Preface
The Norwegian Coastal Administration, hereinafter the NCA, administers and manages the Aid Scheme for Shortsea Shipping.
The guide applies to the application process itself and must beused as a supplement to the guidelines for the aid scheme, updated February 16th, 2018. This objective of this guide is to make the work of completing the application a simple and easily understood process, thus ensuring that prospective applicants provide the information necessary to process his application.
Find more information on the scheme web page:
If you have any queries or comments regarding this guide please contact us at:
The Norwegian Coastal Administration's Head Office
Post-box 1502
6025 Ålesund
Email:
The Norwegian Coastal Administration's Head Office
February 2018
Content
Preface
Terms and clarifications
1.About the scheme
1.1.Scheme background
1.2.Legal basis
1.3.Scheme objective
1.4.Beneficiaries
1.5.Duration and budget
1.6.Grant allocations
2.Administrative procedures
2.1.Announcement of the scheme
2.2.Guidance
2.3.Priority
2.4.Applications proceedings
3.Projects eligible to receive aid
3.1.New shortsea service
3.2.Upgrade of existing service
3.3.General restrictions
3.3.1.Distortion of competition
3.3.2.Complementary and overlapping services
3.3.3.Control measures
4.Award criteria
4.1.Identified utility value
4.1.1.Calculation of utility value for existing services
4.1.2.Conversion to tonnes
4.2.Financial need for support
4.3.Commercial viability
5.Aid ceiling
Accumulation
6.Eligible costs
Alternative 1: Operational cost
Alternative 2: Investment in trans-shipment equipment
7.Grant payments
8.Completing your application
8.1.Application requirements
8.1.1.Confidentiality
8.2.Electronic application form
8.2.1.Part 1: Contact details
8.2.2.Part 2: Utility value
8.2.3.Part 3: Project presentation
Appendix C: Examples of calculations
Example 1: Transfer of freight in accordance with the plan
Example 2: Fewer freight transferred than anticipated after the first period
Example 3: More freight transferred than anticipated after the first period
Example 4: Advance payment with subsequent deduction
Example 5: Line traffic
1
Terms and clarifications
Shortsea shipping means the movement of cargo and passengers by sea between ports situated in geographical Europe or between those ports and ports situated in non-European countries having a coastline on the enclosed seas bordering Europe. Shortsea shipping includes domestic and international maritime transport, including feeder services along the coast, to and from the islands, rivers and lakes. The concept of shortsea shipping also extends to maritime transport between the Member States of the Union and Norway and Iceland and other States on the Baltic Sea, the Black Sea and the Mediterranean.
Modal shiftor transfermeans transferring freight transportperformed by road to a seaborne service.
A shipowner is the person or persons who equip and run a vessel at their own expense. The shipowner can be the owner of the vessel, or he who runs a total freight service on a chartered vessel (“bareboat charter”). The shipowner can be one individual or a conglomeration, for example a general partnership or a limited company. If the vessel is operated by a jointly-owned shipping company, all the individual partners are ship-owners in accordance with this definition.
A project is defined by the route (sailing pattern), cargo, all related services and the freight volumes to be transferred to sea.
A line (or route) is a scheduled sailing pattern between two or more ports in Norway or between Norwegian ports and ports in the EEA area.
An external costor negative externality is a cost that a transaction or activity imposes on a party that is not part of the transaction or activity. Freight transportimpose negative externalities onsociety in the form of accidents, noise, congestion, local pollution, greenhouse gas emissions and depletion of infrastructure.
A project’s utility value is equal to the reduction in external cost resulting from the transfer of freight from road to sea transport, as calculated for road by Thune-Larsen et al (2014) and sea by Magnussen et al (2015).
The marginal external cost is the cost of a marginal increase in the activity.
The Norwegian economicterritory is limited on land by the boundaries to our neighbouring countries, and in terms of the sea; by the Norwegian economic zone.
Eligible costsinclude the expenses the grant can cover.
The eligible cost will be compared to the project’s utility value, to calculate the aid ceiling; the maximum support available to each project.
Accumulationof supportis allowed up to the most advantageous aid ceiling.
A criteria for grant from this scheme is to provethat the service will continue after the grant period by demonstrating how the project will achieveeconomic viability following the grant period.
Grant allocation is the annual funds available to public funding of projects.
Awarded grants equal the total grant awarded to a specific project. The actual grant paid to each project depends on the actual modal shift measured in tonnes.
Actual payments depend on the actual freight volumes transferred to sea, and is calculated by applying thefactor per tonne;the grant allocated to the period in question divided over the expected freight to be transferred to sea during each period.
1.About the scheme
1.1.Scheme background
The aid scheme for shortsea shipping aims at attenuating the substantial financial difficulties that launching new shortsea shipping services often is associated with implementation of new services.
The scheme is open to all EEA undertakings. An English scheme website and guidelines are available to prospective EEA applicants.
1.2.Legal basis
The Norwegian Ministry of Transport and Communication is responsible for the aid scheme for shortsea shipping and the scheme guidelines.
The schemeguidelines are pursuant to EFTA Surveillance Authority (ESA) decision (208/16/COL) of 21 November 2016 and the conditions set forth in the Maritime Guideline.
The guidelines are also pursuant to Section 8 of the Norwegian Regulation on Financial Management in the Central Government and Chapter 6 in the Provisions on Financial Management in Central Government.
1.3.Scheme objective
The objective of the grant scheme is to encourage a modal shift of freight from road to sea.
1.4.Scheme administration
The NCA administers and manages the grant scheme. The administrative procedures are in accordance with the Public Administration Act.
1.5.Beneficiaries
Grants can be awarded to ship-owners established in the EEA having ships registered under the flag of an EEA country. A shipowner is deemed to be the person or persons who equip and run a vessel at their own expense.
The shipowner can be the owner of the vessel but can also run total freight services on a chartered vessel (“bareboat charter”). The shipowner can be one individual or a conglomeration, for example a general partnership or a limited company. If the vessel is operated by a jointly owned shipping company, all the separate owners are ship-owners in accordance with this definition.
More than one shipowner may collaborate on projects. In the event of collaboration with other stakeholders, such as the owner of the freight, transporters or ports, the grant will be paid only to the shipowner. Other stakeholders or companies than established ship-owners may apply for aid as long as they satisfy the above definition of a shipowner.
1.6.Duration and budget
The duration of the aid scheme is three years from February 16th, 2017 through February 16th 2020. Projects may receive aid from this scheme for a maximum of three years.
The scheme is funded over the Norwegian National budget, chapter 1360, post 72. Annual funds are set in the Norwegian Parliament’s adopted annual budget.
1.7.Grant awards
The NCA will announce grants awarded upon completing the review process.
2.Grant process
2.1.Grant announcement
All relevant information about the scheme, annual funds, and deadlines will be published on the NCAwebsite for the scheme.
If funds remain after the review process is completed, the NCA will announce a new deadline for additional applications.
2.2.Grant support
In addition to the scheme web page,scheme guidelines andapplication guide,The NCA offersindividual counselling upon request. Contact the NCA grant manager to request a meeting.
The purpose of individual counselling is to ensure that yourapplication is in accordance with the scheme objective and that the information submitted is adequate and correct.
2.3.Priority
Within the framework of the funds available, projects completing the general application criteria, will be ranked according to the project’s utility value per NOK, then according to the project’s total utility value.
The NCA advices prospective applicants to contact the NCA prior to submitting the application to verify the content requirements.
2.4.Application review and assessment
Following the deadline for submission of applications, the NCA initiates a preliminary review process. The process involves a review of the project with respect to general application criteria and award criteria.
Applications meeting all grant criteria,go on to an extensive review of the project.
The general review process is about six weeks after the application deadline. However, if additional information is required, the review process may delay.
Grant decisions arerelated in writing in the form of an award letter including all relevant terms and conditions concerning the grant, such as reporting and payment conditions. Grant recipients must accept the terms and conditions in writing within two weeks after receiving the award letter. Failure to submit a written acceptance of the terms and conditions, will lead to a cancelation of the grantwithout further notification.Unsuccessful applicants will receive a rejection letter.
The outcome of the reviewprocess is adecision that may be appealedto the NCA within three weeks after the decision is received cf. Section 28 of the Norwegian Public Administration Act.
Sections 18 and 19 of the Norwegian Public Administration Actentitle applicants access to the case documents. If the NCA upholds its decision, the appeal will be forwarded to the Norwegian Ministry of Transport and Communications for a final decision.
3.Projects eligible to receive aid
The NCA can grant financial support to projects that transfer freight from Norwegian roads to waterborne services.
Grants from this scheme shall offer financial aid to new, or, in exceptional circumstances, existing shortsea services, provided they generate environmental and wider social benefits within Norway,
depend on funding for implementation, but will become viable within the end of the grant period.
A project is defined by its route (sailing pattern), its cargo, all related services and the freight transferred.
No more than one shortsea service can be financed per line/route, and no renewal, extension or repetition of the project in question is permitted.
Applicants must specify whether they apply for grant to launch a new shortsea service, or, to upgrade an existing service at risk of discontinuation.
3.1.New shortsea service
Only new services can receive aid, hence the objective of the scheme is to shift freight from road to sea, and to fund the transport of freight already transported by sea.
A new shortsea service will generally be the result of a new route between two destinations not previously served by a waterborne service. A new service may also result from a modification to an existing service, provided the modification leads to a modal shiftto sea for road freight. Such modifications can include changesto the service’s sailing pattern or type of freight services.
The project shall be limited to the part of the service, which constitutes a new service for freight currently transported by road, i.e. the project will be defined by the modification made to the existing service and the modal shift of road freight, resulting from the modification.
Existing freight volumesmay not be included in the project nor the calculation of the project’s utility value. Only expenses and revenues related to the transferred freight will be deemed part of the project.
3.2. Upgrade of existing service
In exceptional circumstances,grantsmay be awarded to existing services in danger of discontinuation. Special conditions apply for such applications:
- The application must demonstrate the NCA with clear evidence that the services in question will cease operationin the absence of financial support by the state.
- The applicant must identify why the current service is failing, identify upgrades to the service that would turn the service into one with long-term viability byincluding calculations of future volumes and financial development.
- All expenses pertaining to the upgrade must be clearly identifiable and verifiable.
Upgradesto existing services can include increased capacity, improved quality of service, increased regularity, changes to sailing schedules or reduced duration of transport. An eligible existing route, can, in exceptional circumstances, be treated in the same way as a new route.
The NCA will examine the possibility that other operators might be able to run the service without support, or, at a lower cost.
3.3.General restrictions
3.3.1.Distortion of competition
All projects will be subject to an assessment of any negative effects on competition, such as diversion
of business from neighbouring ports or from alternative modes of transport (other than by road).
A limited distortion may be accepted, provided the project leads to a net increase in freight being transported by sea.
The point is that the potential impact that the aid may have on competition must be outweighed by the wider benefits that the scheme will provide in transferring freight traffic flows, thus encouraging a modal shift towards a sustainable transport system.
The NCA may reject applications if the potential negative effects for existing rail and/or sea transport services are deemed significant.
No more than one shortsea service can be financed per line/route, and no renewal, extension or repetition of the project in question is permitted.
3.3.2.Complementary and overlapping services
Applicants must identify potential overlapping or complementary services and describe in detail why the services are not in direct competition.
Grant may be awarded to complementary services if they are different, i.e. their freight services or sailing schedules are different to one another.
Complementary services must result in a net increase in transferred freight from road to sea transport.
A service may partly overlap with anotherservice, i.e. by sharing its point of origin, stops during the journey or destination point. If two projectsshare the same starting point, but have different sailing schedules, or destination point, the services will be considered as different.
If two services have complete geographical overlap, the services must in other terms be complementary such as not compete for the same freight.
If an existing service matches your service, i.e. in sailing schedule, or freight service, you will need to explain how it is different from yours.
3.3.3.Control measures
To ensure that grants are not given to projects that distort, or threaten to distort, competition between existing services, applicants are asked how the freight is currently transported, i.e. by road, sea or rail.
You will also be asked if rail transport is an alternative to your service. If the answer is yes, you will need to explain why rail services are not a preferred choice for your customer.
Failure to provide sufficient information will increase the time needed to process your application. The NCA may request further information and make an individual assessment.
You can find information about existing sea transport services at
4.Award criteria
4.1.Utility value
Transport activities impose (external) costs on society in the form of accidents, noise, queues, local pollution, greenhouse gas emissions and infrastructure decay.
Transport by sea means fewer accidents, reduced greenhouse gas emissions and reduced maintenance costs per tonne kilometres compared to transport by road.
The utility value of a project equals the reduction in external costs.
Applicants to this scheme must use the NCA mapping tool to pre-calculate the utility value.
The calculation of the utility value is done by plotting the origin and destination point, including origin and destination port for the freight to be transferred from road and the total freight volume in tonnes.
Note that the calculations made in the mapping tool are based on representative alternatives, and may differ from the freights chosen route. You should provide a description of such variations in your application. All calculations will be checked by the NCA and may be altered after submission. If you are concerned about this, or uncertain about how to calculate the utility value, contact the NCA grant manager. Request assistance particularly if the service includes route traffic with various distances, or, different freight categories.
The mapping tool calculates the external costs for any given road and sea alternative. The external costs for sea included in the calculation are limited to the Norwegian Economic Zone (NEZ), and to Norway for the road option. The sea routes are defined by the NCA’s own fairway and port data. Road alternatives are based on Google’s API mapping tool.
Note that feeder transport to and from the port must be included in the external costs for the sea transport alternative.
Example: Stavanger - Oslo
In the example below the service in question expects to move 70,000 tonnes of freight from road to sea between Oslo and Stavanger.
The mapping tool will display a map showing a road route as shown below. The first option will often be the quickest or shortest route between two points.
Figure 4.1 Road alternative 1
The route may be altered by dragging the blue line towards a different road route. If doing so increases the utility value compared to the first option, an explanation must be provided.