10 Pre-accession assistance to the
Western Balkan states and Turkey
| (a)
(32383)
18219/10
+ ADD 1
COM(10) 793
(b)
(32210)
16314/10
COM(10) 622
|
Commission Report: 2009 Annual Report on PHARE, Turkey Pre-accession Instrument, CARDS and the Transition Facility
Commission Report: 2009 Annual Report on the Instrument for Structural Policies for Pre-accession (ISPA)
|
| Legal base | (a)—
(b)—
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| Document originated | (a) 20 December 2010
(b) 4 November 2010
|
| Deposited in Parliament | (a) 20 December 2010
(b) 18 November 2010
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| Department | International Development
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| Basis of consideration | EM of 8 February 2011
|
| Previous Committee Report | None; but see (31251) 5226/10 HC 5-xi (2009-10), chapter 1 (24 February 2010) and (31099)
15365/09: HC 5-x (2009-10), chapter 1 (9 February 2010)
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| To be discussed in Council | To be determined
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
|
Background
10.1 During the previous financial perspective, a number of
programmes of assistance that, applied to acceding and candidate
countries. The main ones were:
— the
PHARE (Poland/Hungary Assistance for Reconstruction of Economy)
programme, principally involving institution-building measures
(with accompanying investment) as well as measures designed to
promote economic and social cohesion;
— the ISPA programme: support for large-scale
environment and transport investment;
— the SAPARD programme: support for agricultural
and rural development.
10.2 The others included Community Assistance
for Reconstruction, Development and Stabilisation (CARDS) programme.
This 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 was provided under CARDS
between 2000 and 2006.
10.3 The Turkey Pre-Accession instrument (TPA)
ran from 2000 to the end of 2006.
10.4 All involved a process, which, over time,
seeks to ensure that candidate countries are prepared for and
finally enabled to access post-accession funding effectively and
efficiently on their own. This process of increasingly decentralised
management — DIS and EDIS — is explained at Annex
1 of this chapter of our Report.
10.5 All these instruments were replaced from
1 January 2007 by the new single, focussed Instrument for Pre-accession
Assistance (IPA). Existing projects under these former programmes
continued, but all new pre-accession actions came under the new
IPA. It has five components: transition assistance and institution
building measures (with accompanying investment); cross-border
cooperation; regional development; human resources development;
and rural development. The latter three are for candidate countries
and are designed to mirror structural funds, thus necessitating
the relevant management structures to be in place. Potential candidates
can benefit from similar measures implemented through the component
for transition assistance and institution building.[44]
10.6 The 10 new Member States that joined the
EU in 2004 received a Transition Facility in 2004-2006. Contracting
was envisaged to continue until 2008 and payment of funds until
2009. Bulgaria and Romania received a Transition Facility in 2007;
implementation is expected to continue until 2010. These Transition
Facilities provide continued financial assistance in a number
of core areas requiring further reinforcement, as identified in
the last Comprehensive Monitoring Reports before accession. Assistance
is implemented under the Extended Decentralised Implementation
System (EDIS).
The 2009 Annual Reports on PHARE, Turkey Pre-accession
Instrument, CARDS and the Transition Facility and on the ISPA
10.7 The 2009 annual reports detail the implementation
of these now-replaced EU aid instruments. Their last year of programming
was 2006. Since then no new projects have been committed to under
the instruments covered by these reports. The reports therefore
focus on the implementation of projects committed to in 2006 and
earlier budget years.
10.8 The 2009 report on PHARE, the Turkey Pre-Accession
Instrument, CARDS and the Transition Facility gives an overview
of implementation, with examples of successful projects and the
key lessons learned for future assistance, while the accompanying
addendum gives detailed project-level information for each country
covered.
10.9 For the Western Balkans CARDS countries,
2001-2006 programmes are almost entirely contracted, with disbursements
now over 90% completed. Progress has been slower for the Turkey
Pre-Accession Instrument, with 85% of committed funds for 2002-2006
programmes contracted, and 73% disbursed by the end of 2009. The
report puts this down to poor performance by Turkey's implementing
agencies. The Commission reports that the improved management
structures put in place for the implementation of the new IPA
should lead to an improvement in contracting and payment rates
for Turkey.
10.10 PHARE continues to be implemented in Bulgaria,
Romania and Croatia, as previously committed funds are disbursed.
Disbursement rates for the PHARE 2005 programme are 77.1% for
Bulgaria and 79.6% for Romania, and for the 2006 programme 65.1%
and 69% respectively. In Croatia, PHARE 2005 and 2006 programmes
have completed contracting, and the disbursement rate is currently
around 60%. Although this figure was lower than for Romania and
Bulgaria, it was higher than forecast, partly due to increased
staffing levels in the Central Financing and Contracting Agency.
10.11 Transition Facility activities were completed
in 2009 for the countries that acceded in 2004, with the Commission
reporting that the facility achieved the expected results in strengthening
public administration and implementation of the acquis.
Bulgaria and Romania only achieved a contracting ratio of 70%
by their deadline, which the report puts down mainly to the suspension
of the accreditation of Bulgaria's implementing agency in 2008
due to unreliable management systems.
10.12 The 2009 report for the ISPA provides an
overview of implementation and the accompanying document gives
a financial breakdown of projects. Since the accession of Bulgaria
and Romania in 2007, Croatia has been the only remaining recipient
of ISPA assistance. Of the six ongoing ISPA projects in environment,
transport and technical assistance, one has been physically completed,
and all contracting for the remaining projects was due to be completed
in early 2010. Projects are now in their implementation phase
and the currently low rate of payments is therefore expected to
increase during 2010 and 2011.
10.13 Evaluations in several partner countries
have found that the performance of assistance has varied —
more successful in increasing the capacity of institutions, and
in modernising infrastructure, equipment, practices and procedures;
but showing weaknesses in partner countries' capacity to programme,
implement and monitor assistance.
10.14 The reports draw several lessons for current
and future pre-accession assistance from experiences in 2009.
The Commission says that it is taking several steps to increase
the effectiveness of the current Instrument for Pre-Accession,
including improving links between programming and political priorities,
improving project objectives and indicators, using clearly defined
conditionalities, and increasing the focus and results impact
of projects through improved monitoring systems. The reports also
make recommendations for future programming that include better
assessment for absorption capacity, increasing the capacities
of the beneficiary institutions that deal with EU assistance,
and improved links to national strategies. The reports point out
though that partner countries will need to address the issue of
high staff turnover to ensure the sustainability of the results
of projects.
The Government's view
10.15 The Parliamentary Secretary at the Department
for International Development (Mr Stephen O'Brien) begins by saying
that he has combined these two documents into his one Explanatory
Memorandum of 8 February 2011 "because both refer to the
continuing implementation of EU aid instruments relating to pre-accession".
He comments on the Reports as follows:
"The UK supports the Commission's initiative
to improve the effectiveness of pre-accession funding. The key
concern for the UK is to ensure that lessons learned from these
funding instruments, now in their final years of implementation,
are fed into the current Instrument for Pre-accession (IPA)."
10.16 Referring to his separate EM on the Commission's
2009 Report on the 2009 IPA report,[45]
the Minister says that:
— the
Commission has been working to improve IPA's effectiveness, impact,
sustainability and ownership by beneficiary countries through
a series of lesson-learning conferences and workshops;
— one of the key achievements has been
a movement towards sector-based strategic planning rather than
a piecemeal project-based approach;
— the UK has actively participated in this
process;
— the lessons detailed in these reports
are being used by the Commission, particularly in cementing the
link between political priorities and assistance, in the recognition
of the need for greater capacity in implementing agencies for
decentralised implementation, and through the application of the
Results Orientated Monitoring system (ROM) to IPA programmes,
which last move should lead to better monitoring and a more useful
assessment of impact for IPA programmes;
— the UK continues to work closely with
the Commission to ensure pre-accession funds are put to the best
possible use, and believes that lessons are still being learned
in the final implementation phases of pre-2007 programmes for
current and future assistance.
10.17 The Minister also notes that, as previously
announced, DFID's bilateral programmes in Bosnia & Herzegovina
and Serbia will close early this year, leaving Kosovo as the sole
remaining DFID bilateral programme in the region. Nonetheless,
the Minister says, he will maintain oversight of IPA through British
Embassies in the region, through staff in the UK Permanent Representation
in Brussels, through secondments to the Commission (DG Enlargement)
and by ensuring the UK plays an active role on the IPA Management
Committee.
Conclusion
10.18 We are reporting this information to
the House because of the level of interest in both the accession
process and the degree of effectiveness of the EU's technical
assistance programmes.
10.19 As the Minister says, the present and
future is now with the all-embracing Instrument for Pre-Accession
(IPA). As we say in our consideration of the 2009 IPA Annual Report,[46]
it is notable that, this year and in contrast to previous years,
the Minister has some encouraging words to say about improvements
in effectiveness and evaluation, which we welcome. However, as
we also note there, the proof will be in the meta-evaluation to
be carried out this year, about which we look forward to hearing
more from the Minister in due course.
10.20 In the meantime, we clear these documents
from scrutiny.
Annex: Decentralisation in the
contracting process[47]
Decentralisation involves the transfer of responsibility
in the programming and implementation of the pre-accession instruments
from the Commission to the Contracting Authority of the recipient
country. The latter becomes responsible for the tendering and
contracting, as well as the financial and administrative management
of the projects. There are two steps in the decentralisation process:
the first and usual one based on ex-ante approval (DIS)
and the second "extended" one based on ex-post
control (EDIS). Under the Commission's ex-ante controls,
decisions concerning procurement and the award of contracts require
prior approval by the Commission Delegation in the recipient country
before they are taken by the Contracting Authority.
THE EX-ANTE DECENTRALISATION PROCEDURE
The ex-ante control carried out by the Commission
Delegations involves:
1. Approving the content of the tender dossier
before the tender is launched.
2. Approving the composition of the evaluation
committee (which is responsible for recommending a bidder to the
Contracting Authority).
3. Checking and approving the evaluation report.
4. Endorsing the contract, through the signature
of the Head of Delegation on the contract itself, not as a party
to the contract but to confirm that the project can receive EU
financing.
The main actors are the National Aid Co-ordinator,
the National Authorising Officer, the National Fund, the Programme
Authorising Officer in the respective Implementing Agency, EC
Delegations and the final beneficiaries.
The National Aid Co-ordinator (NAC) is responsible
for ensuring co-ordination both at the level of programming (with
the aim of ensuring a close link between the general accession
process and the use of Community financial assistance) and at
the level of monitoring and assessment. This person is usually
a high-ranking official appointed by the government.
The National Authorising Officer (NAO) is the NAC's
financial counterweight (also appointed by the government) and
is responsible for the National Fund, which deals with:
- financial management of all
programmes
- requests to and the receipt of funds from the
Commission
- redistribution of funds to the relevant beneficiaries
- financial reporting to the
Commission.
It is located in a national ministry with central
budgetary competence, such as the Ministry of Finance.
The Implementing Agencies (IAs) are located within
a ministry or administration in the recipient country and fall
under the authority of the NAO. A Programme Authorising Officer
(PAO) is in charge of each agency and is responsible for the sound
financial management of the programme(s) to be implemented by
the IA and monitoring project implementation. One of the implementing
agencies is the Central Financing and Contracting Unit (CFCU).
The role of the Implementing Agencies is to carry out the tendering
and contracting elements of the programme whereas project selection
and monitoring remain the responsibility of the ministries/administrations
directly benefiting from the assistance. In addition, the CFCUs
manage Institution Building programmes, which are multi-sectoral
by nature, as well as being the specialised agency for the administrative
and financial management of twinning operations.
EXTENDED DECENTRALISATION
The participation of the new Member States in Community
funds (above all in the area of regional and agricultural policy)
and the replacement of large EC Delegations by smaller Representations
(as in the older Member States), whose primary function is information
and communication, requires Member States to adapt their administrations
in order to cope with a framework of ex-post control. As
such, all countries which previously were eligible for the Phare
programme, Bulgaria and Romania, Croatia and Turkey are presently
moving towards an Extended Decentralisation Implementation System
(EDIS) whereby the Commission's ex-ante approval on project
selection, tendering and contracting is waived in accordance with
Council regulation 1266/1999.
Four procedural stages have to be undergone before
EDIS can be granted. With the assistance of the Commission, candidate
and acceding countries are required to undertake the first three
themselves:
1. Gap assessment: assessing the target national
institutions (principally the National Fund and the Implementing
Agencies) in order to determine to what extent the conditions
for EDIS are currently met and to identify specific actions, changes
and improvements required.
2. Gap filling: the responsible national authorities
must then implement the recommendations of the Gap Assessment
Report (GAR).
3. Compliance Assessment: the national authorities
determine whether the pre-conditions are fulfilled so that a formal
EDIS application can be submitted to the Commission.
The fourth and final stage — Preparation for
a Commission decision to confer decentralised management under
Article 12(2) of the Co-ordination Regulation 1266/1999 —
remains the exclusive responsibility of the Commission services.
44 See http://ec.europa.eu/enlargement/how-does-it-work/financial-assistance/index_en.htm
full information on the history and present arrangements pertaining
to EU pre- and post-accession financial assistance.
Back
45
Which we consider in chapter 9 of this Report: see (32295) 17052/10
+ ADD 1 and (32197) 16293/10. Back
46
See (32295) 17052/10 + ADD 1 and (32197) 16293/10 at chapter 9
of this Report. Back
47
See http://ec.europa.eu/enlargement/how-does-it-work/financial-assistance/decentralisation_en.htm
for full information. Back
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