NEWS ITEMS FROM THE EUROPEAN INSTITUTIONS:

FOCUS ON TRANSPORT POLICY –

Implementing Transport White Paper recommendations:

Transport and Energy Commissioner Loyola de Palacio speaks in Paris on 19^th March at the AGM of FIEC member organisation, the  Federation Nationale des Travaux Publics

Mme de Palacio opened her speech to FNTP members by reminding them of the congestion which affects around 7,500km of the trans-European road network (about 10% of total length) and the 16,000 km of rail network (about 20% of  trans-European rail in the EU). Some 30% of internal roads cause delays of more than 15 minutes.

Freight’s share of rail has fallen from 21% in 1970 to 8% in 2000.  Mme de Palacio did not view this decline as terminal, citing the 40% of US goods which are transported by rail.  She warned that unless measures are taken to control demand in Europe, heavy goods traffic would increase by 50% by 2010.

In parallel to the increasing car population, major infrastructure construction has not measured up to the changes in transport economics.  Despite Commission and Council enthusiasm, scarcely more than 20% of the TENs transport network identified in 1996 has been completed.  Public financing has contracted and PPPs have not fulfilled their potential.

Mme de Palacio focused on particular proposals arising from the Transport White Paper which are, or very soon will be, on the negotiating table at the Parliament and the Council, namely

·        A second package of railway measures comprising five proposals to extend the freight and cabotage market, to extend interoperability and set down the basis of a safety policy.

She wished to respond to critics who believe that balancing transport modes is valid, but reckon that the transfer of road traffic is not realistic in the short term.  She felt it contradictory to imply that increasing roads and motorways is not to offer a simple solution to the problem.

• Revision of the directions in the TENs in the years to come.  Community financing will have to be concentrated on a restricted number of projects which aim to reduce persistent bottlenecks in certain parts of the network.
• The Commission has adopted a proposal to revise the financial regulation, increasing maximum support to 20% from its current 10% level.
• European infrastructure should respect necessary conditions for safety – a proposal for tunnel safety will be presented shortly.
• The Commission has ambitions for a major inter-modal programme “Marco Polo”.  This programme will have a budget of Euro 115 million for 2003-7.  Inter-modality will be more than a slogan.  Co-financing will be available for actions involving modal transfers and best practice in all sectors of freight transport.  The “highways of the sea” characterises this new inter-modal approach.

The most sensitive and ambitious part of the proposals is the Commission’s ideas on fiscal aspects of the use of infrastructure, which will be presented in a few months’ time.  The idea comes from a Swiss model which has been used to beneficial effect on the new alpine train links to the Loetschberg and the Gothard.

The total infrastructure cost from now until 2010 has been estimated as 400,000 million Euros; a further 100,000 million is required for the candidate countries.  When all available EU instruments are merged, the Union budget only releases Euro 2,500 million a year to co-finance investments.  The 15 Member States contribute 25,000 million.  20-25 years would be needed to carry out what is expected for 2010.  How can this be resolved?

The Swiss example is interesting: Since the inception of the initiative in 2001, Switzerland has collected 450 million Euros in fees on European lorries in transit across its territory.  This is the equivalent of the trans-European network budget line.  The fee varies in relation to distance, size of the lorry and degree of pollution emitted.  Taking into account increase in traffic and raising fees, 900 million Euro fee revenue is forecast for 2005; to be distributed 1/3 to the Cantons and 2/3 to the Confederation for its rail infrastructure policy.  Clearly EU transporters are financing the Swiss railways.

The EU is thus considering the value of implementing a comparable measure, all the more so as it can not succeed in financing plans for the Lyon-Turin or Brenner projects.  Strong budgetary constraints and the need for new infrastructure, particularly from the viewpoint of enlargement mean that in the medium-term entirely public financing appears utopic, to quote Mme de Palacio.  For her the solution lies in re-launching Public Private Partnerships (PPPs).  The Financial Regulation for TENs permits a maximum 1% of the Transport TENs (TEN-T) budget to be used as risk capital under the auspices of the European Investment Bank.  She believes that the following developments have contributed to facilitating private financing for major infrastructure projects:

• Council’s approval on 8 October 2001 of the status of European Companies to allow simplification and considerable economies of scale in setting up companies to manage cross-border projects
• An interpretative Communication on public markets which provided the necessary clarification on operating these markets by clearly identifying the responsibilities of each partner.

Recourse to PPP is the last option and part of the reason for delays in some major projects is because the level of public subsidy for PPPs is not sufficient to act as a catalyst.  That is the reason for the Commission proposal raise Community financial subsidies to 20% rather than 10% of TEN-T projects.  Mme de Palacio concluded by affirming her belief for the need for innovation solutions to mobilise both public and private investment, which will be subject to a European concessions regime.

She then made positive mention of the Galileo project as an example of PPP at European level in which the private sector can anticipate profitability with a very high cost benefit ratio, estimated at 4.6.

TRANSPORT :

Galileo Satellite Navigation system:  Germany will provide Euro 450 million for Europe’s satellite navigation system.  The German government has insisted that the European Commission secures private capital for the project.  The joint projects should involve an agreement which grants that public funding for the project does not go beyond what is already outlined.  (The German Ministry’s position can be found on http://www.bmvbw.de)

RESEARCH AND DEVELOPMENT

Should there be a European Research Council?  A discussion on this subject is on the agenda for the Council meeting of Research Ministers to be held on 7^th/8^th October 2002 during the Danish EU Presidency.  A European Research Council  would  create an independent public funding structure for high quality European-level research.  Further information can be obtained from the Danish Research Agency: http://www.forsk.dk

Sixth Framework Programme for Research and Development: On 20^th March the Commission published Expressions of Interest (EoI) to assist in setting an agenda for research themes to be covered in the next Framework programme (FP6).  EoI are a means of gathering information on some of the areas the research community is focusing on as well as measuring the level of activity in specific fields.  FP6 will support the European Research Area (ERA) and in this way national programmes will be opened to greater cross-border co-operation.  New types of projects or instruments will appear – namely large-scale Integrated Projects partners expected to be around 100 million Euros in magnitude and eligible for 50% EU funding; also Networks of Excellence which will be of 10-100 Million Euro size and be eligible for up to 25% funding.

Further information is to be found on http://www.cordis.lu/fp6/eoi-instruments 

ENVIRONMENT:

March Meeting of the Environment Council: 

Climate change was a key feature of the agenda when Council Ministers met on 4^th March, with ratification of the Kyoto Protocol the main topic.

The Council adopted its conclusions on the EU’s sustainable development strategy.  The European Commission recently published a Communication “Towards a Global Partnership for Sustainable Development”.  Environment Ministers have concluded that the environment must be put on a level footing with the economic and social dimensions in the future.  A public debate was held on environmental liability focusing on three issues: extension of the scope of the proposed Directive, the burden on public authorities, and the effects on the Internal Market of the non-compulsory insurance scheme.

It is hoped that the June Council of Ministers will be able to reach common positions on the proposals to revise the Seveso II Directive (Major accident hazards) and the revision of the Packaging Directive.  Preparatory work is being carried out within the Commission on a new chemicals policy, batteries and accumulators and integrated product policy.

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