction  phase.  Budget  overruns  had  various
causes  including  higher  than  expected  land  acquisition  costs,  changes  in  certain
prices or changes to the original project. In general this did result in a change in the
Community contribution.

The operation of the projects was very satisfactory. For example, traffic on improved
sections of the trans-European road network well outstripped forecasts.

The projects improved access to Union territory, particularly outlying areas, reduced
congestion in the major urban areas and reduced the impact of frontiers, which often
impede  the  integration  of  regional,  national  and  European  markets.  The  ex-post
cost/benefit analyses show that many projects had an economic rate of return of over
20%, excluding those socio-economic benefits  which  are  difficult  to  quantify,  such
as jobs created or the positive impact on the environment. In this respect, following
the  transposition  of  Directive  85/337/EEC,  the  presentations  of  transport  projects
always included an assessment of the environmental impact of their implementation.

6.

INTER-INSTITUTIONAL DIALOGUE, INFORMATION AND PUBLICITY

6.1.

Annual report for 1999

6.1.1.

European Parliament

In its report13,  Parliament  welcomed  the  annual  report,  which  it  regarded  as  a  vital
tool for assessing the work of the Fund,  and found that  the  1999 annual report  had
provided an overview of developments throughout the period 1993-99.

13 Marques report.

46

                                                
Parliament  also  congratulated  the  beneficiary  Member  States  on  their  compliance
with the goal of reducing budget deficits.

Parliament  noted  with  satisfaction  the  balance  between  aid  for  transport  and  the
environment  in  1993-99,  despite  the  imbalance  at  the  beginning  of  the  period  in
favour of transport.

Points giving particular satisfaction were the increased investments in rail in Greece,
Spain and Portugal and greater investment in solid waste in Portugal and Greece.

Parliament  was  also  pleased  that  no  cases  of  fraud  had  been  detected  in  1999,  but
nevertheless  asked  the  Commission  to  devote  greater  resources  to  on-the-spot
inspections to detect weaknesses in management systems.

6.1.2.

Economic and Social Committee (Ecosoc)

In its report14, the Committee welcomed the positive results secured by the work of
the  Cohesion  Fund,  which  had  contributed  indirectly,  in  the  four  beneficiary
countries, to  achieving  the  aims  of  reducing  budget  deficits  in  accordance  with  the
convergence programmes drawn up in preparation for economic and monetary union.

For the next programming period, the Committee insisted on the need to coordinate
the  work  of  the  Fund  with  that  of  the  Structural  Funds,  particularly  through  the
strategic reference frameworks.

It also stressed the need for the Member States to pay special attention to the ex-ante
of projects.

6.2.

Information for the Member States

An  information  meeting  with  the  15  Member  States  was  held  in  Brussels  on  18
December 2000.

At that meeting, the Commission presented the draft Annual Report of the Cohesion
Fund for 1999. It also reported on progress in Cohesion Fund assistance in 2000 in
each beneficiary  Member  State.  They,  in  turn,  gave  a  detailed  presentation  of  their
strategic reference frameworks.

6.3.

Other events

6.3.1.

Information for the social partners

There was no meeting with the social partners in 2000.

6.3.2. O t h e r

The  Commission  attended  the  17th  meeting  of  the  ‘Regional  policy,  Structural
Funds,  economic  and  social  cohesion,  cross-border  and  interregional  cooperation"
section of the Committee of the Regions on 25 June which included an initial debate

14 Rapporteur: Mr Pezzini.

47

                                                
on  the  Annual  Report  199915.  The  Committee’s  final  opinion  is  expected  in
November 2001.

6.4.

Commission measures on publicity and information

The  Cohesion  Fund  also  figured  in  the  publications  of  the  Regional  Policy  DG  on
regional and cohesion policy.

The  annual  report  was  published  in  an  appropriate  format  and  summarised  in  the
Inforegio information bulletins published by the Regional Policy DG.

Special material was produced for specific events such as information meetings and
conferences  (portable  stand,  computer-designed  graphics,  audio-visual  material  and
printed matter).

The  Regional  Policy  DG  used  funds  from  budget  line  B2-1600  to  continue  its
publication of studies on the Cohesion Fund and the environment, particularly water
management. These studies are now available.

15 Debate based on the conclusions of the rapporteur, Mr Bree.

48

                                                
A N N E X

LIST OF MONITORING AND QUALITY-CONTROL MISSIONS IN 2000

Spain

Monitoring missions

January (20-21): Galicia. Santiago de Compostela.

Project No 97.11.61.047 - Management of solid urban waste in Galicia - SOGAMA.

February (7-9): Madrid and Calatayud.

HST South project. Madrid-Barcelona-French frontier Commission staff met representatives
of the Ministry for Economic Affairs and the body responsible for implementing the project,
to receive and analyse together the latest cost estimates for the project as a whole, the extent
to  which  future  technical  phases  had  been  defined  and  the  schedule  for  the  works.  Some
sections under construction were visited to assess progress.

March (20-21): Barcelona. Three projects:

Project No 95.11.61025-6 - Management of urban waste in Rubí.

Project No 96.11.61.051 - Management of urban waste in the Metropolitan area of Barcelona.

Project No 97.11.61.035 - Integrated waste treatment plant at Rubí. (Phase 2).

Greece

Monitoring missions

Environment

Project No 93.09.61.061  Voïo Kozanis - Feasibility  study  for the  ‘Freight Village’  at Chios
and Mytilene.

Project No 94.09.61.026 - Waste-water pipes and waste-water treatment station at Ioannina.

Project No 97.09.61.001 - Drinking water pipes at Ioannina.

Project No 99.09.61.009, Pilot project for the management and treatment of waste water and
waste on Santorini.

Transport

Project  No  94.09.65.024  -  Completion  of  the  Kardia-Kalikratia-Potidea  section  of  the
Thessaloniki-Moudania motorway.

49

Ireland

Monitoring visits

1-3 March - Cork and Limerick

Project No 96/07/61/010  - Cork  Main Drainage: An audit visit by  DG Regional  Policy  was
also used to verify the reasons for the extension being sought to the project completion date.
An  application  for  support  to  the  construction of  the  treatment works  was also  examined  in
detail with local officials.

Project No 95/07/61/013 - Limerick City & Environs Main Drainage: The purpose of the visit
was to verify the reasons for the extension being sought to the project completion date and the
relationship between the advance drainage works and other linked projects. An application for
the  construction  of  the  collection  network  and  the  treatment  works  was  also  examined  in
detail with local authority officials.

28 March - Dublin

Project No 94/07/65/002 - Southern Cross Route Motorway: A request for a modification of
the  completion  date  and  the  physical  description  following  the  redesign  of  certain  elements
was examined with local officials.

8 May - Waterford

Project No 94/07/61/013 - Waterford City & Environs Water Supply; cost variations had been
highlighted by the  Irish  authorities  with elements  of  the  projects  and  additional  works  were
being  proposed  for  inclusion.  The  project  also  involves  water  conservation  work  that  was
proving difficult in view of the age of the distribution network and other local factors.

Project  No  93/07/61/021  -  Waterford  Main  Drainage.  The  project  was  approaching
completion and the opportunity was taken to verify the state of the works.

Portugal

Monitoring missions

8 May - Caldas da Rainha and Foz do Arelho

Project No 97.10.61.020 - Drainage systems at Caldas da Rainha, Foz  do  Arelho and in  the
urban areas of the Arnóia and Real basins.

Project  No  2000/PT/16/C/PE/001  (under  examination)  -  A  local  analysis  of  the  elements  of
this project, which is the second phase of the same multimunicipal system, has been carried
out.

27 and 28 November - Lisbon and Loures, clean-up of the Trancão basin, Frielas and S.
João da Talha treatment stations

Project No 93/10/61/013 - Clean-up of the Trancão basin.

Project No 94/10/61/006-007 - Frielas and S. João da Talha treatment stations.

Project  No  96/10/61/004  -  Decontamination  and  regularisation  of  the  final  section  of  the
Trancão.

50