TRANS-EUROPEAN TRANSPORT AND ENERGY NETWORKS
(10089/06)
Letter from the Chairman to Rt Hon Margaret
Hodge MP, Minister of State for Industry and the Regions, Department
of Trade and Industry
Thank you for your letter of 14 August 2006,[48]
replying to my letter of 19 July. Sub-Committee B considered your
letter at its meeting on 9 October.
In my letter of 19 July, two questions were
raised: we asked you to explain to us the rationale behind the
Commission's proposal that priority inland waterway projects should
have higher levels of financial intervention than priority projects
involving other modes of transport and we asked for details of
the Commission's explanation of how the proposed loan guarantee
arrangements would operate.
We look forward to receiving a response to our
two questions, and will continue to maintain the scrutiny reserve
on this proposal at this stage.
10 October 2006
Letter from Rt Hon Margaret Hodge MP to
the Chairman
I am writing to update you on developments relating
to Explanatory Memorandum 10089/06.
On 8-9 June the Council adopted Conclusions
on the NAIADES action programme to promote the use of inland waterways
for freight transport. The Conclusions invited the Commission
to give "appropriate weight" to inland waterways projects
within the framework of the Trans-European Network, transport
(TEN-T). They also indicated that the River Information Services
(RIS) should be part of the Multi-Annual Indicate Programme of
TEN-T. The Department for Transport wrote to the Committee on
5 July 2006[49]
about this matter. I attach a copy of this letter (not printed).
The proposed TEN Finance Regulation number 10089/06
wished to pay special attention to inland waterways projects,
increasing the intervention rate to up to 30%. We opposed this,
and furthermore, we do not believe that the Conclusions justified
this increase. While we agree that the TEN-T should concentrate
funds on those projects of Community interest, we argue that the
selection criteria should focus on how the project optimises the
capacity usage of the TEN-T network, not on the mode of transport.
We were successful in removing the reference
to a 30% intervention rate for inland waterways works-based projects
in a subsequent Presidency compromise proposal number 12777/06.
We have been unable to retain our blocking minority opposing further
increases in the TENs intervention rates, and the removal of this
reference was therefore a trade-off in exchange for the general
increase in the intervention rates.
The Presidency issued a final compromise proposal,
12777/06 following the COREPER of 15 November 2006. Notably, the
proposal sets the new TENs intervention rates for 2007-13 following
observations made by the Member States and draft amendments by
European Parliament representatives. An outline of the revised
TEN-T intervention rates is enclosed (not printed).
Regarding the Commission's explanation about
how the proposed loan guarantee mechanism would work, the Annex
to the final compromise proposal includes clarification on the
proposed loan guarantee instrument which was the subject of an
Explanatory Memorandum number 7281/05, 7282/05 and 7280/05, considered
by Sub-Committee B on 20 June 2005. The Annex sets out, in general
terms, the form that the support under the loan guarantee will
take and provides that the Community Contribution to the loan
guarantee instrument would be committed by 31 December 2013 at
the latest, with the approval of guarantees to be finalised by
31 December 2014. The guarantees may not exceed five years after
the date that projects are taken into operation. In exceptional
circumstances the guarantee may be granted for up to seven years.
The proposal notes that the contribution from
the Community budget to the loan guarantee instrument may not
exceed €500 million. The European Investment Bank (EIB) would
contribute an equal amount. The proposal also states that the
Community input to the loan guarantee instrument would be limited
to the amount of the Community contribution and that there would
be no further liability on the Community budget.
In the case of termination of the loan guarantee
instrument during the current Financial Perspectives, any balances
on the Trust Account, other than funds committed and funds needed
to cover other eligible costs and expenses, would be returned
to the TEN-T budget line. If the loan guarantee instrument were
not extended into the next Financial Perspectives, any remaining
funds would be returned to the revenue side of the EU budget.
Funds allocated to the loan guarantee instrument
may be called upon until either the last guarantee has expired
or the last subordinated debt has been cleared.
UK officials have been involved in all aspects
of the negotiation on the PPP loan guarantee and throughout these
negotiations have been clear that the basis of any transfer of
risk must be that it is placed with the party best able to manage
it and it must not be the case that the guarantee undermines this
principle. Key to ensuring that risk transfer remains a reality
within TENs PPP projects has been the inclusion in this Regulation
(Annex 6), at the prompting of the UK, of a facility to support
availability payments to PPP contractors. This will enable TENs
PPP projects to adopt a mechanism whereby payments to the contractor
are (in part) dependent on the availability of the infrastructure
to a contractually agreed standard.
The Regulation and Annex set out in general
terms the principles of the loan guarantee but much of the operational
detail will be covered in a co-operation agreement between the
Commission and the EIB. As stated in Explanatory Memorandum number
7281/05, 7282/05 and 7280/05, this proposal is an incentive measure
and as it will not impose any burdens on the private sector or
any additional burdens on the public sector, this proposal did
not require a Regulatory Impact Assessment.
In conclusion, the revised proposal presents
the best possible outcome for the UK. We were able to remove the
reference to a 30% intervention rate for inland waterways works-based
projects, and although the intervention rates have increased,
these are the maximum rates; in practice the Commission rarely
hits the higher rates.
The next stage of the procedure relating to
the proposed Regulation will be the formal adoption of the Council
Common Position on the proposal, which is expected in February
2007. I would therefore be grateful if you could pelase confirm
that the above information would enable your Committee to clear
the document from scrutiny.
I am also enclosing a letter from the Department
for Transport 5 July 2006 (not printed).[50]
19 December 2006
Annex A
COMPROMISE PROPOSAL 12777/06
INTERVENTION RATES IN THE FIELD OF TRANSPORT
FOR 2007-13 (TEN-T)
|
| | Current
| 2004 draft | Compromise
Proposal
|
|
| TEN-T | Studies | 50%
| 50% | 50%
|
| Priority projects | 10%
| 30% | 20%
|
| Cross-border sections of priority
| 20% | 50%
| 30% |
| Inland Waterway projects
| — | 30%[51]
| — |
| Projects including: |
10% | 50%
| 50%[52]
|
| interoperability—security—safety
| | | 20%[53]
|
| All other projects | 10%
| 15% | 10%
|
|
Letter from the Chairman to Rt Hon Margaret Hodge MP
Thank you for your letter of 19 December, replying to my
letter of 10 October, which Sub-Committee B considered at its
meeting on 15 January 2007.
We were grateful to you for providing an update on the draft
Regulation, and for addressing our questions on the levels of
financial intervention and the loan guarantee arrangements. We
welcome the abandonment of the 30% intervention rate for inland
waterways in the latest Presidency compromise, as we shared your
view that funds should be concentrated according to the value
of the project rather than the mode of transport. We do however
recognise that inland waterways represent a sustainable alternative,
and should be supported as part of the wider efforts to tacke
CO2 emissions.
We understand that the UK is no longer in a position to prevent
further increases, and that the consequent raising of the maximum
rates for intervention across the board was "a trade-off".
We hope that, as you write, these are treated as maximum limits,
and rarely approached by the Commission.
As the revised draft does represent an improvement on the
original draft, we are content to lift scrutiny on the proposal
ahead of the Council meeting in February. We would of course be
grateful to you for a report on the meeting should a common position
be agreed.
17 January 2007
48
Correspondence with Ministers, 40th Report of Session 2006-07,
HL Paper 187, p 140. Back
49
Correspondence with Ministers, 40th Report of Session 2006-07,
HL Paper 187, p 113. Back
50
Correspondence with Ministers, 40th Report of Session 2006-07,
HC Paper 187, p 113. Back
51
N/A as no special attention was given to Inland Waterways. Intervention
rate set as other work-based priority projects. Back
52
50% for projects implementing European Traffic Management Systems
(ERTMS). Back
53
20% for projects implementing other traffic management systems. Back
| 
