Hard decisions ahead for TENs funding committee

Date: 05/10/1995

By Tim Jones

THREE and a half years after the Maastricht Treaty committed the EU to promoting the creation of a web of trans-European transport, energy and telecommunications networks (TENs), a brand new committee of the Council of Ministers will meet this month to begin handing out the cash.

At their last meeting, finance ministers put the finishing touch to a regulation freeing up 2.345 billion ecu for network financing between now and the end of the century. This will be the Union's contribution to a huge 91-billion-ecu programme to build 14 priority links between member states.

On 12 October, the TENs committee for financial aid will meet in Brussels to sift through applications for the first year's funding. But money already looks tight.

Back in June, Transport Commissioner Neil Kinnock warned that the basic TENs budget line of 1.8 billion ecu would certainly be breached and the top-up fund agreed at December's Essen summit would be needed.

Since February, the Commission has been taking soundings from member states over the levels of financing they need for their priority projects.

So far, bids have come in for 450 million ecu compared with a budget line for 1995 of only 180 million ecu.

The job of the new committee, to be comprised of officials from the relevant ministries of each member state and chaired by the Commission, will be to square this circle.

The Commission was unhappy that so many member states had put in bids for block grants rather than applying in the spirit of the financing regulation. This emphasises that the budget line should go towards feasibility studies, interest subsidies, loan guarantees and, only in very limited cases, towards grants.

Kinnock has also complained that programmes have not been constructed imaginatively with the aim of catalysing private-sector investment with the smallest possible amount of EU cash.

As a result, some early requests for funds have been altered along these lines.

The Commission wants more than half of this year's financing to go towards feasibility studies. “We're trying to get the maximum leverage out of the funds,” says an official involved in the preparations. “Feasibility studies are vital right at the beginning of a project and it's very risky for companies to do them.”

Once the committee gives its blessing to selected projects, DGVII, the Directorate-General for transport, along with DGII, responsible for economic and monetary affairs, will be empowered to make a formal proposal that will then return to the Council of Ministers for the go-ahead to start making payments.

“Our aim is for money to be going out by November,” the official said.

Several key projects are well underway, including the 3.4-billion-ecu Øresund road and rail link between Denmark and Sweden, the 1-billion-ecu Malpensa airport for Milan and a 300-million-ecu rail link between Cork and Stranraer.