Rail finance: INEA – supporting rail projects

From 1 January 2014, TEN-T EA became INEA. Beyond the management of the legacy of the TEN-T network and of the Marco Polo programmes, INEA now holds an extended mandate covering the implementation of parts of Union programmes in the field of transport, energy and telecommunications infrastructure (the new programme Connecting Europe Facility – CEF) and in the field of transport and energy research and innovation (parts of Part III Societal Challenges of the Horizon 2020 Specific Programme).

Through this extended mandate, INEA will allow stakeholders to benefit from the agency’s long-standing expertise and high quality of programme management and service delivery. It will also provide a single access point for funding for all potential beneficiaries. Finally, bringing together the management of infrastructure and research projects in the fields of transport and energy within INEA is expected to result in significant economies of scale and synergies between such activities – ultimately to benefit economic growth and EU citizens.

On-going INEA project portfolio

INEA is currently managing approximately 400 open projects out of almost 600 that were launched between 2007 and 2013.

During this period, 14 Calls for Proposals were issued under Multi-Annual and Annual Calls for Proposals. In the Multi-Annual Calls, around 80-85% of the available budgetary resources are allocated to promoting TEN-T Priority Projects, traffic management and cross-border sections; whereas the Annual Calls devote around 15-20% of the available budgetary resources for smaller projects covering the different modes of transport. A special one-off Call, under the European Economic Recovery Plan (EERP), was published in 2009 to give an immediate boost to the European economy. Thirty-nine projects were selected under this call, with a total available funding of €500 million.

The projects selected for funding between 2007 and 2013 received a total of €6.72 billion of actual support.

The Marco Polo Programme has also awarded support to 146 projects aimed at shifting the transport of freight from road to rail and other forms of transport, totalling funding of €283 million in EU grants. Ninety of these projects focused on modal shift to rail, with EU funding amounting to €163 million.

Policy background for EU rail infrastructure projects

In the past decades, the European Union has considerably developed the legislation encouraging competitiveness and market opening in the rail sector. The overarching idea has been that greater competition makes for a more efficient and customer-responsive industry. Efforts have concentrated on opening of the rail transport market to competition, on improving the interoperability and safety of national networks and encouraging the development of a well-integrated rail system leading to ‘European’, rather than ‘national’, railways and on developing rail transport infrastructure.

The latter was a clear priority already in the 2001 Transport White Paper with its modal shift objective, and the 2004 TEN-T Guidelines clearly focused EU investments in rail and water transport with 18 out of the 30 priority projects identified being rail projects.

The 2011 Transport White Paper aims to create a Single European Transport Area with more competition and a fully integrated transport network which links the different modes and allows for a profound shift in transport patterns for passengers and freight. It made a clear commitment to rail for both passenger and freight transport and a dedication to the use of the pan-European traffic management system ERTMS. In particular, the Commission singled out specific rail goals which will contribute to the reduction of greenhouse gas emissions by 60% by 2050, notably by:

• Completing a high-speed rail network (2050)
• Tripling the length of the high-speed rail network (2030) and maintaining a dense railway network in all Member States
• Having a majority of medium-distance passenger transport by rail (2050).

As of January 2014, the new 2013 TEN-T Guidelines and Connecting Europe Facility (CEF) Regulation form an important building block in the development of a well-functioning Single European Railway Area by closing the gaps between Member States’ transport networks, removing bottlenecks that still hamper the smooth functioning of the internal market and overcoming technical barriers such as incompatible standards for railway traffic. Investment under CEF will therefore be focused on:

• Removing bottlenecks
• Enhancing rail interoperability
• Bridging missing links
• Improving cross-border sections.

EU rail infrastructure projects

Rail has been an essential part of the TEN-T Programme, especially throughout the entire 2007–2013 financial framework of the Commission.

Of all the projects established during the 2007–2013 period, 270 were rail projects (including both rail and European Rail Traffic Management System – ERTMS) and the corresponding funding allocated to the sector was over €4.3 billion. By far the highest, this represents the importance of the sector to European TEN-T policy aims overall.

Key rail projects

The rail projects managed by INEA range from ambitious large-scale international undertakings such as the Brenner Base tunnel in the Alps to simple line upgrades at the regional level.

To give some other concrete examples, the Agency provided implementation support for a global project which constructed a 44.4km-long section of high-speed line between the Spanish town of Figueres and Perpignan in France. The specific project, which included the construction of an 8.2km-long tunnel and a number of viaducts, received just over €60 million in EU TEN-T co-financing. It was completed in 2009, and has improved mobility across the Franco-Spanish border and increased the overall safety of rail transport.

The TEN-T Programme also funds smaller infrastructure improvements if these are deemed to have a positive impact on TEN-T network development and European mobility as a whole. Another Agency-managed project, receiving a total amount of EU TEN-T co-financing of €2.2 million, supported the construction of a new 2.2km-long section of single track line between Cattolica and Pesaro on the Italian Adriatic coast. Although the length of the works may seem insignificant, the project removed a large bottleneck which was slowing down north-south passenger and freight rail traffic as a whole in Italy.

Funding channelled to rail infrastructure does not only include improvements to lines and laying down new tracks. As part of the EU priority to make transport smarter, €482 million has been allocated to projects focusing on ERTMS (see Figure 1), in order to foster the adoption of a common European train management standard which will ensure faster connections and an increased level of safety. When summed to the other rail projects this yields an impressive €4.3 billion for the entire rail sector.

A concrete example of a successful implementation of an ERTMS project is the equipment of 97 Austrian locomotives with the latest version of the European Train Control System (ETCS), one of the two integral elements comprising the ERTMS system. The project, which was supported by the EU project to the tune of €7.3 million, guarantees railway interoperability on a significant section of ERTMS Corridor E located between Austria and Romania – about two-thirds of the total length of the corridor connecting southeast Europe to the heart of the EU.

Future outlook

INEA will continue to follow-up the implementation of rail infrastructure projects through the final part of the 2007–2013 TEN-T Programme to improve the European rail sector’s performance and increase its attractiveness, in line with the European Commission’s priorities outlined in the Transport White Paper. It will also be responsible for the projects to be launched under CEF Transport, where the first call for proposals will be launched later this year.

The Agency will also soon be responsible for its first transport research projects – which will, however, not specifically involve the rail sector as this will be undertaken by the new Joint Undertaking ‘Shift2Rail’, which is currently being established between major rail stakeholders and the European Commission. INEA will nevertheless collaborate with this Joint Undertaking to exploit synergies between the research and implementation phases.

INEA will always strive to offer the best added value to both the European Union as well as its project stakeholders, to guarantee a continuous flow of funding and ensure that rail is supported in line with the overall policy priorities of the White Paper, TEN Guidelines and CEF Regulation.

Reference

1. http://inea.ec.europa.eu / [email protected]