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Politics and projects combine in the European Union's TEN-T initiative. High profile projects with strong government support mean fat fees and prestige mandates for infrastructure lenders. And the next step will be to expand the network to accession countries. By Natasha Calvert.
The trans-European transport network (TEN-T) vision is a fully integrated transport network across Europe and the European Commission (EC) estimates that Eu400 billion is needed to fulfil this by 2010. As governments across the continent struggle with budgetary constraints, private sector money is likely to play an increasing role. The potential deal flow is enough to keep project financiers busy. The typically large size and cross-border nature of these projects, however, means that the structure of each must be analysed separately and carefully.
As with its counterparts in the telecommunications and energy industry, TEN-T was an idea born at the end of the 1980s. Talk of a single market was picking up and links between countries needed to improve in order for goods, people and services to move around freely. In July 1996 the European Parliament and Council adopted Decision No 1692/96/EC on Community guidelines and the initiative was born.
The full design demands 70,000km of railways, including 22,000km of new and upgraded track for High Speed Trains, 15 000km of new roads, nearly half in regions on the outskirts of the Union, combined transport corridors and terminals, 267 airports of common interest and networks of inland waterways and sea ports.
The EC identifies the links but the actual projects are progressed by the host governments. It is they that choose the procurement method. Cross border links can be complex, with lengthy negotiations, as more than one government has to agree on how to proceed. All projects are eligible for a whole range of European community funds and loans. The EIB, which specialises in long-term funding, has loaned money to every project so far.
"The EIB played an important role in helping to achieve value for money on the High Speed Rail Link (HSL) Zuid project in the Netherlands," says Hans Classen, transport finance, ING. "Its presence improves tenor and pricing." The EIB put up a Eu400 million tranche for consortium Infraspeed to construct and operate the link between Amsterdam and...