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Implementation of Regional Competitiveness Operational

Programme in Croatia

25 March 2014

IPA Components, 2007-20131. Transition Assistance and Institution Building2. Cross-border Cooperation3. Regional Development– Transport – Environment– Regional Competitiveness

4. Human Resources Development5. Rural Development

IPA components in Croatia

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Role of CFCAAs an Implementing Agency in IPA funds, the CFCA is responsible for the overall budgeting, tendering, contracting, payments, accounting and financial reporting aspects of all procurement in the context of the EU funded programmes in Croatia. CFCA acts as the Intermediate Body, Level 2 in management and control system of EU structural instruments in specific Operational Programmes. CFCA will perform administrative and on-the-spot checks as well as financial control – determination of the eligibility of costs incurred during contract implementation, based on which the beneficiaries will request for reimbursement of funds from the European Commission

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Regional Development (I)Implemented in Croatia through three multi-annual Operational Programmes (2007-2013):• Environmental Operational Programme (EOP)

investing in projects in the waste and water sub-sectors

• whilst assisting Croatia in meeting its obligations for implementing the EU environmental acquis governing the treatment and disposal of waste, the supply of drinking water, collection, treatment and discharge of waste water.

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Regional Development (II)• Transportation Operational Programme (TOP)

investing in projects which will have the greatest impact on the modernization of the railways along TEN Corridors X & V.

• It aims to continue preparing future projects for upgrading and improving inland waterway infrastructure along TEN Corridor VII.

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Regional Development (III)• Regional Competitiveness Operational

Programme (RCOP) a) Achieving higher competitiveness and a balanced regional development by enhancing SMEs competitiveness, alongside with improving economic conditions in Croatia's lagging areas. - business advisory services, cooperation between enterprises, strengthening of entrepreneurial skills in the academia, promoting investment climate, developing business-related infrastructure.

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Regional Development (IV)

Regional Competitiveness Operational Programme (RCOP)

b) Developing capacity in Croatian institutions to programme and implement activities supported by the ERDF upon accession.

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RCOP – overview (I)

Priority Axis 1: Improving development potential of the lagging behind regions- Ministry of Regional Development and EU Funds (MRDEUF)

Measure 1.1. BUSINESS-RELATED INFRASTRUCTURE

Operation 1.1.1. Business-related infrastructure

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RCOP – overview (II)Priority Axis 2: Enhancing the competitiveness of the Croatian economy

Measure 2.1. IMPROVEMENT OF BUSINESS CLIMATE- Ministry of Entrepreneurship and Crafts

Operation 2.1.1. Improvement of administrative efficiency on national levelOperation 2.1.2. e-Business competitiveness improvement programmeOperation 2.1.3. Provision of advisory services to SMEs Operation 2.1.4. Development of investment climate Operation 2.1.5. Support for cluster development

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RCOP – overview (II)

Operation 2.1.6 Support for Increasing the Competitiveness of Croatian SMEsOperation 2.1.7 Improving information to the Croatian business communityOperation 2.1.8 Straightening the Competitiveness of Croatian Crafts by utilisation of ICT technology

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RCOP – overview (III)

Priority Axis 2: Enhancing the competitiveness of the Croatian economy

Measure 2.2. TECHNOLOGY TRANSFER AND SUPPORT SERVICES FOR KNOWLEDGE-BASED START-UPS- Ministry of Science, Education and Sports

Operation 2.2.1. Science and Innovation Investment FundOperation 2.2.2. Biosciences technology commercialisation and incubation centre (BIOCenter)Operation 2.2.3 Providing graphics processing units in high performance computing environment

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RCOP - overview

Priority Axis 3: Technical Assistance

Measure 3.1.OP MANAGEMENT AND CAPACITY BUILDING- Ministry of Economy

Operation 3.1.1. TA related to horizontal OP management issuesOperation 3.1.2. Preparation of future programming documents and project pipelines

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RCOP - allocationYear Total IPA allocation

(EUR, EU contribution)

2007 11.050.2502008 11.600.000*2009 12.699.500*2010 14.200.0002011 14.400.0002012 10.348.0002013 7.785.640

Total 2007 – 2013 06 30 82.083.390

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RCOP – NUTS 2 regions (I)Croatian NUTS 2 Regions (2012) - statistical regions primarily important for the programming and allocation of available EU funds intended for regional development.Continental Croatia (14 counties): City of Zagreb, County of Zagreb, County of Krapina-Zagorje, County of Varaždin, County of Koprivnica-Križevci, County of Međimurje, County of Bjelovar-Bilogora, County of Virovitica-Podravina, County of Požega-Slavonia, County of Brod-Posavina, County of Osijek-Baranja, County of Vukovar-Sirmium, County of Karlovac, County of Sisak-Moslavina. Adriatic Croatia (7 counties): County of Primorje-Gorski kotar, County of Lika-Senj, County of Zadar, County of Šibenik-Knin, County of Split-Dalmatia, County of Istria, County of Dubrovnik-Neretva.

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RCOP – – NUTS 2 regions (II)

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RCOP – Priority Axis 1 (I)

Priority 1: Improvement development potential of lagging behind regions. It targets ten counties that are relatively less economically developed than the rest of the country.

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RCOP – Priority Axis 1 (II)

Lagging behind regions 21 counties in Croatia, including the City of Zagreb, which are administrative, self-governing units - of which 10 are identified as lagging behind

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RCOP – Priority Axis 1 (III)

Measure 1.1 Business Related Infrastructure Supports setting-up and expanding small enterprises by providing quality business infrastructure.Implemented via:- 4 Grant schemes

- 3 CfPs IPA - 1 CfP ERDF

- Service contract

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RCOP – Priority Axis 1 (VI)Business-Related Infrastructure Grant scheme:IPA CfPs (projects: 20 completed, 4 under implementation and approx 10 under evaluation)Total contracted 18.9 MEUR + additional 8 MEUR to be contacted 2Q 2014:Supporting regional and municipal authorities and institutions in the lagging behind regions with the development of business-related support systems, i.e. infrastructure investments, as well as investments into the accompanying services.

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RCOP – Priority Axis 1 (V)Investments focus on:- improving the efficiency, capacity, quality and

attractiveness of existing business zones and new and existing business incubators and other business support entities grouping and servicing SMEs

- development of and upgrading public tourism-related infrastructure appropriate to the health, culture and activity tourism which those areas specialize in, aimed for enlargement of tourism offer and development of SMEs for tourism.

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RCOP – Priority Axis 1 (VI)ERDF CfP – open CfP; total available: 26.95 MEUR:- Development of infrastructure (energy,

communication, traffic, communal ) within business zones (where the lack of such infrastructure presents obstacle to SME development)

- Development and support to business support institutions;

- Development and support to research infrastructure;- Development and support to tourism-related

infrastructure.The whole territory of Croatia (not just lagging behind regions)

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RCOP – Priority Axis 1 (VII)Service contract: Support to the effective implementation of the BRI grant scheme under RCOPCompleted. Total contracted: 686.375,00 EURAssistance with project pipeline preparation for the grant schemes under this measure and assistance with secondary procurement for the beneficiaries of the grant schemes in question, trainings (including on-the-job trainings), seminars, workshops, information material and guidelines and consultancy advice on individual basis.

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RCOP – Priority Axis 2 (I)Priority 2: Enhancing the competitiveness of the Croatian economy. Aims to enhance the competitiveness of the Croatian overall economy and in particular to enhance growth of SMEs.

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RCOP – Priority Axis 2 (II)Measure 2.1 Improvement of business climate Assistance focuses on assuring that quality business advisory services are more accessible to SMEs, improving business and investment climate, encouraging cooperation between businesses through development of clusters, and on developing e-business.

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RCOP – Priority Axis 2 (III)

Implemented via:- 10 Service contracts - 2 FWC contracts- 3 Supply contracts- Grant schemes

- 1 CfP – IPA- 2 CfPs - ERDF

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RCOP – Priority Axis 2 (IV)Service (and FWC)contracts:Total contracted: 15.24 MEUR- E-business competitiveness Improvement programme- Capacity building of business service professionals and

business support institutions- Promotion and provision of advisory services to SMEs- Development of Investment climate- Support to Cluster development- Strengthening the competitiveness of Croatian Crafts by

utilisation of IT Technology- TA for support for increasing competitiveness of Croatian

SMEs (grant scheme support!)

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RCOP – Priority Axis 2 (V)Supply contractsTotal contracted: 304.127 EUR + additional 554.297 EUR to be contracted 2Q 2014- E-business competitiveness Improvement

programme: ICT equipment to 10 selected business support centres in order to increase the level of utilisation of, and participation in, e-commerce and e-business activities by enterprises in Croatia

- Strengthening the competitiveness of Croatian Crafts by utilisation of IT Technology: Software for Croatian Chamber of Trades (the delivery of short messages to the craftsmen’s mobile devices and to other interested groups) and Crafts, IT Equipment

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RCOP – Priority Axis 2 (VII)Grant schemesIPA CfP (53 projects under implementation)Total contracted: 6.8 MEURSupport for Increasing the Competitiveness of Croatian SMEs Investments in technologies and production methods related to introduction of energy efficiency and eco standards (including renewable sources of energy) in production processes.Establishment and incorporation of procedures for testing and certification of products in order to ensure compliance with International Quality standards including investment in know-how, licenses, introduction of eco labels, preparation of technical specifications for eco products, etc.

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RCOP – Priority Axis 2 (VIII)ERDF CfPs (under evaluation)Total available: 30.3 MEUR1) Increasing SME’s economic activity and competitiveness – open CfPLOT 1: Increasing SME’s economic activity and competitiveness (improving their technological structure, facilitating productive investments and reinforcing their sustainability and competitiveness)LOT 2: Contributing to sustainable tourism development by increasing of tourism sector competitiveness (small and medium sized private enterprises investing in the construction, refurbishment and increase in the quality of accommodation of small and middle sized hotels, as well as the development of additional tourist offer)

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RCOP – Priority Axis 2 (IX)2) Applying ICT solutions to improve business processes – open (on-going) CfPTotal available: 3.1 MEURAnalysis and improvement of business process ;Implementation of ICT solutions aimed to establish processes that extend beyond the boundaries of the enterprise such as supply chain management and customer relationship management;Training of employees for work with new ICT system(s);Implementation of holistic ICT solutions for integrating the operations of an enterprise;Exploitation of the capabilities of broadband solutions, such as e-learning and e-commerce

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RCOP – Priority Axis 2 (X)Measure 2.2 Technology transfer and support services for knowledge-based start-ups Supports cooperation of business and education and research sectors Builds technology transfer and commercialization capacities of higher education institutions and public research organizations in order to contribute to sustainable regional development and industry competitiveness of high value added sectors of the economy and knowledge-based SMEs.

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RCOP – Priority Axis 2 (XI)

Implemented via:- 4 service contracts- 2 supply contracts- 1 works contract – MAJOR PROJECT- 5 grant schemes

- 2 IPA CfPs- 3 ERDF CfPs

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RCOP – Priority Axis 2 (XII)Service contracts:Total contracted: 2.1 MEUR- Science and Innovation Investment Fund –

support to grantees in all aspects of project implementation

- BIOCentre – supervision of works contract- BIOCentre – TA; developing organisational and

administrative structure of the BIOCentre (in relation to the proposed service programmes) and preparing the marketing strategy of the BIOCentre.

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RCOP – Priority Axis 2 (XIII)Supply contracts: Contracted 75.904 EUR + additional4.1 MEUR 1Q 2014- BIOCentre: Supply of general laboratory equipment, process

monitoring and analysis equipment, bioprocessing and downstream processing equipment, laboratory furniture, office furniture and IT equipment which will be installed in the newly constructed BIOCentre

- Providing graphics processing units in high performance computing environment: Supply of graphics processing units - GPU Compute Nods, in order to provide easy access to new high computing (HPC) infrastructure to knowledge based Small and Medium Enterprises (SMEs), Public Research Organization (PRO) and Higher Education Institutions (HEI)

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RCOP – Priority Axis 2 (XIV)Works contract (MAJOR PROJECT):Total contracted: 6.2 MEURConstruction of the Biosciences Technology Commercialization and Incubation Centre (BioCentre). It will offer a range of professional services, facilities and expertise to assist start up, incubation and commercialization of new companies in the area of biosciences.Includes: 1. Central Laboratory qualified according to Good Laboratory Practice (GLP) on the second floor, 2. laboratories and offices for rental on the first floor, 3. joint support facilities and 4. technical areas and installations.

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RCOP – Priority Axis 2 (XV)Grant Schemes:IPA CfPs (5 completed projects, 19 under implementation)Total contracted: 11.1 MEURScience and Innovation Investment FundImprovement of regional and national innovation system by establishment/development of professionally facilitated technology transfer services across regional/national networks of HEIs and/or PROs.Enhancement of the science-industry/business collaboration in order to enable the HEIs and PROs to effectively interact with business sector and thus to better serve the needs of industry.

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RCOP – Priority Axis 2 (XVI)Grant Schemes:ERDF CfPs (under evaluation):1) Development of Research Infrastructure on University of Rijeka Campus – restricted CfP; total available: 23.62 MEURImproving overall conditions for R&D&I through infrastructural investments and investments in necessary research equipment2) Infrastructure Project pipeline preparation for ERDF 2014 – 2020 – restricted CfP; total available: 6 MEURDevelopment of all project documentation needed for the successful future application and implementation of R&D&I infrastructure projects

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RCOP – Priority Axis 2 (XVII)3) Strenghtening capacities for research & development & innovation – open CfP; total available: 11.3 MEUR Industrial research activities in cooperation with industry/business stakeholders acting as partners, resulting in potentially commercial application and/or creation of relevant know-how (necessary research equipment)Experimental development in cooperation with industry/business stakeholders acting as partners including proof of concept activities that aim to technically and commercially verify and validate research results and/or demonstrate that a new process or technique is feasible and can potentially be used for a commercial application

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RCOP – Priority Axis 3 (I)

Priority 3: Technical Assistance Aims at ensuring sound and efficient implementation of the programme by providing support in areas of programme management, monitoring, evaluation, control and communication, as well as helping to prepare sectoral studies and the development of new projects.

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RCOP – Priority Axis 3 (II)

Implemented via:3 service contracts – TA related to horizontal OP management issues; Preparation of future programming documents 3 FWC – Enhancing regional and territorial dimension in programming documents; Smart specialisation strategy; Design of IT disaster recovery planTotal contracted: 4.2 MEUR, pending: 1 MEUR1 supply contract – Delivery and installation of ICT equipment to BROP; contracted: 76.103 EUR

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RCOP – Priority Axis 3 (II)

ERDF CfP (restricted):Total available: 6.4 MEURSpecific amount allocated per OP body in advance- Activities/costs to be financed:

- Trainings, seminars, meetings, business trip, monitor, management, audits, assessment, etc.

- Staff (salaries)- Information and publicity- All other cost related to management of RCOP

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RCOP – 01/07/2013 – 31/12/2013 (I)

Priority axis 1:Development and upgrading of the regional infrastructure and enhancement of the attractiveness of regions• Measure 1.1. Support to public infrastructure

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RCOP – 01/07/2013 – 31/12/2013 (II)

Priority axis 2:Enhancing the competitiveness of the Croatian economy• Measure 2.1. Development of business

climate and SME competitiveness• Measure 2.2. Research, development and

technology transfer

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RCOP – 01/07/2013 – 31/12/2013 (III)

Priority axis 3:Technical Assistance• Measure 3.1: OP management and capacity

building

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Mid-term evaluation report, 2012 (I)Recommendation 1:To improve efficiency of handling territorial disparities, update National Strategy of Regional Development taking into account EU2020 strategy and update county development strategies accordingly in order to provide more accurate information on territorial needsResponse:Relevant strategic documents will be prepared (new strategy of regional development, county development strategy) taking EU 2020 into consideration

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Mid-term evaluation report, 2012 (II)Recommendation 2:To strengthen the input from the tourism sector representatives to programming and project selection, by a more formalized and - to the necessary extent, extended cooperation with industry stakeholders. Response:Representatives of related institutions (Ministry of Tourism and Ministry of Culture) have been involved in the last revision of RCOP (involved in the development of the Selection criteria for the relevant Priority axes and identifying suitable projects for project pipeline)

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Mid-term evaluation report, 2012 (III)Recommendation 3:For R&D schemes prepare the extension of the eligibility to the private sector and consider to launch a pilot scheme to collect experiences upfront. Response:Projects (grant schemes) to envisage eligibility of private sector

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Mid-term evaluation report, 2012 (IV)Recommendation 4:Improve the quality of the main indicators for the purposes of evaluation, by (i) providing more information with regard the method and the underlying assumptions, (ii) cross-check, possible against benchmarks of similar Programmes Response:The indicators have been futher addressed in teh revised programmes (methodology behind them, setting more realistic targets, taking into consideration changes in the OP environment)

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Mid-term evaluation report, 2012 (V)Recommendation 5:Devise a comprehensive set of interventions in the delivery system of the OP that include coordinated actions in the following fields: (i) Review and re-design the assessment and contracting procedures with the clear intention of streamlining those and assign the realistic need for human inputs for timely execution of each step of the procedure and, as a result of this, increase number of staff accordingly (ii) for accelerating the pace of physical implementation of the projects, the reinforcement of technical assistance services for beneficiaries and a reinforced (more frequent, more detailed, more motivating for the beneficiary) physical monitoring activity is needed.

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Mid-term evaluation report, 2012 (VI)

Response:The process of selection an appraisal of project proposals is directly affected by:• number of received proposals, their

complexity and quality• the availability, capacities and expertise of the

members of Evaluation Committees and assessors

• adequate number of staff implementing the evaluation procedure

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Mid-term evaluation report, 2012 (VII)Submission of project proposals in line with conditions for:Open Calls for Proposals (both Concept Notes and Full Applications Forms are submitted together for appraisal), orRestricted Calls for Proposals (only the applicants who have been shortlisted on the basis of Concept Notes submit Full Applications Forms for appraisal)In case of open Calls, the submission of proposals which do not result from well-designed project ideas may be discouraged, therefore, this procedure is considered more appropriate and effective with respect to duration of procedure.

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Mid-term evaluation report, 2012 (VIII)

Recommendation 6:Devise and make public a comprehensive roadmap with regard to the evolution of the roles of the current institutions involved in the management of the OP, including the IB’s designated earlier. The Plan should also indicate how these institutions will spread their experiences gathered until now to other bodies. Response:ODS prepared, plan for transition of human resources and knowledge from IPA to SF prepared, institutional and legal framework for SF in place

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IPA – Legal framework• FRAMEWORK AGREEMENT between the European

Community and the Republic of Croatia on the general principles for the participation of the Republic of Croatia in Community programme

• Council Regulation 1605/2002 and 1995/2006: the Financial regulation

• Commission Directives 2342/2002, 1261/2005, 1248/2006 and 478/2007: rules for implementation of Finacial regulation

• Council Regulation 1085/2006: establishing IPA• Council Regulation 718/2007: rules for

implementation of IPA

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Structural instruments – legal framework (I)

• Treaty concerning the accession of the Republic of Croatia to the European Union

• Council Regulation 1605/2002 and 1995/2006: the Financial regulation

• Commission Directives 2342/2002, 1261/2005, 1248/2006 and 478/2007: rules for implementation of Finacial regulation

• Council Regulation 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No. 1260/1999 (OJ L 210/25, 31.7.2006) (the General Regulation);

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Structural instruments – legal framework (II)

• Act on the Establishment of Institutional Framework for the Use of European Union Structural Instruments in the Republic of Croatia

• Decree on the Bodies of the Management and Control System for the Use of European Union Structural Instruments in the Republic of Croatia

• Common National Rules

• Public Procurement Act

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Key players• IPANational Authorising Officer (NAO)National IPA Coordinator (NIPAC)National Fund (NF)Audit Authority (AA)Head of Operating Structure (HOS)- Body Responsible for the

Operational Programme (BROP)

- Body Responsible for Priority/Measure (BRPM)

- Contracting Authority - Implementing Body (IB)

• Structural Instruments

Coordination Body

Audit Authority

Certifying Authority

Managing Authorities

Intermediate Bodies level 1

Intermediate Bodies level 2

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Transition IPA/SF – institutional framework (I)

RCOP IPA

IOperational Programme

Body Responsible for

Operational Programme(BROP)

MRDEUF, Assistant minister

(HOS)

IIPriority/Measure

Body responsible for Priority/Measure(BRPM)

MSESMRDEUF

MECME

Assistant minister(Head of BRPM)

IIIProject

Implementing Agency(Contracting Authority)

CFCADirector

(Head of IB)

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Transition IPA/SF – Institutional framework (II)

RCOP Structural instrumentsI

Operational Programme

Managing Authority

MEDEUF

IIPriority/Measure

1 – Intermediate Body Level 1 (IB1)

IIIProject

2 – Intermediate Body Level 2 (IB2)

MSESMRDEUF

MECME

CFCA

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Accession Treaty – transition (I)The implementation of operations and major projects shall, as of 1 July 2013, be governed by the rules laid down in the General Regulation:

• Any procurement procedure relating to operations within Ops or major projects which, on the date of accession, has already been the subject of an invitation to tender published in the Official Journal of the European Union shall be implemented in accordance with the rules laid down in that invitation to tender

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Accession Treaty – transition (II)

• any procurement procedure relating to operations within OPs or major projects which, on the date of accession, has not yet been the subject of an invitation to tender published in the Official Journal of the European Union shall be implemented in compliance with the provisions of the Treaties or of the acts adopted under the Treaties

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Accession Treaty – transition (III)

• Operations for which CfPs were launched in accordance with Article 158 of IPA Implementing Regulation or for which applications had been submitted to the competent authorities before the date of accession, and for which the contracting could only be finalised after that date, shall be implemented in accordance with the conditions and eligibility rules which were published in the relevant CfP or were communicated in advance to potential beneficiaries

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Accession Treaty – transition (IV)• for the operations for which the approval was

given or for which the respective grant agreements with final beneficiaries were signed before the date of accession as well as for the operations within major projects for which bilateral project agreements were signed before the date of accession, the rules governing the eligibility of expenditure in accordance with or based on IPA Implementing Regulation shall remain applicable, except in duly justified cases to be decided on by the Commission at the request of Croatia

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General requirements for projects - SI- Maturity of projects- Administrative and legal requirements- Technical requirements- Financial and aconomic requirements- Requirements for Major projects- Requirements for horisontal policies- Procurement rules- State aid- Durability- Publicity requirements- Double financing

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Challenges

• Implementing IPA projects under framework for SI

• Adapting institutional organisation for the tasks delegated in line with Framework for the Use of European Union Structural Instruments

• Segregation of duties• New legal framework for awarding grants• Public procurement

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Questions?

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Thank you for your attention!

Andrijana Anić-Antić,CFCA, Croatia

Andrijana.AnicAntic@safu.hr