European Scrutiny Committee Contents


9 EU pre-accession funding

(30435) 6380/09 — Special Report No. 12/2008 on the Instrument for Structural Policy for Pre-accession (ISPA) in 2000-2006, together with the Commission's replies

Legal baseArticle 248(4) EC; —
Deposited in Parliament16 February 2009
DepartmentInternational Development
Basis of considerationEM of 27 February 2009
Previous Committee ReportNone; but see (30162) 15620/08 and (30303) 17210/07: HC 19-vii (2008-09), chapter 1 (11 February 2009)
To be discussed in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionCleared; relevant to the debate to be held in European Committee B on 23 March 2009 on the Commission Communication on the IPA Multi-annual Indicative Financial Framework for 2010-12 and the associated Commission Report on the IPA.

Background

9.1 Article 248(4) EC empowers the Court of Auditors to submit observations, particularly in the form of special reports, on specific questions.

9.2 ISPA (Instrument for Structural Policies for Pre-Accession) finances major infrastructure projects in the transport and environment sectors. It is part of a trio of pre-accession support programmes, the other principal ones being:

—  PHARE (Poland/Hungary Assistance for Reconstruction of Economy; originally created in 1989 to assist Poland and Hungary, but expanded to incorporate all the former EU candidate countries), which provided assistance in adopting the acquis communautaire (the entire body of European laws, including treaties, regulations and directives) through improving administrative capacity and supporting related investment; and

—  SAPARD (Special Accession Programme for Agriculture and Rural Development), which finances agricultural and rural development.

9.3 Both ISPA and SAPARD are designed to lay the groundwork for the countries concerned to be able properly to implement structural and cohesion funds upon accession.

9.4 From 2007, the Instrument for Pre-Accession replaced these and the other similar existing instruments (Turkey's pre-accession instrument and CARDS).[37] The IPA will provide a total amount of €11.468 billion over the 2007-13 Financial Perspective.

9.5 Decentralisation is the process for devolving management of EU funds to candidate countries. ISPA (and PHARE) is implemented by the Decentralised Implementation System (DIS) under which EC Delegations must endorse procurement documents before tenders are launched or contracts signed.[38]

9.6 Having been awarded Candidate Country status in June 2004, Croatia has benefited from ISPA as of 1 January 2005. Croatia thus followed the previous ISPA beneficiary countries which received ISPA assistance from when the instrument was launched in 2000.[39]

The Court of Auditors Report

9.7 The Court of Auditors' Report recalls that the total allocation for ISPA in the period 2000-2006 was €7,280 million (£6,536 million), with a total of 336 projects being approved, of which 201 were in the environment sector, 78 in the transport sector and 87 concerned technical assistance.

9.8 The report focuses on three questions:

—  whether there was a coherent strategy and adequate preparation to support ISPA actions;

—  whether projects were implemented according to planning; and

—  whether projects contributed to beneficiary countries' compliance with the EU environmental directives and to the improvement of the Trans-European Network for Transport (TEN-T).

9.9 The report concludes that:

—  there was a coherent strategy, but projects were not always adequately prepared;

—  projects were not implemented according to planning because of significant delays and changes in the financing plans; and

—  the specific projects audited by the Court did demonstrate an increase in compliance with EU standards or an improvement in links to the TEN-T.

9.10 In its response, the Commission notes that most of the Court's sample was selected from among the older ISPA projects approved in the first or early years of use of the instrument, with some having been prepared even earlier. The Commission says that "the poor preparation of some projects was due to a large extent to a lack of capacity and the short timeframe in which projects had to be developed." Guidance was given through the detailed application forms and existing explanations of procurement procedures. Delays and changes in planning which occurred in many of the early projects were hard to avoid given the lack of experience in managing major infrastructure projects and the need for ex ante control of tendering procedures. The Commission agrees with the Court's recommendation and will continue to monitor ex-ISPA projects, some of which will be evaluated in the 2000-2006 ex post evaluation exercise, paying particular attention to cost overruns and delays. Its experience with ISPA has already led to steps to offer greater assistance with project preparation, and the Commission will "continue and intensify such technical assistance under the new pre-accession instrument IPA."

The Government's view

9.11 In his Explanatory Memorandum of 27 February 2009, the Parliamentary Secretary at the Department for International Development (Mr Michael Foster) highlights the recommendation that the Commission should learn the lessons from ISPA, and seek to avoid delays in future when implementing a similar instrument — in particular, that the Commission should make guidance documents available before Candidate countries start preparing their projects, and should devote greater attention to reducing the time needed to complete procedures. He continues as follows:

"The UK is working closely with the Commission, in the region and in Brussels, to ensure that the Instrument for Pre Accession (the successor to ISPA) avoids the same pitfalls, and builds on ISPA's successes. DFID offices are supporting national governments in their efforts to co-ordinate donors and to improve aid. Unfortunately there have been some delays to IPA funding for some countries, but these have mostly been caused by specific political or structural questions in beneficiary countries, and they have now been resolved."

Conclusion

9.12 It remains to be seen whether or not the lessons learned will produce a more effective new IPA.

9.13 In the meantime, at our meeting on 11 February 2009 we recommended that the Commission Communication on the IPA Multi-annual Indicative Financial Framework for 2101-12 and the associated Commission Report on the IPA be debated in European Committee B.[40] Here, as there, the Minister highlighted the role of DFID offices in the region in ensuring improved effectiveness in implementing the IPA during this financial perspective. But neither here nor there does he make it clear if those offices will be there for the duration.

9.14 This is one of the questions that might usefully be explored during that debate, which is now to take place on 23 March 2009. We consider that this document, which we now clear, is relevant to that debate.





37   The Community Assistance for Reconstruction, Development and Stabilisation (CARDS) programme supported Western Balkans countries (Albania, Bosnia and Herzegovina, Croatia, Macedonia, and the then Federal Republic of Yugoslavia) to make progress on post-conflict stabilisation and accession to EU membership, as part of the Stabilisation and Association Process. €5.13 billion (£3.50 billion) has been provided under CARDS between 2000 and 2006.  Back

38   SAPARD is implemented in a fully decentralised manner under the Extended Decentralised Implementation System (EDIS) which involves administrations in candidate countries fully managing EU pre-accession funds.  Back

39   On 1 January 2007, Bulgaria and Romania became members of the European Union and ceased being beneficiaries of pre accession funding, including ISPA.  Back

40   See headnote: (30162) 15620/08 and (30303) 17210/07: HC 19-vii (2008-09), chapter 1 (11 February 2009). Back


 
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