Setbacks hit efforts to keep TENs on track

Date: 29/02/1996

Lauded as a physical manifestation of the single market, Trans-European Networks have been dogged by problems. Tim Jones reports.

'TRANSFORMING a patchwork into a network', is the proud boast made by the European Commission for its prized Trans-European Networks (TENs).

A long list of cross-frontier links between roads, railways, telecommunications, and gas and oil pipelines - most of which were either under way or in the planning phase already - have been given the political steer regarded as vital for their completion.

In total, their size and cost is staggering - close to 400 billion ecu, a figure equivalent to Spain's annual gross domestic product.

So why was such an ambitious project ever launched? When Europe's leaders puzzled over why they could not generate jobs in sufficient numbers to soak up the long-term unemployed, they asked former Commission President Jacques Delors to go away and produce the analysis they needed. In his 1993 White Paper on Growth, Competitiveness and Employment, Delors came up with a raft of suggestions, including his dream of TENs.

“The establishment of networks of the highest quality throughout the whole Union and beyond its frontiers is a priority task,” said the White Paper, to general agreement. But Delors' second requirement, that this would “require a joint, massive and sustained effort on the part of the authorities at all levels and of private operators”, found fewer takers.

For the Commission, allowing projects to find their own feet and leaving them to the 'magic' of the market-place or the distortions caused by national subsidies was against everything for which the EU should stand.

The transport networks in particular, they insisted, should be seen in grander terms - as a physical manifestation of the single European market.

It was for this reason that member states agreed to draw up a priority list of 14 transport projects deemed essential to the realisation of a single European entity, and to bind peripheral regions to the centre.

At the same time, an 'A-list' of the top ten energy schemes was drafted - including electrical interconnection between Italy, France, Greece and Spain, and the introduction of natural gas to Greece and Portugal.

Yet even the EU's best-thought out plans have often been longer on good intentions than on real progress.

While some of the major projects have been unable to attract the funds they need, most have also been beset by administrative trip-wires.

The prime and most frightening example was that of the long-awaited Channel Tunnel between the UK and France.

While finance ministers were deciding how much money to set aside from the Union budget to fund the TENs, Eurotunnel, the tunnel operator, stopped paying interest on over 9 billion ecu of its debt to its 225 creditor banks. With revenues from tunnel users well below expectations, the company simply could not meet the repayments.

Eurotunnel is regarded by many as a classic example of how this kind of project should not be run. But others ventures have scarcely inspired confidence either.

The high-speed train network intended to link London, Paris, Brussels, Cologne and Amsterdam illustrates the extent to which the EU remains a mosaic of member states, despite its rhetoric.

France's Société Nationale des Chemins de Fer (SNCF) has already carried out its side of the bargain, laying and operating the TGV track from Lille to the lip of the Channel Tunnel, at crippling cost. But years after the French leg was completed, the Belgian and Dutch railways and governments are still arguing over where their link routes should be laid and who should foot the bill.

A small part of the line from Lille into southern Belgium has been completed. However, the country's regionalised structure, mandating that planning authorisations be given by the Flemish, Walloon and Brussels governments, hardly helped matters. Compensation to the regions has added more than a billion ecu to the cost of the TGV link.

Work on the Channel Tunnel rail link between London and the coast has not yet begun, despite ten years of planning. Compulsory purchase orders worth 160 million ecu placed on homes in south London had to be reversed when the route was changed.

Meanwhile, the 22-billion-ecu high-speed train and combined transport link between Berlin and Verona is engulfed by administrative log-jams. The Brenner tunnel through the Alps will mostly benefit southern Germany and northern Italy while running through Austria, which is waiting for a study of the economic benefits before it will even consider paying the bill.

Away from the railways, the construction of Spata Airport in Athens has, at times, looked like a comedy of errors.

The state acquired all the land in 1980 and finally awarded the concession to plan, build, finance and run the airport to German firm Hochtief three years later, after it beat a French consortium in an international tender competition.

But the fall of the Conservative government meant the agreement could not be signed and, while the French consortium appealed through the Greek courts, the new government of Andreas Papandreou decided to re-run the tender offer. After a round of complaints and investigations, a government committee recommended acceptance of the Hochtief offer again, and work began in August last year.

These are the kinds of problems that lie behind the bald and barely imaginable money figures, and the visionary speech-making.

Transport Commissioner Neil Kinnock put it succinctly when he said last year: “While welcoming the potential benefits - competitiveness, job creation and economic cohesion - many countries behave as if construction and funding are the job of someone else.”

EU institutions have set aside substantial sums for TENs. The European Investment Bank has already lent nearly 5 billion ecu to the projects and EU governments have allocated 2.3 billion ecu from the Union budget for spending on feasibility studies and interest rate subsidies.

After the roasting it received at the December 1993 Brussels summit for suggesting that extra money needed to be raised to finance the projects, the Commission kept its head down for two years.

But at the end of 1995, detailed studies of two of the high-speed train links revealed financial shortfalls and continued delays caused by red tape.

Commission President Jacques Santer went to the December 1995 Madrid summit armed with a document from Kinnock's services, planning to broach once again the idea of raising extra sums at low cost by tapping the bond market.

In the end, he thought better of it and simply handed the report over to EU leaders - and quietly ordered his services to study the feasibility of using EU borrowing rules to issue bonds in favour of select TENs, or possibly make more efficient use of the European Investment Fund.

In the meantime, the European Parliament is using TENs to flex its 'co-decision' muscles, just as it did with biotechnology and powerful motorbikes.

While the 182.5 million ecu paid to the projects in 1995 is safe, the 1996 budget line payments are under threat unless MEPs can agree with the Council of Ministers on their choice of priority schemes.

Parliament is pushing for tougher environmental impact assessments on all the projects.

To Kinnock, there is no contradiction between these huge infrastructural projects and the need to protect the environment. He insists that most of the priority projects will transfer people from cars to rail or improve the quality of existing roads.

But he adds: “I don't beat my chest that suddenly we've discovered a new transport policy that's environmentally neutral or in all respects environmentally beneficial. The choice we have is between the absolute best and as good as we can get.”