Annual Activity Report

Transcription

1 Ref. Ares(2016) /04/ Annual Activity Report Directorate-General for Mobility & Transport

2 Foreword Introductory message by the Director General This Annual Activity Report covers the activities of the Commission's Director-General for Mobility and Transport (DG MOVE) for The purpose of this report is to give an outline of the operations of the DG and to help in understanding the different challenges that are faced. Part 1 provides an overview of the policy achievements of the DG for 2015 and tries to give a flavour of the wide range of activities going on in the DG. Part 2 gives information on the management of the allocated resources as well as on the internal organisation of the DG. For more information on the activities of DG MOVE, please visit our website: Henrik Hololei Director-General of DG MOVE 2

3 Table of Contents INTRODUCTION 4 THE DG IN BRIEF... 4 EXECUTIVE SUMMARY 5 A) POLICY HIGHLIGHTS OF THE YEAR (EXECUTIVE SUMMARY OF SECTION 1)... 5 B) KEY PERFORMANCE INDICATORS (5 KPIS)... 7 C) KEY CONCLUSIONS ON MANAGEMENT AND INTERNAL CONTROL (EXECUTIVE SUMMARY OF SECTION 2) D) INFORMATION TO THE COMMISSIONER KEY RESULTS AND PROGRESS TOWARDS THE ACHIEVEMENT OF THE DG'S GENERAL AND SPECIFIC OBJECTIVES ACHIEVEMENT OF GENERAL AND SPECIFIC OBJECTIVES DG MOVE GENERAL OBJECTIVES AND IMPACT INDICATORS SPECIFIC OBJECTIVES FOR ABB ACTIVITY "EUROPEAN TRANSPORT POLICY" INFRASTRUCTURE POLICY CEF TRANSPORT SPECIFIC OBJECTIVES FOR ABB ACTIVITY "HORIZON 2020 RESEARCH AND INNOVATION RELATED TO TRANSPORT EXAMPLE OF EU-ADDED VALUE AND RESULTS/IMPACTS OF PROJECTS OR PROGRAMME FINANCED ECONOMY AND EFFICIENCY OF SPENDING AND NON-SPENDING ACTIVITIES EXAMPLE EXAMPLE MANAGEMENT AND INTERNAL CONTROL CONTROL RESULTS OVERVIEW OF THE 2015 PAYMENTS CONTROL EFFECTIVENESS AS REGARDS LEGALITY AND REGULARITY DIRECT MANAGEMENT FP H CROSS-SUB-DELEGATIONS INDIRECT MANAGEMENT CO-DELEGATIONS INEA EIB FOR FINANCIAL INSTRUMENTS (PBI, CEF DI) PPPS (JOINT UNDERTAKINGS (JU), EX-ART 185 INITIATIVES ART. 208 & 209): SESAR JU AND S2R JU DECENTRALISED AGENCIES: EASA, EMSA, ERA CONTROL EFFICIENCY AND COST-EFFECTIVENESS FRAUD PREVENTION AND DETECTION AUDIT OBSERVATIONS AND RECOMMENDATIONS INTERNAL AUDIT SERVICE (IAS) EUROPEAN COURT OF AUDITORS (ECA) OVERALL CONCLUSION ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS SOURCE AND METHODOLOGY FOR THE ASSESSMENT DG MOVE INTERNAL CONTROL STANDARDS SELF-ASSESSMENT EXCEPTIONS AND NON-COMPLIANCE EVENTS PRIORITISED ICS GENERAL RISK ENVIRONMENT CONCLUSION ON THE EFFECTIVENESS OF THE ENTIRE CONTROL SYSTEM CONCLUSIONS AS REGARDS ASSURANCE DECLARATION OF ASSURANCE AND RESERVATION DECLARATION OF ASSURANCE RESERVATION ON FP

4 INTRODUCTION The DG in brief Under the political guidance of the College of Commissioners, in particular Vice- Presidents Jyrki Katainen and Maroš Šefčovič and Commissioner Violeta Bulc, the Directorate-General for Mobility and Transport (DG MOVE) is in charge of developing transport policies for the European Union. Its remit is to ensure efficient and sustainable mobility within a single European transport area, to serve Europe's citizens and economy. The Commission priority areas set out in President Juncker's Political Guidelines which are of particular relevance for DG MOVE are notably jobs, growth and investment, a connected digital single market, energy union and climate change policy, a deeper and fairer internal market and a stronger global actor. DG MOVE develops strategic policies for the transport sector; it monitors the implementation of existing EU law and makes new legislative proposals; it encourages the exchange of best practices. Its work is accompanied by financial support programmes, particularly for research and innovation projects and for co-financing investments in transport infrastructure. The DG promotes policies internationally and provides information to the public as well as to stakeholders. DG MOVE is assisted in its work by the expert input from several European Agencies and two Joint Undertakings, which it oversees: the European Aviation Safety Agency (EASA), the European Maritime Safety Agency (EMSA), the European Railway Agency (ERA), Innovation and Networks Executive Agency (INEA), and the SESAR (Single European Sky ATM Research) Joint Undertaking and the Shift2Rail Joint Undertaking. DG MOVE has also built a strong partnership with EUROCONTROL and is represented in the Management Board of the Fuel Cells and Hydrogen Joint Undertaking. At the end of December 2015, DG MOVE had 423 staff in Brussels and shared administrative staff of 155 people with DG Energy (Please refer to Annex 2 for more details). The total payments made by DG MOVE and the Executive Agencies represented EUR 2.01 billion, while the committed amounts added up to EUR 2.63 billion at year-end, mostly concerning CEF. On 1 October 2015 Mr Henrik Hololei replaced Mr João Aguiar Machado as Director- General of DG MOVE. 4

5 EXECUTIVE SUMMARY The Annual Activity Report is a management report of the Director-General of DG MOVE to the College of Commissioners. It is the main instrument of management accountability within the Commission and constitutes the basis on which the Commission takes its responsibility for the management of resources by reference to the objectives set in the management plan and the efficiency and effectiveness of internal control systems, including an overall assessment of the costs and benefits of controls. a) Policy highlights of the year (executive summary of section 1) The transport sector is a key element of the Europe 2020 strategy for generating growth and jobs. Investments in modern infrastructure and in the digitalisation and decarbonisation of transport contribute to the 20/20/20 targets for GHG emissions, renewable energy and energy efficiency and the targets of 3% of GDP in R&D. Transport therefore also makes an important contribution to key Commission priorities for the European Union, as set out in President Juncker's Political Guidelines, notably jobs, growth and investment, a connected digital single market, energy union and climate change policy, a deeper and fairer internal market and a stronger global actor. The Commission's strategy for the transport area is set out in the White Paper on the Future of Transport from A mid-term review of the White Paper is currently ongoing. The overall strategic objectives were formalised in four different "general objectives" in DG MOVE's Management Plan One general objective is linked to the completion of a competitive Single European Transport Area, two general objectives are linked to the implementation of the Connecting Europe Facility and the last general objective is linked to research and innovation activities in the transport area under Horizon In order to address these objectives and challenges, the Commission took forward several important policy initiatives in 2015: The Aviation Strategy, adopted by the Commission on 7 December 2015, is one of the flagship initiatives of the Commission 2015 work programme. It includes a Communication on a new Aviation Strategy for Europe identifying challenges and opportunities for improving the competitiveness of the EU Aviation sector. It is supported by an analytical Commission Staff Working Document and an indicative list of actions for the years to come. The Aviation Strategy was accompanied by a proposal for a revision of the aviation safety regulation to get the EU aviation safety system ready for the challenges of the future, including provisions on a framework for drones to pave the way for our industry's success in this promising market and by a comprehensive package of proposals for new mandates to negotiate EU-level air transport agreements with third countries to ensure the EU industry has the opportunity to be where the growth is. Following the first call for proposals for transport infrastructure under the Connecting Europe Facility (CEF) in 2014, the Commission delivered on its top 1 White Paper "Roadmap to a Single European Transport Area Towards a competitive and resource efficient transport system" (COM(2011) 144 final of ). 5

6 priority of creating jobs and boosting growth in Europe by approving support to 263 transport projects with an overall amount of EUR 12.8 billion in Along with the European Fund for Strategic Investments (EFSI), the CEF will play a major role in bridging the investment gap in Europe. The new call for proposals for a total amount of about EUR 7.5 billion was announced in November Financing from the CEF financial instruments will support the development and implementation of key pilot initiatives such as set-up and financing of the greening of shipping fleet in Europe, deployment of the SESAR technologies for the Single European Sky and the European Rail Traffic Management Schemes by means of risk sharing arrangements between the Commission and the European Investment Bank under the CEF Debt Delegation Agreement signed in July In order to enhance connectivity with countries outside the EU and indicative extension of the TEN-T Core network to the Western Balkans, Norway and Iceland was agreed. An EU-China "Connectivity Platform" aiming to improve the links between the two regions was also set up. The Horizon 2020 transport work programme for 2016/7 was prepared and adopted in October It contains an additional focus on safety, Cooperative Intelligent Transport Systems (C-ITS) and automation and addresses social, economic, systemic and mode specific research and innovation actions to progress transport contributions to the Energy Union and the Digital Single Market as well as jobs, growth and investment. The first calls were launched in October Funding for a new ELENA action on supporting innovative sustainable investment projects in EU cities was agreed with EIB and DG ENER and adopted in October as part of the Horizon 2020 transport work programme. Important industrial innovation projects such as SESAR and Shift2Rail and the development the European Innovation Partnership on Smart Cities have also been taken forward under Horizon The CIVITAS initiative supported sustainable urban mobility measures in cities across Europe and nearly 1900 European cities and towns participated in the European Mobility Week on the theme "Multimodality". Within the framework of the Digital Single Market Strategy, DG MOVE is also supporting use of C-ITS for a more efficient management of the transport network. C-ITS will improve road safety and quality of travel and logistics operations. In addition, C-ITS deployment will pave the way to further automation in road transport. In 2015 the C-ITS platform brought together the Commission, Member States and private stakeholders to agree on a shared vision for the deployment of C-ITS across the EU. In the area of multimodal information services, a delegated act has been prepared, aiming to enable interoperability in the exchange of travel data for passenger journeys. A Digital Transport and Logistic Forum with participation of national experts and industry representatives was launched in July 2015 to further support the development of "e-transport" initiatives. It will promote digitisation and use of ICT tools in transport, which are of great importance for the efficiency of transport and logistics and have a great potential for economic growth. The Commission launched the preparations for swift, coherent and consistent implementation of Directive 2014/94 on the deployment of alternative fuels infrastructure. A standardisation mandate was given to the European Standardisation Organisations. A Sustainable Transport Forum was launched, gathering 60 Member States and stakeholders. A state-of-the-art report on alternative fuels and related infrastructure was published in July

7 Important progress was made in negotiations with the Council and the European Parliament on legislative proposals aiming to further improve the functioning of the Single European Transport Area, in particular on the 4 th Railway package, and proposals in the areas of ports and inland waterways. Safety and security in transport was put high on the agenda in 2015 and specific measures have been taken to address these issues in aviation, maritime as well as in land transport. The TTE Council on 10 December 2015 confirmed that transport security continues to be of the utmost strategic and political importance for the European Union. The Commission also continued to address these issues in cooperation with key countries and regions as well as in the relevant international fora. DG MOVE continued to monitor transposition and implementation of existing transport EU legislation in the Member States and took the appropriate action, including infringement procedures, to address incorrect transposition and practical implementation at national level. DG MOVE continued its important contributions to the Commission's Regulatory Fitness (REFIT) initiative with an aim to clarify and simplify existing provisions. Several evaluations were concluded in 2015, in particular in the maritime area with REFIT evaluations of passenger ships safety legislation and of the port reception facilities directive and in the area of road safety with a REFIT evaluation of the tunnel safety directive and a mid-term evaluation of road safety policies. A review of existing measures aimed at effective reduction of rail noise of freight wagons was concluded. Several ex-post evaluations were undertaken in 2015 in view of adopting proposals to improve the efficiency of road transport in In order to make it easier for rail passengers to benefit from their rights, the Commission adopted Interpretative Guidelines on the Rail Passengers' rights' Regulation. Part 1 of the annual activity report below further evaluates the implementation of the Management Plan 2015, in particular the progress made towards meeting transport policy's general and specific objectives. The main achievements for each are summarised for each specific objective linked to the three operational ABB areas under the responsibility of DG MOVE. b) Key Performance Indicators (5 KPIs) To measure the progress made by the EU towards effective, sustainable, safe and secure transport and the contribution of EU transport policy to this, reporting on a number of indicators included in DG MOVE's Management Plan 2015 are presented in the following sections of the Annual Activity Report under each general and/or specific objective. The reporting on the indicators in AAR 2015 therefore "mirrors" the ones presented in the MP The below five key performance indicators (KPIs) selected in the MP 2015 were given special attention in It is important to note that the implementation of the Management Plan (and in particular 2 In the Management Plan 2015, the transposition rate in transport legislation replaced the labour productivity of the transport sector as a key performance indicator, while the other indicators remain unchanged compared to Management Plan The reporting in the Annual Activity Report 2015 is based on the indicators presented in the Management Plan

8 achieving objectives and seeing improvements in the indicators) does not only depend on the Commission. It is for the European Parliament and Council to decide on the Commission's proposals and then primarily for the Member States to implement them. In addition, there are often measures that will contribute to the actions that are outside the scope of EU competence. Finally, external factors, such as energy price fluctuations or the general economic situation, can have a significant influence. Trend / 3 General Objectives 1. To contribute to a deeper, fairer and safer internal market by promoting a better functioning Single European Transport Area. 2: to contribute to smart, sustainable and inclusive growth by developing modern and high performing trans-european networks (CEF). 3: to enable the Union to achieve its sustainable development targets, including a minimum 20 % reduction of greenhouse gas emissions compared to 1990 levels and a 20 % increase in energy efficiency, and raising the share of renewable energy to 20 % by 2020 (CEF). 4: To contribute to a European transport system that is resourceefficient, climate and environmentally-friendly, safe and seamless for the benefit of all citizens, the economy and society by promoting innovation and research in transport KPI 1 A competitive Single European Transport Area Transposition rate in transport legislation (%) : 94.9% : 99.3% Target: 99% of Directives to be transposed in 2015 (annual target) (target used by the Commission for the Single Market Scoreboard) 3 The presentation of the trend was split in order to reflect the limited improvement in the reduction of road fatalities in 2014 and

9 KPI 2 Infrastructure Volume of private, public or public-private partnership investment in projects of common interest 2013: : : 12.8 billion EUR have been allocated through grant agreements signed in 2015, under the 2014 calls for proposals. The CEF funding has generated 28.3 billion EUR of investments including the regional, State budgets, as well as EIB loans. KPI 3 Target: By 2022, 500 billion of investments realised on the entire TEN-T network, of which 250 billion on the core network (target date set to 2022 due to n+2 rule) Innovation and sustainable and low-carbon transport GHG emissions from transport (excluding maritime international bunkers) : 846 Mt CO2 eq. 2008: Mt CO2 eq. 2010: 1 062Mt CO2 eq. 2011: Mt CO2 eq. 2012: Mt CO2 eq. 2013: Mt CO2 eq : +24.7% : +20.4% : +19.7% : -4.2% : -7.5% : -8.1% Target: 881 Mt CO2 eq. in 2030 (20% reduction by 2030 compared to 2008) and 338 Mt CO2 eq. in 2050 (60% reduction by 2050 compared to 1990) 4 The figures presented are in million tonnes (Mt) CO2 equivalent. The figures for 1990 and 2008 have changed compared to figures presented in the Annual Activity Report 2014 due to revised statistics provided by Member States to the European Environmental Agency (EEA). The targets change accordingly, as they are derived as percentage of the baseline figures. The latest GHG emissions statistics available from the European Environmental Agency (EEA) are for Data for 2014 will only be available in the second half of

10 KPI 4 Safe and secure transport Fatalities in road transport accidents Target: Max by 2020 (EU28), i.e. 50% reduction from 2010 KPI 5 Indicator linked to the internal control objectives % of payments made by the contractual deadline 6 Target: 100% (annual target) 5 6 Figures for 2015 are based on estimations and subject to revisions. Figures for fatalities in road transport accidents in 2014 (tentatively indicated as at the beginning of 2015) were corrected to at the end of Based on the data provided in table 6 of Annex 3 to the respective AARs

11 Note: The table shows five key performance indicators (KPIs) selected in DG MOVE'S Management Plan These indicators are also shown among the indicators presented under each general and/or specific objective in part 1 of the AAR below. KPIs 1-4 illustrate the achievement of some of the most important general policy objectives for DG MOVE. The presentation in the table has been adapted accordingly to clarify the link between the objectives and the indicators selected. KPI 5, as required by the instructions for the Annual Activity Report, is linked to the internal control objectives. The indicators illustrate the progress made towards achieving a more competitive and productive Single European Transport Area, better road safety and the reduction of GHG emission from transport in recent years. Following two years of solid decreases in the number of fatalities in road transport accidents in Europe, only limited improvements in 2014 and 2015 have been seen overall. This means that more efforts are needed to reach the strategic target of cutting in half the number of road deaths from 2010 to Member States are the main actors as most of the day-to-day actions are delivered at national and local level: enforcement of traffic rules, infrastructure development and maintenance but also education and awareness raising campaigns. The European Commission acts where there is a clear EU added-value, for instance through legislation enabling the enforcement of cross-border traffic offences or by setting technical safety standards for infrastructure and vehicles. The Commission actively monitors the situation, stimulates and helps Member States to improve their performance through the exchange of data, knowledge and experience, and by sharing best practices. Among the concrete initiatives in 2015 for road safety can also be mentioned updates of the driving licences directive, on-going reviews of the professional drivers and infrastructure safety management directives, the adoption of the directive enabling cross-border enforcement and technical updates and international negotiations on the rules on transport of dangerous goods. The Transport White Paper established a goal to reduce the greenhouse gas emissions from the transport sector by 60% by 2050 compared to 1990 and by around 20% by 2030 compared to emissions in Greenhouse gas emissions increased by 33% during the period 1990 to 2007 but have since fallen on the back of increased efficiency of passenger cars and slower growth in mobility. This declining trend has continued in 2013 (-8.1% for ). Further reduction of emissions from transport will require a gradual transformation of the entire transport system towards a better integration between modes, greater exploitation of the non-road alternatives, improved management of traffic flows through intelligent transport systems, and extensive innovation in and deployment of new propulsion and navigation technologies and alternative fuels. Progress has also been made in modernising Europe's transport infrastructure under the trans-european Transport network (TEN-T) programme. The CEF Programme (Transport) in the first calls for proposals has supported to date 263 projects with an overall amount of EUR 12.8 billion EUR investments across Europe, out of which 4.6 billion for the Cohesion Envelope. The grant funding to the TEN-T projects has helped to kick off major infrastructure investments in Europe on the TEN-T core and comprehensive networks and thus contributing to achieve the overall CEF goals such as bridging the missing links and removing bottlenecks. Through Programme Support Actions the Commission has supported directly the administrations of the Member States in charge of preparing the projects. The first Corridor Work Plans were presented by the European Coordinators and adopted by the Member States in They list projects and key priorities on each of the Corridors and ensure pan-european coordination of the TEN-T network. Financing from the CEF financial instruments will also support the development and implementation of key pilot initiatives under risk sharing arrangements between the Commission and the European Investment Bank under the CEF Debt Delegation Agreement signed in July 11

12 2015. KPI 5 shows the percentage of payments paid within the legal time limits set up by the Financial Regulation. About 97% of the payments authorized in 2015 by DG MOVE were made within the legal deadlines, which highlights the good performance of the payment workflows. A particular attention is paid to ensure a close monitoring of the payment deadlines to reach the target of 100% and to avoid those very few cases that could escape to the vigilance measures put in place. Overall progress was made in recent years towards achieving a more competitive and productive Single European Transport Area, better road safety and the reduction of GHG emission from transport. Progress was also made in modernising Europe's transport infrastructure under the trans-european Transport network (TEN-T) programme and promoting research and innovation activities related to transport under Horizon The results achieved contribute to improving the life of European citizens and the economic framework conditions for businesses and to the Europe 2020 strategy objectives for generating growth and jobs. Additional performance indicators on transport in the European Union can be found in the EU Transport Scoreboard: Further information on all our policies and more is available on our website: c) Key conclusions on Management and Internal control (executive summary of section 2) In accordance with the governance statement of the European Commission, (the staff of) DG MOVE conducts its operations in compliance with the applicable laws and regulations, working in an open and transparent manner and meeting the expected high level of professional and ethical standards. The Commission has adopted a set of internal control principles, based on international good practice, aimed to ensure the achievement of policy and operational objectives. The financial regulation requires that the organisational structure and the internal control systems used for the implementation of the budget are set up in accordance with these standards. DG MOVE has assessed the internal control systems during the reporting year and has concluded that the internal control principles are implemented and function as intended. Please refer to AAR section 2.3 for further details. In addition, DG MOVE has systematically examined the available control results and indicators, including those aimed to supervise entities to which it has entrusted budget implementation tasks, as well as the observations and recommendations issued by internal auditors and the European Court of Auditors. These elements have been assessed to determine their impact on the management's assurance as regards the achievement of control objectives. Please refer to Section 2 for further details In conclusion, management has reasonable assurance that, overall, suitable controls are 12

13 in place and working as intended; risks are being appropriately monitored and mitigated; and necessary improvements and reinforcements are being implemented. The Director General, in his capacity as Authorising Officer by Delegation has signed the Declaration of Assurance albeit qualified by a reservation concerning the Seventh Framework Programme (FP7) rate of residual errors. d) Information to the Commissioner The main elements of this report and assurance declaration, including the reservation envisaged, have been brought to the attention of Commissioner Violeta Bulc, responsible for Transport. 13

14 1. KEY RESULTS AND PROGRESS TOWARDS THE ACHIEVEMENT OF THE DG'S GENERAL AND SPECIFIC OBJECTIVES 1.1 Achievement of general and specific objectives DG MOVE policies aim to provide European citizens and businesses with competitive, sustainable, secure and safe transport services. The transport sector is a key element contributing to the Europe 2020 strategy. Adequate infrastructure, intelligent transport systems, measures to improve the environmental performance of the transport sector and the promotion of new technologies, inter alia through increased research, developments and demonstration, are important instruments to this effect, in particular for reaching the 20/20/20 targets for GHG emissions, renewable energy and energy efficiency and the targets of 3% of GDP in R&D. Acknowledging the importance of reducing greenhouse gas emissions and of risks related to fossil fuel dependency in transport, the 2030 climate and energy policy framework reiterates the need for examining instruments and measures for a comprehensive and technology neutral approach for the promotion of emissions reduction and energy efficiency in transport, for electric transportation and for renewable energy sources in transport also after The Commission priority areas set out in President Juncker's Political Guidelines which are of particular relevance for DG MOVE are notably jobs, growth and investment, a connected digital single market, energy union and climate change policy, a deeper and fairer internal market and a stronger global actor. DG MOVE breaks down these overall objectives into four different "general objectives" in its Management Plan One general objective is linked to the completion of a competitive Single European Transport Area, two general objectives are linked to the implementation of the Connecting Europe Facility and the last general objective is linked to research and innovation activities in the transport area under Horizon In turn each of the "general objectives" is broken down into a number of more "specific objectives". Functioning of the Single European Transport Area 7 General objectives: General objective 1: To contribute to a deeper, fairer and safer internal market by promoting a better functioning Single European Transport Area. 7 In Management Plan 2015 the formulation of general objective 1 and specific objective 1 was changed and the number of specific objectives directly related to general objective 1 reduced from four to two in order to align with the new Commission political guidelines and reduce overlap with the relatively wide objectives introduced in the legal basis for the Connecting Europe Facility (CEF), see general objectives 2 and 3 and the associated specific objectives. 14

15 Specific objectives: Specific objective 1: To improve the efficiency of the European transport market by improving regulation, ensuring a high degree of implementation of EU legislation in the transport area and open and fair competition both in the EU and in relations with key partner countries. Specific objective 2: To promote safe and secure transport by developing unified European policy standards for safety and security and ensuring a high degree of implementation. Connecting Europe Facility (CEF) General objective: General objective 2: to contribute to smart, sustainable and inclusive growth by developing modern and high performing trans-european networks. General objective 3: to enable the Union to achieve its sustainable development targets, including a minimum 20 % reduction of greenhouse gas emissions compared to 1990 levels and a 20 % increase in energy efficiency, and raising the share of renewable energy to 20 % by Specific objectives: Specific objective 3: to enable more performing transport infrastructure by removing bottlenecks, enhancing rail interoperability, bridging missing links and improving cross-border sections. Specific objective 4: to ensure sustainable and efficient transport systems in the long run Specific objective 5: to optimise the integration and interconnection of transport modes and enhancing the interoperability of transport services Specific objective 6: to create an environment more conducive to private and public investments Research and innovation activities in the transport area under Horizon 2020 General objective 8 : General objective 4: To contribute to a European transport system that is resource-efficient, climate and environmentally-friendly, safe and seamless for the benefit of all citizens, the economy and society by promoting innovation and research in transport Specific objectives 9 : 8 9 Based on European Commission Decision C (2014)4995 of 22 July 2014 regarding smart, green and integrated transport for the Horizon 2020 work programme Based on European Commission Decision C (2014)4995 of 22 July 2014 regarding smart, green and integrated transport for the Horizon 2020 work programme

16 Specific objective 7: To promote research and innovation for resource-efficient transport that respects the environment Specific objective 8: To promote research and innovation towards better mobility, less congestion, more safety and security. Within Part 1 of the Annual Activity Report, information is provided on the progress towards the achievement of the policy objectives established in DG MOVE's Management Plan 2015, on the basis of available information at the moment of reporting. The structure used for the reporting in the Annual Activity Report therefore "mirrors" the structure of the Management Plan in order to facilitate comparison. The information covers important outputs delivered by DG MOVE during 2015, as well as mid-term results and long-term impacts whose achievement may be influenced by factors beyond the control of the DG and the Commission. It is important to note that the implementation of the Management Plan (and in particular achieving objectives and seeing improvements in the indicators 10 ) does not only depend on the Commission. It is for the European Parliament and Council to decide on the Commission's proposals and then primarily for the Member States to implement them. In addition, there are often measures that will contribute to the actions that are outside the scope of Commission's competence. In particular obtaining authorisations to negotiate depends on Council decisions and the success of negotiations with international partners depends on the willingness of both sides to achieve compromise solutions. Finally, external factors, such as energy price fluctuations or the general economic situation, can have a significant influence. DG MOVE's selected "impact indicators" for each general objective are presented in the tables in section below. In the subsequent sections "result indicators" measuring progress towards achieving the specific objectives are presented. The specific objectives are grouped by the operational activity areas of DG MOVE, also called "Activity-Based Budgeting" (ABB) activities. In 2015 these ABB activities were section European Transport Policy, which also includes under Transport infrastructure policy financed under the Connecting Europe Facility (CEF), and section Research and innovation related to transport under the framework programme Horizon Along with the ABB activities and indicators, information on the achievement of the most significant outputs (i.e. the policy proposals, documents and decisions adopted) planned for 2015 as set out in the Management Plan is also given. 10 Targets for indicators have generally been set on the basis of objectives in the Europe 2020 strategy, the White Paper of March 2011, relevant legal bases and results previously achieved. 16

17 1.1.1 DG MOVE General Objectives and Impact Indicators The indicators presented for General Objective 1 have been selected to illustrate different aspects of a well-functioning Single European Transport Area. The indicators for the additional general objectives are linked to the respective spending programmes, the Connecting Europe Facility and Horizon General objective 1: To contribute to a deeper, fairer and safer internal market by promoting a better functioning Single European Transport Area. Programme-based Non programme-based Impact indicator Baseline (year) Current Situation Milestones Target in MP 2015 Labour productivity of the transport sector (Gross value added divided by total employment, (Source: Eurostat) (MOVE.A3) per person employed (2010) (EU 28) : per person employed 2012: per person employed 2013: per person employed n.a. target) (annual Steady annual increase indicating increase of efficiency in transport sector : per person employed : +0.72% : +0.30% : +0.47% KPI: Number of fatalities in road transport accidents (Source: CARE) (MOVE.C4) (2010) (EU28 ) 2011: : : : : * (* preliminary report) Halving road fatalities by 2020: Max (EU 28) by By 2050, move close to zero fatalities in road transport 14 Satisfaction with airline/ railway / local transport services (Source: Market Performance Indicators SANCO) (MOVE.A3) Airline 77.7 services: Railway services: 70.8 Urban transport: 76.2 (2010) Airline services: 2011: : : 79.4 n.a. target) (annual Steady annual increase indicating increase of quality in transport services Baseline values revised following the new ESA2010 methodology for national accounts by Eurostat. Indicator in line with the 2011 White Paper, which foresees a more efficient transport sector for the future, without a quantitative target. New strategic guidelines for road safety ( ) have set up a new target for the decade, i.e. 50% of reduction of road fatalities by The White Paper 2011 "Roadmap to a Single European Transport Area Towards a competitive and resource efficient transport system" has indicated this long-term target ( 2.5). 17

18 Railway services: 2011: : : 72.7 Urban transport: 2011: : : Planned evaluations: Road Safety - Interim evaluation of the Policy orientations on road safety (FV 574/2014) See further under specific objective 2. Comments Labour productivity Labour productivity has increased in line with the target. Further continuous increases might be observable in the future, as a result of the efficiency gains in transport services due to a more competitive transport market, of the modernisation of European transport infrastructure and of the positive effects of newer technologies to transport companies performance. Number of fatalities in road transport accidents Following two years of solid decreases in the number of fatalities in road transport accidents in Europe, the first reports on road deaths in 2014 showed stagnation compared to the 2013 figures 17. The first preliminary indications for 2015 show that this trend has likely continued and no great improvement should be expected for 2015 when looking at the EU average. The small overall improvement in these two years means that more efforts are needed to reach the strategic target of cutting in half the number of road deaths from 2010 to There is no simple single factor explaining the current stagnation trend and the development differs greatly between Member States with some reporting increases and other reporting decreases. Possible contributing factors could be a general decrease of police enforcement activities, e.g. linked to the rerouting of resources following the exceptional migration flows in Member States are the main actors in the area of road safety as most of the day-to-day actions are delivered at national and local level: enforcement of traffic rules, infrastructure development and maintenance but also education and awareness raising campaigns. The European Commission acts where there is a clear EU added-value, for Indicator in line with the 2011 White Paper, which foresees the improvement of transport services quality and competitiveness for the future, without a quantitative target. No statistics referred to 2014 are available as the survey became biannual since statistics are expected to be available mid Figures for 2015 are based on estimations and subject to revisions. Figures for fatalities in road transport accidents in 2014 (tentatively indicated as at the beginning of 2015) were corrected to at the end of

19 instance through legislation enabling the enforcement of cross-border traffic offences or by setting technical safety standards for infrastructure and vehicles. The Commission actively monitors the situation, stimulates and helps Member States to improve their performance through the exchange of data, knowledge and experience, and by sharing best practices. Consumer satisfaction In general, consumers satisfaction for transport services has increased towards the target 18, with the sole exception of urban transport services which have registered a slight decrease of 0.7 points compared to This seems due to an increase in consumer complaints over the problems experienced during their trips 19. General objective 2: to contribute to smart, sustainable and inclusive growth by developing modern and high performing trans-european transport networks Programme-based (Connecting Europe Facility (CEF)) Non programme-based Impact indicator Baseline (year) Current situation Milestone Target in MP 2015 KPI: Volume of private, public or publicprivate partnership investment in projects of common interest (Source: TENTtec) (MOVE.B4) 0 in 2013 Investments generated by the CEF grant support resulting from the 1st Multi-annual and Annual calls for proposals: 12.8 bn EUR CEF funding have generated 28.3 bn EUR of investments including the regional, State budgets, as well as EIB loans By 2017, EUR 280 billion of investments realised on the entire TEN-T network, of which EUR 140 billion on the core network By 2022, EUR 500 billion of investments realised on the entire TEN-T network, of which EUR 250 billion on the core network (target date set to 2022 due to n+2 rule) 20 Planned evaluations: Evaluation of the Pilot Phase of Project Bonds (ending 2015): see results below. (MOVE.B4) The corresponding target has changed in the 2015 Management Plan due to the nature of those opinion-based indicators, for which reaching a score of 100 is considered unrealistic. Based on the conclusions of the 2013 DG JUST market monitoring survey: consumer_market_monitoring_2013_part_2.pdf No newer statistics are currently available values are expected to be published by mid Source for this target is the Commission's Impact assessment for the Connecting Europe Facility SEC(2011)1262 of , page 27 related to the Regulation (EU)1316/2013 establishing the Connecting Europe Facility, extensively discussed through the ordinary legislative procedure. 19

20 Comments The Commission adopted in 2015 the Selection Decisions C(2015)5274 and C(2015)5294 selecting 263 projects to be financed following the 2014 CEF Calls for Proposals launched in The total amount covered by these Decisions is some 12.8 billion EUR. The 12.8 billion EUR of CEF funding have generated a total of 28.3 billion EUR of investments including the regional, State budgets, as well as EIB loans. Feedback on results and impact from evaluation reports Ad-hoc Audit of the pilot phase of the Europe 2020 Project Bond Initiative: The pilot phase of the Project Bonds Initiative (PBI pilot phase) was established under the Regulation (EC) 680/2007 amended by Regulation (EU) 670/2012 with an aim of providing financing facilities to the project promoters by means of credit-enhancement mechanisms in the form of sub-ordinated facilities. The Commission has contributed EUR 200 million from transport, EUR 20 million from ICT and EUR 10 million from energy to the European Investment Bank, to serve as the "first loss piece" contribution to the portfolio of projects. The EIB has acted as appraisal agency for credit and issuing the debt enhancement facility to projects eligible under the Union guidelines for transport (TEN-T), energy (TEN-E) and ICT. This final evaluation of the pilot phase is required by the Regulation in 2015 and the work has been led by DG ECFIN coordinating other contributing DGs. The main achievements of the pilot phase of the PBI are that it: contributed to the development of capital markets as an additional source to finance infrastructure projects in the areas of TEN-T, TEN-E, ICT and broadband; helped finance priority projects with a clear EU added value. Under the PBI pilot phase 7 projects were signed. The EU contribution achieved a leverage effect of 18.6 in line with expectations. The PBI provided additional financing over existing risk-sharing schemes both at EU and national level. The overall design of the instrument served well the needs of bond investors for greenfield projects. The protection for pre-completion cash shortfalls mitigated construction risk, one of the foremost reasons why institutional investors did not want to enter the infrastructure market. The report proposed recommendations to improve the instruments effectiveness along the following lines: focus on the projects with the highest EU added value which lack financing in view of the higher relevance of the PBI, current market needs should be addressed in a more appropriate way and the design of the PBCE should be made more attractive. In particular, credit enhancement seems to be more needed on certain projects i.e. projects located in Southern and Eastern Europe and projects involving substantial risk. 20

21 The EU added value can be maximised in focusing on sub-investment grade projects, renewable energy projects, extending further a higher PBI risk coverage, in making it eligible for bank debt and in eliminating barriers for a stable European project pipeline. General objective 3: to enable the Union to achieve its sustainable development targets, including a minimum 20 % reduction of greenhouse gas emissions compared to 1990 levels and a 20 % increase in energy efficiency, and raising the share of renewable energy to 20 % by 2020 Programme-based (Connecting Europe Facility (CEF)) Non programme-based Impact indicator Baseline (year) Current situation Milestone Target in MP 2015 KPI: GHG emissions from transport (excluding maritime international bunkers but including international aviation) (Source: EEA) (MOVE.A3) 846 Mt CO2 eq. (1990) 1101 Mt CO2 eq. (2008) (EU28) 2010: Mt CO2 eq. 2011: Mt CO2 eq. 2012: Mt CO2 eq. 2013: Mt CO2 eq : +24.7% 881 Mt of CO2 eq (level in 2030) (20% reduction by 2030 compared to 2008) 338 Mt of CO2 eq (level in 2050) (60% reduction by 2050 compared to 1990) : +20.4% : +19.7% : -4.2% : -7.5% : -8.1% Increase in energy efficiency (economywide) 22 (Source: Eurostat) (MOVE. A3) 1853 Mtoe in primary energy (2020 projection) 2011: Mtoe 2012: Mtoe 2013: Mtoe 2014: Mtoe n.a % by 2020 (i.e Mtoe primary energy in 2020) 24 Share of renewable 4.8 % (2010, 2011: 3.4% 26 energy in transport 25 n.a % share of renewables in Target based on the 2011 White Paper on Transport. Values revised after data revision from EEA. This indicator is defined according to the Energy Efficiency Directive 2012/27/EU, applicable to the EU overall economy. Transport contributes without a specific sectoral target, as mentioned in the Connecting Europe Facility Regulation (EU) No 1316/2013. No milestone is foreseen in the Energy Efficiency Directive 2012/27/EU. The 20% reduction in the primary energy consumption is calculated with respect to projections for 2020 made in This indicator is defined according to the Renewable Energy Directive 2009/28/EC. Some breaks in series are present for some countries. Starting with the data collection for year 2011, countries had to report as compliant only those biofuels and bioliquids for which compliance with Articles 17 and 18 (on sustainability criteria) of Directive 2009/28/EC can be demonstrated. 21

22 (Measurement unit: %; Source: Eurostat) (MOVE.A3) EU28) 2012: 5.0% 2013: 5.4% 2014: 5.9% 27 energy use in transport by Planned evaluations: n.a. Comments The Transport White Paper established a goal to reduce the greenhouse gas emissions from the transport sector by 60% by 2050 compared to 1990 and by around 20% by 2030 compared to emissions in Greenhouse gas emissions increased by 33% during the period 1990 to 2007 but have since fallen on the back of increased efficiency of passenger cars and slower growth in mobility. This declining trend has continued in 2013 (-8.1% for ). Further reduction of emissions from transport will require a gradual transformation of the entire transport system towards a better integration between modes, greater exploitation of the non-road alternatives, improved management of traffic flows through intelligent transport systems, and extensive innovation in and deployment of new propulsion and navigation technologies and alternative fuels. The 2020 Climate and Energy package established an indicative target of 20% energy savings (economy-wide) by It also set a sectoral target for the share of renewable energy in transport (10% by 2020). Further progress has been achieved in 2014 with regard to energy efficiency 31. In transport, CO 2 performance requirements further reduced fleet average emissions and energy consumption 32. Additional progress has also been achieved regarding the share of renewable energy in transport (5.9% for 2014). General objective 4: To contribute to a European transport system that is resource-efficient, climate and environmentally-friendly, safe and seamless for the benefit of all citizens, the economy and society by promoting innovation and research in transport Programme-based (Horizon 2020) Non programme-based Impact indicator Baseline (year) Current situation Milestone Target in MP 2015 R&D expenditure for transport as share of total GDP (Source: (2010) 2011: : n.a. 3.0 (2020), and rising further No milestone is foreseen in the Renewable Energy Directive 2009/28/EC. Preliminary data. The share of renewables in energy use in transport is derived according to the definition set in the Renewable Energy Directive 2009/28/EC. 30 This equates to million tonnes of oil equivalent (Mtoe) in primary energy consumption in COM(2015)574 final 32 Carbon dioxide (CO 2 ) emissions from new cars sold in 2013 fell 4% to an average of 127 grams per kilometer (g/km). This means the legal target of 130g/km set for 2015 has been met two years early. 33 Baseline revised following the new methodology for calculating National Accounts from Eurostat. 22

23 Eurostat) (A3) (Based on available data for 17 EU MS) : (One of five key targets within the Europe 2020 strategy) Planned evaluations: Assess impact of Horizon at mid-term (transport specific study by end 2016; feeding into general Horizon 2020 review by end 2017). Separate mid-term reviews of the SESAR and Shift2Rail JUs will also be carried out in this time frame Comments The figures for R&D expenditure for transport as share of total GDP are slightly lower than the figures presented in the 2014 AAR due to the revision of the methodology for the calculation of national accounts by Eurostat, which has led to a general increase in European GDP and subsequently to a decrease for the values of this indicator. However, R&D expenditure has substantially increased since 2010 and it is still relatively close to the threshold of 3.0% foreseen for Indicator in line with the 2011 White Paper, which foresees more technological research and innovation in the transport sector, without a binding quantitative target set through legislation. Country sample widened compared to AMP 2014, and further work ongoing according to data availability. More recent figures are currently unavailable from Eurostat. A gap of at least 18 months exists between the current year and the reference year of Eurostat statistics. This is a requirement of the H2020 Basic Regulation to be carried out under the leadership of DG RTD, using independent experts etc. Various criteria are set out in the Regulation. See Art 32(3) of Reg 1291/

24 1.1.2 Specific objectives for ABB activity "European Transport Policy" Transport has been driving European integration for more than 50 years. Persons and goods now travel more freely than ever before with the removal of borders between Member States. The 2011 Transport White Paper on the Future of Transport presents proposals for transforming the European transport system into a competitive system that will further improve mobility and continue to support growth and employment. Transport and logistics chains do not stop at the EU's external borders and thus it is essential to take a global approach on standards, rules and practices. This is also at centre of the Commission's efforts to fight climate change. The EU has put in place a comprehensive legislative framework to ensure competitive, reliable, affordable and safe transport for passengers and goods in Europe and to protect passengers' rights in all modes of transport. In addition, the Commission worked to develop common rules and standards for security, including an inspection system, and reinforced international cooperation so as to ensure high quality and a level-playing field beyond the EU. The challenge is to keep and make the EU's transport system both sustainable and globally competitive, tackling climate change and contributing to economic growth. Therefore the EU s transport policy is striving both to promote the economic development of the transport sector, source of industrial projects and jobs, while improving its environmental performance. Developing the conditions for access to neighbouring and emerging markets and for open and fair competition in international transport markets is also essential. The work of the three European Agencies 38 that work on safety is also covered by this ABB activity. Their work contributes to harmonising technical rules and safety and checking their implementation. Implementation of activities in the area of European Transport Policy is generally progressing according to plan. More detailed information on individual initiatives can be found below under each specific objective. It should nevertheless be noted that the final adoption of legislative measures proposed by the Commission depends on the co-legislators, the European Parliament and the Council, and the possible amendments they make to the Commission's initial proposal. Their implementation in turn depends on the Member States and on the actions taken by organisations and businesses operating in the area of transport. The Commission's possibilities for conducting negotiations with international partners depend on the acceptance of the Council to grant the Commission a mandate and on the interests of partner countries. Progress on international transport relations is in general also closely linked to foreign policy developments and trade negotiations. The level of safety and security in transport not only depends on the Commission's actions, but to a much larger extent on the implementation of rules and standards in the Member States and in third countries and on the respect of these and the behaviour of 38 The European Maritime Safety Agency, the European Aviation Safety Agency and the European Railways Agency. 24

25 transport businesses and individual citizens. Two specific objectives below are linked to the ABB-activity and general objective 1. Relevant general objective(s): General objective 1 Specific objective 1: To improve the efficiency of the European transport market by improving regulation, ensuring a high degree of implementation of EU legislation in the transport area and open and fair competition both in the EU and in relations with key partner countries. Programme-based Non programme-based Result indicator Baseline (year) Current situation Milestone Target in MP 2015 KPI: 94.9% ( ) : 99.3% n.a. (annual target) 99% of Directives to be transposed in 2015 Transposition rate in transport legislation (%) (source: MOVE.A5 monitoring) (target used by the Commission for the Single Market Scoreboard) Percentage of noncommunication cases open and respecting the oneyear benchmark (for closure or referral to Court) (source: MOVE.A5 monitoring) Percentage of open infringement cases not open for more than 3 years (source: MOVE.A5 monitoring) Comprehensive aviation agreements with neighbouring countries and key trading partners 39 (Source: MOVE.E1) 97.5% ( ) 98.5% ( ) Number agreements signed 2013: 8 of end (Western Balkan countries, Morocco, Jordan, Georgia, Moldova, Israel, United States and Canada) : 97% : 97% Number agreements signed 2015: 8 of end n.a. (annual target) n.a. (annual target) N.a. [It has proved to be difficult to indicate exact intermediary milestones due to uncertainty about timing of negotiations with partner countries) 100% (target set in the Commission Communication "A Europe of results Applying Community law" (COM (2007) 502) 100% (target set in line with internal Commission benchmark) 21 agreements signed in total by end (New agreements assumed signed with Ukraine, Brazil, ASEAN, Turkey, Mexico, Azerbaijan, Armenia, Tunisia, China, Russia, India, UAE and Qatar.) 39 The scope of the indicator has been extended from the one used in Management Plan 2014 to include also key trading partners. 25

26 Main outputs in 2015: Description Indicator Current situation Target in MP 2015 Ports: Final output: Negotiations in EP and Council of the Regulation on the access to the market of port services and the financial transparency (MOVE.B3) State of negotiation in Council and EP Report adopted in 1 st reading TRAN on , mandate for start 1 st reading negotiations with Council to be discussed in March EP Plenary. Adoption of report in EP TRAN Committee in Q4/2015. (Final adoption by colegislators foreseen in 2016) The target of Q4/2015 could not be reached due to delays in the European Parliament. Rail: Final output: 4 th Railway Package Market and Technical Pillars (market opening, infrastructure governance, increased role for ERA) (MOVE.B2) State of negotiation in Council and EP Technical pillar: adoption of Council position at 1 st reading on 10 December 2015 Market pillar: Council general approach on 8 October Technical pillar: political agreement between Council and EP in Q2/2015 Market pillar: Council General approach by end (Final adoption by colegislators foreseen in 2016) Maritime: Commission output: Commission Report on the Maritime Transport Strategy (MOVE.D1) Commission Report Report could not be finalised in 2015 due to prolonged internal consultations and delay in the completion date of one of the supporting studies. New target date: Q1/2016 Q4/2015 Road transport: Final output: Revision of Directive 96/53/EC on maximum weights and dimensions of certain road vehicles (MOVE.D3) Adoption by colegislators Directive (EU) 2015/719 amending Directive 96/53/ECE was adopted on 29 April Q1/2015 Aviation: Commission output: Communication on the Aviation package (CWP 2015, annex 1, action 11) (MOVE.E1) Adoption of the Communication COM(2015) 598 final adopted on 7 December 2015 Q4/2015 Commission output: Proposals for new negotiating mandates for the Commission to negotiate comprehensive Adoption of a Commission proposal Proposals adopted as foreseen with Aviation Strategy: Armenia (COM (2015) Q4/

27 air transport agreements with key partners (MOVE.E1) 604) ASEAN (COM (2015) 609) China (COM (2015) 608) Gulf (COM (2015) 607) Mexico (COM (2015) 606) Turkey (COM (2015) 605) Final output: Follow up of inter-institutional negotiation on airport package (slots proposal) (MOVE.E4) Adoption of Airport package (slots proposal) No further progress was made on this file in the Council due to issues related to Gibraltar. First half of 2015 Passengers' rights: Commission output: Communication on interpretative guidelines on Regulation (EC) No 1371/2007 on rail passengers rights and obligations (MOVE.D4) Adoption of the Communication by Commission Adopted on (OJ C220, , p. 1) 1 st semester 2015 REFIT: Commission and final output: REFIT Repeal of Regulation 569/2008 amending Regulation No 11 (1960) concerning the abolition of discrimination in transport rates and conditions (CWP 2015, annex 3, action 73) (MOVE.A1) Adoption by legislator An analysis of other legislation has shown that article 3 of Directive 92/106/EC on the establishment of common rules for certain types of combined transport of goods between Member States includes a crossreference to Regulation No 11 of 27 June 1960 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79 (3) of the Treaty establishing the European Economic Community as amended by Regulation 569/2008. A repeal of Regulation 569/2008 must therefore await a revision of Directive 92/106/EC to avoid creating a legal gap. Q Planned evaluations: REFIT evaluation of the Combined Transport Directive (92/106/EEC) (CWP 2015, annex 3, action 75) (MOVE.D1) 27 Final report New target date: Q Data search and analysis were more timeconsuming than expected due to lack of available Q2 2015

28 data. Ex-post evaluation of Regulations (EC) No 1071/2009 and 1072/2009 (CWP 2015, annex 3, action 74) (MOVE.D3) Final report The Final Report was approved in Nov 2015 and published in Dec The slight delay is due to the initial quality of the draft final report, which the consultant had to improve. A Commission Staff Working Document presenting the final results of the evaluation process will also be published. Q3/2015 Ex-post evaluation of social legislation in road transport and its enforcement (MOVE.D3) Final report The external Final Report be submitted in Feb The slight delay is due to the initial quality of the draft final report, which the consultant had to improve Q4/2015 Ex-post evaluation of Regulation (EC) No 1073/2009 (MOVE. D.3) Final report The study supporting the ex-post evaluation was cancelled. An alternative study was launched and the Final Report will be delivered in May 2016, which is the date foreseen in the contract. Q Ex-post evaluation of legislation on European Electronic Toll System (Directive 2004/52/EC and 2009/750/EC) (MOVE.D.3) Final report The external Final Report was submitted in Oct A Commission Staff Working Document presenting the final results of the evaluation process will also be published. Q4/2015 Ex-post evaluation of Directive 2006/1/EC on the use of vehicles hired without drivers for the carriage of goods by road (MOVE.D3) Final report The external Final Report was delivered in Jan The slight delay is due to a delay in signing and kicking off the contract Q4/2015 Study for evaluation and impact assessment in view of a possible modification of Regulation (EC) No 1371/2007 on rail passengers rights and obligations (MOVE.D4) Final report Study on-going. Final report still foreseen by end Q2/2016 Q2/2016 Note: To reduce the number of indicators to a maximum of 5 for this specific objective as required in the guidelines, the reporting focuses mainly on transposition of legislation and infringement cases, which cover all modes, including passenger rights and the social dimension. One indicator for international aviation agreements is also maintained. 28

29 Comments Transposition rate On the transposition rate, the figure for 2015 (99.3%) marks a significant improvement from 2014 (94.9%) and exceeds the Commission target used for the Single Market Scoreboard. DG MOVE monitors transposition and implementation of existing EU law in the Member States and takes the appropriate action, including infringement procedures when appropriate, to address incorrect transposition and practical implementation at national level. Ports and Inland Waterways DG MOVE continued the implementation of the action plan: "Ports: an engine for growth" adopted in Contributing to create a more investment-friendly climate in ports, the Commission supported the Transport Committee of the EP to adopt a report which forms the basis to reach a first reading agreement in 2016 on the Regulation establishing transparent accounts and access to the market of port services. Contributing to more open port labour market and cargo handling contracts, the Commission pursued its infringement procedures on the basis of Article 49 TFUE on the right of establishment and the CJEU Court ruling of 11 December 2014 on Spanish ports to ensure a more open port labour market and open procedures to grand land lease terminal contracts. Major reforms, taking into account the consultation of the social partners, have been engaged in three Member States. DG MOVE has continued the implementation of the NAIADES II action plan "Towards quality inland waterway transport" adopted in In June 2015, national actions plans have been elaborated for the implementation of the Danube Fairway Rehabilitation and Maintenance Master Plan endorsed at Ministerial level. The social dialogue with the sector has been pursued, supporting the preparation of a new legal initiative on the mutual recognition of professional qualifications in inland waterway transport for which an impact assessment has been completed. The new approach to governance in inland waterway transport announced in the NAIADES II programme has been further rolled out. The CESNI Committee has been established in 2015, and will act as repository of uniform standards in the field of inland waterway transport. This Committee has prepared and adopted such standards for inland waterway vessels including for those using LNG. Single European Rail Area In 2015, the Council adopted a General Approach on the market pillar of the Fourth Railway Package, specifically on the proposals to modify Directive 2012/34/EU and Regulation (EC) 1370/2007. As far as the technical pillar is concerned an agreement was reached between the Council and the EP on 17th June. On this basis, the Council adopted its position at first reading on the recast of the Interoperability and Safety Directives and the new ERA Regulation on 10th December with a view to final adoption in Spring DG MOVE has already started the preparatory works with ERA on the implementation of the technical pillar. A working group chaired by the Commission and composed by the representatives of the Member States and the railways sector has been already set up. In the framework of Directive 2012/34/EU establishing a Single European railway area, four implementing acts received the 'Single European Railway Area Committee (SERAC)'s favourable opinion (noise differentiated track access charges, modalities for 29

30 the calculation of direct costs for charging for use of rail infrastructure, extension of Rail Freight Corridor 8 and collection of data for the purposes of Rail Market Monitoring). The Commission adopted on 25 March 2015 a Communication on a report on cooperation between Regulatory bodies, describing the progress made. With regard to the Interoperability Directive (2008/57/EC) and Safety Directive (2004/49/EC) 5 legislative acts have been adopted that aim at removing the technical barriers for facilitating the cross-border operations and creating the conditions for a single European railway area as well as enhancing the safety conditions. The breakthrough program to speed up the implementation of ERTMS has reached important results in 2015, notably the proposal on a realistic and committed European Deployment Plan for the Core network Corridors, the progress towards an interoperable and compliant EU-wide infrastructure and the preparatory works for a clear and transparent regulatory framework. On 22 December 2015, the Commission services finalised a Commission Staff Working Document (SWD) on rail freight noise reduction. This SWD includes a review of existing measures aimed at effective reduction of rail noise of freight wagons and provides an analysis of additional possible solutions that might be considered to address the pressing issue in the coming years. Based on the numerous feedbacks gathered during the first years of setting up and operation of the Rail Freight Corridors and considering the report to be submitted to EP and Council on the application of the RFC Regulation, a process for evaluating and possibly reviewing this Regulation has been launched. An evaluation has started, including a broad stakeholder consultation. Based on the reports produced by ERA on the implementation of the Train Drivers Directive (2007/59/EC) and the feedback received from various stakeholders on the certification scheme for train drivers, a process for evaluating this Directive has been launched. Regular dialogue was maintained with the Rail Regulatory bodies in order to ensure a coherent application of EU rules and address cases of potential conflict of interest. Moreover regular meetings were held with rail infrastructure managers on key issues such as performance, financing, security and safety. An Advisory Body was established on Passengers with Reduced Mobility in the rail sector with stakeholder representation. Finally, a dialogue with Rail Undertakings was established to mirror the contacts already held with infrastructure managers and a number of sub-groups are now actively pursuing the priority areas identified by the sector. DG MOVE and ERA maintain technical dialogues on rail with third countries in order to exchange expertise and, in some cases, explore possibilities of moving towards mutual acceptance or harmonisation of existing rules. In this framework meetings took place with relevant interlocutors of the Gulf Cooperation Council, Japan, China, Brazil and the US. Maritime transport As concerns the Mid-term review of the maritime transport strategy, the necessary steps to prepare the Commission Report were concluded in 2015, including the finalisation of two external studies and an extensive consultation of stakeholders and Member States. The adoption is foreseen at the beginning of The preparatory studies and consultations (stakeholders consultation launched from 28 January until 22 April 2015 and the views of the Member States maritime administrations obtained through a questionnaire) identified the developments and achievements of the recent past as well as the areas where further work is needed. As far as the objectives set under the 2009 Communication are concerned, progress is made (covering the period ) in the areas of maritime safety; in the use of technology and innovation 30

31 which contributes to the environmental performance of the sector; in the legislative framework in relation to the qualification standards and the appropriate working and living conditions for seafarers on board of ships; as well as in the promotion of the overall efficiency and competitiveness of the sector. Bilateral maritime transport dialogues and contacts continued in 2015; and maritime transport provisions in bilateral agreements have been defended in respective negotiations. In particular, bilateral maritime dialogue meetings were held with USA, Norway, China and Brazil. More specifically, the Commission and Brazil had several exchanges on the conclusion of a Memorandum of Cooperation (MoC), the two sides agreed to sign the MoC at a mutually convenient date. In addition, DG MOVE participated in the negotiations of the maritime chapters of the Transatlantic Trade and Investment Partnership (TTIP) agreement with USA, the EU-Japan Free Trade Agreement (FTA) and the Trade in Services Agreement (TiSA). As concerns the simplification of reporting formalities in maritime transport, in spring 2015, the expert group on maritime administrative simplification and electronic information services (the ems group) adopted harmonised guidelines for the National Single Windows that Member States establish for vessels' reporting formalities in application to Directive 2010/65/EU. Six months after the 1 st June 2015, deadline set by the Directive, Member States are reporting that the implementation of the National Single Windows is either totally or largely completed. The Commission services will assess the situation in launching visits to identify possible problems in Member States. In 2015 DG MOVE launched in close cooperation with DG TAXUD a pilot project to establish a harmonised electronic single cargo declaration (the emanifest ) which is strongly advocated by the maritime industry. Member States which are volunteers will participate in the pilot project. Road transport Directive 2015/719/EU was formally adopted in April 2015, amending Directive 96/53/EC laying down for certain road vehicles circulating within the Community the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic. Directive 2015/719/EU grants derogations on the maximal lengths with the purpose of improving fuel efficient and aerodynamic performance of heavy goods vehicles. It also grants derogations on weights of heavy goods vehicles powered by alternative fuels to enable the uptake of new and cleaner technologies. The Commission adopted two decisions related to transport of immigrants on the request of Germany C(2015)8073 and of Slovenia C(2015)8662 according to Art. 14(1) of regulation 561/2006 to relax driving and rest time rules for the purpose of transporting high numbers of immigrants by bus upon their arrival. The Joint Committee that manages the EU-CH Land Transport Agreement adopted a decision (1/2015) that amends several Annexes to the Agreement, updating the list of EU legal acts in the area of land transport where Switzerland has adopted equivalent rules and adapting related provisions to the new legal acts. The Commission adopted several Decisions on tolling arrangements notified by Member States (e.g. Germany, Austria, Sweden) in accordance with Art. 7h of Directive 1999/62/EC as amended. The Decisions were based on assessments carried out by DG MOVE allowing Member States to implement new tolling arrangements in line with the user and polluter pays principles (see also specific objective 6) Aviation The main achievement in 2015 was the adoption by the Commission on 7 December 2015 of the Aviation Strategy. This includes a Communication on a new Aviation Strategy for Europe (COM(2015) 598 final) identifying challenges and opportunities for improving 31

32 the competitiveness of the EU Aviation sector, supported by an analytical Commission Staff Working Document and an indicative list of actions for the years to come. The Aviation Strategy was accompanied by a proposal for a revision of the aviation safety regulation to get the EU aviation safety system ready for the challenges of the future, including provisions on a framework for drones to pave the way for our industry's success in this promising market and by a comprehensive package of proposals for new mandates to negotiate EU-level air transport agreements with third countries to ensure the EU industry has the opportunity to be where the growth is. Passenger rights The Interpretative Guidelines on the Rail Passengers' rights' Regulation were adopted as foreseen. They will make it easier for passengers to benefit from their rights and therefore bring EU closer to its citizens and will also ensure a better level-playing field between rail operators. This is fully in line with President Juncker's priority for a deeper and fairer internal market. As regards air passenger rights; we have worked intensively at the inter-institutional level on the proposal to revise the main Regulation and the Regulation on luggage which has been discussed at 12 Council working parties and at COREPER. Unfortunately and despite the significant efforts, limited progress has been achieved because of the Gibraltar issue. In parallel, draft interpretative guidelines on the Air Passenger Rights Regulations have been prepared in order to allow adoption in early Relevant general objective(s): General objective 1 Specific objective 2: To promote safe and secure transport by developing unified European policy standards for safety and security and ensuring a high degree of implementation Programme-based Non programme-based Result indicator Baseline (year) Current situation Milestone Target Number of accidents and incidents: - involving ships flying the flag of an EU Member State, - occurring within Member States' territorial seas and internal waters, - involving other substantial interests of the Member States. (Source EMSA) (MOVE.D2) (2013) 40 Very Serious Casualties Fatalities Very Casualties 2014: 99 Fatalities 2014: 136 Serious n.a. target) (annual Less than 50 very serious casualties per year. Less than 60 fatalities per year (by 2015) Target set by DG MOVE on basis of previous years, target adjusted slightly upwards to reflect change of result indicator to more accurately reflect scope of Directive 2009/18/EC Source: European Maritime Casualty Information Platform (EMCIP). Data should however be treated with caution as not all MS have been consistent in populating the EMCIP databases and the Commission/EMSA has identified significant problems with under-reporting in the past. As a result some of the apparent increase in the number of very serious casualties and fatalities may relate to improved reporting. The targets set are very low was a year with a low number of accidents and the figures that year reflected as well some under-reporting. 32

33 Aviation safety: a. Fatal accident rate for scheduled commercial air transport per 10 Million flights (10 year moving average to even out inevitable year on year variations) a : EASA Member States 1.8 Asia 6.3 North America 1.9 a. 2014: 43 EU 1.7 (EASA MS) Asia 11.1 North America 0.9 n.a. a. To match, or be, the lowest world rate : EU 1.7 (EASA MS) b. Number of fatal accidents to EU commercial air transport (aeroplanes) (source : EASA Annual safety Review(MOVE.E3) b : 0 Other regions: N/A b. 2013: : : 1 45 b. Maximum of 1.0 Target is set in line with the aim in the 2011 White Paper to become the safest region for aviation. Reported total number of rail accidents, including level crossing accidents (source : Railway Safety Performance report of the European Railway Agency; the number of accidents is one of the Common Safety Indicators that have to be reported to the Agency by the Member States, as required by Annex I to the Railway Safety Directive) (MOVE B2) Compliance with Community legislation: aviation security inspection results (Source Commission accidents in 2012 with a total of fatalities 2013: accidents in 2013 with a total of fatalities 2014: accidents in 2014 with a total of fatalities 83% (2012) 2013: 80% 2014: 80.7% : 80% n.a. target) n.a. target) (annual (annual Reduction of approx. 5% per year (Target reduced compared to MP 2014 and set by DG MOVE on the basis of figures from previous years) At least 85% compliance with main provisions for aviation security confirmed through EU inspections (annual target set by Source: EASA Annual Safety Review 2013 Source: Data delivered by EASA, to be published in the upcoming EASA Annual Safety Review 2014, still subject to validation. Therefore the final 2014 figures may slightly vary. Source: Data delivered by EASA, to be published in the upcoming EASA Annual Safety Review 2014, still subject to validation. Due to the lack of quality in the source data for the number of flights outside the EASA MS, the rates for the other world regions will not be included in the upcoming Safety Review. This concerns the Germanwings accident, which is considered as an unlawful act under the context of ICAO Annex 13 but for which there are safety lessons to be learned. Results show a stable and relatively high rate of compliance with core aviation security rules. 33

34 inspection (MOVE.A2) reports) DG MOVE on the basis of figures from previous years) Main outputs in 2015 Description Indicator Current Situation Target in MP 2015 Rail safety: Final output: Identification of Member States with the lowest safety performance records and development of corresponding actions plans (MOVE.B2) Assessment of Member States s ERA is preparing three documents: ERA/ADV/ (Croatia), ERA/ADV/ (Estonia), ERA/ADV/ (Romania) Assessment of 3 Member States in 2015 and 3 Member States in 2016 The 3 documents will be finalised and delivered before mid Maritime safety: Commission output: Up to 8 Implementing acts in the area of Maritime Safety (MOVE.D2) Number of implementing acts 3 Implementing Acts and two Commission Decisions were adopted in order to keep the existing maritime safety acquis up to date 47 : - Commission Directive (EU) 2015/559 of 9 April 2015 amending Council Directive 96/98/EC on marine equipment, OJ L 95, , p. 1 - COMMISSION IMPLEMENTING DECISION (EU) 2015/668 of 24 April 2015 on amending the recognitions of certain organisations in accordance with Article 16 of Regulation (EC) No 391/2009 of the European Parliament and of the Council (notified under document C(2015) 8 Implementing acts 47 Three additional implementing acts that had been anticipated in 2015 were not adopted this year due to delayed transmission of information to the Commission which could not finalise its assessment in time for

35 2595), OJ L 110, , p COMMISSION DIRECTIVE (EU) 2015/2087 of 18 November 2015 amending Annex II to Directive 2000/59/EC of the European Parliament and the Council on port reception facilities for shipgenerated waste and cargo residues, OJ L 302, , p COMMISSION DECISION of repealing Decision 2007/421/EC on the publication of the list of recognised organisations which have been notified by Member States in accordance with Council Directive 94/57/EC (C(2015) 2596) - COMMISSION DECISION (C(2015) 5240 ) of on the publication of the list of third countries recognised as regards the systems for training and certification of seafarers for the purposes of Directive 2008/106/EC Commission output: Up to 10 Commission proposals for positions in IMO (MOVE.D2) Number of proposals For the IMO, 16 submissions/proposals and 7 information papers were produced; 3 Commission proposals authorising MS to act on behalf of the Union in the IMO along with 10 coordination papers for IMO committees and subcommittees completed the substantial effort to coordinated EU policy in external/international bodies. 10 proposals 35

36 Aviation safety: Commission output: Legislative proposal for a broader revision of regulation 216/2008 (EASA basic regulation) (MOVE.E) Revision of regulation 216/2008 Adopted on 7/12/2015 (COM 2015/613 final) Commission proposal to be adopted in the 4 th quarter of 2015 together with the Aviation Package. Commission output: Regular updates of the list of banned air carriers (MOVE.E) Improvement of the aviation safety in the EU Commission implementing regulation 2015/2322 of 10 December 2015 Every three - four months the Commission verifies whether it is appropriate to update the list (through comitology procedure). Aviation security: Commission output: Aviation Security: revision of the Aviation Security legislation as regards the screening of cabin baggage (MOVE.A2) Adopt legislation implementing Adopted 6 February 2015: Commission Implementing Regulation (EU) 2015/187 and Commission Implementing Decision C(2015) 561 Q Commission output: Aviation Security: risk based update of air cargo and mail legislation Commission Implementing Decision C(2015) 984 adopted 19 February 2015 [Additional output not included in MP 2015] Commission output: Aviation Security: revision of the Aviation Security legislation as regards small airports (MOVE.A2) Adopt legislation implementing Delayed due to late input (Member States, industry). Revised target date: June 2016 Q Commission output: Aviation Security: revision of the Aviation Security legislation as regards liquids (MOVE.A2) Adopt legislation implementing Commission Implementing Regulation (EU) 2015/187 and Commission Implementing Decision C(2015) 561 of 6 February 2015 updated the aviation security legislation as regards liquid screening. F Q A 'Study on how to optimise the screening of liquids at airports to enable the lifting of restrictions' is scheduled to be completed by October Commission output: Aviation Security: annual clarification & simplification of the Aviation Security legislation (MOVE.A2) Commission output: Aviation Security: recast of the Aviation Security Adopt legislation Adopt legislation implementing implementing Commission Implementing Regulation (EU) 2015/1998, adopted 5 November 2015, and Commission Implementing Decision C(2015) 8005, adopted 16 November 2015 (for practical reasons, both outputs were merged) First half 2015 Second half

37 legislation (MOVE.A2) Commission output: Number of aviation security inspections planned for 2015 (MOVE.A2) 2015: 34 inspections planned 32 inspections (94,1%including 1 follow-up inspection) plus 2 international assessments (US, Montenegro) 100% completion of inspection scheduled Land and maritime security: Commission output: Number of maritime security inspections planned for 2015 (MOVE.A4) 2015: 30 inspections planned 59 inspections conducted 100% completion of inspection scheduled Planned evaluations: Road Safety: Interim evaluation of the Policy orientations on road safety (FV 574/2014) (MOVE.C4) Final report Evaluation concluded in May 2015 according to the time plan. Results published in Staff Working Document "On the interim evaluation of the EU road safety policy framework ", SWD(2015) 116, 8 June Q More information, the SWD and the full evaluation report can be found on sport/road_safety/events - archive/interim_eval_rep ort_2011_2020_en.htm Road Safety: REFIT evaluation of Directive 2004/54/EC on Tunnel Safety (Commission Staff WP) (CWP 2015, annex 3, action 79) (MOVE.C4) Final report Evaluation completed as planned. Final report available on: sport/factsfundings/evaluations/doc /tunnel_final_report.pdf Q Road safety: Cross Border Enforcement Assessment of the application of Directive 2011/82/EU by Member States (MOVE.C4) Final report Evaluation is still ongoing according to time plan. Evaluation report expected by March Passenger ship safety REFIT Fitness Check (CWP 2015, annex 3, action 77) (MOVE.D2) Final report Evaluation finalised on time (See SWD/2015 /0197 final of available at:) Q &uri=CELE X:52015SC0197 ) 37

38 Note: To reduce the number of indicators to a maximum of 5 for this specific objective as required in the guidelines, the indicator on road fatalities is included only under the General Objective and the specific reporting on infringements following security inspections has been discontinued as this is included under the general indicators on implementation of legislation under specific objective 1. The indicator for compliance with community legislation for maritime security previously included in Management Plan 2014 was discontinued due to the unavailability of data from maritime security inspections in the necessary format to assess the results against the target set. Comments Number of fatalities in road transport accidents The implementation of the policy orientations on road safety has continued. Directive 2015/413 facilitating cross-border exchange of information on road-safety-related traffic offences was adopted in March 2015, targeting unsafe road user behaviours. Directive 2006/126/EC on driving licences was amended by Commission Directive 2015/653, including an important update of the codes on alcohol interlocks. The review of Directive 2003/59/EC on the initial qualification and periodic training of professional drivers, continued in 2015 with an impact assessment expected to be finalised in Conformity-checks have continued; a total of 35 infringement cases and 25 EUPILOTs were opened during 2015 on the road safety acquis. Despite the efforts made to improve road safety in Europe, following two years of solid decreases in the number of fatalities in road transport accidents in Europe, the reports on road deaths in 2014 showed stagnation compared to the 2013 figures. The first preliminary indications for 2015 show that this trend has likely continued and no great improvement should be expected for 2015 when looking at the EU average. The small overall improvement in these two years means that more efforts are needed to reach the strategic target of cutting in half the number of road deaths from 2010 to There is no simple single factor explaining the current stagnation trend and the development differs greatly between Member States with some reporting increases and other reporting decreases. Possible contributing factors could be a general decrease of police enforcement activities, e.g. linked to the rerouting of resources following the exceptional migration flows in Safety is addressed not only by legislative actions at EU level but also by Commission activities for awareness-raising, information exchanges and spreading of best practices. Tools for this include the European Road Safety Observatory providing data and road safety information, the European Road Safety Charter which provides a platform for stakeholders, several expert groups and committees including a High Level Group on Road Safety for exchange of best practices among Member States. The Commission has also been active on global level, notably within the framework of the United Nations Decade of Action on Road safety and the United Nations High Level Meeting on Road Safety in Brazil, November Rail Safety Around significant accidents occur each year on the railways of the EU Member States. Accidents to persons caused by rolling stock in motion and level-crossing accidents constitute more than three quarters of railway accidents, excluding suicides. In these accidents, around persons are killed and around persons seriously injured each year. 38

39 In 2013, railway safety continued to improve across Europe, with significant accidents resulting in fatalities and 912 seriously injured. The year-to-year reduction between 2012 and 2013 is significant for both accidents and serious injury numbers. All main outcomes have been decreasing over the past four years. In 2014, there was an increase in the number of significant accidents: 2 076, albeit with a decrease in the number of fatalities: 1 054, with 819 seriously injured. The year-onyear reduction between 2012 and 2014 is significant for both fatalities and serious injury numbers, however, it is below the target of 5% per year. Monitoring safety performance is one of the key tasks of ERA, which conducts an annual assessment of the achievement of common safety targets in line with the Commission Decision 2009/460/EC. In addition to its obligations, ERA monitors the activities of the major institutional bodies on a voluntary basis, by means of: the NSA cross-audit programme, aimed at evaluating NSAs performance of the three main activities required of them under the Safety and Interoperability Directives (safety certification and authorisation, supervision and authorisation for the placing in service of vehicles) and to share best practices; and NIB voluntary assessments, supporting NIBs by assessing their current performance in accident investigation, sharing good practices and identifying practical ways in which their work can be improved. With the support of the Commission, in the period ERA is performing a deep assessment of 6 priority countries that show a risk level 3-6 times worse than the EU average. In view of the number of tasks requested to ERA in 2015 and 2016, the assessment programme has been delayed by approximately 6 months (until mid-2017). Importantly, work has been undertaken by ERA to establish a safety occurrence reporting system in the rail sector and we will see further progress on this in the coming years. Maritime Safety The work on maritime safety focussed on collaborative efforts with stakeholders/soft law, evaluation and simplification (REFIT), and implementation of existing legislation. REFIT evaluations of passenger ships safety legislation and of the port reception facilities directive were concluded in Commission interpretative guidelines on the port reception facilities directive were prepared to cater for a better implementation of the existing directive and an implementing measure was adopted to align the existing directive to reflect certain international developments and first evaluation results. For the implementation of the directive on vessel traffic monitoring, operational guidelines for ships in need of assistance were tested in a desk top exercise that involved all concerned stakeholders. At the International Maritime Organization (IMO), substantial efforts were undertaken to progress with maritime safety and environmental files, most importantly the stability of passenger ships when they get damaged and the collection of data in relation to the fuel efficiency / Green House Gas emissions of ships. The external representation aspects were formalised with a number of Commission proposals for Council decisions in relation to IMO and the Paris Memorandum of Understanding on Port State Control. For the IMO 23 EU submissions and information papers were prepared and 3 Council decisions authorising MS to adopt positions on behalf of the EU. Technical coordination papers have been prepared for 10 meetings of IMO committees and subcommittees. 39

40 For the Paris MoU on Port State Control a Council decision on external representation was produced for the first time and a multi-annual coordination framework was proposed by the Commission to MS at the end of the year. It is hoped that this new approach could also contribute to improving IMO coordination on which institutional divergences exist between the Council and the Commission. Importantly, in order to help the Union better face the migration crisis and lay the building blocks for a European Coast Guard, the Directorate contributed to new Commission proposals for changing the mandates of three regulatory agencies. The proposal foresees a significant increase of resources for the European Maritime Safety Agency (EMSA) in terms of resources and staff in order to increase maritime surveillance in a multi-purpose way by deploying remotely piloted aerial systems and by using Satellite Automatic Identification System (SAT AIS). The oversight of EMSA and Commission representation in the administrative board progressed smoothly. In particular, a new visits methodology was adopted by the board: in order to support the exercise of the Commission s prerogatives in relation to checking implementation of maritime legislation by MS. For the latter, some 35 assessments were carried out on the basis of EMSA technical inspections and visits in the Member States and in third countries which, amongst others, led to 28 EU-pilots. As regards non-communication of transposition measures, 25 letters of formal notice were issued in 2015, out of which 21 were adequately addressed by the concerned Member States and two were followed-up by reasoned opinions. Aviation Safety The aviation strategy contains two initiatives related to safety. The first initiative is a mandate to negotiate bilateral aviation safety agreement with Japan and China. The second initiative is a proposal to revise the EU safety rules. The revision should reflect the overall tendency to build on the rule based system and move towards performance based rulemaking. Such evolution should more focus on the risk of operations and so keep the regulatory and administrative burden proportionate to the risk. The rules would be opened to aircraft operated by or on behalf public authorities (so-called state aircraft) and include unmanned aircraft (drones). Qualified entities can support national administrations in their tasks. Safety tasks may also become delegated to industry, with more emphasis on safety management systems. In March 2015 the Latvian Presidency had organised the conference on drones in Riga with Commission support. The Riga Declaration, where the views of the aviation stakeholders converged in five concrete principles was the basis for the drone rules developed in aviation strategy. Furthermore, new safety rules were introduced, after the preparatory work of EASA and the constructive discussions with the Member States in the EASA Regulatory Committee. Early January, the Commission adopted new rules on environmental protection to reflect the last changes to the relevant ICAO rules. The EU integrates, quasiautomatically, all ICAO environmental rules into EU law. The changes in case make new aircraft engines cleaner through stricter standards for NOx emissions. On 30 January 2015, the Commission published supplementary requirements for sterile flight crew compartment. This regulation addresses the risks linked to potential errors resulting from the disturbance or distraction of flight crew during certain phases of flight. The Commission also adopted the Implementing Regulation classifying civil aviation occurrences to be mandatorily reported according to Regulation (EU) No 376/2014 of the European Parliament and of the Council on the reporting, analysis and follow-up of occurrences in civil aviation. It aims at providing a list of occurrences that persons 40

41 subject to Regulation No 376/2014 will have the obligation to report to their employer or to the regulator in the context of the mandatory reporting systems. In the area of Aircrew regulation, amendments were introduced to alleviate Member States and stakeholders from overly demanding administrative and economic requirements, as well as to alleviate general aviation operators from certain measures which are considered disproportionate to the activities involved and the associated risks. In the airworthiness domain the Commission amended the rules for operations, critical maintenance tasks and aircraft continuing airworthiness in the specific Commission regulations. The Commission adopted and published the amended requirements for flight recorders, underwater locating devices and aircraft tracking systems. These new EU rules are performance-based rules that address the issues raised by the accident of Air France flight AF447 in June 2009 and the disappearance of Malaysian Airlines flight MH370 in March The rules will improve the tracking of European aircrafts and the location of an aircraft in distress anywhere in the world. In case of an accident over water, they will also allow for a quick localisation of the wreckage and a swift recovery of the data contained in the flight recorders. The EU Air Safety List, which reflects a list of air carriers banned from operating to the EU, was subject to update twice in It was possible to relax the restrictions on a number of air carriers, including removing all air carriers from the Philippines that were still on the list and to remove the restrictions on Air Astana from Kazakhstan. On the other hand it was necessary to add Iraqi Airways to the EU Air Safety List. In 2015, EASA issued the first Third Country Operator authorisations, checking the safety of non-eu operators in the EU. One negative decision against Iraqi Airways was considered necessary. The European Network of Civil Aviation Safety investigation Authorities (ENCASIA) continued to work on the Peer Review programme with the review of six additional Safety Investigation Authorities. The Network also improved the European database of safety recommendations, analysed its content and identified Safety Recommendations of Union-wide Relevance. Through training and cooperation, ENCASIA aims to further prepare the authorities to manage a major investigation and pool resources in Europe. DG MOVE hosts the new ENCASIA website: EASA continued to carry out standardisation inspections in 46 European States to ensure the correct implementation of the EU aviation safety acquis. The first cycle of inspections in the ATM/ANS field was completed at the end of For the first time the lack of compliance led to the launching of pre-infringement EU Pilot procedures against certain Member States. Transport Security In reply to the persistent threat of terrorism in today's volatile geopolitical environment established channels of cooperation between the Commission and Member States' experts (transport security, law enforcement, and intelligence) are vital. Together with the coordination at international level and cooperation with industry and other stakeholders (transport operators, security providers and equipment manufactures) they provide a strong basis to further strengthen secure passengers and goods transport by improving legal standards and the monitoring of their appropriate implementation by way of Commission inspections of airports, ports, and national authorities. 41

42 The cooperation with Member States and industry stakeholders through regulatory committees for aviation and maritime issues respectively, and a Commission expert group for industry and other stakeholders for land transport issues give DG MOVE close communication channels with key actors in transport security saw the entry into force (full effect as of September 2015) of measures expected to considerably strengthen explosive detection capability at airport security checkpoints in respect of passenger and cabin baggage. The 2015 package of proposals for the clarification, harmonisation, and simplification of aviation security measures that was adopted in November 2015 (application date 1 February 2016) replaced the earlier implementing acts by two new consolidated legal acts, Commission Implementing Regulation (EU) 2015/1998 and Commission Implementing Decision C(2015)8005. Content wise the 2015 package clarified and harmonised certain aviation security requirements in particular as regards training and cargo and established performance standards for certain screening equipment including enhanced standards for Explosive Detection Systems. The end of the year was marked by security alerts in several Member States following the Russian plane incident over Sinai and the Paris attacks. The security impact on different transport modes, including aviation was significant. This risk situation alas confirmed the importance of the Commission's policy choices and the ongoing work on enhancing the explosive detection capability at passenger security checkpoints and air cargo screening facilities. Furthermore, an important topic for future co-operation with international partners will be the capacity building in third countries. The EU's continuous quest for harmonised security rules at international level and One- Stop-Security compensate operators' aviation security efforts and provide them with the least onerous method for offering high-level aviation security for both passengers and cargo. The Commission therefore continued its efforts on the international scene through cooperation with the United States and other likeminded aviation security partners. The Commission participated effectively in all relevant events of the International Civil Aviation Organisation (ICAO) and air cargo related meetings of the World Customs Organisation (WCO). In close coordination with the development cooperation departments of the Commission (DEVCO and NEAR) a programme for capacity building in aviation security had been established and will be operational as of Assistance will focus on countries in Africa and the Middle East as well as EU Neighbouring countries and states in Central Asia. Our closest partner for aviation security in wider Europe, the European Civil Aviation Conference (ECAC) will manage this programme on our behalf. Towards the end of the year the legal basis for One Stop Security (OSS) with Canada and Montenegro was added to the OSS regime already existing with the US. These actions allowed a further increase in the EU s visibility and influence as regards aviation security policy internationally. DG MOVE services conducted 32 aviation security inspections, covering 21 airports and 11 appropriate authorities. Overall, the inspections found a stable and relatively high rate of compliance with core aviation security rules. Member States and/or airports rectified effectively any deficiencies encountered during inspections. Therefore, no procedural follow up (EU Pilot or infringement procedure) was required. In maritime security a total of 59 maritime security inspections were performed including national administrations, ports, port facilities and ships to verify compliance with Regulation 725/2004 and implementation of Directive 2005/65. In accordance with the Working Agreement with EMSA, inspectors from EMSA have participated in all shiprelated and port facility inspections. Concerning the implementation of Directive 2005/65/EC three infringement cases opened in 2012 were definitively closed in 2015 (Greece, Spain, UK). One case opened in 2014 was referred to the ECJ in 2015 (Germany). 42

43 Compliance with the Best Management Practice on anti-piracy measures for ships sailing around the Horn of Africa continued to decline in 2015 to 92% (96% at the end of 2014, 99% at the end of 2013). In accordance with the Memorandum of Understanding between DG MOVE and US Coast Guard (USCG), desktop exercises were carried out in March 2015 in Brussels and June 2015 in Washington. In addition, supervised participation of the USCG in a port inspection took place in September 2015 in Ireland. The second training session on maritime security in the framework of the Memorandum of Understanding between DG MOVE and USCG was held in February 2015 in Norfolk, USA. Rail security was put high on the security agenda after the attempted terrorist attack in August 2015 on a Thalys high-speed train from Amsterdam to Paris. The EU Expert Group on Land Transport Security (LANDSEC) - a forum bringing together Member States and industry at technical expert level - discussed current best practices in rail security and what additional measures should be established at the EU level. LANDSEC met five times in 2015; the meeting focussing on rail passenger security took place on 11 September. The topic of rail security was also raised at the meeting of EU Transport Ministers in October. The possible scope for action includes mandatory requirements for rail operating companies to have security programmes for operations, better training for rail staff in dealing with security incidents, greater use of CCTV both at railway stations and on board high-speed trains - and clear, common rules at EU level on the legal powers of train staff and railway police when trains cross borders. A study on rail security was launched and is expected to deliver results in the summer of 2016 in order to guide future action in rail security. Feedback on results and impact from evaluation reports: REFIT Fitness Check of Passenger Ship Safety Legislation The results of the fitness check showed that the key objectives of the EU passenger ship safety legislation related to passenger safety and internal market are being overall met and remain highly relevant. The EU passenger ship safety legal framework resulted in a common safety level for passenger ships within the EU and a level playing field between operators as well as increased transfer of ships between Member States. In addition to harmonised safety standards, the system of inspections and surveys played a key role in maintaining the required high level of safety. The fitness check also showed that there is scope for further enhancing the level of safety as well as the efficiency and proportionality of some of the regulatory requirements. Recommendations to simplify, clarify and repeal a number of ambiguous, outdated or overlapping requirements have been made in a number of areas. In addition to the identified simplification potential, the fitness check also revealed a number of issues that unnecessarily reduce the effectiveness of search and rescue operations. Interim evaluation of the road safety policy framework The evaluation found that the policy framework remains relevant and that the strategic target, the focus areas and the specific measures in the framework still address the main road safety problems. It also concluded that the fatality reduction target is an important tool and that, in May 2015, the target was still within reach although challenging. For policy consideration, the evaluation pointed out that more attention would be needed to urban road safety, vulnerable road users and serious injuries since these are the areas with weaker improvement over time in the EU. Risk factors for the future include an 43

44 ageing population and the proliferation of distracting technical devices such as smartphones in traffic. The over-all conclusion is that no amendments are needed to the policy framework but that within the existing framework, more communication efforts will be aimed at the vulnerable road users and the serious injuries in the common years. REFIT evaluation of the tunnel safety directive The principal conclusion of the evaluation was that the Directive had a positive influence on road tunnel safety management. However, not all the TEN-T road tunnels in the scope of the Directive were compliant with the Directive's requirements. Therefore the minimum safety standard prescribed by the Directive was not yet in place. This was also due to the extended refurbishment deadline of 2019 which the Directive allows for those Member States that have a higher than the EU average tunnel density on their share of the TEN-T network. The evaluation noted that the Directive had a positive effect regarding the awareness of the problem of tunnel safety. It had prompted investments that successfully complement other road safety measures, such as road safety campaigns, improvements in vehicle safety and introduction of speed control systems and it had improved the capacity of tunnel managers and emergency services to manage dangerous events and to prevent and mitigate the effects of accidents and fires. It had also triggered research into new solutions and technologies Infrastructure policy CEF Transport Regulation (EU) n 1316/2013 establishing the Connecting Europe Facility (thereafter the CEF) establishes the framework and conditions for financing European infrastructure projects in three areas: transport, energy and telecommunication and information services. The Regulation (EU) n 1315/2013 establishing the Union guidelines in trans- European transport network (the TEN-T network) defines the "core" infrastructure nodes and services in Europe and the complementary connection points and services are called the "comprehensive" network. The core network provides a coherent, multimodal network within and across the EU Member States and in connection with the neighbourhood countries. Full interoperability of systems and technologies, for example in the rail sector is mandatory. The TEN-T facilitate the mobility of persons, goods and services in the internal market and play a major role for territorial, economic and social cohesion of the Union. The European Union by establishing the CEF supports the "European projects of common interest" which aim at implementation of: new infrastructures and services, rehabilitation and upgrading of existing infrastructures and services Priority is given to projects demonstrating high EU value added that resolve critical bottlenecks and establish the missing connection points. By implementing these projects, access to the Single Market and to international markets, which are part of the "Europe 2020 strategy", are optimised. The CEF contributes to supporting projects with significant societal benefits which do not receive adequate financing from the market. The EU intervention in the transport infrastructure projects concretely contributes to the implementation of the TEN-T policies through the enablers of the CEF, such as: 44

45 Grants; Procurements; and financial instruments developed jointly by the Commission and the European Investment Bank and other entrusted entities. DG MOVE ensures the implementation of funding for the Trans-European Network under the Connecting Europe Facility in close cooperation with INEA (for the grants part of the CEF). MOVE is responsible for setting out the CEF funding policy, notably the preparation and adoption of the CEF Work Programmes (funding decisions) establishing inter alia the indicative budget, funding priorities, and eligibility, selection and award criteria. INEA ensures the technical and financial management of the CEF grants, notably the preparation and launching of the calls for proposals, in close consultation with DG MOVE, as well as the negotiation, signing and management of the grant agreements with beneficiaries. With regard to the evaluation and selection of proposals, this is organised in two phases: an assessment by external experts organised by INEA in coordination and with participation of DG MOVE, followed by an internal phase, led by DG MOVE in association with concerned DGs. The list of selected proposals is adopted by the Commission following consultation of the CEF coordination committee. Both the CEF Work Programme decisions and selection decisions are submitted to the European Parliament under its right of scrutiny. INEA also ensures the effective financial and technical management of the legacies of the TEN-T and Marco Polo programmes. DG MOVE considers that INEA executed the tasks under its responsibility in 2015 efficiently and effectively. In this respect, DG MOVE and overall the INEA Steering Committee approved the INEA 2015 Annual Activity Report including the related Declaration of Assurance. DG MOVE also contributes to the implementation of the new European Fund for Strategic Investments (EFSI). Much needed transport infrastructure projects will benefit from additional private funds mobilised by the use of innovative financial instruments as part of the EUR 315 billion investment plan of the Union as part of the Commission's jobs, growth and investment initiative. In 2015, the Commission has concluded a Delegation Agreement with EIB supporting the implementation of the projects' financing via financial instruments. The Commission is actively involved with Member States authorities, project promoters, EIB and national promotional banks to exploit the financing of projects via Financial Instruments/PPP procurement schemes. The EFSI and CEF projects pipelines are actively monitored. It should nevertheless be noted that as mentioned above the Commission's role in the implementation of the CEF Regulation, except the design of the TEN-T policy, is limited to the correct and sound management of the Union's financial aid, including the financial instruments and technical assistance, attributed to the final beneficiaries. The main external factors which may hinder or delay the implementation of the TEN-T Core and Comprehensive networks are: inadequate number and quality of the proposals submitted by the Member States/ applicants in the calls for proposals, due to changing priorities within the Member State in their transport pipelines, inadequate administrative capacity to prepare wellstructured proposals, shortage of public and private funding for projects identified by the Member States, insufficient political support to implement nationally and in the cross-border dimensions the Core and Comprehensive networks 45

46 insufficient interest of the private partners to enter into cooperation with the public institutions in the implementation of the projects due to many external factors including the implementation timelines, the remuneration of the parties, which could hinder or delay the realisation of the projects in the Core and Comprehensive networks. Four specific objectives below are linked to the ABB-activity and to general objectives 2 and 3. Relevant general objective(s): General objective 2 and 3 (CEF general objectives) Specific objective 3: To enable more performing transport infrastructure by removing bottlenecks, enhancing rail interoperability, bridging missing links and, in particular, improving cross-border sections programme-based (Connecting Europe Facility) Non programmebased Result indicator Baseline (year) Current situation Milestone Target Number of new or improved crossborder connections* (Source TENTec) (MOVE B1) 0 in : : 0. Projects' implementation is following the first CEF call in 2014/2015. It should be further specified that the indicator concerns connections on the TEN-T core network corridors. Detailed information will be available in the second Work Plans to be published in June by by 2020 (including the 6 by 2017) 36 by 2030 (including the 14 by 2020) The estimated targets result from in-depth consultations between the Member States and DG MOVE, whose implementation is monitored by the Commission. Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks. Number of removed bottlenecks and sections of increased capacity for all modes on core network corridors which have received funding from the CEF (source:tentec) (MOVE.B1) 0 in : : 0 Projects' implementation is following the first CEF call in 2014/2015. Detailed information will be available in the second Work Plans to be published in June by by 2020 The estimated targets result from in-depth consultations between the Member States and DG MOVE, whose implementation is monitored by the Commission. Regulation (EU) n 1315/2013 sets out the binding implementation 46

47 targets by 2030 for the Core and by 2050 for the Comprehensive networks Length of inland waterway network by class * (Source TENTec) (MOVE B3) N/A (incorrectly indicated as 0 in 2013 in MP 2015) 2014: 95.2% of inland waterways reaching class IV standards 2015: 95.2% of inland waterways reaching class IV standards At this stage, no set milestone is possible, as planning of TEN-T implementation is still at an early stage Whole TEN-T inland waterways reaching class IV standards or higher by 2030, except where allowed by Regulation Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks Length of the railway network in the EU-28 upgraded following the requirements set out in Article 39(2) of the TEN-T regulation* (Source TENTec) (MOVE B1/B4) N/A (incorrectly indicated as 0 in 2013 in MP 2015) 2014: Reliability of available data under assessment, first reporting will be postponed to : Information on the compliance with standards according to Art. 39 (2) of Reg. 1315/2013 has been delivered by May 2015 per individual rail KPI. These data will be consolidated for the first time in June/July 2016 as a result of greater enhancement of the TENtec application. At this stage, no set milestone is possible, as planning of TEN-T implementation is still at an early stage Whole core network complying with the requirements by 2030 Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks 47

48 Main outputs in 2015 Description Indicator Current Situation Target in MP 2015 Commission output: Core Network corridors (MOVE.B1) Stocktaking on the state of advancement of the implementation of the corridors Corridor accomplished Studies Staff working document has been postponed to 2 nd quarter Staff working document (2015) Final output: Approval of the Work Plans of the 9 established European Corridors by the Member States and for certain important parts of the Work Plans (such as cross-border sections) (MOVE.B1) Implementation of the European Corridors 9 work plans for Core Network Corridors were approved in May Approval of work plans by Member States in 2015 Final output: Evaluation and award decisions to the projects selected under the Annual Work Programme C(2014)1919 and under the Multi Annual Work programme C(2014)1921 and amendments thereof (MOVE.B1) Granting the financial assistance in the form of grants and of the programme support actions to the selected beneficiaries Commission implementing decision for financial assistance in the field of CEF Transport C(2015)5274 of 31/7/2015. Commission implementing decisions for the selected projects (2015) Planned evaluations: Second 3-year midterm evaluation of the TEN-T executive agency (MOVE.B) Final report The final external evaluation report was completed in September 2015 and is available here: nsport/factsfundings/evaluations/do c/ eval-3-yrsops ten-tea.pdf Ex-post evaluation of TEN-T programme (MOVE.B) Final report Not yet launched 2017 Note: indicators marked with * will be assessed in the framework of the work plans for the core network corridors. The second work plans will be established in June At that time, a reliable baseline scenario and precise targets can be defined. The figures presented above correspond to the financial statement accompanying the Commission proposals of Note: The CEF Regulation includes the following additional indicator for this specific objective "The number of kilometres of railway line adapted to the European nominal gauge standard and fitted with ERTMS". However, this indicator is presented under specific objective 8 as DG MOVE considers that it is more closely linked to that particular objective. 48

49 Comments The first half of 2015 focussed on the final approval process of the work plans for the nine Core Network Corridors foreseen by the TEN-T Regulation. These work plans, prepared by European Coordinators for their respective corridors, have been approved by the involved Member States in May 2015 and officially presented in the TEN-T Days in Riga in June In parallel, work plans were presented by the European Coordinators responsible for ERTMS and MoS. Subsequently, under the lead of the respective European Coordinator, the corridor fora met twice to discuss the status and implementation progress as well as the deepening of the analyses to include further elements into the next generation of works plans. The staff working document on TEN-T corridors / policy is still under preparation and its delivery is now foreseen for the 2 nd quarter This postponement to 2016 can be explained by several factors. On the one hand, the staff working document is not only a stocktaking exercise of the state of advancement of the implementation of the corridors but also aims at developing the contribution of TEN-T core network corridors to several transport policy areas. To that goal, European Coordinators have accepted to prepare issue papers which require a large consultation process both within the Commission and with transport stakeholders. On the other hand, the document will also include developments on the financial possibilities for TEN-T implementation, including the use of the recently created European Fund for Strategic Investment (EFSI). Finally, the new timing will allow for linking the publication of the staff working document to other initiatives in line with Commission priorities (such as the Energy Union). At the TEN-T days in Riga, Commissioner Bulc and Ministers of the Western Balkans countries agreed on the indicative extension of the Core network and the Corridors in these countries. Furthermore, at the Western Balkans Summit in August, all participants welcomed this agreement, that will enhance connectivity between Western Balkans countries as well as with the EU network. The exercise related to the update of the maps of the comprehensive network (foreseen in the TEN-T Regulation) was launched in September and was further discussed in the expert group meeting in December. Moreover, a delegated act on the adaptation of indicative TEN-T maps for the Western Balkans, Norway and Iceland has been prepared and was adopted on 4 February On 28 September 2015, the EU and China signed a Memorandum of Understanding setting up a "connectivity platform" which aims at improving links between the two regions by creating an environment conducive to trans-national infrastructure investment and by improving transport connections in all regions and countries linking China to Europe. The Commission has put forward a report to the Council called "An Action Plan - Making the best use of new financial schemes", drafted by Prof. Secchi, Bodewig and Mr Christophersen, recommending a set of structural reforms at European and national levels, aiming at facilitating public-private financing schemes, as well as including a list of transport projects suitable for the use of financial instruments. The EU EIB Delegation Agreement for the implementation of the CEF Debt Instrument was signed on 22 July Subsequently, the Commission adopted the Connecting Europe Facility Annual Work Programme 2015 on Financial Instruments, which constitutes a basis for financing projects by means of Financial Instruments and the delegation to the EIB. The total 2015 budget allocation is EUR 128,5 million, of which a second tranche of EUR 70 million for transport. The Investment Plan for Europe sets actions along three mutually reinforcing strands i) mobilising at least EUR 315 billion in additional investment through the new European 49

50 Fund for Strategic Investments (EFSI) ii) initiatives to develop investment proposals through the European Investment Advisory Hub (EIAH) and European Investment Project Portal (EIPP) and iii) measures to provide greater regulatory predictability and to remove barriers to investment. DG MOVE is actively supporting the implementation of the Investment Plan's three pillars. EFSI is operational since mid-2015, and investment in infrastructure is on track, with transport representing above 25% of the overall financing commitment. DG MOVE jointly with the EIB is supporting the development of a pipeline of transport projects and new products, including for small projects and horizontal policy priorities. Dissemination and promotion activities will be further strengthened with closer involvement of the EIB and the TEN-T Coordinators. There will be dedicated resources within the Hub for transport and improved PPP capability building at Member States level through additional resources within the Hub. A positive dynamic has been triggered in the discussion on investment barriers for transport in particular within the Economic Policy Committee. On 8 April 2015, the Commission adopted an amendment to the 2014 CEF Multi- Annual Programme (MAP) concerning Programme Support Actions in the fields of maritime and inland waterways, SESAR and Intelligent Transport Systems (ITS) for a total amount of about EUR 25 million under 2015 appropriations. In July, the Commission adopted the Selection Decisions for 263 projects to be financed following the 2014 CEF Calls for Proposals. The amount covered by the signed grant agreements is about EUR 12.8 billion. On 30 October 2015, the Commission adopted a 2 nd amendment to the 2014 MAP concerning the 2015 Calls for Proposals and new Programme Support Actions (PSAs) The Calls for Proposals, launched in November, have an indicative amount of about EUR 7.6 billion including EUR 6.5 billion under the Cohesion envelope plus EUR 181 million remaining from the first call. The PSAs provided for in the MAP concern mostly SESAR, ITS, maritime ports and cooperation between rail infrastructure managers. Feedback on results and impact from evaluation reports: Evaluation of the 3 years of operation of the Trans-European Transport Networks Executive Agency TEN-T EA ( ) In accordance with Article 25 of the Council Regulation 58/2003 on the Executive Agencies, DG MOVE conducted an evaluation of the TEN-T Executive Agency for the period It should be noted that as of January 2014 the TEN-T EA became the Innovation and Networks Executive Agency, responsible inter alia for the implementation of the CEF Regulation (EU)1316/2013 (transport, energy and telecoms) and the transport and energy specific programmes of Horizon The main conclusions and recommendations in the final evaluation report are as follows: Main conclusions: Mandated tasks were delivered efficiently and effectively (i.e. good performance) Significant contribution to the operational enhancement and visibility of the Commission's action in TEN-T across European Commission was recognised Consultants received overwhelmingly positive feedback on the performance from the consulted stakeholders Consultants found in particular that recruitment procedures were excellent and resulted in employment of highly motivated staff leading to high quality of execution Recommendations: Keep excellent recruitment procedure 50

51 Maintain consistent approach of all Project Managers vis-à-vis beneficiaries (a big challenge in the growing organisation) Keep handing-over projects between project managers to a minimum. Stakeholders should have maximum continuity Avoid excessive administrative burden for beneficiaries (analyse and potentially reduce administrative burden) Avoid workload peaks (e.g. reporting by the beneficiaries in the form of the Action Status Reports and Call evaluation at the same time) Develop a high level of communication to the new parent DGs (similar to the one to DG MOVE) The evaluation study also demonstrated that the Agency was the most cost-effective option available for the implementation of the TEN-T programme. This option allowed savings of EUR 8.8 million of EU budget compared to having the programme implemented in-house. Relevant general objective(s): General objective 2 and 3 (CEF general objectives) Specific objective 4: To ensure sustainable and efficient transport systems in the long run programme-based (Connecting Europe Facility) Non programmebased Result indicator Baseline (year) Current situation Milestone Target in MP 2015 Number of supply points for alternative fuels for vehicles using the TEN-T core network for road transport in the EU-28* (Source: reporting by Member States) (MOVE.C1) Baseline (2012) Electric public recharging points: CNG refuelling stations: LNG road refuelling stations: 23 Hydrogen refuelling 2015: Electric public recharging points: CNG refuelling stations: LNG road refuelling stations: Hydrogen refuelling stations: To be determined by Member States in their National Policy Frameworks, see note below. 48 The interim data on the current situation (year 2015) is submitted by stakeholders on the basis of a questionnaire for a study commissioned by the Commission. This interim data is expected to correspond to the data to be submitted by Member States as part of the national policy frameworks in November 2016 and can therefore be used as interim indicators As above As above As above 51

52 stations: 90 Number of inland and maritime ports of the TEN-T core network equipped with supply points for alternative fuels in the EU-28* (Source: reporting by Member States) (MOVE.C1) Baseline (2012) LNG waterborne supply points: 1 (including maritime and inland waterway) 2015: LNG waterborne supply points: 16 (including maritime and inland waterway) To be determined by Member States in their National Policy Frameworks, see note below. Main outputs in 2015 Description Indicator Current situation Target in MP 2015 Commission output: Final conference and report of the Green emotion project Brussels (MOVE.C1) Successful conclusion of the project The project was finalised successfully end of March All deliverables were sent to the Commission according to the grant agreement. The results were presented at the occasion of the EU electro-mobility stakeholders' forum in February The financial claims are almost closed. Q Commission output: 1st meeting of the Sustainable Transport Forum with Member States and industry and presentation of the EC guidelines Brussels (MOVE.C1) Number of Member States and stakeholders representatives 1 st meeting of the Sustainable Transport Forum held on 29 June nd meeting of the Sustainable Transport Forum held on 14 December Oral presentation of Good Practices to help MS draft their National Policy Frameworks All member States and key stakeholders for the different transport modes Participants: 19 MS; 3 observers from EFTA countries (IS, NO, CH); 28 stakeholders Planned evaluations: Evaluation of the Clean Vehicle Directive 2009/33 (CWP 2015, annex 3, action 78) (MOVE.C1) Final report Concluded as planned: final report published on nsport/factsfundings/evaluations/do c/ ex-post- evaluation-directive ec.pdf Q CLEAN TRANSPORT/URBAN MOBILITY Impact of EU support (ERDF, CF, CIVITAS Initiative, Final report Final report expected end May Q

53 IEE/STEER) on sustainable urban mobility conditions and on the use of alternative fuels in the EU urban areas 52 (MOVE.C1) Evaluation of the PORT RECEPTION FACILITIES DIRECTIVE 2000/59/EC and any action to enhance the delivery of ship source waste in ports contributes to a sustainable and efficient transport system (CWP 2015, annex 3, action 76) (MOVE.D2) Final report Final external evaluation report available here: nsport/modes/maritime /studies/doc/2015-ex- post-evaluation-of-dir ec.pdf) Q Note: indicators marked with * will generally be assessed in the framework of the work plans for the core network corridors. However, as regards the indicators for alternative fuel, please see additional information in note below. Note: Baseline figures have been updated from Management Plan 2014 in order to present figures from 2012 based on the Impact assessment Accompanying the document Proposal for a Directive on the deployment of alternative fuels infrastructure /* SWD/2013/05 final. The targets previously presented in the Management Plan 2014 were established on the basis of the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the deployment of alternative fuels infrastructure /* COM/2013/018 final. The Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the deployment of alternative fuels infrastructure modified the Commission's proposal, deleting the mandatory targets for the refuelling/recharging points to be build-up by Member States and also modifying the dates for implementation of infrastructures for some fuels. According to the Directive, the targets will be defined by the Member States in their National Policy Frameworks to be submitted to the Commission in November The Member State targets for electricity recharging points and CNG refuelling points in urban agglomerations must be implemented by 31 December The Member State targets for LNG refuelling points for road transport and maritime transport must be implemented by 31 December 2025 and for inland transport by 31 December The build-up of hydrogen refuelling points only concerns those Member States which decide to include hydrogen refuelling points accessible to the public in their national policy frameworks. The date established is 31 December No milestones are foreseen in the text of the Directive. The monitoring of the targets will be carried out on basis of the report submitted by Member States to the Commission on the implementation of its national policy framework by 18 November Note: The CEF Regulation includes an additional indicator for this specific objective "The reduction in casualties on the road network in the Union". However, this indicator is presented under general objective 1 as DG MOVE considers that it is more closely linked to that particular objective. Comments The Commission launched the preparations for swift, coherent and consistent implementation of Directive 2014/94/EU on the deployment of alternative fuels infrastructure. A standardisation mandate was given to the European Standardisation Organisations by Commission Implementing Decision C(2015) The Sustainable Transport Forum was launched by Commission Decision C(2015) 2583, gathering Also contributing to Specific Objective 8. 53

54 Member States and stakeholders. A state-of-the-art report on alternative fuels and related infrastructure was published in July So far the number of electric public charging points has grown by a factor 4. The current number of hydrogen filling stations is smaller than the number showed in the baseline as this latter number included pilot (temporary) filling stations set up for demo projects. Funding for the freight transport services in the period has been integrated into the Trans-European Transport Network (TEN-T) programme and the Connecting Europe Facility (CEF). The financial support will be granted in particular to projects that develop links and synergies between the core and the comprehensive transport network, improving efficiency, sustainability, interoperability and safety of the freight operations as well as optimising the functioning of the supply chains. A specific funding priority supporting freight transport services was incorporated in the 2014 CEF-Transport Annual Call for proposals, which was launched in September 2014 and closed in March The priority focused in particular on the improvement of efficiency, sustainability, interoperability and safety of the freight operations as well as the optimisation of the supply chains. In response, 25 proposals were submitted, out of which 4 finally contracted for EUR 5 million of co-financing. The selected proposals will contribute to the greening of supply chains and better integration and balance between the transport modes. These projects are expected to deliver environmental solutions that are cost-effective, at the same time building up awareness on the market and contributing to reduction of negative impacts of transport. They will therefore contribute to the achievement of Specific objective 4 on ensuring a sustainable and efficient transport system. The uptake and success of the Freight Transport Services under the TEN-T will depend on external factors such as the future economic and financial situation of business and the economy as a whole, as well as on specific factors that can influence the competitiveness of individual transport modes and their relative convenience for operators. The European Sustainable Shipping Forum, established in 2013 and gathering representatives of industry and Member States, continued to support the efforts of the maritime sector to improve its environmental performance. It prepared four submissions to the IMO in 2015 with a view to clarify the use of Exhaust Gas Cleaning Systems on ships and started cooperation with the International Organization for Standardization (ISO) on the development of a LNG bunkering standard and a separate standard for connectors (initiated by the ESSF submission to the IMO). In 2015, the ESSF also started contributing to the REFIT evaluation of the Directive on port reception facilities for shipgenerated waste and cargo residues, and collecting information in line with the new directive on Monitoring Reporting and Verification of carbon dioxide emissions from maritime transport. Recognising the value of the forum as a very effective and practical cooperative platform to underpin policy making, the Commission decided to prolong its mandate, initially valid until end of 2015, until June Feedback on results and impact from evaluation reports: Evaluation of Directive 2009/33/EC on the promotion of clean and energy- Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles was externally evaluated in The main conclusions are that this legislation is ineffective and inefficient as well as incoherent with some other EU initiatives. Still, targeting publicly procured vehicles is considered to be a relevant tool to increase the energy efficiency and to reduce the CO2 and pollutant emissions from road transport. Despite the lack of clear benefits, stakeholders have stated a preference for retaining the Directive, although with improvements focusing on making it more effective and delivering better results. As a review was announced in the Energy Union package for 2017, the procedure for an Impact Assessment study was started, at the moment this is in the Inception Impact Assessment stage. 54

55 The evaluation "on the Impact of EU support (ERDF, CEF, FP7, IEE/STEER) on sustainable urban mobility conditions and on the use of alternative fuels in the EU urban areas" is progressing well and it is expected to be concluded in May REFIT Evaluation of Directive 2000/59/EC on port reception facilities for shipgenerated waste and cargo residues The evaluation concludes that the Directive provides relevant policy measures in relation to its overall objective of reducing discharges of ship generated waste into the sea. The Directive has only been partially effective to achieve the intended goals. Although the adequacy of PRF has generally improved, differences between ports and regions have created limitations. The costs associated with the implementation of the Directive are outweighed by the benefits from compliance, but these costs are not always proportionate to what is being achieved. The Directive provides EU added value by not only transposing the international MARPOL requirements into EU law, but also aiming at the reduction of all operational discharges at sea. However, the EU added value of the Directive is not attained to its full potential. Furthermore, it has been noted that the Directive has only been partially coherent with other relevant EU legislation. In particular, there is large scope for improvement of coherency with EU waste legislation, and to ensure the Directive is instrumental in combating marine litter. A number of recommendations are made in order to address these and other issues. 55

56 Relevant general objective(s): General objective 2 and 3 (CEF general objectives) Specific objective 5: To optimise the integration and interconnection of transport modes and enhancing the interoperability of transport services programme-based (Connecting Europe Facility) Non programmebased Result indicator Baseline (year) Current situation Milestone Target Multimodal logistic platforms, including inland and maritime ports and airports connected to the railway network* (Source TENTec) (MOVE.B1) - 27 maritime ports connected - 12 airports connected End 2014: - 27 maritime ports connected - 12 airports connected End 2015: updated information is expected to be available by June/July 2016 after data collection in TENtec (improved) connections of maritime ports by (improved) connections of maritime ports by (improved) connections of airports by (improved) connections of airports by All core maritime ports connected by core airports connected by 2050 Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks. Improved rail-road terminals* (Source TENTec) (MOVE.B1/B4) 0 in End 2014: Reporting figures are not robust at this stage. Discussions have started to get an automated process in place in Requests to MS have not given any results. 6 MS have not replied at all End 2015: Data should be made available in June 2016 in TENtec as a result of the new Work Plans to be published in June At this stage, no set milestone is possible, as planning of TEN-T implementation is still at an early stage * Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks (see also note under the table). It should be further specified that the indicator concerns rail-road terminals along the TEN-T core network corridors. Number of improved or new Motorways of the Sea projects End 2014: Reporting figures At this stage, no set milestone is *

57 connections between ports through Motorways of the Sea* (Source TENTec) (MOVE.B1/D1) contributing to this objective were implemented in the period (Data corrected from MP 2015) are not robust at this stage. Discussions have started to get an automated process in place in Requests to MS have not given any results. 6 MS have not replied at all. Data not available yet. DG MOVE expects to be able to rely on more detailed information through the preparation of work plans of second generation in the second half In addition, the link with TENtec is about to be strengthened to allow for timely reporting in the system. possible, as planning of TEN-T implementation is still at an early stage Regulation (EU) n 1315/2013 sets out the binding implementation targets by 2030 for the Core and by 2050 for the Comprehensive networks (see also note under the table). It should be further specified that the indicator concerns improved or new connections on the TEN-T network which benefited from CEF financing. This will increase the availability of data based on the final reports of CEF funded projects submitted to INEA. Main outputs in 2015 Description Indicator Current situation Target Commission output: Set-up of the Digital Transport and Logistics forum (MOVE.D1) Forum Forum established July (Commission C(2015)2259) Decision Q Planned evaluations: Motorways of the Sea ex-post study on the development of the concept from 2001 and possible ways forward (MOVE.D1) Final report The evaluation has expanded beyond initial plans, analysing in detail more reference projects and surveying Interreg and European Neighbourhood and Partnership Instrument (ENPI) projects beyond TEN-T and Marco Polo New target date: Q Q

58 Note: indicators marked with * will be assessed in the framework of the work plans for the core network corridors. The second work plans will be established in June At that time, a reliable baseline scenario and precise targets can be defined. The figures presented above correspond to the financial statement accompanying the Commission proposals of Note: The CEF Regulation includes the following additional indicator for this specific objective "The number of kilometres of inland waterways fitted with RIS" and "The level of deployment for the SESAR system, VTMIS and ITS for the road sector". However, these indicators are presented included under specific objective 7 as DG MOVE considers that they are more closely linked to that particular objective. Comments In the second year of implementation of the TEN-T/CEF framework, the availability of data on project implementation remains largely determined by Member States' input. Information is therefore not available on a timely manner. In addition, project implementation is only starting now following the first CEF call in 2014/2015. DG MOVE expects to be able to rely on more detailed information through the preparation of work plans of second generation which will need to be approved by Member States. In addition, work has started with specialised consultants to strengthen the link with TENtec and make sure timely reporting on progress on project implementation can be more systematically ensured. In the framework of the Digital Single Market strategy and in order to further support the development of "e-transport" initiatives, DG MOVE launched in July 2015 a Forum on Digital Transport and Logistics which gathers 110 national experts and industry representatives. Two Forum subgroups were created, in order to address: on the one hand the acceptance of electronic documents by public authorities, on the other hand how paperless, harmonised and simplified electronic exchange of data along the supply chain can support the optimisation of transport processes along EU transport corridors. For each of these groups, a work programme was agreed upon. The subgroups will now assess the state of the art for each of the topics mentioned above, challenges and possible solutions, and are expected to provide policy recommendations in that respect. Digitalisation and use of ICT tools are of great importance for the efficiency of transport and logistics and have a great potential for economic growth. Developments under the Digital Transport and Logistics Forum will support the integration and interconnection of transport modes (Specific objective 5). Furthermore, since the use of ICT can also optimise goods routing and increase vehicle load factors, thanks to real-time information on traffic conditions and location of goods, these initiatives can also promote the general objective of reduction of greenhouse gas emissions increase in energy efficiency. The study aiming at collecting facts on Short Sea Shipping and making recommendations has been finalised in 2015 and its outcomes presented to the stakeholders. This will be taken into account in the Review of the maritime transport strategy and the future activities to better use the potential of Short Sea Shipping to reduce greenhouse gases emissions and other externalities from transport. The study notably recommends to further reduce administrative burden, improve the connection of ports of the comprehensive TEN-T network to the land transport network and examine possible measures to incentivize shippers to better use Short Sea Shipping. As concerns Motorways of the Sea (MoS) an evaluation consisting of the collection of data and analysis of the development and implementation of the concept since its inception in 2001 has been undertaken. It will also provide suggestions as regards an enhanced future utilisation of Motorways of the Sea in line with maritime and transport 58

59 policy but also other EU policies. This task will continue in 2016 and is expected to provide input for further Commission initiatives and to support the task of the European Coordinator of Motorways of the Sea. Relevant general objective(s): General objective 2 and 3 (CEF general objectives) Specific objective 6: To create an environment more conducive to private and public investments programme-based (Connecting Europe Facility) Non programmebased Result indicator Baseline (year) Current situation Milestone Target in MP 2015 Volume of private investment in projects of common interest achieved through the financial instruments under the CEF regulation (Source: Reporting provided by the EIB on the financial instruments, on project by project basis) (MOVE.B4) 0 in 2013 The Commission has contributed 140 million EUR to the CEF Debt Delegation Agreement in To date no projects have been yet signed. Few projects have been signed under the Pilot Phase Portfolio (thus without CEF contribution). EIB has submitted updated projects pipeline in January 2016 focusing on promoting the greening of the shipping fleet, ERTMS deployment, which are new and challenging schemes, which are expected to come to fruition in By 2017, EUR 8 bn of private investment in projects of common interest By 2022, EUR 23 bn of private investment in projects of common interest (target date set to 2022 due to n+2 rule) The target I set in the Commission's impact assessment for the Connecting Europe Facility SEC(2011)1262 of , page 134 related to Regulation (EU) 1316/2013 establishing the Connecting Europe Facility. The average leverage effect of the EU funds dedicated to the financial instruments has been estimated at 20 based on the past evaluations. In the minimal investment estimate, the leverage effect of the EU funds dedicated to the financial instruments would be 10x2.3bn. Increase in the external cost charging (compared to today's infrastructure charging) (Source Notifications by Member States in 0 in 2013 Germany introduced external cost charges to internalise the cost of air pollution as of 1 January By 2015, have at least 1 HGV tolling scheme charging for external costs on top of the recovery of infrastructure By 2020, all nonconcession distance based-hgv tolling schemes include an external cost component on top of the recovery of 59

60 accordance with Article 7h(3) of Directive 1999/62/EC as amended) (MOVE.D3) Main outputs in 2015 costs infrastructure costs (Target set in accordance with Phase II ( ) of initiative 39 (Smart pricing and taxation) of the 2011 White Paper on transport (COM(2011)144)) Description Indicator Current situation Target in MP 2015 Commission output: Amendment to the annual work programme C(2014)1919 in view of transferring the EU financial contribution to the European Investment Bank for the financial instruments and new annual work programme 2015 in case additional commitments for the financial instruments (MOVE.B4) Development of the pipeline of the infrastructure projects which benefit from the EU and the EIB contributions financed in the form of the financial instruments. Commission Implementing Decision constituting an Annual Work Programme on Financial Instruments C(2015) /12/2015 Commission implementing (2015) decision Commission output: Financing of transport infrastructure by the means of financial instruments (MOVE.B4) Information to the stakeholders on the usage of the financial instruments in the transport sector The Launch of the Juncker Plan and the documents adopted by the Commission on the Investment Plan for Europe has superseded the need of a Transportonly communication on the opportunities offered by financial instruments for transport infrastructure projects. Staff working document (2015) DG MOVE organised in October 2015 a multi stakeholder conference on financing attended by 400 stakeholders. Commission output: Delegation agreement with the European Investment Bank in view of managing the EU contribution on the financial instruments (MOVE.B4) Management of the EU contribution to the projects financed by the means of financial instruments Delegation Agreement signed with EIB on 22 July 2015 Commission Implementing Decision C(2015)5172 of 22/7/2015 authorising the signature of the Agreement Commission implementing (2015) decision Commission output: Report on the implementation and effects of Directive 1999/62/EC as amended, in particular as regards the 60 Adoption Commission report of The report is expected to be adopted in Q The delay is due to late input from Member States. Q4 2015

61 effectiveness of the provisions on the recovery of the costs related to traffic-based pollution, and on the inclusion of vehicles of more than 3,5 and less than 12 tonnes (required under Article 11(2) of Directive 1999/62/EC as amended by 16 October 2015). (MOVE.D3) Planned evaluations: N.a. Note: Specific objective 6 is derived from one of the indicators of the wide general objective of the Connecting Europe Facility (CEF) Regulation as regards the contribution to smart, sustainable and inclusive growth, which is reflected in the 2 nd General Objective of the CEF Programme Statement. It was deemed appropriate for the purpose of monitoring the activity of DG MOVE to include in the Management Plan a specific objective concerning the improvement of the environment for investing in infrastructure since it is an important policy objective. Only the first result indicator presented "Volume of private investment in projects of common interest achieved through the financial instruments under the CEF regulation" is directly linked to the activities under the CEF. DG MOVE nevertheless considers that the indicator on external cost charging provides useful information on activities undertaken in order to achieve the objective of creating an environment more conducive to investments in transport infrastructure, even if it also contributes to specific objective 4 on sustainable transport. Two additional indicators presented in the Management Plan 2014 were discontinued in the Management Plan Comments Grant Support The CEF Programme (Transport) in the first calls for proposals 2014 has supported to date 263 projects with an overall amount of EUR 12.8 bn EUR investments across Europe, out of which 4.6 bn for the Cohesion Envelope. The grant funding to the TEN-T projects has helped to kick off major infrastructure investments in Europe on the TEN-T core and comprehensive networks and thus contributing to achieve the overall CEF goals such as bridging the missing links and removing bottlenecks. The second call for proposals published on 5 November 2015 and closing 16 February 2016 has an envelope of 7.7 bn EUR, out of which 6.5 BN for the Cohesion Envelope and an additional amount of 181 million EUR which has not been used from the first call for proposals. Support directly to the Member States and to relevant stakeholders via the Programme Support Actions in preparing and implementing the TEN-T priorities Through the Programme Support Actions defined in Article 5(2) (a) of the CEF Regulation, the Commission has supported directly the administrations of the Member States or bodies under their responsibility such as the Railway Infrastructure Managers in charge of preparing the projects and enhancing their administrative capacity in terms of human and technical capital to prepare, manage and implement CEF projects. The Commission has also established dedicated knowledge exchange fora for each of 9 Corridors supporting the work of the European Coordinators and feeding into the establishment and review of the Corridor Work Plans defined in TEN-T Regulation. Development of the pilot schemes for transport by means of the Financial Instruments implemented by the European Investment Bank and the European Commission The financial instruments component of the transport part of the Connecting Europe Facility within this ABB activity under the responsibility of DG MOVE is on course to meet 61

62 its multiannual objectives, thanks to the signature of a delegation agreement with the European Investment Bank on 22 July 2015, and the building up on the successful implementation of the instruments under the MFF (Project Bonds Initiative Pilot Phase). The Commission has secured financing from the CEF financial instruments budget line to support the development and implementation of key pilot initiatives such as set-up and financing of the greening of shipping fleet in Europe, deployment of the SESAR technologies for the Single European Sky and European Rail Traffic Management Schemes by means of risk sharing arrangements between the Commission and the European Investment Bank under the CEF Debt Delegation Agreement. Such initiatives are challenging from the point of view of their establishment and sustainability as the pilot projects need to be technically, financially and economically viable and generate revenue streams. These schemes have not been financed in the past by public- private financing and require long lead times for their establishment due to complex engineering and appraisal procedures. Some projects on the road sector are expected to be financed in 2016 by financial instruments facilities. Ensuring pan-european coordination on the TEN-T network through the European Corridor Coordinators The first Corridor Work Plans have been presented by the European Coordinators and adopted by the Member States in 2015, listing the projects lists and the key priorities on each of the Corridors. A new generation of the Corridor Work Plans will take place in 2016/2017 focusing on the comparability of the Key Performance Indicators, including new areas related to the Corridors implementation such as impacts on the climate change and review of projects lists. Contribution to EFSI The transport sector is on track to deliver the Investment Plan for Europe and ranks 2nd after energy in the EFSI infrastructure/innovation window. However, there are risks to the future pipeline, including sectoral challenges and specific investment barriers in particular in the areas of permitting, procuring, PPPs, and for cross borders projects. Additional efforts are being made by DG MOVE to reinforce engagement with administrations, industry and project promoters building on the existing governance set to implement the TEN-T and CEF policies. In the coming months, over 2000 projects that are part of the TEN-T working programme will be screened to assess their potential suitability for the EFSI. EFSI transport project progress so far Following the approval by the EIB Board on 2 February 2016 of 2 additional transport projects, the EFSI transport pipeline totals 10 projects. 62

63 Infrastructure and innovation window, projects approved by the EIB Board: All sectors Transport Number of projects % EFSI investment (loan amount) 6.6 billion 1.9 billion 30% Total investment (project cost) 21 billion 4.9 billion 23% In addition, 1 project has been approved by the EIB Board to be supported by the CEF Debt Instrument and one more is expected to be signed using project bonds. The EIB estimated that 5 operations will be signed in 2016 under the CEF Debt Instrument. Complementarity between EFSI and CEF and other financial instruments A complementary approach agreed with the EIB between CEF Debt Instrument and EFSI will be pursued, where the CEF Debt Instrument shall concentrate on innovative, demonstrator and pilot products and initiatives. DG MOVE and the EIB are promoting "blending" between grants and EFSI. External cost charging schemes Following the possibility for Member States to introduce external cost charging for heavy goods vehicles, as provided for by Directive 2011/76/EU, Germany was the first country to introduce such charges in 2015 on top of traditional infrastructure charges. This development is considered very positive in view of the implementation of the user and polluter pays principles, as advocated by the Commission on several occasions, including in the 2011 White Paper on transport. It is also seen as a potential catalyser for other Member states to implement similar external cost charges for heavy goods vehicles. 63

64 1.1.3 Specific objectives for ABB activity "Horizon 2020 Research and innovation related to transport The White Paper on Transport identifies four priority areas as essential to developing the EU transport system into a competitive and resource efficient transport system and to reach its ultimate objective of cutting carbon emissions in transport by 60% by Innovation is one of them. Transport activities under Horizon 2020 are aimed at increasing the effectiveness of research and innovation in responding to key societal challenges by supporting piloting, demonstration, test-beds, and support for public procurement, pre-normative research and standard setting, and market uptake of innovations. The activities thus support directly the competiveness of the EU's transport and logistics system and technologies as well as providing highly qualified jobs for EU companies active in global markets for transport solutions. Horizon 2020 is in particular focussing on innovation and the development of near market solutions. The intervention logic of the research and innovation activities in transport under Horizon 2020 is to contribute to increasing the effectiveness of research and innovation in responding to key societal challenges by supporting excellent research and innovation activities and bridging the gap to full deployment in order to reap the societal benefits of innovation as well as helping to increase the competitiveness of European industry and their products and services. The activities should cover the full range of research and innovation with an emphasis on innovation-related activities such as piloting, demonstration, test-beds, and support for public procurement, pre-normative research and standard setting, and market uptake of innovations. The activities should support directly the corresponding policy competences at Union level in the area of transport. DG MOVE ensures the implementation of funding for research and innovation activities in the transport area under Horizon 2020 in close cooperation with INEA. DG MOVE is responsible for setting the scope and expected impact of Horizon 2020 projects as parts of the Horizon 2020 transport work programmes. The work programmes are adopted after having achieved positive opinions by Member States. INEA organises the evaluations of project proposals via independent external evaluators according to the general rules of Horizon The external evaluators are required to check the general quality of the proposals as well as the extent to which the proposals meet the scope and expected impact of the particular call topics. A ranking list based on evaluation scores is then established by INEA and matched with the available budget to ensure that the best projects can be funded. DG MOVE considers that INEA executed the tasks under its responsibility in 2015 efficiently and effectively. In this respect, DG MOVE and overall the INEA Steering Committee approved the INEA 2015 Annual Activity Report including the related Declaration of Assurance. In 2015 implementation of activities in the area of research and innovation activities related to transport was generally progressing according to plan. More detailed information on individual initiatives can be found below under each specific objective. It should nevertheless be noted that DG MOVE can only directly control the planning of Horizon 2020 elements under its exclusive responsibility (mainly the systems parts). In order to agree on a harmonised approach on all transport relevant elements, DG MOVE will actively coordinate with DGs RTD, CNECT and ENER. Final results of that coordination depend on finding and agreeing on common positions. The overall Horizon 2020 process is managed by DG RTD and respective delays or changes in the finalisation of the work programme cannot be directly controlled by DG MOVE. 64

65 In addition the adoption of the work programme does not only depend on the Commission, but on the agreement within the respective programme committees and thus the positions and priorities of Member States. Two specific objectives below are linked to the ABB-activity and to general objective 4. Relevant general objective(s): General objective 4 (Horizon 2020 general objective) Specific objective 7: To promote research and innovation for resource-efficient transport that respects the environment programme-based (Horizon 2020) Non programmebased Result indicator Baseline (year) Current situation Milestone Target in MP 2015 Synchronisation of the deployment process of SESAR related technology (Source: CIR (EU) 409/2013) (MOVE E2) 0 (2013) 2015: a) The Deployment Manager provided the full version of the Deployment Programme to implement the Pilot Common Project (Reg. (EU) 716/2014) b) The deployment Manager coordinated and synchronised applications in the context of the 2014 CEF Call for proposals which lead to the award of grants for EUR 315 million for SESAR implementation projects and allowing to expand the SESAR Framework partnership. a) Approval of the deployment programme (2015) b) Selection of the first batch of implementation projects (2015) By 2025, development and deployment of a new generation ATM system (Target based on the SESAR Deployment framework partnership) ITS in the road sector: Implementation by the Member States of the delegated acts adopted under the ITS directive (ecall, road safety related traffic information, 0 (2013) 2015: 89 % of Member States deploying the services (23 out of 28 Member States) n/a In 2015, 100% of Member States deploying the services 65

66 information on safe and secure truck parking) 53 (Source: MOVE.C3 monitoring) Implementing RIS (River Information Services) (source : PLATINA 7RFP research project) (MOVE.B3) 12/2012: km of class Va+ waterways equipped with ENC's (Electronic navigation charts 12/2012: km of class Va+ waterways equipped with shore based inland AIS infrastructure 12/2012: vessels equipped with AIS transponders 12/2012: Electronic Reporting operational on the Rhine; in other regions still in the starting phase 2015 full coverage with ENC for most Class Va+ and some Class IV waterways (10000km) 2015: nearly all commercial vessels equipped with inland AIS (app vessels) Electronic reporting fully operational in 2015 for BtA communication, AtA in some regions only (e.g. Rhine basin) 2015 full coverage with ENC for Class Va+ waterways (10500km) 2020: full coverage of class Va+ waterways equipped with shore based inland AIS infrastructure (10 500km) 2015: all commercial vessels equipped with inland AIS (app vessels) Electronic reporting fully operational in 2015 for BtA and AtA communication Target is set according to legal deadlines for implementation in the RIS Directive 2005/44/EC Main outputs in 2015 Description Indicator Current situation Target in MP 2015 Commission output: Establishment of Shift2Rail Joint Undertaking (MOVE C2) Full establishment (including selection of associated Members) and selection and nomination of an Executive Director for Shift2Rail Partially achieved: In 2015, the governance structure of the Shift2Rail Joint Undertaking was nearly completed. Associated Members were selected (Commission Decision C(2015) 8674 final The indicator for the level of deployment of ITS in the road sector has been changed in Management Plan 2015 as the data for the indicator previously presented was is no longer collected following the end of the TEN-T EasyWay II project. While awaiting the results of a study on the development of indicators for ITS, an indicator for the implementation by the Member States of the 3 sets of specifications applicable for ecall, road safety related traffic information and information on safe and secure truck parking is presented. 66

67 on 08 December 2015); however the recruitment of the Executive Director was only finalised early 2016 so that the interim Executive Director designated by the Commission exercised the Executive Director's duties during all of In 2015, the Shift2Rail Master Plan was endorsed (Council decision (EU) 2015/214 on 10 February 2015) and the Joint Undertaking launched the first Shift2Rail EUR 170 million call for projects on 17 December 2015 Commission output: Adoption by the Commission (after consultation of the Transport Programme Committee) of the transport relevant Horizon 2020 work programme for the years 2016/2017 (MOVE.C2) Adoption by the Commission of the work programme 2016/7 Work Programme 2016/7 was adopted in October 2015 (European Commission Decision C (2015)6776 of 13 October 2015) 2015 Commission output: Commission Communication on Rail freight noise reduction (MOVE.B2) Adoption by the Commission Commission Staff Working Document (SWD(2015) 300 final) adopted on Commission output: Revision of ATM Master plan (MOVE.E2) Adoption of a revised European ATM Master Plan The 2015 Edition of the European ATM Master Plan was adopted by the SESAR JU Administrative Board on 15/12/2015. Q The Commission adopted the Union's position on the approval of the 2015 edition of the Master Plan on 15/12/2015 (C(2015) 9057). Planned evaluations: 3 rd Interim evaluation of the SESAR Joint Undertaking Activities ( ) (MOVE.E2) Final report With the amendment of the SESAR JU Regulation and adaptation to the H2020 framework, the periodic evaluations of the SESAR JU follow a new timing and are coordinated with all JUs/JTIs through DG RTD. The next evaluation will start in 2016 and is due in

68 Comments The large-scale coordinated Air Traffic Management research programme under the SESAR Joint Undertaking private-public partnership has been successfully conducted and has demonstrated its value to pool public and private efforts and resources, improve the efficiency of research activities and focus on developing competitive solutions and systems for large scale and coordinated deployment. The first SESAR solutions developed and validated by the SESAR JU have been translated into implementation projects coordinated and synchronised by the Deployment Manager in accordance with a single Deployment Programme. Since the end of 2015 SESAR solutions are being deployed into the operational environment through these implementation projects. The Horizon 2020 transport work programme for 2016/7 was prepared and adopted in October. It contains an additional focus on safety, Cooperative ITS and automation and addresses social, economic, systemic and mode specific research and innovation action to progress transport contributions to the Energy Union and the Digital Single Market as well as jobs, growth and investment. The first calls were launched in October Funding for a new ELENA action on supporting innovative sustainable investment projects in EU cities was agreed with EIB and DG ENER and adopted in October as part of the Horizon 2020 transport work programme. The Commission initially planned to adopt a Commission Communication on Rail freight noise reduction. The adoption was scheduled for September However, at the end of December, DG MOVE decided to opt for another format i.e. a Commission Staff Working Document, which was finalised on 22 December. The SWD includes a review of existing measures aimed at effective reduction of rail noise of freight wagons and provides an analysis of additional possible solutions that might be considered to address the pressing issue in the coming years (see also under specific objective 1). Shift2Rail The Shift2Rail Joint Undertaking (S2R JU) achieved major progress in 2015: 19 associated members from across Europe were selected; the S2R Master Plan was endorsed by the Council; the Multiannual Action Plan was adopted and the first S2R 170m call for projects was launched on 17 December 2015 (Commission contribution 90m from Horizon 2020, 80m from the other members of S2R). The last pre-condition for full establishment/autonomy of the Shift2Rail Joint Undertaking is the deployment of a dedicated accounting system, which is contingent on the appointment of an Executive Director. Following the initial vacancy notice (COM/2014/10363 published on 25 July 2014), none of the applicants passed the assessment centre; requiring a new vacancy procedure in mid By the end of 2015 the Commission had produced a short list of candidates for consideration at the December meeting of the JU Governing Board, but a final decision by the Board on appointment was still pending. At its meeting on 16 February 2016 the Board appointed Mr. Carlo Borghini to be Executive Director from a date to be confirmed in May This should allow the JU to obtain autonomy in late May ITS As part of the Digital Single Market Strategy, DG MOVE is supporting more use of ITS solutions for a more efficient management of the transport network. The C-ITS platform in 2015 brought together the Commission, Member States and private stakeholders to agree on a shared vision the deployment of C-ITS across the EU. These results will be crucial for the adoption of a C-ITS Master Plan in In the area of multimodal information services, a delegated act has been prepared, aiming to enable interoperability in the exchange of travel data for passenger journeys. 68

69 A study on key performance indicators for intelligent transport systems was contracted in 2014 and produced a final report in April A task force of interested Member States have been involved in the follow-up of this study, the identification and definition of a recommended set of KPIs (both deployment and benefit KPIs). This list will be submitted to the attention of the ITS Committee for a further discussion and possibly at a later stage the adoption of reporting guidelines for Member States. A large number of Member States are already making widely use of ITS solutions to support increased road safety, more efficient road traffic management and more sustainable travel behaviours. 89 % of Member States have started the preparatory work to implement the delegated acts under the ITS directive. The objective of 100% use is therefore not reached. The 2014 reports submitted by the Member States in relations to the implementation of the ITS Directive will be discussed at the ITS Committee on 11 March The deadlines to report on the implementation of the already adopted Delegated regulations were 24 December 2015 for ecall and October 2015 for safe & secure truck parking and road safety related applications. Few Member States however respected these reporting obligations. The issue will also be addressed at the ITS Committee in March 2016 in order to follow up with Member States on their performance. Relevant general objective(s): General objective 4 (Horizon 2020 general objective) Specific objective 8: To promote research and innovation towards better mobility, less congestion, more safety and security programme-based (Horizon 2020) Non programmebased Result indicator Baseline (year) Current situation Milestone Target in MP 2015 Number of cities that are members of the CIVITAS forum (Source : CIVITAS initiative) (MOVE.C1) 218 in in by Km of lines in service equipped with the European Railway Traffic Management System (ERTMS), linked to TEN-T (Sources: European Railway Agency interoperability report pa.eu/document- Register/Documents 2013 in service: km 2013 in service + under construction: km End 2014: almost km 2015: concrete data not yet available. Figures will be available once the Interoperability Progress Report of ERA is finalised in April km by km by 2020 (Commission Decision 2012/88/EU, which repeal Commission decision 2009 Regulation (EU) n 1315/2013 sets out the binding implementation targets for equipment with ERTMS by 2030 for the Core and by 2050 for the Comprehensive 54 The target was reduced compared to Management Plan 2014, based on the trend observed in

70 /Interoperability_pro gress_exec_summar y_2013_en.pdf p.9, (MOVE B.2) Main outputs in 2015 requires that some lines called "ERTMS corridors" are equipped by 2015 and by 2020) TEN-T networks 55 Description Indicator Current situation Target in MP 2015 Commission output: 2nd Sustainable Urban Mobility Plans Platform conference ( Bucharest) (MOVE.C1) Increase of use of the Sustainable Urban Mobility Plan Portal Contacts to the portal of EU cities increased with 14-15% Contacts to the portal by 10% of EU cities Commission European Week, (MOVE.C1) output: Mobility Brussels Number of city representatives participating cities. This is a decrease by 3% in number of participating municipalities compared to 2013 (1930 cities). The reason for this is mainly external factors (e.g. Austria merged its 542 municipalities to 287; 80 Catalan cities postponed their involvement due to regional elections, etc.). 5% increase as compared to 2013 event The objective has therefore not been achieved, due to external factors beyond DG MOVE control. However, among the participating cities, activities have increased: there were 906 car-free days, which is an increase by 123 cities from 2014; an increase by 16%. Commission output: CIVITAS Forum Ljubljana, (MOVE.C1) Number of city representatives Close to 600 participants of which around 350 city representatives 100 representatives Commission output: publically available, online, urban mobility "policy support tool" for use by cities to deliver on the Transport White Paper goals for 2030 (MOVE.C1) Quality of tool and timely publication 8 new policy notes published under CIVITAS over Q3-Q Q Commission Non-binding output: EU Guideline available 6 guidelines on urban vehicle access regulations 2 Guidelines by end 55 Based on the official maps of the TEN-T Regulation (1315/2013), the EU28 Core Network to be equipped by 2030 can be estimated to some km and the total Core and Comprehensive Network to be equipped by 2050 can be estimated to some km. 70

71 guidelines on 'Urban Access Regulations" (MOVE.C1) and 6 guidelines on urban logistics have been drafted in 2015 in cooperation with stakeholders. Publication is expected by end 2016 or early The original plan was to have two of these guidelines for urban access regulations published already by These two are also almost ready but a decision was made following consultations with partners to await publication of the complete package of 12 guidelines together. Therefore, the publication has been postponed to await the finalisation also of the ten other guidelines in Commission output: Adoption by the Commission (after consultation of the Transport Programme Committee) of the transport relevant Horizon 2020 work programme for the years 2016/2017 (MOVE.C2) Adoption by the Commission of the work programme 2016/7 Transport Work Programme 2016/7 was adopted in October 2015 (European Commission Decision C (2015)6776 of 13 October 2015) Q Commission output: Progress smart cities (MOVE.C2) Common approach on smart cities in collaboration with other Commission DGs A common approach (strategic implementation roadmap to market building for smart cities innovation) has been achieved as part of the European Innovation Partnership on smart cities and with main involvement of DGs ENER and CNECT (slight delays encountered during the coordination process).. Several respective actions were undertaken in 2015 to successfully establish by the end of 2015 an implementation roadmap for 2016, bringing together a wide range of cities and companies. Common approach agreed on smart cities in 1st half of 2015 Commission output: ITS Conference 2015 will promote the contribution of ITS to a better, safer, more secure and efficient mobility (MOVE.C3) Overall, a higher participation Registered Participants in 2013: 441 Registered Participants in 2015: 670 This represents an increase by 50%, above expectations. 20% increase as compared to the 2013 event 71

72 Planned evaluations: CLEAN TRANSPORT/URBAN MOBILITY Impact of EU support (ERDF, CF, CIVITAS Initiative, IEE/STEER) on sustainable urban mobility conditions and on the use of alternative fuels in the EU urban areas 56 (MOVE.C1) Final report Final report expected end May Q Comments The CIVITAS forum There are currently 248 cities in the CIVITAS Forum, +20 cities vs This was thanks to a clear call for joining on the CIVITAS website, through various events and through new projects. The CIVITAS Annual Forum "Sharing the City" in Ljubljana, 7-9 October 2015, benefited of the presence of the Slovenian Prime Minister, Vice-presidents Katainen and Šefčovič and Commissioner Bulc, and was attended by 600 European and international city representatives and transport practitioners. ERTMS In 2015, the Commission proposed a two-step approach for the implementation of the Core Network Corridors. First those sections have to be defined that can be implemented by 2020, with a strong focus on cross-border sections. In 2015, the Commission launched a call for tender under the Connecting Europe Facility (CEF) with budget of EUR 200 million from the general envelope and another EUR 200 million from cohesion funds dedicated to ERTMS deployment. In 2015, the Deployment Management Team (i.e. DMT, a consortium of INECO + Ernst & Young) started working on a business case analysis aimed at preparing a persuasive argument for ERTMS, for corridors Rhine Alpine and North Sea Mediterranean, that proves the economic benefit of ERTMS though a comparison between added value and cost. In 2015 the European Railway Agency (ERA) submitted a Recommendation to the Commission regarding the release 2 of Baseline 3, a version of ERTMS specification that will introduce new functionalities that address problems of spectrum capacity (GPRS) and protection of messages between the infrastructure and the train from cyber-attacks as well as error corrections. This Recommendation was discussed with Member States and the sector. Smart cities Regarding the progress achieved on smart cities, several successful actions were concluded in 2015 towards a general Commission-wide approach on smart cities and 56 Also contributing to Specific Objective 8 72

73 communities / cities of the future: The European Innovation Partnership on Smart Cities adopted a strategic implementation roadmap on Smart Cities for the European Innovation Partnership on Smart Cities Two new action cluster initiatives on smart electro mobility and smart mobility services were established (and launched on 28 January 2016 by Commissioner Bulc). The initiatives bring together cities and industry and other organisations to roll out innovative smart city applications in these areas. Coordination meetings were held with Mayors Roundtable and an Action Cluster Outreach meeting took place in Gothenburg on 1 December Funding for a new ELENA action on supporting innovative sustainable investment projects in EU cities was agreed with EIB and DG ENER and adopted in October as part of the Horizon 2020 transport work programme. Several new research and innovation topics on urban mobility and smart cities were developed and coordinated with other DGs and included in the respective Horizon 2016/7 work programmes (mainly transport and energy). For Horizon 2020 see also general comments above under Specific Objective 7. 73

74 1.2 Example of EU-added value and results/impacts of projects or programme financed On behalf of the Commission, a consortium led by the Fraunhofer Institute for Systems and Innovation completed a study on the economic impact of the completion of the TEN- T core network. It has shown that, cumulatively until 2030, around 10 million additional man-years of employments will be generated. This includes direct and indirect effects during construction, with an expected peak around the middle of the forthcoming 15 years' period (direct effects concerning the construction sector, indirect effects being generated in related industries such as the supply of electronic, equipment or other materials as well as in various service sectors) and secondary effects (generated in a wide range of the economy, resulting from a changed structure in trade and factor productivity). The latter build on marked reductions of travel times and transport costs as well as the improved accessibility of all regions and economic centres. They will increase over time until 2030 and ensure sustainable employment benefits far beyond core network completion in a wide range of market services (including transport industry, trade, communication, banking, tourism etc.). Keeping the European transport system abreast with future innovative developments and with societal changes also entails the continuous generation of a major share of "innovative" jobs. The completed TEN-T core network will add 1,8 % to the GDP of the EU in These jobs' and growth effects show: Any single TEN-T project, as identified in the Guidelines' Regulation, makes a vital contribution to achieving the full network benefit. Member States, regions' private sector's investments in this sector, supported by EU instruments where necessary, create sustainable assets for Europe's economy and its citizens. Transport projects supported by the European Fund for Strategic Investment (EFSI) The EFSI can complement other EU and national funding sources and ensure the completion of important projects in the transport sector attracting sufficient funding for pipeline building, planning and structuring. By the end of 2015 eight transport projects expected to trigger 4.6 bn in total investments, have been approved by the EIB Board including a projects in Italy for the acquisition of new stock for rail services to connect major cities and two projects in Spain for the construction and improvement of road and rail access to ports in Spain and the construction of two new dual-fuel vessels for a Spanish shipping company, replacing two older, less fuel-efficient vessels. Blending of EU grants with financial instruments: In July 2015 a transaction under the pilot phase of the Project Bond Initiative (PBI) was signed for the development of the Port of Calais, for which the combined support of a CEF grant and the PBI has been successfully proposed to finalise the financing plan to provide the optimum blending mix. The port extension, which requires investments in excess of 700 million, was structured as a PPP (Design, Build, Finance, Maintain and Operate). The private sector consortium issued project bonds, which were in turn supported by the PBI. In addition CEF grant has been allocated to the Nord Pas de Calais Region to support the public subsidy to be provided by them. The project will enable to accommodate more traffic and alleviate the operational constraints of the current port layout. CEF projects Like in previous years, the delivery of the TEN-T focused in 2015 again on cross-border projects, as well as major bottlenecks and interoperability. In this sense, the major cross-border projects made considerable progress, like Brenner, Lyon-Torino, Rail 74

75 Baltica. To highlight some other such major projects that saw considerable progress in 2015, the following could be noted: - Koralm: The project of the Koralm new railway line (127 km) and tunnel (33 km) between Graz and Klagenfurt in Austria addresses one of two missing links along the Baltic-Adriatic Corridor. Its realisation is therefore of high EU added value as it brings immense time gains (120 min) for the Alpine crossing freight and passenger traffic. The project is funded with around 60 MEUR by the 1st CEF call In 2015, works on two further sections of the tunnel (Tunnelkette Granitztal, Tunnelkette St. Kanzian) and the second phase of the new railway line between Althofen/Drau and Klagenfurt have been launched. - Y Basque: The cross-border connection FR-ES on the Atlantic Corridor (Bayonne- Bergara) comprising a new, high-speed high-capacity line ("Y Basque3) in Spain, upgrading on the junction Irún-Hendaye, and the upgrading of the signalling on the French existing rail line has been endorsed by the EU with a high CEF contribution of around 450 M. Works are on-gong on both sides, and thanks to the EU co-funding the whole project will become operational by SCOOP@F is a Cooperative ITS pilot deployment project that intends to connect approximately 3000 vehicles with 2000 kilometres of roads. It consists of 5 specific sites with different types of roads: Ile-de-France, "East Corridor" between Paris and Strasbourg, Brittany, Bordeaux and Isère. SCOOP@F is composed of SCOOP@F Part 1 from 2014 to 2015 (ongoing) and SCOOP@F Part 2 from 2016 to Its main objective is to improve the safety of road transport and of road operating staff during road works or maintenance. SCOOP@F Part 2 includes the validations of C-ITS services in open roads, cross border tests with other EU Member States (Spain, Portugal and Austria) and development of a hybrid communication solution (3G-4G/ITS G5). SCOOP@F Part 2 will cooperate with ongoing European pilot projects and the C-ITS platform (chaired by DG MOVE). The project aims at reaching a critical mass in the number of tested vehicles, roads and services, in order to provide a representative evaluation of C-ITS. It also stimulates collaboration between automotive manufacturers and road operators, the exchange of best practice and innovation in solving common problems. The estimated cost of the action is 20,036,598, with an EU cofinancing rate of 50% also saw the first generation of urban nodes projects financed by the CEF on the TEN-T core network. Seven projects for a total EU co-financing of 49 million were kicked off, most of them focusing on inter-modal connexions and acknowledging the importance of urban areas, as the main socio-economic centres of the Union and as the main generators of jobs and growth, for long-distance seamless mobility. In 2015, the first transport projects under Horizon 2020 were launched following the 2- stages selection procedure for 2014 call project proposals call projects will be launched in Projects that were launched in 2015 will provide new insights into how to reduce impacts and costs of freight and service trips in urban areas, reducing congestion in cities and fostering synergies and de-stressing the supply chain as well as achieving seamless smart mobility with the necessary safe and resource efficient infrastructure. Projects under the previous 7 th framework contract are nearing their conclusion and have provided further policy insights in 2015 for example in the following areas: - The KNOW-ME project, addressing the human factor in shipping and in particular the skills shortages, developed methodologies and tools to improve the retention of European seafarers and enhance the attractiveness of maritime professions; 75

76 - The MAINLINE project developed effective and efficient improvement tools for existing rail infrastructure in Europe, including the implementation of new technologies and new construction methods and the application of advanced monitoring techniques for older rail infrastructure. - The EBSF project brought together several bus equipment suppliers to develop an IT standard architecture and application platform for on-board information and communication systems, strengthening the leading global role of the European bus industry and paving the way for developing industrial standards. The implementation of FP7 projects in the areas of liquefied natural gas and electromobility has continued in 2015: The "LNG Blue corridors project" involves the cooperation between heavy duty vehicle manufacturers, fuel suppliers, fuel distributors and fleet operators. The core of the project is the roll out and demonstration of four LNG Blue Corridors involving 14 new LNG or L-CNG stations at critical points/locations and a fleet demonstration operating along the corridors. The number of trucks in the project continues to increase; the total fleet consists now of 115 LNG trucks, on top of the 100 trucks regarded as a critical mass for the project to succeed. The number of vehicles is likely to increase in the next future. Important European fleet operators have already made decisions to invest in LNG and will at different stages purchase trucks and to be part of the project. FREVUE is one of the two projects devoted to electro-mobility. FREVUE intends to demonstrate that the use of electric vehicles (as an alternative to the diesel vehicles currently employed) for the last mile freight movements in urban centres can con offer a significant contribution to the decarbonisation of the European transport system, particularly when combined with state-of-the art urban logistics applications, innovative logistics management software, and well-designed local policy. Demonstrators have been deployed in Amsterdam, Lisbon, London, Madrid, Milan, Oslo, Rotterdam and Stockholm. Some 27 electric vehicles will be used throughout the project. The second project on electro mobility, ZEUS, is about testing electrification solutions in urban buses through demonstrations in order to facilitate the market uptake of electric buses in Europe. In 2015 the following demonstration phases were launched: Munster, Plzen and London. In 2015 new cities were included in the project following the withdrawal of Glasgow: Paris, Warsaw and the Randstad region CIVITAS gathers all urban mobility projects financed under Horizon2020. In 2015, it organized amongst others a very successful yearly conference with a record high of close to 600 participants, and strongly contributed to sharing the latest knowledge and best practice in the different areas of urban mobility towards especially local authorities. 1.3 Economy and efficiency of spending and nonspending activities. According to the financial regulation (art 30), the principle of economy required that the resources used by the institution in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and the best price. The principle of efficiency concerns the best relationship between resources employed and results achieved. The respect of these principles is continuously pursued through the implementation of 76

77 internal procedures and predefined practices. These procedures ensure that activities are executed in an efficient manner (e.g. the different workflows contribute to the efficient cooperation between staff, units, etc ) and according to the principle of economy (e.g. the procurement rules ensure procurement in optimal conditions). DG MOVE is continuously working to improve the efficiency and economy of its operations. The following two initiatives highlighted in the Management Plan 2015 show how these principles are implemented by DG MOVE: Example 1 On 22 July 2015 the Delegation Agreement for the Connecting Europe Facility Debt Instrument has been signed by Commission VP Katainen and EIB President Hoyer. The first Steering Committee has been organised on 22 September, where inter-alia the progress reports of the PBI and the LGTT have been presented. Members of the Steering Committee exchange of views and agreed on main principles related to CEF and EFSI relationship and the CEF pipeline has been presented, including 6 projects on TEN-T. Discussion on specific product sheets also took place. The Agreement specifies detailed terms and conditions applicable for the efficient design, management and implementation of the CEF debt instrument. It foresees a more flexible and wider use of financial instruments by offering more diverse products focusing on projects with the highest EU added value, thereby concentrating the resources where they are most needed and making the best use of the EU contribution available. For example, the scope of the Agreement also covers technical assistance dedicated to supporting the relevant authorities in project identification or financial structuring, that so far have been lacking. Additionally - the expected leverage effect of the financial instruments is between 6 and 15 times, which will maximise the EU contribution. A balanced approach to spending is also ensured by the flexibility to adjust (increase or reduce) the indicative EU contribution, depending on whether the up-take of the financial instruments is higher or lower than expected Example 2 DG MOVE, in collaboration with DG RTD, is in the process of setting the "Shift2Rail" Joint Undertaking a public-private partnership in the rail sector, providing a platform for the rail sector to work together with a view to driving innovation in the years to come. Established by the Council Regulation 642/2014 of 16 June 2014, the Joint Undertaking will be tasked with implementing the research and innovation budget for rail under the Horizon 2020 framework programme. By bringing together the coordination, programming and execution of rail-related research and innovation activities under the responsibility of a single, dedicated structure, the Joint Undertaking will ensure continuity and avoid fragmentation of research and innovation efforts, helping to avoid costly overlaps and duplication. The first work plans of the Shift2Rail Joint Undertaking have been adopted on 11 December 2015 and thus the first Shift2Rail calls for activities were published on 17 December In addition, these work plans foresee the use of complementary grants (an option allowed under Horizon 2020) in order to ensure a sufficient level of coordination between the research activities carried out in the different projects. 77

78 Furthermore, as the costs of running the Joint Undertaking will be shared by the Commission and the rail industry participants on a 50%-50% basis, hence the administrative costs relating to the management of Horizon 2020 funds will be significantly lower than if managed internally while achieving the same, if not better results. Thus the Joint Undertaking will also ensure a significantly higher leverage effect of EU funds by making EU funding (of up to EUR 450 million between ) conditional to firm financial commitments from the rail industry (of at least EUR 470 million between ). The core objective of the Joint Undertaking is to enable a faster and cheaper transition to a more attractive, competitive, efficient, integrated and sustainable European rail system, thereby supporting the achievement of the Single European Railway Area and the competitiveness of the rail sector as a whole. In particular, the initiative is expected to contribute to a 50% reduction of the life-cycle costs of the railway transport system. 78

79 2. MANAGEMENT AND INTERNAL CONTROL Assurance is an objective examination of evidence for the purpose of providing an assessment of the effectiveness of risk management, control and governance processes. This examination is carried out by management, who monitors the functioning of the internal control systems on a continuous basis, and by internal and external auditors. Its results are explicitly documented and reported to the Director-General. The reports produced are: the reports by AOSDs; the reports from Authorising Officers in other Directorates-General managing budget appropriations in cross-delegation; the reports on control results from entrusted entities in indirect management as well as the result of the Commission supervisory controls on the activities of these bodies; the contribution of the Internal Control Coordinator, including the results of internal control monitoring at the Directorate-General level; the reports of the ex-post audit; the opinion of the internal auditor on the state of control and the observations and recommendations reported by the Internal Audit Service (IAS); the observations and the recommendations reported by the European Court of Auditors (ECA). These reports result from a systematic analysis of the evidence available. This approach provides sufficient guarantees as to the completeness and reliability of the information reported and results in a complete coverage of the budget delegated to the Director- General of DG MOVE. Section 2 reports the control results and other relevant elements that support management's assurance. It is structured into (1) Control results, (2) Audit observations and recommendations, (3) Cost-Effectiveness and efficiency of the internal control system, and resulting in (4) Conclusions as regards assurance. 2.1 Control results This section reports and assesses the elements identified by management that support the assurance on the achievement of the internal control objectives. The DG's assurance building and materiality criteria are outlined in the AAR Annex 4. Annex 5 outlines the main risks together with the control processes aimed to mitigate them and the indicators used to measure the performance of the control systems Overview of the 2015 payments The total payments of DG MOVE in 2015 amount to EUR million, the vast majority being operational as the administrative part only accounts for 2.97%. DG MOVE's programmes and activities are mostly implemented under indirect management (82%). Section covers the payments under direct management by DG MOVE, while 79

80 section reports on the payments made by other AODs or to entrusted entities. Distribution of the expenditure in 2015 per type of activity Co-delegations 3% CEF 2% Financial instruments 24% Other direct expenditure 7% Research (FP6, FP7, H2020) 6% Subsidies to Decentralised Agencies 29% Contribution to SESAR JU 24% Subsidy to INEA 5% Allocation of the 2015 payments between direct and indirect management (in EUR million) 350 M 300 M 250 M 200 M 150 M 100 M 50 M 0 M 11 M 18 M 93 M 116 M 37 M 12 M 84 M 23 M Direct Indirect Other expenditure INEA SESAR JU Decentralised Agencies (ERA, EMSA, EASA) Financial instrucments Research (FP6, FP7, H2020) 80

81 In 2015 DG MOVE absorbed 99.14% of the commitment appropriations and 99.66% of the payment appropriations. Execution of DG MOVE's appropriations 57 over time: 100,0% 99,4% 99,3% 99,3% 99,9% 99,7% 98,7% 98,6% 98,5% 99,1% 90,0% 93,2% % Commitment appropriations % Payment appropriations 80,0% 70,0% This chart is based on C1 credits only (commitment appropriations voted in the current budget (C1), budget modifications and other current year commitment appropriations, modifications due to amending budgets and transfers (C1)), while tables 1 and 2 of Annex 3 include all authorised appropriations. 81

82 Table 2.1 Overview table: activities and main indicators (in EUR): Risk-types / Activities H2020 (prefinancing) Research (FP6- FP7) Contribution to SESAR JU Subsidy to INEA Subsidies to Decentralised Agencies Financial instruments CEF (prefinancing) Other operational expenditure Administrative expenditure Totals (coverage) Links to AAR Annex 3 Grants / Procurements Cross-subdelegations to other DGs Codelegations to other DGs Subsidies / funds to EE Delegation Agreements with EE Available ICO indicators RER not yet applicable Controleffectiveness Info from IAS /ECA on assurance or on new/overdue critical recommendations Reservation AAR Section Not available N N RER: 2.65% N Y (FP7) Audit / monitoring activities N N Audit and mgnt decl. N N , Audit / monitoring activities N N Audit / monitoring activities / mgnt decl. N N RER not yet applicable Not available N N , Estimated RER < 2% Not available N N Estimated RER < 2% Not available N N (Partly under and ) (Partly under and ) 82

83 The following important points can be drawn from this overview table: Based on the main indicators results available, overall suitable controls are in place and work as intended; The reservation on the Seventh Framework Programme (FP7) overpayments is maintained as the residual error rate remains persistently above the 2% materiality threshold defined in Annex 4 "Materiality Criteria". Section 3.2 addresses the FP7 reservation Control effectiveness as regards legality and regularity DG MOVE has set up internal control processes aimed to ensure the adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multiannual character of programmes as well as the nature of the payments concerned. For 2015, the control effectiveness is outlined in section for the research programmes (FP7 and Horizon 2020) directly managed by DG MOVE, as well as for the cross-sub-delegations given to other Commission's services and in section for the budget entrusted to other entities. Overall amount at risk Table 2.2 below shows that around 97.4% of the expenditure implemented in DG MOVE in 2015 is considered as complying with all the legality and regularity requirements. The remaining 2.60% is the part of the expenditure impacted by the risk that the underlying transactions were not compliant with the legal or contractual provisions. For DG MOVE, the estimated overall amount at risk for the 2015 payments made is EUR 5.97 million (see Table 2.2 below for the calculation). This is the AOD's best, conservative estimation of the amount of expenditure authorised during the year not in conformity with the applicable contractual and regulatory provisions at the time the payment is made. This expenditure will be subsequently subject to ex-post controls and a sizeable proportion of the underlying error will be detected and corrected in successive years. The conservatively estimated future corrections for those 2015 payments made are EUR million. This is the amount of errors that the DG conservatively estimates to identify and correct from controls that it will implement in successive years. 83

84 Detected Estimated Table 2.2 Overall amount at risk and corrective capacity Activities (2) Scope: payments made (FY ; in EUR) (As per AAR Annex 3, table 2) (3) Error rate (%) 58 (4) Amount at risk (FY ; in EUR) = (2) * (3) (5) Estimated future correctio ns (FY ; in EUR) 59 (6) Corrective Capacity (FY ; in EUR) = (2) * (5) H2020 (prefinancing) % 0 Research (FP6-FP7) % Contribution to SESAR JU Subsidy to INEA Subsidies to Decentralised Agencies Financial instruments CEF (prefinancing) Administrative expenditure % % % % % % Other operational % expenditure 63 Total % % In order to calculate the weighted average error rate for the total annual expenditure in the reporting year, detected or - if not available - estimated error rates have been used (not the RER). Average % since 2009 applied to FY payments (source: DG BUDG). As only pre-financings were paid, the error rate in terms of legality and regularity is estimated at 0%. For FP6, the same detected error rate as the one for FP7 is used for 2015, given the low amount paid (EUR million) and the similarities between the two programs (including as regards beneficiaries). From the draft AAR of SESAR JU. Mostly payments for procurement contracts. 84

85 Direct management This section provides details on the control effectiveness for the research programmes that DG MOVE managed directly in 2015 (FP7 and H2020) as well as for the cross-subdelegations given to other Commission's services FP7 The objective of transport research under FP7 is to develop safer, greener and smarter pan-european transport systems that will benefit all citizens, respect the environment, and increase the competitiveness of European industries in the global market. The amount paid from the FP7 budget lines represents 13.17% (or EUR million) of the total payments made in 2015 by DG MOVE. However, this percentage includes a part of the contribution paid to SESAR Joint Undertaking (11.84% or EUR million), therefore the contributions to the FP7 projects paid by DG MOVE in 2015 actually correspond to 1.25% (or EUR 4.97 million) of the total payments. In addition, the operational expenditure related to the FP7 accounts for 0.07% (or EUR 0.29 million) of the total payments (e.g. reviewers, IT, external audits). In 2015, DG MOVE also managed financial operations under the Sixth Framework Programme (FP6) but, given their limited share (around 0.02%), and the fact that these were residual payments for a programme that is about to be closed, they are not detailed in a specific section. The control systems are divided into four distinct stages, each with specific control objectives. Key indicators have been defined for each stage. However, this AAR will only focus on stages 3 and 4, as the first two stages of the control system (call for proposals, their evaluation and the contracting phase) were completed prior to 2015 for this programme. Stage one: Call for an evaluation of proposals Not applicable Stage two: Contracting Not applicable Stage three: Monitoring the execution of projects The third stage concerns the management of the project and the grant agreement. This stage comprises the technical monitoring and the ex-ante checks of participants' cost claims. The purpose of these ex-ante checks is to ensure that the transactions authorised are in compliance with the applicable rules. In addition, every cost claim over EUR must be accompanied by a certificate on 85

86 the financial statement (CFS), given by a qualified auditor or a Certified Public Official. The Research family, as well as ECA, have identified that these certificates do not always identify all ineligible expenditure in the cost claim. To assess the impact of this weakness DG RTD carried out a study that showed that cost claims with a CFS had an average error rate 50% lower than those without. This shows that, while not perfect, these CFSs do have a significant positive effect. Control effectiveness: Ex-ante checks: reductions to the requested EU contribution 64 The chart below shows the reductions made to the EU contribution claimed by grant beneficiaries as a result of ex-ante checks. The have prevented the payment of around EUR 0.86 million, representing 2.6% of the requested EU contribution. The main errors detected in cost claims concern inconsistencies between the information supplied by grant beneficiaries (amount of costs, methods of calculation, periods, etc.) and that included in the audit certificate; audit certificates that are incomplete or missing, or not provided by a qualified auditor; arithmetical errors; and costs incurred outside the eligibility period or costs not covered by the legal basis. EUR 0.86 million (2.6%) EUR million (97.4%) EU contribution requested by beneficiaries Estimated reductions through ex-ante checks Even though for the reporting year, the ex-ante checks only detected 2.6% undue EU contribution from the payments requested, it does not mean that the controls were not effective, but rather that all supporting documents supplied ensured that the expenditure was covered by the legal basis. Stage four: Ex-post controls and recoveries 64 Audit results implementation and budget capping not included. 86

87 The fourth stage includes the ex-post audits as well as the recovery of any amounts found to have been paid in excess of the amount due. Control objective The general control objective for FP7 has always been to ensure that the residual error rate does not exceed a cumulative level of 2% 65 by the end of the programme implementation. The key aim is to achieve a good balance between legality and regularity and the achievement of policy objectives, and between trust and control. As detailed ex-ante controls represent a considerable administrative burden on beneficiaries and the Commission, requiring the transfer of large amounts of information and its detailed checking, it has a seriously negative impact on the time to pay to beneficiaries. For this reason, the Research family has decided to obtain most of its assurance from ex-post controls and has consequently defined and implemented a common control strategy, the key elements of which are the ex-post audit strategy and the recovery process. Besides, because of its multi-annual nature, the effectiveness of the control strategy of the Research Directorates-General can only be fully measured and assessed in the final stages of the Framework Programme, once the ex-post control strategy has been fully implemented and the systematic errors have been detected and corrected. Common ex-post audit strategy of the Research DGs Since 2007, the Research Directorates-General have adopted a common audit strategy intended to ensure the legality and regularity of expenditure on a multi-annual basis including detecting and correcting systematic errors. The audits examine only interim and final claims by beneficiaries. Transactions relating to pre-financing are not included in the population subject to audit. Since 2012, a Common Representative audit Sample (CRaS) has been introduced across the research family to reduce the audit burden on beneficiaries by reducing the number of repeat audits whilst continuing to provide a representative view of the implementation of FP7. The CRaS is thus intended to estimate the overall level of error in FP7, across all services involved in its management ("representative audits"). It is complemented by risk-based audits, selected according to one or more risk criteria, aiming at detecting and correcting as many errors as possible and to identify possibly fraudulent operators ("corrective audits") saw the creation of the Common Support Service, of which the Common Audit Service (CAS) is a key part. In 2014 the CAS undertook all audits for the DGs that fund research grants (amongst which DG MOVE). Different indicators are calculated to provide a comprehensive view of legality and regularity (more information provided in Annex 4): Representative Error Rate: derived solely from the results of audits on a 65 Materiality for FP 7 is assessed in accordance with Annex 4. 87

88 representative sample of beneficiaries, extrapolated by a statistical method to the overall population (calculated for FP7 as a whole). Residual Error Rate: The residual error rate, on a multi-annual basis, is the extrapolated level of error remaining after corrections/recoveries undertaken by Commission services following the audits that have been made. To derive assurance, DG ENER is using the residual error rate, which is considered by the Research DGs as a reliable and acceptable indicator for the purposes for which it was intended, i.e. as legality and regularity indicator on the progress made, through its ex-post strategy, in dealing with errors over a multi-annual basis. Results of FP7 ex-post audits In the case of FP7, the year 2015 was the seventh year of implementation of the common audit strategy. Detailed data on DG MOVE FP7 audit coverage are shown in table 2.3: Table 2.3 FP7 audit coverage Planned cumulative period Achieved cumulative period Planned in 2015 Achieved in 2015 Number of closed audits Total amount audited (EC share EUR) n.a n.a The error rates resulting from the audit work on DG MOVE's FP7 projects are: Common 66 Representative Error Rate (RepER): Based on 298 cost statements for which the audit is completed (92% out of a sample of 324, this error rate is 4.47%. The remaining cases are still subject to contradictory procedures with the beneficiaries; consequently, the Common Representative Error Rate may still develop. Residual Error Rate (RER): At this point in time, this error rate amounts to 2.65% (see calculation below). As it is above the materiality threshold of 2%, DG MOVE maintains the reservation for FP7 67. It also has to be noted that the RER may still vary following the development of the Common Representative Error rate. 66 I.e. for the whole Research family. 67 The reservation in the declaration of assurance for the FP7 expenditure is addressed in Section

89 Table 2.4 Calculation of the FP7 residual error rate RepER: RepERsys: -4.47% (DG RTD) -2.40% (DG RTD) Total EU contribution (P) EUR Costs accepted by Financial officers (A) EUR Total non-audited participations of audited beneficiaries (E) Residual error rate: ResER=(((RepER*(P-A))-(RepERsys*E))/P EUR % 3,50% 3,00% 2,50% 2,00% 1,50% 1,00% 0,50% DG MOVE FP7 RER: evolution over time 3,20% 3% (estimated) 2,82% 2,65% 0,00% Development of error rates DG MOVE and the Research services will continue their actions to prevent some causes of errors in the FP7 expenditure, however, it seems clear that the maximum 2% residual error target for FP7 will not be attained without a massive increase in the number of audits, or a considerable escalation in the administrative burden imposed on participants through widespread ex-ante controls. Therefore, although the RER remains above 2%, account should be taken of the cost of achieving this target. Furthermore, a modification of the FP7 legal framework is no longer an option, so the services responsible for Research will continue their actions to prevent some causes of errors in FP7 expenditure (guidance to beneficiaries and certifying auditors, control and audit operations, including recovery and extrapolation of errors to non-audited contracts wherever appropriate). This should have some effect on the error rate, particularly in lowering the RER, but will not provide fundamental changes. Besides, there are other objectives and interests, especially the success of the Union's

90 research policy, international competitiveness, and scientific excellence, which should also be considered. At the same time, there is a clear need to manage the budget in an efficient and effective manner, and to prevent fraud and waste. In conclusion, taking these elements in balance, and in the light of the results of the FP7 audit campaign, DG MOVE considers that the overall FP7 control strategy ensures that trust, control and other policy objectives are kept in balance. Aiming to achieve a residual error rate of 2% at all costs is not a viable approach. Finally, so as to reinforce the cleaning effect of the ex-post controls, a third Common Representative Audit Sample will be launched in 2016 by DG RTD. Implementation of audit results In total over the period , the results of the FP7 audits relate to 185 participations, out of which 15 were still in the contradictory procedure with the beneficiaries (and will most likely be in favour of the Commission). From the remaining 170 participations for which the results have been implemented, 76 are in favour of the EC, 63 in favour of the beneficiary and 31 resulting in "zero" adjustments. The table 2.5 below provides an overview of the adjustments in favour of the Commission. By the end of 2015, the adjustments concern 91 participations, corresponding to EUR 3.13 million in favour of the Commission (EUR 1.64 million for the year 2015). Out of the 91 participations with an audit adjustment in favour of the EC, 76 adjustments (84%) for EUR 1.32 million have already been implemented and 15 were in the contradictory procedure with the beneficiaries (as indicated above). About 90% of the adjustments implemented were recovered through offsetting from subsequent payments (EUR 1.2 million) and 10% through recovery orders (EUR 0.13 million). It has to be noted that it is not unexpected to have open cases at this stage as there might be 18 months before new declarations are received from beneficiaries. Table 2.5 Implementation of FP7 ex-post audit results in favour of the EC ( ) Results from external audits Adjustments in contradictory procedure Adjustments implemented Number Funding adjustment ( ) Number Funding adjustment ( ) Number Funding adjustment ( ) For information, in 2015, DG MOVE waived two debit notes related to ineligible costs identified during ex-post audits on FP6 projects for a total amount of EUR Implementation of extrapolation 90

91 The extrapolation of audit findings to non-audited beneficiaries continues. These corrections stem from audits made by DG MOVE or other DGs in the research family where systematic errors were found. As can be seen from the table 2.6, by the end of 2015, 82 such participations were found and the beneficiaries were asked to rectify the errors in DG MOVE projects and submit revised costs statements. On this basis, 47 participations were judged to be concerned by the systematic errors identified by DG MOVE or any of the other DGs. Systematic errors have been corrected for 13 participations, of which two in favour of the beneficiaries. The implementation rate of FP7 recommendations was 58.5% at the end of It has to be noted that it is not unexpected to have open cases at this stage as there might be 18 months before new declarations are received from beneficiaries. Table 2.6 Implementation of extrapolation of FP7 audit results ( ) Number of participations with expected systematic errors Number of participations without systematic errors Implemented cases In favour of EC In favour beneficiary Number of participations to be Number Value Number Value (EUR) (EUR) implemented Taking Tables 2.5 and 2.6 together shows that, by the end of 2015, EUR 1.42 million were recovered following ex-post audits of FP7 projects. Liquidated damages Liquidated damages must be claimed from a beneficiary who is found to have overstated expenditure and who has consequently received an unjustified financial contribution from the EU. In such case, the beneficiary has to repay the overpaid amount plus the liquidated damages. The extent of the liquidated damages is proportionate to the overstated costs and the unjustified amount received by the beneficiary. In several cases, they do not result in a recovery order due to the application of the de minimis rule 69. Since its creation, DG MOVE has applied liquidated damages to beneficiaries who received unjustified EU contributions in the FP7. By the end of 2015 there were 52 cases (seven new cases in 2015), with recoveries of EUR for 43 cases (still three to be issued in 2016). As to the remaining nine cases, as the amounts due were below the threshold of EUR 200, they were not recovered Cases to be implemented are those for which the Commission has written to the beneficiaries requesting them to submit revised cost statements to correct the systematic issues detected. Liquidated damages will only be applied where the unjustified contribution exceeds 2% of the total contribution claimed for the given period. 91

92 Recovery of undue payments (Annex 3) For information, table 8 of Annex 3 displays the total amounts recovered by DG MOVE for undue payments made to beneficiaries. Note that these amounts include corrections implemented both before and after payments distinguishing between errors, irregularities and those notified to OLAF if applicable. In other words, the amounts in this table do not only include the recoveries issued following the implementation of audits and extrapolations, but also other types of recoveries of undue payments H2020 In 2015, three H2020 grant agreements were signed by DG MOVE on behalf of the Shift2Rail JU (S2R JU), as the JU is not yet financially autonomous. Stage one: Call for an evaluation of proposals Not applicable for these grants as the calls were published and evaluated in Stage two: Contracting The second stage concerns the preparation and award of contracts. The overall objective of this stage is the translation of the retained scientific research proposals into a legally binding contract allowing for the management of both the scientific and financial aspects of the project. In DG MOVE, three grant agreements were signed in 2015 for H2020, for a total EU contribution of EUR 36 million. Stage three: Monitoring the execution of projects In 2015, only pre-financing payments were made for these three H2020 grants, representing 4.55% (or EUR 18 million) of the total payments made in 2015 by DG MOVE. These pre-financing payments (still un-cleared thus), due to their nature, are considered as being free of error from legality and regularity perspective. The third stage, comprising the ex-ante checks of participants' cost claims and the analysis of the deliverables, has thus not yet taken place since the first reporting period is still ongoing for each of the three grants. Stage four: Ex-post controls and recoveries Not yet applicable. 92

93 Cross-sub-delegations As in previous years, DG MOVE has cross-sub-delegated a number of activities to different services within the Commission, in order to arrange the provision of certain operations more efficiently. Being a Commission service itself, the AOD of the cross-subdelegated service is bound to implement the appropriations subject to the same rules, responsibilities and accountability arrangements as DG MOVE. Besides, the cross-sub-delegation agreement requires the AOD of the concerned DGs to report on the use of these appropriations. In their reports, the AODs did not communicate any events, control results or issues which could have a material impact on assurance. In 2015, DG MOVE gave cross-sub-delegations to DGs PMO, DIGIT, DGT and ECFIN for the following amounts and purposes: To PMO: EUR were committed in 2014 and EUR in 2015 to cover expert s missions related to the Connecting Europe Facility (CEF) and administrative expenditures related to the setting up of the S2R JU of which EUR were paid. To DG DIGIT: EUR were committed in 2014 for e-fp7/h2020 which were fully paid in Also EUR were committed in 2015 for CEF for which no payment was made in To DG DGT: EUR were committed in 2015 for the transport security for which no payment was made in To DG ECFIN: EUR million of commitment appropriations for the Marguerite Fund 70 were still outstanding by end 2014 of which EUR million were paid in The Marguerite Fund's mission is to provide equity to finance new infrastructure projects. It is an independent fund investing equity in energy, climate change and infrastructure (TEN-T) projects: Greenfield: new projects and facilities, with typical development risks largely mitigated (minimum of 65% of the Fund); Brownfield: replacement, modernisation and capacity enhancement of existing assets (maximum of 35% of the Fund). The Marguerite Fund is managed by an external Management Board, which makes drawdown requests for credits as required. DG ECFIN is responsible for the commitments and authorisation of payments and is also in charge of monitoring the management of the fund as well as the regular reporting to DG MOVE. In 2015, a single payment of EUR 12.4 million was made to the Marguerite Fund. The Marguerite Fund is coordinating efforts with DG MOVE, DG ECFIN and INEA to accelerate its investment in TEN-T projects. In 2015, the Fund has not concluded any new deal in the TEN-T and the amount of investment remains at EUR 69 million committed into three TEN-T projects in prior years. 70 The cost-effectiveness of the supervision of the Marguerite Fund is reported in DG ECFIN's AAR. 93

94 Governance and supervision arrangements The Commission is represented in the Supervisory Board of the Fund, which monitors the activities of the Management Board and, more precisely, its focus on TEN-T projects. The material terms and conditions for EU investment in the Marguerite Fund are established by Commission's Decision C (2010)941 of 25 February The regular reporting from the Fund to the Commission is timely, precise and well prepared. The regular reporting for 2015 (quarterly and semi-annual reports) confirms that the TEN-T supported by the Fund have performed as expected (no losses incurred). The external auditor confirmed in mid-2015 the accuracy and fair view of the financial statements of the Fund as at December 31, The audited financial statements of the Marguerite Fund for the year 2015 will be submitted to the Commission once the external audit is completed (June 2016). In conclusion, as a result of the regular reporting and contacts with the Marguerite Fund and DG ECFIN, DG MOVE is in a position to have a detailed overview of projects pipelines related to the TEN-T investments as well as of the financial accounts of the Fund. Besides, in 2015 DG MOVE did not identify any events, issues or problems which could have a material impact on assurance Indirect management This section reports and assesses the elements that support the assurance on the achievement of the internal control objectives as regards the results of the DG s supervisory controls on the budget implementation tasks carried out by other Commission DGs and entrusted entities distinct from the Commission, i.e.: Co-delegations; The INEA Executive Agency; The European Investment Bank (for financial instruments); Joint Undertakings (SESAR JU, FCH JU and S2R JU) also see Annex 6; Decentralised Agencies (EASA, EMSA, ERA) also see Annex 8. For all these cases, the DG's supervision arrangements are based on the principle of controlling "with" the relevant entity. For details, please refer to Annex 5, section on indirect management Co-delegations The Commission may delegate powers concerning a given budget line to one or more authorising officers by delegation, i.e. various AODs are responsible for the same item of expenditure, but each one for a specific type of transaction. For MOVE, this is the case with PMO, HR, OP and DIGIT. Being Commission services themselves, these DGs are required to implement the appropriations subject to the same rules, responsibilities and accountability arrangements as DG MOVE. In 2015, payments amounting to EUR million were made through co-delegations. 94

95 INEA DG MOVE is one of four parent DGs (with ENER, CNECT and RTD) for the Innovation & Networks Executive Agency (INEA). INEA started its life as TEN-T Executive Agency in 2006 and was initially responsible for implementing the TEN-T Programme and the TEN-T projects from the and financial perspectives. Thanks to a new mandate, approved on 23 December , the Agency became the Innovation and Networks Executive Agency as from 1 January 2014 and its lifetime has been extended to 31 December With the new mandate, the Commission has delegated to INEA the task of executing the operational budget and performing tasks linked to the implementation of its delegated Union programmes in the field of transport, energy and telecommunications infrastructure CEF, and in the field of transport and energy research and innovation - H2020. In addition, the Agency is also managing the legacies of the TEN-T and Marco Polo programmes. In 2015, DG MOVE contributed EUR million to the Agency's running costs. INEA has justified the use of the subsidy and any unused appropriations will be recovered by the parent DGs. Supervision arrangements The Commission Decision establishing INEA and the Commission Decision delegating powers to INEA set out the governance and supervision arrangements. These are complemented by a specific Memorandum of Understanding (MoU) signed between the Parent DGs and INEA that contains reporting and supervision provisions and consists of a two-layer document: A top layer, aiming to harmonise the modalities and procedures of the interaction between the parent DGs and INEA and that includes amongst other: o o o o o o the membership in the Steering Committee (ensuring that the work of the Agency is in line with the Agency s Annual Work Programme); the requirement for INEA to report regularly on the use of resources and performance of tasks (using the Key Performance Indicators agreed between INEA and the parent DGs in INEA's Annual Work Programme 2015: rate of execution of C1 payment appropriations, residual multi-annual error rate, net time to pay and time to grant); the preparation of the Agency's annual budget, in coordination with the parent DGs; the definition of objectives and priorities in the Annual Work Programme of INEA (approved by the Commission); the establishment of security related procedures and processes, including Business Continuity Planning, in consultation with its parent DGs; the assessment of the activities carried out by the Agency through the Annual Activity Reports. A middle layer, with specific provisions for the implementation for CEF and H2020. It has to be noted that work is ongoing on the update of the top layer of the MoU as well 71 Commission Implementing Decision 2013/801/EU. 95

96 as on the middle layer for H2020. This update was considered necessary to accommodate practical cooperation issues brought forward during the first year of collaboration with the Executive Agencies. In practice, the Steering Committee of INEA, chaired by the Director-General of DG MOVE, meets four times per year and oversees the running of the Agency. In particular, at each meeting the Director reports on key issues relevant to the work of the Agency, among which, on the performance of the Agency against the key performance indicators set out in the Agency s Annual Work Programme and on the implementation of the administrative budget and any issue that could have a significant negative impact on his assurance. Meetings and exchanges of information between the parent DGs and INEA on Horizon 2020 and CEF take place regularly, as well as meetings between INEA and the relevant units in DG MOVE on CEF transport and H2020. DG MOVE also attends the Management meetings of INEA and vice-versa. Furthermore, with regards to the human resources, as the management of the Executive Agency are Commission staff on detachment, the parent DGs maintain a close contact with these seconded officials by associating them to the work and life of the parent DG. These close contacts between DG MOVE and INEA are considered essential for the achievement of their respective goals and allow avoiding difficulties impacting on the good governance of INEA. In addition, DG MOVE received the draft Annual Activity Report of the agency, coordinated and reviewed by the Steering Committee. All the KPIs have met their target and in particular the RER is below 2% for the TEN-T and Marco Polo programmes managed by INEA and the Agency Director, in his capacity as AOD, has signed the declaration of assurance without reservations. Besides, DG MOVE conducted an evaluation of the Executive Agency for the period (carried out by an external company that issued the final report in September 2015), in line with Article 25 of the Council Regulation 58/2003 on the Executive Agencies. The overall conclusion of the study was positive, confirming, amongst others, that: The (then) TEN-T Executive Agency produced a good performance when delivering the tasks and functions delegated to it by the Commission, efficiently and effectively; The Agency significantly contributed to the operational enhancement and visibility of the Commission s action in TEN-T across Europe and allowed DG MOVE to focus on policy and institutional tasks; The excellent and very transparent cooperation between both entities, which ensured that there was no overlap; In addition, the Agency was the most cost-effective option available for the implementation of the TEN-T Programme, with the result of the cost benefit analysis significantly in favour of the external Agency option. This option allowed savings of EUR8.8 million of European budget compared to having the Programme implemented in-house. The evaluation also listed a number of recommendations, notably to ensure the continuation of the good performance of the Agency. 96

97 The Agency is also subject to audit by the IAS and by ECA and DG MOVE uses their reports as an element of supervision. The Court of Auditors: o o o In the Declaration of Assurance (DAS) exercise 2014, ECA found the annual accounts for the administrative expenditure of INEA legal and regular in all material aspects and that they present fairly in all material respects the financial position of the Agency. The Court made one observation related to a technical budgetary issue (high levels of carry-overs for committed appropriations for titles II and III), to which the Agency provided replies and justifications. ECA also selected three transactions from the TEN-T programme for review within the framework of the DAS 2014 in the field of Mobility and Transport. More details on the findings can be found in section In addition, in its 2014 Annual Report, ECA made an observation related to the methodology used by INEA for calculating the residual error rate for TEN-T as reported in the Agency's AAR, as INEA does not systematically extrapolate all detected errors. The Internal Audit Service: o The IAS issued on 29 January 2016 its final audit report on "The Preparedness of the Management and Control system for CEF and Horizon 2020", in which they acknowledged the efforts made by INEA to define a control strategy covering the grant management process for CEF and H2020 in a relatively short timeframe and had one very important observation, which INEA accepted: "An insufficiently developed control strategy without adequate control objectives and robust KPIs used for monitoring and reporting on the effectiveness and efficiency of the controls may prevent proper performance management, delay mitigating measures to address performance issues and result in unreliable reporting on performance aspects to external stakeholders. Furthermore, the late definition and implementation of ex-ante and ex-post controls may limit the assurance building process". Conclusion The regular supervision of INEA did not identify any particular events, issues or problems that could have a material impact on assurance or that would need to be included in this report. Overall DG MOVE considers that its supervision of INEA is effective and appropriate EIB for financial instruments (PBI, CEF DI) DG MOVE uses innovative financial instruments for leveraging EU investment and attracting new sources of funding for TEN-T infrastructure projects. The European Investment Bank (EIB) has been entrusted with the implementing tasks concerning notably: The Pilot phase of the Project Bonds Initiative (PBI pilot phase) under Regulation (EC) 680/2007 and amended by Regulation (EU) 670/

98 The PBI is a joint initiative by the Commission and the EIB to stimulate capital market, including institutional investors, financing for large-scale infrastructure projects in transport (TEN-T), energy and information and communication technology. In 2015, EUR million were paid by DG MOVE for the pilot phase of the Project Bond Initiative. The EIB has acted as appraisal agency for credit and issuing the debt enhancement facility to projects eligible under the Union guidelines for transport (TEN-T), energy (TEN-E) and ICT. The PBI pilot phase has been subject to final independent evaluation coordinated by DG ECFIN. The evaluation has outlined the main achievements of the PBI pilot phase: (1) that it contributed to the development of capital markets as an additional source to finance infrastructure projects in the areas of TEN-T, TEN-E, ICT and broadband; and (2) that it helped finance priority projects with a clear EU added value. The report also proposed several recommendations to improve the instruments effectiveness by focusing on the projects with the highest EU added value which lack financing. The Project Bond facility is particularly suitable for projects that struggle to reach investment grade because of sovereign ratings constraints or specific project features (innovative construction technique or high demand risk for instance). The evaluation underlined the need to focus on the projects with the highest EU added value which lack financing. The EIB and the Commission have made considerable efforts to promote the initiative and to outreach towards wider public via various bilateral meetings with the Member States, international events, conferences, and workshops. The EIB has identified a strong pipeline of projects for 2015 and beyond. In 2015, the Court of Auditors selected for testing as part of the DAS process, two transaction payments to LGTT and PBI and concluded that the risk-sharing arrangements needed to be better disclosed in the legal basis and that the Commission took excessive risks in terms of risk sharing arrangements between the Union's contribution and the EIB's exposure in case of default. The Commission argued that such risk sharing arrangements are explicitly foreseen in the legal framework, i.e in the Regulation (EC) 680/2007 as amended by Regulation (EU) 670/2012. Financial instruments (debt) under the Connecting Europe Facility Regulation (EU) 1316/2013 On 22 July 2015 the Delegation Agreement 72 for the Connecting Europe Facility Debt Instrument (CEF DI) was signed by the Commission and the EIB. This new agreement defines that as of January 2016 the projects in the portfolios of LGTT 73 and PBI pilot phase will be merged with the CEF DI. The first Steering Committee was organised on According to the latest Delegation Agreement for CEF DI, the EIB shall be responsible for managing the financial instruments in accordance with the Legal Basis, the Financial and Administrative Framework Agreement (FAFA) and the Delegation Agreement, in particular supporting projects aligned with the TEN-T policy eligible under the CEF regulation. 73 The LGTT is a financial instrument set up jointly by the Commission and the EIB to facilitate a greater private sector participation in the financing of TEN-T projects. This instrument is managed by the EIB which makes annual drawdown requests. DG MOVE did not make any payment in 2015 to the LGTT, so this instrument is not reported in detail in this AAR. 98

99 September 2015, where inter-alia the progress reports of the PBI and the LGTT have been presented. Members of the Steering Committee exchanged views and agreed on main principles related to CEF and EFSI relationship and the CEF pipeline has been presented, including six projects on TEN-T. Subsequently, the Commission adopted the CEF Annual Work Programme 2015 on Financial Instruments, which constitutes a basis for financing projects by means of Financial Instruments and the delegation to the EIB. The total 2015 commitment appropriation for transport is EUR 70 million. No payments from CEF DI were made in 2015 by DG MOVE. Governance and supervision arrangements The Commission is participating in the governance and supervision of the financial instruments managed by the EIB. Service Level Agreement with DG ECFIN for the supervision of technical reports and information regarding management aspects of the instruments (e.g. asset management, treasury guidelines). DG ECFIN acts as Asset Management Designated Service (AMDS) following the corresponding Cooperation Agreements. A joint Steering Committee between the three CEF DGs (DG MOVE, DG ENER and DG CNECT) took place in September 2015, also summarising the state of play on the portfolio of projects signed for LGTT and PBI. Regular teleconferences and exchanges of information with DG ECFIN and DG BUDG on the implementation of projects and management of assets entrusted to the EIB. General supervision of the implementation of the financial instruments in the context of FIIEG. Reception and analysis of the quarterly operational reporting from the EIB. Daily contacts with desk officers of the EIB on the pipeline of projects for the financial instruments and state of advancement of specific projects. The CEF Committee under the comitology procedure approves the annual allocation amount to the projects presented by the EIB as potentially suitable for the financial instruments. In March 2016, the EIB provided its management declaration on the EU funds engaged in the current financial instruments, which did not identify any issues. The audited statements for 2015 for LGTT and PBI were also received in March As a result of the regular reporting provided by the EIB, the management declaration and audited financial statements and the regular contacts with the EIB, ECFIN and DG BUDG, DG MOVE is in a position to have a detailed overview of the state of implementation of the TEN-T projects by means of the financial instruments. Conclusion DG MOVE's supervision of the financial instruments did not identify particular issues that would need to be included in this report, which is the reason why DG MOVE considers that their supervision is effective and appropriate. 99

100 PPPs (Joint Undertakings (JU), ex-art 185 initiatives art. 208 & 209): SESAR JU and S2R JU 74 DG MOVE is responsible for the SESAR JU, a public-private partnership developing operational and technical improvements for the modernisation of the European and global air traffic management system. Furthermore, in 2014, DG MOVE, in collaboration with DG RTD, set up the S2R JU with the aim of coordinating and implementing research and innovation activities in the rail sector. DG MOVE plays a key role in the monitoring of the JUs and relies on the JUs to achieve their policy objectives. DG MOVE is a member of the Administrative Board (SESAR JU)/Governing Board (S2R JU). Arrangements are in place to ensure that all key proposals to these Boards are properly assessed and the Commission position agreed. Each JU is required to produce an Annual Activity Report and the JU Director signs a declaration of assurance in line with the one used in the Commission. In addition, regular reporting and extensive informal and formal contacts are also part of the interaction. The JUs are also required to inform the Commission without delay of any significant developments in the area of risk management, internal control and audit. The Single European Sky Air traffic management Research Joint Undertaking (SESAR JU) In June 2014, the Council of Ministers of the European Union adopted 75 the extension of the SESAR JU for the period up to 31 December This decision was taken in recognition of the need to foster the research and innovation on ATM 76 beyond the organisation's original mandate of 2016, as well as in appreciation of the ability of SESAR JU to respond to evolving business needs and fast track technological and operational improvements in Europe's ATM system. Concerning the governance and supervision arrangements related to SESAR JU, the Commission, represented by DG MOVE, supervises the SESAR JU through its main governance body and through specific arrangements. The Commission is a member of and chairs the SESAR JU Administrative Board. It therefore participates directly (in many cases with an effective veto right particularly when acting in concert with Eurocontrol) in all the decisions affecting the budget, accounts, staff and progress of the JU. All documents related to these issues are evaluated by DG MOVE Single Sky Unit, in cooperation with several other Commission services, in order to establish the Union's position in the Board. Being an EU body, the SESAR JU is also audited by the IAS and by ECA. Moreover, audit As of 2014, DG MOVE is no more accountable for the expenditure related to the Fuel Cells and Hydrogen JU, for which DG RTD is responsible. However, DG MOVE is still a member of the Governing Board. Council Regulation (EU) No 721/2014. ATM Air Traffic Management 100

101 issues are further coordinated through the Permanent Audit Panel assembling all the auditing bodies of the SESAR JU, to which DG MOVE also participates. The Commission has also concluded a Delegation Agreement (General Agreement) with the SESAR JU, which establishes detailed requirements in terms of financial and technical reporting and working arrangements. Furthermore, the Single Sky Unit and the SESAR JU meet on a quarterly basis to discuss the progress of the technical programme. Under this agreement, a representative of the Single Sky Unit also participates in the Programme Committee chaired by the JU's Executive Director. Staff from the Single Sky Unit regularly participates in working groups and evaluations (calls for tender, calls for proposals and staff selection) organised by the SESAR JU. Through the above mentioned mechanisms and arrangements, DG MOVE is satisfied with the quality of the monitoring it is able to exercise as well as with the results achieved by the SESAR JU. The results of the audits carried out by the Court of Auditors, the IAS and the first mid-term evaluation support this conclusion. In 2015, DG MOVE made contributions of EUR million to the SESAR JU (EUR million from the TEN-T budget, EUR million from the FP7 budget and EUR million from the SESAR II budget). The Shift2Rail Joint Undertaking (S2R JU) Set up DG MOVE, in collaboration with DG RTD, set up the S2R JU a new public-private partnership, established under Horizon , to provide a platform for pooling together and better coordinating research and innovation efforts in the rail sector. As a newly established JU under H2020, activities in 2015 remained focused on completing the governance structure of S2R JU and fulfilling remaining preparatory actions to lead to its financial autonomy in The S2R JU was formally established on 7 July 2014 following the adoption by the Council of Regulation (EU) 642/2014. Set-up activities are underway with a view to ensuring that S2R JU can achieve operational and financial autonomy by mid The overall duration of the delegation is foreseen until 31 December The founding members of S2R JU are the European Union plus eight major players from the rail industry having made a commitment of at least EUR 30 million to the S2R JU. The consultation and negotiations with the selected candidate associated members were concluded in the last quarter of 2015 with the signature of the individual membership agreements and their approval by S2R JU Governing Board and by the Commission 78. In 2015, DG MOVE, on behalf of the S2R JU, directly paid EUR 1.23 million to cover the 77 The S2R JU was formally established on 7 July 2014 following the adoption by the Council of 78 Regulation (EU) 642/2014. Commission Implementing Decision (C(2015) 8674 final) of 8 December 2015 on the selection of associated members of Shift2Rail Joint Undertaking. 101

102 administrative expenditure related to the setting up of the JU. In addition, seven projects were funded by the Commission under the rail chapter of the general Horizon 2020 Transport Work Programme for The grant agreements for all seven projects were signed in April Three of these projects are currently managed by DG MOVE and will be taken over by S2R JU once it achieves the operational capacity to implement its own budget. One project is managed by DG RTD and the remaining three projects are managed by INEA. In order to provide a meaningful start to the S2R JU activities and in response to the requests of the S2R bodies (Governing Board, States Representatives Group and Scientific Committee), as well as following the completion of the selection of associated members, the first calls for proposals were successfully launched on 17 December This first batch of calls combines the available commitment appropriations from both the 2015 and the 2016 operational budget of the JU. On 16 February 2016 the Executive Director of S2R JU has been nominated by the Governing Board. His appointment will be effective by late spring 2016, subject to the completion of the necessary administrative procedures required to finalise the recruitment. The complete financial autonomy of the JU is expected to be achieved shortly after that. Objective The core objective of the Joint Undertaking is to enable a faster and cheaper transition to a more attractive, competitive, efficient, integrated and sustainable European rail system, thereby supporting the achievement of the Single European Railway Area and the competitiveness of the rail sector as a whole. By bringing together the coordination, programming and execution of rail-related research and innovation activities under the responsibility of a single, dedicated structure, the Joint Undertaking will ensure continuity and avoid fragmentation of research and innovation efforts, helping to avoid costly overlaps and duplication. The Joint Undertaking will also ensure a significantly higher leverage effect of EU funds by making EU funding (of up to EUR 450 million between ) conditional to firm financial commitments from the rail industry (of at least EUR 470 million between ). Supervision arrangements As an EU PPP body under Article 209 FR, S2R JU will function under strict monitoring rules. The main bodies of the JU are the Governing Board, in charge of strategic decisionmaking, and the Executive Director, responsible for day-to-day management. Monitoring is performed through the supervision of the Governing Board (in which the Commission holds 50% of voting rights) and via regular evaluations by external experts (every three years and at the end of the programme, under the supervision of the Commission). Operational and financial reporting provisions are clearly set out in the Statutes of the S2R JU (Article 20). In 2015 the Commission was in charge of the JU operations and activities. While awaiting the recruitment of the Executive Director, the S2R JU operates under the guidance of the interim Executive Director (seconded from DG MOVE). In addition, there are other key posts at the JU which are currently occupied by DG MOVE staff. The position of the Commission in the Shift2Rail Governing Board is jointly established with other services (including DG RTD, DG BUDG, etc.). Five meetings of the S2R JU Governing Board were held in 2015, where aside from dealing with the preparation and 102

103 adoption of all the basic legal, administrative and financial documents required with a view to achieving operational autonomy, the Governing Board worked on preparing the Shift2Rail Multiannual Action Plan and Annual Work Plans for 2015 and for 2016, which set out the research and innovation priorities of the S2R JU, and on the implementation of the call for Associated Members to the S2R JU. In its last meeting in 2015 the Governance Board also adopted the calls for proposals and calls for tenders for 2015 and DG MOVE has been in charge of validating the different reports before presenting them to the Board (including the Annual work/budget plan and the activity report). The JU will be subject to audits by the IAS and ECA and DG MOVE will use their reports as an element of the supervision of this body. DG MOVE's involvement in the governance of the entrusted entity through the Commission participation did not identify any events, issues or problems which could have a material impact on assurance Decentralised Agencies: EASA, EMSA, ERA DG MOVE: parent DG for three decentralised agencies (DAs) EASA - the European Aviation Safety Agency based in Cologne (DG MOVE subsidy in 2015: EUR million). The main objective of EASA is to maintain a high uniform level of civil aviation safety in Europe and to ensure the proper functioning and development of civil aviation safety. This is achieved through opinions and recommendations to the Commission; certification specifications and guidance material; decisions regarding airworthiness and certifications of aviation products and the oversight of approved organisations and EU Member States. EMSA the European Maritime Safety Agency based in Lisbon (DG MOVE 2015 subsidy: EUR million). EMSA provides technical assistance and support to the European Commission and Member States in the development and implementation of EU legislation on maritime safety, pollution by ships and maritime security. It has also been given operational tasks in the field of oil pollution response, vessel monitoring and in long range identification and tracking of vessels. ERA the European Railway Agency, based in Valenciennes (DG MOVE subsidy in 2015: EUR million), provides technical assistance to the Commission and Member States in the area of railway safety and interoperability. This involves the development and implementation of Technical Specifications for Interoperability and a common approach to questions concerning railway safety. DG MOVE is a member of the Administrative Board (ERA, EMSA) / Management Board (EASA) and relies on the DAs to achieve their policy objectives entrusted to them. Arrangements are in place to ensure that all key proposals to these Boards are properly assessed and the Commission position agreed. In addition, regular reporting and extensive informal and formal contacts are also part of the interaction. Monitoring EASA, EMSA and ERA are fully fledged, regulatory agencies with a clearly established governance set-up, documentation and procedures as required by the "Common approach to the decentralised agencies". DG MOVE is a member of the Management / 103

104 Administrative Board. Arrangements are in place to ensure that all key proposals to the Board are properly assessed and the Commission's position agreed. As part of the supervision and monitoring activities, DG MOVE is involved in numerous contacts at working level, coordination meetings, providing opinions on annual/multiannual work programmes, draft budget, staff policy plan and reporting. Whenever necessary, bilateral meetings between DG MOVE and the Agencies are organised. The agencies have full responsibility for the implementation of their budget, while DG MOVE is responsible for the regular payment of the contributions established by the Budgetary Authority. The working arrangements with the agencies have been clarified either by Memoranda of Understanding or working methods of the budgetary committee which were set up for each agency with the objective to advise the Administrative /Management Boards on all issues related to drafting and implementation of the budget as well as staff-related issues within the agencies. DG MOVE is also represented in the sub-committee meetings which take place before the Administrative/Management Board meeting. Performance indicators have been set up for the monitoring and follow up of the implementation of the budget, the audit recommendations and administrative matters. A report (which includes information on budget implementation, vacancy rate and audit recommendations) is provided by the agencies on a quarterly basis to DG MOVE, which helps detect any weaknesses. Additionally, after the closure of the financial year, the parent DG claims any surplus paid to the Agency on the basis of the budget outturn calculations provided to the Commission. Finally, the Commission provides assistance to the agencies with regard to the application of the financial regulations, but also through the use of different Commission tools and services (ABAC, Medical Service, recruitment via EPSO, training, PMO). Audit by the Court of Auditors In the DAS 2014, ECA found the annual accounts of EASA, EMSA, and ERA legal and regular in all material aspects and that they present fairly in all material respects the financial position of the Agencies. The Court made a few observations to EASA and ERA relating to the budgetary and financial management notably, the high level of carry-overs of committed appropriations as well as shortfalls in procurement planning (EASA) and in reopening of a competition procedure (ERA). Overall, the DAs are taking ECA's observations into account in their continuous development of systems and procedures for controls and governance processes to achieve their objectives. Conclusion In conclusion, the regular supervision of the decentralised agencies did not identify particular issues that would need to be included in this report or that could have a material impact on the assurance. Overall DG MOVE considers that its supervision of the DAs is effective and appropriate. 104

105 2.1.3 Control efficiency and Cost-effectiveness Based on an assessment of the most relevant key indicators and control results, DG MOVE has assessed the cost-effectiveness and the efficiency of the control system and reached a positive conclusion. Direct management For the year 2015, the following efficiency and cost-effectiveness indicators have been estimated related to stages 2 (H2020) and 3 (FP7). No indicators can be provided for stage 1, which was not applicable anymore for DG MOVE in o Stage 2: efficiency indicators Time-to-Grant (days) 243 days The new Regulations for Horizon 2020 (and the Financial Regulation (FR 128.2)) give a total of eight months for the full process of signing a grant: the so-called Time-to-Grant (TTG). In 2015 the TTG was respected for each of the three cases against the H2020 target of eight months, with a TTG of 243 days. Value of grant agreements completed over budget requested in the corresponding proposals (%) 99.99% o Stage 3: efficiency and cost-effectiveness indicators The evolution over time of these efficiency indicators for FP7 is outlined in the two charts below. For 2015, 88.24% of the FP7 payments were made on time, slightly below the Commission's average (93.39%), with a net average time to pay of days, which is below the legal deadline of 90 days. 105

106 Net average time to pay (days) 66,9 39,63 47, % % Payments on time 95% 90% 85% 88,90% 88,24% 80% 75% 80% As to the pre-financing paid for the three H2020 grants, the Time-To-Pay was 23 days in each case, which means a 100% achievement of payments within the legal deadline of 30 days for this activity. The table hereunder provides cost-effectiveness indicators concerning the stage 3 for FP7 for 2015, in comparison to 2014: 106

107 Cost-effectiveness indicators FP Number of FP7 running projects Cost for monitoring the execution 79 EUR EUR Average project management costs 80 EUR EUR Average number of FP7 running projects by FTE Cost of controls 81 / total amount paid 5.3% 10.8% The average project management costs per number of running projects can be justified by the fact that the ongoing projects can be quite complex, with a high number of beneficiaries and in need of a close supervision as most of them are in the final stages of implementation. As for the cost of monitoring and the number of ongoing FP7 projects in 2015, whereas it does not differ significantly from 2014 and the number of ongoing projects is identical, the ratio "cost of controls / amount paid" has deteriorated due to the fact that the payments decreased nearly by half in In addition to the indicators in the table above, the cost-effectiveness of stage 3 for FP7 is outlined in the following chart, comparing the quantifiable benefits stemming from this stage to the costs incurred to perform the ex-ante controls. It is important to note that the amount of unduly claimed EU contribution may vary from one year to the other, depending notably on the quality of the required supporting documents to be provided by the beneficiary, which ensure the conformity of the expenditure with the legal basis. 79 Including overheads 80 Including overheads 81 Including overheads 107

108 Stage 3 - FP7: costs versus benefits Estimated costs of stage 3 (EUR) Estimated benefits of stage 3 (i.e. reduction in unduly claimed EU contribution; in EUR) o Stage 4 implementation of audits: cost-effectiveness indicator As the FP7 ex-post audits are the responsibility of the Common Audit Service since January 2014, only an indicator on the implementation of the adjustments can be provided by DG MOVE: Implementation of FP7 ex-post audits in Costs of implementing the audits (EUR) Adjustments implemented (in favour of the EC; EUR) 108