Auditors: Many EU Port Investments "Ineffective"

The European Court of Auditors issued a report Friday on port investments within the bloc, and its findings were not entirely positive. "One in every three euros [out of a sample of capital projects] has been spent ineffectively so far," the auditors found.

"Around half of this funding . . . was invested in infrastructures which were not used or were heavily underused for more than three years after the works ended," the team said.

In addition, the auditors identified $330 million of inefficient investment in five recently reassessed ports, plus $160 million in cost overruns and delays. 

Ports directly employ 1.5 million people in the EU, and shipping contributes a full percentage point to the bloc's GDP. The overwhelming majority of that activity occurs at about one quarter of the EU's 1,200 seaports, and the three largest ports alone – Hamburg, Rotterdam and Antwerp – account for about 20 percent of the total for freight. 

The auditors suggested that a trend of concentration would continue as increasing ship size requires more and more capital-intensive port infrastructure – deep channels and berths, automated shoreside handling equipment and bigger intermodal yards capable of high peak volume. 

The EU is on track to expend a total of 10 billion euros on port projects over the period from 2000 to 2020. But the Court noted that utilization of port capacity in Europe is below the global average, according to the OECD, and is actually expected to decline in some regions – counter to European Commission projections.

As an example of subsidy spending which runs against trends, the auditors observed that all four major ports in north west Italy – Genova, La Spezia, Livorno and Savona – are investing in additional facilities while competing with each other for the same, unchanging cargo volume. Substantially similar EU investment patterns occurred in Spain, Morocco (through foreign assistance) and the north Adriatic, with each new port expansion effectively scavenging cargo volume from a neighboring, EU-subsidized facility. 

The Court called for increased advance project analysis, better regional coordination and streamlined administration to reduce project delays and inefficiencies.