25 Pre-accession assistance in 2002
| (25245)
5171/04
COM(03) 844
| Commission Report— General report on pre-accession assistance (PHARE — ISPA — SAPARD) in 2002
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| Legal base | — |
| Document originated | 5 January 2004
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| Deposited in Parliament | 14 January 2004
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| Department | International Development
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| Basis of consideration | EM of 22 January 2004
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
25.1 The three pre-accession aid instruments, PHARE, ISPA and
SAPARD, operate under guidelines implemented in 2002. Areas of
responsibility were agreed as follows: PHARE's main purpose is
to help candidate countries adopt the acquis communautaire and
prepare them for the use of Structural Funds; ISPA finances large
infrastructure projects in the transport and environment sectors;
SAPARD's purpose is to assist in the implementation of the acquis
in relation to the Common Agricultural Policy and all related
areas.
25.2 SAPARD is implemented in a fully decentralised
manner, whereas PHARE and ISPA are implemented by the Decentralised
Implementation System (DIS). Both PHARE and ISPA will however
be moving to an Extended Decentralised Implementation System (EDIS)
similar to that used by SAPARD.[52]
This system requires each country to set up
the relevant management and control systems.
The Commission report
25.3 This is the third annual report by the Commission
on the three pre-accession instruments and their co-ordination.
It sets out the allocation of each instrument on a country-by-country
basis, explains how ISPA and SAPARD were developed in 2002 and
assesses how well the three instruments were coordinated.
25.4 The total allocation for PHARE in 2002 amounted
to €1,699 million. Apart from the allocations to each country,
the report gives the figures for: Nuclear Safety Programmes €108
million; Cross-border Co-operation (CBC) €163 million; and
Regional and Horizontal Programmes €260 million. Institution
Building, primarily through Twinning, accounted for 40% of commitments
within national programmes. When combined with associated investment,
it accounted for 70% of the PHARE budget. The remainder was in
the form of investments to assist in the adoption of the acquis.
25.5 The 2002 allocation for ISPA amounted to €1107
million. This consisted primarily of 80 new ISPA measures and
second tranches for projects decided in 2000 and 2001. Of this,
€4.2 million was committed for technical assistance for EDIS,
and €35.1 million for project preparation. ISPA projects
are established on a co-financing basis, with the beneficiary
states and International Financial Institutions (IFIs) accounting
for an average of 35% of project cost in 2002. The total cost
of the 249 projects approved between 2000 and 2002 is €8.75
billion, of which the EU is financing €5.56 billion.
25.6 Commitments in 2002 were divided equally between
the environment and transport sectors. In the environment sector,
projects focussed primarily on sewage works, and 18% of spending
in this sector was applied to solid waste management. In the
transport sector, 45.7% of funds were allocated to road projects,
and over 50% to rail projects.
25.7 ISPA experienced some delays in project implementation,
and some shortfall in the quality of tenders during the reporting
period. This was primarily due to delays in land acquisition,
problems in traffic flow forecasting and environmental impact
assessments, and problems in managing tendering procedures. The
training seminars, and other measures begun in 2001 to assist
the candidate countries to improve their capacity and compliance
with Community policies, continued in 2002.
25.8 The SAPARD programmes for all ten countries
were approved by the Commission in 2000. Most were later modified,
primarily to take into account the work associated with the expected
conferral of the management role on the new SAPARD agencies in
the countries concerned. By the end of 2002, the Commission had
decided to transfer the management of SAPARD programmes to the
national authorities of all the candidate countries. In addition
to the €30.5 million transferred to these countries in 2001,
€123.8 million was transferred in 2002.
25.9 General co-operation between those managing
the three instruments, and between them and the IFIs, is the responsibility
of the Enlargement Directorate General, working with the PHARE
Management Committee. Co-operation with the European Investment
Bank (EIB) and other IFIs continued in 2002 under the 1998 Memorandum
of Understanding between the Commission, the European Bank for
Reconstruction and Development (EBRD) and the World Bank. This
was signed later the same year by the Nordic Environment Finance
Corporation, the Nordic Investment Bank, the International Financial
Corporation and the Council of Europe Development Bank. Within
each country, the EC delegations take responsibility for co-ordination
between government ministries with regard to these programmes
and also for organising donor meetings with IFIs and bilateral
donors to exchange information.
25.10 During 2002, some 125 evaluation reports were
issued, covering all aspects of PHARE assistance. The Interim
Evaluation system was revised in 2002 to help ensure the sound
financial management of PHARE measures. The revision included
improvements in methodology and formats, and a faster, more differentiated
reporting system, with clearer targeting of specific audiences.
The Government's view
25.11 The Secretary of State for International Development
(Mr Hilary Benn) comments that the progress made in the movement
towards EDIS is especially welcome, given that this will develop
the candidate countries' capacity to handle the significant resources
that will be allocated to them on accession. He adds:
"PHARE's monitoring and assessment reports show
that the instrument is being effectively implemented, and that
there has been a substantial improvement in administrative capacity.
While this is welcome, the report also notes some difficulties
with financial and time management, and with the recruitment and
training of specialists. The continuing emphasis on capacity
building, and the improvements in the Interim Evaluation system
are however welcomed.
"It is welcome that the results of co-operation
between ISPA and participating IFIs, mainly EIB and the EBRD,
have been positive. Collaboration with these two institutions
resulted in the co-financing of several projects in 2002. Co-operation
with IFIs has led to operational improvements, and the EIB and
EBRD have also contributed expertise to the preparation of Commission
guidelines."
Conclusion
25.12 How effective these three programmes have
been in preparing the eight Accession States of Central and Eastern
Europe for enlargement may only become apparent after they have
become Member States of the EU. This report shows that by 2002
the need to build up their administrative capacity had been recognised.
Increasing emphasis was placed on institution building to enable
them to implement the acquis successfully and to make good use
of the substantial Structural and Cohesion Funds that they will
receive. It was unfortunate, perhaps, that this lack of capacity
was not sufficiently appreciated earlier and there may be a lesson
here for future enlargements.
25.13 We now clear the document.
52 The Extended Decentralisation Implementation System
(EDIS) is a process which gives the Commission power to confer
on implementing agencies in the Accession States and Candidate
Countries management of aid on a decentralised basis and to waive
the requirement for prior approval from the EC Delegations for
tendering and contracting procedures. The four procedural stages
are: gap assessment; gap filling; compliance assessment; and preparation
for a Commission decision. Back
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