Annexes to COM(2008)671 - Annual report of the instrument for structural policy for pre-accession (ISPA) 2007 [SEC(2008)2681] - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2008)671 - Annual report of the instrument for structural policy for pre-accession (ISPA) 2007 [SEC(2008)2681]. |
|---|---|
| document | COM(2008)671  |
| date | October 27, 2008 |
Due to the slow progress in ISPA project implementation it was decided that no specific ISPA audits would be carried out in 2007 for Croatia. However, an advisory audit was carried out by DG Regional Policy's Control and Audit Unit on the National Fund and Implementing Agency (CFCU) in April 2007 as a follow-up to the previous ISPA DIS (Decentralised Implementation System) accreditation mission. The overall conclusions of the mission for the part relating to ISPA concerned the high turnover of staff in the CFCU, and subsequently ways to ensure staff retention as well as insufficient level of checking of documents within the CFCU prior to being submitted to the EC Delegation for endorsement.
DIS
The requirement for the DIS accreditation of the ISPA Implementing Agency in Croatia, the CFCU (now transformed into the CFCA), follows the stipulations of Article 164 of the Financial Regulation. DIS accreditation was awarded by the Commission on 13 February 2006.
EDIS
Until EDIS (Extended Decentralised Implementation System – requiring ex-post control only) is granted, the staff of the EC Delegation in Croatia will continue to carry out ex-ante controls and play an important role in supervising the daily management, implementation and monitoring of ISPA measures. Currently the aim is to achieve EDIS for Croatia by the end of the second half of 2009. To a large extent preparations for the move to EDIS will depend on an improvement in the function of the existing DIS structure.
RISK ASSESSMENT
The audit strategy planned for 2007 and subsequent years was based on the results of an analysis of the state of ISPA implementation and the related objectives of the Audit Directorate of DG Regional Policy. The audit strategy sets out the objectives which are defined by the senior management of DG Regional Policy. These objectives are defined on the basis of detailed discussions with the operational directorates during which information on potential risk is shared. The audit strategy then sets out the actions to achieve the objectives, taking account of the risks identified. In general, risk is minimized by implementing this strategy. No audits were carried out in 2007 due to the limited progress in implementation.
Under the system of ex ante approval, priority is given to ensuring that sufficient control procedures are put in place regarding project implementation and payments. However, the management of pre-accession funds carries an inherent risk since the funds are delivered by a variety of organisations and systems. Eligibility of expenditure is determined by compliance with rules and conditions fixed at Community and national level which can lead to complexity and risk of misinterpretation. The Croatian authorities are planning to submit the application to waive ex-ante control during the second half of 2009 for ISPA projects in accordance with the provisions of Regulation 1266/1999.
EUROPEAN COURT OF AUDITORS FINDINGS
No missions or audits were carried out in Croatia during 2007.
CO-FINANCING PARTNERS – EIB, EBRD AND KFW
Given their expertise in project preparation and implementation, the Commission has maintained regular contact with these lending institutions, both at a horizontal level to co-ordinate policy and methodological issues related to programming and implementation, and at country level. The specialist skills of these Banks in structuring grant/loan combinations of funding, including public-private partnership arrangements, is highly useful for improving the quality of projects funded from ISPA. Nevertheless the EIB is not involved in any ISPA project in Croatia with the EBRD being the only IFI which is actively involved in an ISPA project in Croatia. One environmental project approved in 2005 is co-financed by a loan from the EBRD – the Karlovac Water and Wastewater Treatment Programme.
Contribution to Community policies
PUBLIC PROCUREMENT
From the start of ISPA, the fulfilment of legal requirements for sound, fair and transparent public procurement as enshrined in the PRAG has proved to be a major challenge. In many cases, ensuring compliance with EU procurement principles has lead to delays in the implementation of ISPA projects. The Commission services -especially the EC Delegation in Zagreb - had to intervene frequently, not only to check that procedures were correctly applied but also to rectify errors, to liaise with dissatisfied bidders, and to explain to the implementing agency how the procedures concerned should be implemented. Regularly, the quality of the tender documents needed to be improved resulting in the very late announcement of tenders. The cumulative effect of these interventions was additional delays to the implementation process.
The ex ante approval by the Commission which governs the tendering and contracting of ISPA projects is therefore entirely justified until the conditions exist for EDIS to be granted (see above). Under the ex-ante system of approval and in line with the DIS decision for the conferral of management, only the CFCA plays the role of the contracting authority responsible for project implementation, whereas the Commission endorses each step of the procurement process. It follows that, although the Commission is not a contracting partner, it bears shared responsibility for the procedural correctness of the procurement process (without the Commission’s approval, contracts concluded between beneficiaries and contractors are not valid).
COMPETITION POLICY
As the ISPA assistance is directed primarily to cover public expenditure -or equivalent - concerning utility projects, this does not generally raise problems of incompatibility with the Community rules on competition. Unless the rules on public procurement are infringed, and provided free access to such infrastructure is guaranteed for all operators meeting the necessary technical and legal conditions, such assistance does not confer any special advantage to specific firms.
ENVIRONMENT POLICY
By providing direct assistance to priority projects for the environment, ISPA also contributes to the implementation of environmental policy and to the compliance with EU standards in Croatia. Experience gained through project development and implementation develops administrative capacity and accelerates sector reform in the environment sector. In particular, administrative capacity is being strengthened with regard to environmental investment planning and prioritisation. Continued and increased efforts are needed concerning the implementation of EIA-related legislation, especially relating to public consultation aspects. It is hoped that ISPA will in these ways contribute towards progress in environmental protection in Croatia. Problems exist in relation to the difficulties of environmental authorities in obtaining adequate funding and staffing with the high turnover of staff cancelling out of any benefits received through training and gained experience.
In this respect, it is important to emphasise that, as far as Croatia is concerned, in view of the introduction of IPA, with its greater number of bodies and a stream of additional projects, the provision of sufficient financial and human resources for implementation (including monitoring, inspection, the provision of permits and reporting) needs to be ensured.
TRANSPORT POLICY
The transport networks in Croatia, agreed in accordance with TINA (Transport Infrastructure Needs Assessment) and REBIS (Regional Balkans Infrastructure Study) were constructed around the framework of pan-European corridors. Several of them run across the territory of Croatia including Corridors VII (the Danube river), X (Salzburg-Ljubljana-Zagreb-Beograd-Nis-Skopje-Veles-Thessaloniki, including branch Xa) as well as Corridor V, which has two branches in Croatia (Vb - Budapest, Zagreb Rijeka, and Vc - Budapest, Sarajevo, Ploče). These networks were used as the planning basis for the national transport strategies for ISPA purposes. As a consequence the single ISPA transport project forms part of the TINA and REBIS networks, i.e. it concerns the construction or rehabilitation of a section, nodal point or access relating to the networks. The TEN-T networks for Croatia are based on SEETO (South East Europe Transport Observatory) recommendations.
Co-ordination among pre-accession instruments
As required by the Coordination Regulation[2], the Commission ensures close co-ordination among the three pre-accession instruments, PHARE, SAPARD and ISPA. In line with the provisions of this Regulation, the PHARE Management Committee plays a special role in general co-ordination of the three pre-accession instruments.
Co-ordination with the (PHARE) Joint Monitoring Committee
The Joint Monitoring Committee is responsible for co-ordinating the monitoring of each pre-accession instrument and for assessing the overall progress of EU–funded assistance in the beneficiary countries. The Committee issues recommendations to the ISPA Committee or to the Commission when relevant.
Co-ordination with EC Delegations
Periodic meetings were organised by the Commission services (DGs Enlargement, External Relations and Regional Policy) with the experts in the Delegations responsible for PHARE and ISPA to discuss programming and implementation issues, in particular those related to tendering and contracting.
Co-ordination with the IPA instrument
In order to ensure the efficient coordination of activities and the prevention of duplication the two ISPA Monitoring Committees held in Croatia in 2007 were organised alongside the IPA Sectoral Monitoring Committees for the Regional Development component. In addition it should be noted that 2 of the technical assistance measures being funded through ISPA relate to the preparation of project pipelines for implementation using IPA co-finance. In this way it is hoped that there will be a smooth transition from the ISPA to the IPA instruments and the uninterrupted implementation of measures in the respective sectors.
Publicity actions
No publicity actions were taken in 2007 with regard to the ISPA projects as no project had reached the physical implementation stage. However, a signing ceremony is planned to be held for the signature of the first works contract (concerning the project: Vinkovci to Tovarnik Railway Rehabilitation) in 2008. The relevant media will be invited to attend.
[1] The N+2 rule refers to the requirement that the tender for the main works or supply contract within a measure must be launched within 2 years of the signature of the corresponding Financing Memorandum. In the case of a measure exclusively consisting of service contracts N+2 relates to the signature of the main service contract within 2 years of the signature of the corresponding Financing Memorandum.
[2] Council Regulation (EC) N° 1266/1999 of 21 June 1999 on co-ordinating aid to the applicant countries in the framework of the pre-accession strategy.