Commission Staff Working Document. Annex to the Annual report of the Cohesion Fund (2004) - Hoofdinhoud
COUNCIL OFBrussels, 9 November 2005
THE EUROPEAN UNION
14135/05 ADD 1
FC 46
ADDENDUM TO COVER NOTE
from:
Secretary-General of the European Commission, signed by Mr Jordi AYET PUIGARNAU, Director
date of receipt: 7 November 2005
to: Mr Javier SOLANA, Secretary-General/High Representative
Subject: Commission Staff Working Document. Annex to the Annual report of the Cohesion Fund (2004)
Delegations will find attached Commission Staff Working document SEC(2005) 1396.
________________________
Encl.: SEC(2005) 1396
COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 7.11.2005 SEC(2005) 1396
COMMISSION STAFF WORKING DOCUMENT
Annex to the:
ANNUAL REPORT OF THE COHESION FUND (2004)
TABLE OF CONTENTS
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1.General Context ......................................................................................................... 16
1.1. Convergence and economic development in the beneficiary countries of the Cohesion Fund ........................................................................................................... 16
1.1.1 Greece ........................................................................................................................ 16
1.1.2. Spain........................................................................................................................... 16
1.1.3. Portugal ...................................................................................................................... 17
1.1.4. Cyprus ........................................................................................................................ 18
1.1.5. Czech Republic .......................................................................................................... 18
1.1.6. Estonia........................................................................................................................ 19
1.1.7. Hungary...................................................................................................................... 20
1.1.8. Latvia.......................................................................................................................... 20
1.1.9. Lithuania .................................................................................................................... 21
1.1.10. Malta .......................................................................................................................... 22
1.1.11. Poland......................................................................................................................... 22
1.1.12. Slovakia...................................................................................................................... 23
1.1.13. Slovenia...................................................................................................................... 24
1.2. Conditionality............................................................................................................. 24
1.3. The accession of the ten candidate countries ............................................................. 25
2.3.3. Implementation of the budget for the previous period (1993-99).............................. 43
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3.The projects and measures adopted............................................................................ 43
3.1. Assistance from the Fund by Member State .............................................................. 43
3.1.1. Greece ........................................................................................................................ 43
3.1.1.1 Environment ............................................................................................................... 44
3.1.1.2 Transport .................................................................................................................... 45
3.1.2. Spain........................................................................................................................... 46
3.1.2.1 Environment ............................................................................................................... 47
3.1.2.2 Transport .................................................................................................................... 52
3.1.3. Portugal ...................................................................................................................... 54
3.1.3.1. Environment ............................................................................................................... 55
3.1.3.2. Transport .................................................................................................................... 56
3.1.4. Cyprus ........................................................................................................................ 58
3.1.4.1. Environment ............................................................................................................... 58
3.1.4.2. Transport .................................................................................................................... 58
3.1.5. Czech Republic .......................................................................................................... 58
3.1.5.1. Environment ............................................................................................................... 58
3.1.5.2. Transport .................................................................................................................... 60
3.1.6. Estonia........................................................................................................................ 61
3.1.6.1. Environment ............................................................................................................... 61
3.1.10.1. Environment ............................................................................................................... 71
3.1.10.2. Transport .................................................................................................................... 72
3.1.11. Poland......................................................................................................................... 72
3.1.11.1. Environment ............................................................................................................... 73
3.1.11.2. Transport .................................................................................................................... 74
3.1.12. Slovakia...................................................................................................................... 76
3.1.12.1. Environment ............................................................................................................... 77
3.1.12.2. Transport .................................................................................................................... 78
3.1.13. Slovenia...................................................................................................................... 78
3.1.13.1. Environment ............................................................................................................... 78
3.1.13.2. Transport .................................................................................................................... 80
3.2. Technical assistance and studies ................................................................................ 81
3.2.1 Technical assistance at the initiative of the Commission........................................... 81
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4.Monitoring, controls and irregularities ...................................................................... 81
4.1. Monitoring: committees and missions ....................................................................... 81
4.1.1. Greece ........................................................................................................................ 81
4.1.1.1 Monitoring Committees ............................................................................................. 81
4.1.1.2. Monitoring missions................................................................................................... 82
4.1.2. Spain........................................................................................................................... 82
4.1.2.1. Monitoring Committees ............................................................................................. 82
4.1.6.1. Monitoring Committees ............................................................................................. 85
4.1.6.2. Monitoring missions................................................................................................... 85
4.1.7. Hungary...................................................................................................................... 85
4.1.7.1. Monitoring Committees ............................................................................................. 85
4.1.7.2. Monitoring missions................................................................................................... 85
4.1.8. Latvia.......................................................................................................................... 85
4.1.8.1. Monitoring Committees ............................................................................................. 85
4.1.8.2. Monitoring missions................................................................................................... 85
4.1.9. Lithuania .................................................................................................................... 86
4.1.9.1 Monitoring Committees ............................................................................................. 86
4.1.9.2. Monitoring missions................................................................................................... 86
4.1.10. Malta .......................................................................................................................... 86
4.1.10.1. Monitoring Committees ............................................................................................. 86
4.1.10.2. Monitoring missions................................................................................................... 86
4.1.11. Poland......................................................................................................................... 86
4.1.11.1. Monitoring Committees ............................................................................................. 86
4.1.11.2. Monitoring missions................................................................................................... 86
4.1.12. Slovakia...................................................................................................................... 87
4.1.12.1. Monitoring Committees ............................................................................................. 87
4.1.12.2. Monitoring missions................................................................................................... 87
5.1. General ....................................................................................................................... 91
5.2. Examination and ex-ante appraisal of projects .......................................................... 92
5.3. Cooperation with the EIB when a project is considered ............................................ 92
5.4. The programme of ex-post evaluation........................................................................ 93
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6.Inter-institutional dialogue, information and publicity .............................................. 97
6.1. Annual report for 2003............................................................................................... 97
6.1.1. European Parliament .................................................................................................. 97
6.2. Information from the Member States......................................................................... 97
6.3. Commission measures on publicity and information................................................. 97
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1.GENERAL CONTEXT
1.1. Convergence and economic development in the beneficiary countries of the Cohesion Fund
1.1.1 Greece
In spite of a less supportive international context, the economic activity continued to be buoyant in Greece in 2004. After picking up in 2003 at 4.7%, real GDP growth reached at 4.2% and real GDP per capita in PPS attained around 80% of the EU average. Growth in 2004 was driven by domestic demand, especially investment and public consumption. The general government deficit in 2004 is now estimated to have reached 6.1% of GDP, from 5.2% in 2003, and the debt ratio attains 110.5% of GDP, compared to 109.3% in 2003. The slippage from the 2004 deficit target of 5.2% of GDP reported in the 2005 Budget reflects tax shortfalls and expenditure overruns in the execution of the 2004 budget, on the top of those already unveiled in September 2004.
On 21 March 2005 Greece submitted a revised update of its stability programme, covering the period 2004-2007. According to the reference scenario of the programme, real GDP would grow at 2.9% in 2005 and 3.0% in 2006 and 2007. The budgetary strategy aims at reducing the deficit below the 3% of GDP reference value by 2006, as required by the Council in its notice under Article 104(9). Specifically, the deficit is expected to attain 3.7% of GDP in 2005, and would fall to 2.9% in 2006 and to 2.4% in 2007. Fiscal consolidation is based on a mix of revenue-enhancing measures and expenditure retrenchment, which should lead to high primary surpluses. The debt ratio is projected to decline to 109.5% in 2005 and then to 107.2% in 2006 and 104.7% in 2007. The primary surplus and high nominal GDP growth would be the main driving forces behind the projected path of debt reduction.
In its Opinion on the update on 12 April 2005, the Council noticed that, although the budgetary strategy of the Greek government is in line with the Council notice under Article 104(9), there are several risks to the budgetary outlook for 2005 and beyond, both on the revenue and expenditure sides. Should such risks materialise, the Greek authorities would need to implement additional measures in 2006, on top of those already announced, to effectively bring the deficit below 3% of GDP.
projects real GDP growth from 2.9% in 2005 to 3.0% for the rest of the period underpinned by strong domestic demand. The budgetary strategy of the Spanish authorities consists of maintaining a close-to-balance position over the economic cycle. The estimated deficit of 0.3% in 2004 is targeted to become a balanced budget in 2005, to be followed by small increasing surpluses reaching 0.4% of GDP in 2008. The primary surpluses are consistent with a steady decline in the debt ratio, which is projected to fall to 40% of GDP in 2008.
In its Opinion on the update of 8 March 2005, the Council considered the baseline macro-economic scenario in the programme as rather favourable. However, the budgetary projections were considered consistent with a position of close-to-balance in each year of the programme. Consequently, the Council considered that the budgetary stance provided a sufficient safety margin against breaching the 3% of GDP deficit threshold.
1.1.3. Portugal
After the recession had bottomed out in 2003, the economy picked up in 2004, with real growth at 1%, chiefly thanks to a turnaround in private consumption and investment. Increasing exports were insufficient to offset lively import growth, which led to a deterioration of the net external borrowing position to 6% of GDP. In 2004, real GDP per capita in PPS is estimated at 71% of the EU average. On the back of subdued growth, unemployment rose to 6.7% and inflation declined to an annual 2.5%. After a general government deficit of 2.8 per cent of GDP in 2003, Portugal benefited in May 2004 from an abrogation of the excessive deficit procedure that had been initiated in late 2002. In 2004, the government deficit stood at 2.9% of GDP: fiscal revenues were above target helped by a stronger-than-expected domestic demand recovery, but expenditure slippages held back fiscal consolidation. Since, without further measures, a deficit in excess of 3% of GDP would have ensued, and in order to bring the outturn below this reference value, the Portuguese authorities decided to raise 2.2% of GDP of revenue with the one-off transfer to the government of pension liabilities for four enterprises. Government debt stood at 61.9% of GDP, up from 60.1% in 2003.
1.1.4. Cyprus
In 2004 real GDP strengthened to 3.6%, bringing real GDP per capita in PPS to nearly 85% of the EU average. Consumer price inflation fell back to 1.9%, after peaking at 4% in 2003. The 2004 deficit is estimated to have declined to 4.2% of GDP, down from 6.3% of GDP in 2003. The result, far below the target of 4.8% of GDP, is attributed to the successful impact of fiscal consolidation measures both on the expenditure and revenue side, in conjunction with a more domestic-demand based growth composition leading to extra tax revenues, and despite negative revenue effects linked to delays in the introduction of some measures initially planned for 2004 which are now to be implemented in 2005. Additionally, the debt- to-GDP ratio was clearly lower than targeted, at 71.9% of GDP.
The first update of the convergence programme, submitted in December 2004 and covering the period 2004-2008, reaffirms the fiscal consolidation strategy set out in the May 2004 convergence programme. It projects real GDP growth to pick up from 3.6% in 2004 to 4.3% on average over the rest of the programme period. Within this growth path, the general government deficit is to be reduced to below the 3% of GDP reference value in 2005 at 2.9% of GDP, and to further decline thereafter reaching 0.9% of GDP in 2008. The programme envisages both an increase in the revenue ratio and a decrease in the expenditure ratio. Since interest expenditure is projected to remain constant as a share of GDP, the path of the primary balance is similar to that of the overall balance, improving from -1.3% in 2004 to 2.5% at the end of the period. Improving primary balances, together with debt-reducing stock-flow adjustments (SFAs, reversing earlier debt-increasing SFAs in 2000-2003) are the main drivers of the relatively steep decline in the debt ratio, which is projected to reach 58.1% of GDP in 2008.
In its Opinion on the update of 8 March 2005, the Council considered the projections based on the so-called "central" scenario plausible. The risks to the budgetary projections in the update were considered as broadly balanced, while the planned deficit reduction for 2005 was judged challenging but increasingly feasible. In view of this risk assessment, the budgetary stance in the programme was deemed sufficient to reduce the deficit to below 3% of GDP by 2005 and to provide a sufficient safety margin against breaching this threshold with normal macroeconomic fluctuations from 2006 onward. It was however not sufficient to ensure that the Stability and Growth Pact's medium-term objective of a budgetary position of close to balance is achieved within the programme period.
The Czech Republic submitted the first update of its convergence programme, covering the period 2004-2007, on 1
st December 2004. The baseline macroeconomic
scenario presented in the programme expects real GDP growth to be 3.8% in 2004.
In 2005, real GDP growth is forecast to reach 3.6% and to accelerate to 3.8% in 2007. The programme aims at reducing the deficit to below the 3% of GDP in 2008. The reduction in the general government deficit should be achieved mainly by a cut in the expenditure ratio which more than compensates the planned reduction in the revenue ratio.
In its Opinion on the updated convergence programme on 18 January 2005, the Council considered the overall macroeconomic scenario as plausible. The risks to the budgetary projections were assessed as broadly balanced. On the one hand, the macroeconomic scenario suggests that revenues could be better than expected and that expenditures could be lower than budgeted. On the other hand, important expenditure cuts, particularly regarding government consumption, still have to be adopted in order to meet expenditure ceilings in 2006 and 2007. In view of this risk assessment, the budgetary stance in the programme was considered sufficient to reduce the deficit to below 3% of GDP by 2008 as envisaged in the programme.
1.1.6. Estonia
Real GDP growth accelerated in 2004 to 6.2% year-on-year. Real GDP per capita in PPS as compared with the EU average increased to over 50%, continuing the rapid catching-up process. Estonia posted a higher-than-projected general government surplus of 1.8% of GDP in 2004, more than 1 percentage point above the original budget target. The deviation occurred due to stronger-than-budgeted real growth coupled with strict nominal expenditure ceilings. The country's public debt level further declined to 4.8% of GDP at the end of 2004, which is the lowest in the EU-
25.
The updated convergence programme of Estonia for the period 2004-2008 was submitted on 1 December 2004. The programme projects output growth to accelerate from 5.6% in 2004 to 5.9% in 2005 and remain close to 6% p.a. until 2008, implying an annual average growth of 5.9% over the entire programme period. The programme aims at achieving a budgetary surplus of 0.7% of GDP in 2004 (which was outperformed by over 1 percentage point, see above), and balanced budgets throughout the rest of the programme period.
significant decrease in net disposable income, while exports rose strongly. GDP per capita in PPS is estimated to have reached close to 60% of the EU average. The revised 2004 deficit target
1of 3.7%2of GDP was missed by 0.8 percentage points of
GDP. Government debt stood at 57.6% of GDP in 2004.
The Hungarian authorities submitted the convergence programme update, covering the period 2004-2008, on 1 December 2004. The rather favourable macroeconomic scenario foresees real GDP growth gradually increasing to 4.6% in 2008. The renewed disinflation is projected to continue. After having missed the initial 2004 deficit target of the May 2004 programme, the update foresees a flattening of the previously frontloaded adjustment path. It keeps the target date by which to correct the excessive deficit at 2008. The deficit strategy would be mainly based on a decline in the interest burden, a strong decline in public investment in 2005, and structural reforms, partly still to be adopted.
In its Opinion on the convergence programme update on 18 March 2005, the Council considered the macroeconomic scenario as reflecting rather favourable growth assumptions. Although the adjustment path contained in the programme was considered appropriate to correct the excessive deficit by 2008, the fiscal stance in the programme did not appear to be sufficient to credibly implement this path.
1.1.8. Latvia
In 2004 real GDP growth was remarkably high 8.5%. GDP per capita in PPS reached around 46% of the EU average. Investments and private consumption were the driving factors for this remarkably strong growth performance, Buoyant export growth was outpaced by an even faster expansion of import growth, thus widening the already large external deficit. Inflation rose sharply in 2004 and reached 6.2% mainly due to higher regulated prices, and a sharp rise in healthcare costs. The general government deficit in 2004 is estimated to have been ¾% of GDP, considerably lower than the official target of 1.7%. The deviation results mainly from a higher-than-expected higher tax revenue and the out-performance of the social security sub-sector. Additionally, the debt-to-GDP ratio was very low (14.4% of GDP).
In its Opinion on the update on 8 March 2005, the Council considered the risks to the budgetary projections as broadly balanced. Furthermore, the Council warned that although the programme outlines a gradual consolidation path, this may provide an insufficient margin against breaching the 3% ceiling with normal macroeconomic fluctuations and is still some way from achieving the close-to-balance-or-surplus medium-term objective of the Stability and Growth Pact. It was noted that the budgetary strategy is sufficient to maintain the debt-to-GDP ratio at a very low level.
1.1.9. Lithuania
Lithuania's strong growth in the last few years has placed the country on a steady convergence path with the EU. Real GDP per capita in PPS is estimated to be about 49% of the EU average in 2004. Output growth remained robust at 6.7% in 2004, although the pace of expansion slowed. As in previous years, domestic demand expanded more rapidly than GDP and continued to be the major driver for growth, fuelled by particularly strong investment and private consumption. A widening of the visible trade gap induced by robust domestic demand led to a further deterioration of the current account deficit to 8.3% of GDP, as estimated in the Commission services' spring 2005 forecast. Following a deflationary period of nearly two years, prices started edging up in May 2004, to a large extent driven by tax alignments due to EU accession. The annual average inflation rate stood at 1.1% in 2004. Despite better- than-expected revenues, the general government deficit is estimated to have increased from 1.9% of GDP in 2003 to 2.5% in 2004, as expenditure increased significantly. The outcome was slightly better than planned in the budget for 2005. Government debt stood at 19.7% of GDP in 2004.
Lithuania submitted the first update of its convergence programme, covering the period 2004-2007, in January 2005. The macro-economic scenario envisages real GDP growth to decelerate to 6.2% on average over the period 2005-2007. The key budgetary objective defined in the update is to approach a cyclically balanced general government budget. The general government deficit is foreseen to remain at 2.5% of GDP in 2005 and to decline gradually thereafter to 1.5% in 2007. Consolidation is planned to be mainly achieved by an increase in the revenue ratio from a low base, with the expenditure side also contributing after 2005.
Malta submitted the first update of its convergence programme, covering the period 2004-07, in December 2004. The update reaffirms the fiscal consolidation strategy set out in the May 2004 convergence programme. It projects real GDP growth to rise from 0.6% in 2004 to 2% on average over the rest of the programme period. Against this background, the general government deficit of 10.6% in 2003 was targeted to be reduced to 5.2% of GDP in 2004, followed by a further deficit reduction to below the 3% of GDP reference value in 2006 at 2.3% of GDP, and to 1.4% of GDP 2007 respectively. Budget consolidation is based on both an increase in the revenue ratio and, more significantly, a decrease in the expenditure ratio. The path of the primary balance is similar to that of the overall balance, improving from -1.4% in 2004 to 2.4% at the end of the period. These increasingly positive primary balances, together with debt-reducing stock-flow adjustments from privatization operations, are the main drivers to stabilize the debt ratio projected at around 70% of GDP by 2007.
In its Opinion on the update on 17 February 2005, the Council considered that the projections based on the so-called "central" scenario are plausible. The risks to the budgetary projections were considered as broadly balanced, while the planned deficit reduction for 2006 was judged as feasible. In view of this risk assessment, the budgetary stance in the programme was deemed sufficient to reduce the deficit to below 3% of GDP by 2006 and to provide a sufficient safety margin against breaching this threshold with normal macroeconomic fluctuations from 2006 onward. It was however not sufficient to ensure that the Stability and Growth Pact's medium-term objective of a budgetary position of close to balance is achieved within the programme period.
1.1.11. Poland
In 2004, real GDP growth is estimated to have reached 5.3% against 3.8% in 2003, while real GDP per capita in PPS reached almost 50% of the EU average. At 4.8% of GDP, the general government deficit in 2004 is estimated to be considerably lower than the official target of 5.4%. The deviation results mainly from a better-than- expected implementation of the State budget due to higher tax revenue and the out- performance of the social security sub-sector and local government. The 2004 debt ratio turned out to be also lower compared to the target (43.6% of GDP against the forecast 45.9%).
However, meeting the budgetary targets in the update was seen to be subject to a number of risks
3 among which an incomplete implementation of the public finance
reform plan. Thus, based on the update and in the absence of additional savings measures, Poland might not be able to bring the deficit below 3% in the end year of the programme.
1.1.12. Slovakia
In 2004, real GDP growth accelerated to 5½%. Real GDP per capita in PPS reached some 52% of the EU average. Unemployment turned out at 18% and consumer price inflation amounted to 7½%, with adjustments in administered prices and indirect taxes contributing about 5¾ percentage points. The implementation of the budget 2004 reflected most of the government's structural reform agenda for the current legislative period. Altogether, the budget deficit turned out significantly better than the 3.8% of GDP foreseen in the most recent convergence programme. However, the better outturn was mostly due to spending postponements, including related to co- payments for EU-funds. The general government deficit for 2004 is now estimated at 3.3% of GDP and the debt-to-GDP ratio at some 43%.
Slovakia submitted the first update of its convergence programme on 30 November 2004. The update covers the years 2004 to 2007 and projects real GDP expansion for this period at an average of 5%. Inflation is foreseen to drop rapidly to some 2½% in 2007. The update aims at reducing the fiscal deficit to the 3% of GDP reference value in 2007, but does not plan for any safety margin. The adjustment is back- loaded, even net of the impact resulting from the introduction of a funded pension pillar in 2005. Including this impact, all the adjustment in the headline and primary general government deficits is postponed to 2007.
The Council delivered its opinion on the update on 17 February 2005. It found that the programme's growth assumptions were plausible and that the risks to the budgetary projections appeared broadly balanced. It stated that the update broadly confirmed the planned adjustment path of the previous programme in spite of a more favourable macroeconomic scenario and that it looked therefore less ambitious. It continued that, accelerating the deficit reduction, in particular in 2005, would help the implementation of Slovakia's euro adoption strategy. It would also pave the way to attaining a sufficient safety margin against breaching the 3% of GDP Treaty reference value and eventually reaching a structural budgetary position of close to balance or in surplus.
the general government deficit estimated at just below 2% of GDP and the gross debt accounting for roughly 29.5% of GDP.
The first update of the convergence programme, covering the period 2004-2007, was submitted in January 2005. The macro-economic scenario underlying the programme foresees real GDP to grow close to 4% while inflation settles below 3%. Slovenia's budgetary strategy aims at achieving a budgetary position of close-to-balance as defined by the Stability and Growth Pact. However, this objective extends beyond the programme horizon as the general government deficit is projected to narrow to 1.1% of GDP by 2007. Moreover, most of the fiscal adjustment is postponed until the last year of the programme, as net budgetary inflows from the EU are expected to double with the new EU financial perspective 2007-2013, amounting to 0.8% of GDP.
In its Opinion on the update of the Slovene convergence programme, adopted on 8 March 2005, the Council regarded the budgetary consolidation strategy as having set plausible yet rather unambitious targets. The risks to the budgetary projections in the programme were considered as broadly balanced. The budgetary stance in the programme was deemed not consistent with the Stability and Growth Pact's medium- term objective of a budgetary position of close to balance. The safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations was seen as insufficient except for the final year of the programme.
1.2. Conditionality
The Council Regulation on the Cohesion Fund4 sets conditions for financing by the
Fund in relation to macro economic management. No new projects or, in the event of large projects, no new project stages can be financed if the Council, acting by a qualified majority on a recommendation from the Commission, finds that a Member State has not implemented its stability or convergence programme in such a way as to avoid an excessive deficit.
In 2004, seven recipient Member States under the Cohesion Fund, including six new Member States, were considered to have an excessive deficit.
programme (and confirming the deadline of 2008 for the correction of the excessive deficit).
The Council decided on 5 July 2004 that an excessive deficit existed in Greece and recommended that this be corrected by 2005. The Council decided on 18 January 2005 that Greece had taken no effective action in response to this recommendation and on 17 February adopted a decision giving notice to Greece to take measures to remedy the situation of excessive deficit and extending the deadline for the correction of the excessive deficit from 2005 to 2006. It recommended a rigorous implementation of the budget for 2005 as well as an additional adjustment of at least 0.6% of GDP in 2006, with a new update of the Greek stability programme to be submitted in 21 March 2005 and a deadline for taking the requested additional measures of 21 March. The Council reassessed the situation in Greece on 12 April 2005 on the basis of the Commission Communication of 12 April. It concluded that the Greek government is taking effective action in response to the Council notice.
1.3. The accession of the ten candidate countries
On accession on 1 May 2004, all 8 new Member States formerly benefitting from ISPA, together with Cyprus and Malta, met the criteria for eligibility.
Projects previously adopted under the ISPA financial instrument were automatically transformed into Cohesion Fund projects, and are since then governed by Cohesion Fund rules.
For 2004-06, 24 billion (current prices) was earmarked for structural assistance in the 10 countries acceding to the EU, of which over one third (8.5 billion) has been allocated to the Cohesion Fund.
Table: Breakdown of CF allocations for the acceding countries 2004-06
Country Mid-range allocations
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2.IMPLEMENTING PRINCIPLES AND ASSISTANCE GRANTED
2.1. Coordination with other Community policies
2.1.1. Competition
Council Regulation n°1164/94 setting up the cohesion Fund and Commission Regulation n°16/2003 on the eligibility of the expenditure of actions part-financed by the cohesion Fund specify that approval by the Commission of the proposed projects has to be carried out subject to the respect of the criteria guaranteeing compatibility with the Community rules of the field of competition.
Financial support from the Fund is essentially directed towards infrastructure projects for transport or environmental protection (treatment of water and waste management, solid waste). Provided the rules on public procurement are complied with, and free access to such infrastructure is guaranteed for all operators meeting the necessary technical and legal conditions, such assistance does not provide specific firms with any special advantage.
2.1.2. Environment
In agreement with Article 8 of Regulation (EC) n°1164/94, the projects co-financed by the Cohesion Fund must be consistent with the treaties, Community law and Community policies, including those concerning environment.
The cohesion Fund contributed to developing the implementation of environmental legislation, not only through the direct financing of infrastructures, but also by providing incentives encouraging the application of directives as part of the preconditions to the granting of support. This concerns thematic interventions such as solid waste and waste-water management and the environment impact assessment (EIA).
The new Member States have set water and solid waste management as important priorities for expenditures. Investments and infrastructure needs remain high in the majority of cases in fields such as solid waste and water (in particular urban waste- water treatment), but also in the fields of air quality and the effort to reduce industrial pollution. Support for environmental infrastructure under the Cohesion Fund is therefore important for the new Member States.
The Commission, in the appraisal of co-financing applications, also took account of the inclusion of the projects in integrated functional systems and of their integration into basin plans.
Environmental impact assessment
The requirement of the EIA procedure for the projects covered by Directive 85/337/EEC amended by Directive 97/11/EC, and the evaluation under Article 6 of Directive 92/43/EC "Habitats" made it possible to ensure a high environmental requirement compliance, the consultation of competent environmental authorities and the participation of the public. In some cases, minimization and compensation measures were implemented.
Waste
In the field of urban waste processing, the Commission evaluated the financing requests taking into account the policy and the legislation applicable for this sector.
The implementation of the national strategic Plans for the reduction of biodegradable urban waste in the dumping grounds made it possible to co-finance investments contributing substantially to the reduction in the methane emissions coming from the dumping grounds and contributing to the processing of waste, for example composting. These investments fulfill the requirements of Directive 1999/31/EC and the guidelines on waste hierarchy.
Climatic change
The examination of the environmental policy 2004 stresses that to help fight against the climatic change one must continue promoting the integration of the environmental aspects in the other policies, in particular in transport.
The most recent data on the emissions of greenhouse gases and the new convincing elements available concerning the potential breadth and the repercussions of the climatic change continue to be worrying. The emissions of greenhouse gases decreased slightly, but not sufficiently to place the EU15 on a linear pathway enabling it to achieve its Kyoto goals. On the whole, 12 of the 25 Member States recorded emissions higher than this linear pathway.
Polluter pays principle
The projects financed under the Cohesion Fund made it possible to implement the polluter pays principle by the application of various aid levels. The application of the polluter pays principle will be soon strengthened by the application of Directive 2000/60/EC (Water Framework Directive). This Directive has been in force since 23 December 2003.
Partnership
The environmental monitoring of projects is also carried out by Member States. The competent authorities in the field of environment are associated to the project assessment by the means of consultations and by their participation in the monitoring committees.
2.1.3. Transport
In 2004, the Commission took 131 decisions on the financing of TENs-Transport projects totalling 661.7 million. Among these projects, we could mention PP3 (High-speed train south: Madrid-Barcelona-Perpignan-Montpellier and Madrid-
Vitoria-Dax): which receives funds in the Spanish part also from the Cohesion Fund and that, in The Mediterranean branch, the section Madrid- Lleida was completed by 2004, or PP7 (Greek motorways), by the end of 2004 a substantial part of the Via Egnatia and Pathe motorway was completed. In Ireland, several TEN road projects
(PP13: Ireland-UK- Benelux road link) are still under construction and co-financed by the Cohesion Fund and the TEN-T budget.
On 21st April 2004, the European Parliament and the Council adopted the modification of the Regulation nº 2236/95 laying down general rules for the granting of Community financial aid in the field of trans-European networks. It was published
on 30
th April and came into force on 20th May of the same year. The new regulation
increases the Community co-funding rate from 10% up to 20% for the sections of the priority axes, which crosses borders or natural barriers. This rate should provide a greater incentive for implementation of projects including the setting up of public- private partnerships. These new rules should also allow multi-annual commitments, which would provide greater flexibility in the financial commitments to promoters of TEN-T projects.
cost of the 30 priority projects and projects such as ERTMS and SESAME5, and their
financing. In the financial perspectives for the period 2007-2013, the Commission proposed an increase for the TENs and, at the same time, an increase in the maximum co-financing rate following publication in July 2004 ((COM) 475 2004)
of its in-depth review of the TEN financial framework.
In the area of road safety the Commission proposed an EU wide 50% reduction of the number of deaths by 2010. Road safety should be incorporated in the design, construction and maintenance of infrastructure.
2.2. Coordination with the Structural Funds: the strategic reference frameworks (SRF)
2.2.1. Environment
Greece
The Strategic Reference Framework (SRF) for environment projects is described in a separate chapter of the Operational Program "Environment" of the Greek Community Support Framework 2000-2006. This Operational Program was approved by the Commission on 24 July 2001 (Decision E(2001) 1357). The SRF is a reference tool for interventions which aim at enhancing the compliance of the country with its obligations arising from the EU environmental legislation and at contributing to sustainable development.
The financial contribution of the Cohesion Fund focuses on some of the major needs of Greece in the field of drinking water, the treatment of urban waste water and the disposal of solid waste.
In relation to solid waste management, the overall action plan is based on the 2003 Revised National Solid Waste Management Plan which in turn is linked to Regional Management Schemes which have been subject to revision as well. The overall objective is the correct management of all categories of solid waste and, where necessary, the restoration of environmental conditions which have been polluted or otherwise degraded by waste. A planning has also been made for the treatment of urban waste water, in accordance with the requirements of Directive 91/271/EEC.
be financed through the Cohesion Fund for the Programming period 2000 2006 are
-
:Water Supply ; Sewerage and Wastewater Treatment ; Municipal, Industrial and Hazardous Waste Management
The interventions are selected in the context of a coordinated strategic approach designed for each of the sectors selected identifying the main priorities for intervention. A coordinated approach is ensured with the interventions within the same sectors financed through the Structural Funds.
Portugal
The environment strategic framework for Portugal for 2000-06 states its main objectives as further development and completion of the basic environment infrastructure and providing the conditions needed for sustainable development, environmental protection and management of natural resources.
The coordination of Cohesion Fund with the Structural Funds is done by a strategic reference frameworks in the Community support framework, in particular through "reference framework " in the transport and environment fields.
Following the Mid-term review exercise (MTR), this strategic framework was actualised. The MTR proposed to reinforce the coordination of the Cohesion Fund and the Structural Funds, in the context of this "reference framework". In particular the regional programmes should give priority to the projects necessary at municipal level in order to complete the multimunicipal systems financed by the Cohesion Fund concerning water supply, urban waste water treatment and solid waste treatment.
In order to assure the adequate implementation and monitoring of these priority projects, a new measure was created in the 5 regional programmes of the main land, as well as in the Madeira Region.
and quality of water (both drinking water and urban waste water treatment); waste management; air quality; elimination of old environmental burden.
Estonia
The Estonian authorities presented their strategic reference framework for the environment sector in 2003 which is the basis for assistance under the Cohesion Fund to all individual projects in the waste water, drinking water, solid waste and air sectors.
As regards the coherence with Structural Funds, there is a clear dividing line as all projects in the waste water and drinking water sector as well as all large-scale projects in the solid waste sector are co-financed by the Cohesion Fund. Due to the small size of projects in the waste water and drinking water sectors, several projects have been grouped according to the sub-river basin in which they are located.
Hungary
In 2003 the Hungarian Authorities presented the Strategic Reference Framework for the environment sector for the period 2004 to 2006, which is the basis for assistance under the Cohesion Fund to all individual projects in the waste water, drinking water and solid waste management sector.
With support of ERDF and CF by the year 2015 the wastewater of 85% of the inhabitants of Hungary shall be treated in waste water treatment plants. The target set for the drinking water sector is to provide drinking water to every inhabitant of Hungary according to the EU standards by 2009. For the Solid Waste sector the measures focus on waste selection with a view to rise the share of selected waste treatment from 3% to 40%. By 2009 all landfills should thereby meet the respective EU standards.
Latvia
The Latvian authorities presented the Reference Framework document for the Cohesion Fund in 2003. It consists of a general part and the Cohesion Fund Strategy Documents for the environment and transport sectors (2004-2006).
The selection of individual projects to be financed is co-ordinated with assistance from the Structural Funds by setting the minimum threshold of 2000 population equivalent for water services development activity under the Cohesion Fund, allowing small agglomerations (below 2000 p.e.) to benefit from ERDF. In order to ensure the completeness of regional waste management systems, the separated waste collection is defined as eligible activity under ERDF.
Lithuania
The Lithuanian authorities presented their National reference framework document for the period 2004-2006 in 2004. The document presents the main priority investments into the environmental sector using the Cohesion fund assistance.
The priority sectors for assistance to be financed through the Cohesion Fund for the 2004-06 programming period are: water supply and sewerage collection; sewerage and waste-water treatment; municipal, and hazardous waste management; air protection in relation to the environmental protection measures at Large Combustion Plants; technical assistance for project preparation.
Coherence between Structural Fund programmes and the Cohesion Fund priorities is relatively easy to ensure because of the concentration of Cohesion Fund assistance on a the heaviest investments while the Structural funds will mainly deal with the soft investments.
Lithuanian authorities introduced the new basin based water management approach while the whole territory of Lithuania is covered by 5 investment river basins containing 10 to 14 municipalities each. This forms the basis for further strengthening of water sector management in Lithuania. Since 2000 Lithuanian authorities introduced the new regional waste management approach, which is under implementation through ISPA and CF assistance. The regional system is based on the reduction of the number of the landfills in the regions to one regional landfill complying to relevant EU requirements and also on establishment of unified waste collection, transportation and accounting system. Lithuania plans to have 10 such systems- one in each region.
constitute a considerable threat for the environment and for human activities. Malta plans to address these issues by introducing appropriate clean-up measures.
Poland
The Polish authorities presented the strategic reference framework for environment projects in 2003. This document is the basis for the selection of all the individual projects in the priority sectors for assistance to be financed through the Cohesion Fund. For the 2004-2006 programming period the priority sectors are: improvement of the quality of surface water, and improvement of the distribution and quality of drinking water; rationalisation of waste management and protection of soils; improvement of air quality; improvement of safety from flooding.
The selection of individual projects to be financed is also co-ordinated with assistance in the same priority sectors financed by the Structural Funds.
Slovakia
Slovakia transmitted to the Commission the final version of it Strategic reference framework 2004-2006 in March 2004. This strategy links the various community policies with the national policies in the transport infrastructure (Trans-European networks) and environment sectors, and ensures complementarity of interventions between Cohesion Fund and the Structural Funds.
In the environment sector, some short term priority objectives (up to 2006) have been designed to meet the urgent environmental needs that affect the population's quality of life and the economic development of the regions.
Strategic objectives in the Environment sector :
Support for environmental infrastructure in Water management: Drinking water supply ; Collection and treatment of waste water ; Anti-flood protection.
Support for environmental infrastructure in Waste management: Waste incineration plants ; Support for integrated management of waste management ; Support for the creation of public-private partnership in waste management at the regional level.
2.2.2. Transport
Greece
The strategic reference framework (SRF) for transport projects in Greece had been approved in the context of the Operational Programs "Road axes, Ports, Urban development" and "Railways, Airports, Urban transport" in March and April 2001 respectively, and was updated in the context of the 2004 mid-term review of these programs. The SRF covers interventions by the Cohesion Fund and the ERDF, which mainly aim at:
-
a)the completion of the priority TEN road axes in Greece, i.e. the PATHE,
EGNATIA and IONIAN axes, as well as the Korinthos Tripoli Kalamata/Sparti motorway,
-
b)the completion of the modernisation of the PATHEP railway axis, also part of
the TEN, including its electrification and signalling systems and the construction of a freight railway line from the Ikonio port to the railway freight centre of Thriassio,
-
c)The modernisation of infrastructure of the ports at Igoumenitsa and Heraklion,
as well as the construction of new port infrastructure at Lavrio, and
-
d)the modernisation of the air traffic control system in Greece.
In 2004 investment projects were approved for the electrification of sections of the Athens Thessalonica railway and for the construction of a section of the Korinthos Patras railway, on the basis of the Strategic Investment Plan for the railways adopted in 2003.
Spain
The Cohesion Fund interventions in 2004 continued to be implemented in accordance with the guidelines established within the strategic reference framework presented in 2000 by the Spanish authorities. Interventions continued to concentrate in high speed rail (44,7%) and in the ports (37,9%). In these two sectors, coordination with the Structural Funds went on in 2004. The case of the railway line Madrid Valladolid must be stressed, where and ERDF financing was approved in 2004, for the financing of the electrification and signaling phase, thus supplementing the contributions approved under the cohesion Fund in 2002 and 2003 for other phases of the project. It is also advisable to point out the interventions in the ports, where the ERDF and the Cohesion Fund combined themselves to give a financial support for various ports (Cantabrian and Mediterranean coasts).
railway projects, including Lisbon underground network projects, represented the greater share, both in number and in terms of volume of investment.
In this regard, particular attention continued to be paid to overall coordination, especially as regards investments part-financed by other Community sources, in order to secure maximum synergy in completing operational transport systems by 2006, as referred to in the reference framework for the Cohesion Fund approved in 2000.
The main strategic guidelines of the framework remained unaltered.
The projects adopted in 2004 follow these strategic guidelines, and aim to achieve the objectives laid down under this framework, in particular developing mobility and access to the outermost regions, including the autonomous regions (Madeira and Azores), in the interest of social development and national cohesion. Improving the quality of life in urban centres, in particular in metropolitan areas, is another objective planned and implemented, in particular by the project for the North/South route and by the enlargement of the underground network in Lisbon.
Finally, a strategy was pursued to provide Portugal with a national rail network, ensuring a package of services meeting market needs, for both goods and passenger transport, and which could attract potential traffic away from other, more expensive and less environmentally-friendly forms of transport.
Cyprus
The Cypriot Strategic Reference Framework for transport focuses on motorways, ports, airports. However, the scarcity of funds available have made it necessary to focus on the two projects selected, i.e. respectively roads and waste.
Czech Republic
As regard transport infrastructure, support from the Cohesion Fund is given to projects related with the modernisation and the development of the Trans-European Networks (TEN-T).
The major priority in the road sector is to finish the missing sections whithin Corridor I and IX.
Hungary
In 2003 the Hungarian Authorities presented the Strategic Reference Framework for the transport sector for the period 2004 to 2006, which is the basis for assistance under the Cohesion Fund to all individual projects in the rail, road and air traffic sector. The Cohesion Fund focuses on projects which belong to the TEN-T (Trans- European Networks for Transport), whereas Structural Funds support projects, which are complementary to the TEN-T network, cover the development of express roads and highways, the construction of by-pass roads and the development of regional airports. In the rail sector the main priority is to modernize the infrastructure along the Corridor V and VI.
Latvia
For the 2004-2006 programming period the priorities for the transport sector are the
following:
Development of the TEN road network: Via Baltica and East - West road corridor improving the quality of infrastructure and traffic safety by increasing the bearing capacity of bridges and roads.
Modernisation of East-West railway corridor, envisaging increase of safety level and throughput capacity.
Construction of access roads to Ventspils and Liepaja ports, as well as improvement of traffic situation in Riga.
Infrastructure development of the International Airport "Riga" including the access road to the airport, extension of the current runway and modernisation of the runway lighting system.
section includes measures necessary for receiving support from Structural Funds for regional-local development, i.e. they are intended to ensure good access to the trans- European corridors, to improve transportation from counties to industrial, business and tourism centres, to improve traffic conditions in towns, to reduce transport congestion, to improve transport infrastructure so that it meets needs of tourism and small and medium business development.
Malta
There are no natural inland waterways in Malta, therefore the only access to goods and services and means of individual mobility within the Maltese islands is by road.
In fact around 90 % of road transport involves the use of motor vehicles for private, passenger and goods transport.
The recent growth in both private ownership of vehicles and goods transportation by road has become a cause of concern as it has caused more damage on the road network and emit higher levels of harmful exhaust. In this context the quality of Malta's road infrastructure needs to be improved to bring it to a reasonable state of repair and to ease bottlenecks and general congestion.
The Structural Funds and Cohesion Fund have prioritised the upgrading of various stretches of TEN-T arterial tracts in both Malta and Gozo, mainly around the main international and national seaports and international airport. A group of projects was submitted for Cohesion Fund co-financing in 2004 upgrading a total of 5.8 km of roads in Malta and Gozo.
Poland
The Reference Framework document for the Cohesion Fund was a joint document for the Environment and the Transport sectors. The Polish Authorities adopted a coherent and coordinated strategy for the Transport sector, thus ensuring complementarity and avoiding overlaps between the Cohesion Fund funded projects and the projects funded under the Transport Operational programme.
Funds will make it possible to develop regional access to large corridors of the TEN.
Strategic objectives in the Transport sector:
-
-Road infrastructure: development of motorways on the TEN-T corridors: in the area of the capital Bratislava; on corridor V/A between Bratislava, Zilina and Poprad; on corridor VI between Cadca and the Polish/Slovak border; on other corridors in case of economically effective investment.
-
-Rail infrastructure: Renovation and modernisation of the international corridors IV, V, VI to comply with the technical parameters of tracks according to the AGC and AGTC treaties and to achieve operational speed of 160km/h on the corridor IV section Kuty-Bratislava-Sturovo and the corridor V/A section Bratislava-Zilina stretch and 120-140 km/h on the Zilina-Kosice section.
Slovenia
The national authorities have defined in 2003 a National Cohesion Strategy for the Transport sector which identifies the objectives of its transport strategies and the projects to be financed through the Cohesion Fund. It involves the country establishing itself as a maritime transit country within the European Union and market its geopolitical position at the crossroads of two important European corridors (Corridors V and X) along the existing southern border of the EU. An important role will be played by the port of Koper, and by logistics centres at the crossroads of these corridors in Koper, Ljubljana and Maribor.
To this end, bottlenecks on corridors must first be removed involving the completion of the motorway network, upgrading, modernisation and completion of the rail.
2.3. Implementation of the budget, commitments and payments
2.3.1. Budget available
In accordance with Article 4 of Regulation (EC) No 1164/94, as amended by Regulation (EC) No 1264/1999 (the Cohesion Fund Regulation), Cohesion Fund resources available for commitment in 2004 amounted to 2 723 606 000 (1999 prices) for the 3 Member States of EUR15 (Greece, Spain and Portugal), and 2 897 000 000 (1999 prices) for the 10 new Member States. As a result of its growth in GNI per head, Ireland is no longer eligible under the Cohesion Fund with effect from 1 January 2004. These amounts include technical assistance credits ( 1 001 118 for the 3 "old" Member States, and 1 500 000 for the 10 new Member States).
EUR 3
Member State Allocation
million
Spain 1 680 878 607
Greece 562 804 008
Portugal 478 922 267
Technical assistance 1 001 118
TOTAL 2 723 606 000
EUR 10
Member State Allocation
million
Cyprus 18 257 000
Czech Republic 316 681 000
Estonia 104 565 000
Hungary 376 433 000
Latvia 192 089 000
Lithuania 209 572 000
Malta 7 414 000
Poland 1 413 670 000
Slovakia 192 974 000
Slovenia 63 845 000
Technical Assistance 1 500 000
TOTAL 2 897 000 000
.
2.3.2. Implementation of the budget
Budget implementation in 2004, with indexation of the appropriations carried over, was as follows:
Implementation of commitments in 2004 (in euro)
Commitment Initial Movements Final Outturn Cancelled Carryovers
Implementation of payments in 2004 (in euro)
Payment Initial Movements Final Outturn Cancelled Carryovers
appropriations resources 2005
2004 budget 2 641 600 000 134 811 585 2 776 411 585 2 642 101 718 134 309 867
Appropriations carried over from 2003
Appropriations made available again
Repayments
Totals 2 641 600 000 134 811 585 2 776 411 585 2 642 101 718 134 309 867
A total of 134.8 million of payment appropriations was transferred to the Cohesion Fund. Taking account of this transfer, some 95.16 % of the payment appropriations were implemented in 2004.
Implementation of the appropriations by country is shown in the following tables:
Budget implementation of appropriations in 2004 by Member State
Commitment appropriations 2004 (in euro)
Member Environment Transport Mixed Total
State
%
Amount %
Envir. Amount TransAmount Amount %
p.
Spain 724 068 354 42.6 977 541 835 57.4 1 101 600 1 702 711 789 30,3%
Poland 698 528 072 49.4 707 162 832 50.6 8 947 500 1 414 368 404 25,2%
Slovakia 125 556 724 65.1 67 417 276 34.9 - 192 974 000 3,4%
Slovenia 19 295 525 29.7 45 605 942 69.3 45 000 64 946 467 1,2%
Technical Assistance
-
-- - - 4 381 678 4 381 678 0,1%
Total 2.685.123.995 48.2 2.889.340.901 51.8 44.938.123 5.619.403.018 100%
Payment appropriations 2004 (in euro)
Figures for the new Member States refer only to payments for projects adopted under the Cohesion Fund as from 1 May 2004 (i.e. not taking into account pre-accession aid for ISPA projects). The second table below shows payments effected in 2004 in relation to ISPA projects adopted before accession.
Member Environment Transport Mixed Total
State
Amount % Amount % Amount Amount %
Envir. Transp.
Spain 1 052 792 007 54.3 886 931 978 45.7 3 084 1 939 727 070 73,4%
Greece 85 219 745 24.3 265 538 804 75.7 1100 350 759 649 13,3%
Ireland 8 179 679 31.6 17 669 517 68.4 25 849 196 1,0%
Portugal 123 130 259 38.9 193 354 445 6.1 316 484 704 12,0%
Cyprus - - -
Czech Republic
Total 1 269 566 410 48.1 1 371 036 240 51.9 1 499 067 2 642 101 718 100%
For the third year running, there was tendency in favour of projects in the transport sector, although in a less marked manner than in the two previous years.
New Member States Payments made in 2004 related to former ISPA projects
Member State Environment Transport Total
Amount % Amount % Amount
Envir. Transp.
Ceska Republika 17 801 156 26.5 49 355 929 73.5 67 157 085
Eesti 10 196 374 42.7 13 675 285 57.3 23 871 659
Latvija 9 844 972 42.2 13 490 711 57.8 23 335 683
Lietuva 3 948 533 27.5 10 395 195 72.4 14 343 728
Magyarorszàg 25 960 588 71.9 10 122 098 28.1 36 082 686
Polska 80 792 048 36.6 139 872 597 63.4 220 664 645
Slovenija 6 024 627 78.9 1 611 175 21.1 7 635 802
Slovenska Republica 17 390 376 46.6 19 933 084 53.4 37 323 460
Technical assistance 68 076
TOTAL 171 958 668 40.0 258 456 071 60.0 430 482 824
Republic
Estonia 104 565 000 97 157 035 97 157 035
Hungary 376 433 000 376 118 570 376 118 570
Latvia 192 089 000 183 073 410 183 073 410
Lithuania 209 572 000 194 912 500 194 912 500
Malta 7 414 000 7 418 000 7 418 000
Poland 1 413 670 000 1 405 690 904 1 405 690 904
Slovakia 192 974 000 192 974 000 192 974 000
Slovenia 63 845 000 64 901 467 64 901 467
EUR4 13 720 926 000 2 243 686 981 2 711 029 052 2 787 989 716 2 833 816 030 2 715 036 503 13 291 558 282
2.3.3. Implementation of the budget for the previous period (1993-99)
Changes in 2004 in appropriations to be settled for 1993-99 were as follows:
Settlement in 2004 of commitments for the period 1993-99 (in euro)
Member State Initial amount to Decommitments Payments Final amount to be
be settled settled
Spain 650 933 534 4 952 169 268 409 585 377 571 780
Greece 424 708 187 86 288 597 29 744 454 308 675 136
Ireland 51 096 704 4 037 714 47 058 990
Portugal 139 854 914 5 852 657 23 728 888 110 273 369
-
3.THE PROJECTS AND MEASURES ADOPTED
3.1. Assistance from the Fund by Member State
3.1.1. Greece
In 2004 the Commission approved new Cohesion Fund grants for a total of 724 M, of which 340 M were committed on the budget of 2004.
Taking into account 196 M in commitments for decisions adopted in previous years, the total amount of Cohesion Fund commitments for Greece in 2004 reached around 536 M.
The following table shows the Cohesion Fund assistance approved in 2004 as well as the total amount committed:
Total eligible Total CF Commitments
cost (M) assistance (M) 2004* (M)
Environment 596.504.907 428.836.257 296.658.028
Transport 590.000.000 295.000.000 239.009.533
Total CF 1.186.504.90723.836.257 535.667.561
7
% Environment 50% 59% 55%
% Transport 50% 41% 45%
-
*including commitments based on the decisions taken in 2004 and in previous years
ENVIRONMENT
PROJECTS APPROVED IN 2004
CF Code Project title Total cost CF grant Committe
d
2003GR16CPE019 Solid waste management in Thessaly 18.035.278 13.526.459 10.821.167
2004GR16CPE004 Main sewage networks and water waste treatment plant in the Thriassion area
62.071.260 27.932.067 22.345.654
2004GR16CPE005 Secondary sewage networks of Eastern and Western section of Thriassion area
66.500.001 49.875.001 39.900.000
Waste compaction plant (SMA) Athens and neighbouring municipalities at Eleonas, Attiki
2004GR16CPE003 15.261.970 11.446.477 9.157.182
Construction of Phase A 2nd Landfill West Attika in Skalistiri of Phyli municipality
2004GR16CPE001 53.345.000 40.008.750 32.007.000
2004GR16CPE002 Landfill + Waste recycling and compost plant in Attika
19.450.710 14.588.032 11.670.426
2004GR16CPE010 Construction of Landfill at Mavro Vouno Grammatiko, Attiki
21.450.410 16.087.808 12.870.246
Water Supply of Patras from the rivers Piros and Parapiros , Phase B - Construction
2004GR16CPE009 173.556.329 130.167.247 26.033.449
Sludge drier unit waste processing centre at the Psittalia waste water treatment plant
2004GR16CPE018 48.557.000 36.417.750 29.134.200
Prefecture of Axaïa, West Greece
SUB-TOTAL 594.925.801 427.572.972 263.958.028
Modified decision
With grant increase
97.09.61.005 Construction of a reservoir and transportation pipeline for the water supply of the municipality of Alexandroupolis and of six neighbouring communities 1.579.106 1.263.285
SUB-TOTAL 1.579.106 1.263.285
GRAND TOTAL 596.504.907 428.836.257 263.958.028
Sixteen new projects totalling 427.5 M of Cohesion Fund assistance were approved in 2004. Of this amount, 264 M were committed from the 2004 budget. In addition, the Commission issued one modification decision, which resulted to an increase of the Cohesion Fund grant by a total of 1.2 M.
Furthermore, on account of decisions taken in previous years, an amount of 32.7 M was committed from the 2004 budget.
Finally, the Commission issued 9 modification decisions without any increase in the Cohesion Fund grant.
3.1.1.2 Transport
In 2004 the European Commission approved 2 new rail projects with a total of 295 M in Community assistance, of which 76 M were committed on the 2004 budget. The new grant decisions concern the electrification of the Athens- Thessaloniki double track railway line, B Phase, and of the single track railway section Inoi-Chalkida and the Construction of the new double track railway line Athens-Patras, section Kiato-Rododafni.
2 double track railway line Athens-Patras,
section
Kiato-Rododafni
TOTAL 590.000.000 295.000.0076.050.000
Based on decisions taken in the previous years, an amount of 163 M has been committed in the 2004 budget for the transport sector.
In addition, the Commission issued 9 modification decisions without any increase in the Cohesion Fund grant.
3.1.2. Spain
The Commission adopted 65 new decisions granting a Cohesion Fund co-financing of 1,720 million including 1,702.7 million committed in 2004 (taking account of the carryovers). These commitments exceeded by 21.8 million the credit allocation for Spain this year, in order to avoid a loss of available budgetary resources not fully used by Greece.
These commitments of which 42.7% goes to the environment sector and 57.3% to the transport sector, correspond to new decisions adopted in 2004, to modifications and annual instalments of decisions adopted previously and to the final balances of projects to be closed.
A total of 60 modifying decisions were approved including 17 with increase in CF assistance.
The following table indicates the amount corresponding to each sector:
Total eligible Total CF assistance* Commitments 2004*
cost* (million ) (million )
3.1.2.1 Environment
The Cohesion Fund continued concentrating its financial support on the three priority
sectors: water supply, cleansing and purification of waste-water, and solid urban, industrial and hazardous waste management. Preparatory studies necessary for the realisation of projects in the sector of water were also financed.
The contribution of the cohesion Fund by sectors shows that cleansing and purification of the waste-water continued receiving the main part of the resources, followed by water supply.
A total of 41 decisions for new projects were adopted which represent an assistance of 659 million including 727 million committed in 2004 (taking account of the commitment of the balances for projects to close). A total of 57 decision modifications have been adopted.
Sector Total eligible cost (million ) Total CF % of Commitments 2004 (million )
assistance (million ) assistanc
e
Water supply 351,43 237,00 35,95 % 238,33
Waste-water management 402,00 325,59 49,39 % 395,05
Solid waste 116,49 93,19 14,40 % 74,55
Technical assistance 4,05 3,44 0,52 % 2,75
Total 873,97 659,22 100,00 710,68 *
WATER SUPPLY
Projects adopted in 2004
Total eligible cost () CF assistance ()
Project n° Projet name
Arteria aductora del campo de pozos del Guadarrama y Estación Tratamiento Agua Potable de Griñón
2002-ES-16-C-PE- 035
77.890.648 46.734.389
2002-ES-16-C-PE- 050 Abastecimiento de agua potable a las comarcas de la Ribera- Parcial 2
15.127.394 12.101.915
Abastecimiento en Alcañiz, Calanda, Castelaserás
2003-ES-16-C-PE- 013 y otros(Cuenca del
Matarraña) 7.179.867 6.102.888
2003-ES-16-C-PE- 014 Abastecimiento a Lérida y su comarca desde el embalse de Santa Ana (2ª fase) 28.300.627 14.150.313
2003-ES-16-C-PE- 026 Abastecimiento de agua a Cantabria (Areas de Santander y Torrelavega
59.149.606 38.447.244
2003-ES-16-C-PE- 034 Actuaciones en Estación tratamiento agua potable San Isidro- Valladolid
9.732.009 7.785.607
Abastecimiento a poblaciones de
2004-ES-16-C-PE- 005 Castilla y León:Valle de Esgueva 2ª fase ; Benavente y Valle del Tera
36.257.148 23.567.146
2004-ES-16-C-PE- 009 Ampliación del abastecimiento de agua a la Mancomunidad de Algodor
2004-ES-16-C-PE- 029 Abastecimiento Cuenca Hidrográfica
del Norte 2004
7.359.126 5.887.301
2004-ES-16-C-PE- 030 Abastecimiento de aguas en la Cuenca Hidrográfica del Tajo- 2004
2.017.552 1.614.042
Waste-water treatment
The aid allocated to this sector in 2004 amounts to 402 million, i.e. 49% of the environment sector. Efforts focused, once again, on the implementation of Directive 91/271/EEC and on the implementation of the National and Regional Plans for the Cleansing and Purification.
Fifteen decisions were adopted for projects and groups of projects in the agglomerations located in the main catchment areas and ten amendment decisions of projects already adopted. These projects deal with the improvement of purification networks, the construction of collectors in several regions, the construction of purification and underwater outlets.
WASTE-WATER TREATMENT
Projects adopted in 2004
Total eligible cost () CF assistance ()
Projet n° Project name
2002-ES-16-C-PE- 055 Saneamiento Cuenca hidrográfica del Guadalquivir - 2002 - Grupo II
22.873.279 18.298.623
Ampliación y mejora del saneamiento en la Cuenca hidrográfica del Jucar de la C. Valenciana-Grupo IV
2003-ES-16-C-PE- 004
Colector interceptor General Santoña- Laredo-Colindres.Tramo
2004-ES-16-C-PE- 014 Argoños-
Santoña-Gama 19.993.177 16.994.200
2004-ES-16-C-PE- 015 Colector interceptor General Santoña- Laredo-Colindres.Tramo Santoña-Laredo 37.611.000 31.969.350
Colector interceptor General Santoña- Laredo-Colindres.Tramo
2004-ES-16-C-PE- 016 Laredo-
Colindres y Colector general de Laredo 22.377.261 19.020.672
2004-ES-16-C-PE- 017 Mejora de la depuración y vertido de A
Coruña: Emisario submarino de Bens
20.200.000 17.170.000
2004-ES-16-C-PE- 019 Estación depuradora de aguas residuales
de Lugo
44.500.000 37.825.000
Emisario Subm. de Xagó para el saneamiento
2004-ES-16-C-PE- 020 de Avilés,Castrillón,
Corvera y Gozón 23.800.000 15.470.000
2004-ES-16-C-PE- 024 Saneamiento de la Cuenca Hidrográfica
del Tajo 2004
34.022.003 27.217.602
Colectores y estación depuradora de aguas residuales de Novelda y Monforte
de Cid
2004-ES-16-C-PE- 028
15.348.997 12.124.649
Waste
In order to implement the National Waste Plan approved in 2000 and the regional Plans approved for each Autonomous Community, the Spanish authorities submitted several projects in this sector.
SOLID WASTE
Projects adopted in 2004
Total eligible cost () CF assistance ()
Project n° Project name
2003-ES-16-C-PE-007 Gestión de residuos en la Comunidad Autónoma de Andalucía - 2003
16.401.597 13.121.278
2003-ES-16-C-PE-021 Plantas de clasificación y estaciones de transferencia- Andalucía -2003
13.151.000 10.520.800
2003-ES-16-C-PE-022 Centros de acondicionamiento y puntos limpios-Andalucía -2003
25.097.000 20.077.600
2003-ES-16-C-PE-023
Sellado de vertederos -Andalucía -2003 15.892.017 12.713.614
2003-ES-16-C-PE-033 Gestión de residuos urbanos en la Comunidad Autónoma de Castilla y León 15.188.114 12.150.491
Planta de vitrificación de cenizas de incineración de la planta de incineración de Melilla
2003-ES-16-C-PE-035
1.257.210 1.005.768
2004-ES-16-C-PE-003 Planta de tratamiento de residuos urbanos
de Alicante
14.401.349 11.521.079
2004-ES-16-C-PE-031 Gestión de residuos en Castilla la Mancha - Grupo 2004
A.T. para el Estudio y redacción del proyecto de abastecimiento a poblaciones del alto Tiétar desde el Alberche
2004-ES-16-C-PE-004
1.392.000 1.183.200
Redacción del proyecto de abastecimiento de agua a núcleos de la cuenca del Matarraña
2004-ES-16-C-PE-027
388.590 330.301
2004-ES-16-C-PE-032 Aplicación del análisis Delphi en las Cuencas Hidrográficas del Júcar y Segura
650.000 552.500
3.1.2.2 Transport
In 2004, the Commission adopted a total of 24 new decisions in the transport sector, totaling a CF assistance of 1,061 million. 3 decision modifications were also adopted. The commitments corresponding to 2004 reached an amount of 975.5 million and correspond to new decisions adopted this year (608.8 M), and to the annual instalments of decisions adopted previously (366.7 M).
Distribution by mode of transport is shown in the following table.
Transport Total CF % Co-Commitment
mode eligible assistance financing s 2004
cost (Mio (Mio ) (Mio )
)
Roads 217,2 184,6 13,1% 93,1
Rail 610,2 474,7 37,0% 697,2
Ports 823,7 402,0 49,9% 185,2
TOTAL 1.651,1 1.061,3 100,0% 975,5
cost (million ) (million )
2004-ES-16-C-PT- 001, 002 et 003 TGV Connexion Vallès - Sant Joan 173,9 125,7
Despí and Ramal
(new sections)
2004-ES-16-C-PT- 007 à 018 TGV Madrid Levant (several new sections) 436,3 349,0
Total 610,2 474,7
Ports
The Cohesion Fund continued, in 2004, to give a significant financial support for the process of expansion and of improvement of seaports, thus meeting the Community guidelines for Trans-European Transport Networks (TEN-T). In supplement of the thirteen projects approved during the period 2000-2003, the Cohesion Fund granted assistance to eight new port projects: development or construction of new dams, in order to improve the safety of the harbour facilities and to increase the capacities of coastal traffic.
PORT PROJECTS ADOPTED IN 2004
Project n° Projet name Total eligible cost (million ) CF assistance (million )
2003-ES-16-C-PT-015 Puerto de Castellón 28,7 14,2
2004-ES-16-C-PT-004 Puerto de Tarragona 45,2 22,6
2004-ES-16-C-PT-006 Puerto de Santander 23,9 9,6
2004-ES-16-C-PT-019 Puerto de Sevilla 142,8 62,8
2004-ES-16-C-PT-021 Puerto de Gijón 450,0 247,5
2004-ES-16-C-PT-022 Puerto de Palma de 18,5 14,6
028 et la Meseta
2003-ES-16-C-PT- 029 Voie express entre Teruel et Sta Eulalia 63,9 54,3
Total 217,2 184,6
3.1.3. Portugal
After having catch-up in 2003 the level of commitment execution to the overall allocation of credits for the period covered, the execution in 2004 did not present any special difficulty.
In 2004, the Commission approved 12 new environmental projects and 5 transport projects. These projects involve eligible investments of 1,003 million, for which assistance of 729 million was granted, of which 418 million was committed from the 2004 budget.
Following these commitments and including projects adopted in previous years which have an impact on the budget for 2004, the total commitments for the year were as follows:
Projects adopted in Total eligible cost Total CF assistance 2004 commitments
2004 ( million) ( million) ( million)
Environment 489.5 313.1 250.4
Transport 513.9 416.0 168.0
Total 1 003.4 729.1 418.4
% Environment 48.8% 42.9% 59.8%
The implementation of 2004 commitment appropriations for new environmental projects is shown in the following table:
Sector Total eligible CF assistance % of 2004
cost ( million) assistance commitments
( million) ( million)
Integrated water- management (disposal and supply) 79.0 42.9 13.7% 34.3
Waste-water disposal 121.0 81.2 26.0% 64.9
Water supplies 141.2 95.3 30.4% 76.2
Urban waste 148.3 93.7 29.9% 75.0
Total 489.5 313.1 100% 250.4
Water
All the projects adopted involve water management on a basin level, which shows a determination to ensure the efficient use of water resources and meet Community environmental requirements.
Solid Urban Waste
In 2004, 13 applications for co-financing of projects of organic recovery of Solid Urban Waste were submitted. Although all applications were lodged in bulk late in the year, it was possible nonetheless to approve 6 of them still in 2004. The amounts available for commitment in 2004 were therefore fully used.
The 12 environmental projects approved are shown in the following table:
ENVIRONMENTAL PROJECTS
No of project Project name Total eligible CF assistance
2004/PT/16/C/PE/00 2 Urban Solid Waste of Planalto Beirão 29.2 21.9
2004/PT/16/C/PE/00 7 Organic Waste Sintra/Cascais 43.9 25.5
2004/PT/16/C/PE/01 0 Urban Waste compost of 10.3 6.0
Rebat/Resat
2004/PT/16/C/PE/01 2 Urban Waste compost of Amarsul 39.6 23.7
2004/PT/16/C/PE/01 5 Urban Waste compost of Amalga 15.1 9.2
2004/PT/16/C/PE/01 7 Urban Waste compost of Algar 10.25 7.5
3.1.3.2. Transport
Although most Cohesion Fund assistance in the transport sector during the previous period went to road infrastructure, financing is now being concentrated on other sectors, in particular on railways (including metropolitan railway systems).
The modernization of the North and South Lines, are part of the main objectives of the national plan to modernize the railway network. This Project is also part of the 2000-2006 objectives and part of the director plan Combined Transport Trans- European Network. At the same time, the project is part of the conventional Railway with communitarian interest, the Trans-European transport networks and the priority project n° 8, multimodal connection between Portugal/ Spain.
The main goal is the global increment of the railway transport demand reached by higher levels of equipment and infrastructures and quality of the delivery services to the users. Having as background a group of detected circulation problems like: a large group of tracks are non electrified, single tracks, the existence of several level crossings in this way, stops and stations with inadequate conditions and the inexistence of adequate terminals and interfaces in stations, these projects will help to enlarge the railway services quality delivered to all users.
Sectors Total eligible CF assistance % of assistance 2003
cost ( million) ( million) commitments
( million)
Airport 17.9 13.8 3.3% 11.1
Urban rail 293.4 239.5 57.6% 104.0
Rail 188.9 151.1 36.3% 43.6
Road 13.7 11.6 2.8% 9.3
Total 513.9 416.0 100% 168.0
The six transport projects adopted involve urban rail, railways, airports and roads.
Most of assistance from the Fund went to the modernisation of the Portuguese rail network. Financing has also been granted for projects on lines in addition to the Northern and Beira Alta lines, enabling intermodality.
Finally, one road project was adopted, involving a section of the North-South trunk road in the Region of Lisbon.
The six transport projects approved are shown in the following table:
TRANSPORT PROJECTS
No of project Project name Total eligible CF assistance
cost ( million)
( million)
AIRPORT PROJECTS
2003/PT/16/C/PT/01 1 Aerogare das Lajes 17.9 13.8
URBAN RAIL PROJECTS ( METRO)
2003/PT/16/C/PT/01 2 Metro of Porto - airport 98.7 74.0
connection line
2004/PT/16/C/PT/00 1 Metro of Lisbon Gil/airport connection line 194.7 165.5
environment project will necessitate a Community financing of 29 million , which means that the sector balance will be slightly in favour of environment.
3.1.4.1. Environment
No environment projects were adopted in 2004.
3.1.4.2. Transport
The project adopted aims to finalise the Limassol motorway ring, which is a bottleneck of strategic importance, as the motorway links the island with the Límassol port, which is on a TEN corridor. Implementation is expected to start around summer 2005.
3.1.5. Czech Republic
In 2004, the Commission approved 15 projects under the Cohesion Fund since the accession of the Czech Republic on 1 May 2004. 10 of these projects were made in the environmental sector (the majority in the waste water sector), 4 being adopted in the transport sector. One technical assistance project has also been adopted.
Total eligible cost Total CF Commitments
(million) financing (million 2004 (million )
)
Environment 238.9 178.9 143.1
Transport 577.9 279.6 101.6
Technical 0.5 0.4 0.3
Assistance
Sector Total Total CF % Co-Commitments
eligible cost financing financing 2004 (million )
(million ) (million )
Water supply 47.28 37.35 79 % 29.88
Waste water and sewage 178.04 131.97 74 % 105.58
Solid waste 13.67 9.57 70 % 7.66
Total 238.9 178.89 100,00 143.12
ENVIRONMENT PROJECTS
Projects adopted in 2004
Total eligible cost () CF financing ()
Project n° Name of the project
Waste water
2004/CZ/16/C/PE/00
1
Karvina : Sewerage extension 22,062,000 17,649,600
2004/CZ/16/C/PE/00
2
Pribram : WWTP upgrading 8,938,000 6,345,980
2004/CZ/16/C/PE/01 6 Beclav, Sewer, WWTP, water
distribution 47,279,000 37,350,410
Solid waste
2004/CZ/16/C/PE/00
7
Klatovy Clean town 13,677,000 9,573,900
3.1.5.2. Transport
During this first year of implementation, 4 projects in the transport sector were adopted by the Commission. These 4 projects count for 70 % of the total eligible
cost: indeed, transport projects represent most of the time much higher costs that environmental projects.
Sectors Total eligible CF assistance % of assistance 2004
cost ( million) ( million) commitments
( million)
Roads 444.33 179.40
40.3 %
81.58
Rail 133.53 100.15
75 %
20.03
Total 577.86 279.55
48.3 % 101.61
TRANSPORT PROJECTS
Projects adopted in 2004
Project number Name of the project Total eligible cost (million ) CF financing (million )
3.1.6. Estonia
In 2004, the Commission adopted 5 new decisions granting assistance from the Cohesion Fund totalling 95 million, of which 76 million were committed in 2004. One amending decision was approved with an increase of assistance by 10.2 million of which 8.16 million were committed in 2004.
The following table shows the Cohesion Fund assistance approved in 2004 and the total amount committed.
Sector Total eligible cost Total CF 2004
(million ) assistance (million Commitments
) (million )
Environment 82.0 63.9 51.1
Transport 59.9 48.8 33.1
Total CF 141.9 112.7 84.2
Environment from previous years (ISPA) 75.9 43.5 7.0
Transport from previous 57.9 58.8 14.4
years (ISPA)
% Environment 57.2 % 49.9 % 55.1 %
% Transport 42.8 % 50.1 % 44.9 %
TOTAL 275.7 215.0 105.6
ENVIRONMENT PROJECTS
Projects adopted in 2004
Project n° Name of the project Total CF
eligible cost financing
( million ) ( million)
2004/EE/16/C/PE/00
2
Viimsi water management 13.10 9.82
2004/EE/16/C/PE/00 3 Parnu sub-river basin, Pärnu and Plaide water management
19.84 14.88
2004/EE/16/C/PE/00 4 Matsalu sub-river basin, water and sewage system
27.56 22.05
2004/EE/16/C/PE/00 5 Läänesaarte sub-river basin, water and sewage system
21.50 17.20
Total 82.00 63.95
3.1.6.2. Transport
In 2004 the Commission adopted one project in the road sector. An existing grant for technical assistance for the transport sector was increased by 10.2 million to prepare additional 8 large transport projects for the next programming period.
TRANSPORT PROJECTS
Projects adopted in 2004
Project n° Name of the project Total CF
take up all available funds. At the same time it was possible to ensure an equal distribution between transport and environment (50-50).
The below figures indicate the dynamic development of the Community assistance, since the amount committed in the year 2004 is higher than the total of the committed amounts of the four years between 2000 and 2003 (369,2 Mio ).
Total eligible cost Total CF financing Commitments 2004
( million) ( million) ( million)
Environment 1,094.1 687.1 188,2
Transport 1,096.8 710.0 188,2
Total CF 2,190.9 1397.1 376,4
% Environment 49.9 % 49.1 % 50,0 %
% Transport 50.1 % 50.9 % 50,0 %
3.1.7.1. Environment
In 2004 the Cohesion Fund focused on the waste water and solid waste sectors. 245.8 million have been committed to the waste water sector, supporting 10 waste water projects, while 120.9 million were committed to the solid waste sector supporting another 12 projects adopted in previous years :
Sector Total Eligible CF assistance % co-Commitments 2004
Cost ( million) financing ( million)
( million)
Waste Water 815.9 510.6 62.6 % 175.9
Solid Waste 278.2 176.5 63.4 % 12.9
ENVIRONMENT PROJECTS
Adopted in 2004
No of Project Name of Project Total Eligible Cost CF Assistance
(million ) (million )
2004/HU/16/C/PE001 Budapest Waste Water 468,7 304,7
2004/HU/16/C/PE002 Zalaegerszeg Waste Water 48,9 36,7
2004/HU/16/C/PE003 Veszprem Waste Water 29,9 22,1
The Budapest waste water treatment project includes the construction of a 7 km long main sewer connecting the existing sewage system with the green field waste water treatment plant on Csepel island. Three major pumping stations and two river crossings are also foreseen.
3.1.7.2. Transport
The average assistance rate for transport projects decided before accession (ISPA) was 50.6 %. The average contribution rate for the two transport projects decided in 2004 after accession is 83.6 %.
The following table shows the distribution of CF funding between the rail sector and the road sector (Technical assistance not included):
Sector Total Eligible CF assistance % co-Commitments 2004
Cost ( million) ( million) financing ( million)
Rail 613.6 351.2 57.2 % 64.3
Rail
The CF support is focussing mainly on the TEN-Corridor IV running from Praha in two branches to Budapest and continuing in various branches to Constanta at the Black Sea, Istanbul and Thessaloniki. One branch enters Hungary coming from Austria at Hegyeshalom and continues via Budapest to the Romanian border at Lökösháza. 267,5 Mio of the 351.2 Mio. allocated to the railway sector will be spent on this sector of corridor IV. The CF contribution to this corridor is divided into 4 projects, which were decided in the years 2000 to 2004. One project aims to improve the railway line between Boba and Zalalövö which is a part of a branch of EN Corridor V arriving from Slovenia and continuing to Ukraine.
The following table shows the distribution of CF funds allocated to the railway sector according to TEN-corridors (ISPA and Cohesion Fund) :
No. of Total Eligible Cost Total Assistance
Projects ( million) ( million)
Corridor IV 4 446,2 267,5
Corridor V 1 167,4 83,7
Road
Till 2004 the CF contribution to the road sector was focussing on the rehabilitation of National Roads, strengthening the superstructure in order to achieve 11.5 ton load bearing capacity. Only in 2004 one motorway project has been decided contributing to the 0-Ring around Budapest
The following table shows the distribution of CF funds allocated to the road sector distinguishing between motorways and national roads:
No. of Total Eligible Cost Total Assistance
Total eligible costs CF assistance 2004 commitments
( million) ( million) ( million)
Environment 97.82 82.27 65.81
Transport 197.15 138.06 85.56
TOTAL 294.97 220.33 151.37
For measures adopted in the 2000-2003 period, commitments in the form of annual instalments were made in total for the amount 38.59 million. The total commitments figure for Latvia in 2004 was 189.96 million.
The transport sector accounted for 52.47 % of the total commitments made for the assistance granted under the decisions approved by the Commission until the end of 2004. This imbalance between the transport and environment sectors should be compensated in subsequent years of the programming period.
During 2004, the Commission authorised payments amounting to 23.3 million. A total of 5 modifying decisions were adopted in 2004.
3.1.8.1. Environment
The applications for assistance submitted to the Commission in 2004 were predominantly focused on the water sector though the solid waste sector was also addressed.
Four decisions out of 7 granted financial support for projects addressing the issues regarding further development of water supply and waste-water systems in municipalities. 3 of the projects are located in the second (Daugavpils), the third (Liepja) and the sixth (Ventspils) largest cities of Latvia and will form the second stage of investments in water service development in these municipalities. The remaining project from the four approved projects in this sector is a group of projects aiming to improve water services development in Olaine town and Jaunolaine village. In total 4 decisions in the water and waste-water sector will provide assistance of 65.11 million, of which almost 52.08 million was committed.
western and eastern parts of the country. The aim of the project is to select professional support for tendering processes, supervision of works and also to build up where required the technical and administrative expertise in the management of investment projects in the municipalities concerned.
The following table shows the projects adopted in 2004:
Total Eligible cost ( million) Total CF Committed
in 2004 ( million)
Project N° Project title Assistance ( million)
Technical Assistance project:
TA for projects for Water Services
2004LV16CPA002 Development in 8.92 7.31 5.85
Latvian Municipalities
Water Service Development projects:
2004LV16CPE001 Development of water
services in Ventspils, Stage II 21.78 18.52 14.81
2004LV16CPE002 Water Service Development in Olaine and Jaunolaine
10.19 8.67 6.93
2004LV16CPE003 Development of Water
Services in Liepja, Stage II 25.30 21.50 17.20
Development of Water
2004LV16CPE004 Services in Daugavpils, Stage II 19.32 16.42 13.14
Total Water Service Development projects 76.59 65.11 52.08
The following table shows the projects adopted in 2004:
Total Eligible Cost CF Assistance ( million) Committed in 2004
No of project Name of project ( ( million) million)
Road projects:
Improvements of the TEN road network, Project I
2004LV16CPT001 106.19 90.26 63.18
Rail projects:
Track Renewal on Sections of the East- West
2004LV16CPT002
Railway 89.42 46.50 21.33
Corridor
Technical assistance projects:
2004LV16CPA001 TA for transport
sector 1.53 1.30 1.05
TOTAL 197.14 138.06 85.56
Roads
The approved road project is a group of projects with the overall objective to rehabilitate and upgrade sections of the Latvian State Main Road, which form part of the Trans-European Network (TEN). There are five projects grouped together and each project involves upgrading a road section of between 5.9 and 47.9 km in length, all of which are located in different places on the Latvian State Main Road network.
a Unified Railway Communication GSM R System on the Latvian East West railway corridor; the renovation of Riga Railway Network.
3.1.9. Lithuania
In 2004, the Commission approved new Cohesion Fund grants totalling 239 million, of which 181.1 million were committed from that year's budget. Including the commitments of 29 million made as a result of decisions taken in previous years, the total amount of Cohesion Fund commitments for Lithuania in 2004 was 209 million. The following table shows the Cohesion Fund assistance approved in 2004 and the total amount committed.
Total eligible cost Total CF assistance 2004 commitments
( million) ( million) ( million)
Environment 108 78 52
Transport 190 161 129
Total CF 298 239 181
% Environment 36.2 % 34% 28%
% Transport 63.8 % 66% 72%
3.1.9.1. Environment
In 2004 the Cohesion Fund concentrated its financial support on the three priority
sectors: water supplies, waste-water disposal and treatment and management of solid domestic waste. The main aim of these projects is to help municipalities and regions improve drinking water supplies, waste-water networks and treatment, and collection and treatment of waste.
The contribution of the Cohesion Fund by sectors shows that waste-water disposal and treatment continued to receive the bulk of resources for the environment, followed by water supplies.
No of Project Name of Project Total CF grant Committed
2004
Water and waste water
2004/LT/16/C/PE/002 Nemunas Midland River Basin- 1st
package 51.196.000 30.808.000
Solid waste
004/LT/16/C/PE/003 Utena Regional waste management system development
9.709.260 7.767.408
Technical assistance
Technical Assistance for Project preparation in environmental sector (modification)
2001/LT/16/C/PA/002 16.575.000 13.260.000
3.1.9.2. Transport
In 2004, the European Commission approved seven new transport projects with a total of 161.6 million in Community assistance, of which 129.3 million was committed from the 2004 budget. The breakdown by sector is given below.
Roads
Five projects were approved in 2004. Projects concerns different sections on
corridors: Development of TEN roads in 2004-2006 (E85: Lyda-Vilnius and E272: Vilnius-Panevezys-Siauliai-Palanga), Development of TEN (2004-2006) (E28: Vilnius-Prienai-Marijampole), Development of the Transport Corridor IXB (2004- 2006), Development of Transport Corridor IXD (2004 2006) and Development of the Transport Corridor I (Road Via Baltica). Total Community assistance for these projects is 127 million.
E272: Vilnius-Panevezys-Siauliai- Palanga)
2004/LT/16/C/PT/002 Development of TEN (2004-2006)
(E28: Vilnius-Prienai-Marijampole)
19.312.000 15.449.600
2004/LT/16/C/PT/003 Development of the Transport Corridor IXB (2004-2006)
45.993.000 36.794.400
2004/LT/16/C/PT/004 Development of Transport Corridor IXD (2004 2006)
10.262.500 8.210.000
Development of the Transport Corridor I (Road Via Baltica) (2004-2006)
2004/LT/16/C/PT/005 20.706.000 16.564.800
Rail
Modernisation of the Marshalling Yards on Corridor IX (Vaidotai and Radviliskis)
2004/LT/16/C/PT/006 18.623.500 14.050.029
2004/LT/16/C/PT/007 Rehabilitation of Kaunas Railway Tunnel
15.991.900 12.793.520
3.1.10. Malta
In 2004, the Commission approved only one project totalling 16.7 million, of which 11.7 million is granted by the Cohesion Fund. Malta's 2004 commitment of 7.418 million was entirely committed to that project:
Total eligible cost Total CF financing Commitments 2004
( million) ( million) ( million)
The 2001 Solid Waste Management Strategy indicates that to meet its obligations regarding the acquis, Malta will have to introduce waste separation at source, which will involve significant infrastructural works in the area of composting and recycling, as well as public information campaigns. The upgrading of the current waste treatment plant should enable a significant reduction in the amount of rejects to be landfilled.
3.1.10.2. Transport
In 2004 no decisions were taken to approve any transport projects for Malta, due to the fact that the project submitted under the environmental sector took up 100 % of Malta's allocation for the year.
3.1.11. Poland
The Commission had registered 42 applications for assistance from the Cohesion Fund, of which 35 were for the environment, five for transport investment measures and two for technical assistance measures.
The Commission adopted 27 new decisions granting assistance from the Cohesion Fund amounting to 1716.1 million, of which 1061.8 million were committed in 2004. The split of commitments between the transport and environment sectors is approximately 60:40. The total eligible cost of these measures is 2254.7 million.
New projects adopted in 2004
Total eligible costs CF assistance 2004 commitments
( million) ( million) ( million)
Environment 1005.1 689.2 512.9
TOTAL 3790.6 2577.8 352.8
During 2004, the Commission authorised payments amounting to 223.1 million. A total of 11 amending decisions were adopted.
3.1.11.1. Environment
The applications for assistance submitted to the Commission were predominantly focused on the water sector though the solid waste sector was also addressed. The decisions adopted in 2004 covered only waste-water treatment, waste-water collection, drinking water production and supply. The majority of these projects addressed at least two or more of the above fields of the water cycle.
The below table shows projects adopted in 2004:
Total
Total CF Committed
CCI Number Title of Measure Eligible
Cost ( Assistance ( million) in 2004 ( million) million)
2004PL16CPE001 Bedzin, waste-water management and water supply
28.381 21.286 17.029
2004PL16CPE003 Bydgoszcz, Water and waste-water management, phase II
137.983 99.348 69.544
2004PL16CPE004 Bytom, water and waste-water
management 61.998 49.599 34.719
2004PL16CPE005 Chrzanów, Water supply & urban sewerage
30.098 21.671 17.336
2004PL16CPE007 Grodzisk Mazowiecki, Water &
waster-water management 15.131 11.046 8.837
2004PL16CPE016 Raziborz, waste-water management 20.503 14.558 11.646
2004PL16CPE017 Radom, water & waste-water
management 41.371 26.064 20.851
2004PL16CPE019 Slupsk, Comprehensive waste-water programme in slupsk Region
19.597 13.718 10.974
2004PL16CPE020 Starachowice, water & waste-water management
19.224 13.073 10.458
2004PL16CPE021 Tarnobrzeg, water & waste-water management
15.315 12.406 9.925
2004PL16CPE024 Tychy, water & waste-water
management 100.125 75.094 52.566
2004PL16CPE025 Jastrzebie Zdroj, water & waste-water management system
33.895 28.472 22.778
2004PL16CPE026 Wadowice agglomeration, water & waste-water management
17.609 14.968 11.975
2004PL16CPE027 Zabrze, waste-water management 89.672 58.287 40.801
2004PL16CPE029 Zielona Gora, water & sewerage management
31.346 26.645 21.316
2004PL16CPE031 Wroclaw II, Water & waste-water management (phase II)
50.251 31.156 21.809
All projects adopted in 2004 included a condition relating to the Environmental Impact Assessment (EIA) procedure and NATURA 2000 sites. The condition allows payments to the projects only after the finalised EIA and NATURA 2000 proceeding were screened and accepted by the Commission. Already in parallel with preparation of decisions the Commission and the Polish Managing Authority initiated a screening exercise on compliance of the Polish EIA legislation with the EIA Directives, with the aim to facilitate preparation of decisions in the future and lift the condition in the 2004 decisions.
The transport sector accounted for 60 % of the total assistance granted under the decisions approved by the Commission in 2004 and 50.6 % of the commitments made. This unbalance between transport and environment sectors should be compensated in the following years of the current programming period.
The breakdown by the sub-sectors in Transport sector is given in the following table:
2004
Sub-Sector Total eligible CF assistance
costs ( million) ( million) % Co-financing commitments
( million)
Roads 1165.2 960.0 93.5 494.6
Rails 72.4 61.5 6.0 49.2
Technical Assistance
6.0 5.1 0.5 5.1
TOTAL 1243.6 1026.6 100.0 548.9
Roads
In 2004, the road projects cover mainly construction of the motorways and expressways sections and reconstruction of one section of the national road No 2. All projects are located on the Trans-European Transport Corridors, namely: Corridors
No: I, II, III and VI. The project concerning Construction of A1 motorway, section: Sosnica Gorzyczki contributes to the implementation of one of the European transport priority projects (project No 25) in accordance with the Decision No 884/2004 of the European Parliament and the Council of 29 April 2004.
Total eligible
No of project Name of project costs CF assistance
( million) ( million)
Road projects:
2004/PL/16/C/PT/001 Construction of A2 motorway, section: Konin-Emilia
380.6 312.1
2004/PL/16/C/PT/002 Construction of S8 expressway,
section: Radzymin-Wyszków 168. 9 140.2
2004/PL/16/C/PT/003 Construction of A1 motorway, section: Sosnica Gorzyczki, stage I
233.5 193.8
2004/PL/16/C/PT/004 Construction of the A4 motorway,
section: Zgorzelec-Krzyzowa
307.4 252.0
2004/PL/16/C/PT/007 Rehabilitation of the national road No 2, section: Siedlce - Terespol
74.8 62.1
Rail projects:
2004/PL/16/C/PT/005 Modernisation of E59 railway line,
section: Wroclaw Rawicz (stage I)
30.0 25.5
2004/PL/16/C/PT/006 Modernisation of E65 railway line,
section: Warszawa - Gdynia (stage I)
42.4 36.0
Technical assistance projects:
2004/PL/16/C/PA/001 Technical assistance for transport sector
4.0 3.4
2004/PL/16/C/PA/002 Technical assistance for rail sector 2.0 1.7
Total eligible cost CF assistance Commitments
() () 2004*
(en )
Environment 200.649.060 152.557.848 125.556.724
Transport 279.562.000 206.875.880 67.417.276
TOTAL 480.211.060 359.433.728 192.974.000
% environment 41,8 % 42,4 % 65 %
% transport 58,2 % 57,6 % 35 %
-
*including the commitments based on the decisions taken in 2004 and the previous years.
3.1.12.1. Environment
In 2004 the Cohesion Fund concentrated its support to integrated water management projects. Five projects that combined drinking water supply and collection and treatment of waste-water were adopted:
Total CF
Project n° Project name eligible cost assistance Commitments
() () 2004 ()
2004SK16CPE001 Water supply and sewerage of Horne Kysuce 54,339,000 43,471,200 8,694,240
2004SK16CPE002 Vranov - Drinking water and sewerage in the Topla River Basin 42,525,800 34,020,640 27,216,512
2004SK16CPE003 Basin of River Vah and Danube
3.1.12.2. Transport
The Commission adopted in 2004 a motorway project and a rail project for a total CF assistance of 206.8 million:
Total CF
Project n° Project name eligible cost assistance Commitments
() () 2004 ()
2002SK16PPT004 Construction of Motorway D 1, Section Mengusovce - Jánovce
190.246.000 140.782.040 29.192.408
Modernisation of Railway Track Trnava Nove Mesto nad Vahom, zkm 47,550 -100,500 at a speed 160 km/h stage II Piestany Nove Mesto nad Vahom
2004SK16CPT001 89.316.000 66.093.840 13.218.768
3.1.13. Slovenia
In 2004, the Commission approved 2 new environmental projects and 2 transport projects. These projects involve eligible investments of 132.4 million, for which assistance of 81.3 million was granted, of which 64.9 million was committed from the 2004 budget.
Following these commitments and including projects adopted in previous years which have an impact on the budget for 2004, the total commitments for the year were as follows:
Coût total éligible Contribution Engagements
(en ) Fonds de cohésion
(en ) 2004 (*)
In 2004 the Commission adopted 2 new environmental projects, one for waste-water collection and treatment and the other for the construction of a regional Waste Management centre. Both projects covered areas that encompass several municipalities.
Sector Total eligible CF assistance % of 2004
cost ( million) assistance commitments
( million) ( million)
Waste-water collection and treatment 26.4 15.2 63 % 12.2
Waste Management Centre 14.8 8.8 36 % 7.1
Projects from previous years 0.3 0.225 1 % 0.045
Total 41.5 24.3 19.3
Water
The adopted project will upgrade and extend the waste-water collection systems and construct treatment infrastructure facilities for the municipalities of Koper, Izola and Piran.
Waste Management
The aim of the single adopted project on solid waste management is to provide the Celje area with a Regional Waste Management Centre, introducing separate collection at source of waste fractions, treatment of the collected fractions, preparation of raw materials in order to market them and landfilling the rest of waste
3.1.13.2. Transport
Previously adopted ISPA projects were all railway projects. In 2004 and for the first time, a road project was adopted.
The implementation of 2004 commitment appropriations for transport projects is shown in the following table (no commitments in 2004 for projects adopted prior to
2004):
Sectors Total eligible CF assistance ( million) % of assistance 2004
cost ( million) commitments ( million)
Road 27.4 14.5 25 % 11.6
Rail 63.4 42.5 75 % 34
Total 90.8 57.0 45.6
Two transport projects were adopted in 2004.
Rail
The railway line Pragersko Ormoz is located on the Pan-European Corridor V (Venice Trieste - Koper - Ljubljana state border Slovenia/Hungary Budapest state border Hungary/Ukraine - Uzgorod - Lvov - Kiev) and represents one of the ten priority corridors between EU and other European countries.
The modernisation of the sections of this corridor through Slovenia is needed to satisfy the required level of technical standards and future traffic needs along the entire Corridor. The overall project of modernisation of the line Pragersko Ormoz, to be implemented in four phases and the current project A completes the first of them.
200 SI16CPT002 Modernisation of the Pragersko Ormoz railway line- Project A 27.4 14.5
ROAD PROJECTS
2004SI16CPT001 Construction of the Smedik- Krska 63.4 42.5
vas motorway
3.2. TECHNICAL ASSISTANCE AND STUDIES
3.2.1 Technical assistance at the initiative of the Commission
In 2004 a study on analysis and evaluation of the various investments made within the framework of the Alqueva dam was supplemented. The project of the Alqueva dam received a Community assistance from the Cohesion Fund, from the ERDF and from the EAGGF Guidance Section.
The conclusions of the study showed that ERDF and EAGGF Guidance Section resources will not be sufficient for the complete implementation of the programme by EDIA (Empresa de Desenvolvimento e Infraestruturas do Alqueva S.A.) for the carrying out of the networks planned for the use of the water of the dam.
The existence of intention indexes on the part of certain private activities for multiple use of the influence area of the EFMA (Empreendimento of Fins Múltiplos do Alqueva) would allow diversification of the activities of the area.
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4.MONITORING, CONTROLS AND IRREGULARITIES
4.1. Monitoring: committees and missions
On 9 June 2004, the Commission services met with the Cohesion Fund services of the Ministry of Finance and Economics for a technical meeting to review in detail the progress implementation of adopted decisions and monitor the physical indicators and financial absorption. The state of affairs relating to the closure of projects under the Cohesion Fund I was also assessed.
On 16 & 17 September 2004, the Commission services and representatives of the Ministry of Environment and Public Works met in Athens. The aim of the meeting was to review the implementation of the environmental strategy and to consider the submission of environment projects which might be the subject of co-financing in 2004.
4.1.1.2. Monitoring missions
No Cohesion Fund monitoring missions were carried out.
4.1.2. Spain
4.1.2.1. Monitoring Committees
In 2004, a meeting of the monitoring Committee was held in Madrid from 27 to 29 April 2004.
To prepare this meeting, the national authorities transmitted the information presenting the situation of implementation at 31 December 2004 of the 307 decisions approved before the 30/06/2004 which were in progress at that date. The 47 decisions approved after the 30/06/04 were not discussed at that meeting.
The management Authority and the Commission selected in partnership the 183 decisions to be followed-up in future sessions of the Committee.
The meetings of the Committee were organized in 7 specific sessions:
One for the projects of the Transport sector and six for the projects of the Environment sector. The latter were distributed in the following way:
16 and 17.06.04: Project control mission in Madrid. A technical meeting was organized with GEDESMA (public sector Madrid Community Company) in order to clear up and specify aspects concerning modification requests for the projects.
Visit of the project "Facilities for the recovery of methane and for manufacturing of compost from urban waste" in Pinto. The project is finished and functions normally, except with regard to the manufacturing of compost (test phase).
Project "pneumatic Recovery of urban waste in Zarzaquemada" in Madrid. Discussion with EMSULE (public-sector Company), operational since February 2004.
13.07.04: Monitoring of groups of projects concerning the cleansing of the region of Madrid (Tagus Basin). Discussions on "Plan 100%", involving the construction of 170 km of collectors and 75 waste water sewage treatment plants was.
15 and 16.07.04: "Infraestructuras portuarias en las instalaciones de Campamento ", in Algeciras. Obsolete harbour facility rehabilitation, with development as a container terminal in an economically depressed area. Once finished, this project will make it possible to satisfy the container traffic and will create 104 direct and 662 indirect Jobs.
28/07/04: Meeting with the persons responsible for Galicia to take stock of the principal projects co-financed by the Cohesion Fund, and visit of a group of purification and cleansing projects in the area of A Coruña.
21.10.04: Periodic monitoring of the high-speed line project Madrid-Barcelona- French Border: state of play of the project and probable effects of the Spanish Law on rail Sector, enforced on 1/01/2005.
11/11/04: Visit of two desalination plants in Alicante and Cartagena and technical meetings with ACUAMED (public company responsible for hydraulic development).
15.12.04: "EDAR y Colectores del Rincón de la Victoria" in Malaga. This visit follows a parliamentary petition denouncing olfactive harmful effects. The managing authority of the project took corrective measures to improve the situation.
topics such as publicity, audit and control matters, payments, public procurement, the implementing rules and miscellaneous information.
Although the project relating to the construction of the Alqueva hydroelectric station is monitored by the general Committee, it is also monitored in the broader forum of the Structural Funds Monitoring Committee for the specific integrated development programme for the Alqueva (PEDIZA).
4.1.3.2. Monitoring missions
Besides attending meetings of the Monitoring Committee and taking part in some inspections carried out by the Audit Unit of DG Regional Policy, the geographical unit responsible for the implementation of the Cohesion Fund in Portugal also carries out technical inspections, when considering or when monitoring assistance, to check on the progress of projects, acquire on-the-spot knowledge of the problems encountered in implementation and find the best solutions for the correct implementation of the projects.
In June 2004, a visit to the port of Caniçal in Madeira took place, as well as two visits to the Alqueva dam project.
4.1.4. Cyprus
4.1.4.1. Monitoring Committees
No monitoring committees were organised in 2004, as no project had started implementation.
4.1.4.2. Monitoring missions
No monitoring missions were carried out.
4.1.5.2. Monitoring missions
No Cohesion Fund monitoring missions were carried out.
4.1.6. Estonia
4.1.6.1. Monitoring Committees
The first Cohesion Fund monitoring committee was held in Tallin on 30 November 2004. The "Rules of procedure of the national Cohesion Fund monitoring committee" had been agreed as well as the minutes of the last ISPA monitoring committee which took place in April 2004.
The first Cohesion Fund monitoring committee was divided into three separate parts dealing with the environment sector, the transport and horizontal issues. All 26 projects approved under ISPA which continue after 1 May 2004 under the Cohesion Fund have been discussed.
4.1.6.2. Monitoring missions
No monitoring missions for ongoing projects have been carried out. In September a mission was carried out to discuss and assess the Cohesion Fund projects which had been submitted in 2004. Site visits had been arranged for 2 environmental projects (Matsalu an Läänesaarte sub-river basins) and one transport project (reconstruction of Jõhvi-Tartu-Valga road).
4.1.7. Hungary
4.1.7.1. Monitoring Committees
The first Cohesion Fund Monitoring Committee was held in Budapest on 14-15 October 2004. Six transport projects, 19 environment projects and 6 technical assistance projects were reviewed and overall presentations were provided for each sector. Many projects were in substantial delay as compared to the original implementation schedule. The Commission called on the Hungarian authorities to tighten the monitoring of projects and to speed up tendering and contracting, with a view not to lose any further time. Because of the delays in implementation, the amount of payments fell considerably behind the expectations. The Hungarian side promised to take systematic steps to get the situation under control.
Authority, the Paying Authority, the Intermediate Bodies, the implementing agencies and the final beneficiaries responsible for projects approved in 2000-2003.
The situation with regard to the implementation of 10 transport projects and 13 environmental projects has been assessed, in general terms, as satisfactory. Shortcomings have been observed in the progress of implementation and the Commission urged the national authorities to accelerate the implementation of the projects thus improving the payment balance.
4.1.8.2. Monitoring missions
The Commission visited a number of projects during its the visit to Latvia from 19 to 21 October 2004: one environment project "Development of water services in Jelgava"; and 2 transport projects: "Improvements of Via Baltica (Corridor I) from Riga to dazi (km 0 to km 6.3)" and "Improvement of links to Via Baltica (Airport Access Road (P133) and related section on A10) located in the district of Rga". All projects visited are well advanced in terms of implementation.
4.1.9. Lithuania
4.1.9.1 Monitoring Committees
In 2004, one monitoring committee meeting was held in Vilnius on 15-16 April. The Committee examined written progress reports on all the ex-ISPA projects.
4.1.9.2. Monitoring missions
No Cohesion Fund monitoring missions were carried out.
4.1.10. Malta
4.1.10.1. Monitoring Committees
On 29 November 2004 a first Cohesion Fund monitoring committee was held even though no project had yet been adopted by the Commission. Information on the main differences between the management and implementation methods of the Cohesion Fund and the Structural Funds was presented by the Managing Authority to the members of the Monitoring Committee and the projects submitted for Community co-financing outlined.
managing authority, the paying authority, the intermediate bodies, the implementing agencies and the final beneficiaries responsible for projects approved in 2000-2003.
The first part of the meeting dealt with horizontal issues relevant for both sectors. The Committee also examined each project individually, starting with the transport sector. The situation with regard to the implementation of 24 transport projects and 46 environmental projects have been assessed, in general terms, as satisfactory. The shortcomings have been observed in fulfilling the environmental conditions defined in the Article 8 of the Financing Memoranda. The national authorities have been urged to complete the required documents and submit these to the Commission.
4.1.11.2. Monitoring missions
No Cohesion Fund monitoring missions were carried out. A number of projects have been visited during the regional tours for Structural Funds, e.g. in Warminsko- Mazurskie voivodship.
4.1.12. Slovakia
4.1.12.1. Monitoring Committees
Two monitoring committees took place in 2004:
-
-The last monitoring committee under ISPA was held in March. It dealt with horizontal questions concerning primarily the ISPA transition towards Cohesion Fund and the state of preparation of the Slovak authorities. As from May 2004, the Ministry of Construction and of regional Development became the managing authority under the Cohesion Fund. Agreements were drawn with the Ministry of Transport and that of Environment which will act as intermediate bodies. In addition, the monitoring committee reviewed the state of progress of 30 ISPA projects.
-
-In November 2004 the installation of the monitoring committee under the Cohesion Fund and its first meeting took place. The committee adopted its rules of procedure, discussed horizontal questions (ISPA transition to Cohesion Fund, cost-benefit analysis, quality of "monitoring sheets"), examined the preparation of Commission Decisions for 2004 projects, as well as the implementation of the projects adopted.
interpretation of the Fund rules, monitoring institutional arrangements and the improvement of the submitted projects.
It was also decided to organize, in a partnership collaboration between the Commission services and national authorities, workshops for exchanging experience and information on certain topics, with a view to improving the quality of submitted projects and ensure compliance with existing regulations. These workshops, to be held from early 2005, will focus on environmental aspects, cost-benefit analysis and public procurement.
4.1.13.2. Monitoring missions
No Cohesion Fund monitoring missions were carried out.
4.2. Inspections and conclusions
In Ireland, Spain, Greece and Portugal, 10 project audit missions and 6 audit missions of the management and control systems were carried out.
At projects level, the main deficiencies observed concerned the procedures for the award of public contracts, although the situation is different between the Member States concerned. This persistence of irregularities in this domain is due mainly to the fact that the procedures for the award of public contracts are very long to implement. For the projects audited from the 2000-2006 period, procedures started at the beginning of the period or even before, which did not enable Member States to correct all irregularities.
The irregularities which were observed are subject to contradictory procedures with the four Member States, in order to determine the application of possible financial corrections. Six hearings have already taken place, one financial correction decision was approved for Ireland and six others are in preparation for the four Member States.
With regard to the systems set up by Member States to fulfill the requirements of Commission Regulation (EC) n°1386/2002 on the management and control systems, progress was achieved in 2004, although some difficulties were identified in 2003 in Greece, Spain and Portugal and communicated to the national authorities in the framework of the partnerships.
The monitoring of the audit on the management and control system was carried out and it was noted that some deficiencies had not been completely corrected, such as:
-
-The absence of controls of the service done, in particular with regard to eligibility expenditure in two very important intermediate bodies, partly due to an insufficient staff.
-
-The problem of the weakness of the control of the procedures for the award of public procurement for the 2000-2004 period (mathematical formula, substantial changes after the signature of the contract).
4.2.2. Spain
Six projects audit missions and three systems audit missions were carried out.
The situation in Spain is not homogeneous due to its decentralized organization. Nevertheless one can draw a number of conclusions as a result of controls carried out.
With regard to the projects audits, 18 decisions were examined. The main anomalies observed are similar to what had been discovered in 2002 and 2003: they concern the inobservance of regulation on the public procurement (confusion between selection and attribution of contracts, the use of the "baja temeraria" rule -average price-, the use of irregular criterion) and the inclusion of ineligible expenditure, primarily VAT.
The monitoring of the Action Plan set up as a result of the audit on management and control system for projects managed by the Spanish central administration, made it possible to conclude that important progress had been made. Nevertheless important deficiencies persist with regard to Article 4 controls (reality of expenditure, execution of the project including the eligibility of expenditure).
4.2.3. Ireland
Only one audit mission was carried out. It consisted in examining the systems as well as two decisions: one in the transport sector, and one in the environment sector.
The audit mission on the management and control system confirmed the problems already identified in 2003, namely the insufficiency of Article 4 controls (reality of expenditure, execution of the project including eligibility of expenditure).
4.2.5. New Member States
With regard to the ten new Member States, pursuant Article 5 of Regulation n°1386/2002, all Member States transmitted the description of their management and control systems to the Commission which found that they were in conformity with the standards required by Community legislation.
This favorable opinion suggests that a good start has been made in putting in place the implementation of the systems, which will be subject to further checks by the Commission in the coming years. Thus in 2005, in accordance with the audit strategy of the Directorate-General for Regional Policy, there will be on the spot checks and conformity tests on randomly selected sample of projects. The tests will be made in all ten new Member States.
Ten projects audit missions were carried out in Latvia, Hungary, Estonia, Poland, Czech Republic, Slovakia and Slovenia. These audits covered primarily the examination of the financial flows of the projects and the compliance with the rules of eligibility of expenditure.
The procedures concerning public procurement were not the subject of a detailed analysis since these procedures proceeded under the direct control of the delegations of the Commission in these countries, at that time candidate countries. A complete audit of these procedures will be led at the end of 2005 to evaluate their functioning since accession.
The main problems identified were the inobservance of the rules on eligibility of expenditure, in particular with regard to the financing of durable equipment. Financial correction procedures will be initiated with the Member States concerned.
The case communicated by the Spanish authorities involved 384 407 and the 12 cases communicated by the Portuguese authorities involved 22 234 344 of Community contribution. Furthermore, two of the new Member States, namely Poland and Latvia, communicated to the Commission a total of six cases of irregularities (respectively 5 and 1). The cases communicated by the Polish authorities involved 802 426 in Community contribution and the case communicated by the Latvian authorities involved 1 273. The type of irregularities is of the same kind as mentioned above.
It should to be pointed out that Ireland informed the Commission, under the above- mentioned Regulation, that it had not registered irregularities during 2004. However, the attention of the beneficiary Member States must be drawn to the fact that a number of cases detected during Community audits were not subject to a notification in virtue of the aforementioned Regulation.
During 2004, the OLAF carried out no survey mission, pursuant to Regulation (EC) n° 2185/96.
-
5.APPRAISAL AND EVALUATION
QUALITY ASSURANCE CAPABILITY
In late 2004 DG Regional Policy launch a dialogue with all Cohesion Fund beneficiaries on "quality assurance capability". The speed with which the Commission may appraise Cohesion Fund applications depends on the quality of the project submitted for funding and a thorough preparation of the application. The timely preparation of a sufficient number of projects the project pipeline to a high standard is the prerequisite for absorbing the annual commitment appropriations. The preparatory phase is of course also the first step in the effective implementation of projects and the prompt realisation of their benefits.
The Member States were invited to engage in this dialogue on Quality Assurance Capability through three steps:
Cohesion Fund grant awards shall come to an end in 2006 a quality assurance capacity for project preparation shall continue to be of benefit under the revised programming arrangement proposed for the next period of funding.
5.1. General
In accordance with the provisions of Article 13 of Regulation (EC) n°1164/94 as revised, the Commission and Member States must ensure the effectiveness of Community aid when implementing the projects co-financed under the Cohesion Fund. This implies the use of monitoring and evaluation techniques.
The Commission and Member States can carry out an appraisal and an evaluation of projects where necessary in cooperation with the European Investment Bank.
During the implementation of the projects and after their realization, the Commission and Member States carry out an evaluation of the methods used to implement the projects, of the respect of their objectives and of the impact of their implementation. This evaluation covers in particular the environmental incidence of the projects, in compliance with the Community rules in force.
At a methodological level, each project application is consequently accompanied by a cost-benefit analysis (CBA). The CBA should show that the socio-economic benefits identified in the medium-term are commensurate with the financial support provided.
It is for the Commission to examine this evaluation with the help of the cost-benefit analysis guide published in 2003
8 which is a common reference used both by the
project sponsors and by the Commission itself.
On the basis of this guide, the Commission carried out during 2004 an important methodological support work aiming to improve the consistency of the ex-ante financial analysis of the projects. Specific technical assistance and training actions were undertaken in the majority of the new Member States in order to help them better prepare the cost-benefit analysis of the projects financed.
reduce the amount of Community contribution significantly. This question is crucial if one wishes to optimize the impact of the resources allocated to the Community structural policies, since it is likely to enable the co-financing of a higher number of projects. It remains however that vis-à-vis the absence of a sufficient number of projects or vis-à-vis their insufficient maturity, the management authorities can be urged to request intervention rates close to the ceiling level.
Moreover, numerous project files include no genuine risk analysis, which can lead a minima to an insufficient control in the future implementation of the projects.
On this point, the Commission strongly prompted the project sponsors to use these techniques - not only to increase the probability of success of the project and its financial solidity, but also in order to improve its impact on regional development.
5.3. Cooperation with the EIB when a project is considered
Under the terms of a framework contract signed by both institutions in 2000 and valid until 2006 and in conformity with the regulatory provisions in force (Article 13.2 of Regulation 1164/94), the Commission may request technical help from the European Investment Bank for the appraisal of Cohesion Fund projects, as well as for major projects supported by the ERDF or projects financed by ISPA.
Moreover, the Commission gets from the EIB any relevant information on the projects submitted to any of these three funds and which the Bank decided to co- finance itself.
For 2004, the EIB examined 25 projects supported by the Cohesion Fund:
By country: Portugal: 5 files (20% of the total); Poland: 5 files (20 %); Slovakia: 5 files (20 %); Spain: 3 files (12 %); Lithuania: 3 files (12%); Slovenia: 3 files (12 %);
Greece: 1 file (4 %).
By types of project: Environment: 17 projects (84% of the total); Transport: 8 projects (16 %).
for the next programming period including negotiations with the Member States, especially the ten new MS highly concerned by the Cohesion Fund.
Thus, in January 2004 DG REGIO launched an ex-post evaluation of a sample of 200 projects co-financed by the Cohesion Fund (1993-2002) in Greece, Spain, Ireland and Portugal. The synthesis report and the four country studies were finalised in January 2005, following close cooperation with the services of the Commission directly concerned.
The evaluation was carried out between February and September 2004 by an evaluation consortium consisting of four country evaluation teams and an evaluation coordinator
-
10.The work of the evaluators was supported by a steering group which
met three times. All directorates of DG REGIO and other interested DGs were invited to participate as well as two experts.
Main findings
Appropriateness of strategy: relatively appropriate projects without precise quantification.
The relevance of the projects in relation to the national needs and EU policies is
high: nearly all of them can be regarded as relevant in these respects. Nevertheless, the project applications generally fail to assess their precise quantitative contribution to these national needs or EU priorities. The managing authorities focused on timely commitment and on consumption of the available funding, paying less attention to the content or quality of projects. This approach is stimulated by the organisation around annual commitments. Technical or financial feasibility studies were seldom available. This lack may lead to problems such as bad design, need for further technical modifications, late start of execution, cost overruns or delays.
Until now limited use has been made of Public Private Partnerships (PPP) in Cohesion Fund projects. This lack of enthusiasm by applicants to submit PPP- projects could be due to the complicated character of such projects which might make financing from the Cohesion Fund more difficult or less significant.
not set a minimum content11. This leads to some very formal reports almost empty of
any new pieces of information. For instance, the only figures which can be found in such reports are often the amount of concrete or iron which has been used. Final reports, mainly focussed on technical indicators, planning and costs, are rather poor in terms of describing impacts or effects linked to the projects.
Efficiency: some substantial costs overruns and delays
The analysis suggests that time and cost overruns are one of the main weaknesses of the reviewed projects. On average, the sample shows a cost overrun of 17.5%. The main reasons are poorly prepared projects, external factors (such as archaeological findings, unexpected geological or meteorological conditions
12), community
involvement (i.e. opposition from local communities) and lack of managerial ability (especially for the smaller implementing bodies).
There is no indication that "gold plated" projects have been financed though there is some evidence that a few projects have been over-financed with regard to their utilisation or at a rate which was not fully justified. In addition, some basic dilemmas exist between EU policy objectives. For instance, the application of the "polluter pays principle" is only partially adopted as increasing user charges to cover depreciation and interest costs (in practice some 60-70% of all costs) is discouraged by the fact that the co-financing rate would become lower.
Socio-economic impact: projects impacts are considered as satisfactory although evidence is still weak.
The quality of the Cost Benefit Analysis (CBA) shown in the application forms was found to be generally weak. In many cases, non valued benefits were assumed to be high although this was insufficiently documented. Therefore, it is difficult to draw firm conclusions on the socio-economic impact of environmental projects. For transport projects, the quality of the CBA is generally higher but a problem can emerge if projects are part of a wider section and no specific CBA is available or could be made in the meantime.
In three countries pre-funding systems are in place (Spain, Portugal and Ireland). These have a decisive influence in terms of speeding up the implementation of projects, when EU funding is not yet available. The Portuguese example of a revolving fund, which is fed by transferring half of the advance payment in the fund, is especially interesting and easily transferable to the new Member States.
High community value added
The Cohesion Fund has played a key role in Spain, Portugal, Ireland and Greece in terms of improving transport infrastructure and rising standards with regard to drinking water supply, waste-water treatment and waste management. Over the period 1989-2002 the public spending in both sectors has been 32% (transport) and 37% (environment) higher due to the availability of the Cohesion Funds. In absolute terms, this extra spending amounts to 42.5 billion over the period with an increasing over the period, from 2 billion per year in 1989-1993 to 4.5 billion per year in 2000-2002. The size of this effect differs by country and period, from very low levels (5% in Greece's environment sector in 2000-2002) to almost a doubling (95% in Portugal's environment sector in 1994-1999). There is thus a tangible improvement of the situation in the period 1993-2002, which has been overall faster than in the EU15.
The Spanish evaluation report estimates for instance that the CF has contributed 15%
of the needs over the period in sanitation and 69% in erosion and forestation. Consequently, in some aspects some CF countries are today ahead of the EU15 average (e.g. Portugal and Spain in motorway development).
The following table presents the development of environmental indicators in Greece and Portugal:
Evolution of main environmental indicators (% of population)
Greece Ireland Portugal Spain EU15
1993 2001 1993 2001 1993 2001 1993 2001 1993 2001
Motorways (km) 330 742 53 125 579 1,659 6,577 9,571 43,541 52,762
The CF has had also a significant added value by developing and focusing sector policies. We can thus conclude that for these four countries, the CF was a major source of socio-economic integration within EU and one of the main causes of the enhancement of their growth potential as well as a powerful lever for the implementation of the EU directives.
Most relevant and feasible recommendations and follow-up of the report
Among the 26 recommendations made by the consultants, 9 stand out as more relevant and feasible than the others:
-
-To select only mature projects, fulfilling clear quality standards
-
-To request active public consultation before submission
-
-To use an expert opinion on the quality of the project
-
-To approve only projects which are close to or have completed tendering
-
-To provide methodological support in preparing CBA and proposing indicators
-
-To request measurable and quantified goals, results and impacts
-
-Checks with the Commission services must be carried out before submission
6.2. Information from the Member States
Two information meetings bringing together all 25 Member States were held in Brussels, on 24 June and 24 November.
At the first meeting, the Commission outlined the expected commitments and payments for the year. The Member States outlined their respective situations. In addition, the delegations from the four "old" beneficiary Member States (Ireland, Greece, Spain and Portugal) presented to the new member States their management and control systems concerning Cohesion Fund projects.
At the November meeting, the Commission presented the Cohesion Fund annual report for 2003 and the commitment and payment forecasts for the year. Moreover, a presentation by the consultant of the main features of the ex post evaluation of 200 Cohesion Fund projects was made. Following a wish expressed by one delegation, the Commission accepted to organize a meeting to discuss the recommendations made in the evaluation study. This meeting took place on 20 April 2005.
6.3. Commission measures on publicity and information
During the information meeting held in November 2002, several delegations expressed the wish to see the Commission Decision n° 96/455/EEC of 25 June 1996 concerning information and publicity measures for CF reviewed by the Commission services. Indeed, they claimed that certain measures have proved too complex to implement and some provisions proved to be inconsistent with the Regulation n°1164/94 as revised in 1999.
In order to facilitate the implementation of information and publicity measures and improve their effectiveness, a Commission Regulation was adopted in April 2004
13,
replacing the 1996 Commission Decision. This new Regulation is also intended to increase the visibility of projects and raise public awareness of the role which the European Union is playing through Cohesion policy.
| publication date | 09-11-2005 |
|---|---|
| reference | 14135/05 ADD 1 |
