REPLY OF THE COMMISSION TO THE SPECIAL REPORT "IMPROVING TRANSPORT PERFORMANCE ON TRANS-EUROPEAN RAIL AXES: HAVE EU RAIL INFRASTRUCTURE INVESTMENTS BEEN EFFECTIVE?"
Date: 2010-09-07
Institutions: European Commission
Subjects: action programme, carriage of goods, common transport policy, intra-EU transport, rail transport, transport capacity, transport infrastructure, transport network

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EUROPEAN COMMISSION 

Brussels, 7.9.2010 
SEC(2010) 1017 final 

REPLY OF THE COMMISSION TO THE SPECIAL REPORT 

"IMPROVING TRANSPORT PERFORMANCE ON TRANS-EUROPEAN RAIL AXES: 
HAVE EU RAIL INFRASTRUCTURE INVESTMENTS BEEN EFFECTIVE?" 

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REPLY OF THE COMMISSION TO THE SPECIAL REPORT 

"IMPROVING TRANSPORT PERFORMANCE ON TRANS-EUROPEAN RAIL AXES: 
HAVE EU RAIL INFRASTRUCTURE INVESTMENTS BEEN EFFECTIVE?" 

EXECUTIVE SUMMARY 

II. first indent. The Commission agrees that the definition of the Priority Projects has not been 
based  on  an  analysis  of  the  actual  and  anticipated  traffic  flows.  It  is  important  to  note, 
however, that while  such  studies  have been carried out, both for individual projects and the 
network, they have yet to lead to conclusive results and so could not be used as such. 

The Commission considers that providing a definitive description of the main trans-European 
rail axes is likely to be particularly difficult, as they are in a constant state of flux depending 
on  migration,  trade  patterns  and  the  geopolitical  context.  The  Commission,  however,  also 
shares the view that the definition of the main network should be based on objective criteria. 
Therefore, in the future, Priority Projects should continue to be based on political agreement 
between  the  Council  and  European  Parliament,  but  relying  even  more  on  the  best  available 
evidence.  

II.  second  indent.  The  Commission  welcomes  the  Court's  recognition  of  the  improvements 
flowing from the concentration of TEN-T co-financing at cross-border locations and the work 
of  the  Coordinators.  It  agrees  that  further  work  on  defining  a  bottleneck  is  needed  and  will 
work on this. 

The Commission considers that the procedures for approving projects are sound, particularly 
following their substantial overhaul for the 2007-2013 programming period. These procedures 
were substantially strengthened by the integration of the Cohesion Fund in programming and 
specific  measures  to  improve  project  preparation,  documentation  and  the  quality  of 
Commission appraisals.  

II. third indent. The Commission welcomes this positive assessment of what the TEN-T and 
Cohesion co-financed projects have delivered. It would emphasise that, as the Court states in 
its paragraph 47, cost escalations do not have an impact on the EU budget because the EU's 
contribution is fixed at the beginning of the project.  

II.  fourth  indent.  The  Commission  shares  the  Court's  analysis  of  the  measurable 
improvements on lines dedicated to high-speed passenger services. It is working to improve 
the situation on conventional mixed and freight lines. 

III. first indent. The Commission already has close contacts with the Member States and the 
Railway  Institutions.  It  will  continue  to  work  closely  with  them.  In  addition,  as  part  of  its 
ongoing  stakeholder  consultation  exercise  on  the  TEN-T  guidelines,  the  Commission  is 
looking  for  input  on  how  trans-European  corridors  for  which  there  is  significant  actual  or 
anticipated demand can best be delivered. 

III.  second  indent.  The  Commission  agrees  that  the  Coordinators  play  a  vital  role  and  it 
appointed three new ones on 8 June 2010, bringing their number to nine. 

The  Commission  agrees  that  further  work  on  defining  a  bottleneck  is  needed  and  will 
continue  to  work  on  this.  The  European  coordinators  have  analysed  the  bottlenecks  on  the 
Priority  Projects  for  which  they  are  responsible.  The  Commission  has  also  reported  on  the 
bottlenecks in its yearly reports.  

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III. third indent. The Commission considers that the procedures for approving projects under 
the  Cohesion  Policy  for  the  2007-2013  programming  period  are  sound.  The  Commission 
continues to work on their improvement and is investing significant resources to contribute to 
the improvement of project preparation. 

The  Commission  welcomes  the  Court's  recognition  of  the  improvements  made  to  TEN-T 
selection  procedures;  however,  it  accepts  that there  is  room  for  improvement  as  regards  the 
use of cost-benefit analysis. The TEN-T Executive Agency is working to develop this further; 
nevertheless,  given  that  TEN-T  financing  only  co-funds  a  limited  amount  of  each  project 
compared to that funded by Member States, it is logical that the onus for assessing costs and 
benefits  should  fall  on  them,  particularly  as  almost  all  data  and  assumptions  originate  from 
them. 

III.  fourth  indent.  The  Commission  recognises  the  importance  of  exchanges  of  information 
amongst  project  promoters.  The  TEN-T  Executive  Agency  will  facilitate  this  by  organising 
discussions at its regular workshops with current and potential beneficiaries on best practices 
and knowledge exchange between all project promoters, particularly in the rail sector. 

III. fifth indent. By adopting Technical Specifications for Interoperability the Commission has 
worked,  and  will  continue  to  work,  on  these  "practical  constraints".  The  European 
Coordinators also devote particular efforts to these issues. 

INTRODUCTION 

11,  footnote  6.  When  presenting  figures  related  to  investments  in  its  documents  the 
Commission bases itself on the information provided by Member States. Recognising that the 
quality  of  the  financial  data  would  benefit  from  improvement,  the  Commission  invested 
significant  efforts  which  resulted  in  the  information  in  the  Commission's  June  2010  report 
being significantly better than in previous reports.  

14. The Commission underlines that, prior to 2007, Cohesion Fund projects were adopted on a 
project-by-project basis and in line with the available budget credits. The legal basis for the 
Priority Projects only applied after 2004.  

OBSERVATIONS 

22. The Commission understands that the Court means by stating that “the Priority Projects do 
not represent definitive descriptions of the main trans-European rail axes” that there needs to 
be  general  agreement  on  what  are  the  main  axes,  and  that  this  agreement  should  remain  as 
stable as possible over time.  

The Commission considers that it is likely to be particularly difficult to provide a definitive 
description of the main  trans-European rail axes, as they  are in a constant state of  flux as a 
function of migration, trade patterns and the geopolitical context. The Commission, however, 
also  shares  the  view  that  the  definition  of  the  main  network  should  be  based  on  objective 
criteria.  Therefore,  in  the  future,  Priority  Projects  should  continue  to  be  based  on  political 
agreement between the Council and European Parliament, but relying even more on the best 
available evidence.  

22. third indent. While the Commission acknowledges that connections to some important sea 
ports  are  not  included  in  the  Priority  Projects,  it  would  underline  that  many  are.  On  4  May 
2010,  as  part  of  its  TEN-T  revision  process,  it  put  forward  a  working  document  that 
establishes the methodology for identifying a future TEN-T network. This should avoid any 
future occurrence of the situation described by the Court. 

Box 4 

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The Commission acknowledges that the ERTMS corridors do not 100% coincide with Priority 
Projects.  ERTMS  has  requirements  that  need  to  be  met  for  both  infrastructure  and  rolling 
stock.  The  TEN-T  revision  process  is  designed  to  tackle  this,  and  one  possibility  being 
considered is to include ERTMS corridors directly into the Priority Projects. 

The Commission understands that the Polish authorities will submit an application for funding 
for the part of the Polish north-south axis from Warsaw to Gdynia in late 2010, that this will 
include ERTMS and that it will have an indicative total cost of 386 million euro.  

23.  The  Commission  agrees  that  there  is  scope  for  improving  the  definition  of  Priority 
Projects. This is something that is being addressed through the TEN-T revision process. 

24. The Commission agrees that the definition of the Priority Projects has not been based on 
an  analysis  of  the  actual  and  anticipated  traffic flows.  It  is  important  to  note,  however,  that 
while  such  studies  have  been  carried  out  both  for  individual  projects  and  the  network,  they 
have yet to lead to conclusive results and so could not be used as they stood. 

As the Court has stated, the Commission acknowledges the need to review the TEN-T policy. 
This review is currently being carried out and includes an examination of the methodology for 
defining the future TEN-T network. 

29.  The  Commission  considers  that  EU  financing  has  had  a  significant  influence  on  all  the 
TEN-T sections reviewed by the Court for this audit. This has included improving the projects 
originally planned or reducing their risk.  

30.  The  Commission  considers  that,  in  countries  covered  by  the  Cohesion  Fund,  many  rail 
projects  would  simply  not  go  ahead  without  the  substantial  EU  co-financing  from  the 
Cohesion Fund or the ERDF including cross-border sections, thereby improving accessibility 
and  performance  for  all  users.  The  requirement  is  to  give  priority  to  technically  and 
economically mature projects that are feasible within the programming period; otherwise the 
Funds may be lost to the beneficiaries. 

The  definition  of  major  projects  in  Article  39  of  Regulation  (EC)  No  1083/2006  has  been 
amended to make it easier for the Member States to submit major cross-border projects.  

33.  The  Commission  agrees  that  further  work  on  defining  a  bottleneck  is  needed  and  will 
continue  to  work  on  this.  The  European  coordinators  have  analysed  the  bottlenecks  on  the 
Priority Projects they are responsible for. The Commission also reported on the bottlenecks in 
its yearly reports.  

34.  The  Commission  for  the  2007-2013  period  improved  its  approval  procedures  for  major 
projects co-funded by the ERDF and the Cohesion Fund. Large projects co-financed under the 
Cohesion Fund in the 2000-2006 period were often approved section by section for budgetary 
reasons. In this sense the quality of the preparation of individual sections may not reflect the 
quality of preparation and development of the overall axis. 

35.  Internal  consultation  of  the  relevant  Commission  services  ("inter-service  consultation") 
has been and still is a crucial element in the appraisal and approval process.  

In  the  2007-2013  programming  period  the  Commission  has  established  JASPERS,  which 
provides  technical  assistance  to  the  new  Member  States  in  order  to  contribute  to  the 
improvement of quality of projects at an early stage. It also has a contract with outside experts 
for technical advice in the appraisal of major projects. 

Under  shared  management,  the  project  promoter  is  responsible  for  adequately  defining  the 
technical  specifications  of  projects.  The  adoption  of  technical  specifications  (see  annex  I) 
makes a significant contribution to improving the technical quality of rail infrastructure. The 

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Madrid-Levante  project  was  approved  in  stages,  section-by-section,  for  budgetary  reasons, 
and not in its totality, as the network involves a total of 940 km of high-speed rail. The EIB 
was consulted and its recommendations were progressively taken on board in this project. The 
EIB considered the financing of this projects justified and itself is providing substantial loans 
for it, in addition to the Cohesion Fund support. 

The  Commission  disagrees  with  the  implication  that  subsequent  cost  escalations  were  all 
linked to the EIB’s concerns. It considers that as explained in reply to 46 other factors were 
responsible. 

37.first indent. The Commission would like to emphasise that external experts are at the heart 
of  the  TEN-T  project  selection  process.  There  is  also  an  external  observer  who  provides 
comprehensive  feedback  to  the  TEN-T  Executive  Agency  on  the  whole  external  evaluation 
process. 

38.  While  the  Commission  welcomes  the  Court's  recognition  of  the  improvements  made  to 
selection procedures, it accepts that there is room for improvement as regards the use of cost-
benefit analysis. In the future, the TEN-T Executive Agency will develop a more systematic 
approach to cost-benefit analysis taking into account existing work. In order to do this it will 
work  with  the  projects  selected  in  priority  3  of  the  2010  annual  call  to  improve  project 
preparation, including by developing consistent approaches to cost-benefit analysis. 

Nevertheless,  given  that  TEN-T  financing  only  co-funds  a  limited  amount  of  each  project 
when compared to that funded by Member States, it is logical that the onus for assessing costs 
and  benefits  should  fall  on  them,  particularly  as  almost  all  data  and  assumptions  originate 
from them. 

As  far  as  the  coherent  model  of  European  rail  traffic  flows  is  concerned,  the  Commission 
remains  to  be  convinced  that  the  additional  insights  it  would  provide  would  justify  the 
potentially significant level of resources needed in order to bring it to fruition. 

44. A Memorandum of Understanding was adopted on 8 June 2010, setting out the steps to 
remedy  this  situation.  The  three  Member  States  concerned  by  PP3  (France,  Spain  and 
Portugal) have signed it. 

45.  The  Commission  would  like  to  emphasise  that  cost  escalations  are  typical  for  large 
infrastructure projects. 

46.  The  Commission  agrees  on  the  benefits  of  thorough  and  detailed  project  preparation; 
however, as the Court states in the previous paragraph, cost escalations in the  cases studied 
generally arose for reasons linked to unforeseeable factors. 

Concerning  the  Madrid–Levante  section  (but  also  other  equally  complex  projects),  the  cost 
increases  mentioned  by  the  Court  could  be  due  to  a  variety  of  factors,  some  of  which  are 
unforeseeable. For example, high inflation in construction projects in Spain and an unforeseen 
increase  in  costs  due  to  difficult  geological  conditions  have  had  a  significant  effect  on  the 
Madrid-Levante project cited by the Court.  

47-48.  The  Commission  shares  the  Court's  opinion  that  the  cost  escalations  did  not  have  a 
direct  impact  on  the  EU  budget  and  notes  that  the  Court  has  not  documented  any  indirect 
impacts either. 

The  Commission  would  like  to  underline  that,  according  to  the  new  model  of  financing 
decisions for TEN-T funds for the period 2007-2013, the beneficiaries and project promoters 
have to submit a Strategic Action Plan (SAP) detailing how the project will be implemented, 
including in terms of project planning, the risk management plan and project governance. The 

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TEN-T Executive Agency has already developed guidelines on this issue and is working on 
the exchange of good practices between beneficiaries. 

Box 8 

The  Warsaw-Gdynia,  stage  II  project  faced  many  problems  that  are  independent  of  the 
Commission's  approval  procedures,  such  as  significant  delays  in  the  tendering  procedures, 
problems with land purchase and ensuring access to the building site, as well as disputes with 
contractors. The Commission has repeatedly raised the issue of cost overruns on the Warsaw - 
Gdynia,  stage  II  project,  and  the  Polish  authorities  have  announced  that  they  will  submit  a 
modified  proposal  for  it.  The  Commission  made  it  clear  that  it  will  not  process  this 
modification without the Polish authorities submitting a horizontal analysis on cost overruns 
in the rail sector and how they are dealt with. 

54.  The  Commission  agrees  with  the  Court  that  overall  progress  on  trans-European  rail 
transport depends on achieving synergies between the effects of legislative measures affecting 
markets and interoperability and co-financing policy measures. 

Box 11 

The Commission is closely monitoring this situation in the framework of ERTMS Corridor A. 
It  has  adopted  a  European  Development  Plan  for  ERTMS,  as  well  as  a  proposal  for  a 
regulation for Rail Freight  Corridors,  which was adopted on 15 June 2010 by the European 
Parliament and the Council. Moreover, the Commission has appointed TEN-T Coordinators.  

Box 12 

The Commission is aware that no freight trains currently use the Roma-Napoli and Bologna-
Firenze  high-speed,  high  capacity  lines.  However,  thanks  to  the  introduction  of  these  high-
speed, high-capacity lines, there has been more capacity for freight transport on the existing 
conventional lines. In any case, most of the expected benefits from the ERDF funded sections 
relate to passengers' improved access to the rail network and not to freight transport.  

57.  The  Commission  acknowledges  that  progress  towards  interoperability  is  slow.  Radical 
harmonisation  is  not  possible,  given  that  rail  infrastructure  and  rolling  stock  have  long 
lifetimes and the sector's investment costs need to remain realistic. 

Nevertheless, the amount of interoperable infrastructure and rolling stock is increasing and the 
number  of  derogations  requested  by  Member  States  from  the  Commission's  implementing 
legislation  setting  out  Technical  Specifications  for  Interoperability  (TSI)  is  limited.  This 
shows  that  the  existing  TSIs  are  being  implemented  successfully.  As  far  as  the  TEN-T 
network is concerned, the TSIs are expected to be completed in 2010. This will benefit both 
TEN-T and Cohesion policy funded projects. 

The Commission will continue its efforts by concentrating on the implementation of TSIs that 
will deliver significant benefits in the short and medium term, such as telematics applications 
in  signalling,  freight  and  passenger  transport.  It  has  also  set  up  corridor  organisations  to 
identify and tackle all issues that hamper the competitiveness of rail freight along axes.  

As far as the measures in paragraph 8 of Annex VII are concerned, the Commission considers 
that steps are being taken at the European level to improve the situation: 

1) in the framework of Directive 2008/57, activities are ongoing to classify all national rules 
regarding rail traffic, assess which ones are equivalent and thus avoid duplication of controls, 
in particular at the borders 

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2)  in  the  framework  of  the  ERTMS  corridors,  working  groups  are  identifying  all  existing 
obstacles  -  in  particular  delays  at  the  borders  -  by  looking  at  the  obstacles  specific  to  each 
border.  

60. The European coordinators have made efforts to alleviate system constraints on corridors, 
which will be extended as a result of the proposed regulation on rail freight. 

The Commission's November 2008 proposal for a regulation creating a structure for each rail 
freight  corridor  is  also  significant  in  this  respect.  It  will  develop  reinforced  cooperation 
between  Infrastructure  Managers  on  traffic  management  (operational  measures)  and 
investment (mainly to remove bottlenecks and harmonise technical conditions). It is based on 
the experience with the Rotterdam-Genoa and Antwerp-Lyon/Basle corridors. 

CONCLUSIONS AND RECOMMENDATIONS 

62.  The  Commission  welcomes  the  work  of  the  Court,  which  is  especially  timely  given  the 
upcoming revision of the TEN-T networks. 

63. The Commission agrees with the Court that Priority Projects are the main mechanism for 
co-ordinating  and  concentrating  financial  resources  on  TEN-T  networks  and  continues  to 
pursue this course, while ensuring complementarity with regional development objectives and 
cohesion  policy.  In  this  light,  it  understands  why  the  Court  wishes  that  Priority  Projects 
should  be  defined  on  the  basis  of  an  analysis  of  current  and  expected  traffic  flows.  It  is 
important to note, however, that while such studies have been carried out, both for individual 
projects  and  for  the  network,  they  have  yet  to  lead  to  conclusive  results  and  so  cannot 
currently be used as such. 

The Commission considers that arriving at a definitive description of the main trans-European 
rail axes is likely to be particularly difficult, as they are in a constant state of flux depending 
on  migration,  trade  patterns  and  the  geopolitical  context.  The  Commission,  however,  also 
shares the view that the definition of the main network should be based on objective criteria. 
Therefore, in the future, Priority Projects should continue to be based on political agreement 
between  the  Council  and  European  Parliament,  but  relying  even  more  on  the  best  available 
evidence. 

Recommendation 1 

Recommendation 1. first indent. The Commission already has close contacts with the Member 
States and the Railway Institutions. It will continue to work closely with them on rail traffic 
matters. 

Recommendation  1.  second  indent.  As  part  of  its  ongoing  stakeholder  consultation  exercise 
on the TEN-T guidelines, the Commission is looking for input on how this can best be done. 

64.  The  Commission  welcomes  the  Court's  acknowledgement  of  the  improvements  flowing 
from the concentration of TEN-T co-financing at cross-border locations and the work of the 
Coordinators.  It  agrees  that  further  work  is  needed  to  define  a  bottleneck  and  will  work  on 
this. 

The  Commission  notes  that  Cohesion  Fund  project  approval  procedures  have  substantially 
changed from 2007. 

The  Commission  welcomes  the  Court's  recognition  of  the  improvements  made  to  TEN-T 
selection  procedures;  however,  it  accepts  that there  is  room  for  improvement  as  regards  the 
use of cost-benefit analysis.  

Recommendation 2 

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Recommendation  2.  first  indent.  The  Commission  agrees  that  further  work  on  defining 
bottlenecks  is  needed  and  will  continue  to  work  on  this.  The  European  Coordinators  have 
analysed  the  bottlenecks  on  the  Priority  Projects  for  which  they  are  responsible.  The 
Commission also reported on the bottlenecks in its yearly reports.  

Recommendation 2. second indent. The Commission agrees that the Coordinators play a vital 
role and appointed three additional Coordinators on 8 June 2010. 

Recommendation  2.  third  indent.  The  Commission  considers  that  the  procedures  for 
approving  projects  are  sound,  particularly  following  their  substantial  overhaul  for  the  2007-
2013 programming period. The Commission continues to work on their improvement and is 
investing  significant  resources  to  contribute  to  the  improvement  to  project  preparation  and 
appraisal As far as the technical characteristics of projects are concerned, their review will be 
greatly improved through the continued development of TSIs.  

Recommendation  2.  fourth  indent.  The  Commission  accepts  that  there  is  room  for 
improvement as regards the use of cost-benefit analysis. In the future, the TEN-T Executive 
Agency  will  develop  a  more  systematic  approach  to  cost-benefit  analysis.  To  do  this  it  will 
work  with  the  projects  selected  in  priority  3  of  the  2010  annual  call  to  improve  project 
preparation, including by developing consistent approaches to cost-benefit analysis. 

Nevertheless,  given  that  TEN-T  financing  only  co-funds  a  limited  amount  of  each  project 
when compared to that funded by Member States, it is logical that the onus for assessing costs 
and  benefits  should  fall  on  them,  particularly  as  almost  all  data  and  assumptions  therefore 
originate with them. 

Recommendation 3 

The  Commission  recognises  the  importance  of  exchanges  of  information  amongst  project 
promoters. The TEN-T Executive Agency will facilitate this by organising discussions at its 
regular  workshops  with  current  and  potential  beneficiaries  on  best  practices  and  knowledge 
exchange between all project promoters, particularly in the rail sector. 

66.  The  Commission  shares  the  Court's  analysis  of  the  measurable  improvements  on  lines 
dedicated  to  high-speed  passenger  services.  It  is  working  to  improve  the  situation  on 
conventional mixed and freight lines. 

Recommendation 4 

for 
Recommendation  4. 
Interoperability the Commission has worked on these "practical constraints" and will continue 
to do so. The European Coordinators also devote special efforts to these issues. 

indent.  Through  adopting  Technical  Specifications 

first 

Recommendation  4.  second  indent.  In  November  2008,  the  Commission  proposed  a 
regulation  creating  a  structure  for  each  rail  freight  corridor  that  will  strengthen  cooperation 
between  Infrastructure  Managers  (supervised  by  Member  States),  for  traffic  management 
(operational measures) and for investment (mainly in removing bottlenecks and harmonising 
technical conditions). It is based on the experience with the Rotterdam-Genoa and Antwerp-
Lyon/Basle corridors. 

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