Dear Members of the European Parliament,
I am happy to be here to discuss the progress on the implementation of the Connecting Europe Facility (CEF), President Juncker's Investment Plan and the European Fund for Strategic Investments (EFSI), Horizon 2020 (H2020).
My vision and priorities
As most of you in this house know by now - I have a clear vision for transport. Within Europe, my focus is on the single market. I want to make sure that transport is as efficient as possible. That it is an enabler of the economy and not an obstacle.
My focus is connectivity and global leads through economic diplomacy. I try my best to present our standards and regulatory framework as attractive as possible to create smooth conditions for collaborative and favourable market conditions. This vision is based around 6 content drivers; all with a strong motivation to seize growth opportunities and generate conditions for high value jobs, including new ones.
- People-focused solutions
The importance of investing in Transport
In order for Europe to deliver on these priorities, investment is essential. Good seamless connectivity, through a safe, clean transport network, meeting the needs of consumers and needs of businesses will help Europe to stay ahead of the curve, and remain competitive globally. To achieve our goals, I would like to stress in particular 2 drivers:
- R&I with disruptive innovation in the lead,
- Sufficient financing, such as blending public and private funds.
What have we done? Currently there are several mechanisms in place for transport financing:
- The Connecting Europe Facility
- Structural Funds
- The European Investment Bank
- Member States based financing
- Other financial institutions and individuals
- The European Fund for Strategic Investments (EFSI)
Much has been done to date. Let us look at the progress under CEF, H2020, and the Juncker Investment Plan / EFSI.
The Trans-European Transport Network (TEN-T) and the TEN-T core network in particular are the backbone of our economy and we continue to concentrate our efforts to deliver by 2030. On the Core Network Corridors, around €700 billion of investment to 2030 has been identified from the corridor work plans.
In 2014, we launched the first CEF call with a budget of €12.77 billion. We concluded it in 2015 with CEF grants being allocated to 263 projects and mobilising €28.3 billion of investment. There was an oversubscription of 3 times the amount proposed. Under the current CEF Call with a budget of €7.6 billion, 427 proposals were submitted, requesting €12.96 billion, meaning an almost 2-fold oversubscription. We expect the third call to be announced by the end of this year. In 2018 a call for the remaining CEF money will be carried out.
2. Horizon 2020
The first call in 2014 had a budget of around €570 million. In 2015 the call was for €290 million. In 2016-2017 we expect to offer funding of a further €434 million. This includes special programs to support SMEs, and an important focus on bridging the gap between research and deployment by supporting large scale demonstration projects.
A novelty in 2016-2017 is a strong focus on automation, and a just announced prize of €3.5 million for the development of the “cleanest engine”.
In addition, the four transport-related joint undertakings (Shift2rail, SESAR, Clean Sky, Fuel cell and Hydrogen) will receive total budget from the Union of approximately €2.7 billion over the 7 years of the program. This will leverage at least €3 billion in further contributions from the industry. These grants will fund projects and help create resource-efficient transport that respects the environment, smart equipment, infrastructures and services and improve transport and mobility in urban areas.So we are delivering, in a very efficient and focussed way.
3. The Investment Plan for Europe (EFSI)
As you know, the Investment Plan for Europe is underpinned by three pillars.
The third pillar works to make the investment environment more predictable and removing regulatory barriers. The completion of the TEN-T core network is hindered by complex regulatory and administrative procedures. Solvency II, permitting and procurement procedures. Eurostat assessments in connection with PPPS are another example of these obstacles. This leads to increased costs, significant delays and uncertainty especially for cross-border infrastructure projects. The Commission is currently examining these regulatory barriers to investments and we are actively engaged in development of action plan and its fast implementation.
The second pillar of the Investment plan for Europe gives technical support to projects via an Advisory Hub and visibility on projects to Investors through the European Investment Project Portal. Transport is the second most popular sector for requests submitted to the Hub. But within the Hub I would like to see more dedicated resource for transport and a more proactive approach. The Hub should be supporting the pipeline by actively seeking out potential opportunities and working more closely with Member States and project promoters. Additionally, it is critical that EFSI delivers for all Member States. I want to ensure that EFSI can contribute to closing the gap between the East and West of Europe, generating socio-economic growth and competitiveness. The first phase results are showing contrary results – only one project approved and financed from cohesion countries. A proactive, project-focussed Hub can help achieve better balance and results. This was also one of the proposals of transport ministerial meeting from cohesion countries in Western Balkans Group, which I hosted on April 22 in Ljubljana.
The first pillar of Investment plan for Europe that includes EFSI, facilitates access to liquidity on the market and puts unused sources of funding to more targeted use. The EFSI progress has been strong. As of May 2016, €12.8 billion of EFSI financed projects have been approved, triggering investments of around €100 billion. 12 transport projects have been approved by the EIB Board, and 2 signed.
Examples include an innovative investment platform to accelerate investments to improve land access to ports in Spain, trains for regional services in Italy, an important project in Slovakia, and infrastructure funds to provide investment across Europe. And these transport projects alone have a potential to generate about 60.000 jobs in the coming years.
Overall, between the CEF and EFSI, over €40 billion of investment has, or is soon to be, triggered in the transport sector, allowing us to estimate that it will potentially support about half a million temporary or permanent jobs in the coming years.
And on top of that the EIB itself makes substantial investments outside of EFSI. The total volume of EIB lending for transport in 2015 was around €12.5 billion. Last Thursday, the EIB issued a press release that they approved new lending totalling nearly €4 billion for large scale investment projects, including the new Terminal 3 at Frankfurt airport, expansion of the ESPOO metro in Finland, new trains on the Liverpool rail network.
But we should not be complacent:
We are working to develop a pipeline that delivers big contributions to society, with a substantial economic return, and significant impact on jobs and growth:
- Projects to support decarbonisation – for example supporting ship owners to fit cleaner engines on their fleets and electrification.
- Projects to support digitalisation – for example ERTMS in the rail sector, and SESAR for the aviation sector.
- Projects such as investment platforms to support smaller investments across urban areas for urban mobility – better connected and cleaner vehicles.
- The pipeline has improved compared to a year ago, but there is still work to do, and my services have been actively supporting EFSI, working very closely with the EIB to deliver new financial products & solutions, and targeting support at new industries equally across all 28 Member states.
I am focussed on making sure that the Investment Plan for Europe, including EFSI, delivers for the transport sector. To achieve this, we need a strategic plan to support Member States and project promotors to transition from a publicly financed approach towards the use of new financial instruments. This in principle means to create a new investment culture in EU. I am more and more convinced that the “blending” of grants with EFSI instruments is an effective way forward. It could also be a smooth bridging between the new and old world.No matter what the project an additional component of grant in a "blending" approach helps fix the funding gap while an EFSI instrument catalyses investments.
I talk from practical experience. This "blending" approach has been successfully and flexibly applied in the financing of the Core Ports of Dublin and Calais under the Connecting Europe Facility (CEF). It is also expected to be used for the EFSI project in Slovakia and more widely under the CEF call that we are currently evaluating. Critical to the blending approach is the availability of CEF grants. So I believe that there is a very strong case, should there be available budget in the upcoming MFF review, to supplement the CEF budget to be used primarily to support a blending approach. And potentially other sources of funds could be directed through the CEF to ensure faster and efficient delivery projects of EU added value. CEF is well defined, well-functioning tool with strong governance structure. It ensures that only the best projects are selected and also delivered within the project specification.
I would seek your support in delivering this extra funding for CEF. Beyond financing and funding, we continue with active promoting of opportunities for EFSI and CEF under the Investment Plan for Europe.
At this point I would like to remind you of the TEN-T days in Rotterdam this year. For the first time we included a dedicated Investors Conference, where we will kick-off a speed-dating exercise bringing together investors who are prepared to invest in transport and mature projects. Project promoters will face investors directly, receiving a hands-on response. Political support to the TEN-T, CEF and EFSI development will be provided in the form of a "Rotterdam Declaration", which will give impetus to the completion of the TEN-T core network by 2030, as well as to innovatively financed smart and green infrastructure.
It is always a pleasure to address you formally through this committee, or in the plenary sessions. In particular for such an important topic at the time when the awareness of financial needs for transport investments is growing and the public resources, such as national budgets or grants, are very limited. We are aware that this transition demands our active and strategic approach. My door, and the door of my services, is always open to you, to ensure we engage in constructive dialogue. You are the eyes and ears in all four corners of Europe, so I urge you to continue to highlight those matters of concern to you.
But equally so, I would also appeal to you to spread the message when you go back to the countries you know best, of what we are doing at EU level in order to support transport projects right across the EU.
I thank you for your time and I look forward to your questions and comments.