Activity: EU Financial framework

EU Financial framework struggles to commit to rail freight

MFF budget allocation before EFSI
The Multiannual Financial Framework (MFF) for 2014-2020 is set up to support programmes that reflect the European political economic and development priorities, including:
  • the Trans-European Transport network policy (TEN-T), aiming to close the gaps between Member States' transport networks, remove bottlenecks and overcome technical barriers such as incompatible standards for railway traffic
  • Transport, Energy and Infrastructure projects to be funded under the Connecting Europe Facility (CEF)
  • Research and Innovation under HORIZON 2020 and the Rail Joint Technology Initiative, Shift2Rail
  • Strategic investments in key areas such as infrastructure, education, research and innovation, as well as risk finance for small businesses under the European Fund for Strategic Investments (EFSI)

It also supports administrative structures such as European Union Agency for Railways formally known as ERA or Innovation and Network Executive Agency (INEA) designed to launch application procedures, evaluate projects, and execute and monitor the realisation of the defined or approved projects under their relevant programmes.

Financial Instruments

The Connecting Europe Facility (CEF) provides co-financing grants and financial instruments to support the implementation of the broad range of TEN-T projects, including core network, freight services, ERTMS, and retrofitting of freight wagons for noise reduction. For example, the CEF funding provides for a 20 % reimbursement to retrofitting costs for projects on noise reduction.  However, it is often considered as not sufficient and other alternatives are needed.

The European Fund for Strategic Investments (EFSI) adopted in June 25, 2015 is part of the Juncker “Investment Plan for Europe” which aims to mobilise €315 billion by leveraging private investments for transport infrastructure and other strategic sectors of the European economy.  The EFSI Instrument is meant to complement the Connecting Europe Facility (CEF) and the European Structural and Investment Fund (ESIF). However, to establish this new Fund, a guarantee of €16 billion was created under the MFF backed up by 50% of existing EU funds from the EU budget (€2 billion), CEF (€3.3 billion) and the Horizon 2020 programme (€2.7 billion). In addition, the European Investment Bank (EIB) committed €5 billion in cash, bringing the EU contribution to a total of €21 billion. A revision of the EFSI, called EFSI 2, proposed in September 2016 and brought important modifications: EFSI will be prolonged until 2020; €500 billion will now be mobilised by leveraging private investments with an extension of the guarantee under the MFF from €16 billion to €26 billion backed with an additional €650 million from CEF, and a €2.5 billion increase from the EIB.

Despite this new initiative, rail and other transport sectors are concerned about the possible further shift of funds originally dedicated to TEN-T projects (including projects for noise reduction), which would mean a further reduction from the total dedicated envelope. On this UIP published in 2015 a joint press release asking European Council representatives and MEPs not to cut the CEF budget. Anticipating the EC proposal for the mid-term review of the Multi-annual Financial Framework (MFF), UIP is campaigning together with other European Transport associations across all modes for safeguarding the already reduced EU budget for transport.

The European Commission has launched a mid-term review of the Connecting Europe Facility (CEF).  The EU projects for Noise Reduction and retrofitting of rail freight wagons are under Annual General Call Funding Objective 2.

Significance to UIP and our Members

There is political pressure to increase rail freight transportation and reduce environmental pollution such as noise. By understanding the EU financial programme, its framework and where the EU budget is prioritised, our members can more easily consider strategies to participate in relevant to them EU projects and receive financial support through dedicated EU financial resources. A CEF call for noise related projects was launched in Autumn 2016. The allocation of European funds towards Transport development, including TEN-T was put recently under examination by the European Court of Auditors who published on May 24, 2016 a special report on rail freight’s performance. The report presents a series of observations supported by statistical data, conclusions and recommendations and highlights the well-known fact that rail freight is still not on the right track!

UIP Documents

UIP Guidelines on CEF calls for Noise reduction - June 2016
Joint Statement on EU financing on Transport - June 2016
Joint Statement on the risks of shifting CEF money to EFSI - March 2015
UIP Brochure EU financing 2014-2020: Frequently Asked Questions - November 2014

EU Documents of interest

Mid-term evaluation of the Connecting Europe Facility (CEF)(General questionnaire) - Deadline: 27 February 2017
Mid-term Review roadmap - November 2016
2016 CEF Transport Info Day  - All presentations and the web streams of the Info Day - October 2016
The trans-European transport network – state of play in 2016 - October 2016
Regulation 2015/1017 on the European Fund for Strategic Investments - June 2015
Multiannual financial framework 2014-2020 and EU budget 2014 - December 2013
Regulation 1316/2013 establishing the Connecting Europe Facility (CEF) - December 2013

Tagged under Infrastructure