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Development theme II : Trans-European transport and energy networks

1. Why?

Europe's ascendancy in the past was due to the quality of its communications networks, which gave its inhabitants easy access to natural and technical resources. By developing the movement of people and goods, Europe has been able to marry economic prosperity, quality of life and commercial efficiency; it has also been able to remain at the forefront of technology and to back highly successful industries, Airbus being a good example. Our transport and energy systems are clear evidence of this tradition.

We need to continue along this road, to enter a new phase and to visualize other frontiers in the light of the globalization of markets, the growing mobility of capital and technology and the investment needs which are becoming apparent in the East and the South. The development of trans-European transport, telecommunications and energy infrastructure neworks answers this need, which all the Member States emphasized in their contributions.



This is also a chance to:



2. Why now?



This is particularly true of transport; the result is rigidities, procedural slowness and malfunctions, which are blamed by economic circles as being one of the main causes of the current decline in competitiveness. This can now be remedied with the aid of the new provisions of the Treaty on European Union (Article 129).



Time wasted because of traffic congestion, under-utilization of the new communications media, environmental damage owing to the failure to use the most efficient technology are all to some extent contributory factors in the present malaise of our cities and the resulting social discord. The same is true of the thinly populated rural areas, whose isolation is a threat to their very existence.

The rapid progress made in data processing, environmental engineering, propulsion methods and new materials completely change the outlook. We are living with separate, compartmentalized networks, with means of transport which are often environmentally damaging. It will henceforth be possible to combine different transport modes, to use electronics to organize links and traffic better, to connect networks in all sectors for which different national authorities are responsible and to integrate stringent environmental standards in infrastructure projects. A wholly new generation of projects is emerging, and a completely different development logic.

Countries such as the USA and Japan are making significant, targeted efforts to renew their infrastructures. New industrial powers such as Singapore, Taiwan, certain parts of China and Argentina are creating networks which integrate the latest technological advances.



Equally, it is inconceivable that we should develop an economic partnership with Russia and a deeper association with the countries of Central Europe without, at the same time, embarking on bold infrastructure projects. The two are complementary.



3. How?



Within the framework of a system of open and competitive markets, action by the Community shall aim at promoting the interconnection and interoperability of networks as well as access to such networks. It shall take account in particular of the need to link island, landlocked and peripheral regions with the central regions of the Community (Article 129b).

It shall establish a series of guidelines covering the objectives, priorities and broad lines of measures (master plans); these guidelines shall identify projects of common interest; it shall support the financial efforts made by the Member States for the projects identified, particularly through feasibility studies, loan guarantees or interest rate subsidies; it may also help coordinate the policies pursued by the Member States and cooperate with third countries (Article 129c).

The Council of Ministers acting by qualified majority and the European Parliament decide on the guidelines and projects of common interest; Member States must approve the guidelines and projects that concern their territory.

The Community has two tasks:

It is therefore recommended that priority should be given to projects of Community interest, the financial and administrative arrangements for which have been well prepared, and for which environmental impact assessments have been carried out.

Project evaluation will concern the financial risks, the possible sources of financing, the legal status (duration of concessions), management and the environmental impact. This procedure is particularly important in the energy sector where the main implementation difficulties are not so much financial as related to the length and complexity of administrative procedures.



4. Where are we now?

(a) Transport

The plan for high-speed trains was accepted by the Council in 1990, and it will be updated for integration in a multimodal perspective in 1994.

On 29 October 1993, the Council and the European Parliament approved three master plans on

Three other plans will be presented in 1994 on

(b) Energy

A master plan and projects of common interest for electricity and gas will be presented at the beginning of 1994. Their implementation will depend to a great extent on the establishment of a genuine internal energy market.

5. What are the priorities?

The projects will focus above all on the trans-European transport network. This is the sector which will require the most substantial investment, and where the gap between available financial resources and needs is biggest. The aim is to develop a truly multimodal strategy, which is essential in order to improve economic performance and the quality of life.



The development of energy networks reflects two priorities: the reduction of costs by making better use of existing capacities, and enhancing security of supply. The first priority is more particularly concerned with electricity, while the second applies to gas.

This will permit more rational overall use of the available energy throughout the whole European continent.

As far as electricity is concerned, the objective is essentially to increase interconnection of networks and thus avoid their saturation in some cases and, in others, provide a better service to the more remote areas.



With regard to gas, Europe must come to terms with growing consumption which will increasingly be covered by imports from the North Sea, Algeria or Russia.



Eight major programmes will shortly be proposed to the Council with this in mind. The success of all these projects is closely linked with the deepening of the internal market.

6. Financing options

The financial requirements for the next 15 years can be put at over ECU 400 billion; by the end of the century alone, they will probably amount to ECU 250 billion (ECU 220 billion for transport and ECU 30 billion for energy).

The total investment involved for the proposed projects amounts to ECU 82 billion for transport and ECU 13 billion for energy.

The purpose of the above assessment is to create the best possible conditions for financing by the market in the framework of a partnership between the public and private sectors.



With regard to the 26 transport projects already examined in the framework of the master plans (23) or in other Council bodies (3), the Community has already financed feasibility studies and work to the tune of ECU 332 million.

It could provide almost ECU 15 billion over the period 1994-99 from its various instruments, which could be added to loans of an equivalent amount (growth initiative facilities).

The eight major energy programmes will require ECU 13 billion from these instruments. Community budget funding could be significantly augmented by European Investment Bank loans and the new mechanisms described in the Annex.


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