Address https://gelex.eu/eli/EU/doc/http://publications.europa.eu/resource/cellar/efb8afcc-6c33-4eff-bf1b-6c86d77d61ba.0006.01@2016-09-23/en

Contents

1. Preamble
2. ANNEX
3. ANNEX I SPENDING OF EU FUNDS FOR MARITIME TRANSPORT PROJECTS 2000-2013 PERIOD
4. ANNEX II OVERVIEW OF PROJECTS EXAMINED PER MEMBER STATE
5. ANNEX III OVERVIEW OF NON-COMPLETED PROJECTS
6. ANNEX IV Main characteristics of Member States’ port systems, and overview of EU and EIB support for the audited port areas (2000-2013 period)
7. ANNEX V OVERVIEW OF USER-SPECIFIC SUPERSTRUCTURES CO-FUNDED WITH EU FUNDING
8. ANNEX VI OVERVIEW OF STATE AID DECISIONS SINCE 2007

The ECA’s special reports set out the results of its performance and compliance audits of specific budgetary areas or management topics. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest. This performance audit was produced by Audit Chamber II — headed by ECA Member Henri Grethen — which specialises in investment for cohesion, growth and inclusion spending areas. The audit was led by the Reporting Member Oskar Herics, supported by Thomas Obermayr, Attaché of private office; Pietro Puricella, Principal Manager; Luc T’Joen, Head of Task; Kurt Bungartz, Luis de la Fuente Layos, Rafal Gorajski, Enrico Grassi, Di Hai, Aleksandra Kliś-Lemieszonek, Afonso Malheiro de Castro and Christian Wieser, Auditors. From left to right: T. Obermayr, E. Grassi, C. Wieser, P. Puricella, A. Malheiro de Castro, A. Kliś-Lemieszonek, O. Herics, L. T’Joen, R. Gorajski, D. Hai. Blue Belt The policy framework for the Blue Belt environment consisted of two measures: further simplification of the Regular Shipping Service scheme, which applies from March 2014, and the development of an electronic manifest (the ‘customs goods manifest’), making it possible to distinguish between EU and non-EU cargo on board a vessel, with the intention of facilitating the transport of EU goods. This new manifest will be a tool (amongst others) at the disposal of the issuer to declare the EU status of the goods. This measure applies as of 1 May 2016 for authorised issuers; non-authorised issuers will have the possibility to register proofs of EU status in a new central database managed by customs, expected to be fully functional as of October 2019. An e-manifest pilot project has been set up to harmonise the cargo manifest requested by national authorities when vessels arrive in or leave EU ports. The submission and exchange of this e-manifest will be done through the European Maritime Single Window prototype, developed by the EMSA. Cohesion Fund (CF) The Cohesion Fund is aimed at strengthening economic and social cohesion within the European Union by financing environmental and transport projects in Member States with a per capita GNP of less than 90 % of the EU average. Cohesion policy Cohesion policy is one of the largest policy areas in EU spending. Its aim is to reduce development disparities between different regions by restructuring declining industrial areas and diversifying rural areas, and to encourage cross-border, transnational and interregional cooperation. It is financed from the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund (CF). Connecting Europe Facility (CEF) The Connecting Europe Facility (CEF) has, since 2014, provided financial aid to three sectors: energy, transport and information and communication technology (ICT). In these three areas, the CEF identifies investment priorities to be implemented in the coming decade, such as electricity and gas corridors, use of renewable energy, interconnected transport corridors and cleaner transport modes, high-speed broadband connections and digital networks. Core ports Core ports are those EU seaports which are considered to be of strategic interest. The Commission set out a list of 104 such core ports in 2013. Member States are required to ensure that an appropriate connection exists between these ports and the rail, inland waterway and road networks by 2030. European Regional Development Fund (ERDF) The European Regional Development Fund is aimed at reinforcing economic and social cohesion within the European Union by redressing the main regional imbalances. This is achieved through financial support for the creation of infrastructure and productive job-creating investment, mainly for businesses. European Structural and Investment Funds (ESIF) The European Structural and Investment Funds (ESIF) cover five separate funds that aim to reduce regional imbalances across the EU, with policy frameworks set for the 7-year MFF budgetary period. The funds include: European Regional Development Fund (ERDF); European Social Fund (ESF); Cohesion Fund (CF); European Agricultural Fund for Rural Development (EAFRD); and the European Maritime & Fisheries Fund (EMFF). Ex ante conditionalities Ex ante conditionalities are conditions, based on predefined criteria established in partnership agreements, which are regarded as necessary prerequisites for the effective and efficient use of the EU funding covered by those agreements. When preparing ERDF, CF and ESF OPs under the 2014-2020 programming period, Member States have to assess whether these conditions have been fulfilled. If they have not been fulfilled, action plans need to be prepared to ensure that they are fulfilled by 31 December 2016. Financial corrections Financial corrections are aimed at protecting the EU budget from the burden of erroneous or irregular expenditure. For expenditure that is subject to shared management, recovering incorrectly made payments is the primary responsibility of Member States. Financial corrections can be made by withdrawing irregular expenditure from Member States’ expenditure declarations or through recoveries from beneficiaries. Financial corrections can also be imposed by the Commission. Gateway ports Gateway ports are ports which serve the economic and industrial needs of their area of influence (hinterland). Mixed ports serve both gateway and transhipment traffic. Innovation and Networks Executive Agency (INEA) The Innovation and Networks Executive Agency (INEA) is the successor of the Trans-European Transport Network Executive Agency (TEN-T EA), which was created by the European Commission in 2006 to manage the technical and financial implementation of its TEN-T programme. On 1 January 2014, INEA officially started working to implement parts of the following EU programmes: Connecting Europe Facility (CEF), Horizon 2020, and legacy programmes (TEN-T and Marco Polo 2007-2013). Motorways of the Seas ‘Motorways of the Seas’ is the term used to refer to the maritime part of the Trans-European Transport Network (TEN-T). It provides funding for: (a) maritime links between ports within the comprehensive network, or between a port within the comprehensive network and a third-country port where such links are of strategic importance to the EU; (b) port facilities, freight terminals, logistics platforms and freight villages located outside the port area but associated with the port’s operations, information and communication technologies (ICT) such as electronic logistics management systems, and safety and security and administrative and customs procedures in at least one Member State; (c) infrastructure for direct land and sea access, (d) activities which have wider benefits and are not linked to specific ports, such as services and actions to support the mobility of persons and goods, activities for improving environmental performance, such as the provision of shore-side electricity that would help ships to reduce their emissions, making available facilities for ice-breaking, activities ensuring year-round navigability, dredging operations, and alternative fuelling facilities, as well as the optimisation of processes, procedures and the human element, ICT platforms and information systems, including traffic management and electronic reporting systems. Operational programme (OP) An operational programme (OP) sets out a Member State’s priorities and specific objectives, and how the funding (EU and national public and private co-financing) will be used to finance projects during a given period (generally 7 years). These projects must help to achieve a certain number of objectives specified in the OP’s priority axis. OPs may receive funding from the ERDF, the CF and/or the ESF. An OP is prepared by the relevant Member State and has to be approved by the Commission before any payments can be made from the EU budget. OPs can only be modified during the period covered if both parties agree. Port infrastructures The infrastructure resulting from work to ensure that vessels can be berthed and moored safely (e.g. quays, dykes, breakwaters), make possible the transit of vessels between areas of water located at different levels (locks), or create facilities for vessel construction and repair (e.g. dry-docks). Port superstructures Fixed assets (e.g. sheds, warehouses, office buildings) built on port infrastructures, as well as fixed and mobile equipment (e.g. cranes) used in the port areas. State aid State aid is any form of direct or indirect financial support provided by public authorities to private sector undertakings. The Treaty on the Functioning of the European Union (TFEU) generally prohibits state aid within the common market unless it is duly justified. The EU’s state aid rules specify where such support does not distort (or threaten to distort) competition. The European Commission has the exclusive power to assess whether state aid granted by Member States complies with these rules. Procedural decisions and actions taken by the European Commission are subject to review by the General Court and the European Court of Justice. Trans-European Transport Networks (TEN-T) The Trans-European Transport Networks (TEN-T) are a planned set of road, rail, air and water transport networks in Europe. The TEN-T networks are part of a wider system of Trans-European Networks (TENs), including a telecommunications network (eTEN) and a proposed energy network (TEN-E). The development of infrastructure within the TEN-T is closely linked with the implementation and further advancement of EU transport policy. Transhipment port Transhipment ports are ports where goods are loaded onto another vessel or, sometimes, onto another mode of transportation for transfer to a final destination. Twenty Foot Equivalent Unit (TEU) Measurement unit of cargo capacity used to indicate the capacity of container ships and container terminals. This is based on the volume of a 20-foot-long intermodal container, used between different modes of transportation, such as ships, trains and trucks. Seaports are economically very important in the European Union (EU). There are more than 1200 commercial seaports in 23 of the EU’s 28 Member States. They are the key nodes in the global trade network, since they handle around three quarters of the EU’s cargo trade with non-member countries and more than a third of intra-EU freight transport. In 2013, the European shipping industry is estimated to have contributed around 1 % to the EU’s GDP and supported employment for around 2.2 million people. Investments in port infrastructures are eligible for EU co-financing through the European Regional Developments Fund (ERDF) and the Cohesion Fund (CF) under shared management, but also through the Trans-European Networks-Transport (TEN-T) and the Connecting Europe Facility (CEF) under the direct management of the European Commission. Overall, between 2000 and 2013, around 6.8 billion euros of funding was provided from the EU budget for investments in ports. In addition to funding from the EU budget, the European Investment Bank (EIB) financed port investments in the form of loans amounting to around 10.1 billion euros. We assessed the Commission’s and Member States’ EU maritime freight transport strategies and the value for money delivered by EU-funded investments in ports, where we examined 37 new projects and five reassessed projects. Overall, our audit found that:

The long-term port development strategies put in place by the Member States and the Commission did not provide a robust and coherent basis for planning the capacity needed in EU ports and for identifying the necessary EU and national public funding for port infrastructures;

Funding in similar port infrastructures and superstructures in neighbouring ports has led to ineffective and unsustainable investments: based on the 30 of 37 projects examined and already completed between 2000 and 2013, one in every three euros (corresponding to 194 million euros for 12 projects) has been spent ineffectively so far. Around half of this funding (97 million euros of EU funding for nine projects) was invested in infrastructures which were not used or were heavily underused for more than 3 years after the works ended. This highlights shortcomings in the ex ante needs assessment and indicates a high risk of the amounts invested being wasted;

This observation also applies to the five reassessed ports already examined in 2010. This reassessment did indicate poor value for money overall: the use of the EU-funded capacity for these ports was still inadequate after almost a decade of operations. The port areas in four ports were still at a very low level or empty. Overall, 292 million euros of the investments was considered to have been spent ineffectively;

Cost overruns and delays are further illustrations of inefficiencies in the examined investments in port infrastructures. Overall, the EU-funded projects examined had cost overruns of 139 million euros. Moreover, 19 of the 30 completed projects faced delays, out of which 12 were delayed by more than 20 % of the planned project duration. Relative to the initially planned duration, the delays were of up to 136 %. Of the seven projects (corresponding to 524 million euros of EU funding) not yet completed at the time of the audit, six were also delayed;

Many missing and inadequate links to hinterlands, such as missing road and rail connections, will need further public funding to make the initial port investments work properly;

Both the internal coordination within the Commission and the procedure in place between the EIB and the Commission to assess proposed EIB loans for port infrastructures have not been functioning properly as the EIB does not share all relevant information with the Commission. Moreover, for some loan proposals, critical problems were highlighted internally within the Commission, but not signalled to the EIB in the form of a negative opinion by the Commission; and

The Commission did not take the necessary actions in the area of state aid and customs procedures to enable ports to compete on a level playing field. The Commission’s state aid control could have been more proactive and more effective by monitoring ex post whether the conditions under which earlier decisions (e.g. for concessions) were taken, remained unchanged or by refusing support to user-specific superstructures.

For example, projects which included superstructures used by private operators had been co-financed with around 92.5 million euros from the EU budget.

In our report, we make the following recommendations:

Put in place a monitoring of core port capacity, taking account of the Member States’ plans for implementing their long-term strategies;

Revise the current number of 104 ‘core ports’ which are necessary to maintain an adequate level of accessibility for the EU as a whole;

Set out an EU-wide port development plan for core ports, maritime waterways and canals;

Work with the Member States to reduce the administrative burden and delays in project selection and implementation by promoting the principle of a national ‘one-stop-shop’ for the issuing, or refusal, of all permits and authorisations for port infrastructure-related investments. Moreover, a ‘tacit agreement’ principle (e.g. of 2 years) should be implemented as soon as possible;

Strictly apply the ESIF Common Provisions Regulation and the CEF Regulation on financial corrections due to underperforming investments for the 2014-2020 period;

Assess the possibility of excluding EU funding for port infrastructure for container transhipment and storage (e.g. construction of quays, docks and storage capacities) during the 2014-2020 period. In addition, superstructures which are not within the public remit should be excluded from EU funding, as these should be considered a commercial environment;

Prioritise EU co-financing from both CEF and ESIF spending to core ports to improve their connections to their hinterlands;

Fund port infrastructures other than connections to hinterlands only on the condition that there is a clearly established need, where EU added value is demonstrated and where there is a sufficiently large private investment component secured in the overall investment envelope;

Ensure that all necessary loan information on proposed EIB loans is shared between the EIB and the Commission to facilitate robust assessments;

Internally clarify, and consistently implement, the procedure for determining whether critical remarks should lead to a negative opinion on a proposed EIB loan;

Issue state aid guidelines for seaports;

Ensure consistency in the treatment of user-specific port superstructures;

Increase the number of desk-based state aid investigations on ports and follow-up of earlier state aid decisions to ensure that the conditions present at the outset remain;

Member States should systematically notify the Commission of all public financial support to ports in accordance with EU state aid rules;

Ask Member States to periodically provide specific information on the type and number of customs procedures at individual core ports in order to assess whether ports are being treated equally;

Improve the competitive position of maritime transport compared to other transport modes by further simplifying maritime transport and customs formalities, in particular by moving towards an EU ‘single window’.

Ports are economically very important in the European Union (EU). There are more than 1200 commercial seaports in 23 of the EU’s 28 Member States. They are the key nodes in the global trade network: they handle around three quarters of the EU’s cargo trade with non-member countries and more than a third of intra-EU freight transport. Liquid bulk accounted for 37 % of all cargo passing through EU seaports in 2014, followed by dry bulk (23 %) and containers (21 %). Moreover, there are around 400 million passengers per year using these ports. In 2013, the European shipping industry is estimated to have contributed up to 147 billion euros (or around 1 %) to the EU’s GDP. It also supported employment for an estimated 2.2 million people. Of these, some 1.5 million people were directly employed by ports in the EU. Ports also play an important role in linking islands and peripheral areas with the mainland. The ports sector is a very heterogeneous one, with ports differing significantly in their size, type, organisation and in how they are connected to their hinterlands. Efficiency and productivity vary greatly between EU ports, and these differences have even increased in recent years. Some 96 % of all freight and 93 % of all passengers transiting through EU ports do so through the 329 key seaports identified as essential to the functioning of the internal market in the EU Guidelines on the Trans-European Transport Network (TEN-T). There are considerable differences even between these key ports: in 2012, the three largest EU ports (Rotterdam, Hamburg and Antwerp) alone accounted for about a fifth of cargo movements, partly due to their proximity to major production and consumption markets in north-western Europe. In contrast, the combined activity of the nine largest Mediterranean ports in the EU Member States comprised less than 15 % of total cargo movements. In an attempt by global players to lower costs, increase operational efficiencies and improve the environmental footprint of maritime transport, ship sizes for all segments (e.g. tankers, container carriers) have continuously increased in recent years (see Picture 1). Source: © 1998-2015, Dr Jean-Paul Rodrigue, Department of Global Studies and Geography, Hofstra University. To give an indication of how large these vessels really are: a ‘Triple E’ vessel is 400 metres long (the equivalent of two football pitches, two ice hockey rinks and two basketball fields combined) and carries 18000 TEU (more recently up to 22000 TEU). If the same load were to be put onto lorries, these lorries would occupy an entire lane of the motorway from Amsterdam to Paris with a ‘wall of trucks’ (see Picture 2). Source: ECA. Larger vessels result in lower transport costs for shipping. There is a cascade effect: ships that have become redundant because of the newly built mega vessels are deployed on other trade lanes, replacing other vessels, which in turn replace others and so forth, ultimately putting the smallest ships out of operation. Finally, deploying larger ships requires new infrastructure and also has an impact on competition between port authorities and port operators. The port sector brings together a broad range of industries, such as the petrochemical, steel, automotive, manufacturing and energy distribution industries. Port services include the provision of:

general transport infrastructure (e.g. maritime access channels, quays) and ancillary infrastructure equipment (e.g. dredging, ice-breakers);

technical nautical services: pilotage, towing and mooring (usually commercial services);

operational infrastructure and ‘superstructures’ (e.g. berths and cranes) which are usually provided by terminal operators; and

passenger-handling and cargo-handling services.

In 2013, the Commission issued a communication, including an action plan, identifying a number of recent maritime transport trends, which often require significant upgrades of existing port infrastructure. These concern

the increase in the size and complexity of seagoing vessels requiring greater peak capacities when unloading cargo or embarking a higher number of passengers;

the substitution of oil and refined products with gas and alternative fuels, such as liquefied natural gas (LNG), leading to large gasification facilities and shore-side electricity supply, and

port security aspects, as ports can also serve as access point for drugs, weapons, contraband goods and chemical, biological, radiological and nuclear materials.

Furthermore, the Commission presented a legislative initiative aimed at making the port services market more easily accessible and establishing common rules on financial transparency and on the charges to be applied by managing bodies or providers of port services. While two previous proposals to regulate these issues in 2004 and 2006 had been rejected by the European Parliament, or significantly modified and subsequently withdrawn by the Commission, the Council adopted a provisional position in October 2015, and the Parliament also adopted a provisional position on this 2013 proposal for a regulation in March 2016, thus paving the way for an agreement in the discussions between the legislative bodies. Compared to other transport modes, shipping is disadvantaged by the fact that ships leaving a Member State’s territorial waters (12 nautical miles from shore) are considered as moving out of the EU customs territory, which means that goods have to go through customs formalities both on departure and arrival at EU ports, resulting in delays and higher costs. This problem of distortion between transport modes has existed since 1992, and in 2013, the Commission issued a communication on measures to simplify administrative and customs formalities (the ‘Blue Belt’ initiative) which led to changes in customs legislation. Work to set up national centralised points for reporting data (‘national single windows’) is ongoing for transport reporting formalities (complying with the requirements of the Reporting Formalities Directive (RFD)), the objective of which is to simplify and harmonise the administrative procedures for maritime transport by making the electronic transmission of information standard and by reducing reporting formalities. In parallel, electronic customs systems are being developed over a transitional period lasting until 2020, in order to gradually adapt to the new, modernised Union Customs Code requirements. As regards customs controls, a new modernised Union Customs Code has been adopted, replacing the 1992 Customs Code. This lays down the overall framework governing the work of the Member States’ customs authorities. The funding of infrastructure that is not to be economically exploited does not constitute state aid within the meaning of Article 107(1) of the Treaty. Such funding therefore cannot be checked by the Commission. State aid does not include, for example, the funding of infrastructure that is used for activities that the state normally performs in the exercise of its public powers (for instance lighthouses and other equipment for the needs of general navigation including on inland waterways, flood protection and low water management in the public interest, police and customs). Furthermore, the funding of infrastructure that is not used for offering goods or services on a market (for instance roads made available for free public use) does not constitute state aid. However, the funding of infrastructure that is to be exploited economically, such as port infrastructures, falls under state aid rules. Public funding of port infrastructures and/or financial support granted to port authorities may distort competition between ports, since it may allow them to charge shipping companies lower prices in order to attract traffic. This may also be true of indirect aid to these economic operators (i.e. terminal operators) and users if they do not pay market price for port infrastructure. Any state aid needs to be reported to the Commission so that its compatibility with the internal market can be assessed. The new General Block Exemption Regulation (GBER), which came into effect in July 2014, defines cases when state aid can be granted to companies without notifying the Commission in advance. The Commission is currently considering defining non-problematic investments in ports in the GBER (i.e. the categories of port investments which do not need to be notified). The vast majority of port authorities in Europe are publicly owned. The port authority owns the basic infrastructure and leases it out to port operators, usually by means of a concession, while retaining all regulatory functions (‘landlord’ model). Port operations are run by private companies, which provide and maintain their own superstructure, including buildings and cargo-handling equipment at the terminals. In the UK, some of the larger ports (such as Felixstowe, Manchester, Liverpool, Immingham and Southampton) are fully privatised. Port authorities generally have limited autonomy in setting port charges (which are usually defined by the governments), but they nonetheless bear a significant share of the investment responsibilities. In the major European ports, at least, a key factor contributing to the need for additional capacity and new port infrastructure and superstructures is the increase in vessel size. In addition to specific investment needs in order to adapt ports, mega-ships also create other challenges for ports: their significantly larger cargo volume leads to peaks in port activity, and creates the risk of congestion in port areas and the transportation links with economic hinterlands. These may be costly to mitigate. Moreover, due to peak loads, ports will need more land. Since mega-ships can only be profitable if they are handled very quickly in ports, there will also be an increasing trend towards automation. Finally, mega-ships increase the risk of unsustainable port infrastructure investments as significant numbers of containers and large volumes of cargo can be shifted from one port to another, thereby increasing the pressure on ports to offer attractive landing fees. Investments in port infrastructure have been co-financed from the EU budget through the European Regional Development Fund (ERDF) and the Cohesion fund (CF) under shared management, but also through the Trans-European Networks-Transport (TEN-T) programme and the Connecting Europe Facility (CEF) under direct management. Overall, between 2000 to 2013, around 6.8 billion euros of funding was provided from the EU budget for investments in seaports: 3 billion euros during the 2000-2006 programming period and 3.8 billion euros during the 2007-2013 period. In both periods, the bulk of the EU funding (around 91 %) came from the ERDF/CF, provided through Operational Programmes (see an overview per Member State in Annex I). However, there is no complete information available on the total public and private investments in ports made in the Member States which are not EU co-funded. For the 2014-2020 programming period, EU funding will remain important: the Connecting Europe Facility (CEF) has an indicative amount of 24 billion euros to co-fund transport investments (all modes of transport) either under direct management or using financial instruments (delegated to the EIB). Maritime transport projects, including investments in port infrastructure and in Motorways of the Seas (MoS), are eligible for this funding. Up to 900 million euros have been earmarked for MoS projects, while projects for the comprehensive network and projects for freight transport services will have respective budgets of up to 1 billion euros and 200 million euros at their disposal. For the first CEF call for proposals (2014), applications were submitted for 7.1 billion euros of co-funding for ports, and grants have been approved for a total of 907 million euros, mainly for 104 core ports (see paragraph 41) and MoS projects. In addition, around 2 billion euros in EU funding via the ERDF/CF has been earmarked for seaports: 1.5 billion euros for major (TEN-T) seaports and 0.5 billion euros for smaller seaports (see Figure 1). Note: The amount stated for direct management for the 2014-2020 period is an estimate based on the data gathered from the first call for proposals for CEF funding. Source: ECA based on date provided by DG Regional and Urban Policy and INEA. According to the Treaty on the Functioning of the European Union (TFEU), the task of the European Investment Bank (EIB) is ’to contribute, by having recourse to the capital market and utilising its own resources, to the balanced and steady development of the internal market in the interest of the Union’. In carrying out its task, the Bank shall ‘facilitate the financing of investment programmes in conjunction with assistance from the Structural Funds and other Union Financial Instruments’. Moreover, according to the EIB Statute, the EIB shall ensure that its funds are employed as rationally as possible in the interest of the Union. It may grant loans or guarantees only ‘… where the execution of the investment contributes to an increase in economic productivity in general and promotes the attainment of the internal market’. In addition to funding from the EU budget, the EIB has financed investments in port infrastructures and superstructures in the EU and neighbouring countries in the Mediterranean (Morocco and Egypt) in the form of loans for around 10.1 billion euros between 2000 and 2013. In 2012, in a previous special report, the European Court of Auditors identified problems in the planning and allocation of EU and national ERDF/CF funding for port infrastructure by examining 27 randomly sampled port projects in 2010. In particular, our report found that many of the projects had not been completed, some were not in use and others needed considerable further investment before they could be put into effective use. In this audit, the Court assessed the Commission’s and Member States’ EU maritime freight transport strategy and the value for money delivered by EU-funded investments in port services. In particular, our audit examined whether:

the Member States and the Commission had put in place coherent strategies for developing port services for maritime freight transport, developed robust capacity planning and identified the EU and national public funding required for port infrastructures;

EU-funded port infrastructure projects (selected between 2000 and 2013) had been completed within budget and on time, and implemented effectively to improve port services for maritime freight and the transport of goods to the port’s hinterland; and

the Commission had taken the necessary action as regards state aid and customs procedures to enable seaports to compete on a level playing field.

The audit consisted of a documentary review (including EU and national strategies for maritime transport, development plans for ports, and port master plans); interviews at the Commission and with representatives of regional and port authorities in Member States, and on-the-spot checks of ports and port projects. Interviews and a survey were also carried out with representatives of federations of port authorities, port operators, ship owners and logistics companies (key stakeholders). In addition, external experts from the OECD and the Free University of Brussels (VUB) provided us with an analysis of port capacities and projections of freight volumes. The audit work was carried out between February 2015 and April 2016 both at the Commission (involving the Directorates-General for Mobility and Transport, Regional and Urban Policy, Competition, Economic and Financial Affairs, Taxation and Customs Union and Budget) and in five Member States: Germany, Spain, Italy, Poland and Sweden. These countries account for 60 % of all EU funds allocated to port infrastructure investments between 2000 and 2013 and, according to Eurostat, around 40 % (by value) of the shipped goods that passed through all EU ports in 2013. In the five Member States covered in this report, our audit included:

Audit visits to 19 seaports to examine the results of EU-funded investments in port infrastructure. These ports were selected based on their location (i.e. their proximity to ports offering similar services), the overall amount of EU funding they received and the extent to which infrastructure had been built there for a specific private operator. We also selected ports identified in our previous report in 2012 as having infrastructure that was either empty or poorly connected to their hinterlands;

Specific case studies on neighbouring ports on the north-west coast in Italy (Genova, La Spezia, Livorno and Savona) and on the Adriatic Sea in Italy, Slovenia and Croatia (North Adriatic Ports Association (NAPA) ports: Venice, Trieste, Koper and Rijeka) to assess the potential for, and the advantages of, inter-port collaboration, as well as a case study in Germany on the Nord-Ostsee-Kanal (NOK).

Our examination covered investments in port infrastructures which had received 1.4 billion euros of EU funding between 2000 and 2013 (around 20 % of the total EU co-financing). This is split between 1.076 million euros (37 newly examined projects), and 329 million euros (five reassessments of the results of projects already examined in 2010). Most of the projects examined were about increasing capacity: 24 of the 42 projects examined, representing 55 % of the EU funding (774 million euros) in our sample, involved constructing or extending quays and breakwaters. The second category was about improving port connections (road and rail: 17 projects, representing around 600 million euros in EU funding), while one acquisition of superstructures (e.g. cranes) accounts for the remainder of the expenditure examined. Picture 3 provides an overview of the ports visited during this audit. Source: ECA. Investments in port infrastructure and superstructures are very costly and require long-term planning to ensure that they are profitable. This is why Member States should put in place a robust and coherent long-term strategy for developing their ports. Since 2013, the TEN-T Regulation has provided for EU-wide infrastructure planning by establishing a core and comprehensive network, along with technical standards and implementation deadlines. For investments in ports to be supported using EU funding during the 2014-2020 period, there is even a legal obligation to make these investments part of a wider, more general strategic port development plan (the ‘ex ante conditionality’ rules). This plan should improve the potential for increased effectiveness of future port infrastructure investments, because such a strategy should include the identification of already existing port capacity and the need for additional capacity, assess current and plausible future market demand, and explore port collaboration, synergies and specialisation. We assessed whether the five Member States covered in this audit had put in place such a strategy in relation to port development and infrastructure planning. Our audit found that all five Member States visited had put in place a long-term port strategy by the end of 2015. Spain had started drawing up documents supporting its strategy as far back as 1998 and 2000, and had completed these in 2005 and 2013 respectively. Poland had had a plan since 2007, Germany since 2009, Sweden since 2010 and Italy only since 2015. In Germany, this strategy had been revised in 2016, while Sweden’s strategy was updated regularly (see Table 1). Member State Name of port strategy Year adopted Germany Gemeinsame Plattform des Bundes und der Küstenländer zur Deutschen Seehafenpolitik Nationales Hafenkonzept für die See- und Binnenhäfen Nationales Hafenkonzept für die See- und Binnenhäfen 2015 1999 2009 2016 Spain Marco Estratégico del Sistema Portuario de Titularidad Estatal (MESPTE); Plan de Infraestructuras 2000-2007 (PIT); Plan Estratégico de Infraestructuras y Transporte (2005-2020) (PEIT); Plan de Infraestructuras, Transporte y Vivienda (2012-2024)’(PITVI) 1998 2000 2005 2013 Italy Piano Strategico Nazionale della Portualità e della logistica 2015 Poland Strategia rozwoju portów morskich do 2015 roku 2007 Sweden Nationell plan för transportsystemet för perioden 2010–2021 2010, 4-yearly updates Our analysis of these national strategies indicated that the mere existence of a strategy did not necessarily mean successful implementation of sustainable investments. Information about the national strategies is provided in Box 1. For the sample of ports covered by this report, we tested the reliability of the data on container transhipment capacity reported by port authorities (i.e. how much container traffic, in TEU, can be handled annually). Our analysis found that the port authorities of seven of the 16 ports covered in this report which had container transhipment activities did not report any aggregated capacity data. For seven of the remaining nine ports which had compiled capacity data for containers, their actual available capacity is higher than that reported by the port authorities. For two ports, the reported figure is higher than the one calculated by us. This illustrates that even where port authorities do report capacity data, doubts remain as to the robustness of this data. This raises questions as to the basis on which decisions are taken for major investments in port infrastructure.

Germany had a long-term national port strategy, but the Federal States (Bundesländer) decided on the main port infrastructure investments. There was no effective coordination between regional and federal authorities. The Federal state (Bund) has no responsibility in port planning, which is done at local and regional level. The direct involvement of the Bund in port planning at local level is neither sufficient nor sufficiently timely. However, the Bund is responsible for hinterland connections and the dredging of access channels.

Spain had a comprehensive strategy in place, with a central body linked to the national Ministry of Public Works and Transport assessing and monitoring the need for port investments for the entire country on an ongoing basis. Although weaknesses were noted in some of the documents (e.g. no hinterland analysis and no search for synergies between neighbouring ports because of free competition), there was generally sufficient technical support for launching projects;

Italy had also adopted a national strategy with a lot of elements able to serve as a basis for making good port investments, but this strategy had been adopted in 2015, and was not yet accompanied by an implementation plan. The first action implementing this strategy was to put in place a new port governance system, which led to the decision to merge various existing ports, thus reducing the number of port authorities and increasing the potential for coordination and cost savings;

Poland had adopted a national strategy with many elements able to serve as a basis for making good port investments, but this strategy had neither been accompanied by an implementation plan nor properly monitored. As a result, the projects selected had not always been of the highest priority or sufficiently well-developed. Moreover, in some cases, non-maritime projects (e.g. typical city roads, quays with tourist attractions) had been financed from the allocation dedicated to maritime transport;

Although providing sufficient capacity in its ports is a key objective for Sweden’s government, it is the municipalities that decide on investments in infrastructure for the country’s 52 main ports. The national government is responsible only for fairways (access to ports) and land connections to ports. This arrangement is reflected in the strategy, and only limited information on investments in port infrastructure was available at national Ministry level;

The situation is similar for data on job creation. Our audit showed that port authorities were generally unable to provide data on employment including the jobs created by their concession holders and external service providers. Therefore, the Commission’s information and data on job creation by ports is also very limited. In 2013, the Commission launched a research project (‘Portopia’) under which ports data are gathered on a voluntary basis. Nevertheless, few Member States and port authorities provided such data, and methodological differences in analysing job creation effects were noted. For more than two decades, particularly since the Commission’s first White Paper on transport in 1992, the EU has had in place a policy to support the development of ports and their infrastructures as a way to improve mobility. Since then, investments in port infrastructure, multi-modal terminals and interoperability have been considered key to increasing sustainable mobility in Europe. In 1997, the Commission issued a Green paper on ports and maritime infrastructure. In 2007, it adopted a communication highlighting the need to improve the main ports’ connections with their economic hinterlands, and to achieve a more balanced mix of transport modes within the EU. In 2013, the Commission issued a new communication in which it further developed its strategy for port development in the EU. In this document, it established the link, for the first time, between the proposed infrastructure investments and the EU funding available under CEF during the 2014-2020 programming period. This was a significant improvement on its previous 2007 communication. In addition, the Commission defined 329 ports as EU key ports, of which 104 were considered ‘core’ ports based on a set of predefined criteria. The Commission aims to have these core ports connected to their hinterlands by 2030, while the deadline for the remaining 225 ports on the comprehensive network is 2050. This has given core ports de facto priority status as regards access to EU funding for these connections. During our audit, some stakeholder organisations pointed out that the Commission strategy designated too many ports as core ports. Initially, the Commission had proposed 94 core ports, but additional proposals had been made during the legislative procedure. However, even the Commission’s initial proposal had already been significantly higher than the 50 core ports considered necessary to maintain an adequate level of accessibility for the EU as a whole. Although the global economic crisis had a temporary negative effect on the overall volumes transported between 2007 and 2009, port traffic has been growing over the past 15 years (see Figure 2). This trend is expected to continue: in 2013, the Commission forecasted a growth in port traffic of 50 % for EU ports by 2030. Also, the OECD expects a further increase in port traffic, but at a slightly lower level. The projected growth rates vary according to cargo type and ship type. Relatively slower growth rates are foreseen for the container sector. The expected growth in this sector for EU ports is 38 % for the period to 2030, while the growth is estimated to be higher in the other market segments: 46 % for liquid bulk, 50 % for dry bulk and 58 % for RORO. Moreover, this expected growth is not distributed equally worldwide: South Asia will have the fastest growth and Europe the slowest. Source:Eurostat, ‘Maritime ports freight and passenger statistics’, January 2016. Our audit showed that the Commission did not receive detailed and up-to-date data from the Member States on their available capacity, the capacity they actually used or their future capacity needs. As a result, there was no EU-wide monitoring of the capacity of the EU’s 104 core and overall 329 key ports. In the absence of such information, the Commission has to date not been in a position to put forward an EU-wide port development plan. As nobody (neither at EU nor at Member State level) had a strategic overview of which ports needed funding and for what, many neighbouring ports invested simultaneously in similar container transhipment infrastructure and superstructures. Based on updated traffic projections and comparison with other studies and reports which included forecasts, the Commission estimated in 2013 that the average capacity utilisation of all ports in the EU was around 90 %, and that there was a risk of port congestion in the years to come. By contrast, the OECD, which provided us with an assessment of future port capacity needs, estimated that:

the EU port utilisation rate for containers is generally far below the global level of 67 %;

there is significant variation of port capacity use between Europe’s regions: 50 % in Scandinavian and Baltic ports; 56 % in north-west Europe, 61 % in the eastern Mediterranean and Black Sea; 62 % in the western Mediterranean Sea; and

the expected capacity use is forecasted to be decreasing in several regions. For example, from 50 % to 30 % in Scandinavian and Baltic ports, and from 61 % to 50 % in the eastern Mediterranean and Black Sea.

There is therefore a risk that the Commission overestimated the need for additional port capacity. This is particularly true for the specific regions indicated above. In this context, we also noted a mismatch between the EU funding set out in the strategy and the trade flows: most goods from outside the EU enter the EU via the ports in the Hamburg-Le Havre range. However, more than 90 % of the EU funding for ports during the 2000-2013 period is provided under the ERDF/CF, and most of it is allocated to Mediterranean and Polish ports (see amounts allocated per Member State in Annex I). The Member States and regional authorities decide which projects are to be funded from the ERDF/CF, except for major projects, which must be approved by the Commission. An important waterway, the Nord-Ostsee-Kanal (NOK), was identified as a section of the Core Network in the CEF Regulation. However, the NOK was not part of the Core Network Corridors and was not selected for funding (see Box 2). The NOK is the most heavily used artificial canal in the world, with 32000 freight vessels passing per year. It is a strategic waterway for maintaining the competitiveness of the Baltic Sea states, of which Denmark, Sweden, Finland, Estonia, Latvia, Lithuania and Poland are members of the EU. It links the ports of Brunsbüttel and Kiel in northern Germany (see Picture 4). There is an urgent need to improve the existing infrastructure, both at the eastern entrance to the canal, where some locks are in poor condition, and at the western entrance. The additional cost of sailing around Jutland compared to passing through the NOK is around 70000 euros. In addition, there are time gains to consider: sailing around Jutland takes 10 to 14 hours. According to an industry estimate, up to 2.2 billion euros could potentially be saved each year by making this infrastructure safe and reliable. In 2015, an application for a grant of 161 million euros in EU co-funding via the CEF to build a fifth lock chamber in Brunsbüttel was not selected. Despite the fact that this channel is part of the TEN-T Core Network, it was not a priority for CEF funding in 2015. Note: The ports with red circles were those visited by our auditors. Source: ECA. Given the weaknesses in capacity planning for port infrastructure at national and EU level, there is a significant risk of EU funding resulting in unsustainable investments, since the additional capacity created is not actually needed. For this audit, we visited 19 ports in five Member States to examine a total of 42 EU-funded projects, of which:

37 projects concerned newly examined projects; and

five projects were being followed up, having originally been examined in 2010 (see Special Report No 4/2012).

In particular, we assessed whether:

the additional port capacity created through investments had been fully used;

the projects had been completed within time and budget;

EU funding had been allocated to neighbouring ports for similar investments, and

the coordination between the Commission and the EIB functioned properly.

Investments in port infrastructure need some time to show results and, by their very nature, port projects are about building capacity for the long-term future (meaning that, in most cases, the return on investments is low and slow). The timeliness of investments is often crucial to their effectiveness, particularly in a very competitive environment such as maritime transport. Our analysis of the 37 newly examined projects showed that 30 projects with 553 million euros of EU funding had been completed by mid-2015. Out of these 30 projects:

18 projects were being used as initially intended, representing EU funding of 359 million euros; and

12 projects were either not being used (empty) or were heavily underused, representing EU funding of 194 million euros — meaning that one in every three euros has been spent ineffectively so far. Around half of this funding (97 million euros of EU funding for nine projects) was invested in infrastructures which were not used or were heavily underused for more than 3 years after the works ended. This highlights shortcomings in the ex ante needs assessment, and indicates high risks of waste of the amounts invested. This observation also applies to the five reassessed ports which have been in operation for almost a decade (see paragraph 63).

The remaining seven projects in our sample (524 million euros of EU funding, mainly in Italy) were not yet completed at the time of the audit. These seven projects were therefore not included in our analysis of their actual use. Detailed information on the ports and the projects examined can be found in Annex II. Box 3 below provides two examples of well used infrastructures and two examples of empty or underused EU-funded port infrastructure projects. Further examples of unused and underused infrastructures can also be found in Box 4, Box 6 and Box 8). This project contributed to safer navigation, in accordance with international norms. Existing restrictions for darkness, visibility and wind were reduced and this allowed 24-hour access to the port, 7 days a week, for vessels of a much larger size. Also the ability for vessels to meet in the fairway, achieving time savings and security gains was enhanced, and positive environmental impacts in terms of an increased filling factor of larger vessels were also achieved. The EU co-funded this project with 3.5 million euros out of a total cost of 35.3 million euros. The construction of the stretch of 2.63 km of road was completed in 2009, and the road infrastructure is being used. The main project outcome was improved road access to the port of Szczecin (see Picture 5) avoiding the former road with many traffic lights. Although there are critical last mile connection problems, the improvement of the road access to the hinterland is visible, reducing the road congestion to and from the port, and improving the safety of the inhabitants. The EU co-funded this project with 23 million euros out of a total cost of 28 million euros. © Szczecin City Hall. The Taranto Container Terminal entered into operation in 2002. The project resulted in considerable traffic volumes soon after the terminal commenced its activities. However, volumes decreased from 2006 onwards. The shipping line calling at the port of Taranto gradually stopped serving the port, and the terminal’s operating company joined a group based in a competing neighbouring port (Pireaus), and ceased activities in Taranto in June 2015 (see Picture 6). The concession agreement between the terminal operator and the Taranto port authority had provided that that the port authority should undertake additional infrastructure work, such as dredging. However, this work was never carried out. In the port of Taranto, 38 million euros in EU funding has been invested in a transhipment terminal and its hinterland connections during the 2000-2006 programming period. The terminal is currently unused. Source: ECA. In February 2013, the port of Cartagena finished building a 575-metre long dock, an adjacent area of 4.5 hectares and a storage space of 20 hectares for operations related to a future multifunctional terminal. The total combined cost of the two projects reached 62.8 million euros, and 29.7 million euros was paid. Currently, part of the area is used for dry bulk, scrap, and storing by-products from the nearby refinery. The other part (20 hectares) has not yet been paved and remains unused (see Picture 7). EU funding worth 10.4 million euros from the ERDF had been allocated to this particular project. Source:ECA. We had already observed and reported on significant delays in the implementation of port projects in our 2012 report resulting from administrative arrangements in place: 33 authorisations had been needed for building and operating a marina in Italy, and it took 22 years to obtain the necessary authorisations to start port constructions in Greece. This indicated structural problems related to the issuing of permits and authorisations. Our analysis of the 30 newly examined projects that had already been completed showed that 11 projects finished on time, but also that 19 projects did not finish on time. For those 19 projects, the average delay was almost 13 months, with delays varying between 3 months (provision of RORO terminal equipment in the port of Vigo, Spain) and 33 months (Jade-Weser-Port in Wilhelmshaven, Germany). Twelve of the 19 projects were delayed by more than 20 % of the planned project duration. Relative to the initially planned duration, the delays were of up to 136 % in the port of Santa Cruz de Tenerife (Spain). Figure 3 provides details on the 19 (completed) projects concerned. Source:ECA. As mentioned above, seven of the 37 newly audited projects had not yet been completed at the time of the audit, mainly because of administrative burden. These projects had been allocated almost half of the expenditure audited (524 million euros in EU funding). Six of these seven incomplete projects had also experienced delays, ranging from 13 months for dredging works to a minimum of 36 months for connections within the port of Salerno. National and regional administrative procedures can contribute significantly to delays in completing port infrastructure projects. Our audit showed that, in Italy alone, five of the six projects examined had been delayed, mainly due to problems related to the issuing of permits and authorisations, which highlights issues related to coordinating the various bodies involved. Detailed information on the incomplete projects can be found in Annex III. In addition, in several Member States, the procedure for adopting a port master plan (needed before infrastructure works can take place) involves a lot of intermediate bodies. For example, for the port of Taranto, a proposal for a port master plan submitted in 2006, involving the port committee, the High Council for Public Works, the Regional Authority for Environmental Protection, the Region concerned and the local municipality, had still not yet been adopted at the time of the audit visit (end of 2015). On top of that, our audit also showed that only 14 of the projects examined did not have any cost overruns, meaning that 16 of the 30 completed projects had experienced cost overruns of 139 million euros in total. This applied mainly to seaports in Germany and Spain (the Italian projects have not yet been completed, so a final assessment cannot be made at this stage). The average cost overrun was around 8.7 million euros, with overruns varying between 0.2 million euros for an inspection building in the port of Vigo (Spain) and 67 million euros for transhipment infrastructure in the port of Algeciras (Spain). In comparison to the initially planned costs, the overruns were up to 38 % (for the construction of a new port quay in Cuxhaven). Table 2 gives an overview of the cost overruns for the 16 projects in seven different ports. Source:ECA. Member State Port Project to examine Project costs (in euros) EU funding (in euros) Cost overruns (in euros) % of total cost Germany Cuxhaven Herstellung Offshore Basishafen Cuxhaven Liegeplatz 8 31945019 15942509 3300000 10.3 Östliche Erweitung Offshore Basis Cuxhaven Liegeplatz 9 41436573 18800000 15600000 37.7 Offshore Basis Cuxhaven Errichtung der Hafensohle Liegeplatz 8 3400649 1250000 1000000 29.4 Wilhelmshaven Ertüchtigung der Niedersachsenbrücke 16456421 6704346 305000 1.9 Großprojekt ‘Jade-Weser-Port’ 146856096 32930149 17000000 11.6 Hafen Brake Norderweiterung Hafen Brake - 2. Ausbaustufe) 14803596 5924021 400000 2.7 Spain Cartagena Ampliación Dársena de Escombreras. Fase 1 116492375 46035682 22461000 12.5 Terminal Polivalente de Graneles 34454637 19275477 Relleno y Urbanizacion Terminal Polivalente 28314601 10440783 Algeciras Infraestructuras Portuarias Y Auxiliares En Isla Verde (3ª Fase) En Algeciras 511460000 127314481 67045000 9.9 Muelle Y Explanada Exterior Al Dique, Junto A Isla Verde 168576557 52199106 Vigo Mejora De La Operatividad De Los Muelles Comerciales (1ª Fase) 48249668 27973501 5449000 11.3 Ampliación Del Puesto De Inspección Fronteriza Arenal 2188957 750884 236000 10.88 SC Tenerife Nva. Base de Contenedores en la Dársena del Este del Pto. SC. Tenerife 17770802 7860602 4301000 24.2 Nueva Base De Contenedores En La Dársena Del Este, 2ª Fase 15605808 6387113 1153000 7.4 Tramo 1o Fase2ª Def. rellenos D. Este: quiebro 1o y 2ª alineación Espigón Cueva Bermeja 5673967 2809113 562000 9.9 Total 1203685726 382597768 138812000 In 2012, we reported that a high proportion (82 %) of the EU funding spent on a randomly selected sample of 27 port projects had been used ineffectively. In this audit, we reassessed five ports (Augusta in Italy, and the Spanish ports of Arinaga, Campamento, Ferrol and Langosteira) which had been particularly problematic in 2010 as the constructions had not been in use, and the EU-funded infrastructure had been empty or poorly connected. These ports had received 329 million euros in EU funding during the 2000-2006 period to build these infrastructures. The key findings of this reassessment were as follows:

(i) Overall, effectiveness was very low: only around 5 % (representing 18 million euros of EU funding invested) of the overall capacity created was being used as initially planned after almost a decade of operations. The fact that no significant level of port activity had taken place on average after almost a decade after completion of the works highlights that there was no need to spend EU funding on these infrastructures, and that there was neither a sound business case, nor a proper analysis of costs and benefits up front. In total, we consider that 292 million euros of the EU-funded investments made are still ineffective in 2015. As indicated in our earlier report, Member States focus on absorbing EU funds rather than on the effectiveness of the investments in additional port capacity;

(ii) Three of the four Spanish ports (Arinaga, Ferrol and Langosteira) demonstrated a modest increase in their operations compared to 2010, but were still significantly below the maximum capacity of the EU-funded infrastructure (around 10 % for Arinaga and Langosteira, and around 25 % for Ferrol). The commercial port of Augusta has no activity in the EU-funded container terminal or the RORO-berth.

While the initial EU-funded investments in container storage areas in Campamento remain largely unused, ship repair activities do take place (see Picture 8).

(iii) Since 2012, the Commission has followed up on three of these five ports by making a visit on the spot, or discussing the way forward at a central level. For example:

For Arinaga, phase 3 of the port extension has been postponed by the Spanish authorities until there is sufficient activity;

For the commercial port of Augusta, additional investment funding has been allocated by the Italian authorities to complete the works during the 2014-2020 period. The estimated cost of the outstanding works is 145 million euros, and the EU will co-finance this with 67 million euros from the ERDF (a Commission decision concerning the major project was issued on 27.3.2013). The recently adopted new national general strategic ports framework in Italy has led to a merger with the nearby port of Catania, and this could provide synergies with Augusta on RORO traffic, cruise traffic and bulk cargo. The outstanding works and the allocated EU funding should therefore be revised in light of the recent merger to increase the potential for greater effectiveness.

Source: ECA. In the 14 ports examined, connections to the network were either missing (in Italy and Spain) or inadequate (in Germany and Poland). In Italy (Salerno and Taranto), Spain (Algeciras, Ferrol and partially Langosteira), Germany (Jade-Weser-Port) and Poland (Szczecin-Świnoujście, Gdańsk and Gdynia), road and rail connections were either absent, delayed, or had not yet been planned, or they had experienced critical ’last mile’ problems. This includes the Gdynia-Karlskrona MoS project between Poland and Sweden, where the construction of a ferry terminal needed to link the two ports has been postponed until 2019 (see Box 6). Significant additional public funding will be needed so that the projects concerned can work properly. For example, the additional cost of building rail connections to the Spanish ports of Algeciras, Ferrol and Langosteira is estimated at around 183 million euros. In Poland, an additional 350 million euros will need to be invested to increase to – 12.5 m the water depth of the 65 km access channel to the port of Szczecin, so that the bigger vessels for which the infrastructure was upgraded will be able to enter the port. As Europe is only a small part of the globe in geographical terms, ports are divided into ‘port ranges’ For example there is the Hamburg-Le Havre range, or the Mediterranean range with an East and West Med range (see Picture 9). Ports within the same range compete against each other, while competition also exists between port ranges. During our audit, we examined the traffic volumes of the 171 largest EU container ports over the 2005 to 2014 period, i.e. ports with a container volume of at least 200000 TEUs in 2005. Source:ECA. Our analysis showed that activity at six of these 171 container ports had declined by more than 50 % compared to 2005: Savona and Taranto (Italy, see Box 3), Medway and Thames port (UK), Rouen (France) and Malaga (Spain, see Box 5). The decline of one port was related to the growth of a nearby, often larger port. Moreover, we also identified noticeable shifts in traffic between other neighbouring ports covered by this report: between Salerno and Naples (Italy) and between Gdańsk and Gdynia (Poland). As soon as additional infrastructure became operational in one port, it had a negative impact on the volumes passing through the neighbouring port. All projects examined involved work to increase the depth of access channels, enlarge turning basins, berths and storage areas, improve port connections and provide adequate cranes and yard equipment to efficiently handle the larger cargo volumes forecasted. Our analysis identified 14 cases where similar investments had been made in neighbouring ports within the same range: several port authorities and port operators had invested simultaneously in additional capacity for transhipment infrastructure and superstructures despite the fact that unused capacity had been available in neighbouring ports. These similar investments had even been made in ports serving the same hinterlands located in the same Member State, indicating a lack of coordination in capacity planning at national level. Such investments were considered unsustainable (see examples in Box 4). In Italy, all four ports on the North West coast (Genova, La Spezia, Livorno and Savona) have ongoing or planned investments to increase their current combined capacity of 3730000 TEUs by 50 % (or an additional 1800000 TEUs). These ports all compete for the same hinterland: in recent years, Savona has clearly lost market share to Genoa, as has Livorno, but to a more limited extent. Moreover, the current capacity is not being fully used: in 2014, container terminal utilisation rates were approximately 20 % in Savona, 65 % in Livorno, 74 % in La Spezia and 77 % in Genoa. There is no expectation that traffic will significantly increase in the years to come. In Poland, the Ministry of Infrastructure and Development simultaneously approved a significant extension of container terminals in Gdańsk and dredging in the port of Gdynia, both aimed at the same container business, having similar hinterlands, and without considering the extent to which the available existing capacity was being used. In Spain, the ports of Cartagena, Algeciras and Ferrol all included in their growth strategy the capture of more traffic destined for/originating from the Madrid region, which is also a traditional market for other large ports (Valencia in particular). The capacity increases were undertaken without assessing whether there was enough traffic to cover the same hinterland. All NAPA ports (Venice, Trieste, Koper and Rijeka) aimed to attract more traffic and bigger vessels, but there was no strategy for increasing synergies among them once a ship had decided to call at a port in the North-Adriatic range. An obstacle to enhanced cooperation is the fact that these ports are located in three different Member States, with different governance systems both nationally and in individual ports, and with differing co-funding rates under the cohesion policy and CEF Regulations, which may lead to individual considerations prevailing over more collective ones. A simultaneous increase in port capacity in neighbouring ports also carries the risk of additional price competition between these ports in order to attract the required additional traffic volumes. As a result, unless the overall traffic volume increases, capacity in all ports will remain unused or underused while, at the same time, the ports’ profitability will decrease. In the case of transhipment ports, this risk is particularly high since shipping companies can decide to change ports of call in line with their own network approach. According to the Treaty on the European Union, the task of the European Investment Bank (EIB) is to contribute, by having recourse to the capital market and utilising its own resources, to the balanced and steady development of the internal market in the interest of the Union. In addition to the 6.8 billion euros in EU funding (i.e. through ERDF/CF or CEF), several of the ports examined in the course of this audit also received a loan from the EIB, amounting to a total of 10.1 billion euros between 2000 and 2013. Annex IV provides detailed information on the main characteristics of the Member States’ port systems, and an overview of the EU and EIB funding support for the audited ports areas (2000-2013). Before the EIB grants a loan, the Commission and the Member State concerned have to provide an opinion on whether the investments to be financed from the EIB’s resources comply with the relevant EU legislation and policies. The procedure for coordination between the Commission and the EIB is governed by a Memorandum of Understanding. For the ports examined for this report, such consultation had taken place in four cases: Algeciras (Spain), Tanger-Med (Morocco), Taranto (Italy) and Jade-Weser-Port (Germany). Our analysis found that only limited information was shared between the EIB and the Commission. For example, no loan amount was indicated, the beneficiary was not specified, the EIB’s technical and financial appraisal and its assessment of risks to the effectiveness of Cohesion policy were not shared with the Commission. The information provided by the EIB limits the Commission’s capacity to assess a case properly. Moreover, the Commission does not have the power to block a loan proposal if it disagrees. As it happens, the Commission has never given a negative opinion on an EIB loan proposal, although there have been some highly controversial cases. The absence of a proper Commission response to EIB-proposed loans to support neighbouring ports outside the EU undermined the effectiveness of EU funding invested in EU ports. The example in Box 5 for ports in the West Med range indicates that there was a lack of adequate coordination within the Commission services, and no signal of problems by the Commission to the EIB, and this led to overcapacity of transhipment infrastructures and unsustainable investments, as some of the ports lost significant volumes handled previously. Since 2000, more than 500 million euros from the ERDF/CF and 229 million euros in EIB loans has been provided to support infrastructure in several ports in Spain (Andalusia) and Portugal. The port of Algeciras (Spain) alone has received EU funding of around 248 million euros. In addition, the EIB provided a loan of around 129 million euros to increase capacity. In 2008 and 2010, two EIB loans for a total of 240 million euros were provided with EU guarantees for the port of Tanger-Med (Morocco) to build additional capacity for handling container traffic of 8 million TEU. This port is in direct proximity to the port of Algeciras on the other side of the Strait of Gibraltar. Both ports specialise in transhipment, and are in direct competition with each other and with neighbouring transhipment activities (e.g. Cadiz, Malaga and Sines, see Picture 10). Source: ECA. Although a new terminal operator started operations in the newly built container transhipment terminal of the port of Algeciras (Spain), 30 hectares of transhipment area (representing 58 % of the EU funding of 144 million euros) was unused at the time of the audit, and the effectiveness of the EU investment in this port will depend on the capacity of the port authority to attract additional operators. This, however, may negatively impact on the traffic volumes of neighbouring ports. In addition, the neighbouring Spanish ports of Cádiz and Malaga experienced considerable reductions in container traffic between 2007 and 2015: by 53 % in Cádiz and by 92 % in Malaga. Finally, the Commission does not obtain information on the EIB’s final decisions on loan applications, nor a signed copy of the loan contract, with or without a guarantee provided by the EU. Nor is any final report submitted on the relevant project’s implementation or on how the loan provided has been spent, or any other relevant information on whether or not a loan has been fully repaid. During the 2000-2006 and 2007-2013 programming periods, the EU funding at project level needed to be linked to outputs, but not to results (i.e. outcomes or impacts). Even though some of the EU-funded investments were not actually in use (they were empty, heavily underused, or did not produce the intended objectives, results and impacts), their costs were therefore still eligible for EU co-financing under both the ERDF/CF and TEN-T programmes. Box 6 provides one of the many examples where the project output had been achieved, but not the intended result. This MoS project, managed directly by the Commission’s executive agency INEA, involved linking two ports: one in Poland (Gdynia), and one in Sweden (Karlskrona). It was aimed at reducing the amount of freight transported on roads, increasing the intermodal share on the corridor from 3 % in 2008 to 10 % in 2015 and 36 % in 2025). Key performance indicators (KPIs) were agreed, with dedicated monitoring to indicate the progress made each year towards the expected results. The road and rail connections in the port of Gdynia were built, and the railway tracks were modernised in Sweden by the end of 2013. However, none of the intended project objectives (outcomes) were achieved because a vital element was missing to make it work: the ferry terminal in the port of Gdynia, which was a prerequisite for fully implementing the project, and which was essential to achieve its expected benefits, has not been built. Having originally been scheduled for completion during the 2007-2013 period, the terminal was postponed until 2016 as early as the application stage because the traffic volumes originally anticipated had been revised downwards by the port of Gdynia. Construction of the building has therefore been further postponed until the end of 2018 at the earliest. This means that the MoS as initially planned will at best, only become operational in 2019 (at least 6 years after completion of the examined project). The EU nevertheless paid 34.4 million euros for the outputs without being able to expect any real outcomes or impacts in the coming years: 17.3 million euros in EU funds from the ERDF on the Polish side for road and rail accesses (see Picture 11), and 17.1 million euros from TEN-T on the Swedish side to modernise rail tracks. This was due to incorrect information from the beneficiary, insufficient monitoring by the INEA agency of the agreed KPIs, and inadequate grant agreement texts which allowed payments without results. Had the terminal not been included in the project application, the Swedish authorities would only have been able to apply for the usual TEN-T investment financing of 10 %, while in this case 20 % was co-funded because it was considered a MoS project. Source:ECA. Competition between ports can be quite intense if ports serve the same hinterland or types of goods and traffic. Granting public support to port authorities may however distort the market. The absence of state aid guidelines for seaports and differences in customs control practices between Member States can make one port more attractive than others for global shipping lines. We therefore reviewed whether the Commission had taken the necessary action as regards state aid and customs procedures to enable ports to compete on a level playing field. As far back as 2000, the General Court of the European Union clarified that the operation of publicly owned infrastructure, such as of an airport, may constitute an economic activity; this principle was confirmed and further developed in the Leipzig Halle judgement in 2011. However, our audit identified certain significant risks of distorting competition in the ports sector. For example, concession holders are responsible for financing the superstructures they use on their terminals (e.g. cranes, loading and unloading equipment and warehouses). This is why the Commission made a distinction between public (general) and user-specific infrastructure in its 2001 communication on ports. Public financing of superstructures open to all users on a non-discriminatory basis was not to be considered state aid, while the co-funding of such equipment, either with a particular user in mind or for the benefit of a particular company that already had the concession, was to be considered state aid as it provided an advantage to that undertaking and may therefore affect competition. We found a lack of clarity concerning the public funding of superstructures for ports: in principle, the terms of the 2014 call for proposals for CEF considered the funding of superstructures for ports to be ineligible expenditure. There were however two exceptions to this: superstructures could be funded under the multimodal part and (subject to certain conditions) under the ‘Motorways of the Seas’ part of the same call for proposals. As a result, several ports applied for EU funding for such equipment under the latter parts of the call for proposals. Moreover, the terms of the ESIF do not, in principle, consider the funding of superstructures for ports to be ineligible expenditure. Overall, we identified 10 cases of user-specific superstructures being supported with EU funding in the ports examined, mainly in Poland (in the three examined ports Szczecin-Świnoujście, Gdańsk and Gdynia) and Spain (port of Algeciras). Projects which included cranes and transhipment equipment used by private operators had been co-financed with around 92.5 million euros from the EU budget. The Commission, which was notified of these cases by the Member States concerned in 2005 (Poland) and 2010 (Spain), authorised them without raising any objection to their financing. Box 7 provides an example, and the full list can be found in Annex V. In the Spanish port of Algeciras, 22 million euros of EU funds were invested for the purchase of eight dock (‘ship to shore’) cranes for a particular private terminal operator (see Picture 12). Source: ECA. The EU system of state aid control is based on an ex ante assessment by the Commission and effective cooperation between the Commission and the Member States. Problems can arise where the conditions of notified aid have been substantially changed after the Commission decision, and there is no follow-up by the Commission to assess whether these changed circumstances result in a distortion of competition (see an example in Box 8). In Germany, between 2008 and 2012, a new container terminal, the ‘Jade-Weser-Port’ (JWP) with a 2.7 million TEU capacity, was built in the direct vicinity of the deepwater port of Wilhelmshaven (one of the 104 ‘core ports’). The terminal’s basic infrastructure was built by the State of Lower Saxony with the help of a grant. Along with national and private funding, the EU provided 33 million euros worth of funding. In addition, the EIB provided two loans totalling 325 million euros to finance the building of infrastructure. In December 2008, the Commission decided not to raise any objection to the measures for which notice had been given (concession agreement with an international company for 40 years) because it did not consider these to be state aid. However, the conditions communicated with the notification were substantially amended after the decision was made: two significant amendments to the concession agreement (signed in 2006), made in 2010 (even before the terminal had started operations) and 2014 respectively, significantly altered the initial conditions of the public tender. These amendments also had an impact on external shipping companies’ ship-side charges. On the whole, this had a negative financial impact of around 15 million euros as of October 2015 (less income, more expenses for interest rates) for the public entity granting the concession agreement with the private company. The German authorities did not notify these amendments to the Commission, even though it would have been appropriate to do so for the sake of establishing legal certainty, and the Commission itself did not follow up on the original decision to see whether the amended conditions distorted competition. Although the publicly owned entity granting the concession was expected to operate at a profit to secure the loan that it took, it in fact made losses as Jade-Weser-Port is heavily underused: since the port opened in September 2012, container volumes, although increasing from 76000 TEU (2013) to 429000 TEU (2015), are only at around 16 % of the ultimate capacity of 2.7 million TEU that will exist once all works have been completed and the port becomes fully operational in the medium term (see Figure 4 and Picture 13). Due to the amendments of the concession agreement and the losses of the public granting entity amounting to 21.5 million euros at the end of 2014, both Lower Saxony and Bremen, joint owners of the entity, planned to provide 3 million euros (2015) and 5.5 million euros in 2016 for this entity. Source: ECA. Our audit showed that Member States had notified very few cases of state aid to ports in recent years:

before 2007, the Commission had collected no data on port state aid notifications;

between 2007 and 2010, in total only four cases of state aid for port infrastructure had been notified by Member States; and

between 2011 and 2015, there were 27 state aid notifications (see Annex VI).

Our audit showed that the Commission had received very few complaints:

before 2007, no data had been available on complaints;

between 2007 and 2011, there had only been one formal Commission decision in a complaint case, while all other complaint-based cases had been closed without a formal Commission decision (i.e. the cases had been closed following a preliminary assessment letter to which the complainant had not responded, or due to a withdrawal of the complaint); and

between 2011 and 2015, only three individual complaint cases had been brought to the Commission.

The Commission undertook very few desk-based investigations of public funding of port infrastructure. Moreover, in accordance with the legal provisions, the Commission’s annual state aid monitoring exercise only partially covers ports since it is limited to aid schemes rather than individual aid notifications. Given the significant number of key ports (329) and the large amount of public funding invested in these ports, we consider the current number of aid notifications to be unrealistically low. We also noted the absence of such aid notifications during several of our financial and compliance audits of ERDF/CF-funded projects in ports. For example, our 2012 Annual Report identified a lack of notifications in relation to ERDF support for the construction of facilities in the ports of Patras (Greece) and Rostock (Germany). During the audit, a number of stakeholders (i.e. port authorities, port operators, ship owners and logistics companies) indicated that Commission guidelines on state aid to ports were needed in order to clarify which investments came under the definition of state aid, and which investments needed to be reported. However, despite having already been announced several times by the Commission, there are currently no state aid guidelines for investments in the seaports sector. The Commission has included the task of issuing such guidelines in its actions for 2014-2019. We also assessed whether differences in the organisation, quality and speed of customs control resulted in some ports being more ’attractive’ than others for global shipping lines. We noted that the EU’s customs legislation provides for the possibility of local clearance procedures and simplifications for processing goods upon arrival and before admission for free circulation, for example:

carrying out a risk analysis before the arrival of goods (or before their loading), primarily for security and safety risks, based on the entry summary declaration. This should be complemented, for the same consignments, by another layer of risk analysis, primarily for financial risks, based on the customs declarations;

collecting information on additional requirements related to the goods in advance (e.g. certificates); and

speeding up the release of the cargo after arrival and the final confirmation that the goods match the declaration lodged before arriving.

All customs controls are based on Article 13 of the Customs Code, which provides that each Member State may carry out all checks they deem necessary. Customs inspections are based on risk analysis. The customs authority can decide to use simplified procedures, under certain conditions and after assessing the operator’s reliability. In 2014, the EU adopted a common risk management system for customs, but the Commission has not yet put in place a risk management system for Member State customs authorities: a detailed roadmap should lead to implementation by 2020. Each customs authority had its own arrangements. Moreover, there were different ways of simplifying procedures and differences in the speed, quality and impact of customs control procedures. This made some ports more attractive than others for global shipping lines. For example, several Member States such as Belgium, Denmark, the Netherlands the UK, Finland or Sweden were systematically waiving the obligation to notify customs authorities of the arrival of the goods, or of the intention to release them. However, this should be done only on a case-by-case basis, after a thorough risk analysis. Doing so means that customs authorities cannot carry out risk-based checks. In a previous audit, we also found evidence of differences in customs control practices, resulting in goods being delivered to their final destination via an unusual route: goods were being unloaded in Hamburg (Germany) and transported to Rotterdam (the Netherlands), where they were cleared for free circulation and transported to their final destination in Poland. In other words, the importers were seeking clearance in a Member State other than the one importing the goods, either to reduce the likelihood of being subject to checks or to complicate any potential recovery procedure. The Commission’s own resources inspection at the customs office of the port of Rotterdam in 2013 found that checks of the correctness of the EU status were carried out only at random, and that, in some cases, customs supervision was being terminated without verifying all information. Of the 200 bills of lading received daily, only 15 to 20 were subject to normal customs declarations, and in the case of local clearance procedures for warehousing or free circulation, there were no checks, electronic or otherwise, to ensure that the summary declaration for temporary storage was consistent with the subsequent declaration for a customs procedure before terminating customs supervision. We also assessed data available within the Commission from own resources inspections on ex post clearance checks, and compared data for the Netherlands with data for neighbouring and other countries. This indicated that the number of customs staff involved in ex post clearance checks in the Netherlands is significantly lower than in other EU Member States, and their numbers have decreased in recent years (from 164 full-time equivalents (FTE) in 2007 to 141 FTE in 2013). To compare this with the data for some main port countries’ customs organisations: Belgium has twice the number of customs staff involved in ex post clearance (292 FTE); Germany has 50 times as many customs officers conducting ex post clearance checks (7 222 FTE); the UK has 1033 customs staff conducting ex post checks, Poland has 794, France 491 and Spain 413. While the Customs Code provides a framework for all authorities to decide whether or not to simplify their practices, customs procedures in the EU must be uniformly implemented. In other words, the lack of a single EU customs authority should not result in economic operators being treated differently. Although there is a high risk of distortion, there is no system in place for monitoring possible differences. For example, our audit showed that:

Member States are not required to provide information on the number of specific customs checks to the Commission at individual core port level. Such information is however essential in order to identify differences in how customs authorities treat economic operators;

a ‘Customs 2013’ programme had been launched, which included action to harmonise or streamline customs control practices. The Commission’s ex post evaluation indicated that, although progress had been made towards realising the key programme objective of having all customs authorities act in unison, there remained considerable diversity in the execution of import processes in the EU, while each Member State still had its own automated import system;

there are good practices regarding the assessment of controls which could be shared: for example, the port authority of Santa Cruz de Tenerife built within its port zone a dedicated building to regroup all inspection bodies (customs, phytosanitary, veterinary and health border inspection control bodies). This means that only one single integrated inspection is done, which makes it possible to measure the time needed for the inspection, and improves the quality and speed of inspections over time.

Under the current conditions, road transport is still the dominant way to send freight from one point to another in the EU, as it has the advantages of flexibility, low cost and smooth, quick door-to-door delivery. Intra-EU maritime transport will only become competitive if it is made quicker and more reliable. One of the main problems facing maritime transport is the fact that the internal market is still not fully realised in the maritime sector. Vessels leaving the territorial waters of a Member State (12-nautical-mile zone) are considered to be outside the EU customs territory and have to go through customs formalities upon arriving in the next EU port, even if they only carry EU goods and have not called at a third country port. By comparison, a truck driving from Tallinn (Estonia) to Lisbon (Portugal) can cross the EU without fulfilling any additional formalities at intra-EU borders. The lack of a level playing field between maritime transport and other transport modes has been apparent since the opening of the internal borders in 1992. In 1995, the Commission indicated that not all transport modes were treated equally and that maritime transport was disadvantaged. Despite the importance of this issue, progress has been particularly slow:

Based on a ‘Blue Belt’ action plan aimed at creating a ‘European maritime space without barriers’ for shipping, a new scheme entered into force in March 2014, facilitating intra-Union shipping through quicker registration and the possibility of waiving customs checks for ‘regular shipping services’ (RSS) which have to be pre-authorised by the customs authorities. However, only 10 to 15 % of vessels can use the RSS, and all others must still undergo full customs formalities;

Directive 2010/65/EU on maritime transport reporting formalities (an ‘e-Maritime initiative’) promoting the use of information technologies in the maritime transport sector was adopted to simplify and harmonise the administrative procedures applied to maritime transport. Work to simplify the electronic reporting of goods on board vessels is ongoing, but this work relates only to creating a ‘national single window’ for reporting. This means that all Member States will keep their national systems for reporting, while a single EU window for reporting formalities is yet to be put in place. In parallel, electronic customs systems are being developed during a transitional period lasting until 2020, in order to gradually adapt to the new modernised Union Customs Code requirements. This means that almost three decades after the problem first became apparent, the issue will still not have been resolved.

Our audit of the Commission’s and Member States’ strategies on EU maritime freight transport and of the value for money delivered by EU-funded investments in ports, in which we examined 37 new projects and five reassessed projects, points to significant problems. Overall, we found that:

The long-term port development strategies put in place by the Member States and the Commission did not provide a robust and coherent basis for planning the capacity needed in EU ports and for identifying the EU and national public funding required for port infrastructures;

Funding in similar port infrastructures and superstructures in neighbouring ports has led to ineffective and unsustainable investments: based on the 30 of 37 projects examined and already completed between 2000 and 2013, one in every three euros (corresponding to 194 million euros for 12 projects) has been spent ineffectively so far. Around half of this funding (97 million euros of EU funding for nine projects) was invested in infrastructures which were not used or were heavily underused for more than 3 years after the works ended. This highlights shortcomings in the ex ante needs assessment and indicates a high risk of the amounts invested being wasted;

This observation also applies to the five reassessed ports already examined in 2010. This reassessment did indicate poor value for money overall: the use of the EU-funded capacity for these ports was still inadequate after almost a decade of operations. The port areas in four ports were still at a very low level or empty. Overall, 292 million euros of the investments was considered to have been spent ineffectively;

Cost overruns and delays are further illustrations of inefficiencies in the examined investments in port infrastructures. Overall, the EU-funded projects examined had cost overruns of 139 million euros. Moreover, 19 of the 30 completed projects faced delays, out of which 12 were delayed by more than 20 % of the planned project duration. Relative to the initially planned dur- ation, the delays were of up to 136 %. Of the seven projects (corresponding to 524 million euros of EU funding) not yet completed at the time of the audit, six were also delayed;

Many missing and inadequate links to hinterlands, such as missing road and rail connections, will need further public funding to make the initial port investments work properly;

Both the internal coordination within the Commission and the procedure in place between the EIB and the Commission to assess proposed EIB loans for port infrastructures have not been functioning properly as the EIB does not share all relevant information with the Commission. Moreover, for some loan proposals, critical problems were highlighted internally within the Commission services, but not signalled to the EIB in the form of a negative opinion by the Commission; and

The Commission did not take the necessary actions in the area of state aid and customs procedures to enable ports to compete on a level playing field. The Commission’s state aid control could have been more proactive and more effective by monitoring ex post whether the conditions under which earlier decisions (e.g. for concessions) were taken, remained unchanged or by refusing support to user-specific superstructures.

For example, projects which included superstructures used by private operators had been co-financed with around 92.5 million euros from the EU budget. All five Member States visited (Germany, Spain, Italy, Poland, Sweden) had put in place long-term port development strategies by 2015, due in part to the introduction of an ex ante conditionality for EU funding. Weaknesses were found in how collaboration between ports was explored, in terms of synergies between ports and the potential for specialisation, and in how these strategies were translated into timely and well-coordinated port investment. At EU level, the Commission’s strategy on ports has developed over time, but robust information on capacity planning is still lacking. Moreover, there are too many ‘core ports’ (104 in total, to which the majority of the EU funding is to be allocated). This prevents EU funding from targeting the most important ports. On the other hand, some important waterways in need of funding are not included in the Commission’s strategy. Moreover, the Commission has little information about the actual situation of these core ports: in particular, the Commission does not receive data on their available capacity, the capacity they are actually using or their future capacity needs, nor on the Member States’ public investments in these ports. In the absence of such monitoring information, there is no EU-wide overview to provide the basis for better coordination of the core ports’ capacity planning. The Commission’s lack of robust information on available port capacity, together with overestimated future traffic growth has contributed to the overestimation of the additional port capacity needed within the EU, at least for certain regions (see paragraphs 31 to 49). We recommend that the Commission should:

(a) put in place a monitoring of core port capacity, taking account of the Member States’ plans for implementing their long-term strategies;

Target implementation date: by the end of 2017.

(b) revise the current number of 104 ‘core ports’ which are necessary to maintain an adequate level of accessibility for the EU as a whole;

Target implementation date: by 2023.

(c) set out an EU-wide port development plan for core ports and maritime waterways and canals;

Target implementation date: by 2020. Investments in port infrastructures need some time to show results and, by their very nature, port projects are about building capacity for the long-term future. The timeliness of investments is often crucial to their effectiveness, particularly in a very competitive environment such as maritime transport. Many projects examined were unused (empty) or heavily underused at the time of the audit. Based on the examined and already completed 30 projects between 2000 and 2013, one in every three euros (corresponding to 194 million euros for 12 projects) has been spent ineffectively so far. Around half of this funding (97 million euros of EU funding for nine projects) was invested in infrastructures which were not used or were heavily underused for more than 3 years after the works ended. This highlights shortcomings in the ex ante needs assessment and indicates high risk of the amounts invested being wasted. As in our previous special report on seaports, we found a significant number of projects being delayed, due in part to cumbersome administrative procedures. The average delay was almost 13 months, with delays varying between 3 months and 33 months. Relative to the initially planned duration, the delays were of up to 136 %. We also observed cost overruns of 139 million euros, or 8.7 million euros on average (without the projects that had not yet been completed). In addition, there were many missing and inadequate links to hinterlands (i.e. roads and railways) which will need further public funding to make the initial port investments work properly. The reassessment of the five projects examined in 2010 indicated poor value for money overall: the use of the EU-funded capacity for these ports was still inadequate after almost a decade of operations. The port areas in four ports were still at a very low level or empty, while another one did not have any operations. Overall, 292 million euros of the investments (around 89 % of 329 million euros in total) was considered to have been spent ineffectively. Many port authorities across Europe invested simultaneously (and plan to further invest) in similar port infrastructure and superstructures to improve their competitive situation. This entails significant risks to the projects’ effectiveness and sustainability. Both the internal coordination within the Commission and the procedure in place between the EIB and the Commission to assess proposed EIB loans for port infrastructure have not been functioning properly as the EIB does not share all relevant information with the Commission. Moreover, for some loan proposals, critical problems were highlighted internally within the Commission, but not signalled to the EIB in the form of a negative opinion by the Commission (see paragraphs 50 to 81). We recommend that the Commission should:

(a) work with the Member States to reduce administrative burden and delays in project selection and implementation by promoting the principle of a national ‘one-stop-shop’ for the issuing, or refusal, of all permits and authorisations for port infrastructure-related investments. Moreover, a ‘tacit agreement’ principle (e.g. of 2 years) should be implemented as soon as possible;

Target implementation date: by the end of 2017.

(b) strictly apply the ESIF Common Provisions Regulation and the CEF Regulation on financial corrections due to underperforming investments for the 2014-2020 period;

Target implementation date: immediately.

(c) assess the possibility of excluding EU funding for port infrastructure for container transhipment and storage (e.g. construction of quays, docks and storage capacities) during the 2014-2020 period. In addition, superstructures which are not within the public remit should be excluded from EU funding, as these should be considered a commercial environment;

Target implementation date: by the end of 2018. We recommend that the Commission and the Member States should:

(a) prioritise EU co-financing from both CEF and ESIF spending to core ports to improve their connections to their hinterlands;

Target implementation date: by the end of 2016.

(b) fund port infrastructures other than connections to hinterlands only on the condition that there is a clearly established need, where EU added value is demonstrated and where there is a sufficiently large private investment component secured in the overall investment envelope;

Target implementation date: by the end of 2016. We recommend that the Commission should:

(a) ensure that all necessary loan information on proposed EIB loans is shared between the EIB and the Commission to facilitate robust assessments;

Target implementation date: by the end of 2017.

(b) internally clarify, and consistently implement, the procedure for determining whether critical remarks should lead to a negative opinion on a proposed EIB loan;

Target implementation date: by the end of 2016. Different interpretation of state aid rules in the port sector, and differences in how the Union’s customs procedures are applied can contribute to a market distortion and undermine fair competition between ports. In both areas, the Commission has not yet taken sufficient action to create a level playing field between ports. The Commission has examined potential state aid to ports only sporadically since 2010, despite significant public spending by Member States on port infrastructure. Moreover, seaport-specific state aid guidelines have not been presented yet despite being promised years ago. Our audit indicated that differences in customs controls can affect a port’s competitiveness, and that the Commission’s monitoring of customs control practices between ports in the different Member States is inadequate for the purpose of detecting practices which may create unfair competitive advantages. Moreover, customs rules penalise intra-EU maritime transport, as vessels leaving the territorial waters of a Member State have to go through customs formalities upon arrival in the next EU port, even if they are only carrying EU goods and have not called at a third-country port (see paragraphs 82 to 101). We recommend that the Commission should:

(a) issue state aid guidelines for seaports;

Target implementation date: by the end of 2017.

(b) ensure consistency in the treatment of user-specific port superstructures;

Target implementation date: by the end of 2017.

(c) increase the number of desk-based state aid investigations on ports and its follow-up of earlier state aid decisions to ensure that the conditions present at the outset remain;

Target implementation date: by the end of 2017. We recommend that Member States should systematically notify the Commission of all public financial support to ports in accordance with EU state aid rules; Target implementation date: by the end of 2017. We recommend that the Commission should:

(a) ask Member States to periodically provide specific information on the type and number of specific customs procedures at individual core ports in order to assess whether ports are being treated equally;

Target implementation date: by the end of 2017.

(b) improve the competitive position of maritime transport compared to other transport modes by further simplifying maritime transport and custom formalities, in particular by moving towards an EU maritime ‘single window’;

Target implementation date: by end of 2017. This report was adopted by Chamber II, headed by Mr Henri GRETHEN, Member of the Court of Auditors, in Luxembourg at its meeting of 20 July 2016. For the Court of Auditors Vítor Manuel da Silva Caldeira President

ANNEX

ANNEX I SPENDING OF EU FUNDS FOR MARITIME TRANSPORT PROJECTS 2000-2013 PERIOD

Spain 2610322428 38.51 % Italy 837719751 12.36 % Greece 588742943 8.69 % Poland 564232876 8.33 % France 341726711 5.04 % Portugal 314324344 4.64 % Latvia 173729139 2.56 % Germany 143786488 2.12 % The Netherlands 91333779 1.35 % Romania 83148025 1.23 % Estonia 80303497 1.18 % United Kingdom 78033155 1.15 % Lithuania 54675005 0.81 % Belgium 52685257 0.78 % Malta 46945423 0.69 % Sweden 38982443 0.58 % Austria 26910589 0.40 % Cyprus 22085473 0.33 % Slovenia 13330356 0.20 % Hungary 12275556 0.18 % Finland 6515269 0.10 % Czech Republic 4203737 0.06 % Ireland 1842000 0.03 % Bulgaria 1200000 0.02 % Cross-border projects 109561318 1.62 % Interreg 24290310 0.36 % Other EU projects 454519870 6.71 % Total 6777425742 100.00 %

ANNEX II OVERVIEW OF PROJECTS EXAMINED PER MEMBER STATE

No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent Newly audited projects 1 Germany Cuxhaven Herstellung Offshore Basishafen Cuxhaven Liegeplatz 8 31945019 15942509 Construction of a new port quay 15942509 X 7971255 2 Östliche Erweitung Offshore Basis Cuxhaven Liegeplatz 9 41436573 18800000 Construction of a new port quay 18800000 X 18800000 3 Offshore Basis Cuxhaven Errichtung der Hafensohle Liegeplatz 8 3400649 1250000 Construction of a port quay bottom accomodation for ‘jack-up’-vessels 1250000 X 1250000 4 Wilhelms-haven Sanierung ‘Alter Vorhafen’ Wilhelmshaven 2175813 761534 Rehabilitation of a quay-wall 761534 X 761354 5 Ertüchtigung der Niedersachsenbrücke 16456421 6704346 Construction to increase port capacity 6704346 X 6 Großprojekt ‘Jade-Weser-Port’ 146856096 32930149 Construction of a new port area and container terminal 32930149 X 26344119 7 Hafen Brake Norderweiterung Hafen Brake - Sandaufspülung und Errichtung Kaianlage 24600000 8610000 Extension of port area and construction of a new quay. 8610000 X 8 Norderweiterung Hafen Brake - 2. Ausbaustufe) 14803596 5924021 Extension of port area and construction of a new quay. 5924021 X No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent 9 Italy Salerno Logistica e porti. Sistema integrato portuale Salerno 73000000 53262297 1) Expanding port entrance (imboccatura) 2) Stabilising the dock 3) Dredging 26631149 26631149 X 10 Collegamenti ferroviari e stradali. Sistema dei trasporti Salerno Porta Ovest. 1st lot 146600000 115245000 Road and rail connections to the port 115245000 X 11 Collegamenti ferroviari e stradali. Sistema dei trasporti Salerno Porta Ovest. 2nd lot Road and rail connections to the port X 12 Taranto Collegamento ferroviario del complesso del porto di Taranto con la rete nazionale 25500000 1875000 Rail connection to the port 1875000 X 13 Dragaggio e cassa di colmata 83000000 15000000 Dredging and deepening the sea bed 15000000 X 14 Terminal area container porto di Taranto (2000-2006) 41100000 11250000 Expanding an existing terminal 11250000 11250000 No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent 15 Poland Gdańsk Połączenie Portu Lotniczego z Portem Morskim Gdańsk - Trasa Słowackiego 337572017 273634889 Construction of a 10.4 km long road 273634889 X 16 Modernizacja wejścia do portu wewnętrznego (w Gdańsku). Etap I - przebudowa falochronu wschodniego 12550797 10644987 Upgrade of an existing breakwater, widening and dredging of the entry fairway 5322 493.50 5322 493.50 X 17 Modernizacja wejścia do portu wewnętrznego (w Gdańsku). Etap II - przebudowa szlaku wodnego na Motławie 6705529 5676090 Reconstruction of a tourist quay (city centre) 5676090 X 18 Gdynia Rozbudowa infrastruktury portowej do obsługi statków ro-ro z dostępem drogowym i kolejowym w Porcie Gdynia 29070083 10968299 Upgrade of an infrastructure needed to extend the capacity forhandling ro-ro vessels: ramp, road and rail access 10968299 X 5484149 19 Przebudowa Kanału Portowego w Porcie Gdynia 22129659 14691975 Upgrade of the Port Channel via dredging 14691975 X 20 Infrastruktura dostępu drogowego i kolejowego do wschodniej części Portu Gdynia 27474031 17731050 Reconstruction/construction of 2.12 km of roads and 2.85 km of rails 17731050 X 17731050 No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent 21 Poland Szczecin - Świnoujście Modernizacja toru wodnego Świnoujście - Szczecin (Kanał Piastowski i Mieliński) - etap II, strona wschodnia i zachodnia 77825375 65264553 Reconstruction of the fairway between the two ports 65264553 X 22 Modernizacja dostępu drogowego do Portu w Szczecinie 28534045 23002547 Reconstruction of a section of a Street to connect the port 23002547 X 23 Przebudowa falochronu wschodniego w Świnoujściu 10318058 8422871 Reconstruction of 1.47km of breakwater 8422871 X 24 Sweden Norrköping 2008-SE-92606-P (Norrköping intermodal infrastructure package improvement of access fairway) 35300000 3528000 Widening and deepening of the access fairway 3528000 X 25 Karlskrona 2009-EU-21010-P‘ (Motorways of the Seas-project: Baltic Link Gdynia-Karlskrona 85400000 17090800 Infrastructure works to connect the two ports to create a seamless intermodal rail and sea transport chain 17090800 X 17090800 No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent 26 Spain Cartagena Ampliación Dársena de Escombreras. Fase 1 116492375 46035682 Construction of a new breakwater and a new basin 46035682 X 27 Terminal Polivalente de Graneles 34454637 19275477 Construction of a 575 metre long dock and an adjacent area of 4.5 ha 19275477 X 28 Relleno y Urbanizacion Terminal Polivalente 28314601 10440783 Land filling of a storage area of approximately 20 ha 10440783 X 10440783 29 Algeciras Infraestructuras Portuarias Y Auxiliares En Isla Verde (3ª Fase) En Algeciras 511460000 127314481 Creation of 125 ha of new land areas reclaimed from the sea 127314481 X 73842399 30 Muelle Y Explanada Exterior Al Dique, Junto A Isla Verde 168576557 52199106 Construction of a new dock. 52199106 X 31 Terminal Pública de Contenedores TTI Algeciras 168950665 22226148 Acquisition of superstructures for a container terminal 22226148 X 32 Vigo Mejora De La Operatividad De Los Muelles Comerciales (1ª Fase) 48249668 27973501 Enlarging the existing docks to the east and to the north 27973501 X 33 Almacenamiento De Coches En Altura En La Terminal De Transbordadores 20054823 15143049 Construction of a silo for the storage of vehicles at the RO-RO terminal. 15143049 X 34 Ampliación Del Puesto De Inspección Fronteriza Arenal 2188957 750884 Construction of a new building for the sanitary inspection of goods 750884 X No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent 35 Spain SC Tenerife Nva. Base de Contenedores en la Dársena del Este del Pto. SC. Tenerife 17770802 7860602 Construction to increase the capacity of the container terminals and improving the operability. 7860602 X 36 Nueva Base De Contenedores En La Dársena Del Este, 2ª Fase 15605808 6387113 Construction to increase the capacity of the container terminals and improving the operability. 6387113 X 37 Tramo 1o Fase2ª Def. rellenos D. Este: quiebro 1o y 2ª alineación Espigón Cueva Bermeja 5673967 2809113 Construction of new land area adjacent to the existing breakwater, to support operations on the dock for liquid and dry bulk. 2809113 X 2809113 sum 1 (excluding re-audit projects) 2461546621 1076626856 Total of the newly audited projects per category: 447553574 599658626 29414656 7 18 12 193775022 Grand total of the newly audited projects: 1076626856 Grand total of the newly audited projects in % of total: 41.57 55.70 2.73 No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent Re-audited projects 38 Italy Augusta Port of Augusta 15493707 3839328 Construction of buildings, quays, RO-RO berths, pavements, barriers, external systems for the completion of the commercial port of Augusta. 1919664 1919664 X 3839328 39 Spain Campamento San Roque Infrastructuras portuarias en las instalaciones de Campamento, San Roque 37688436 16582912 Rehabilitation of a quay and the construction of 33.2 ha of terminal space, of which 17.6 ha newly created 16582912 X 16582912 40 Punta Langosteira (La Coruña) Nuevas instalaciones portuarias en Punta Langosteira (La Coruña) - 1a Fase’ – Beneficiary: Autoridad Portuaria de A Coruña 590172648 257539720 Construction of an outside port neighbouring the existing port 257539720 X 244662734 41 Ferrol Ampliación del Puerto de Ferrol (puerto exterior)‘ - Beneficiary: Autoridad Portuaria de Ferrol – San Cibrao (‘re-audit’) 110860209 39065500 Construction of an outer port complementing the existing port 39065500 X 35158950 42 Arinaga - Las Palmas Puerto de Arinaga – Muelle de Agüimes 1ª fase A‘ Beneficiary: Autoridad Portuaria de Las Palmas 23480152 11750152 Construction of a new port to decongest Las Palmas 11750152 X 10692638 No of projects Member State Port Project examined Project costs in euros EU-funding in euros Project contents Capacity Connection Others Uncompleted output Output completed and used as planned Output completed and unused or heavily underused % of amount of unused or heavily underused EU funding spent or to be spent sum 2 (only re-audit-projects) 777695152 328777612 Total of the re-audited projects per category: 326857948 1919664 0 0 5 310936562 sum 3 (Re-audit + audited projects) 3239241773 1405404468 Total of all audited projects per category: 774411522 601578290 29414656 7 18 17 Grand total of all audited projects: 1405404468 Grand total of all audited projects in % of total: 55.10 42.80 2.09 Infrastructure related to increasing the potential for transhipment: 943805903

ANNEX III OVERVIEW OF NON-COMPLETED PROJECTS

Member State Port concerned Non-completed project When was the project expected to end (initial date in the contract)? How important is the delay compared to the initial set target (in months, as known now)? EU-amount concerned (euros) Italy Salerno Logistics and ports. Integrated port Salerno 31.12.2015 13 months 53262297 Road and rail connections of the port of Salerno West Gate, 1st lot 30.6.2014 Minimum 36 months 115245000 Road and rail connections of the port of Salerno West Gate, 2nd lot Taranto Rail connection of the port of Taranto to the national rail network 31.12.2015 Minimum 24 months 1875000 Dredging and reclaiming of land 31.12.2014 Minimum 26 months 15000000 Poland Gdańsk Połączenie Portu Lotniczego z Portem Morskim Gdańsk - Trasa Słowackiego 30.9.2015 Minimum 16 months 273634889 Szczecin - Świnoujście Modernisation of the fairway Świnoujście - Szczecin (Kanał Piastowski i Mieliński) - phase II, from east to west 30.9.2015 No delay 65264553 Total minimum delay in months already known at time of the audit: 115 524281739

ANNEX IV Main characteristics of Member States’ port systems, and overview of EU and EIB support for the audited port areas (2000-2013 period)

1. GERMANY Germany has about 21 seaports and about 250 inland ports. There is a division of responsibilities between Federal Government, the Federal States (Länder) and local authorities and other main port stakeholders (e.g. industry, trade unions) which makes it difficult to identify common goals and strategies. The Federal Government is essentially responsible for establishing the regulatory transport framework plan and providing infrastructure links to and from seaports and inland ports (hinterland-connection), whereas the Federal States (and local authorities) are mainly responsible for the port infrastructure and industry and trade unions ensure port operations. The following main investments (structural funds) have been identified: million euros

2. SPAIN Spain has one of the longest coastlines in Europe (8 000 km). Its geographical location, being closest to the axis of one of the world’s major maritime routes, also strengthens its position as a strategic area in international shipping and a logistics platform in southern Europe. The State-owned Spanish Port System includes 46 ports of general interest, managed by 28 Port Authorities, whose investments; coordination and efficiency are monitored and managed by a government agency Puertos del Estado, a body depending on the Ministry of Public Works which is responsible for implementing the government’s port policy. Spain is the country that has invested most of the EU-money in its ports (almost 40 % of the entire EU amount). The following main investments were noted: million euros

3. ITALY The Italian ports system is fragmented. It consists of a multitude of small ports characterised by scale inefficiency and limited market power vis-à-vis global terminal operators. The Italian government has recently adopted a new law for port reform, amongst others, to merge ports located close to each other and their port authorities to rationalise the ports system, improve coordination, attract additional cargo and investments, and provide more financial autonomy. Investments in the Southern part of the country were mainly from the cohesion policy funds, whereas the northern part was focusing on both EIB and TEN-T money. The following investments were noted. million euros

4. POLAND The 2007 ‘National Strategy on development of Polish ports by 2015’ had the objectives of improving the competitiveness of Polish ports, increasing their contribution to the socioeconomic development of the country and strengthening their significance within the international transport network. Three ports were considered key for the functioning of the national economy: Gdańsk, Gdynia and Szczecin-Świnoujście. The bulk of the public investments therefore are concentrated on these three ports, and their connections to the international corridors, as follows: million euros

5. SWEDEN The Swedish law provides to the central state the management and financial responsibilities for the fairways outside, but leading to, the ports, and for the connections to the hinterland whereas the area within the port zone is the responsibility of the local or regional authority. Since 2010, there is a global national investment plan for infrastructure projects for all transport modes in Sweden. The plan covers the period 2010 to 2021, is updated every 4 years, and includes maritime transport, ports and fairways. For port infrastructure investments the port authorities, belonging to the local communes, decide and the state has no say in this because of the regional and local autonomy; whereas the dues for the fairways, managed by the Swedish Maritime Administration (SMA), are State responsibility. The following main EU and EIB investments were noted since 2000: million euros

ANNEX V OVERVIEW OF USER-SPECIFIC SUPERSTRUCTURES CO-FUNDED WITH EU FUNDING

Member State Beneficiary Project name Total cost in euros EU funding in euros Project scope Poland GCT Gdynia Phase III of building GCT container terminal in Gdynia 50007971 15195631 Extension of infrastructure (e.g. track bed for gantry cranes, container storage yards and purchase of equipment (e.g. gantry cranes, terminal tractors, container semi-trailers) BCT Gdynia Modernisation of BCT Terminal in Gdynia 49666124 13469631 Extension/reconstruction of infrastructure (np. road surface of thoroughfares) and purchase of equipment and IT solutions (e.g. machines and equipment used in the process of container handling) Gdynia Port Authority Reconstruction of intermodal rail terminal in the Port of Gdynia 24108770 9773125 Extension/reconstruction of infrastructure including crane tracks, road system DCT Gdańsk Phase III of DCT Gdańsk 23942459 8339326 Building infrastructure (e.g. container storage yards, modernisation of track beds for gantry cranes) and purchase of equipment (e.g. gantry cranes, terminal tractors, container semi-trailers) DCT Gdańsk Phase II of DCT Gdańsk 40845816 6710647 Extension/reconstruction of infrastructure (e.g. railway sliding, container storage yards) and purchase of equipment (e.g. gantry cranes, terminal tractors, container semi-trailers) GCT Gdynia Phase II of building GCT container terminal in Gdynia 45660580 5251613 Extension/reconstruction of infrastructure (e.g. warehouses, container storage yards, car parks, electrical installation) and purchase of equipment (e.g. gantry cranes, terminal tractors, container semi-trailers) DB Szczecin Container Terminal in the Port of Szczecin — stage I phase I 14161270 4887595 Building infrastructure of the container terminal and purchase of equipment (e.g. gantry cranes) BCT Gdynia Purchase of quayside crane to increase intermodal volumes at BCT Gdynia terminal 16275975 3969750 Purchase of equipment (e.g. gantry cranes) Gdańsk Port Authority Expansion of the intermodal container terminal at the Port of Gdańsk’s Szczecińskie Quay 6724173 2704222 Reconstruction of container storage and handling yards, underground utility installations and car parks Spain Port of Algeciras Terminal Publica de Contenedores TTI Algeciras 168950665 22226148 Purchase of 8 dock (‘Ship-to-shore’) cranes Total EU money for superstructures: 92527688

ANNEX VI OVERVIEW OF STATE AID DECISIONS SINCE 2007

State aid cases in sea ports Year Country Seaport concerned Type of good covered, infrastructure (l) and/or superstructure (S) Planned investment costs (in euros) Aid intensity Aid (in euros) Decision number Beneficiary 1 2007 Estonia Muuga The Eastern Extension of Muuga Harbour 92976699 81 % no aid N 507/06 Majandus- ja Kommunikatsiooniministeerium, Harju 11; EE-15072 Tallinn 2 2007 Netherlands Rotterdam Extension of the port of Rotterdam (Contribution to the financing of public infrastructure and stake holding in the Port Authority of Rotterdam) 934000000 571 million euro for public infrastructure and 500 million euro for stake holding no State Aid N60/06 Project Mainportontwikkeling Rotterdam 3 2008 Germany Jade-Weser-Port Wilhelmshaven a) design and construction of port infrastructure (370 million euros); b) design and construction of terminal-related infrastructure (240.2 million euros); c) design and construction of container terminal and related buildings 960000000 no State Aid N 110/08 JadeWeserPort Infrastruktur und Beteiligungen GmbH 4 2009 Greece Pireaus a) loading and unloading equipment in the Container Terminal (Case C 169/08) is excluded from this case; b) construction of a jetty pier (C 168/08) (see also SA. 28876 - allegations) 159768000 less then 50 % 35000000 C21/09 Port Authority of Piraeus none 2010 no no port project no port project 5 2011 Latvia Ventspils a) construction of a dry cargo terminal; b) construction of berths c) construction of breakwater; d) dredging; e) construction of railroads; f) renovation of mooring jetties; g) fortification of the coast of the channel Unknown, for confidentiality reasons no figures provided 62.86 % 31400000 C39/09 (ex. 358/09) Ventspils Port Authority 6 2011 Latvia Krievu Sala Relocation of freeport Rigo from the city centre to the currently unused port area named Kirevu Sala allowing the expansion of the City of Riga 195380916 61.10 % 119387658 N 44/2010 Riga Freeport Authority 7 2011 Netherlands Rotterdam Creation of a multimodal container hub 60 km from Rotterdam Sea terminal. 46300000 17.90 % 8300000 SA 32224 Ablasserdam container transferium 8 2012 Italy Augusta a) expanding existing port (82 000 m2 for Container Storage and solid bulk (28.3 million euros); b) installing two gantry cranes for container handling (21.7 million euros) and strenghtening of a part of the existing dock (17 million euros); c) construction of a new dock and an adjonining yard (45 000m2) (25.83 million euros); d) construction of a new dock (410 m and 116000 m2) (52.5 million euros) 145330000 68.87 % 100088771 SA 34940 Port Authority of Augusta 9 2012 Lithuania Klaipeda Construction of Infrastructure for a new passenger and Cargo Ferries Terminal in Klaipeda: a) investments in constructions by port authority 27825 million euros; b) investments in cargo warehouses, control and inspection point, security related investments by private terminal operator (KKIKT) 21335 million euros) 49200000 64 % 17900000 SA30742 (N 137/10) Port Authority of Klaipeda (SE KSSA) and Klaipedos keleiviu ir kroiniu terminals (KKIKT) 10 2013 Spain Cadiz a) construction of a new container-terminal with breakwater access roads (with tunnel) dredging (108.4 million euros); b) refurbishment of cruise ship station (1 million euros); c) refurbishment of existing port facilities (17.53 million euros deducting 8.4 million euros for value of surface of 9.8 ha) 118538678 50.70 % 60099110 SA.36953 Port Authority of Baiha de Cadiz 11 2013 Greece Pireaus a) construction of breakwater and land area; b) networks (drainage, optic fibres, electricity-water supply) 120000000 95 % 113900000 SA.35418 Pireaeus Port Authority S.A. (PPA) 12 2013 Greece Katakolo a) Extension of windward pier (160 m); b) extension of existing quay in front of restaurants (63 m); c) additional works on existing pier (extension); d) construction of passenger reception building; e) extension/renovation old warehouse; f) construction of an open air-theatre; g) reconstruction of surrounding areas and public spaces; h) construction of port traffic and passport-control building 12265965 91.23 % 11190240 SA.35738 Pygros Municipal Port Fund (PMPF) 13 2013 Spain Santa Cruz de Tenerife a) works for sheltering the harbour (protection and reinforcement of northern side of th quay and external breakwater (128 million euros); b) counter breakwater to protect southern side of the quay (27.8 million euros); c) commercial areas for storage solid bulk and containers (86.8 million euros); d) restauration of the nearby natural reserve (phase 1) (0.6 million euros) 243800000 27.48 % 67000000 SA.36223 Port of Santa Cruz de Tenerife and Ley de Puertos del Estado y de la Marina Mercante (LEPEYMM) 14 2013 Poland Polish ports superstructures Modification of the aid scheme N 546/2008 - Investment aid for the development of intermodal transport under Infrastructure and Environmental Operational Programme (budget increase from 111 million to approx. 170 million euros) due to the substantial need for modernising and investing in intermodal infrastructure in Poland. (port infrastructure will be especially targeted). a) intermodal transport: construction of logistic centres and container terminals, storage and handling facilities, internal roads and railways, water supply, electronic equipment; b) internal transport network within ports (roads, railways, underground passages, parking lots, storage yards; telecommunication systems. 170000000 50 % for port and intermodal infrastructure; 30 % for information and communication equipment SA.36485 Aid is available to enterprises from EU Member States who perform or intend to perform intermodal transportation operations in Poland - such as operators of container terminals and logistics centres - with the exclusion of undertakings in financial difficulties and undertakings from whom the Commission has ordered the recovery of aid, as long as the aid has not been fully recovered. 15 2013 Italy Capo d’Orlando Breakwater dock, dredging, mooring, touristic infrastructure 48.71 % 20020000 SA.36621 16 2014 Latvia Ventspils Improvement of soil stability of the embankment of the Venta River channel behind berth 2 and 3 - first decision 6150000 38.60 % 3775918 SA.38771 Port Authority of the Free Port of Ventspils 17 2014 Greece Patras a) upgrading of the port of Patras (5th pier); b) road and rainwater drain works; c) Terminal building 1; d) Terminal building 2; e) Auxiliary building, 52247600 100 % 52247600 SA.38048 Patras Port Authority S.A. (OLPa) 18 2014 Italy Salerno a) Expanding Port Entrance; b) Stabilising the dock, c) Dredging 73000000 97.28 % 71016396 SA.38302 Port Authority of Salerno (PAS) via Ministro deglo Affari esteri P.le della Farnesina 1 I-00194 Roma 19 2014 Latvia Ventspils Soil stabilisation 2300000 SA.38771 20 2015 Latvia Ventspils Improvement of soil stability of the embankment of the Venta River channel behind berth 2 and 3 - second decision (see also SA.38771) 6150000 (see first decision in 2014) increase aid from 38.6 % to 85 % updated figure: from 3775918 euro up to 5227500 euro SA. 40838 Port Authority of the Free Port of Ventspils 21 2015 Germany Sassnitz Extension of the port by constructing a new berth (No 10) to optimise the use of berths 8 and 9 5100000 88.68 % 4523000 SA.41865 Fährhafen Sassnitz GmbH 22 2015 France Calais Expansion of the Port of Calais and build a new cross Channel terminal to allow better operation of cross-Channel sea transport services 887500000 30.40 % 270000000 SA.39688 Port de Calais 23 2015 Italy Taranto Dredging and disposal of dredging materials due to inadequacy of the infrastructure to accomodate increasingly larger container ships 83000000 54 % 38158587 SA.39542 Port Authority of Taranto 24 2015 Germany Wismar Increase port capacity for wood handling by: a) extension of the wharfage; b) dredging and land reclamation; c) terminal for liquid goods; d) terminal for cooling water; e) environmental compensatory measures 37141615 65.98 % 24506881 SA.39608 Port Authority of the Seaport Wismar 25 2015 Germany Wismar Extension and upgrade of the existing cruise ship terminal by: a) extension the berth length by 240 m; b) building for Customs and Police; ISPS security fence; c) dredging; d) road construction; e) fresh/waste water facility; f) supply area for cruising ships; g) parking for buses 33899000 8.19 % 2776300 euros (the construction of a building for Police and Customs does not constitute state aid and is therefore not included in this amount SA.39637 Port Authority of the Seaport Wismar 26 2015 Netherlands Lauwersoog Eliminating a bottleneck in the port which will be done by extending the fishing quay by 200 m 4161300 No aid No aid SA.39403 Exploitatiemaatschappij Havencomplex Lauwersoog 27 2015 Germany Port of Maasholm Fisher boat, refurbishment of the quay No aid No aid SA.42219 28 2015 Portugal Port of Leixoes Cruise terminal, marina (no effect on trade) No aid No aid SA.43250 29 2015 Latvia Port of Lepaja Dredging 75 % 32300000 SA.41734 30 2015 Greece Port of Mykonos Passenger transport infrastructure, some touristic infrastructure (regional aid) 10718252 100 % 10600000 SA.39232 Municipal Port Management Organisation (MPMO) of Mykonos 31 2015 Germany Port of Rostock Several investments, dry cargo without bulk goods 7182900 80 % 5600000 SA.43376 Rostocker Fracht- und Fischereihafen GmbH

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1. 2016-09-23