Schausberger: Regional infrastructure projects create new jobs and strengthen the economy
Convention organised by the Institute of the Regions of Europe on the topic "Financing Regional Infrastructure Projects" in Schloss Klessheim, Salzburg

"The Institute of the Regions considers itself to be a platform facilitating the regions with information on their political-economic and structural policy concerns", emphasised Dr. Franz Schausberger, President of the Board of Directors and former provincial governor, today in his welcome speech at the convention of the European regions in Schloss Klessheim, Salzburg. The convention was dedicated to the topic "Financing Regional Infrastructure Projects". Approximately 100 participants from 14 European countries as well as the highest representatives of 34 European regions accepted the invitation by Dr. Franz Schausberger, President of the Board of Directors and former provincial governor. Schausberger welcomed Pál Csáky, Vice-Premier of the Slovak Republic, Wolfgang Roth, Vice-President of the European Investmentbank and Mag. Heinz Zourek, deputy Director General of the European Commission (enterprises and industry) as speakers

Schausberger pointed out that in particular the new member states took great efforts to improve their infrastructure. However, this would be impossible without financial support by the EU. In this context Schausberger also indicated that most of the new EU-member states received only a fractional amount of the EU-financial support from the structural Fund or the social Fund. Some member states received only 45 percent of the possible grants. The problem is often a lack of co-ordination in the national Central Bureaus and in the ministries, the sufferer are most often the regions and communities. The convention's objective is to contribute to a faster access to financial support for important infrastructure projects by regions and communities, stressed Schausberger.

Pál Csáky explained, that there was no alternative to the European integration and that the current crisis was also a chance to reconsider, whether this was the right way. Regionalisation was especially important for post-communist countries, many reforms were necessary to overcome the old, centralistic structures. The plan to form again 12 regions with a historic background failed in Slovakia. Instead, the Parliament consented in 2001 only to the formation of 8 regions. Csáky explained self-critically, that this was not the optimum result, especially not with regards to the autonomy of the Hungarian minority.

Slovakia is currently taking efforts to "regionalise" its financial management, a respective development plan for the years 2007 to 2013 has been drafted. Csáky considers the financing and expansion of infrastructure to be one of the most urgent problems of the Slovak Republic. The possibility to introduce PPP-models (Private-Public-Partnerships) is currently assessed to tap new financing sources.

The financial means required for the new member states to catch-up in the field of infrastructure are tremendous. Wolfgang Roth, Vice-President of the European Investmentbank estimates that the deficiency in infrastructure will amount up to 30 billion Euros per year in the years between 2000 and 2015. Roth advised against considering PPP-financing models to be a magic bullet, especially Eastern European countries tend to underestimate the problems often attached to this way of financing at the beginning. Such models would only be efficient, if they were well prepared. In this event, the construction and maintenance of infrastructure may clearly benefit from an increase of efficiency, emphasised Roth.

The European Investmentbank currently oversees app. 160 PPP-projects, only 12 of them are distressed. One particular advantage of PPP-financing is that problems like cost overrun and belated finalisation can be controlled. Whereas in 73 percent of the projects in the public sector the costs are overrun, this happens in only 22 percent of the projects in the PPP-sector. Similar data applies to the problem of belated finalisation, the ratio is 70 percent compared to 24 percent for PPP-financing. Roth names the unsteadiness of plans due to the political situation on the one hand and generally low incomes, which permit no expensive tolls on the other hands as problems to be considered for PPP-financing in the new member states. Otherwise it seems likely that long detours are accepted to avoid tolls.