5 PRE-ACCESSION ASSISTANCE IN 2001
(24651)
10655/03
COM(03) 329
ADD 1
| Commission general report on pre-accession assistance (PHARE
— ISPA — SAPARD) in 2001.
|
| Legal base | —
|
| Document originated | 4 June 2003
|
| Deposited in Parliament |
26 June 2003 |
| Department | International Development
|
| Basis of consideration |
EM of 30 June 2003 |
| Previous Committee Report |
None |
| To be discussed in Council
| No date set |
| Committee's assessment | Politically important.
|
| Committee's decision | Not cleared; further information requested
|
Background
5.1 This is the second annual report by the Commission
on the three pre-accession aid instruments, PHARE,[14]
ISPA[15] and SAPARD,[16]
and their coordination.[17]
It sets out the allocation of each instrument on a country-by-country
basis and explains the development of the two new instruments
introduced in 2000 (ISPA and SAPARD). All three programmes operate
under guidelines agreed in 1999 and first implemented in 2000.
To minimise the overlap between the three instruments, the areas
of responsibility were agreed as follows:
- PHARE'S main purpose should be to assist the candidate countries
to adopt the acquis communautaire and to prepare them for
using Structural Funds.
- ISPA should be to assist in the implementation
of EC environment policy and to build the Trans-European Transport
Network; and
- SAPARD's purpose should be to assist in the implementation
of the acquis in relation to the Common Agricultural Policy
and all related areas. In addition to primary agricultural production,
projects to improve product processing, marketing and quality
are eligible for support, as are more general rural development
measures.
The Commission report
5.2 SAPARD was established later than the
other two programmes and is implemented using the Extended Decentralised
Implementation System (EDIS). PHARE and ISPA are implemented
using the Decentralised Implementation System in which the Commission's
ex ante approval is still required for project selection, tendering
and contracting by candidate countries. However, the Commission
envisages all of the Accession States, at least, moving to the
final stage of EDIS in the course of 2003. Each must first set
up the relevant market and control systems.
5.3 The 2001 allocation for PHARE
was €1,634 million. Approximately 40% of this was allocated
for institution-building, principally through twinning. The remainder
was in the form of investments to assist in the adoption of the
acquis. Apart from the individual allocations to the candidate
countries, €168 million was allocated to the special nuclear
decommissioning programme, €163 million to cross-border cooperation
and €212 million to regional and horizontal programmes.
5.4 The 2001 allocation for ISPA
amounted to €1,109 million. Second tranches for projects
decided in 2000 were supported, together with 94 new projects.
€2.7 million was allocated to technical assistance for EDIS.
With co-financing from the international financial institutions
(IFIs)and beneficiary states accounting for an average of 36%
per project, the total cost of the 94 new projects approved in
2001 will be € 2.3 billion. 51.92% of the ISPA budget in
2001 went to environment projects — more than half of that
to sewage treatment projects. 57.5% of the transport budget was
spent on road projects and approximately 40% on rail projects.
5.5 ISPA experienced delays in tendering
and contracting in its first year of operation (2000). This was
due to difficulties within the candidate countries' administrations
in meeting the high standards required by Community competition
and public procurement rules, and also in ensuring compatibility
with Community policies. In 2001, the Commission began training
seminars and other measures to assist the candidate countries
to increase their capacity to comply with Community policies.
A total of €59.9 million was allocated between 2000 and
2001 to strengthening the project pipeline.
5.6 All of the applicants made progress
in the development of their SAPARD agencies and conferral
of management to national authorities was made by the Commission
to five of the ten countries. Approximately €30.5 million
was transferred to the countries by the end of 2001.
5.7 Most of the coordination between
the three instruments, and between them and the IFIs, is carried
out by the Enlargement Directorate General, working with the PHARE
Management Committee. Most co-operation with IFIs is in connection
with the ISPA programme. A co-operation agreement was signed
between ISPA and the European Investment Bank (EIB) on 19 January
2000, with positive results. Good relations have also been established
with the European Bank for Reconstruction and Development (EBRD),
Nordic Investment Bank (NIB) and the Nordic Environment Finance
Corporation (NEFCO). Within candidate countries, the EC Delegations
take responsibility for co-ordination between government ministries.
5.8 In September 2000, the centralised PHARE
Monitoring and Assessment System was replaced by a Decentralised
Monitoring System and an Interim Evaluation Scheme. Candidate
countries assumed responsibility for monitoring progress, while
the Commission kept responsibility for assessing progress through
regular sectoral Interim Evaluations carried out by independent
evaluators. To facilitate coordination of project monitoring,
Joint Monitoring Committees and Sectoral Monitoring Sub-Committees
were set up in each candidate country. After July 2001, the interim
evaluations were carried out by a new contractor. Over the course
of the year, 42 Monitoring and Assessment reports were issued,
based on the old monitoring and assessment scheme, and 25 sectoral
Interim Evaluations reports were produced, based on sectoral monitoring
reports. The new guidelines were being followed fairly well,
with the majority of projects in line with the Accession Partnerships,
Regular Reports and Action Plans. However, the ECA found that
"an appreciable number are poorly designed
or prepared, with vague aims, imprecise indicators, poor take-up
of lessons learnt, and no feasibility studies. The evaluators'
view is that PHARE's achievements owe more to the ability of those
implementing the programme 'to get something done' than to good
project design. The evaluators also note that while projects'
administrative capacity has improved, financial and time management
remain weak, and specialists are difficult to recruit and retain".
5.9 The Commission says that the Interim
Evaluation system was adapted further in 2002 to help to ensure
the sound financial management of PHARE.
5.10 A Commission staff working paper is
annexed which reports on the ten candidate countries individually.
The Government's view
5.11 The Secretary of State for International
Development (Baroness Amos) says that, despite monitoring reports
now coming on stream, it is still too early to assess the impact
of spending and the relative efficiency of the co-ordination between
the instruments. She then comments:
"One of the benefits of the decentralisation
of the pre-accession instruments is the development of the candidate
countries' administrative structure that this entails. This will
act as important preparation for the implementation of the Structural
Funds. All of the candidate countries acceding next year are
expected to receive EDIS accreditation before the date of accession.
Both Bulgaria and Romania have emphasised administrative capacity-building
and preparation for Structural Funds in their 2003 PHARE programmes
and in the plan for multi-annual programming for Romania. Bulgaria
is expected to move to multi-annual programming in 2004. Past
experience of the candidate countries shows that this early preparation
is sensible.
"DFID is happy with the direction that the PHARE
programme is taking in moving to multi-annual programming, which
allows for a more strategic approach, and with the priorities
set.
"ISPA has not been very efficient in contracting
and disbursing funds but the work that the Commission has done
in assisting the candidate countries in developing their capacity
appears to be making progress. SAPARD's performance, on the whole,
has been very disappointing. The decision to implement it by
EDIS from the outset may have been too ambitious, given the administrative
deficiencies of the candidate countries.
"The structures it has set up and the experience
of implementing the programme will however prove helpful in the
administration of the European Agricultural Guidance and Guarantee
fund, with which it will merge as stated in Article 33 of the
Accession Treaty."
Conclusion
5.12 This report should be read in conjunction
with the two Special Reports from the European Court of Auditors
on which we are also reporting.[18]
They relate mainly to aspects of implementing PHARE and ISPA.
It is disappointing to learn from the Minister that the more
recently established programme, SAPARD, has not been very efficient
in contracting and disbursing funds. Once again, it appears that
the administrative deficiencies of the candidate countries were
under-estimated. Just as disappointing is to read that as recently
as 2001 PHARE projects were evaluated as poorly designed and prepared.
5.13 In view
of her indication that the Government contributes 19% to these
assistance programmes, we ask the Minister to tell us when she
considers that it will be possible to make a sound assessment
of their value.
5.14 Meanwhile,
we do not clear this document.
14 The Phare programme supports economic restructuring
and democratic reform in the states of Central and Eastern Europe,
the Baltic States and in Albania, FYROM, and Bosnia and Herzegovina.
Back
15
Instrument for Structural Policies for Pre-Accession. Back
16
Special Accession Programme for Agriculture and Rural Development. Back
17
(24225) 5585/03;see HC 63-xv (2002-03), paragraph 15 (19 March
2003). Back
18
(24623) - and (24660) -; see paragraphs 4 and 6 of this Report. Back
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