Original publication: July 2019
Authors: José Manuel VASSALLO, Laura GARRIDO.
Short link to this post: http://bit.ly/2lHo8Mc
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Summary

The study provides recommendations for improving the future effectiveness of European Union (EU) funding instruments that support transport projects. These instruments are supposed to comply with three main goals: (i) achieving socioeconomic convergence among Member States (MS); (ii) completing the Trans European Transport Network (TEN-T); and (iii) tackling specific transport challenges such as decarbonisation, digitalisation, etc.  Overall, there are three different types of EU funding instruments available for transport projects: EU grants, European Investment Bank (EIB) loans and innovative financial instruments. Some EU funding instruments are mostly focused on supporting TEN-T projects, while other instruments have greater flexibility to finance projects not necessarily included in the TEN-T.

EU funding of transport projects

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As of today, the performance of the EU funding instruments for transport projects has room for improvement. These instruments have not been so effective in fulfilling transport policy priorities. The current EU allocation seems to be insufficient, especially for the Connecting Europe Facility (CEF) and the Cohesion Fund (CF). The allocation of traditional cohesion policy instruments is too much influenced by MS towards national and regional priorities whereas the allocation of more sophisticated instruments does not seem to be balanced across regions. The evaluation of projects and programmes funded by the EU often lack focus on results and impacts. Administrative procedures, especially in cross border projects, keep on being an obstacle for the effective delivery of projects. The capacity of MS remains being critical to manage EU funding. Finally, there is still certain overlapping among different funding sources.

In the last few years, mobility is experiencing a revolution driven by the impact of digitalization and new cleaner energy sources. The improvement of batteries along with the growth of alternative fuels is steadily reducing the weight that fossil fuels had traditionally played to power transport means. All these changes will require larger funding resources for transport projects, whose availability may be threatened by political pressures to reduce the EU budget or prioritize it to different policies.

Given that framework, regarding funding priorities, the study recommends: (i) raising the amount of funding to transport needs, especially CEF and CF; (ii) increasing the amount allocated to adapt infrastructure to future mobility needs; (iii) promoting measures to improve integration and interoperability; (iv) prioritising metropolitan areas and declining regions; and, (v) allowing funding instruments to finance the maintenance and operation of infrastructure.

Regarding organizational improvements, the study recommends: (i) adopting tougher measures to encourage MSs to give greater priority to cross-border projects; (ii) defining more flexible approaches to combine resources coming from different priorities (ICT, energy, environmental, social), or even different instruments; (iii) setting a minimum common evaluation framework, both ex-ante and ex-post, applicable to all transport projects receiving EU support; (iv) establishing clear guidelines for innovative instruments; and, (v) simplifying and homogenising the administrative procedures.

Regarding governance reforms, the study recommends: (i) establishing independent supervision of the common evaluation framework for transport projects funded by the EU; (ii) constituting a single EU Transport Agency; (iii) providing guidance to less developed regions and countries to modernize their institutions; and (iv) promoting a greater harmonization of charging, taxation and subsidy approaches.

Link to the full study: http://bit.ly/629-199

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