1. 1 2007 - 2013 Article 55 of Council Regulation (EC) No 1083/2006: Revenue-generating projects Impact of the revision 2010 Presented by Anton Schrag DG Regional Policy Programme coordination, relations with other Institutions and NGOs, solidarity fund Seminar Train the trainers - Brussels, 17 June 2010

2. 2 Introduction Revenue-generating projects The funding-gap method is confirmed as the basis for calculating the EU grant for revenue- generating projects. Legal basis: –Article 55 of Council Regulation (EC) No 1083/2006 –Article 150 of Commission Regulation (EC) No 718/2007

3. 3 Modifications of Article 55 2008: Article 55 (5) - Threshold 1 Million Euro for ERDF and Cohesion Fund - Non applicable to ESF projects 2009/2010: Article 55 (3) and (4) –Deductions until the closure of the OP –Monitoring of revenue until the closure of the OP –Cancellation of refunds Introduction

4. 4 Categories of Revenue-generating Projects Charges paid by users for the use of the infrastructure Sale or rent of land or building Services against payment Categories of Revenue-generating Projects Charges paid by users for the use of the infrastructure Sale or rent of land or building Services against payment Revenue- generating Projects

5. 5 Cash in-flows Revenue: cash in-flows directly paid by users Other cash in-flows Charges borne directly by users for the use of infrastructure, sale or rent of land or buildings, or payments for services Private and public contributions and/or financial gains that do not stem from tariffs, tolls, fees, rents or any other form of charge directly borne by the users Investment Financial Profitability and Funding-gap Financial Profitability of the National Capital Classification of Cash In-Flows Categories of revenue-generating projects Article 55(1)

6. 6 Factors to consider in Calculation of the Funding-gap Reference Period for the Category of Investment Reference Period for the Category of Investment Normally Expected Profitability Normally Expected Profitability Affordability Affordability Polluter-pays Principle Polluter-pays Principle Factors to consider in Calculation of the Funding-gap Reference Period for the Category of Investment Reference Period for the Category of Investment Normally Expected Profitability Normally Expected Profitability Affordability Affordability Polluter-pays Principle Polluter-pays Principle Article 55(2)

7. 7 Reference Period for the Category of Investment The reference period or project time horizon: the number of years of the profit economic life, that is, the time period beyond which the investment needs to be replaced. Examples are given in the context of guidance on the Cost Benefit Analysis Article 55(2)

8. 8 Equity (affordability): The Commission encourages MS to provide information about affordability ratios. Tariffs should ideally be levied up to the affordable level. Polluter-pays Principle: The Commission encourages MS to adopt charging systems which "internalise" the environmental costs of pollution. No "modified" funding-gap formula is proposed. Article 55(2)

9. 9 Deductionst IC/NR 2007 2011 2016 Project Operational Programme 31.12.2015 Final Date for Eligibility of Expenditure t Latest Date for Deductions Final Closure of the Operational Programme 2013 Article 55(3)

10. 10 Arrangements for Monitoring Revenue Article 55(5) Monitoring systems: to be decided upon by Managing Authorities; Commission recommendation: Managing Authority set system for monitoring revenue Proportionality: less onerous arrangements for smaller projects (i.e. lower frequency of monitoring revenue).

11. 11 Modification of Article 55 in 2008 The amendment of Article 55(5) of Regulation (EC) No 1083/2006 made by Regulation (EC) No 1341/2008 of 18 December 2008 Article 55(5): Paragraphs 1-4 of this Article shall apply only to operations which are co-financed by the ERDF or CF and the total cost of which exceeds 1 000 000 EUR Retroactive application (1 August 2006) Modification of Article 55(5)

12. 12 Modification of Article 55 in 2009/2010 Cut off date is submission of closure documentation: –Article 55(3): Where it is objectively not possible to estimate the revenue in advance, the net revenue generated within five years of the completion of an operation shall be deducted from the expenditure declared to the Commission. –Article 55(4): Where it is established, that an operation has generated net revenue that has not been taken into account under paragraphs 2 and 3, such net revenue shall be deducted by the certifying authority at the latest at the time of submission of the documents under point (a) of Article 89(1) for the operational programme. The application for payment of the final balance shall be corrected accordingly. Modification of Article 55(3) and (4)

13. 13 Article 55(2)Article 55(3)Article 55(4) Both cases Not possible to estimate revenue in advance: No Funding-gap Revenue objectively estimated in advance: Funding-gap Up to closure Before final date of eligibility DeductionsRe-funding Reallocations (possibly) Article 55 Article 55 overview – after adoption of the amendment of General Regulation in 2010