Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EC) No 2236/95 laying down general rules for the granting of Community financial aid in the field of trans-European networks` () (98/C 407/23)

On 19 May 1998 the Council decided to consult the Economic and Social Committee, under Article 129 D of the Treaty establishing the European Economic Community, on the above-mentioned proposal.

The Section for Transport and Communications, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 July 1998. The rapporteur was Mr Whitworth.

At its 357th plenary session on 9 and 10 September 1998 (meeting of 9 September) the Economic and Social Committee adopted the following opinion by 107 votes for, two votes against and two abstentions.

1. Introduction and Background

1.1. The Treaty of European Union signed at Maastricht in February 1992 laid down the basic framework for the establishment of Trans-European Networks in the areas of transport, telecommunications and energy infrastructures and provided (in Article 129c) for an element of Community financing for projects of common interest in the TENs sphere.

1.2. Detailed rules for the granting of such financial assistance were laid down in Regulation 2236/95 while the guidelines for the development of the TENs and the identification of projects of common interest were contained in Decision No 1692/96.

1.3. Inevitably Regulations and Decisions of this nature benefit from revision in the light of experience. The Committee has already produced its Opinion on the Commission's proposals for amendment of Decision 1692/96 and indeed Article 19 of Regulation 2236/95 calls for its revision to be considered before the end of 1999.

2. The Commission's Proposals

2.1. The Commission has now brought forward its proposals for the revision of Regulation 2236/95. The amendments of substance may be summarized as follows:

- the development of a multiannual approach to financing and budgeting;

- 100 % financing of studies of a strategic nature undertaken on the Commission's initiative;

- the removal of the five-year limitation on interest rate subsidies;

- Community support for risk-capital funding of TENs projects;

- maximising the multiplier effect of Community resources by promoting private financing - in particular through public-private partnerships;

- increasing to 20 % the 10 % limit on Community aid for projects of exceptional trans-European interest;

- the revision of the procedures for appraisal, monitoring and evaluation.

2.2. A number of other relatively minor changes are proposed, the most noticeable of which is a requirement for the erection of display panels when Community aid is provided for infrastructure projects.

2.3. The Commission notes that the revision by the Treaty of Amsterdam of Article 129c (now Article 155) which will permit Community aid for projects supported (but not necessarily financed) by Member States will necessitate further amendments to the Regulation when the Treaty enters into force.

2.4. The Financial Statement attached to the proposed Regulation sets out the TENs Budget Line for the years 2000 to 2006 covering Transport, Energy and Telecoms. This provides an indication of spending needs totalling ECU 5 500 million of which 4 992 million is earmarked for transport as against ECU 1 800 million for the period 1995 to 1999.

3. Previous Committee Opinions

3.1. The Economic and Social Committee has been required to give its opinions on various specific aspects at each stage of the TENs development. In October 1991 the Committee endorsed the global approach to the TENs (). In April 1994 it gave its Opinion on the Proposal for what is now the Regulation for the granting of financial aid (). There followed in November of that year an Opinion on the Proposal for a Decision on guidelines for the development of the Networks (). More recently it delivered an Opinion on the Commission's Communication on public-private partnerships in TENs projects (). Finally as noted in paragraph 1.3 above its most recent opinion has been on the revision of the 1996 guidelines ().

3.2. At each stage the Committee has been wholly supportive of the TENs concept and has pressed for clarity of criteria and adequacy of funding. Latterly it has expressed disappointment that progress on the development of the TENs has been slower than initially expected and at the lack of an overall strategy. It has called for the presentation in the near future of an overview of the entire TEN to be followed by an assessment of progress and the setting of targets for the future.

4. General Comments

4.1. As a matter of principle the Committee welcomes the continuing examination of the working of Regulations such as No 2236/95 so as to ensure that they are improved in the light of experience and are effectively meeting the objectives for which they were designed. It agrees that the revision of the Regulation now proposed is timely in the light of the considerations set out in the Commission's explanatory memorandum.

4.2. The Committee endorses the proposals of substance summarized in paragraph 2.1 above. It believes that all of these are consistent with the more effective deployment of Community financial aid targeted specifically towards those areas where it can be instrumental in stimulating the development of both strategic and risk-capital projects and encouraging recourse to public-private partnerships. The Committee sees the overriding justification for the use of Community financial resources as being to further major strategic objectives and to encourage Member States and the private sector to undertake TENs projects which in the absence of such stimulus might not be initiated at all.

4.3. In the strategic area the Committee attaches particular importance to the proposed revision of Article 4.1 (a) which will permit the Commission to finance 100 % studies of an overall strategic nature undertaken at its own initiative. There is considerable scope for such studies to ascertain the volumes and types of traffic moving from one region of the Community to another with a view to determining the optimum potential use of individual and combinations of the various transport modes. The availability of such data is particularly relevant to the development of environment-friendly intermodal transport such as short-sea shipping. The Committee believes that the initiation of such studies should be a first priority for the Commission following the revision of the Regulation.

4.4. The Committee particularly welcomes the substantially increased financial provision for the years 2000 to 2006, especially in the field of transport, and hopes that this will be instrumental in furthering the development and completion of TENs projects at an increasing pace.

4.5. The Committee notes that the changes to the appraisal, monitoring and evaluation process prescribed by Article 15 are in themselves quite minor but believes that it is particularly important to ensure that projects which attract Community financial aid are carried to a successful conclusion and achieve the objectives which justified the granting of Community funds. Value for money, sound financial control and the elimination of fraud are essential ingredients. The Annual Report to the ESC and other bodies called for by Article 16 should reflect the outcome of this process in Energy and Telecoms as well as Transport.

4.6. The Committee notes the Commission's statement that the Regulation, even as it stands at present, permits the financing of links with third countries. It welcomes the suggestion that with a view to enlargement these provisions should now be used more fully and believes that they are particularly relevant to the implementation in the ten corridors of the CEE countries of the infrastructure projects laid down by the Pan-European Transport Conferences.

5. Specific Comments

5.1. While the Committee generally endorses the objectives of the proposed amendments to the Regulation it believes that the specific provisions to give effect to them could in a number of instances be stated with greater clarity.

5.2. The Committee understands that the risk-capital participation which will be permitted by the new Article 4.1 (e) and revised Article 11 (7) is not intended to take the form of direct investment in high-risk projects but rather the injection of limited amounts (maximum 10 % to 20 % of the total) of Community funds into suitable institutional venture capital funds under independent management which will invest in appropriate TENs projects at that management's discretion. The objective of such Community funding would be to encourage the formation of such institutional funds and to attract private risk capital for TENs projects. Clearly the Commission will need to develop appropriate criteria to determine the eligibility of such funds for Community participation. Such participation should not be regarded as a subsidy as there is the possibility of return on the investment.

5.3. In new Article 4.3 the term 'multiplier effect` is intended to indicate the perceived likelihood that where public financing is limited the injection of Community funds will in itself generate additional private financing. The Committee's Opinion on Public-Private Partnerships welcomed the increased involvement of the private sector in the financing of TENs projects.

5.4. The indicative nature of the financial programming in the context of the multi-annual financing introduced by the new Article 5 (a) might be more clearly defined. It is intended to give the Commission the ability to take longer term decisions within the annual budget procedure. After obtaining the approval of the Advisory Committee (per Article 17) the Commission will be able to devise a financing programming covering a number of years the annual allocations of which will be subject to the approval of the budgetary authority from year to year. Thus the Commission will be able to take funding decisions subject to the annual budget procedure and to switch resources between projects in the light of their individual progress. The revision of Article 10 explicitly absolves the Commission from reverting to the Advisory Committee on an annual basis in respect of projects contained in a multi-annual programme.

5.5. The Committee believes that this is a sensible and practical approach and will minimize bureaucratic delays.

5.6. The addition to Article 12.1 of a direct role for the Commission in the area of financial control of specific projects anticipates the ability of the Commission, once the Treaty of Amsterdam is ratified, to grant TENs aid directly to private companies. This situation will arise particularly in the telecommunications and energy sectors where such companies may be instrumental in undertaking projects of common interest.

Brussels, 9 September 1998.

The President of the Economic and Social Committee

Tom JENKINS

() OJ C 175, 9.6.1998, p. 7.

() OJ C 14, 20.1.1992.

() OJ C 195, 18.7.1994, p. 74.

() OJ C 397, 31.12.1994, p. 23.

() OJ C 129, 27.4.1998, p. 58.

() OJ C 214, 10.7.1998.