21.4.2006   

EN

Official Journal of the European Union

C 94/1

I-IV

1-6

7-10

11-79

11-24

25-51

25-29

30-43

44-51

52-64

65-79

80-91

CF

—

Cohesion Fund

DG REGIO

—

Directorate-General for Regional Policy

DG TREN

—

Directorate-General for Energy and Transport

EGNOS

—

European Geostationary Navigation Overlay Service

EIB

—

European Investment Bank

EIF

—

European Investment Fund

ERDF

—

European Regional Development Fund

FAC

—

Financial Assistance Committee

FTE(s)

—

Full-time equivalent(s)

ISC(s)

—

Inter-service consultation(s)

ITS

—

Intelligent transport systems

MEANS

—

Measures for evaluating actions of a structural nature

MIP(s)

—

Multiannual indicative programme(s)

PMS

—

Programme management system

PP(s)

—

Priority project(s)

PPP

—

Public-private partnership

PSR(s)

—

Project status report(s)

RTD

—

Research, technological development and demonstration activities

SF(s)

—

Structural Fund(s)

SNE(s)

—

Seconded Nnational expert(s)

TEN

—

Trans-European network

TEN-T

—

Trans-European transport network

I.

The Community contributes to the establishment of trans-European networks in the area of transport (TEN-T) to promote cohesion, interconnection and interoperability of national networks as well as access to such networks across the European Union. To achieve this, the Community finances infrastructure projects and studies for roads, railways, inland waterways, airports, ports, satellite navigation and traffic management systems. The budget for the period 2000 to 2006 administered by the Directorate-General for Energy and Transport (DG TREN) amounts to 4 425 million euro.

II.

The Court's audit assessed the extent to which the Commission's management system, including the design and implementation of the legal framework, administrative procedures and internal control system, was conducive to the economic, efficient and effective implementation of TEN-T.

III.

The Court found that:

IV.

The Court recommends that the Commission:

1.

With the entry into force of the Maastricht Treaty in 1993, the Community became responsible for contributing to the establishment and development of trans-European networks in the area of transport (TEN-T) (2). In order to support projects of common interest which are implemented by Member States and international organisations, the Commission set up specific measures for TEN-T in the early 1990's. Budgetary expenditure on TEN-T has increased from 182 million euro in 1993 to 661 million euro in 2005.

2.

The aim of TEN-T is to promote the interconnection and interoperability of national transport networks, as well as the access to such networks, specifically taking into account the need to link island, landlocked and peripheral regions with the central regions of the Community (3).

3.

Community expenditure on TEN-T is directly managed by the Directorate-General for Energy and Transport (DG TREN) (4). Annex 1 provides a comprehensive description of different aspects of the TEN-T management system. From a legal and regulatory perspective, TEN-T is governed by:

4.

Community financial aid may take one or several of the following five forms: co-financing of studies, direct grants to investments or works, interest subsidies on loans granted by the European Investment Bank (EIB) or other financial bodies, contributions towards fees for guarantees for loans from the European Investment Fund (EIF) or other financial institutions, risk capital participation for investment funds or comparable financial undertakings.

5.

The TEN financial regulation provides for a total budget of 4 875 million euro for the period 2000 to 2006 for all TEN sectors (transport, telecommunications and energy infrastructures) combined, of which a maximum of 75 % can be allocated for the purposes of MIPs for these sectors (11). The remaining budget of at least 25 % is available for non-MIP projects.

6.

Of the total amount of 4 875 million euro, the Commission allocated 4 425 million euro to TEN-T, of which, so far, 70 % is reserved for the MIP to be distributed as follows (12):

—

1 551 million euro (50 %) to the PPs,

—

680 million euro (22 %) to the ‘Galileo’ programme,

—

815 million euro to the so called ‘coherent groups of projects’, of which

—

30 million reserve (1 %).

7.

The Court's audit assessed the extent to which the Commission's management system, including the design and implementation of the legal framework, administrative procedures and internal control system, was conducive to the economic, efficient and effective implementation of TEN-T (13).

8.

The specific audit objectives were to ascertain the extent to which:

The Court also verified whether, and to what extent, the Commission has taken corrective action with respect to its previous observations on TEN-T (14).

9.

The Court audited all procedures, from the submission of proposals to, where applicable, ex post financial audits. As part of its system analysis, the Court established a comprehensive description of the Commission's management system and identified the most important internal controls. A total of 72 TEN-T actions were sampled for compliance testing of the internal controls operated by the Commission (15). To allow broad conclusions to be drawn, the sample provided coverage of all transport modes (16), of all EU-15 Member States and represents over 577 million euro expenditure. Out of these 72 actions, 35 were audited on the spot.

10.

The audit also comprised a review of the TEN-T legal bases and model financing decisions adopted by the Commission. Furthermore, the Court issued questionnaires to the competent national ministeries and carried out a staff survey on issues such as programming, project ex ante evaluation, selection, monitoring and control. Finally, in cooperation with the Commission, the Court established a project database providing statistical data on TEN-T actions financed.

11.

The initial deadline set by the TEN-T policy guidelines adopted by the Council and the European Parliament for completing the TEN-T network was 2010 (17). Only three out of 14 PPs decided in 1994 and 1996 have been completed so far, while an additional five PPs are expected to be finalised within the deadline set. For the six remaining PPs, only the main project sections are expected to be completed by 2010. In particular, cross-border sections of TEN-T projects are facing delays as these sections receive less priority at national level and require greater coordination efforts from the Member States concerned (see paragraph 15). In 2003, the Commission acknowledged these important delays, which are mainly due to insufficient financing at European and at Member State level and to a lack of coordination between the different sources of EU, national or regional public funds (18).

12.

Following enlargement, the European Parliament and the Council decided to add a further 16 PPs (with deadlines for completion ranging between 2008 and 2019) when revising the TEN-T policy guidelines in 2004 despite difficulties in completing the existing PPs (see Annex 2) (19).

13.

The overall objective of TEN-T is to ensure the cohesion, interconnection and interoperability of national networks, as as well as access to such networks across the European Union (see paragraph 2).

14.

An analysis of the distribution of the TEN-T budget by EU-15 Member States between 2001 and 2003 shows that with few exceptions, each Member State received a share of the annual TEN-T budget, either through the MIP or non-MIP budget (see Table 1). Moreover, the share of the total budget allocated to each Member State remained nearly constant (i.e. annual deviations of not more than 1 % for 9 out of 15 Member States) and projects included in the selection proposal which were finally not retained were replaced by another project(s) from the same Member State. This corroborates the statements made by the representatives of two Member States (20) in the TEN-T programme committee (FAC) in the Court's survey, and documentary evidence in the case of one Member State (21), that the principle of ‘fair share’ is an essential element taken into account in the TEN-T budget allocation.

15.

Most of the TEN-T project sections financed are located within the boundaries of the Member States. Of the 118 MIP infrastructure project sections (23), only nine sections cover more than one Member State. These cross-border project sections face most difficulties in obtaining national financing and encounter administrative and legal difficulties in their management. In addition, no adequate funding priority has been given by the Commission to these type of projects. Indeed, the MIP decision only provides for 5 % of its budget to cross-border projects, of which only 2 % to intra-Community cross-border projects (24) (see paragraph 6). Moreover, 70 % of the 2000 to 2006 MIP budget for the nine cross-border sections remains to be committed in 2005 and 2006, in particular those related to the railway links between Spain and France, and Austria and Italy.

16.

Although the TEN financing regulation increased the funding threshold for project sections crossing borders or natural barriers from 10 to 20 % in time, to be used from the 2004 financing decisions onwards, this has not led to any cross-border sections being financed at increased financing rates as of June 2005 (25). If the difficulties in completing the railway cross-border sections persist, the trans-European added value of TEN-T will not be exploited to the fullest.

17.

TEN-T financial aid may not exceed 50 % of the cost of studies, and 10 % of the cost of infrastructure works (26) with an overall limit of 10 % of the total investment cost, except for projects concerning satellite positioning and navigation systems and for projects crossing borders or natural barriers for which grants can cover up to 20 % of the total investment cost.

18.

An analysis of the forms of intervention mentioned in paragraph 4 and used for projects committed between 1995 and 2004 showed (see Diagram 1):

19.

40 % of the TEN-T actions committed between 1995 and 2004 concerned works. Even though the TEN financial regulation states that this form may only be used ‘in duly justified cases’, the audit found that specific justifications were hardly ever provided when using this form of aid.

20.

Co-financing of studies is the most used intervention mechanism (59 % of the actions). Unlike works, studies are attractive even for countries and regions benefiting from other EU infrastructure funding programmes, such as the Structural and Cohesion Funds (28). This is mainly due to the high co-financing rate for studies in TEN-T.

21.

In the period 1995 to 2004, the average rate of funding for works and studies amounted to respectively 3,5 % (as compared to 10 %) and 25,4 % (as compared to 50 %) of the total estimated eligible costs (29). These average funding rates are considerably below the maximum allowed for either form of aid. Moreover, the TEN-T budget is spread over a very large number of actions, many of which did not require TEN-T financing and/or did not fully comply with the evaluation and selection criteria (see paragraph 39).

22.

The above observation and the delays in executing PPs (see paragraph 11), indicate a lack of prioritisation in the selection of TEN-T actions for funding thereby reducing the desired catalytic effect of the Community financing (see paragraph 42). Furthermore, the low average of actual funding for works raises questions whether the Commission's proposal for a new TEN financial regulation increasing the maximum funding limits for works will achieve its intended results of attracting more public and private financing (30).

23.

During the period 2001 to 2004 a total amount of 1 926 million euro had been committed for MIP projects, 63 % of the total budget available for that purpose. A further 1 129 million euro remains to be committed in the period 2005 to 2006. To be in the position to commit the remaining 37 % in 2005 and 2006, will require strict monitoring of the MIP project execution by the Commission and the Member States. The measures contained in the amended policy guidelines on how to deal with significant project delays are adequate on a long-term perspective (31). However, to address delays in the short term, projects not progressing as planned should be the subject of a more stringent review by the Commission. In consultation with Member States it should be envisaged, where necessary, to provide for an immediate budget transfer within the MIP programme to projects implemented according to, or ahead of, planning.

24.

Projects belonging to the ‘Coherent Group of Projects’, for which almost 40 % of the budget remains to be committed, should be closely monitored. In particular, this is required for the group of cross-border projects where 56 % of the budget remains to be committed in 2005 and 2006. This highlights the overall difficulties in completing cross-border project sections which are either part of PPs or of coherent groups of projects.

25.

The Commission financing decision is the main legal basis for awarding TEN-T financial aid to single projects and has therefore to specify clearly the scope, timing, form, budget and financial conditions for TEN-T financial aid (see Annex 1). It was only in 2002 that the Commission started consistently to notify such decisions to beneficiaries, despite this being required by the TEN financial regulation (32). Since then, the Commission has revised the model financing decision every year leading to a more complete and clear legal basis (33).

26.

Although the Commission also took steps to improve the description of activities covered by the financing decisions, the Court's suggestion of introducing a binding model structure for a technical annex has not been implemented (34). Such a model should oblige beneficiaries to provide a minimum level of information respecting a pre-defined structure linking activities to budget. This would facilitate project progress monitoring and contribute to a more effective and efficient operation of financial and technical controls of the activities financed by the Commission and Member States.

27.

The financing decision does not indicate what technical and financial information on project status must be provided by beneficiaries and in what form. Due to this absence of standardised reporting (or appropriate guidelines), the technical and/or financial information submitted together with each request for payments was not always sufficient to allow the Commission:

28.

The Court's audit evidenced that errors at beneficiary level were mostly related to the following characteristics of TEN-T financial aid:

29.

This led to payments by the Commission for construction works at the increased rate in 30 % of the study transactions tested. Unambigious definitions of the scope of both ‘studies’ (36) and ‘works’ (37), proposed by the Court to prevent the risk of errors, still remain to be transposed into the model financing decisions.

30.

Applications for TEN-T financial aid are submitted annually either through the MIP or non-MIP procedure (see Annex 1). Despite the multiannual character of the MIP, annual evaluation procedures are organised to allocate funds to MIP projects. This, together with the parallel running of an annual non-MIP procedure, considerably increases the administrative burden for the Commission and the Member States and thereby reduces the overall efficiency of the evaluation and selection process (38). In addition, as priority is given to financing of MIP projects, the budget available for non-MIP depends on the outcome of the MIP procedure, which unnecessarily delays the progress of non-MIP project selection.

31.

The administrative procedures for application and ex ante evaluation are complex. Various models of application and of evaluation forms have been established by the Commission and used in parallel (39). The Court identified several cases whereby this administrative complexity created additional work for the Commission's staff, without having had a fundamental impact on the quality of the project selection or the allocation of Community funds.

32.

Although the Commission has taken the first steps towards simplifying the administrative process by merging the preliminary and detailed application for non-MIP proposals in 2004, there remains room for further simplification of the application and evaluation process, in particular within the MIP.

33.

A deadline is set by the Commission for submitting applications for financial aid. Compliance with this deadline ensures an equal treatment of project applicants and allows Commission staff sufficient time to evaluate proposals (or project progress for second year financing).

34.

The audit showed that a significant number of applications for financial aid were not submitted within the deadline, despite rules on timely submission having been clarified and confirmed by the Commission (40).

35.

A proper and transparent evaluation requires that all relevant project information is available at the start of the process. However, the preliminary application forms used until 2004 as a basis for the first evaluation did not oblige applicants to provide all the essential information even though required by the TEN financial regulation (41).

36.

As a result, the initial evaluation and selection of MIP projects was performed on the basis of application forms which contained incomplete project information (see paragraph 40). Consequently, proposals did not comply with all submission criteria prior to the main evaluation stage. For MIP, a robust evaluation is particularly important as the MIP decision prioritises budget on the basis of which projects are subsequently allocated TEN-T financial aid. For instance, one of the PPs for which MIP budget indicatively allocated 13 million euro for the period 2001 to 2003 only received funding in 2004 (42). Since the preliminary and detailed application forms for MIP had not been merged before 2004, this deficiency persisted until then.

37.

From the second financing year onwards, evaluations are mainly carried out on the basis of project status reports (PSRs), which the audit found provide insufficient information for this purpose. An analysis of the PSRs submitted for projects audited showed that the information provided by Member States was insufficiently precise, in particular regarding the status of the work in previous periods. This is due to the format of the model report, which does not require Member States to provide detailed information. As a result, the quality of the selection of projects largely depends on the qualification, experience and conscientiousness of the individual project officers evaluating the proposals, the time available to perform an adequate progress review and the cooperation from the Member States in providing additional data if, and when, necessary.

38.

The TEN financial regulation specifies the basic conditions for awarding Community aid (43) and the project selection criteria (44). The project application and appraisal forms used by the Commission do not mention or do not sufficiently guide towards assessing compliance with these conditions and criteria. Where relevant questions are included in the project appraisal forms, the replies given by the evaluators are often limited to a yes or no reply, without providing the required supporting justifications.

39.

More specifically, the audit evidenced that:

40.

As for the initial evaluation of MIP projects, the audit showed that for most MIP projects an appraisal form had not been completed. An analysis of those forms where the Commission had documented its evaluation indicated the same deficiencies and weaknesses as identified for the non-MIP evaluations (i.e. not all questions answered, etc.).

41.

Due to the lack of justifications provided by the evaluators and the absence of evaluation guidelines or indicators, it is unclear how the verification of compliance with the established criteria takes place and how Commission staff carrying out the evaluations arrive at the final conclusion on whether the conditions or formal requirements are fulfilled in order to select proposals for funding.

42.

The MIP programme provides a multiannual allocation of TEN-T financing. Nevertheless, the TEN financial regulation requires annual project evaluations and selections to prioritise funding within the MIP (32). In this context, a robust and transparent evaluation is essential to assess the extent to which individual projects fulfil the policy objectives and the selection criteria to achieve the allocation of funding intended by the TEN-T policy guidelines. Given the weaknesses and deficiencies described above for evaluation, but also in the monitoring of ongoing projects from second year financing onwards (see paragraphs 44 to 50), the multiannual MIP budget has been allocated to categories of projects (i.e. projects of common interest, coherent groups of projects and Galileo), individual projects, project sections and actions, without a proper assesment of the legally required criteria. In the Court's view, the weaknesses highlighted above have a negative impact on the prioritisation of projects within the MIP programme.

43.

The Court's recommendation of extending the use of external experts in the evaluation process to all transport modes has not been followed up by the Commission as it was considered ‘a sensitive issue for reason of confidentiality’ (50). It should be noted that many other Community programmes, such as Cohesion Fund and the RTD framework programmes, use external experts as evaluators whereby the confidentiality issue is addressed by a declaration to be signed by the evaluators (51). As shown by the evaluation of ITS projects, the use of external experts would have led to a better documented and jusitified evaluation and selection process (see paragraphs 38 and 39). In addition, experts supporting project officers during the evaluation would contribute to a more time and cost efficient evaluation and add objectivity and expertise to the process (see paragraphs 56 to 58). It is also a possibility explicitly provided for by the TEN financial regulation, which specifies that the Commission may seek any specialist advice it requires, including the opinion of the EIB (52).

44.

In order to ensure that Community aid is used efficiently, the Commission and Member States have a shared responsibility to systematically monitor progress of projects, where appropriate, with the cooperation of the EIB or other bodies. The purpose is to assess the manner in which projects and the programme have been carried out and to evaluate the impact of their implementation (53). In addition, project monitoring is an essential element in the annual evaluation and selection of MIP project proposals requesting financial aid from the second year onwards (see paragraph 42).

45.

TEN-T project monitoring by the Commission mainly relies on the following two elements:

46.

As already mentioned in the case of project evaluations (see paragraph 37), the PSR's submitted for the transactions audited showed that the information provided is often insufficient in detail or sometimes even lacking, complicating an adequate project evaluation and selection, and also having a negative impact on project monitoring. This has been corroborated by the Court's survey of DG TREN project staff.

47.

In addition to the PSR, project officers also receive technical and financial progress reports when cost statements are submitted by the Member States or project promoters. As mentioned in paragraph 27 there is no model structure for the technical and financial reporting that require Member States to provide a minimum level of information to the project officers.

48.

A second element in the project monitoring process consists, in the case of projects funding infrastructure works, of on-the-spot inspections to the project site which, in the majority of the cases, only take place prior to the final payment. For most of the actions, the project officer, accompanied by a financial officer, performs a technical and financial review of the action concerned after the submission of the final payment claim to the Commission and prior to the final payment (55).

49.

However, the Commission does not regularly carry out monitoring activities or ex post impact assessments to verify whether:

50.

Furthermore, as in the case of evaluations (see paragraph 43), no use is made in the monitoring process of external experts or expertise available in other Commission services, other institutions (such as the EIB) or within Member States.

51.

As recommended by the Court in the 2001 and 2002 Annual Reports, the Commission integrated the different TEN-T databases into a central IT system towards the end of 2003 (57). Although efforts have been made by the Commission to establish a user's manual, to train users and add functionalities, this IT system is not commonly used by project officers and therefore does not contain up-to-date and reliable information. The Court's survey of DG TREN project staff showed that project officers are not using the system as it is not user-friendly and too much oriented towards the needs of the RTD framework programmes. As a result, the Commission cannot provide reliable and complete information in its reporting, without extensive and time-consuming reconciliation work with accounting information contained in the Commission's central accounting system.

52.

Table 2 shows the budget and staff allocation for all activities carried out within DG TREN as of 2004.

53.

Adequate staffing is a prerequisite for efficient and effective programme management. As of 2004, the 459 ongoing TEN-T actions were managed by 18 full-time equivalent (FTE) project officers, an average of 26 actions per FTE project officer. In addition, the actual number of actions managed by each project officer differed substantially (ranging from 2 to 71 actions by FTE project officer), indicating an unbalanced allocation of actions and staff allocated to TEN-T between (and within) the directorates managing TEN-T. Moreover, the high number of actions (24 %) managed by seconded national experts (SNEs), who are only on a temporarily basis seconded to the Commission, raises concerns about the continuity of project management.

54.

The results of the staff survey requesting information from project officers about the average working time spent per activity reveals that most staff resources are allocated to technical project monitoring (35 %) and proposal evaluation and selection (16 %) (see Diagram 2). However, a large amount of time is, on average, also spent on ‘support to policy papers and/or legislative proposals’ (11 %), despite policy units existing within each of the four operational Directorates.

55.

The high workload of the project officers involved in a wide range of activities implies that insufficient attention can be paid to key activities such as project evaluation and monitoring, including periodic on the spot inspections. Given that these inspections are an essential element of project monitoring, this is not considered satisfactory by the Court.

56.

TEN-T project officers play a major role in the project evaluation, selection and monitoring processes. In particular in context of the MIP, the decision to continue, suspend or cancel project financing largely depends on the assessment made by project officers, generally without the assistance and advise of external experts. In these circumstances, it is essential that project officers have the necessary technical knowledge related to transport issues.

57.

However, an analysis of the technical expertise of project officers (58) showed that less than half have a degree in transport-related subjects (59). In addition, a significant number of the statutory staff lacked professional experience relating to transport prior to their recruitment as a TEN-T project officer. In comparison, 8 out of 11 SNEs dispose of such professional experience. Although the absence of prior professional experience in a field does not necessarily imply a lack of competence, sufficient technical expertise in transport issues is essential for the quality of the evaluation, selection and monitoring of such complex technical projects.

58.

Moreover, these deficiencies are not adequately addressed by training measures. An analysis of the training activities attended between 2001 and 2004 by 30 project officers (of which six were SNEs) showed that 24 out of 30 (including four SNEs) followed at least one training course on financial or procedural issues. However, only 16 out of 30 (including three SNEs) followed a course on transport-related issues (60). In addition, the average duration of these courses was less than one day.

59.

The limited technical expertise of the majority of the TEN-T statutory project staff is compensated, to a certain extent, by the professional experience offered by SNEs. The temporary nature of their assignment and the Commission's internal rules applicable to SNEs (61) limit their contribution to the evaluation, selection and monitoring process.

60.

Although these rules have been in force since May 2002, it took DG TREN almost two years to clarify the practical implications of these rules for SNEs (62). In addition, the audit identified that contrary to the rules, some SNEs are managing projects originating from their Member State and are initiating and authorising financial transactions.

61.

The Commission's rules are intended to avoid any potential conflict of interest. However, they necessarily imply that SNEs can only partly contribute to project-management-related activities. In turn, this means additional work for the Commission's statutory staff, and a less efficient allocation of resources. Moreover, SNEs consider that their expertise is not being used to its fullest extent, and the results of their work is not visible within the Commission.

62.

To be able to manage the TEN-T activity with a substantially larger number of projects and budget share from 2007 onwards, DG TREN will have to adapt, as quickly as possible, its organisational structure, staff allocation and qualifications to meet these new challenges.

63.

Within the Commission, the creation of a TEN-T Executive Agency is currently under consideration. According to a cost-benefit analysis (CBA) commissioned by DG TREN, setting up such an agency could lead to efficiency gains, mainly through (63):

64.

However, the conclusions of the CBA do not stand scrutiny, in particular due to the overly optimistic parameters and incorrect reference data used in the calculation of the financial consequences. In addition, most of the identified efficiency gains could also be achieved with TEN-T being managed by DG TREN ‘in-house’.

65.

The main sources of Community financing for trans-European transport infrastructure projects are TEN-T, the Structural Funds (SFs), in particular the European Regional Development Fund (ERDF), and the Cohesion Fund (CF) (64). The co-financing rate for individual projects via the ERDF is between 75 and 85 % (65) of total eligible costs while the CF contributes up to 85 % of eligible expenditure. In contrast, the Community contribution from the TEN-T budget heading is limited to 10 % of the overall total investment cost of a project regardless of the form of intervention chosen, except for some projects where the contribution can reach 20 % (see paragraph 17).

66.

The legal bases governing ERDF (66) do not include explicit provisions for the case of simultaneous funding from an SF and other EU funding programmes. As far as the CF is concerned, the question of duplication and overlapping is addressed by Article 9 of Council Regulation (EC) No 1164/94 establishing a CF (67) stating that ‘The combined assistance of the Fund and other Community aid for a project shall not exceed 90 % of the total expenditure relating to that project’. Since the maximum rate of assistance granted by the CF alone is 80 to 85 % of public or equivalent expenditure, there is a margin of 5 to 10 % left for other Community aid, such as TEN-T.

67.

The TEN financial regulation specifies in Article 5(4) that ‘The financial resources provided for under this regulation shall not, in principle, be assigned to projects or stages of projects which benefit from other sources of Community funding’. By using the wording ‘in principle’ the regulation does not exclude co-financing of a TEN-T project by two or more sources of Community funding. There are no further provisions in the TEN financial regulation clarifying the use of multiple funding sources.

68.

The funding of a transport project by different EU funding programmes entails the risk of over- or double-funding of the same project or project section by different Community funding sources. In addition, this risk also exists if due to a combination of funding from the TEN-T programme and:

69.

To limit the risk of over- or double-funding, it is important that the Commission has accurate and relevant information on past, current and future EU financing of a project proposal. Member States are obliged to indicate other Community funding in the applications for the TEN-T programme, as well as in the applications for projects to be financed by the CF, and, in principle, also in the financing plans included in the programming documents of the SFs. However, in the latter case, the information available in the Commission is limited, due to the decentralised management of the SFs.

70.

The Court's analysis of completed application forms showed that the question relating to financing from different EU funding sources is understood differently by individual Member States, which led in some cases to incorrect or incomplete information on other EU financing sources being given to a TEN-T project.

71.

The detailed application forms used for TEN-T project proposals ask whether an application has been, or will be, made for support from any other Community source. The wording and the scope of the question differ between the application forms for works or for studies, but also between the annual models and even sometimes between the language versions. For instance, the term ‘project’ in the application for works was frequently interpreted by Commission staff as referring to the specific project section for which EU funding is requested rather than the project as a whole.

72.

In addition, in the TEN-T project appraisal forms, the question ‘The Project is without other EU funding support’ is interpreted by the Commission as referring only to the section for which financing is requested and not to the project as a whole. In application forms, however, the same term is interpreted differently.

73.

To assist in the evaluations on ERDF and CF proposals, the Commission concluded a cooperation agreement and framework contract with the EIB. In the case of projects jointly financed by both institutions, the EIB makes freely available all its technical and economical analyses and conclusions, at both the appraisal and monitoring stages. In the case of projects for which no application has been made for EIB financing, recourse can be made to the expertise of the EIB for an ex ante evaluation of technical or financial aspects of a proposed project for funding. In addition, DG REGIO makes use of other external experts for project assessments. To this end, a multiannual framework contract has been concluded with a consortium of consultants in the transport field.

74.

As mentioned in the section on evaluation and selection (paragraph 43), TEN-T proposals are mainly evaluated by Commission staff in DG TREN. No use is made of the specific expertise offered by DG REGIO or by the EIB. Such resources could be of particular use for ex ante inspections of projects located in regions or Member States eligible for ERDF or CF funding.

75.

In addition, evaluation practices or programmes existing in the stuctural policy area, such as MEANS (68), aiming at improving methods of evaluation of infrastructure projects, are not used for the evaluation of TEN-T projects.

76.

Inter-service consultations (ISCs) represent the Commission's formal approach to coordination whereby all other Commission services, including the Legal Service, provide within a deadline of 10 working days an opinion (69) on a list of projects proposed for EU funding. By way of this procedure, the different Commission services verify, amongst other things, whether there is any potential overlap of EU funding (70).

77.

The effectiveness of inter-service consultations largely depends on the quality and accessibility of information available in each of the Commission services. Given the limited amount of time available to reply to the ISC, relevant information must be accurate and readily available for consultation. However, no database centralising information on EU funding allocated to transport projects is available within the Commission, nor within any of the services concerned. This is in particular the case for the ERDF managed by DG REGIO, where Member States can only indicate measures, but are not required to provide detailed information on projects within their operational programmes or programme complements as projects are not approved at this stage.

78.

This lack of information limits the validity of the ISCs carried out. This is evidenced by the reply given to several ISCs launched for TEN-T projects where a favourable opinion was given, but with a reservation stating that overlap with other EU funding cannot be excluded.

79.

In addition to the ISC, there are also other possibilities to improve coordination of EU transport funding (71). However, these alternatives are not fully and systematically exploited by the Commission (72).

80.

The Court found that TEN-T financial aid has not always been allocated in the most effective way. The slow execution of PPs (in particular of cross-border project sections), the large number of actions financed and the low average of funding rates used, had a negative impact on the prioritisation of the TEN-T financing (see paragraphs 11 to 24).

81.

The Commission and the Member States, who have combined responsibility for achieving efficient and effective budget allocation and project execution, should take the following measures:

82.

For beneficiaries, the model financing decision is the main legal basis setting the conditions to be observed for obtaining TEN-T financial aid. Despite several modifications, the model financing decision has still to be improved to ensure an efficient project monitoring and effective operation of controls (see paragraphs 25 to 29).

83.

To create a consistent and complete legal framework, the Commission should:

84.

Despite the multiannual character of MIP projects, the Commission established a complex annual administrative framework to evaluate and select MIP and non-MIP projects. These heavy administrative procedures have not always led to relevant information being fully available for the evaluation and to a properly documented evaluation process. In addition, there is no coherent and consistent methodology established by the Commission on how to assess the basic conditions for financing and to check compliance with the submission and evaluation criteria. As a result, evaluations and selections of proposals were carried out by the Commission in an ad hoc manner, and in the absence of documented and publicly available guidelines (see paragraphs 30 to 43).

85.

To ensure a more time and cost-efficient, transparent and strictly applied evaluation process, the Commission should:

86.

For ongoing projects, the information provided by beneficiaries to the Commission is often too limited to allow project officers to carry out an effective and efficient project monitoring. In particular, the Commission's monitoring does not regularly verify whether essential conditions, such as the implementation of policy objectives or the overall funding limits, are complied with during the lifetime of the project (see paragraphs 44 to 51).

87.

To achieve a more rigorous and transparent project monitoring, the Commission should:

88.

Project evaluation and monitoring are impeded by the excessive workload of staff allocated within the Commission to the administration of TEN-T. The lack of educational background and/or limited professional experience in specific transport-related areas for a significant number of TEN-T project officers is not sufficiently addressed by training measures. The involvement of SNEs compensate for the lack of expertise to a certain extent. However, the temporary nature of their assignment and the Commission's internal rules applicable to SNEs limit their contribution to the evaluation, selection and monitoring process (see paragraphs 52 to 64).

89.

Given the expected substantial increase of TEN-T in budgetary terms, it is essential that the Commission makes efficient use of its staff resources. For that purpose, the Court recommends the Commission to:

90.

The coordination of Community funding of transport infrastructure within the European Union does not allow the Commission to identify all cases of over- or even double-funding. The main reason for this is that the legal bases of the different EU programmes are ambiguous as to whether, and if so under what conditions and to what extent, multiple financing of projects is admissible (see paragraphs 65 to 79).

91.

To strengthen the coordination of Community transport infrastructure funding, the Commission is recommended to take following additional action:

1.

high-speed train/combined transport north-south

2.

high-speed train Paris-Brussels-Köln-Amsterdam-London

3.

high-speed train south: Madrid-Barcelona-Perpignan-Montpellier-Madrid-Vitoria-Dax

4.

high-speed train east: Paris-Metz-Strasbourg-Appenweier-(Karlsruhe) with junctions to Metz-Saarbrücken-Mannheim and Metz-Luxembourg

5.

convential rail/combined transport: Betuwe line Rotterdam-NL/D border-(Rhine/Ruhr)

6.

high-speed train/combined transport: France-Italy-Lyon-Turin-Milan-Venice-Trieste

7.

Greek motorways: Pathe: Rio Antirio, Patras-Athens-Thessaloniki-Promahon (Greek/Bulgarian border) and Via Egnatia: Igoumenitsa-Thessaloniki-Alexandroupolis-Ormenio (Greek/Bulgarian border)-Kipi (Greek/Turkish border)

8.

multimodal link Portugal/Spain with the rest of Europe by developing rail, road, sea and air transport links as appropriate in the three principal Iberian corridors: — Galicia (La Coruña)/Portugal (Lisbon) — Irún/Portugal (Vallodalid-Lisbon) — south-west corridor (Lisbon/Seville)

9.

Nordic triangle (rail/road)

10.

Ireland/United Kingdom/Benelux Road Link

11.

west coast main line (rail).

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Öresund fixed link (completed in 2000)

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railway axis Cork-Dublin-Belfast-Stranraer (completed in 2001)

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Malpensa Airport (completed in 2001).

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Group 1-2: Removal of bottlenecks on the railway network to improve freight and passenger traffic

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Group 3: Intra-Community cross-border projects and cross-border projects with third countries

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Group 4: Intelligent transport systems for road

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Group 5: Intelligent transport systems in the air sector.

1.

Galileo

2.

freight railway axis Sines/Algecirias-Madrid-Paris

3.

railway axis Paris-Strasbourg-Stuttgart-Wien-Bratislava

4.

Rhine/Meuse-Main-Danube inland waterway axis

5.

high-speed rail interoperability on the Iberian peninsula

6.

Fehrman Belt railway axis

7.

motorways of the sea (Baltic Sea, sea of western Europe, sea of south-east Europe, sea of south-west Europe)

8.

railway axis Athina-Sofia-Budapest-Wien-Praha-Nürnberg/Dresden

9.

railway axis Gdansk-Warszawa-Brno/Bratislava-Wien

10.

railway axis Lyon/Genova-Basel-Duisburg-Rotterdam/Antwerpen

11.

motorway axis Gdansk-Brno/Bratislava-Wien

12.

railway/road axis Ireland/United Kingdom/continental Europe

13.

‘Rail Baltica’ axis Warszawa-Kaunas-Riga-Tallinn-Helsinki

14.

‘Eurocaprail’ on the Bruxelles/Brussel-Luxembourg-Strasbourg railway axis

15.

railway axis of the Ionian/Adriatic intermodal corridor

16.

inland waterway axis Seine-Scheldt.

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Community aid shall be granted, in principle, only if achievement of a project meets financial obstacles,

—

Community aid shall not exceed the minimum considered necessary for the launch of a project (Article 5(2)),

—

regardless of the form of intervention chosen, the total amount of Community aid under this Regulation shall not exceed 10 % of the total investment cost (20 % in specific cases) (Article 5(3)),

—

the financial resources provided for under this Regulation shall not, in principle be assigned to projects or stages of projects which benefit from other sources of Community funding.

—

degree of contribution to objectives and priorities of the TEN-T policy guidelines,

—

project is potentially economically viable,

—

the financial profitability of the project is insufficient at the time of application,

—

the maturity of the project, stimulative effect on public and private finance, soundness of the financial package, the direct or indirect socio-economic effects in particular on employment and the environmental consequences should be taken into account,

—

in case of cross-border projects, timing of the different parts should be taken into account.

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can go alone on mission or participate in external meetings only as an observer or for information purposes, except in special circumstances authorised by the Director-General,

—

cannot be involved in any procedural phase of authorising financial transactions, implying that a SNE cannot initiate or verify any financial transactions,

—

cannot act as member of an evaluation committee, and

—

cannot act as project officer for projects originating from the SNEs own Member State and from the organisation from which he/she is seconded.