Preface

The Norwegian Coastal Administration, hereinafter the NCA, administers and manages the Aid Scheme for Shortsea Shipping.

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.

This guide applies to the application process itself and may only be used as a supplement to the guidelines for the aid scheme

The guidelines are under revision but will soon be ready. The changes in the guidelines are minimal and should not hinder the application process.

More information about the scheme and award criteria is available on the scheme web page: www.kystverket.no/godsoverforing

If you have any questions or comments regarding this guide please contact us at: The Norwegian Coastal Administration's Head OfficePost-box 15026025 Ålesund Email: godsoverforing@kystverket.no

The Norwegian Coastal AdministrationNovember 2019

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ContentPreface................................................................................................................................2Terms and clarifications......................................................................................................5

1. About the scheme........................................................................................................61.1. Scheme background.........................................................................................6

1.2. Legal basis........................................................................................................61.3. Scheme objective..............................................................................................6

1.4. Scheme administration.....................................................................................61.5. Beneficiaries.....................................................................................................6

1.6. Duration and budget.........................................................................................61.7. Grant awards....................................................................................................6

2. Grant process..............................................................................................................72.1. Grant announcement........................................................................................7

2.2. Grant support....................................................................................................72.3. Priority...............................................................................................................7

3. Projects eligible to receive aid.....................................................................................83.1. New shortsea service.......................................................................................8

3.2. Upgrade of existing service..............................................................................83.3. General restrictions...........................................................................................9

3.3.1. Distortion of competition......................................................................................93.3.2. Complementary and overlapping services..........................................................9

3.3.3. Control measures................................................................................................94. Award criteria.............................................................................................................11

4.1. Utility value......................................................................................................114.1.1. Calculation of utility value for existing services.................................................13

4.1.2. Conversion to tonnes........................................................................................134.2. Financial need for support..............................................................................14

4.3. Commercial viability........................................................................................155. Eligible costs..............................................................................................................17

Alternative 1: Operational cost.........................................................................................17Alternative 2: Investment in trans-shipment equipment...................................................17

6. Aid ceiling..................................................................................................................197. Grant payments.........................................................................................................21

8. Completing your application......................................................................................238.1. Application requirements................................................................................23

8.1.1. Confidentiality....................................................................................................238.2. Electronic application form..............................................................................23

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8.2.1. Part 1: Contact details.......................................................................................248.2.2. Part 2: Utility value............................................................................................24

8.2.3. Part 3: Project presentation...............................................................................248.3. Enclosures......................................................................................................25

8.3.1. Business plan....................................................................................................258.3.2. Financial analysis..............................................................................................25

8.3.3. Time line schedule (not mandatory)..................................................................258.3.4. Letter of intent (not mandatory).........................................................................25

Appendix 1........................................................................................................................26Examples of calculations...............................................................................................26

Example 1: Transfers according to plan........................................................................26Example 2: Less transfer than anticipated....................................................................26

Example 3: Freight transfers beyond the period’s anticipated volume..........................27Example 4: Advance payment with subsequent deduction...........................................27

Example 5: Line traffic...................................................................................................27Appendix 2: Budget plan...................................................................................................28

Appendix 3: Marginal External Costs per tonne kilometre................................................29

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Terms and clarificationsShortsea 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 shift or transfer means transferring freight transport performed 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 cost or negative externality is a cost that a transaction or activity imposes on a party that is not part of the transaction or activity. Freight transport impose negative externalities on society 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 economic territory is limited on land by the boundaries to our neighbouring countries, and in terms of the sea; by the Norwegian economic zone.

Eligible costs include 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.

Accumulation of support is allowed up to the most advantageous aid ceiling.

A criteria for grant from this scheme is to prove that the service will continue after the grant period by demonstrating how the project will achieve economic 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 the factor per tonne; the grant allocated to the period in question divided over the expected freight to be transferred to sea during each period.

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1. About the scheme

1.1.Scheme backgroundThe 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 scheme guidelines 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 administrationThe 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 . 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 awardsThe NCA will announce grants awarded upon completing the review process.

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2. Grant process

2.1.Grant announcement All relevant information about the scheme, annual funds, and deadlines will be published on the NCA scheme website .

If funds remain after the review process is completed, the NCA will announce a new deadline for additional applications.

2.2.Grant supportIn addition to the scheme web page, scheme guidelines and application guide, The NCA offers individual counselling upon request. Contact the NCA grant manager to request a meeting.

The purpose of individual counselling is to ensure that your application is in accordance with the scheme objective and that the information submitted is adequate and correct.

2.3.PriorityWithin 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. Application review and assessmentFollowing 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 the 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 are related 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 grant without further notification. Unsuccessful applicants will receive a rejection letter.

The outcome of the review process is a decision that may be appealed to 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 Act entitle 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.

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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 serviceOnly 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 shift to sea for road freight. Such modifications can include changes to 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 volumes may 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 serviceIn exceptional circumstances, grants may 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 operation in 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 by including calculations of future volumes and financial development.

All expenses pertaining to the upgrade must be clearly identifiable and verifiable.

Upgrades to 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.

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3.3.General restrictions

3.3.1. Distortion of competitionAll 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 another service, i.e. by sharing its point of origin, stops during the journey or destination point. If two projects share 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 measuresTo 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 www.shortseaschedules.com

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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 - OsloIn 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.

Figure 4.2 Road alternative 2

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The calculated utility value and the total external costs for the two alternatives will be presented as shown in figure 4.3. Figure 4.3 Utility value of modal shift

Figure 4.3 lists the difference in external cost between the road and sea option. It also includes an ID unique to the calculation. To ensure swift verification of your calculation, include your ID in your application.

Figure 4.4 External costs road and sea alternative

Transports from one location to various destinations

Some transports have one point of origin, such as a central storage facility in the East of Norway and many destinations, for example in the West of Norway.

The calculation of the utility value should take the location of the central storage facility as the starting point, with the nearest port as origin for the sea alternative. The destination should be a representative location, such as a port in the West of Norway, i.e. Bergen as the destination point for both road and sea alternatives. See figure 4.5 for an example.

If the transport consists of several points of origin, for example abroad and one destination point; a production company in Norway, the external cost will be counted from Svinesund on to the location of the production company.

If you experience that the mapping tool does not include a specific origin or destination outside of Norway, choose an alternative location nearby. The calculated utility value will not be different as the external costs abroad are excluded from the calculation of the utility value.

Transport between many locationsFreight transports between many points of origin and several destinations, but within defined geographical areas; East Norway and Western Norway are calculated by choosing a representative starting point, i.e. the port of Oslo, and a representative destination point such as the port of Bergen.

Line traffic

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A line service may call on many ports (A - B – C – D - E) on its journey between its origin and destination point (A - E).

Prospective applicants must define the projects sailing route; origin and destination and all ports that will be called upon, as well as estimate the number of tonnes of freight to transferred from sea between each combination of ports in both directions, i.e. A-B, A-E, B-C, C-D, D-E, E-D, etc.

The calculation of the utility value for line traffic must be done separately for each lag. Remember to include all calculation IDs in your application.

The calculation of the utility value for line traffic may also be complicated if you need to select a number of defined representative locations for the origin and destination points.

In order to calculate the total utility value, the utility value of each individual relation must be added together.

All calculations will be controlled by the NCA when assessing the application. Projects involving line traffic, or various representative points should request assistance from the NCA when calculation the utility value.

Note that calculation-IDs for the separate calculations must be included in your application, either directly into the application form or in an appendix.

Feeder transportsSometimes both road and sea transports involve feeder transport; transport to and from the port. If these transports match each other in distance, they can be said to cancel each other out. This will often be the case if the ports for the sea alternative are located along the road route.

The feeder transport may be excluded from the calculation of the utility value. The calculation is then based on the selection of a representative starting and destination point, i.e. port to port.

Note that excluded feeder transport must be identified and justified in your application. You may not exclude feeder transport if the freight will need extensive road transport upon arrival due to a significant diversion of the freight route compared to direct transport by road. If the NCA disagrees on the omission of feeder transport, you will be asked to provide detailed freight information.

As an alternative, the freight should be divided and separate calculations made including various destinations. This will often be done if the service includes many points of origin and/or destinations, thus complicating the calculation.

4.1.1. Calculation of utility value for existing services

For upgrades of existing services that are in danger of ceasing operation, both the existing freight and transferred freight may be included in the calculation of the utility value.

4.1.2. Conversion to tonnesAll types of loads are included in the scheme. The following conversion value must be used for volume based loads in the calculation of utility value.

Table 4.1 Conversion values for other load volumesVolume Weight in tonnes1m3 5,151 pallet 7,41 load meter 1,25Semi-trailer 1720 foot container 7,525 foot container 9,5

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40 foot container 1545 foot container 17

4.2.Financial need for supportThe aid scheme for shortsea shipping aims at attenuating the substantial financial difficulties that launching new shortsea shipping services often is associated with.

Thus, applicants need to convince the NCA that the service in question would not be launched without the financial support from this scheme. To do this, the application must include a detailed business plan and a financial analysis for the project.

The business plan should provide a solid description of the project, including sailing patterns, cargo, sailings schedule including origin and destination points, all related services and the transferred road transport for the first four periods of the project. The periods must be of equal length and a period can be one year or less in length.

The business plan, supported by the financial analysis for the project, should demonstrate that the project for a maximum of three years would depend on financial support in order for the defined quantities to be transferred to sea.

The NCA has prepared a template for the financial analysis in accordance with Norwegian accounting regulation and standards, see appendix A. The template can be downloaded from the scheme web page. The analysis can form part of the business plan or included in a separate appendix.

Note that only revenues and expenses associated with the modal shift are eligible for grant. New services resulting from the modification of an existing service, must

exclude all revenues and expenses related to existing freight volumes, from the financial analysis.

It is important to note that the expenses for the project can contain expenses not eligible for aid. Thus, you must specify all the costs you intend to cover with the grant in a separate list. Note that you will be asked to provide a financial statement at the end of each period adherent to Norwegian accounting regulation and standards.

Renting/leasing business assetsThe interest implied in the lease agreement cannot be included in the operating expenses, cf. Norwegian Accounting Standard, NRS 14 Rent agreements and international accounting standards IFRS 16 , in which financial and operational lease/rent no longer is distinguished.

Similarly, lease agreements, administration agreements, crew agreements and similar with other companies are determined according to the so-called “arm’s length principle”, which means that the principle of market prices forms the basis. In cases of a group arrangement a consolidated presentation of figures for all the associated expenses and revenues must also be provided.

Door-to-door servicesIf the service includes D2D services involving additional port expenses, the expenses and revenues must be included in the analysis.

Combined freight/passenger servicesIn a combined freight/pax type of transport a separate before and after calculation must be prepared, which differentiates between pax/freight transport and shows what the expense will be for the transport of the freight.

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A summary of all operational cost should be included in a separate appendix.

4.3.Commercial viabilityThe project’s business plan and financial analysis must show that the project will be commercially viable after the aid period has ended. For further information regarding the requirements for contents in the business plan and financial analysis, see section 15.3.

A new service may require a longer period of operation before achieving profit. Thus, the project does not need to show profit in the fourth period. The application must however convince the NCA that the grant recipient plans to continue the service after the grant period. The application should include a description on how the service will achieve profits as time goes on. Projects that require more than a fourth period before achieving profits, should include more than the mandatory four periods in the financial analysis.

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5. Eligible costsThe term eligible costs applies to those expenses the state aid can be used to cover. The sum of the eligible cost will be used to calculate the maximum aid the project may be granted.

Eligible costs do not have to be the same as the project expenses, but the eligible costs must form part of the project expenses (including feasibility expenses).

Eligible costs are the same for new services as for the upgrade of existing services. Such expenses can either be operational expenses or investment costs related to in trans-shipment equipment. A combination of these two alternatives is prohibited.

Alternative 1: Operational cost Operational costs directly attributable to the modal shift are eligible for grant aid. Operational expenses may include:

The cost of chartering, leasing or depreciating vessels

The cost of hiring, leasing or depreciating installations that enable trans-shipment between shipping routes, railways and roads

The cost of using maritime infrastructure (see comments below)

Cost relating to operation of trans-shipment equipment, including equipment at the port for transferring the freight to a vehicle or a railway.

Expenses relating to the operation of technical equipment (commercial operation of techniques, technologies or equipment, tested and approved earlier, including transport information technology/IT)

The cost of measures related to personnel and training

The cost of fuel

The cost of promoting the specific route, including expenses for information and communication activities

The administrative costs linked with the project in question

The costs associated with separate accounting and feasibility studies

Other operating costs may also be eligible for aid; i.e. expenses incurred before project start-up may, or expenses associated with analyses and feasibility studies. All expenses must be identifiable and verifiable in order to be accepted as eligible.

Note that only transfer of freight from road to sea is eligible for aid. Neither, rail nor passenger expenses are eligible for support.

Alternative 2: Investment in trans-shipment equipmentAs an alternative, the expense of investing in trans-shipment equipment (finance for the purchase) to support the service in question will be eligible for grant aid. This includes necessary freight-handling equipment to enable efficient inter-modal trans-shipment

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6. Aid ceiling

The aid ceiling, or the aid intensity, defines the upper limit for aid.

For applications for financial aid for operational expenses, the following ceiling applies:30 percent of the eligible operating expenses or the calculated utility value of the project

The lower of these two amounts represents the maximum amount of aid.

For applications for aid for trans-shipment equipment, the following ceiling applies: 10percentof the investment expenses eligible for aid or the calculated utility value of the project

The lower of these two amounts represents the maximum amount of aid.AccumulationAccumulation of support means that all public support, including support from other support schemes and EU-programmes, must be included in the calculation of the aid ceiling.

Cumulation (combination) with other public aid, including aid received through EU funding, or entitlements to receive aid under other aid schemes for the same eligible expenses is allowed up to the most advantageous aid ceiling. The aid ceiling applied shall be 30 percent of operational expenses applies.

Grant recipients must provide information on all other public support related to the same eligible costs of the project over a period of 3 years before and after the start of the project.

The aid cannot be cumulated with aid for services of general economic interest

(“public service compensation”).

Aid awards above 500,000 EUR will be registered in the central registry in accordance with Norwegian Regulations of 29 June 2016 No. 834 Relating to the Registration of Public Aid.

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7. Grant paymentsThe total amount of aid a project can receive is equal to the calculated utility value for the project, up to the project’s aid ceiling, cf. section 5 in this guide.

The grant period is divided into three equal. Each period may be one year or less in length.

Grant payments in each period will depend om the actual freight volumes the service transfers from road to sea. The payment in the first period will be up to 50 percent of the total aid amount, up to 33.33 percent in the second period and up to 16.67 percent in the third period.

Projects will receive more aid during the start of the project than at the end. In practice this means that the aid paid per tonne kilometre will be highest in the first period, less in the second period and least in the third period.

The total aid paid to each project will be limited to the utility value of the freight transfer.

In the event that the actual freight transfers are less than estimated, grant payments will be reduced accordingly.

Increased freight transfers do not lead to increased grant payments. You may instead use the incremental volumes to complete the following period’s transfer obligations.

Grant payments are calculated by multiplying the number of transferred tonnes by the payment factor for that period. The payment factor is equal to the total grant period’s percentage divided over the estimated volume to be moved during the specific period, see appendix C for a demonstration.

For line traffic a payment factor must be calculated for each distance (port to port). Grant payment will then be calculated based on the corresponding payment factor multiplied by the number of tonnes transported on each distance.

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8. Completing your application

8.1.Application requirementsAn application for aid from this scheme must demonstrate a financial, professional and practical ability to carry out the project.

Prospective applicants must provide the NCA with a detailed business plan describing the project; quantity, type, origin and destination of the freight in question, the expected freight volumes to be transferred in each period.

The calculated utility value. Argumentation relating to the financial

need for aid (maximum three years) in order for the service to be launched, as well as how the project will be commercially viable after the end of the grant period.

An overview of all the revenues and expenses related to the project over a minimum of four periods.

An overview of all the costs you apply for aid.

Note that you are obligated to state all public support which can be connected to the same project.

8.1.1. ConfidentialityPursuant to the Freedom of Information Act, the public shall, in general, have full or partial access to case documents in possession by the state. Any person may demand access to information regarding a specific case obtained by the pertinent administrative agency. A document may, however, be exempted from public disclosure pursuant to the provisions of this Act. The administrative agency shall consider whether the document should, nevertheless, wholly or partly be made public. Applications containing confidential company information, i.e. financial or competitive nature, must provide the NCA

with a copy of the application marked “confidential” in which all details are disclosed. Another copy should be submitted.

The NCA will carry out an independent assessment and may decide not to exempt project details from publication. In the event of such a decision, you will be given the chance to appeal prior to disclosing the relevant information.

8.2.Electronic application formThe Coastal Administration’s electronic application form must be used to apply for aid under this scheme. The form is available at www.altinn.no A link to the e-application form is also available from the scheme web page.

The form is available in Norwegian and English. To access the English version please choose English as your preferred language at the top of the Altinn web page, then search for the form by plotting “grant for the transfer of freight from road to sea” in the search box. If using Altinn is unfamiliar to you, you will find more information under «Help and advice»

To complete and submit your application press “start service”. In order to complete the form you need to hold the “completer/submitter” or “independently registered user” role in Altinn. You may see what role you hold on the page “Profile, roles and rights”. If you do not hold any of these roles you need to get the role designated to you by the person in your company who does.

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Figure 8.1 Logging in

Foreign applicants can access the form by choosing “Proceed to alternative log-in methods” at the bottom of the log inn page. Follow the steps to open an account allowing you to complete the form.

Once logged in you need to accept the general application conditions prior to initiating the completion of the form.

You may at any time pause the completion of the form.

8.2.1. Part 1: Contact detailsProvide your company's registered name, organisation number, address and account details. In addition, provide the name, title and contact information of at least one person to whom questions regarding the project may be directed. If the project entails a number of collaborative parties, all party names, organisation numbers and contact persons must be provided.

Notify the NCA if information provided here change.

8.2.2. Part 2: Utility valueComplete this part by providing the details for the calculation of the utility value; the expected freight volume to be transferred, the originating and destination point for all

volumes must be specified in detail. For more information about how to complete this part and or calculate the utility value please contact the NCA support.

If your service involves a combination of several origin and destination points, the utility value will consist of a number of individual calculations. Make sure to include each “lag ID” in your application. If your service involves many lags, and thus many individual calculations, it may be a good idea to list the calculations with corresponding IDs and append it to your application.

8.2.3. Part 3: Project presentationBrief presentationProvide a brief presentation of your project. Tell if your project involves the launching of a new service, or, upgrading an existing service. Include also the expected freight volume to be transferred, the calculated utility value and start date for the new service. The information you provide her will be used in publications relating to the NCA’s allocation announcement.

Extended presentationUnder the complete description of the project, a detailed of the project types/quantities of freight that are expected to be transferred, including the origin and destination of the freight. With regard to line traffic, give additional information regarding type/quantity of freight expected to be transported in the different relationships.

In this part of the form you must substantiate/demonstrate that the project requires the aid you are applying for, and provide evidence that the project will be commercially viable from the fourth period. This must be completed using the NCA’s template for financial analysis. The template can if you so wish include a

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summary of the aid eligible costs. Alternatively these can be specified in a separate enclosure, or be included in the business plan.

Start date for the project and desired payment frequency must also be provided in this part. The start date cannot be set at a later point than 12 months after the decision of the grant. Payment frequency can be made on an ongoing basis as transfer is achieved, or at the end of the period.

The application must document that there is a need for financial aid in order for the project to be realised. Confirmation of aid must therefore exist before the start of the first period. In the event that a project is started prior to aid being granted, this could appear to be independent of aid, and therefore be at risk of falling outside this scheme.

This part of the application is used to provide information about how the freight are currently transported. If the freight are currently transported by sea or rail for the whole or part of the route, this might mean that the project will have a negative effect on the competition in the sea transport market. It is important to provide extensive information, which is relevant in an evaluation of whether the project will lead to negative effects on competition in the market.

The field for other information can be used to provide additional information that is of relevance to the handling of the application. When applying for aid for an existing service this can be supported by supplying the annual accounts. Documenting the expected transferred quantity of freight is not mandatory, but will help to reinforce the application.

Please note that all applicants are obliged to state all public support which can be connected to the aid eligible costs included for the project. Please provide comments regarding the contents and relevance of any other enclosures in this part of the form. Before the application is submitted a check of all the obligatory fields will be carried out to ensure these are not left empty.

8.3.Enclosures

8.3.1. Business plan Grant applications must include a detailed business plan describing the project, including sailing patterns, cargo, sailings schedule including origin and destination points, all related services and the transferred road transport for the first four periods of the project.

8.3.2. Financial analysisThe business plan, supported by a financial analysis for the project’s first four periods, should demonstrate that the project for a maximum of three years would depend on financial support in order for the defined quantities to be transferred to sea.

The analysis can form part of the business plan or included in a separate appendix A template for the financial analysis can be downloaded from the scheme web page available in appendix A.

8.3.3. Time line schedule (not mandatory)

The time schedule is meant to provide an overview of the plans, start date for the project, operation and the length of the periods. The progress schedule can be enclosed or be included in the business plan.

8.3.4. Letter of intent (not mandatory)Anticipated volume growth can for example be documented in the form of letters of intent with relevant customers.

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Appendix 1

Examples of calculations

All the examples shown below are based on the following project details:

100 000 tonnes of fish will be transferred from road to a waterborne service, whereby 20,000 tonnes will be transferred during the first period, 30,000 tonnes during the second period and 50.000 tonnes during the third period. The projected transfer in the fourth period are 70 000 tonnes.

The estimated utility value for the total transfer of 100 000 tonnes is 13,5 mill NOK, and corresponds with the project’s aid ceiling.

The payable grant follows a descending payment profile (50

percent of the total grant may be paid after the first period, 33,3 percent after the second period and 16,7 percent after the third period). The maximum amount of aid that can be paid in the three periods will then be approximately 6,75 million NOK, 4,5 million NOK and 2,25 million NOK for the third period.

The actual grant that can be paid corresponds with the actual tonnes transferred multiplied with the periodic payment factor.

The payment factor in each period is equal to the maximum grant payable in each period divided over the estimated freight during each period. Thus the payment factors for each period will be:

PF1 = (6,75 million NOK / 20,000 Tonnes) = 337,5 NOK per Tonne

PF2 = (4,5 million NOK / 30,000 Tonnes) = 150 NOK per Tonne

PF3 = (2,25 million NOK / 50,000 Tonnes) = 45 NOK per Tonne

Example 1: Transfers according to planDocumented transferred freight after the first period amounts to 20,000 tonnes. The grant paid will be 20,000 tonnes x 337,5 NOK = 6,75 million NOK after the first period.

Transfer according to plan after the second and third period will follow the same principle and application of the corresponding payment factors. The total paid will be 13,5 mill NOK.

Example 2: Less transfer than anticipatedIf less freight is transferred by the end of the first period, i.e. 18,000 tonnes instead

of 20 000 tonnes, the grant paid will be 18,000 tonnes x 337,5 NOK = 6,075 million NOK.

The payment factor for the first period will be applied until 20 000 tonnes are transferred and the project is up to date. After this, the payment factor for the second period will be applied until another 30,000 tonnes are transferred. Similarly, the payment factor PF3 will apply until the next 50,000 tonnes are transferred, though within the expiration of the third period.

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Example 3: Freight transfers beyond the period’s anticipated volumeIf freight transfers surpass the estimated amount for the period in question, and this can be documented, you may request a grant payment for the surplus transferred volume. Taking the first period’s expected transfer of 20,000 tonnes as a starting point, an actual transfer of 25,000 tonnes may result in the following grant payment:

Payment factor PF1, will apply to the first 20,000 tonnes, then payment factor PF2 will apply to the next 5,000 tonnes:

20 000 x 337,5 + 5 000 x 150 = 6 750 000 NOK + 750,000 NOK = 7 500 000 NOK.

Grant payment for the surplus transfer require that NCA has funds available and if achieved prior to period end, that the following period is initiated.

Grant payments for transfers above the total anticipated volume will not be done.

Example 4: Advance payment with subsequent deductionThe award of aid provides a basis to request advance payment of up to 50 percent of the aid amount for the first period. On application for advance payment of aid, the maximum advance payment in accordance with the example above will be equal to 3 million NOK.

Advance payment of aid will be deducted from the actual period's aid amount, which will be calculated based on the actual quantity of freight transferred. If the transfer of freight during the first period is 5,000 tonnes, meaning half the anticipated transfer, the advance payment will be equal to the aid required for the first period.

The calculated aid for the period will then be 5,000 * 600 = 3 million NOK. The aid for the first period will therefore have been received in advance. The payment factor for the first period will be kept until the total 10,000 has been transferred and can be paid on an ongoing basis. If less than 5,000 has been transferred, payments of more aid than one is entitled to have been made during the first period. This will be deducted for the next period.

Example 5: Line trafficLine traffic entails an expectation of different sectors with associated anticipated quantities of freight. Each sector of line service will therefore have a different payment factor. The NCA will carry out an adjustment of the deviations between the periods for each single sector as described above. In addition there will be an opportunity of adjustment between the different sectors.

It is possible that the transferred quantity of freight for one or more of the freight transport sectors deviates from the anticipated plan in the application. If one of these sectors reaches the anticipated quantity before the expiry of the period of the grant, it will be possible to continue to pay the aid for this sector, using the current payment factor, until the total grant allocation has been reached.

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Appendix 2: Budget plan

Income Period 1 Period 2 Period 3 Period 4

Operating income

Cost of goods sold

Gross margin

Expenses

Operating expenses

Depreciation and amortization *)

Personnel expenses

Other operating expenses

Total operating expences (OPEX)

Operating profit (EBIT)

Average capital employed **)Return on capital employed (ROACE) ***)

Financial appraisal

*) According to IFRS 16 the classification of leases as either operating leases or finance leases as is required by IAS 17 are eliminated and, instead a lease is required to recognise:

(a) assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and (b) depreciation of lease assets separately from interest on lease liabilities in the income statement.

**) Capital employed = Equity + minority interest - net interest-bearing debt

Net interest-bearing debt = Long - and short-term interest-bearing debt - (cash and deposits + short-term investments)

***) ROACE = Earnings before interest and taxes (EBIT) / (Average capital employed)

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Appendix 3: Marginal External Costs per tonne kilometre

Marginal external costs per tonne kilometre

 Marginal cost from sea transport

Marginal costs from road transport

< 15 000 inhabitants

15 – 100 000 inhabitants

> 100 000 inhabitants

> 100 000 inhabitants

Emissions to air 0.005 0.050 0.050 0.050 0.050Local emissions 0.003 0.015 0.083 0.376 0.614Noise 0.000 0.000 0.010 0.012 0.120Congestion 0.000 0.000 0.000 0.080 1.001Accidents (life and health)

0.0004 0.056 0.282 0.282 0.282

Acute emission to sea

0.002 0.000 0.000 0.000 0.000

Depletion of infrastructure

0.000 0.071 0.071 0.071 0.02

Winter related operations

0.000 0.05 0.05 0.05 0.05

Total 0.010 0.197 0.502 0.877 1.984

The table provides a summary of the marginal external costs per tonne kilometre for road and sea transport per tonne-kilometre.

The factor for marginal external costs for transport by road is multiplied by the total number of tonne kilometres for the road transport service.

The sum of the marginal external costs for transport by sea multiplied by the number of tonne kilometres for the alternative of transport by sea is then subtracted.

There will therefore be less deviation in distances. In the road transport network there is a separation between transports through areas of different degrees of population density, which produce different external costs. The external costs are higher in densely-populated areas. The rates have been obtained from The Institute of Transport Economics’ report on marginal external costs for transport by road (TØI, 2014).

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