Cost-benefit analysis (CBA) of investment projects is explicitly required by the new EU Regulations for Structural Funds (SF), Cohesion Fund (CF) and Instrument for Pre-Accession countries (ISPA), for projects with a budget upper than to, respectively, 50 Meuro, 10 Meuro and 5 Meuro. While Member States are responsible for the prior appraisal, the EU Commission has to evaluate the quality of this appraisal in order to admit the project proposal to co-financing and to determine the co-financing rate. Many differences occur between infrastructure and productive investments; many differences also occur between regions and countries, between different theories and methodologies of evaluation and moreover between different administrative procedures between the three Funds. Despite these differences most of the projects have some aspect in common and their appraisal should be expressed in a common language. Beside general methodological aspects, this verification of costs and benefits is a useful tool to stimulate dialogue between partners, Member States and Commission, project proposers, officials and consultants: a supporting tool for collective decision process. It is also a tool to make more transparent procedures for project selection and financing decision Within the framework of its obligations as regards appraisal of projects which are submitted to it by the Member States in the context of regional policy, the Commission (DG Regio) uses a Guide to cost benefit analysis of major projects. Three years since the last updating, the political, legal and technical context has developed considerably and requires a new update of the guide. The present guide offers to EU officials, external consultants, and all the parties concerned an agenda for the evaluation process. The text is specifically addressed to the EU officials but at the same time it offers helpful indications to the project proposer about the specific information needs by the Commission. The specific tasks of this updated version are: • To incorporate into the document the development of Community policies, financial instruments and cost benefit analysis; • To feed into the Commission's reflection on the modulation of rates of co-financing for projects; • To provide technical support to the reader. The Guide is structured in the following chapters: • Chapter One. Project appraisal in the framework of Structural Funds, Cohesion Fund and ISPA. • Chapter Two. An agenda for the project examiner. • Chapter Three. Outline of project analysis by sectors. • Annexes • Glossary • Bibliography Each chapter comprises: A) main text; B) tables and figures; C) boxes. Boxes are of two different kinds: • Regulation boxes, where the most important statements of SF, CF and ISPA regulations are reminded; • Example boxes, where some examples, both qualitative and quantitative, are given about a specific issue illustrated in the main text. In some cases key information is reported in boxes and tables, and we suggest the reader invests some time studying them. Regulations the chapter focuses on the legal requirements for the co-financing decision and the related project appraisal process. The main point of the chapter is that despite the differences of procedures and methods among the three funds the economic logic of analysis and the methodology should be homogeneous. (Author/publisher)
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