SESAR Joint Undertaking

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• on discharge in respect of the implementation of the budget of the Shift2Rail Joint Undertaking for the financial year 2018 The European Parliament, having regard to the final annual accounts of the Shift2Rail Joint Undertaking for the financial year 2018, having regard to the Court of Auditors annual report on the EU Joint Undertakings for the financial year 2018, together with the Joint Undertakings replies[1], having regard to the statement of assurance[2] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2018, pursuant to Article 287 of the Treaty on the Functioning of the European Union, having regard to the Councils recommendation of 18 February 2020 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2018 (05763/2019 C90071/2019), having regard to Article 319 of the Treaty on the Functioning of the European Union, having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002[3], and in particular Article 209 thereof, having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[4], and in particular Article 71 thereof, having regard to Council Regulation (EC) No 642/2014 of 16 June 2014 establishing the Shift2Rail Joint Undertaking[5], and in particular Article 12 thereof, having regard to Commission Delegated Regulation (EU) No 110/2014 of 30 September 2013 on the model financial regulation for public-private partnership bodies referred to in Article 209 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council[6], Commission Delegated Regulation (EU) 2019/887 of 13 March 2019 on the model financial regulation for public-private partnership bodies referred to in Article 71 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council[7], having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the opinion of the Committee on Transport and Tourism, having regard to the report of the Committee on Budgetary Control (A9-0055/2020), 1.Grants the Executive Director of the Shift2Rail Joint Undertaking discharge in respect of the implementation of the Joint Undertakings budget for the financial year 2018; 2.Sets out its observations in the resolution below; 3.Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Shift2Rail Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

• on the closure of the accounts of the Shift2Rail Joint Undertaking for the financial year 2018 The European Parliament, having regard to the final annual accounts of the Shift2Rail Joint Undertaking for the financial year 2018, having regard to the Court of Auditors annual report on the the EU Joint Undertakings for the financial year 2018, together with the Joint Undertakings reply[8], having regard to the statement of assurance[9] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2018, pursuant to Article 287 of the Treaty on the Functioning of the European Union, having regard to the Councils recommendation of 18 February 2020 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2018 (05763/2019 C90071/2019), having regard to Article 319 of the Treaty on the Functioning of the European Union, having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002[10], and in particular Article 209 thereof, having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[11], and in particular Article 71 thereof, having regard to Council Regulation (EC) No 642/2014 of 16 June 2014 establishing the Shift2Rail Joint Undertaking[12], and in particular Article 12 thereof, having regard to Commission Delegated Regulation (EU) No 110/2014 of 30 September 2013 on the model financial regulation for public-private partnership bodies referred to in Article 209 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council[13], Commission Delegated Regulation (EU) 2019/887 of 13 March 2019 on the model financial regulation for public-private partnership bodies referred to in Article 71 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council[14] having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the opinion of the Committee on Transport and Tourism, having regard to the report of the Committee on Budgetary Control (A9-0055/2020), 1.Approves the closure of the accounts of the Shift2Rail Joint Undertaking for the financial year 2018; 2.Instructs its President to forward this decision to the Executive Director of the Shift2Rail Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

• with observations forming an integral part of the decision on discharge in respect of the implementation of the budget for the Shift2Rail Joint Undertaking for the financial year 2018 (2019/2105(DEC)) The European Parliament, having regard to its decision on discharge in respect of the implementation of the budget of the Shift2Rail Joint Undertaking for the financial year 2018, having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the opinion of the Committee on Transport and Tourism, having regard to the report of the Committee on Budgetary Control (A9-0055/2020), A.whereas the Shift2Rail Joint Undertaking (the Joint Undertaking) was established in June 2014 for a period of 10 years by Regulation 642/2014[15]; B.whereas the founding members are the European Union, represented by the Commission, and rail industry partners (key stakeholders, including rail equipment manufacturers, railway companies, infrastructure managers and research centres) with the possibility that other entities may participate in the Joint Undertaking as associated members; C.whereas the objectives of the Joint Undertaking are to achieve a Single European Railway Area; to enhance the attractiveness and competitiveness of the European railway system; to ensure a modal shift from road transport; and to maintain the European rail industrys leading position in the global market; D.whereas the Joint Undertaking started to work autonomously in May 2016; General 1.Notes that the report of the Court of Auditors (the Court) on the Joint Undertakings annual accounts for the financial year 2018 (the Courts report) finds the annual accounts to be presented fairly, in all material respects, with regard to the Joint Undertakings financial position on 31 December 2018 and the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with its financial regulation and with the accounting rules adopted by the Commissions accounting officer; 2.Acknowledges that the Courts report states that the transactions underlying the annual accounts of the Joint Undertaking for the financial year 2018 are, in all material respects, legal and regular; 3.Notes that the maximum Union contribution to the activities of the Joint Undertaking is EUR450 000 000, to be paid from Horizon 2020; notes that the industry members of the Joint Undertaking are to contribute resources of at least EUR470 000 000, consisting of at least EUR350 000 000 for in-kind and cash contributions to the operational activities and administrative costs of the Joint Undertaking and at least EUR120 000 000of in-kind contributions to the Joint Undertakings additional activities; 4.Notes that effective communication is an essential component of successful Union-financed projects; considers it to be important to increase the visibility of the achievements of the Joint Undertaking and the disseminate information on their added value; calls on the Joint Undertaking to pursue a proactive communication policy by disseminating the results of its research to the public, such as by social media or other media outlets, thus raising public awareness of the impact of Union support, with particular regard to market uptake.
• 5.Asks the Court to assess the soundness and reliability of the methodology for calculating and valuing in-kind contributions.The assessment shall evaluate the design and the robustness of the guidance for the implementation of the in-kind contribution procedurein orderto assist in the planning, reporting and certification process of the in-kind contributions.
• Budget and financial management 6.Notes that the final 2018 budget available for implementation included commitment appropriations of EUR84 756 000 and payment appropriations of EUR71 890 204;stresses that the utilisation rates for commitment and payment appropriations were 100% and 82,3% respectively which represent a low level, especially for payment appropriations; notes that lower than expected payment appropriations implementation is due to a pending legal decision concerning the membership of the Joint Undertaking; notes the low (63.4 %) rate of implementation of payment appropriation in Title 2 (administrative expenditures, representing 3 % of the Joint Undertakings budget) due to delays in invoicing by the suppliers under multi-annual framework contracts; notes, moreover, that most of the payments made by the Joint Undertaking in 2018 were interim payments for the Horizon 2020 projects selected under the 2015 and 2016 calls for proposals, as well as pre-financing payments for Horizon 2020 projects selected under the 2018 calls for proposals; 7.Observes that, out of EUR411 200 000 (including EUR158 900 000 as the maximum of the Union cash contribution, and the industry members cash contribution to the Joint Undertakings administrative costs of EUR6 500 000) by the end of 2018, the Joint Undertaking had made commitments of EUR84 756 000 and payments of EUR59 155 000 for the implementation of its first wave of projects; this shows that the Joint Undertaking has currently signed interdependent multiannual grant agreements and procurement contracts for the implementation of 39 % of the Joint Undertakings research and innovation programme, in line with the Joint Undertakings multi-annual work programme; 8.Welcomes the fact that out of EUR 350 000 000 of contributions to be made by the industry members to the operational activities and administrative costs of the Joint Undertaking, by the end of 2018, i.e.
• four months after the Joint Undertaking had launched its first Horizon 2020 projects, the industry members had reported in-kind contributions of EUR 63 700 000 for operational activities, of which EUR 21 700 000 had been certified; moreover, notes that out of EUR 120 000 000 of contributions to be made by the industry members to additional activities of the Joint Undertaking, the industry members had reported in cash contributions of EUR 6 500 000 for other activities outside of the Joint Undertakings work plan; 9.Observes that by the end of 2018, the total contributions from industry members amounted to EUR252 300 000, compared to the Unions cash contribution of EUR158 900 000; 10.Notes that, in 2018, the Joint Undertaking signed 17 grant agreements resulting from the calls for proposals of 2018, and that the value of the research and innovation activities of those calls for proposals amounted to EUR152 600 000, to be co-funded by the Joint Undertaking up to a maximum of EUR77 300 000; notes that the other members agreed to limit their request for co-funding to 44,44 % of the total project costs, which is the lowest overall for Horizon 2020 Framework Programme; notes with regret that only 76 small and medium-sized enterprises (SMEs) participated to the 2018 call (120 in 2017) and 40 SMEs (50 in 2017) were retained for funding (21,6 % of all retained participants for funding); Performance 11.Notes that the third set of key performance indicators will be developed on the basis of first Horizon 2020 results due to the nature of the projects; in addition, takes note that the Joint Undertaking continued the development of a key performance indicators model to measure the contribution of the research and innovation activities to its Regulation; notes that this work is still ongoing and the first results were presented to the governing board in December 2018; 12.Observes that the management cost ratio (administrative/operational budget) remains below the 5 %, thus pointing to rather lean and efficient organisational structure of the Joint Undertaking; 13.Takes note that the Joint Undertaking helped to create continuity and shared common vision for rail research within the railway community; notes that, in addition, the Joint Undertaking has helped to build trust between players that would otherwise not have the opportunity to share ideas and common interests outside a commercial situation; observes that the presence of rail operators in the Joint Undertaking should be strengthened over time; 14.Notes that the Joint Undertaking should contribute to addressing the challenges faced by the rail sector focusing on the needs of the rail system and of its users, including in Member States that do not have a railway system within their territory; observes that in order to do that, the Joint Undertaking is implementing the Shift2Rail Programme, and research and innovation activities in the railway sector in Europe, through the collaboration between stakeholders and Member States; notes that particular attention should be given to promoting concrete measures for theremoval of remaining technical obstacles toenhancing interoperability and toactions supporting a more integrated, efficient and safe Union railway market,with the ultimate aim of realisingthe Single European Railway Area; 15.Notes that the Joint Undertaking launched the 2018 call for proposals for grants restricted to its members, as a lump sum funding scheme; however, the financial experts involved in the grant evaluation phase revealed some relevant deviations in the financial proposals; the Joint Undertaking used the grant preparation phase to analyse the beneficiaries explanations for the deviations and to correct the lump sum if justified; calls on the Joint Undertaking to continue to strengthen the financial data in its beneficiary database and to disclose important financial experts comments in the evaluation summary report; takes note of the Joint Undertakings reply that all legal and financial aspects of the Commission Decision C(2017) 7151[16] have been strictly followed-up, and that the Authorising Officer has ensured that all the comments of the experts, technical and financial, have been taken in due consideration; moreover, taking into account the recommendation of the Court, the overall process will be further enhanced in the 2019 call for proposals; 16.Notes that, according to the 2018 annual activity report of the Joint Undertaking, the key performance indicators regarding gender balance for that year show a very low percentage of women - only 15 % - on the board, while they made up 34 % of the Joint Undertaking representatives and 40 % of the Scientific Committee; Personal selection and recruitment 17.Notes that in 2018, the Joint Undertaking recruited two seconded national experts in accordance with the Staff Establishment Plan, and with the agreement of the budget authority, recruited a third one for a one-year secondment in order to replace one Programme Manager; 18.Notes that at the end of 2018, the Joint Undertakings staff consisted of 22 members out of the 23 who were foreseen in the Staff Establishment Plan; Internal Control 19.Notes that the Joint Undertaking has set up reliable ex ante control procedures based on financial and operational desk reviews and that the Common Audit Service of Directorate-General for Research and Innovation of the Commission (the common audit service) is responsible for the ex post audit of Horizon 2020 project cost claims; notes, moreover, that the situation at the end of 2018 showed that the most important internal control standards were largely implemented with some actions remaining to be completed in 2019, in particular, the revision of the key performance indicator model; 20.Takes note that the residual error rate for the Horizon 2020 Programme was below the materiality threshold according to the Court, amounting to 0,97 %; takes into consideration that at the end of 2018, the Joint Undertaking could base its error rate calculation on four ex post audit reports, one related to the risk based audit and three related to the Joint Undertaking representative sample; 21.Acknowledges the fact that the internal audit service performs the role of internal auditor of the Joint Undertaking and that, in this respect, it reports to the governing board and the executive director indirectly; notes that the first audit mission established a risk profile of the Joint Undertaking with the objective of establishing a triennial internal audit plan; observes that the internal audit service strategic internal audit plan 2017-2019 was presented in June 2017; moreover, in accordance with this audit plan, the internal audit service, in 2018, carried out a limited review of the implementation of internal control standards; observes with satisfaction that of the five recommendations to management to address the shortcomings identified that had not yet been fully implemented, only one still required implementing actions in 2019; 22.Notes with regret that, at the end of 2017, the Commissions common Horizon 2020 grant management and monitoring tools had not finished the specific developments needed for the processing of the Joint Undertakings in-kind contributions; however, notes that in-kind contributions have been validated by the executive director in 2018; 23.Observes that the Commissions interim evaluation on the Joint Undertakings operating activities under Horizon 2020 covering the period from 2014 to 2016 was carried out; notes that an action plan has been prepared and adopted by the governing board in June 2018; takes into consideration that not all recommendations raised in the interim evaluation will be addressed under the current financial framework programme;however, notes that some actions included in the action plan have already been initiated, while others are expected to be implemented by 2020; Others issues 24.Insists on the importance of the cooperation between the Joint Undertaking and the Union Agency for Railways (ERA); notes the involvement of ERA in meetings of the Joint Undertakings governing board and in the groups that drafted the multi-annual action plan; notes that the Joint Undertaking assessed the requests for research and innovation coming from ERA in order to avoid overlapping activities and to maximize the efficiency of use of the public funding; 25.Notes that, in 2018, one Associated Member became a wholly-owned subsidiary of a founding member, as a result the founding members representation in the governing board increased; observes that the provisions of the Joint Undertakings current legal framework do not sufficiently address corporate acquisitions among the Joint Undertakings industry members and the implications they might have on the balanced representation of members in the governing board; takes note of the Joint Undertakings reply that the legal framework established within the Joint Undertaking does not allow an increase in the influence of a founding member on the decision-making process and overall governance; notes that the finding of the Court will be considered in any possible amendment to the regulation; 26.Notes that the interim evaluation of the Joint Undertaking was completed in the timeframe set by its legal framework; notes with regret that it could not provide the best added value forthe Joint Undertakings decision-making process at this early stage of its activities; takes note of the Joint Undertakings reply that the evaluation took place early in the life of the joint Undertaking but this was a requirement in compliance with the Joint Undertaking regulation and the overall Horizon 2020 programme; 27.Observes that the staff turnover rates for the last two years were entirely caused by turnover of contract agents; welcomes the steps taking by the Joint Undertaking to cope with this situation; notes that the Joint Undertaking made use of interim staff services, which represented about 17 % of its total staff; takes note on the Joint Undertakings reply that the main reasons for this stem from the current staff establishment plan structure, which does not allow the Joint Undertaking to offer the same favourable contractual conditions as those offered by other bodies and institutions; notes that soft measures have been put in place to reduce high levels of turnover; calls on the Commission to follow up this point.
• Transport and Tourism 28.Highlights that the objectives of the Joint Undertaking are to achieve a Single European Railway Area and to enhance the attractiveness and competitiveness of the Union railway system; points out that the rail mode of transport will be key in the future Union actions to promote a shift to low-emission mobility and tackling negative externalities; stresses that the Joint Undertaking needs to be given the necessary financial, material and human resources to reach these key objectives and to contribute to a real modal shift; 29.Notes that the Joint Undertaking is a public-private partnership established in 2014 under the Horizon 2020 Framework Programme; notes that the Shift2Rail Programme is jointly funded through contributions of the Union (through the operational budget of the Joint Undertaking) and in-kind contributions from the other members, i.e.
• the eight founding members (other than the EU) and the nineteen associated members; 30.Notes that during 2018, the Joint Undertaking has progressed towards achieving its targets, delivering the Shift2Rail Programme implementation ensuring an effective and efficient sound financial management; notes that 2018 saw the progress of the research and innovation activities launched in previous years that are now well on track and largely proceeding at a rapid pace; notes that new wave of research and innovation activities (Call 2018) started at the year end; notes that it is estimated that the total project cost of the activities performed in 2018 will amount to EUR 83 400 000; 31.Stresses the need to increase the attractiveness of rail for transport operators and passengers in order to achieve a lasting shift from road to rail, and notes that the next five years will be critical for the success of rail and that the Joint Undertaking plays a key role in making rail cheaper, more efficient and more attractive; 32.Stresses that points, or faulty points, alone account for 25 % to 30 % of all maintenance on the rail network and are responsible for a significant part of infrastructure costs; welcomes the Joint Undertakings efforts to increase the reliability of the system and reduce costs; 33.Welcomes the Joint Undertakings objectives of halving the life-cycle costs of the rail system, doubling capacity and improving reliability and punctuality by 50 %; calls for the Joint Undertaking to have at its full disposal the human and financial resources necessary to achieve these objectives; 34.Welcomes the Joint Undertakings efforts to introduce Automatic Train Operation (ATO); warns that the road transport sector has made greater progress with automation; 35.Welcomes the Joint Undertakings decision to propose to its governing board, as part of the annual working programme 2018, the adoption of the lump sum grant, which was subsequently implemented through the lump sum pilot scheme in the call for members part of the 2018 call; 36.Considers that, in order to ensure the legal clarity of the decision-making process and of the overall governance of the Joint Undertaking, it is of utmost importance to clarify the provisions of the legal framework of the Joint Undertaking regarding corporate acquisitions among its industry members and their consequences for the membership of the governing board; therefore invites the Council to address this issue possible by adopting amendments to Council Regulation (EU) No 642/2014[17] ; 37.Notes that in 2018 the Joint Undertaking launched 14 representative audits on its population and one risk based audit (in addition to the 15 representative audits and one risk based audit launched in 2017) bringing the direct coverage of the Joint Undertakings audits to EUR 4 660 000; notes that the overall detected error rate for the three representative audits and the risk-based audit finalised by 31 December 2018 is 0,94 % on a simple average and 1,19 % on a weighted average; notes that all other error rates (representative and residual), although limited in respect their coverage, are also below the targeted threshold of 2 %;

• on discharge in respect of the implementation of the budget of the SESAR Joint Undertaking for the financial year 2018 The European Parliament, having regard to the final annual accounts of the SESAR Joint Undertaking for the financial year 2018, having regard to the Court of Auditors annual report on the EU Joint Undertakings for the financial year 2018, together with the Joint Undertakings replies[1], having regard to the statement of assurance[2] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2018, pursuant to Article 287 of the Treaty on the Functioning of the European Union, having regard to the Councils recommendation of 18 February 2020 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2018 (05763/2019 C90066/2019), having regard to Article 319 of the Treaty on the Functioning of the European Union, having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002[3], and in particular Article 208 thereof, having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[4], and in particular Article 70 thereof, having regard to Council Regulation (EC) No 219/2007 of 27 February 2007 on the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR)[5], and in particular Article 4b thereof, having regard to Commission Delegated Regulation (EU) No 1271/2013 of 30 September 2013 on the framework financial regulation for the bodies referred to in Article 208 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council[6], having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the opinion of the Committee on Transport and Tourism, having regard to the report of the Committee on Budgetary Control (A9-0044/2020), 1.Grants the Executive Director of the SESAR Joint Undertaking discharge in respect of the implementation of the Joint Undertakings budget for the financial year 2018; 2.Sets out its observations in the resolution below; 3.Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the SESAR Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

on the closure of the accounts of the SESAR Joint Undertaking for the financial year 2018 The European Parliament, – having regard to the final annual accounts of the SESAR Joint Undertaking for the financial year 2018, – having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2018, together with the Joint Undertakings’ replies[7], – having regard to the statement of assurance[8] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2018, pursuant to Article 287 of the Treaty on the Functioning of the European Union, – having regard to the Council’s recommendation of 18 February 2020 on discharge to be given to the joint undertaking in respect of the implementation of the budget for the financial year 2018 (05763/2019 – C9‑0066/2019), – having regard to Article 319 of the Treaty on the Functioning of the European Union, – having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002[9], and in particular Article 208 thereof, – having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[10], and in particular Article 70 thereof, – having regard to Council Regulation (EC) No 219/2007 of 27 February 2007 on the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR)[11], and in particular Article 4b thereof, – having regard to Commission Delegated Regulation (EU) No 1271/2013 of 30 September 2013 on the framework financial regulation for the bodies referred to in Article 208 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council[12], – having regard to Rule 100 of and Annex V to its Rules of Procedure, – having regard to the opinion of the Committee on Transport and Tourism, – having regard to the report of the Committee on Budgetary Control (A9-0044/2020), 1. Approves the closure of the accounts of the SESAR Joint Undertaking for the financial year 2018;

• with observations forming an integral part of the decision on discharge in respect of the implementation of the budget for the SESAR Joint Undertaking for the financial year 2018 (2019/2100(DEC)) The European Parliament, having regard to its decision on discharge in respect of the implementation of the budget of the SESAR Joint Undertaking for the financial year 2018, having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the opinion of the Committee on Transport and Tourism, having regard to the report of the Committee on Budgetary Control (A9-0044/2020), A.whereas the SESAR Joint Undertaking (the "Joint Undertaking") was set up in February 2007 to run the Single European Sky Air Traffic Management Research (SESAR) programme, which aims to modernise traffic management in the Union; B.whereas, following the adoption of Council Regulation (EU) No 721/2014, the SESAR 2020 extended the lifetime of the Joint Undertaking until 31 December 2024; C.whereas the Joint Undertaking was designed as a public-private partnership, with the Union and Eurocontrol as founding members; D.whereas the Union contribution for the deployment phase of the SESAR 2020 2014 to 2024 funded by Horizon 2020 is EUR585000000; whereas under the new Horizon 2020 Membership Agreements, the contribution from Eurocontrol is expected to be around EUR500000000, and the other partners from the aviation industry were to contribute with at least EUR500 000 000, and being around 90 % the in-kind contributions from Eurocontrol and other partners; General 1.Observes from the report of the Court of Auditors (the Court) on the Joint Undertakings annual accounts for the year ended 31 December 2018 (the Courts report) present fairly, in all material respects, the financial position of the Joint Undertaking at 31 December 2018, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with its Financial Regulation and with accounting rules adopted by the Commissions accounting officer; 2.Acknowledges that the Courts report states that the transactions underlying the annual accounts of the Joint Undertaking for the financial year 2018 are, in all material respects, legal and regular; 3.Notes that effective communication is an essential component of successful Union-financed projects.
• Considers it to be important to increase the visibility of the achievements of the Joint Undertaking, and the dissemination of information on the value added.
• Calls upon the Joint Undertaking to pursue a proactive communications policy disseminating the results of its research to the general public, e.g.
• via social media or other media outlets, and thus aiming to raise public awareness of the impact of Union support, with particular regard to market uptake.
• 4.Asks the Court to assess the soundness and reliability of the methodology for calculating and valuing in-kind contributions.The assessment shall evaluate the design and the robustness of the guidance for the implementation of the in-kind contribution procedurein orderto assist in the planning, reporting and certification process of the in-kind contributions.
• 5.Recalls that SESAR is the technological pillar of Europe Single European Sky (SES) initiative and its role is to coordinate and implement research to contribute overcoming the fragmentation of SES; points out that one of the main achievements of the Joint Undertaking includes the free routing to reduce flight and fuel emissions; believes therefore that the Joint Undertaking could be further used to contribute to the sustainability of the aviation sector; 6.Highlights the importance of the work of the Joint Undertaking to help accelerate innovation uptake; stresses moreover its role in the significant development of U-space and the production of a blueprint to enable the safe introduction and use of drones in the low-level airspace, which is the basis for a modern and rapidly growing sector; Budget and financial management 7.Notes that in 2018, budget in payment appropriations was EUR 94 800 000 (EUR 90900 000 in 2017), and budget in commitment appropriations was EUR 129 500 00 (EUR 109 900 000 in 2017); Including the unused appropriations of previous years, which the Joint Undertaking re-entered in the budget of the current year, and assigned revenues, the total available payment budget was EUR 166 465 000 (EUR 213 000 000 in 2017), and the total available commitment budget was EUR 175 918 000 (EUR 130 900 000 in 2017); 8.Notes that in December 2016, the SESAR 1 was formally closed and the last final grant payment was made in December 2017, and unused payment appropriations of EUR 40 000 000 from previous years were carried over to 2018 for the reimbursement of cash contributions received in excess from the SESAR 1 industry members and for the payment of delayed but still justified cost claims for the Seventh Framework Programme and the Trans-European Transport Network (TEN-T) projects; notes with concern that at the end of 2018, only EUR 1 800 000 (5 %) of these appropriations could be used for the corrective payments, EUR 20 000 000 (50 %) had to be cancelled, and EUR 18 200 000 (45 %) were carried over to 2019; regrets at the end of 2018 in the closing phase of the SESAR 1, the Joint Undertaking still showed a large amount of open commitments of EUR 61 400 000, and these resources allocated to the Joint Undertaking will not be fully used; Multiannual budget implementation under the Seventh Framework Programme and TEN-T 9.Notes that, out of the EUR1284300000 of in-kind and cash contributions to be made by the other members to the operational and administrative activities of the Joint Undertaking (EUR700 000 000 from Eurocontrol and EUR584300000 from the air traffic sector members), the Joint Undertaking had, by the end of 2018, validated contributions of EUR1 099 800 000 (EUR560700000 from Eurocontrol and EUR539100000 from the air traffic sector); Multiannual budget implementation under Horizon 2020 10.Notes that out of the EUR585 000 000 Union subsidy under Horizon 2020, by the end of 2018 the cumulative Union (Directorate-General for Mobility and Transport (DG MOVE)) cash contributions to the operational activities of the Joint Undertaking amounted to EUR216 900 000, and that the other members committed to make in-kind and cash contributions of at least EUR 1 000 000 000 to the Joint Undertakings SESAR 2020 operational activities (an estimated amount of EUR 500 000 000 from Eurocontrol matched by estimated EUR 500 000 000 from the air traffic sector); notes, moreover, that, at the end of 2018, the other members had contributed EUR 14 400 000 in cash and had made validated EUR 114 000 000 contribution in kind, while a further EUR 120 200 000 in-kind contribution was reported, but had not yet been validated; 11.Notes that for SESAR 2020, at the end of 2018, the Joint Undertaking implemented 81 % and 61 % respectively of the commitment and payment appropriations available for Horizon 2020 projects, and cancelled around EUR 44 600 000 (35 %) of the available Horizon 2020 payment appropriations (the utilisation rates for commitment and payment appropriations in 2017 were respectively 80,24% and 67,97%); 12.Notes the Courts observations that the low implementation and high cancellation rates for Horizon 2020 payment appropriations available in 2018 were mainly due to the Joint Undertaking s conservative budget planning, and not fully taking account of the amount of unused payment appropriations from previous years in its budget planning and monitoring; Performance 13.Notes the Joint Undertakings key performance indicators (KPIs) in 2018, in particular, forecasted PPP-leverage values at the end of the programme:- by interim evaluation method: 1,22,- by refined interim evaluation method: 1,26,- for Horizon 2020: 2,26, and- partnership leverage: 1,74; 14.Notes that the Joint Undertaking met its key policy and operational objectives as outlined in the Single Programming Document for the period 2017-2019; 15.Reminds the Joint Undertaking of its call to take steps to meet the target leverage effect over the whole 2014-2020 period of 1.41; 16.Observes that the management cost ratio (administrative/operational budget) remains below the 5%, thus pointing to rather lean and efficient organisational structure of the Joint Undertaking; 17.Notes that the SESAR Joint Undertaking is one among several Joint Undertakings which saw more operational synergies with Union decentralised agencies operating in their respective areas of research and innovation, in particular, the Joint Undertaking and the European Union Aviation Safety Agency (EASA) collaborated on drones; 18.Notes that in the Joint Undertaking's 2018 annual activity report, the information on KPIs on gender balance is only given for 2017 and not for 2018; notes that the information for 2017 relates to the Joint Undertaking's calls for proposals regarding the Horizon 2020 programme in 2016, with the figures given for KPIs being as follows: percentage of women in Horizon 2020 projects - 15.4 %; percentage of women project coordinators - 12%; percentage of women in the Commissions advisory and expert groups, etc.
• - 33.3 %; 19.Notes that the Joint Undertaking has conducted three major initiatives that have been key in setting the vision for the future of Air Traffic Management (ATM) in Europe in 2018 and that the results of these achievements, recognised by the whole ATM community, have been transferred to the Commission that will take the next steps for their inclusion in the aviation legislative and policy framework; 20.Acknowledges that in addition to its results from the Exploratory Research projects, the Joint Undertaking has proven to be a key player in innovation for aviation through the integration of new entrants beyond the traditional actors in ATM research and innovation; Procurement and recruitment procedures 21.Notes from the Courts report that at 31 December 2018, the Joint Undertaking employed 42 staff (2017: 40); 22.Observes that in 2018 the Joint Undertaking and signed 48 contracts including 37 specific contracts implementing the Joint Undertakings framework contracts and inter-institutional agreements, and there were 12 procurement procedures: five negotiated procedures without prior publication of a contract notice, five very low, low and middle value negotiated procedures, three open calls for tender, and one prize; 23.Notes that under the DG Move delegation agreement, the Joint Undertaking launched in January 2018 an open call for proposals for studies and demonstrations on drone traffic management in Europe (U-Space Call), the maximum grant amount of EUR 9 500 000 being funded through the Commissions Connect Europe Facility (CEF) fund; notes with grave concern the Courts findings that whilst the award criteria of the call respected in general the orientations laid down in Regulation (EU) No1316/2013[13], there were, according to the Court, several overlaps and inconsistences among award criteria and their sub-criteria, which could put at risk the overall effectiveness of the grant evaluation process and need to be addressed at the call design and preparation phase; Internal Control 24.Acknowledges that the ex ante control procedures of the Joint Undertaking are reliable, in particular, for the Seventh Framework Programme interim and final payments, the Joint Undertaking performs ex post audits at the beneficiaries whilst for Horizon 2020 payments the Commissions Common Audit Service is responsible for the ex post audits; notes that the residual error rates for the ex-post audits reported by the Joint Undertaking at the end of 2018 were 1,29 % for the Seventh Framework Programme and 1,33 % for Horizon 2020; 25.Acknowledges from the Joint Undertakings follow-up of Parliaments discharge resolution for the financial year 2017 that the Joint Undertaking has taken steps to address Parliaments concerns, in particular, the Joint Undertaking has appointed a new Head of Budget and Finance team, that the team incorporates a new Finance Officer and Finance Assistant, Joint Undertaking is in process of recruiting a Chief Financial Officer, and a new budget procedure is in place, which has led to a timely preparation of detailed budget; Internal audits 26.Notes that the Commissions Internal Audit Service (IAS) issued the final audit report on coordination between the Joint Undertaking and the Common Support Centre (CSC) and implementation of CSC tools and services, leading to three important recommendations; notes that the Joint Undertaking set up a detailed action plan to address the risks underlying these recommendations, which was expected to be implemented in the course of 2019; 27.Notes that in 2018, the Internal Audit Capability (IAC) performed activities focusing on assurance audits and consulting engagements; notes that the IAC conducted a follow-up audit on recruitment and actively participated in the Risk Assessment exercise of the Joint Undertaking, liaised with the IAS, the Court and other relevant audit actors, monitored the implementation of Joint Undertaking action plans related to past audits and followed-up on the discharge procedure; 28.Notes that the Joint Undertaking conducted a corporate risk management workshop in July 2018 to report on risk management and validate main changes linked to corporate risks; Issues concerningthe deployment phase of the SESAR project 29.Observes that in 2019, the Court published special report 11/2019 on the Union regulation for the modernisation of air traffic management; notes that in its special report the Court assessed how well the Commission managed the deployment of SESAR since 2011, whether the Union intervention targeted the projects in greatest need of support, and whether it added value to the management of air traffic in the Union; notes the need for effective management of air traffic in the future so as to ensure safety and efficiency; 30.Notes with concern the Courts findings that a majority of the projects audited would have been financed without Union funding support, there were weaknesses in the implementation of the funding scheme, in particular, insufficient prioritisation, and ATM performance benefits in an operational environment are still to be demonstrated; 31.Calls on the Commission to inform the discharge authority of the measures they have taken to mitigate possible conflicts of interest, particularly as regards project selection; 32.Endorses the Courts recommendations aiming to address the issues, and notes that the Commission has accepted all of the Courts recommendations; calls on the Commission to follow up on the implementation of the Courts recommendations; Transport and Tourism 33.Notes that the Joint Undertaking has presented its budget in two separate sections: (1)SESAR1 and (2) SESAR2020; notes further that SESAR1 was co-financed from TEN-T and the Seventh Research Framework programmes and SESAR 2020 is cofinanced from Horizon 2020; 34.Notes that the implementation rates were 83 % for commitment appropriations and 47 % for payment appropriations (for SESAR 1: 99 % and 5 % and for SESAR 2020: 81 % and 61 %); notes that the low overall payment implementation rate is mainly due the low rate for SESAR 1, reflecting the financial closure of its projects and winding up of the programme, and also the efforts of the Joint Undertaking to keep the running costs at the minimum necessary; 35.Recalls that SESAR is the technological pillar of SES initiative and its role is to coordinate and implement research to contribute overcoming the fragmentation of SES; points out that one of the main achievements of the Joint Undertaking includes the free routing to reduce flight and fuel emissions; believes therefore that the Joint Undertaking could be further used to contribute to the sustainability of the aviation sector; 36.Stresses that both the further development of European airspace in the SES2+ framework and the incorporation of drones require sufficient financial and human resources; 37.Notes that the Joint Undertaking ran its operations in full accordance with four different frameworks: the Horizon 2020, the CEF Programme for drone U-space demonstration activities, as well as two specific frameworks for the Active Geo-fencing service call and the study to develop a proposal for the future architecture of the European airspace; recognises that these different legal frameworks mean a high degree of complexity for the Joint Undertaking and therefore commendsthe Joint Undertakingfor successfully implementing innovation projects; 38.Highlights the importance of the work of the Joint Undertaking in helping to accelerate innovation uptake; stresses moreover its role in the significant development of U-space and the production of a blueprint to enable the safe introduction and use of drones in the low-level airspace, which is the basis for a modern and rapidly growing sector; highlights the importance of the Joint Undertaking in preparing for the update of the European ATM Master Plan toward a Digital European Sky through a holistic and passenger-centric digital transformation of aviation; believes therefore that the role of the Joint Undertaking should be recognised and strengthened within the next Multiannual Financial Framework; 39.Notes that the Joint Undertaking continued the financial and administrative closure of SESAR 1; notes that the actual overall programme execution rate is 89,9 %; notes that the Joint Undertaking has EUR 30,7 million on its virtual bank account to cover all remaining obligations of SESAR 1 and that according to payments and recoveries forecasts the Joint Undertaking should close SESAR 1 with an estimate cash surplus of EUR 30,6 million; reminds that the accumulated budget results for the SESAR1 will be used to reimburse the surplus cash contributions of the members of the Joint Undertaking and the remaining unused amount will be paid back to the Union; 40.Notes that 2018 was the first year of SESAR 2020 without SESAR 1 projects; further notes that out of EUR 96,0 million in revenue received by SESAR 2020 in 2018, the contribution from the Union was EUR 88,2 million and from Eurocontrol EUR 5,2 million; 41.Notes that unused payment appropriations in 2018 resulted in a surplus of EUR 19,3 million that remains within the Joint Undertaking (of which EUR 0.05 million for SESAR 1 and EUR 19.25 million for the SESAR 2020) and that the cumulative surplus amounts to EUR 77,24 million (of which EUR 30.93 million for SESAR 1 and EUR 46.31 million for SESAR 2020); 42.Notes that the last audits of SESAR1 regarding payments made in 2017 were launched in 2018 and the 4th cycle of audits consisting of 23 audit exercises in eight Members was completed; is concerned by the residual error rate for the year 2018 of 5,07 %; 43.Notes the results of the 2018 Human Resources benchmarking exercise: 61,67 % operational posts, 28,57 % administrative and 9,76 % of neutral posts;