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Bridging gaps in financing infrastructure

The European Commissioner for transport, Neil Kinnock, speaking at a conference in Amsterdam on 31 March 1998, outlined two main priorities for EU transport policy in relation to the Central and Eastern European countries expected to join the EU in a few years time:

- Establi...
The European Commissioner for transport, Neil Kinnock, speaking at a conference in Amsterdam on 31 March 1998, outlined two main priorities for EU transport policy in relation to the Central and Eastern European countries expected to join the EU in a few years time:

- Establishing a coherent transport network for an extended Union;
- Mobilizing the finance to put this network in place within an acceptable timescale.

The EU's transport networks are based on the TENs guidelines adopted in 1996. Since late 1995, the Commission and the applicant countries have been working on the Transport Infrastructure Needs Assessment (TINA), which aims to develop proposals for the extension of these guidelines to the applicant countries. The Commissioner hopes to see a draft outline of this by summer 1998, with final proposals completed in summer 1999.

The period 2000-2006 will be a crucial time for the financing of trans-European transport networks (TENs) projects. The Commission has put forward a revision to the current TENs financial regulation, which would effectively double the budget to around ECU 5 billion for that period. However, this will only represent 7% of expected spending on the 14 priority projects alone during the years from 2000 to 2006.

Mr. Kinnock welcomed the proposal under Agenda 2000 of a new financial instrument for pre-accession structural policies, worth an annual sum of ECU 1,000 million, to be divided equally between transport infrastructure and the environment. He emphasized, however, that substantial additional funding from public-private partnerships would be required for major infrastructure projects to be realized.

Recognizing the doubts that exist over the viability of such schemes in the Central and Eastern European countries, he outlined five key points:

- Public-private partnerships (PPPs) will only provide a partial solution;
- Partnership is the crucial aspect and PPPs should not be viewed as a subtle form of privatization but as a genuine alliance in which each side plays its own role;
- PPPs may reduce the need for subsidies but the public sector will have to continue to contribute significantly;
- PPPs do not provide an easy option and efforts will have to be made to minimize problems in future;
- The private sector has an essential role to play in improving project design in order to meet the customers' needs at the lowest cost to the taxpayer.

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Policies - Transport
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