European Union member states are currently debating a funding proposal from the European Commission under the Connecting Europe Facility (CEF) that could deliver €31.7 billion ($41 billion) to improve transport infrastructure across the region. That sum is part of a bigger CEF figure of €50 billion that must also cover energy and telecommunications, but in a fiscally strapped Europe the debate is as much about whether that sum can even be allocated as much as about where it is going.
The European Commissioner for Transport, Siim Kallas, was optimistic that the full figure for transport would be delivered and, moreover, that it would help stimulate the short-sea sector and modernise ports. This would be welcome news for those handling the movement of vehicles in Europe, however wider negotiations in the European Parliament over the EU budget for the period between 2014 and 2020 could see that funding cut dramatically. The EU presidency – held by Cyprus in the second half of 2012 – was looking for €50 billion in cuts and a 20% reduction in the proposed CEF figure specifically (down to €36.3 billion as a total). The most severe reduction of the three areas targeted would be transport.
Grimaldi’s commercial and logistics director, Costantino Baldissara, who is also president of the Association of European Ve h i c l e L ogistics (ECG), appeared less optimistic than Kallas about the amount of funding that will be decided given the current climate. In the debates over the previous budget allocation for 2007-2013 – held during a time of growth – requests for €22 billion ended in just €8 billion being delivered. “The only thing that makes me confident enough to share [Kallas’s] positivity is that transport, as well as energy and telecommunications, is the backbone of industry and our society,” said Baldissara. “It represents a big part of the European GDP and employment, and each investment in this field has a positive and direct return to the rest of the economy.”
So far, however, the proposed CEF figure has changed each time a meeting about it has convened. A revised cut resulted in a figure of €46.2 billion last November and it was expected to change again during summits in December and February.
Any amount of funding for short sea will be welcome, although it is still unclear what impact an accepted budget would have on the future of existing projects, such as the Marco Polo programme, which provides incentives for the movement of freight off the roads and onto other modes.
“The CEF is meant for infrastructure investment so is not to be used for any kind of aid, subsidies or incentives to the operators,” says Baldissara.“Furthermore, for the time being, it is much more focused on rail and interconnections than on port projects as such.”
That said, short-sea operators and port companies would benefit in terms of operative competitiveness, said Baldissara, because the efficiency of each link in the intermodal chain contributes to maritime performance. He pointed out that some European ports are currently insufficiently equipped to deal with peak season volumes, while others are inadequately connected to the hinterland or to multimodal platforms. If better port interconnections made sea transport more efficient, more cargo could shift to short sea from road.
The extent to which CEF funding could help tackle what is now short-sea operators’ largest cost – the rising price of bunker – is probably limited, although Baldissara suggested that more cargo going by short sea could maximise load factors and lessen the impact of fuel costs. But he admitted that the sector needs other sources of funding to fight the bunker price increases.