Terms and conditions on rules on financial aid to the TEN-T
Regulation (EC) No 680/2007 of the European Parliament and of the Council of 20 June 2007 laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks.
Actions underway in the field of transport and energy on the date of application of this Regulation shall continue to be subject to Regulation (EC) No 2236/95 in the version in force on 31 December 2006.
The main terms are as follows:
- Projects of common interest co-financed by Member States and identified within the framework of the guidelines referred to under Article 155(1) of the Treaty.
- Applications for Community financial aid shall be submitted to the Commission by one or more Member States or, with the agreement of the Member States concerned, by international organisations, joint undertakings, or public or private undertakings or bodies.
- The concept of "project" includes parts of projects that are technically and financially independent and form a whole designed to fulfil an economic and technical function.
Forms of aid :
- co-financing of studies related to projects, including preparatory, feasibility and evaluation studies, and other technical support measures for these studies;
- direct grants to works in duly justifies cases;
- grants for works in the framework of availability payment schemes;
- interest rate rebates on loans given by the EIB or other public or private financial institutions;
- a financial contribution to the provisioning and capital allocation for guarantees to be issued by the EIB on its own resources under the loan guarantee instrument;
- risk capital participation for investment funds or comparable financial undertakings with a priority focus on providing risk capital for trans-European network projects and involving substantial private sector investment; such risk-capital participation shall not exceed 1 % of the budgetary resources set out in Article 18;
- a financial contribution to the project-related activities of joint undertakings.
The total amount of Community aid shall not exceed the following rates :
- 1. Studies: 50 % of the eligible cost, irrespective of the project of common interest concerned;
- 2. Works:
- 2.1. Priority projects in the field of transport:
- a maximum of 20 % of the eligible cost,
- a maximum of 30 % of the eligible cost for cross-border sections, provided that the Member States concerned have given the Commission all necessary guarantees regarding the financial viability of the project and the timetable for carrying it out;
- 2.2. Projects other than priority projects: a maximum of 10 % of the eligible cost;
- 3. The European Rail Traffic Management System (ERTMS):
- 3.1. Track-side equipment: a maximum of 50 % of the eligible cost of studies and works;
- 3.2. On-board equipment:
- a maximum of 50 % of the eligible cost of developing and making prototypes for the installation of ERTMS on existing rolling stock, provided that the prototype is certified in at least two Member States,
- a maximum of 50 % of the eligible cost of series equipment for the installation of ERTMS on rolling stock; however, the Commission shall set in the framework of the multiannual programme a maximum amount of aid per traction unit;
- 4. Road, air, inland waterway, maritime traffic and coastal traffic management systems: a maximum of 20 % of the eligible cost of works.
The Commission may produce a multiannual work programme. The amount of the financial envelope shall lie within a range of 80 to 85 % of the budgetary resources of the 8.013.000.000 EUR available for transport for the period 2007-2013.
Project selection criteria
Community aid is granted on a priority basis to projects according to their contribution to the objectives set out in Article 129b of the Treaty and to the other objectives and priorities defined in the guidelines referred to in Article 129c(1) of the Treaty. It is intended for projects that are potentially economically viable and for which the financial profitability at the time of application is deemed insufficient. The decision to grant Community assistance should also take account of:
- the maturity of the project,
- the stimulating effect on public and private finance,
- the soundness of the financial package,
- direct or indirect socio-economic effects,
- the environmental consequences,
- the need to overcome financial obstacles,
- the complexity of the project.
Especially in the case of cross-border projects, the Member States concerned have given the Commission all necessary guarantees regarding the financial viability of the project and the timetable for carrying it out.
Applications for financial aid must be submitted to the Commission through the intermediary of the Member State concerned or by the body directly concerned with the agreement of the Member State. The Regulation stipulates the information required for the assessment and identification of applications (e.g. name of the body responsible, the type of assistance envisaged and a description of the project concerned).
Financial provisions: eligible expenditure and method of payment.
Financial control is carried out by Member States. Without prejudice to this control work, the Commission may send officials or staff to carry out spot checks on the projects financed. The Commission may reduce, suspend or cancel financial aid in the event of irregularities, or if one of the conditions specified in the decision granting the financial aid has not been met.
Cooperation to evaluate systematically progress with projects. The Commission has created the Trans-European Transport Network Executive Agency (TEN-T EA) that is entrusted with the management of the Community funds available for the promotion of the Trans-European transport network.
In implementing this Regulation, the Commission is assisted by a Committee composed of representatives of the Member States and chaired by a representative of the Commission.
The total cost of projects for the Trans-European Network from 1996 to 2020 is put at € 900 billion, which gives an idea of the enormity of the undertaking! It is obvious that national government funding - and by extension EU aid - will be nowhere near enough to cover the full cost. The European Union is thus trying to get greater private-sector involvement in the funding of the network, by encouraging public-private partnerships (PPPs). As the name suggests, these are simply partnerships, entailing no privatisation of public responsibilities or nationalisation of private assets.
The advantage of this kind of structure is that it makes for a better spread of the risk, lower borrowing costs, particularly at project launch, and a transparent management structure. Above all, it encourages the private sector to sign up for the public service aspect of projects and the public sector to be better aware of which business services can help to make a project profitable.
The Commission is keen for the private sector and private capital to be brought into projects as soon as possible, at the planning stage. Clearly, the better the risks are understood and spread, the greater the chances will be of bringing the private sector on board: it is thus the job of the public sector to minimise the political and legislative risks and those entailed in scheduling the project, whilst the private sector will bear the risks of planning, financing, construction and traffic.
PPPs are seen as particularly necessary for priority projects which are experiencing difficulties.
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