Commission staff working document accompanying the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) no 1692/2006 establishing the second ‘Marco Polo’ programme for the granting of Community financial assistance to improve the environmental performance of the freight transport system (‘Marco Polo II’) - Summary of the impact assessment {COM(2008) 847 final} {SEC(2008) 3021}
Date: 2008-12-10
Institutions: European Commission
Subjects: EU financing, EU programme, carriage of goods, combined transport, environmental protection, project evaluation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.12.2008 
SEC(2008) 3022 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) No 1692/2006 establishing the second ‘Marco Polo’ 
programme for the granting 
of Community financial assistance to improve the 
environmental performance of the freight transport system (‘Marco Polo II’) 

SUMMARY OF THE IMPACT ASSESSMENT 

{COM(2008) 847 final} 
{SEC(2008) 3021} 

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COMMISSION STAFF WORKING DOCUMENT 

amending Regulation (EC) No 1692/2006 establishing the second ‘Marco Polo’ 
programme for the granting 
of Community financial assistance to improve the 
environmental performance of the freight transport system (‘Marco Polo II’) 

Summary of the Impact assessment 

The  Marco  Polo  programme  helps  achieve  the  EU  Transport  Policy  objective  of  ensuring 
sustainable  mobility  in  Europe.  The  Programme  contributes  to  this  objective  by  helping  to 
reduce  the congestion  in the  roads  and fostering the  use  of  other  more  sustainable  transport 
modes.  In  order  to  do  this  the  Programme  supports  projects  aiming  at  avoiding  freight 
transport on the roads or shifting freight off the roads to other transport modes which are more 
environmental friendly and have spare capacity, like shipping, railways and inland waterways. 

1. 

PROBLEM DEFINITION 

The  results  of  the  2008  call  of  the  second  Marco  Polo  programme  and  the  findings  of  the 
external evaluation of the first Marco Polo programme show that although the Programme is 
achieving a substantial modal shift, it will very probably not be able to meet its objective of 
avoiding  or  shifting  a  substantial  part  of  the  forecasted  total  growth  of  international  road 
freight transport in Europe, as aimed by its legal base. 

The programme is instrumented through yearly calls for proposals. Every year the requests for 
funding,  and  consequently  the  traffic  avoidance  or  modal  shift  proposed,  are  decreasing, 
which  shows  a  lack  of  interest  by  potential  applicants.  The  possible  reasons  for  this 
diminished interest in the Programme are the following: 

•  Lack of visibility of the Programme, with the consequent lack of knowledge by potential 

beneficiaries. 

•  Lack  of  motivation  by  the  potential  beneficiaries  because  of  the  complexity  of  the 
Programme, not suitable funding mechanisms or low funding intensity. These issues can be 
traced in the text of the Programme's regulation: 

–  Unclear or unsuitable scope of the programme (art. 3) 

–  Unclear or unsuitable conditions for eligibility of beneficiaries (art. 4) 

–  Unclear or unsuitable definition of the types of projects (art. 5) 

–  Unclear or unsuitable detailed rules concerning the procedure for submission and 

selection of projects (art 6) 

–  Unclear or unsuitable funding conditions and requirements (annex I)  

–  Unclear or unsuitable administrative procedures. 

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–  Unsuitable financing instrument, grants 

2. 

OBJECTIVES 

The  overall  objective  is  to  help  the  programme  achieve  its  general  aim,  namely  to  avoid  or 
shift  off  the  roads  a  substantial  part  of  the  expected  growth  of  international  road  transport, 
estimated in 20bn tkm every year. 

With  a  view  to  help  the  programme  to  achieve  its  objective  the  underlying  drivers  of  the 
problem must be tackled. Therefore action is needed in order to improve the visibility of the 
programme  and  motivate  potential  beneficiaries  to  engage  in  projects  aiming  at  traffic 
avoidance  or  modal  shift  of  freight  off  the  roads.  The  motivation  for  potential  beneficiaries 
can be achieved with a simplification, clarification or amendment of the legal text. 

A necessary condition is that any changes proposed to the programme are adopted swiftly in 
order to be implemented as soon as possible. A major revision of the programme with policy 
implications should be discarded so to avoid that the amendments agreed arrive too late in the 
life span of the programme (2007-2013). 

3. 

POLICY OPTIONS 

Option A - The baseline scenario considers the effects of the measures already taken by the 
Commission: 

1.  Since  1.3.08  the  management  of  the  Programme  has  been  entrusted  to  the  Executive 
Agency for Competitiveness and Innovation (EACI), among other Community programmes. 
This will result in an increase of the Programme's visibility and streamlining of management 
procedures. 

2.  Following  the  procedure  provided  in  letter  d),  point  2  of  Annex  I  to  the  regulation,  the 
Commission will double the maximum funding intensity from 1 to 2€ per 500 tkm avoided or 
shifted off the roads. 

Option  B  –  Targeted  revision  of  the  Legal  Basis,  by  amending  parts  of  the  regulation 
without political implications, namely: 

B.1 – Facilitating Micro enterprises' access to the Programme. This in turn will be achieved 
by 

B.1.1 - Allowing single undertakings to apply for support. Giving the possibility 
that  projects  are  submitted  by  one  single  undertaking  will  clarify  and  simplify  the 
conditions for eligibility of beneficiaries.  

B.1.2 - Creating an especially low threshold for Inland Waterway projects and 
Micro enterprises. A specific lower threshold will be created for projects aiming to 
shift cargo from the road to inland waterways. This is a long standing request by the 
Inland Waterway sector and a specific recommendation for this fragmented transport 
sector by the external evaluation of the first Marco Polo programme. 

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B.1.3  -  Refunding  of  proposal  preparation  expenses  to  Micro  enterprises.  In 
order  to  foster  applications  by  Micro  enterprises,  which  characterize  the  road  and 
Inland  Waterway  transport  sectors,  a  lump-sum  refund  of  proposal  preparation 
expenses will be provided. 

B.2 – Improving the eligibility thresholds, which will be implemented by: 

B.2.1  -  Lowering  and  simplifying  project  eligibility  thresholds.  Simplifying  and 
lowering some thresholds will bring additional smaller projects and help achieve the 
Programme's objectives.  

B.2.2 – Deleting the specific threshold for traffic avoidance projects. The current 
10% specific threshold for Traffic avoidance actions provided by the regulation is a 
further  obstacle  for  a  kind  of  project  which  did  not  manage  yet  to  get  Marco  Polo 
support.  

B.3 – Raising the funding intensity. Through: 

B.3.1  -  Computing  the  transport  element  in  the  modal  shift  calculations.  It  is 
considered convenient to allow that the weight of the transport elements carrying the 
freight should be included in the modal shift calculations. Congestion on the roads is 
not only caused by the freight itself but by the trucks and containers, even if they are 
empty. 

B.3.2  -  Longer  project  implementation  duration  in  exceptional  cases.  The 
external  evaluation  advises  to  extend  the  maximum  allowed  project  duration  for 
projects  which  have  suffered  start  up  problems.  Having  the  possibility  of  an 
extraordinary  extension  can  give  reassurance  to  the  beneficiaries  that  their  start-up 
loses will be compensated by the Community subvention even if their projects suffer 
start-up  delays.  The  Common  Learning  Actions,  which  currently  has  a  shorter 
implementation  period  than  the  rest  of  the  actions,  also  find  often  difficulties  to 
implement  their  objectives  in  time.  In  both  cases  a  prolongation  possibility  will  be 
envisaged. 

B.4 – Simplification measures 

B.4.1 - Simplifying funding conditions for infrastructure. The current framework 
for  infrastructure  funding  is  complex,  adds  many  exceptions  and  constraints  to  the 
deadlines for implementation of the projects and requires complex calculations of the 
final subsidy allowed to each project. 

B.4.2 - Simplification of the Programme administrative procedures. The duration 
of  the  management  cycle  of  the  Programme,  from  drafting  the  call  to  signature  of 
contracts,  amounts  to  470  days,  which  seems  too  long  not  least  because  the 
beneficiaries  are  market  operators  subject  to  fast  changing  market  conditions.  The 
Commission will streamline the process of adopting the decisions to launch the call 
and award contracts. 

Option C – Full revision of the Legal Basis 

Since action is needed quickly in order to improve the Programme's results, a full revision of 
the  Programme,  including  policy  choices  is  out  of  the  question  and  excluded  from  the 

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analysis.  Therefore  all  the  measures  entailing  an  amendment  of  the  following  issues  are 
excluded  from  the  assessment:  Scope  of  the  Programme,  definition  of  the  types  of  projects 
and ceilings for Community assistance 

Option D – Stopping the implementation of the Programme 

The  hypothetical  option  of  stopping  the  implementation  of  the  Programme  is  not  analysed 
since the Progamme is an integral part of the EU Transport Policy, as defined in the revision 
of the White Paper on EU Transport Policy of 2006, and it is already achieving a substantial 
modal shift. 

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4. 

ANALYSIS OF IMPACTS 

Impacts of the options 

Efficiency 

Distribution 
support among 
kinds of projects 

Simplification 

Evolution 
in time 

Option 

Effectiveness 
(economic, 
environment 
and 
social 
benefits) 

Administrative 
costs 

EU 
/ 

Non 
effects 
specific 
geographical 
effects 

No EC action  

++ 

-- 

Neutral 

+ 

+ 

Neutral 

+ 

Option A – Baseline scenario 

Option B – Targeted revision of the Legal Basis 

Measures benefiting small undertakings (B.1) 

Neutral 

Neutral 

Neutral 

++ 

++ 

+ 

++ 

Neutral 

Neutral 

- 

- 

Neutral 

+ 

+ 

Neutral 

Measures modifying eligibility thresholds (B.2) 

Neutral 

++ 

Neutral 

+ 

+ 

+ 

Neutral 

+ 

Neutral 

Neutral 

Measures rising the funding intensity (B.3) 

-- 

- 

++ 

Neutral 

++ 

Neutral 

Neutral 

- 

Neutral 

Neutral 

Simplification measures (B.4) 

Neutral 

Neutral 

++ 

Neutral 

Neutral 

+ 

- 

- 

+ 

+ 

+ 

- 

+ 

Neutral 

Neutral 

+++ 

++ 

Neutral 

+++ 

Single 
undertaking 

IWT threshold 

Expenses refund 

Minimum 
thresholds 

Traffic 
avoidance 
threshold 

Modal shift 
calculation 

Implementation 
period 

Infrastructure 
funding 

Procedures 

+ 

+ 

+ 

+ 

+ 

++ 

++ 

+ 

+ 

5. 

COMPARING THE OPTIONS 

The  results  of  the  assessment  of  option  A  show  that  if  no  action  is  taken  to  amend  the 
regulation, the effectiveness of the Programme in achieving its objectives will increase but the 
efficiency in achieving them will decrease, and even if the modal shift achieved will increase 
the objective set in the legal basis will not be reached. 

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All measures of option B have been found to be effective, and show that the complement each 
other. A ranking can be established considering their estimated impacts: 

In the first place, the measures raising the funding intensity (B.3) are the highest effective, but 
as  happens  for  option  A,  the  high  effectiveness  is  however  compensated  with  a  substantial 
decrease in efficiency of the Community intervention. 

In  the  second  place,  the  measures  aiming  at  a  simplification  of  the  legal  base  and  its 
implementation (B.4) will of course have a substantial impact in terms of simplification which 
will be compounded over time, with savings in administrative costs. 

In  the  third  place,  the  measures  benefiting  small  undertakings  (B.1)  will  have  above  all  a 
positive  effect  managing  to  balance  the  distribution  of  Marco  Polo  support  among  the 
different alternatives to road transport and among the different project types. 

Finally,  the  measures  modifying  the  eligibility  thresholds  (B.2)  will  have  a  very  balanced 
effect in terms of the basic assessment criteria, with no negative impacts in any of them. The 
added value of these measures in comparison to the baseline is a better balance of the grants 
awarded among the different transport modes, project types and geographical areas benefiting 
from the Programme. 

Choice of options 

The conclusion of the assessment of the options is that action on the side of the Commission 
with a targeted revision of the legal basis has added value in terms of more effectiveness for 
the  Programme,  with  substantial  positive  effect  in  terms  of  a  better  distribution  of  funding 
among types of projects, positive simplification effects and savings of administrative costs. In 
case of no action by the EU the effectiveness of the programme will increase because of the 
non-legislative  measures  which  are  in  the  pipeline,  but  the  efficiency  of  the  Community 
intervention will suffer and its administrative costs will increase. 

Section 7: Monitoring and evaluation 

The  second  Marco  Polo  regulation  already  sets  a  clear  indicator  for  the  assessment  of  the 
results of the Programme's implementation. The modal shift and traffic avoidance should be 
monitored  in  terms  of  tonne-kilometres  shifted  or  avoided  in  the  roads  of  the  countries 
participating in the Programme. 

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