The Connecting Europe Facility (CEF) Regulation and
its impact on Cyprus Republic
Contributed by Andreas Neocleous & Co LLC. [www.neocleous.com]
The European Commission adopted on October 2011, a plan with
a huge budgetary importance of around 50 billion euro aiming
at improving EU’s transport, energy and networks. In
its proposal already adopted on June 19, 2011, the Commission
proposes the creation of a new financial instrument, which
will be completely integrated in the multi – annual
financial framework of the next programming period 2014-2020
and which fully complies with the context of the Commission’s
communication ‘‘A budget for Europe 2020’’.
The Connecting Europe Facility targets investments in key
infrastructures in order to enable the preparation and implementation
of projects within the framework of the trans-European networks
policy in the sectors of energy, transport, ICT and telecommunications.
To this end, the new regulation will boost the development
and the construction of key infrastructure in the sectors
mentioned by developing modern and high-performing trans-European
networks for the entire Union. The objective shall be achieved
through the creation of an attractive environment to private
and public investments which will be measured by the volume
of projects of common interest.
Further, the boosting of these sectors will contribute to
the achievement of the 20-20-20 EU targets regarding the 20%
reduction of the greenhouse gas emissions, the 20% increase
in energy efficiency and raising the share of renewable energy
to 20% up to 2020.
- Sectors covered by the Connecting Europe Facility
The Connecting Europe Facility will invest in upgrading European
Transport Infrastructure by a number of new and improved cross-border
connections, as well as in ensuring sustainable and efficient
transport in the long-run to be measured by the conventional
railway network in the 27 EU Member States. Moreover, it will
focus on the optimisation of the Transport System’s
operability by giving consumers more choice on their way of
traveling.
The energy sector will be supported by projects promoting
the internal energy market and the interoperability of electricity
and gas networks. This way, it will ensure that no Member
State will be isolated as effective interconnection will be
achieved among Member States. The protection of the environment
and the climate objectives which have been settled, either
by the EU or through its engagement in international conventions,
is a parallel objective which shall be supported by the application
of the regulation.
In the field of telecommunication networks, the connecting
Europe Facility intends to support and provide for action
projects in order to guarantee the establishment of a broadband
network and to accelerate it in an ultra-fast broadband coverage
offering access for all at speeds of at least 30Mbps with
at least 50% of households having subscribed for connections
above 100Mbps. This objective shall be completed with the
elaboration and establishment of certain high-valued digital
services regarding e-Procurement, e-Health, e-Justice and
customs related services.
- Connecting Europe Facility and Multi-annual Financial
Framework 2014-2020
The present Regulation covers fully EU’s today’s
needs and concerns as well as its futures’ expectations.
The Commission’s proposal which has been adopted on
June 29th 2011 will be discussed by the Council and the European
Parliament during 2012 and 2013, which corresponds to the
period of negotiations of the financial perspectives for the
next programming period and the stabilisation of the EU budget
in commitments and in payments.
- Programming, implementation and control
The programming and the implementation of the regulation’s
provisions shall be realised through the adoption of multi-annual
and annual Work Programmes for each sector. They will provide
with strategic orientation in the fields of projects of common
interest acting in accordance with the specific regulations
to be adopted in each sector.
Member States shall make every effort to implement the projects
of common interest under Union’s financial aid and the
national regulatory authorities should undertake the technical
monitoring and financial control actions facilitating the
implementation of the project.
On the other hand, the Commission shall ensure the financial
interests of the Union against fraud, corruption or any other
illegal activities by effective controls, by the recovery
of the amounts wrongly spent and by proportion penalties.
The Court of Auditors, the European Anti-Fraud Office (OLAF)
and the European Commission shall be empowered to carry out
controls and investigations aiming at the preservation of
EU’s financial interests.
Direct support will be given to the CEF with financial instruments
in order to guarantee access to capital for the financial
investment needs. Further, together with the successful absorption
of direct EU support, the increased reliance on financial
instruments will contribute significantly to mitigating risks
to project promoters and will ensure implementation of projects
of common interests.
Actions supported by means of financial instruments shall
be selected on a ‘first come first served’ basis.
They may be combined with grants funded from the Union budget.
The Work Programmes may establish additional conditions according
to the specific needs of the sectors.
The new regulation provides also provisions regarding possibilities
to support actions in third countries by financial instruments,
if it is necessary for the implementation of a project of
common interest.
The financial envelope attributed to the implementation of
the Connecting Europe Facility for the next programming period
2014-2020, shall be €50 billion euro. This amount shall
be distributed among the sectors targeted in the regulation
as follows:
€31.694.000.000 euro in transports, out of which €10
billion euro will be fenced in the Cohesion Fund for transport
infrastructures, €9.121.000.000 euro in the energy sector
and €9. 185.000.000 euro for ICT and Telecommunications.
The corresponding amounts are able to be found in the Legislative
Financial Statement and they will be stabilised after the
end of the negotiations for the financial perspectives.
According to the new regulation and guidelines to be adopted
in the areas of transport, energy, ICT and Telecommunications,
only actions contributing to projects of common interest shall
be eligible for support through EU financial aid in the form
of grants, financial instruments and procurement.
Grants may take any of the forms of the new financial regulation
and the Work Programmes will establish the forms of grants
that may be used to fund the actions concerned.
The eligibility of the expenditure starts from the date,
as from 1 January 2014, on which an application for aid may
be submitted.
Proposals may be submitted by one or several Member States,
International organisations, joint undertaking, or public
or private undertakings, or bodies established in Member States.
Proposals may be submitted by entities which do not have legal
personality under the applicable national law, provided that
their representatives have the capacity to undertake legal
obligations and offer guarantees for the protection of the
Union’s, financial interests.
Further, proposals shall be selected through calls for proposals
based on the Work Programmes and they should comply with the
Funding rates settled in each sector and depending on the
specific actions to which special rates are applied.
Regarding the public procurement procedures, they will be
carried out either by the Commission or by specific bodies.
They may provide for specific conditions such as the place
of performance of the procured activities and they may authorise
multiple award of contracts within the same procedure.
- EU added value of the Connecting Europe Facility
The added value of the CEF as a common funding framework,
is concentrated on four specific targets. Firstly, the creation
of a common framework would lead to the simplification of
the EU legal framework concerning transport infrastructures,
funding, ensuring, in parallel, a coherent approach across
the three sectors.
Secondly, a single EU infrastructure fund and financial framework
would provide transparency to EU funding with a potential
to attract more private sector funding. On the other hand,
the centralisation and the coordination of the financial instruments
will improve the relationships with private investors and
financial institutions.
Thirdly, the increase of interdependency between sectors,
networks and infrastructure projects can create economies
of scale, which will allow the development of cross - sector
synergies
The fourth target consists of the sharing of best practices
across sectors, on the basis of a common framework and of
the effectiveness of a centralised management system.
- Geographical impact of the regulation in Cyprus and priorities
targeted
The Connecting Europe Facility will have a direct impact
on the Republic of Cyprus. Based on the lists of pre-identified
projects on the core network in the field of the three sectors
targeted, transport, energy and telecommunications Cyprus
belongs already to the pre-selected corridors.
Precisely, in the field of transport, Cyprus is making part
of the fourth Core Network Corridor of Hamburg – Rostock
– Burgas/TR boarder – Piraeus – Limassol
– Lefkosia. The intervening modes are the construction
and the upgrading of boards and multimodal platforms for the
development of the modal interconnection.
In the field of energy, Cyprus belongs to three priority
corridors. The first one, the ‘NSI East Electricity’
covers the North-South electricity interconnections in Central-Eastern
and South-eastern Europe aiming at the strengthening of interconnections
and internal lines in North South and East-West directions
in order to complete the internal market and integrate the
generations from renewable energy sources.
The second priority corridor, ‘NSI East Gas’
covers the North-South gas interconnections in central Eastern
and Southeastern Europe with the objective to strengthen the
regional gas connections between the Baltic sea region, the
Adriatic and the Aegean seas and the Black Sea, notably to
enhance diversification and security of gas supply.
For the above three pre-identified in the regulation priority
corridors, Cyprus Republic participates together with Austria,
Bulgaria, Czech Republic, France, Germany, Greece, Hungary,
Italy, Poland, Romania, Slovakia and Slovenia.
Further, in the field of telecommunications, Cyprus will
participate together with all Member States to the horizontal
priorities, the broadband networks and the digital service
infrastructure.
The horizontal priorities cover innovative management, mapping
and services, as well as support actions, work necessary for
deployment, governance, investment planning, feasibility studies,
analysis of the environmental impact and mapping of pan-European
broadband infrastructure.
The intervention in the field of broadband networks includes
investments capable of achieving the Digital Agenda 2020 target
and providing higher speeds with universal coverage.
Last but not least, the intervention in the field of digital
service infrastructures shall support trans-European high-speed
connections for public administrations, the cross border delivery
of e-Government services, the access to public sector information
and multilingual services, as well as the deployment of information
and communication technology solutions.
The Connecting Europe Facility is a perfect demonstration
of the value added that can be provided by the EU. The targeted
investments in key infrastructures like roads, railways, energy
grids and pipelines, as well as broadband networks cover the
missing links in Europe’s infrastructure networks that
otherwise would not be built. In parallel, these investments
will generate growth and jobs and they will facilitate the
work and travel for millions of European citizens and businesses.
Cyprus Republic will have the chance to participate together
with other Member States to the creation of these networks
and corridors on its own benefit, as the links with the rest
of European countries will be approached and the opportunities
for growth will be expanded to the European and International
market.
01/11/2011
Christos Floridis
Advocate / Senior Associate
Head of European Affairs
Andreas Neocleous & Co LLC
Limassol
Cyprus
http://www.neocleous.com
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