EX POST EVALUATION OF INVESTMENT PROJECTS CO-FINANCED BY THE EUROPEAN REGIONAL DEVELOPMENT FUND (ERDF) OR COHESION FUND (CF) IN THE PERIOD 1994-1999 INTEGRATED ENVIRONMENTAL REGENERATION OF RĺA DE VIGO PREPARED BY: CSIL, CENTRE FOR INDUSTRIAL STUDIES, MILAN PREPARED FOR: European COMMISSION DIRECTORATE-GENERAL REGIONAL POLICY POLICY DEVELOPMENT EVALUATION MILAN, SEPTEMBER 5, 2012 This report is part of a study carried out by a Team selected by the Evaluation Unit, DG Regional Policy, European Commission, through a call for tenders by open procedure no 2010.CE.16.B.AT.036. The consortium selected comprises CSIL – Centre for Industrial Studies (lead partner – Milan) and DKM Economic Consultants (Dublin). The Core Team comprises: - Scientific Director: Massimo Florio, CSIL and University of Milan; - Project Coordinators: Silvia Vignetti and Julie Pellegrin, CSIL; - External experts: Ginés de Rus (University of Las Palmas, Spain), Per-Olov Johansson (Stockholm School of Economics, Sweden) and Eduardo Ley (World Bank, Washington, D.C.); - Senior experts: Ugo Finzi, Mario Genco, Annette Hughes and Marcello Martinez; - Task managers: John Lawlor, Julie Pellegrin and Davide Sartori; - Project analysts: Emanuela Sirtori, Gelsomina Catalano and Rory Mc Monagle. A network of country experts provides the geographical coverage for the field analysis: Roland Blomeyer, Fernando Santos (Blomeyer and Sanz – Guadalajara), Andrea Moroni (CSIL – Milano), Antonis Moussios, Panos Liveris (Eurotec - Thessaloniki), Marta Sánchez-Borràs, Mateu Turró (CENIT – Barcelona), Ernestine Woelger (DKM – Dublin). The authors of this report are Emanuela Sirtori, Mario Genco and Andrea Moroni of CSIL. Useful research assistance has been provided by Rosa Carmosino of CSIL. The authors are grateful for the very helpful comments from the EC staff and particularly to Veronica Gaffey, José-Luís Calvo de Celis and Kai Stryczynski. They also express their gratitude to all stakeholders who agreed to respond to the team’s questions and contributed to the realisation of the case study. The authors are responsible for any remaining errors or omissions. Quotation is authorised as long as the source is acknowledged. Cover: Ría de Vigo, picture by Enrique Dans (June, 2006). TABLE OF CONTENTS EXECUTIVE SUMMARY ....................................................................................................................... 1 1 PROJECT DESCRIPTION ............................................................................................................... 9 1.1 CONTEXT ........................................................................................................................................ 9 1.2 LEGISLATIVE FRAMEWORK ON WASTE WATER TREATMENT ...................................................................... 13 1.3 STRUCTURAL FEATURES ................................................................................................................... 17 1.4 SERVICE DELIVERY .......................................................................................................................... 23 2 ORIGIN AND HISTORY ............................................................................................................... 27 2.1 BACKGROUND ............................................................................................................................... 27 2.2 FINANCING DECISION AND PROJECT IMPLEMENTATION ........................................................................... 28 2.1 CURRENT PERFORMANCE AND OTHER INVESTMENT NEEDS ...................................................................... 34 3 LONG-TERM DEVELOPMENT EFFECTS ........................................................................................ 41 3.1 KEY FINDINGS ................................................................................................................................ 41 3.2 DIRECT WELFARE AND ECONOMIC GROWTH ......................................................................................... 44 3.3 ENDOGENOUS DYNAMICS ................................................................................................................ 51 3.4 ENVIRONMENTAL EFFECTS ............................................................................................................... 52 3.5 TERRITORIAL COHESION ................................................................................................................... 55 3.6 INSTITUTIONAL QUALITY .................................................................................................................. 56 3.7 SOCIAL HAPPINESS .......................................................................................................................... 57 4 DETERMINANTS OF PROJECT OUTCOMES .................................................................................. 59 4.1 KEY FINDINGS ................................................................................................................................ 59 4.2 APPROPRIATENESS TO THE CONTEXT .................................................................................................. 60 4.3 PROJECT DESIGN ............................................................................................................................ 61 4.4 FORECASTING CAPACITY .................................................................................................................. 63 4.5 PROJECT GOVERNANCE AND MANAGERIAL RESPONSE ............................................................................ 64 4.6 THE ROLE OF THE EUROPEAN COMMISSION ......................................................................................... 65 5 CONCLUSIONS ........................................................................................................................... 67 ANNEX I. METHODOLOGY OF EVALUATION .................................................................................. 71 ANNEX II. COST-BENEFIT ANALYSIS ............................................................................................... 77 ANNEX III. MAP OF STAKEHOLDERS ............................................................................................... 97 ANNEX IV. GLOSSARY .................................................................................................................... 99 ANNEX V. LIST OF INTERVIEWEES ................................................................................................ 101 ANNEX VI. REFERENCES ............................................................................................................... 103 LIST OF ABBREVIATIONS BOD5 Biochemical Oxygen Demand CBA Cost-Benefit Analysis CFU Colony-forming unit DG Regio Directorate General for Regional Policies EAP Environmental Action Programme EC European Commission ECU European Currency Unit ERDF European Regional Development Fund EU European Union EUR Euro GDP Gross Domestic Product GSI Galician Statistics Institute (Istituto Galego de Estadistica) INTECMAR Technological Institute for the Control of Marine Environment of Galicia Km Kilometre(s) l Litre(s) m Metre(s) mg Milligramme(s) ml Millilitre(s) mm Millimetre(s) NSI National Statistics Institute (Istituto Nacional de Estadistica) NUTS Nomenclature of Territorial Statistical Units Ptas Pesetas S.A. Public Limited Company (Sociedad Anonima) S.L. Limited liability company (Sociedad Limitada) ToR Terms of Reference UV Ultraviolet WTP Willingness to pay EXECUTIVE SUMMARY This case study analyses the group of projects “Integrated environmental regeneration of Ría de Vigo”, which envisages the construction of nine waste water treatment plants and the installation of sewage pipelines and pumping stations in eight municipalities of Ría de Vigo, in the Spanish Autonomous Community of Galicia. The timeframe of this evaluation study, which occurs more than ten years after the project’s completion, allows one to analyse the socio- economic-environmental effects generated by the project in the long term, and to identify the factors that may have contributed to producing or limiting these effects. The evaluation methodology adopted comprises both qualitative and quantitative techniques, relying on documentary evidence, press and literature review, interviews and the Cost-Benefit Analysis methodology. The overall evaluation approach has been presented in the First Interim Report of this study. For convenience, it is recalled in the following box and, more extensively, in Annex I. OVERALL APPROACH AND METHODOLOGY The Conceptual Framework delivered in the First Intermediate Report has been developed from the evaluation questions included in the ToR1, and further specified and organised in accordance with the study team’s understanding. In particular, the Team identified three relevant dimensions of analysis: i) The object of the evaluation (the ‘WHAT’): this relates to the typologies of long-term contributions that can be observed. Starting from the typologies identified in the ToR (socio-economic development and quality of life) the Team developed the following classification of long-term effects: ‘Economic development’ (including effects on GDP growth and endogenous dynamics) and ‘Quality of life’, taken here to be synonymous with additional social wellbeing, i.e. including effects that are not captured by the economic variables. ‘Quality of life’, in turn, has been divided into: social cohesion, territorial cohesion, institutional learning, environmental effects and social happiness. ii) The