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Financing transport infrastructure with the

Connecting Europe Facility

Next steps after the negotiations

Matthieu BertrandDG MOVE, Unit B4 Connecting Europe - Infrastructure Investment Strategies

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Connecting Europe FacilityOne instrument – three sectors

Financing framework 2014-2020

Sectoral policy frameworks

(setting priorities for 2020, 2030,

2050)

The "European Infrastructure Package"(European Commission proposal, October 2011)

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Update on the Connecting Europe Facility

• Conclusive informal trilogue : 27/06• Vote in the TRAN/ITRE EP Committee : 7/10

• Next steps• Debate and Vote in the EP Plenary : 22 & 23/10• Adoption by Council : end October/early Nov• Signing of the text by EP President: week of 18/11• Publication at the Official Journal: end November?• Entry into force : one day after publication• Entry into application : 01/01/2014

• BUT: the First work programmes can be adopted only after the adoption of a delegated act…

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CEF budget• €23.1 billion for TEN-T (-40% vs EC)

(€26bn in current prices)

•European Council agreement 7-8 February 2013•EP resolution backed the agreement. Vote on the MFF Regulation in Autumn expected to be positive.

•€13.1bn available to all Member States(€14.8n in current prices)

•€10bn to be transferred from the Cohesion Fund (€11.3bn in current prices)

•To be allocated exclusively to projects in Cohesion Fund eligible Member States

•Respect of National allocations under the Cohesion Fund until end 2016

•Specific Programme support actions for MS experiencing difficulties in proposing projects

•To be spent via:Grants (estimated €21.1 billion)

Innovative financial instruments (€2 billion estimated market uptake)

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• 80 – 85 % of available budget through MAPs for pre-identified projects listed in Annex 1• 4 horizontal priorities (addition of

innovation and new technologies, MoS, Safe and secure infrastructure)

• 9 core network corridors (addition of new projects and changes in the alignment)

• and other important cross-border and bottleneck sections (many sections added)

• 15 – 20 % for other projects of the core and comprehensive networks (new addition, up to 5% of the CEF envelope) and for financial instruments

Main results of the negotiations: Enlarged eligibility

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Revised Co-funding rates

Types of ProjectsAll Member States

Member States eligible for Cohesion Fund

(a) Studies (all modes) 50% 85%(b)Works on

Rail Cross border 40% 85% Bottleneck 30% 85% Other projects of common interest 20% 85%

Inland waterways Cross border 40% 85%Bottleneck 40% 85%Other projects of common interest 20% 85%

Inland transport connections to ports and airports (rail and road) 20% 85%

Development of ports 20% 85% Development of multi-modal platforms 20% 85% Reduce rail freight noise by retrofitting of existing rolling stock 20% 20%Freight transport services 20% 20%Secure parkings on road core network 20% 20%Motorways of the sea 30% 85%

Traffic management systems SESAR, RIS, VTMIS (ground/onboard) 50/20% 85%

ERTMS 50% 85%

ITS for road 20% 85%

Cross border road sections 10% 85%

New technologies and innovation for all modes of transport 20% 85%

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Other changes in eligibility

• Eligibility of VAT• VAT to be eligible when not recoverable under national

law and by a beneficiary other than a non-taxable person• Rules of the Cohesion Fund for the €10bn

• Purchase of land• Is an eligible costs under the €10bn in line with rules of

the Cohesion Fund

• Timing• Apart for 2014, costs eligible for financing shall not have

been incurred prior to the date of submission of the grant application.

• Cancellation possible for studies which have not been started within one year following the start date and two years for works

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Constraints for the implementation (1)

• Split of the available budget per objective• EP and Council added an annex IV setting percentages for

the 3 transport specific objectives of the CEF(i) removing bottlenecks, enhancing rail interoperability,

bridging missing links, and, in particular, improving cross-border sections - 80%;

(ii) ensuring sustainable and efficient transport systems in the long run, with a view to preparing for expected future transport flows as well as enabling the decarbonisation of all modes of transport through transition to innovative low-carbon and energy efficient transport technologies, while optimising safety - 5%;

(iii) optimising the integration and interconnection of transport modes and enhancing interoperability of transport services, while ensuring the accessibility of transport infrastructures, and taking into account the ceiling for on-board components of SESAR, RIS, VTMIS and of ITS for the road sector referred to in article 10(2)c(iv) - 15 %.

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Constraints for the implementation(2)

• Numerous caps and limits: EP and Council added additional caps and limits for certain eligible actions: • capping for on-board components of traffic

management systems, including SESAR but excluding ERTMS, of 5% of the transport envelope of CEF.

a maximum of €1.3bn can be spend via grants on on-board components of SESAR, RIS, VTMIS and ITS for road.

• capping of 5% for the comprehensive networkLimiting the funding to €1.3bn

• capping of 1% for freight noise (retrofitting of rolling-stock),

limiting the funding to €260m

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Constraints for the implementation(3)

• Numerous caps and limits: EP and Council added additional caps and limits for certain eligible actions (2): • 1% Capping for programme support actions consisting

of technical and administrative assistance expenses incurred by the Commission for the management of the CEF

It includes the cost of the Executive Agency

• several caps for financial instruments: 10% overall capping for all financial instruments + limit of €230m for Project Bonds until 2015.

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Constraints for the implementation(4)

• EP and Council adopted a list of general orientations be taken into account when setting the award criteria:• maturity of the action in the project development;• soundness of the implementation plan proposed;• stimulating effect of Union support on public and

private investment; • need to overcome financial obstacles such as the lack

of market finance;• when applicable, economic, social, climate and

environmental impact, and accessibility;• cross-border dimension

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The delegated act on funding priorities

• Result of difficult negotiations• EP wanted MAP to be adopted as delegated acts,

with € allocated to each of the priorities during 2014 -2020

• MAP to be adopted as implementing acts• but Commission to adopt delegated acts to detail

the funding priorities to be reflected in the work programmes, without indicative amounts.

• Commission has to adopt the delegated act on funding priorities before the 1st work programmes can be adopted.

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Next steps for the delegated act• Target date:

• adoption of the delegated act and the Communication just after the entry into force of the CEF and TEN-T Guidelines Regulations

• Provisional planning• Meeting with the consultative Expert group for

preparation of the DA on 26/09 & 7/11• Inter-service consultation early November• CEF and Guidelines to enter into force after

publication at the Official Journal• Adoption of the DA by College early December

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Impact for the 2014 work programmes and calls

• Scrutiny period: • After the DA is tabled by EC, EP and Council have a 2-

month scrutiny period to reject the act. • This period could be extended by 2 months• WP cannot be adopted before DA is adopted

Entry into force of CEF 1/12

DA proposal by EC 5/12

Scrutiny until… 5 Feb 2014 5 April 2014

Adoption of 2014 Work Programme

February April

Publication of calls Feb- March April-May

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Main features of the 2014 Work programmes and calls

• 1 MAP for the €10bn transferred from Cohesion Fund, only for Cohesion MS

(total budget: ~€11.2bn in current prices)

• 1 MAP for the 28 EU MS• 1 AP for the 28 EU MS

total budget for CEF without the transferred from Cohesion fund: ~€14.8bn in current prices)

• The size of the calls will be evaluated on the basis of MS project pipelines

Will be done in cooperation with MS authorities and DG REGIO, especially for Cohesion MS

• No plan to have an AP for the €10bnAll key projects on the Core Network are in included in the Annex, covered by the MAP

• No plan to adopt in 2014 the multi-sectoral call for proposals for actions with synergies

One joint multi-sectoral call will have to be adopted between 2014 -2020.

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Any questions?

Thank you for your attention