Economic and legal commission (ECO)

In 2012, the European Commission issued a proposal for a Regulation on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries - also known as International Procurement Instrument (IPI). The main aim consisted in increasing the EU’s leverage in negotiations in order to achieve reciprocity as regards the access of European companies to foreign procurement markets. Basically, where a third country not being member to the WTO Government Procurement Agreement (GPA) restricts the market access for European companies, economies operators from the concerned country could be subject to restrictive measures taken by the European Commission.

While the legislative file has been at a standstill in the last years, the Member States made considerable progress and reached an agreement in June. Negotiations with the other EU institutions on the final instrument are expected to start at the end of 2021.

Why FIEC is dealing with this topic

FIEC treats this issue in cooperation with the European International Contractors (EIC) and the European Dredging Association (EuDA). Dealing with internal market issues, FIEC considers the IPI as a vehicle to prevent unfair competition on the internal market while our partners are addressing the external challenges. In the last years, we observe a growing number of huge infrastructure projects being awarded to Chinese State-owned enterprises (SOEs) submitting extremely low prices against which private European companies cannot compete. If well designed, the IPI could eventually lead to the exclusion of third country state-owned companies from public procurement procedures.

In order to honour the EU’s commitments within the Paris Agreement from 2015, the European Commission set up an Action Plan on Sustainable Financing in March 2018. The latter comprises amongst others a Regulation on the establishment of a framework to facilitate sustainable invest-ment which was adopted in 2020.

The core of this Regulation is the so-called EU Taxonomy. The EU Taxonomy is a classification which defines under which conditions an economic activity can be considered as environmentally sustainable for the purpose of investments. This classification is set out in delegated acts. The EU Taxonomy applies with regard to the labelling of financial products and the disclosure requirement for companies which fall under the scope of the Non-Financial Reporting Directive. The overarching aim is to create a common for sustainable investments and to direct capital flows to sustainable activities.

The EU Taxonomy is drafted by the Platform on Sustainable Finance. FIEC is the only organisation from the construction industry that has been accepted as a member of the Platform on Sus-tainable Finance. FIEC’s representative in the Platform is Pekka Vuorinen from the the Finnish Construction Federation.

Why FIEC is dealing with this topic

1. Construction activities (e.g. buildings construction, renovation, infrastructure construction) are among the activities which are covered by the EU Taxonomy. In other words, the EU Taxonomy defines under which conditions, for instance, the construction of buildings can be con-sidered as environmentally sustainable.

2. The EU Taxonomy will have a significant impact on the financing/funding of construction activities.

• Companies which are listed on the financial market will have to disclose about their Taxonomy alignment
• Commercial banks will have to disclose about the Taxonomy alignment of their lending activities which will trickle down to the banks’ clients
• The European Investment Bank will use the EU Taxonomy for its financing activities
• We expect that Green Sovereigns Bonds and Green Public Procurement will progressively make use of the EU Taxonomy

The Trans-European Transport Network (TEN-T) comprises the most important transport routes in the EU. (see interactive TEN-T map).

The TEN-T policy aims at removing bottlenecks, addressing missing links, improving interoperability among different transport modes and among regional and national transport infrastructure and integrating urban areas into the network. Initially created by the Treaty of Maastricht, its last revision was in 2013. The 2013 Regulation differentiates between a comprehensive and a core network - the former including remote areas, the latter containing corridors of “highest strategic importance”. According to the Regulation, the core network should be completed by 2030 while the comprehensive network should be established in 2050. A review of the TEN-T guidelines is scheduled for 2021.

In order to foster investment in the TEN-T and to meet the policy’s objective, a specific funding instrument, the Connecting Europe Facility (CEF), has been created in 2013.

Furthermore, the European Commission wants to speed up the completion of the TEN-T through the Regulation on streamlining measures for advancing the realisation of the trans-European transport network. It aims at creating a supportive regulatory environment and introducing efficient procedures since the implementation of TEN-T projects is affected by complex administrative procedures and regulatory uncertainty. The proposal is still under discussion in the Council.

Why FIEC is dealing with this topic

The TEN-T Regulation is a core instrument at EU level for influencing Member States’ infrastructure policies. Key provisions from our perspective are those that refer to the infrastructure requirements. These requirements define the properties the TEN-T infrastructure must have. For instance, the Regulation defines how many lanes a motorway must have. Thanks to FIEC’s intense lobbying over the past years, the European Commission aims at strengthening the approach with the regards to the quality of the TEN-T infrastructure and its maintenance. This also includes the structural stability of critical assets such as bridges and tunnels. Moreover, the European Commission aims at making the TEN-T a precursor for charging infrastructure for electric vehicles. Finally, the eventually revised Regulation is supposed to push for an accelerated completion of the TEN-T.

Depending on how ambitious these requirements will be, the Regulation can be a trigger for infrastructure works.