72
Na
temelju članka 88. Ustava Republike Hrvatske, donosim
Proglašavam
Zakon o potvrđivanju Memoranduma o financiranju usuglašenog između Europske
komisije i Vlade Republike Hrvatske o dodjeli pomoći iz Instrumenta za
pretpristupnu strukturnu politiku za sljedeću mjeru: Program za vode i otpadne
vode u Karlovcu, za Grad Karlovac, Karlovčka županija, Hrvatska, kojega je
Hrvatski sabor donio na sjednici 18. svibnja 2006. godine.
Klasa:
011-01/06-01/16
Urbroj:
71-05-03/1-06-2
Zagreb,
24. svibnja 2006.
Predsjednik
Republike Hrvatske
Stjepan Mesić, v. r.
Članak
1.
Potvrđuje
se Memorandum o financiranju usuglašen između Europske komisije i Vlade
Republike Hrvatske o dodjeli pomoći iz Instrumenta za pretpristupnu strukturnu
politiku za sljedeću mjeru: Program za vode i otpadne vode u Karlovcu za Grad
Karlovac, Karlovačka županija, Hrvatska, potpisan 30. siječnja 2006., u
izvorniku na engleskom jeziku.
Članak
2.
Tekst
Memoranduma iz članka 1. ovoga Zakona u izvorniku na engleskom jeziku i u
prijevodu na hrvatski jezik glasi:
ISPA
Measure No: 2005 HR 16 P PE 001
FINANCING MEMORANDUM
Agreed between the European Commission and the Government of
the Republic of Croatia Concerning the grant of assistance from the Instrument
for Structural Policies for Pre-accession to the following measure Karlovac
Water and Waste Water Programme located in Town of Karlovac, Karlovacka County
in Croatia
The
European Commission, hereinafter referred to as «the Commission», acting for
and on behalf of the European Community, hereinafter referred to as «the
Community» represented by the Director General for Regional Policy, Mr Graham
Meadows, for the Commission
on
the one part, and
The
Government of the Republic of Croatia, acting on behalf of the Republic of
Croatia, hereinafter referred to as “the beneficiary”
on
the other part,
HAVE
AGREED AS FOLLOWS:
Article
1
The
measure referred to in Article 2 below shall be implemented and financed out of
the budgetary resources of the Community in accordance with the provisions set
out in this Memorandum. The measure referred to in Article 2 below shall be
implemented in line with the General Conditions annexed to the Framework
Agreement signed between the Commission and the beneficiary and supplemented by
the terms of this Memorandum and the provisions annexed hereto.
Article
2
Identification
of the measure
The
Instrument for Structural Policies for Pre-accession shall contribute, by way
of a grant, towards the financing of the following measure as described in
Annex I:
Measure
number: 2005 HR 16 P PE 001
Title: Karlovac Water and Waste Water Programme –
Town of Karlovac
Duration: Start date: The date of signature of
the financing memorandum by the Commission
End date: 31/12/2010
Location: Municipality of Karlovac, Karlovacka
County
Group: Kupa River, Danube River Basin
Article
3
Commitment
1.
The maximum public or equivalent expenditure which may be taken into account
for the purpose of calculating assistance shall be € 36 000 000;
2.
The rate of Community assistance granted to the measure is fixed at 62.5 % of
total public or equivalent expenditure as indicated in the financing plan in
Annex II;
3.
The maximum amount of assistance from the Instrument for Structural Policies
for Pre-accession is fixed at € 22 500 000;
4.
An amount of € 12 300 000 is committed from the 2005 budget under budgetary
line 13.050101 Commitments in respect of subsequent instalments shall be based
on the initial or revised financing plan for the measure, subject to the state
of implementation of the measure and to budgetary availability.
Article
4
Payments
1.
Community assistance shall cover payments on the measure for which legally
binding commitments have been made by the Beneficiary and for which the
requisite finance has been specifically allocated. These payments must relate
to the works described in Annex I.
2.
Payments made before the date of signature of Financing Memorandum by the
Commission shall not be eligible for assistance from the Instrument for
Structural Policies for Pre-accession.
3.
The measure described in Annex I and payments by the body responsible for the
implementation of the measure shall be completed no later than the End date
indicated in the Article 2 above.
The
report required for the payment of the final balance should be submitted not
later than 6 months after this date.
4.
The advance payment is fixed at € 4 500 000, which shall be transferred as
follows:
–
An amount of € 2 250 000 is paid out after signature of this memorandum by the
Beneficiary and fulfilment of the conditions in Article (8) 3;
–
The remainder is paid out after signature of the first substantial works
contract indicated in the procurement plan and fulfilment of the conditions in
Article 8 (4) hereunder.
Article
5
Respect
of Community law and policies
The
measure shall be carried out in compliance with the relevant provisions set out
in the Stabilisation and Association Agreement1 and shall contribute to the
achievement of Community policies, in particular those concerning environmental
protection and improvement.
Article
6
Intellectual
property
The
Beneficiary and the authority responsible for implementation mentioned in Annex
I point 3 shall ensure that they acquire all necessary intellectual property
rights to studies, drawings, plans, publicity and other material made in
conjunction with planning, implementation, monitoring and evaluation of the
project. They shall guarantee that the Commission, or any body or person
delegated by the Commission shall have access and the right to use such
material. The Commission will only use such material for its own purpose.
Article
7
Permits
and authorisations
Any
type of permits and or authorisations required for the implementation of the
measure must be provided by the competent authorities of the Beneficiary in due
time and in accordance with national law.
Article
8
Specific
conditions related to the measure
Without
prejudice to the general provisions specified in Annex III the Community grant
for the measure is subject to the following conditions:
1.
Condition on the assumptions and the status of the assets:
The
Commission reserves the right to revise the amount of the assistance for ISPA
set out in Article 3 if, within five years of the date of the completion of
works, the operating conditions (tariffs, revenues, etc.) vary significantly
relative to the original assumptions made in determining the level of the grant
and/or there is a substantial modification:
a)
affecting the nature of the operation or its implementing conditions, or giving
to a private or public body an undue advantage; and
b)
resulting either from a change in the nature of the ownership of any part of
the financed infrastructure, or a cessation or material change in the operating
arrangements.
The
beneficiary country shall inform the Commission of any such change, and shall
seek the ex-ante agreement of the Commission to these changes.
2.
Condition on viability:
The
Community grant for the measure is subject to the authorities concerned making
available sufficient resources in order to ensure the effective operation and
maintenance of the assets.
3.
The first instalment of the advance payment is subject to the awarding of
Decentralised Implementation System (DIS) accreditation by the Commission to
the ISPA implementing agency identified in Annex I.3.
4.
The second instalment of the advance payment is subject to:
(a)
an undertaking by Vodovod i Kanalizacija Karlovac to take the corrective
measures necessary to mitigate the impact of the project on the environment.
(b)
a loan agreement with the EBRD for co-financing investments included in this
measure has been signed.
(c)
the completion of a full EIA in conformity with the requirements of Directive
85/337/EC as amended by Directive 97/11/EC an Directive 2003/35/EC, including
public consultation, and the issuing of an environmental decision by the
competent environmental authority.
5.
The final payment is subject to:
(b)
the Commission receiving evidence that a solution for the safe management of
sludge, compliant with applicable EC Directives, has been implemented.
Article
9
The
implementation provisions described in the Annexes to this financing memorandum
form an integral part of it.
Non-compliance
with the conditions and implementation provisions shall be dealt with by the
Commission according to the procedure stipulated in Annex III.1. Section VIII.
Article
10
The
authentic text of this financing memorandum is the present document as signed
hereunder.
Done
at Vinkovci,30 January 2006 Done at
Brussels,
For
the Recipient For
the Community
Marija Pejčinović Burić Graham
Meadows
National
ISPA Coordinator Director General
ANNEX 1
Description of measure
Karlovac
Water and Waste Water Programme
Commission
code No: 2005 HR 16 P PE 001
|
1. |
MEASURE TITLE |
|
|
Karlovac Water and Waste Water Programme |
||
|
2. |
AUTHORITY MAKING THE APPLICATION |
|
|
|
2.1. Name: |
Ministry of Foreign Affairs and European Integration
Mrs Marija Pejčinović Burić – National ISPA Coordinator |
|
|
2.2. Address: |
Petretićev trg 2, 10 000 Zagreb, Croatia |
|
3. |
AUTHORITY RESPONSIBLE FOR IMPLEMENTATION |
|
|
|
3.1 Name: |
Central Finance and Contracting Unit, Ministry of
Finance |
|
|
3.2. Address: |
Katančićeva 5, 10 000 Zagreb, Croatia |
|
4. |
FINAL BENEFICIARY |
|
|
|
4.1. Name: |
Vodovod i Kanalizacija Karlovac (The Karlovac Water
and Sewage Company) |
|
|
4.2. Address: |
Gažanski trg 8, 47000 Karlovac, Croatia |
|
5. |
LOCATION |
|
|
|
5.1. Beneficiary country: Croatia |
|
|
|
5.2. Region: Karlovacka County |
|
|
6. |
DESCRIPTION |
|
6.1.
Background
The
town of Karlovac has a population of slightly less than60,000. It is situated
at the confluence of the Korana, Mrežnica and the Kupa rivers. The River Kupa
flows into the River Sava, which in turn discharges into the Danube.
The
town is provided with a combined wastewater collection system, large parts of
which were originally constructed in the 1930s. Approximately 75% of the city’s
urban population is connected to the mains sewerage system. The system
comprises 93 km of sewers. Sections of the existing network need to be replaced
or repaired and the network needs to be extended in order to provide greater
cover for the town’s inhabitants.
Currently
the wastewater which is collected is discharged untreated through 6 main
outfalls in the town. Two discharges are into the River Mreznica. This then
impacts on water quality in the River Korana which also flows through the town
and which contains a designated bathing water site. The other four discharges
are into the River Kupa which runs through the centre of the town. The 6
outfalls need to be intercepted and the sewage flow diverted in order to be
suitably treated prior to it being discharged into the River Kupa downstream of
the town.
There
is no WWTP plant in Karlovac, other than a small package treatment plant
serving the suburb of Turanj to the South of the Town, and so a new WWTP is
envisaged within the project to provide preliminary, primary, secondary and
tertiary treatment thereby ensuring that all the sewage collected in the town
is treated according to European Community and Croatian standards. The combined
result of the actions will be the prevention of further pollution of the local
rivers and raising their level of cleanliness to European norms.
The
Karlovac project has been identified by the Danube and Black Sea Task Force
(DABLAS) as a priority project due to the inclusion of the town of Karlovac on
the Danube basin emission inventory. The inclusion on the inventory indicates
that the discharge from the town has a regional, as well as national
significance. In addition, due to it fulfilling the established priority
investment criteria, the project is listed in the Croatian National ISPA
Strategy for the Environment Sector as a priority project contributing to the
improvement of water quality in the tributaries of the Sava River.
The
water and sewerage systems in the city are managed by Vodovod i Kanalizacija
Karlovac (ViK Karlovac) – the Karlovac Water and Sewage Company – which is a
company 100% owned by the municipality of Karlovac. In addition ViK Karlovac
has signed a loan agreement with the European Bank for Reconstruction and
Development in order to joint finance the project.
Aside
from wastewater services ViK Karlovac is also responsible for the provision of
water supply services for the town of Karlovac and to 46 smaller settlements
within the county of Karlovac. The connection rate within the town is close to
100%, but there are some nearby villages without adequate piped water supplies.
The few households that are not served by ViK Karlovac operate their own
shallow wells.
Monitoring
of the current system for water supply in the City does not show any
significant risk to human health associated with the drinking water supply.
However, the condition of many elements of the system is such that there is an
increasing risk of non-compliance with the parametric limits set out in the
Drinking Water Directive, particularly as a result of breakages in older
elements of the network. There are high levels of water losses, and there is a
significant risk of drinking water wells being contaminated by river water at
times of high flow or flood and from ingress of polluted water into damaged
distribution pipes.
The
water for the town is abstracted from 6 shallow well complexes within the town,
where water is disinfected by chlorination. In addition to pumping stations at
the well heads, there are another eight pumping stations delivering to eight
storage reservoirs and a distribution system of approximately 482 km of pipes
with diameters of up to 500 mm. The oldest pipes date back to 1914.
Approximately
25,000 m3 per day (9 million m3 per annum) of water is delivered to some 29,000
premises by ViK Karlovac, with unaccounted water representing about 43% of the
water abstracted.
As
a result of the water and wastewater problems described above the town of
Karlovac currently fails to comply with the following EU Directives:
• Drinking Water Directive (98/83/EC)
• Bathing Waters Directive (76/160/EEC)
• Urban Wastewater Treatment Directive
(91/271/EEC)
• Water Framework Directive (2000/60/EC)
The
objective of this measure is to eliminate the water and wastewater problems in
the town of Karlovac thereby ensuring a greater degree of compliance with the
mentioned Directives through the most cost-effective and sustainable means.
6.2.
Components of the Project
The
project consists of five groups of investment items, which are divided into 3
categories:
Water
Supply
A.
Water Supply System
Waste
Water Treatment
B.
Main Collector Sewers and Pump Stations
C.
Secondary and Tertiary Sewers
D.
New Wastewater Treatment Plant
Technical
Assistance and Supervision
E.
Technical Assistance, Supervision during Implementation and Publicity
A.
Water Supply System
The
water supply investments will help to minimise the risk to drinking water
quality and reliability of service being compromised, through the refurbishment
of key elements of the system and through the introduction of network
management systems which will help to ensure safe operation of the supply
system. In particular the improvements will help to minimise the level of
system breakage and leakage. This will in turn minimise the potential for
ingress into the system of contamination. System management tools will help to
improve leak detection and prompt remediation. The main items to be carried out
within this scope of work are:
1)
Water Source Works
There
is no immediate requirement for the development of any water recourses for the
town of Karlovac. Refurbishment and cleaning of the existing (but unused) water
abstraction wells at Mekušje and at Borlin will ensure that there is adequate
supply for the town in the short term for immediate use in periods of water
shortages due to seasonal low flows in the river or due to emergencies. In
addition the reliable yields of the existing well systems are not known.
Therefore hydro-geological investigations are required to determine the
reliable yields of the existing well systems. These investigations should be
followed by the refinement of the water resources management strategy for the
service area. Such a strategy may include the development of new resources in
addition to the cleaning of the existing ones, but until adequate information
is available, this cannot be properly determined.
2)
Network modelling
This
task will include computer, specialist software and specialist support. This
will enable the creation and calibration of a computerised model of the water
distribution systems. This model will be used to improve the detailed
management of the system.
3)
Metering of the distribution network
Water
meters are already installed at the well systems and at pumping stations within
the water distribution network However, at present there is no district
metering programme which will provide vital information both for leak detection
and for the general management of the system. A district metering system,
consisting of water meters monitoring flows into and out of specific districts,
will be installed so that areas with already high or increasing flows can be
quickly identified and the necessary leak detection and repairs carried out.
This will assist in the reduction of unaccounted for water.
4)
Leak detection programme
This
will include the provision of two loggers, a noise leak correlator, a vehicle
and suitable specialist training. Initially, the programme will concentrate on
the detection of leaks in an area to be selected based on historical data on
the numbers of leaks identified and the condition of the pipes at the repair
locations. During this initial programme, ViK Karlovac staff will be trained in
the operation of the leak detection equipment.
5)
Water distribution pipe replacement
There
are 135 km of old asbestos cement pipes that are in poor condition and are in
need of replacement or refurbishment. The project will replace 10.5 km of the
pipes which are in the worst condition as the start of a programme for their
gradual total replacement.
6)
Refurbishment of reservoirs
This
will entail the refurbishment of the Borlin reservoir, as well as the
refurbishment and repair of the other existing reservoirs. This system will
help to ensure that appropriate levels and pressures are maintained in the
system.
B.
Main Collector Sewers and Pump Stations
These
investment elements will refurbish and complete the main elements of the
wastewater collection network as required by the UWWT Directive. Moreover this
network will divert wastewater flows from the receiving waters in the vicinity
of both the town’s water abstraction points and a designated bathing water
site, to the location of the new wastewater treatment plant, downstream of the
town. The main items to be carried out within this scope of work are:
1)
Construction of the Banija Interceptor Sewer and Syphon
This
sewer will collect wastewater from the Banija and Drežnik areas of the town and
transfer it to the main sewer network via a siphon passing under the Kupa
river. This will eradicate the three discharges of untreated wastewater into
the River Kupa from the North bank.
2)
Construction of the Svarca Interceptor Sewer
This
will comprise of the construction of interceptor sewers in the Svarca and
Mostanje regions of the town together with associated pumping stations. These
interceptors will collect wastewater from these areas (on the South side of the
Town) and transfer them to the South Collector and then to the wastewater
treatment plant. This will eradicate the current discharge of untreated
wastewater into the River Mrežnica from the North bank.
3)
Construction of the Grad Collector Sewer and Lift Station
This
new main sewer, known as the Grad Collector Sewer, will be constructed to
intercept the flows to the existing Grad outfall in the 3m diameter Grad Main
Sewer at the edge of the Zvijezda area of the town. The collector will then
direct the wastewater to the WWTP via a syphon beneath the River Korana. This
sewer will eradicate the main discharge into the River Kupa from the South
Bank.
4)
Construction of the Grad Stormwater Outfall
Stormwater
flows greater than 2 × DWF will be discharged directly to the River Kupa
through a new storm water outfall sewer. The separation of the wastewater from
the storm water will reduce the amount of sewage requiring treatment as the
existing sewerage system is largely a combined one.
5)
Construction of the Grad Stormwater Pumping Station
A
stormwater pumping station is needed to pump the stormwater into the river Kupa
at times of high water level (on the infrequent occasions when large storm
water flows in the sewerage systems coincide with high water levels in the
River Kupa). The new pumping station will replace the existing Sanac Pumping
Station and Grad Outfall Sewer both of which are more than seventy years old.
6)
Construction of the PPK Inceptor Sewer
The
wastewater effluent from the PPK meat factory will be collected by this new
sewer and will in turn connect into the proposed Banija Interceptor Sewer. The
construction of this sewer will eradicate discharges from the PPK meat factory
which currently go untreated into the River Kupa.
7)
Replacement of damaged sewers in the Central Urban Area
Many
of the sewers in Karlovac were built over 50 years ago and some are more than
70 years old. Many of these sewers were built with poor quality materials and
they have deteriorated over time. During periods of high groundwater levels,
water from the surrounding soil gains access to the sewers through badly
constructed joints and the poor quality pipe materials. This contributes to the
relatively high levels of infiltration that are known to be present in some
parts of the sewerage system. Approximately 1.3 km of the most seriously
damaged sewers are to be replaced within this measure.
C.
Secondary and Tertiary Sewers
The
installation of these elements will further contribute to the completion of the
wastewater collection network for the agglomeration of Karlovac. The
combination of this investment and the main collector system investments will
ensure that wastewater from premises within the city is safely and reliably
collected and transferred to the new wastewater treatment plant. The main items
to be carried out within this scope of work are:
1)
Construction of sewerage systems in the areas of Mala Svarca and Logoriste,
These areas are located close to the South Collector sewer and their connection
to it is a cost-effective solution to the provision of wastewater collection in
these areas.
2)
Construction of sewerage systems in the area of Eastern Svarca. This area is
located close to the South Collector sewer and connection to it is a
cost-effective solution to the provision of wastewater collection in this area.
D.
New Wastewater Treatment Plant
This
item will entail the construction of a completely new 100,000 p.e., 26,000 m3/d
(approx. 300 l/sec) design dry weather flow capacity wastewater treatment plant
to provide full treatment to all the wastewater collected within the town of
Karlovac. To fully comply with the effluent requirement standards for a
Category II river in a «sensitive» area, the treatment processes will include
nutrient reduction facilities.
This
item will comprise 6 elements:
1)
Inlet Pumping Station, Inlet Works, Offices, Workshops & Laboratory
The
construction of an inlet works for preliminary treatment of the wastewater
using screening, grit removal, and fat & grease removal. The laboratory
will provide for the monitoring of both the inflow and outflow characteristics
of the wastewater and associated environmental monitoring.
2)
Primary Sedimentation & Sludge Treatment facilities
The
sedimentation tanks will provide primary treatment for the inflow. Sludge
treatment will be in the form of thickening, anaerobic digestion, and
mechanical dewatering.
3)
Secondary and tertiary sewage treatment facilities
A
biological treatment stage using activated sludge will be employed. This will
incorporate tertiary treatment using de-nitrification and phosphorous
precipitation.
4)
Effluent pumping station
The
effluent pumping station will pump the treated final effluent to the river
during high water level periods.
5)
Embankments & fencing
These
elements are to prevent flooding of the WWTP and to ensure security of the
facilities;
6)
Access road;
E.
Technical Assistance, Supervision during Implementation and Publicity
These
items will contribute to an increase in the overall efficiency of operation of
the water and wastewater management systems within ViK Karlovac. In addition
the technical support will assist in the implementation of the project and also
the preparation of a long term investment strategy for ViK Karlovac. The items
consist of the following elements:
1)
Technical Assistance for improving operational efficiency
This
task consists of the following elements designed to improve the asset management
knowledge of the Beneficiary. It comprises of:
• Provision of advice and training to
the PIU (Project Implementation Unit) in the use of mapping, Flow Measurement
techniques, GIS database and network hydraulic modelling software, in order to
undertake a comprehensive inventory of the condition of the water supply and
sewerage networks.
• Devising an infiltration reduction
strategy to identify short and long term projects to further reduce
infiltration and leakage and consequent operational costs.
2)
Supply of operational and maintenance equipment
This
task consists of the supply of 2 modern vacuum and jetting tankers and 1 small
jetting tanker for the collection of sewage and sewerage system maintenance.
They will replace the existing obsolete tankers owned by ViK Karlovac.
3)
Preparation of phase II investments
A
consultant will review and revise the existing long term investment plan for
water and wastewater services in Karlovac taking into account changes in the
baseline situation and the results of the investigations and studies described
above.
4)
Support for the PIU
This
assistance will help to ensure the effective implementation of the measure. The
Project Implementation Consultants (PIC) will assist the PIU as required in the
design, procurement and contract administration processes. The consultants will
be expected to prepare detailed designs and tender documents for the proposed
works and other contracts, and to assist in the preparation of all the
necessary documentation such as public notifications, pre-qualifications where
appropriate, invitations to tender, answering tender questions, functional
guarantees, detailed specifications, evaluation criteria etc. The consultants
will also provide tender evaluators and specialist assistance and training
required for the wastewater and water surveys and future investment strategies.
Furthermore,
the consultants will provide advice and training in the following areas:
• Capacity building (capacity of the
Project Implementation Unit in the preparation, implementation and monitoring
of internationally funded projects), including an agreed training needs
analysis and the provision of an on-the-job training programme.
• Ensuring the continuous upgrading of
an action plan for the monitoring of industrial wastewater and the enforcement
of pre-treatment or treatment compliance, including advice and training in this
field for the PIU. The action plan has clearly to outline the future strategy
regarding the choice between connection of industrial waste water to the
municipal WWTP (and the development of separate tariffs, which reflect the true
costs of treatment) or the installation of a proper purely industrial treatment
process, which will also need clear enforcement requirements.
• Elaboration of a strategy for the safe
management of sludge in compliance with local legislation and EC Directives and
advice and training of the PIU on this.
• Support to the PIU in preparing
project progress reports and performance indicator monitoring information.
5)
Supervision of the construction works
This
assistance is required in order to effectively supervise the various works
contracts that are contained in the measure in accordance with FIDIC Conditions
of Contract.
6)
Publicity for the project
This
will cover both publicity of the EU contribution to the ISPA measure and also
an awareness campaign with regard to the improvements in the quality of
services following the investments. This will be important to support the
acceptance by the population of the necessary tariff increases.
7.
OBJECTIVES
The
main objectives of the measures are:
1.
To ensure the provision of safe drinking water in accordance with the
requirements of European Community and Croatian legislation.
2.
To protect the water environment in the Karlovac region and in so doing to
achieve improved compliance with European Community and Croatian legislation in
respect of the water environment.
The
project’s specific objectives are:
1.
Protect existing drinking water sources from potential contamination by surface
water during high water conditions,
2.
Prevent contamination of the water distribution network and thereby safeguard
drinking water quality,
3.
Improve the water supply system operational efficiency and reliability,
4.
Improve the water quality of surface waters within the town of Karlovac, by
reducing pollution load by over 3,000 kg BOD/d,
5.
Raise the Kupa river water quality downstream of the town from Class III to II
or better,
6.
Reduce ground water pollution through infiltration from sewers,
7.
Improve the operational reliability and efficiency of the wastewater network.
7.1
Physical Indicators
The
indicative key indicators, as illustrated in the following tables, will be used
to monitor the physical progress of the construction of the project. A final
list of physical indicators will be established for monitoring purposes once
the design of the various components has been finalised.
The
proposed indicative performance indicators are the following:
|
Performance Indicators |
Before ISPA |
After ISPA |
|
Drinking Water |
|
|
|
Unaccounted for water |
43% |
35% |
|
Drinking Water Quality Degradation
in Distribution |
7% |
5% |
|
Performance Indicators |
Before ISPA |
After ISPA |
|
Wastewater treatment and collection |
|
|
|
Resident population connected to the sewerage system/total
resident population |
75% |
95% & 100%* |
|
Average wastewater volume collected and treated/day |
0 |
20,800 m3/d |
|
Water quality classification of the Kupa river immediately
downstream of Karlovac |
Class III |
Class II |
|
Infiltration to the sewerage system |
2000 m3/d |
1,500 m3/d |
|
Compliance with discharge standards
of UWWTD |
0% |
100% |
*Town
of Karlovac – 95%, suburb of Duga Resa – 100%
For
the outflow of the WWTP, the following reductions are envisaged:
|
Agent |
Present situation mg/l |
After ISPA |
% |
|
BOD (Biological Oxygen Demand) |
231 |
22 |
90 |
|
COD (Chemical Oxygen Demand) |
512 |
121.5 |
75 |
|
SS (Suspended Solids) |
272 |
25.8 |
90 |
|
Nitrogen |
40 |
9.5 |
75 |
|
Phosphorous |
9 |
1.6 |
80 |
8.
INDICATIVE WORK SCHEDULE
|
|
Category of work |
Tendering |
Award |
Completion |
|
1 |
Supervision of construction works |
July 2006 |
January 2007 |
December 2010 |
|
2 |
Technical support equipment including leak detection
equipment, a vehicle, network modelling equipment and software, together with
training |
July 2006 |
January 2007 |
December 2009 |
|
3 |
Sewer Maintenance Equipment |
October 2007 |
January 2008 |
December 2009 |
|
4 |
Construction and refurbishment of wastewater collectors,
pumping stations and water pipes |
November 2006 |
February 2007 |
December 2009 |
|
5 |
Construction of WWTP |
November 2006 |
February 2007 |
July 2010 |
|
6 |
Technical Assistance (PIC) |
February 2006 |
August 2006 |
June 2010 |
9.
ECONOMIC AND SOCIAL COST-BENEFIT ANALYSIS
The
measure carries a number of important economic, social and environmental
benefits. For the combined water and wastewater components, the cost benefit
analysis results in a positive benefit/cost ratio.
10.
MAIN ELEMENTS OF FINANCIAL ANALYSIS
A
financial analysis of the project has been carried out to ensure its financial
viability and affordability. The following assumptions underlie the financial
analysis:
–
the proposed investment programme of € 36,5 million, out of which a total of €
36 million in eligible expenses, will be financed by a 62.5% ISPA grant, 9.7%
national sources and 27.8% EBRD loan;
–
the actual water/ wastewater tariff in 2005 is € 0.82/m3 (incl. 22% VAT) for
domestic consumers and €1.89/m3 for non-domestic consumers (incl. 22|% VAT);
–
the water consumption: 132 l/d/c in 2004;
–
with the average monthly household income of €375 in 2004 the affordability
ratio does not go above 2.05% during the whole project life;
–
The NPV for the project is €1.17 mln. using ISPA assistance;
–
The FIRR is 5.3% for the project using ISPA assistance;
–
The Benefit/Cost ratio is 1.03.
10.1.
Polluter Pays Principle
Existing
tariffs are applied on a per unit consumption basis, with all consumption being
metered. The volume of water consumed is used to calculate charges for
wastewater services. Since, wastewater discharges are currently not treated –
the charging mechanism for water supply and wastewater services does not
distinguish between degrees of pollution discharged by the current charging
system.
The
Republic of Croatia is committed to the application of the polluter pays
principle and the charging system applied by ViK Karlovac will be adapted to
meet this needs. The application of a full cost recovery tariff necessitates
significant changes (increases) in tariff levels to be made. The needs of the
polluter pays principle will form part of the change process, for which the
development of an implementation strategy is under preparation.
The
Polluter Pays Principle is already applied in Croatia to a great extent as set
out in the relevant national legislation and in the National ISPA Strategy for
the Environment.
10.2.
Tariffs
Charges
for water supply and wastewater services are set to recover operating costs,
provisions for depreciation and partial capitol costs. Owing to differences in
projected sales volumes and budgeted operating costs, ViK realises a small
operating loss. The operating margin in the year 2004 was –3%. Future tariff
polices envisage the continuation of this policy, with tariff levels gradually
being increased to recover:
• Additional depreciation charges from
the proposed capital investment,
• the operating costs of providing
wastewater treatment services,
• debt servicing obligations arising
from the proposed capital investments,
• financial returns enabling future
capital investment needs to be financed from user charges.
Different
tariff levels are currently applied for domestic and non domestic (industry,
commercial and public enterprises. It is intended that equalisation of tariffs
will be implemented over the next 10 years, except where different tariffs
reflecting treatment costs can be justified. This policy forms part of the Loan
Agreement between ViK and the EBRD and the Guarantee Agreement from the City of
Karlovac. This will likely result in larger increases in household tariffs than
would otherwise have been required if the differential were maintained. It is
expected that these increases would be at least 20-30% above other required
tariff increases for domestic customers.
To
ensure financial sustainability the following increases in average tariff
levels for water supply and wastewater services are required for the years
2007-2009:
• 2007: 12% in real terms;
• 2008: 11% in real terms;
• 2009: 15% in real terms.
The
aggregated increase is equivalent to a 45% increase in tariffs. The increase
needs to be applied before the first year of repayment of the debt financing
facility, and some flexibility exists in the timing of the increase, though not
in the total increase that is required. Additional tariff increases will be
necessary for domestic customers to equalise tariffs among different customer
classes as well as to finance additional capital investments over the course of
the project cycle.
With
the proposed increases in tariff levels to meet the needs of the priority
investment project, the cost of water supply and wastewater services is shown
to satisfy affordability benchmark requirements. The consumer affordability
(expressed as a percentage of average household income) for water supply and
wastewater services is initially shown to remain around 2% of household income
with the impact in increased tariffs being offset by a combination of:
• reduction in water consumption (8%) as
a result of increasing tariff levels;
• increases in average household income
of 30% over the period to the year 2010.
In
the longer term, as household income continues to increase, the affordability
of services is shown to improve with cost of services falling to around 1.6%.
However, this improvement will be offset by further needs to increase tariff
levels, in particular to harmonise tariffs for household and commercial
customers.
10.3.
Operation and Maintenance
ViK
Karlovac’s policy in establishing tariff levels is that these are set to
recover all operating and maintenance costs inclusive of provisions for
depreciation. Charges are levied on a volumetric basis with tariff levels being
set each year using forecast projections of operating costs and levels of
consumption. Uncertainties only arise from potential variations from these
forecasts (tariff levels can be altered during the course of the year to address
these issues) and in the ability of ViK Karlovac to collect billed revenues.
ViK Karlovac has a current collection rate of 98%.
11.
ENVIRONMENTAL IMPACT ANALYSIS
An
EIA in compliance with the requirements of Directive 85/337/EC as amended by
Directive 97/11/EC and Directive 2003/35/EC will be carried out and forwarded
to the Ministry of Environmental Protection, Physical Planning and
Construction. The envisaged completion date for the EIA procedure is before the
end of 2005.
12.
COST AND ASSISTANCE (IN €)
A.
Indicative Cost Breakdown between types of Expenditure
|
Item |
Total costs (mln. Euro) |
Non-eligible costs (Euro) |
Total eligible costs (Euro) |
|
Land purchase |
0.47 |
0.47 |
0 |
|
Main works |
22.02 |
0.00 |
22.02 |
|
Plant and machinery |
8.27 |
0.00 |
8.27 |
|
Technical assistance |
0.66 |
0.00 |
0.66 |
|
Supervision during implementation |
1.77 |
0.00 |
1.77 |
|
Contingencies |
3.32 |
0.04 |
3.28 |
|
Tax/public levies |
0.00 |
0.00 |
0.00 |
|
Other |
0.00 |
0.00 |
0.00 |
|
TOTALS |
36.51 |
0.51 |
36.00 |
B.
Indicative Eligible Cost Breakdown by Component
|
Item |
Water network |
Sewer network |
WWTP |
Totals (million Euros) |
|
Site preparation |
0 |
0 |
0 |
0 |
|
Main works |
1.24 |
13.33 |
7.45 |
22.02 |
|
Plant and machinery |
0.32 |
2.09 |
5.86 |
8.27 |
|
Technical assistance: –Drainage Area Study – Water Supply Study II |
0.27 |
0.39 |
- |
0.66 |
|
Supervision during implementation |
0.1 |
0.9 |
0.77 |
1.77 |
|
Contingencies |
10% |
10% |
10% |
3.28 |
|
TOTALS |
2.12 |
18.38 |
15.49 |
36.00 |
|
Total cost (€ mln) |
Private sector contribution |
Non eligible expenditure |
Total eligible cost |
ISPA grant |
Grant Rate % |
|
36.51 |
0 |
0.51 |
36.0 |
22.5 |
62.5 |
Rate
of assistance: 62.5%
13.
INVOLVEMENT OF IFIs
The
EBRD in conjunction with the European Commission, has been involved in the
development of the Karlovac Water Supply and Sewerage Services Development
programme. The EBRD has made a loan commitment to Karlovac ViK to provide €10
mln. of financing that can be used to provide part of the required co-financing
for the European Union ISPA grant.
14.
SPECIFIC CONDITIONS RELATED TO THE MEASURE
See
Article 8 of the Financing Memorandum.
15.
PROCUREMENT PLAN
The
works will be implemented according to the indicative procurement plan appended
as annex I.a.
Since
co-financing is provided also by the EBRD, a derogation from the tendering
procedures under Title V of the Financial Regulation is authorised in line with
the provision of Council Regulation (EC) No 1267/99 of 21 June 1999
establishing an Instrument for Structural Policies for pre-Accession, as
amended by Council Regulation (EC) No 2382/2001. Participation of third
countries in the invitations to tenders and contracts is authorised with regard
to this project. Expenditure carried out in accordance with procedures
appropriate to the EBRD, meeting ISPA rules for eligibility shall be used in
calculating total eligible expenditure for these measures.
|
Tender N° |
Description of works and services to be tendered |
Type of contract (works, supplies or services) |
Provisional month of launch of tender (month/ year) |
Rate of reimbursement of invoices relating to specific
contract |
|
1 |
Supervision of construction works |
Services |
July 2006 |
62.5% |
|
2 |
Technical support equipment including leak detection
equipment, a vehicle, network modelling equipment and software together with training |
Supplies |
July 2006 |
62.5% |
|
3 |
Sewer Maintenance Equipment |
Supplies |
October 2007 |
62.5% |
|
4 |
Construction and refurbishment of wastewater collectors,
pumping stations and water pipes |
Works |
November 2006 |
62.5% |
|
5 |
Construction of WWTP |
Works |
November 2006 |
62.5% |
|
Several |
Technical Assistance (PIC) |
Services |
February 2006 |
62.5% |
ANNEX II
FINANCIAL
PLAN (based on commitments from EU budget)
Title
of measure: Karlovac Water and
Waste Water Programme
ISPA
No: 2005/HR/16/P/PE/001
|
Year |
Total Cost |
|
Eligibile Cost |
|
Loan from IFI* |
||||||||
|
Total |
ISPA |
National authorities |
|
||||||||||
|
Central Goverment |
Regional Authority |
Local Authority |
Other* |
|
|||||||||
|
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
11 |
12 |
|
|
|
|
|
(%) |
|
(%) |
|
|
|
|
|
|
(%) |
|
|
=2+3 |
|
=5+7+8+9+10 |
=3/1 |
|
=5/3 |
|
|
|
|
|
|
=11/1 |
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
19.680.000 |
- |
19.680.000 |
100 |
12.300.000 |
62,5 |
1.980.000 |
- |
5.400.000 |
- |
|
- |
|
|
2006 |
16.320.000 |
- |
16.320.000 |
100 |
10.200.000 |
62,5 |
1.520.000 |
- |
4.600.000 |
|
|
- |
|
|
non |
510.000 |
510.000 |
|
|
|
|
|
|
|
|
|
10.000.000 |
|
|
Total |
36.510.000 |
510.000 |
36.000.000 |
98,603 |
22.500.000 |
62,5 |
3.500.000 |
- |
10.000.000 |
|
|
10.000.000 |
27,39 |
ANNEX III1
ISPA Financial
Implementation Provisions
Section
IForms and rate of assistance
(1)
Community assistance under ISPA may take the form of non-repayable direct
assistance, repayable assistance or any other form of assistance.
Assistance
repaid to the managing authority or to another public authority shall be
reapplied for the same purpose.
(2)
The rate of Community assistance granted under ISPA may be up to 75% of public
or equivalent expenditure, including expenditure by bodies whose activities are
undertaken within an administrative or legal framework by virtue of which they
are regarded as equivalent to public bodies. The Commission may propose to
increase this rate to up to 85%, in particular where it considers that a rate
higher than 75% is required for realising measures essential for achieving the
general objectives of ISPA.
The
rate of assistance and the maximum amount of the ISPA grant shall be specified
in the financial memorandum relating to a measure.
Save
in the case of repayable assistance or when there is a substantial Community
interest, the rate of assistance shall be reduced to take into account:
(a)
The availability of co-financing;
(b)
The measure’s capacity to generate revenues; and
(c)
An appropriate application of the polluter-pays principle.
(3)
Measures which generate revenues in accordance with paragraph 2(b) shall be
those concerning:
(a)
Infrastructure the use of which involves fees borne by users;
(b)
Productive investments in the environment sector.
Guidelines
for application of the polluter pays principle have been elaborated by the
Commission.
(4)
Preliminary studies and technical support measures may be financed
exceptionally at 100% of the total cost.
(5)
Measures covered by a financing memorandum are to be implemented by the
beneficiary country in close collaboration with the Commission, which will
retain responsibility for the utilisation of appropriations.
Section
IICommitments
(1)
The Commission implements expenditure under ISPA in accordance with the
Financial Regulation applicable to the general budget of the European
Communities on the basis of the financing memorandum to be drawn up between the
Commission and the beneficiary country.
However,
annual budgetary commitments in respect of assistance granted to measures shall
be carried out in one of the following two ways:
(a)
Commitments in respect of the measures assisted by ISPA to be carried out over
a period of two or more years shall, as a general rule and subject to point
(b), be effected in annual instalments.
The
commitment in respect of the first annual instalment will be made by the
Commission when it signs the financing memorandum relating to the measure.
This
commitment will correspond to the amount of grant mentioned in the first year indicated
in the financing plan. During the period leading to full decentralisation, it
should be sufficient to cover the works to be contracted in the first years.
Commitments
in respect of subsequent annual instalments shall be based on the initial or revised
financing plan for the measure. They will, in principle, be granted at the
start of each financial year and at the latest by 1 April of the year in
question, provided that the forecast expenditure for the coming year justifies
it and that the progress of the works demonstrates that the project is
proceeding satisfactorily towards completion and subject to budgetary
availability.
(b)
For measures with a duration of less than two years or for which the Community
assistance does not exceed Euro 20 million a first commitment of up to 80% of
the total assistance granted may take place when the Commission signs the
financing memorandum relating to the measure.
The
remainder will be committed provided that the progress of the works
demonstrates that the project is proceeding satisfactorily towards completion
and subject to budgetary availability.
(2)
Except in duly justified cases, the assistance committed to a measure on which
substantial work has not begun within two years from the date of the signature by
the Commission of the financial memorandum relating to the measure will be
cancelled.
In
any case the Commission shall inform in good time the beneficiary country and
the designated authority whenever there is a risk of cancellation.
Section
IIIPayments
(1)
Payments may take the form of either advance payments, intermediate payments or
payments of the final balance.
Intermediate
payments and payments of the balance shall relate to expenditure actually
certified and paid, which must be supported by receipted invoices or accounting
documents of equivalent probative value.
(2)
Advance payments
As
a general rule an advance payment of up to 20% of total assistance from ISPA as
initially decided shall be paid to the designated authority as defined in (9).
The
advance payment is as a general rule transferred in the following ways:
–
A first instalment of up to half of the advance is paid when the beneficiary
country signs the financing memorandum;
–
The remainder is paid out following the signing of the first contract, normally
the first works contract.
Deviations
from the general rule have to be approved by a Commission decision in the
financing memorandum relating to the measure.
All
or part of an advance payment shall be repaid by the designated authority
referred to in paragraph (2) if no payment application is sent to the
Commission within 12 months from the date on which the advance payment is paid.
The amount of the advance to be repaid will be determined by the Commission on
the basis of eligible expenditure effectively paid. Repayment of the advance
does not lead to the cancellation of the Community assistance.
(3)
Intermediate payments
Intermediate
payments are made by the Commission to the designated authority on request and
provided that the measure is progressing satisfactorily towards completion and
shall be made to refund the expenditure certified and actually paid, subject to
the following conditions:
–
The beneficiary country has submitted a report describing the progress of the
measure in terms of its physical and financial indicators and its conformity
with the financing memorandum, including where appropriate any specific
conditions attached to the assistance,
–
The observations and recommendations of the national and/or Community inspection
authorities have been acted upon,
–
Any technical, financial and legal problems that have arisen and the measures
taken to correct them have been indicated,
–
Any departures from the original financing plan have been analysed,
–
The steps taken to publicise the measure have been described.
The
beneficiary country shall be informed by the Commission if one of the above
mentioned conditions is not fulfilled;
The
standard model provided by the Commission for payment claims and for financial
and physical progress reports should be used.
(4)
Beneficiary countries shall ensure that applications for payment are submitted
to the Commission as a general rule three times a year, by 1 March, 1 July and
1 November at the latest.
(5)
The total amount of the payments made under (2) and (3) may not exceed 80% of
the total assistance granted. The Commission may increase this percentage to
90% in justified cases.
(6)
Payment of the balance of Community assistance
The
balance of Community assistance calculated on the basis of expenditure
certified and actually paid will be paid provided that:
–
The measure has been carried out according to its objectives,
–
The measure has met its specific conditions as mentioned in the financing
memorandum,
–
The final report referred to in section V is submitted to the Commission,
–
The designated authority or body referred to in paragraph 2 submits an
application for payment to the Commission within six months of the deadline for
completion of the work and for expenditure laid down in the financing
memorandum,
–
The beneficiary country certifies to the Commission that the information given
in the application for payment and in the report is correct,
–
The beneficiary country has sent to the Commission the declaration referred to
in Annex III.4.C,
–
All the information and publicity measures drawn up by the Commission under
Annex III.6 have been implemented
–
When the management of aid under a measure is conferred on implementing
agencies in applicant countries on a decentralised basis, the beneficiary
country provides the Commission with all the information necessary to verify
that Community rules concerning public procurement have been complied with, in
particular as regards the publication of tender notices and the submission of
tender evaluation and contract award reports and that all conditions specified
in the financing memorandum have been complied with.
(7)
If the final report referred to above is not sent to the Commission within 6
months of the final date for completion of the works and payments as specified
in the financing memorandum, that part of the assistance representing the
remaining balance for the measure should be cancelled.
(8)
Requests for interim and final payment presented by a beneficiary country are
accompanied by a declaration of the National Authorising Officer that declared
payments only relate to expenditure supported by receipted invoices or
accounting documents of probative value and which comply with the provisions
governing eligibility of expenditure for projects assisted by ISPA as specified
in Annex III. 2.
(9)
All payments of aid granted by the Commission under this financing memorandum
shall be made to a central entity, the National Fund, designated by the
beneficiary country to receive such payments. As a general rule, payments shall
be made by the Commission to a single bank account designated by the
beneficiary country no later than two months after receipt of a valid and
complete application for payment. The National Fund shall transfer as quickly
as possible and in full the ISPA contribution to the body responsible for the
implementation.
(10)
The National Fund, as headed by the National Authorising Officer, is to have
overall responsibility for the management of the funds within the beneficiary
country concerned. This officer shall also be responsible for refunding any
overpaid or unduly amounts to the Commission.
The
responsibilities of the National Authorising Officer are laid down in the
Memorandum of Understanding concluded between the Commission and the
beneficiary countries.
Section
IV
Use
of the Euro
(1)
The amounts in the applications for assistance, together with the relevant
financing plan, shall be expressed in Euro.
(2)
The amounts of assistance and the financing plans approved by the Commission
shall be expressed in Euro.
(3)
Declarations of expenditure in support of the corresponding payment
applications shall be expressed in Euro.
The
conversion rate to be used shall be the Commission’s financial accounting rate applicable
for the month in which the declaration of expenditures are registered in the
accounting documents of the responsible authorities in charge of the financial
management of the project. The monthly conversion rate is fixed according to
the provision mentioned in Article 7 (2) of the Commission Regulation (EC,
Euratom) n° 2342/2002 of 23 December 2002 laying down rules for the
implementation of General Regulation (EC, Euratom) n° 1605/2002 on the
Financial Regulation applicable to the general budget of the European
Communities. The conversion rate is the rate on the penultimate working day of
the month preceding that for which rates are established. The Commission will
inform the responsible authorities of this rate2.
(4)
Payments of financial assistance by the Commission shall be made in Euro to the
authority designated by the beneficiary country to receive such payments.
Section
VThe Final Report
The
authority or body responsible for the measure is to submit a final report to
the Commission within six months of completion of the measure. The final report
will contain the following:
(a)
a description of the work undertaken, accompanied by physical indicators,
quantification of expenditure by category of work and the measures taken with
regard to the specific clauses contained in the decision to grant assistance;
(b)
certification of the conformity of the work with the decision granting
assistance;
(c)
a first assessment of the extent to which the expected results have been
achieved, including notably:
–
the effective date of implementation of the measure;
–
an indication of the way in which the measure will be managed once completed;
–
confirmation, if appropriate, of financial forecasts, especially as regards
operating costs and expected revenues;
–
confirmation of the socio-economic forecast, especially the expected costs and
benefits;
–
an indication of the actions taken to ensure protection of the environment and
their cost including compliance with the polluter-pays principle.
–
the date at which the assisted measure became operational,
(d)
information relating to publicity actions.
Section
VIAmendments to financing memorandum
(1)
If the public or equivalent expenditure actually incurred differs from the
expenditure initially planned, the Community assistance granted will be varied
to take account of this but may not exceed the maximum amount stated in the
financing memorandum.
A
change in the rate of community assistance from the initially granted rate or
of the maximum of the grant will require a modification of the financing
memorandum in accordance with the procedure described in paragraph (3).
(2)
If, when the financing plan for a project is amended, the Community commitments
and/or payments already made exceed the amounts entered in the amended
financing plan, the Commission shall, when authorising the first financial
operation (commitment or payment) after that amendment, make an adjustment to
take account of the amount over-committed or over-paid.
(3)
Any amendments to the financing memorandum shall be made in accordance with the
following procedures:
(a)
Amendments which entail a substantial change in the objectives or
characteristics of the project, or a substantial change in the financing plan
or schedule of expenditure, shall be made by means of a financing memorandum
taken in response to a request by the beneficiary country or at the initiative
of the Commission after consultation with the beneficiary country. The
definition of a «substantial» change is given within the provisions governing
eligibility of expenditure.
(b)
In the case of other amendments, the beneficiary country shall send to the
Commission a proposal for amendment. The Commission shall make its comments or
signify its agreement within twenty working days of receipt of the proposal.
The amendments shall be adopted when the Commission has given its agreement.
The ISPA management Committee is informed of such amendments.
(c)
Any change in annual expenditure of less than 25% of the total expenditure
planned for the project shall not be regarded as a substantial change of the
financing plan and of the schedule of expenditure.
Section
VIIFinancial Management and Control
(1)
The Beneficiary countries shall:
(a)
establish management and control systems which ensure:
–
The proper implementation of the assistance granted under this Memorandum in
accordance with the principles of sound financial management,
–
The separation of the functions of management and control,
–
That expenditure declarations presented to the Commission are accurate and
emanate from accounting systems based on supporting documents which are open to
verification;
(b)
verify on a regular basis that the measures financed by the Community have been
properly carried out;
(c)
prevent irregularities and take action against them;
(d)
recover any amounts lost as a result of irregularity or negligence.
(2)
Appropriate internal and external controls are to be carried out in accordance
with internationally accepted audit standards by the competent national bodies,
which must be independent in order to perform this function. Each year an audit
plan and a summary of the findings of the audits carried out are to be sent to
the Commission. Audit reports will be at the disposal of the Commission.
(3)
Without prejudice to checks carried out by Beneficiary countries, the
Commission services and the Court of Auditors may, through their own staff or
duly authorized representatives, carry out on-the-spot technical or financial
audits, including sample checks and final audits.
(4)
The Beneficiary country is to ensure that when Commission staff or its duly
authorised representatives and or the Court of Auditors perform checks, these
persons have the right to inspect on-the-spot all relevant documentation and
accounts pertaining to items financed under the Financing Memorandum. The
Beneficiary countries are to assist the Commission services and the Court of
Auditors to carry out audits relating to the utilisation of funds granted under
ISPA. The provisions of Annex III.5 shall be applicable to on the spot checks
by the Commission.
(5)
The detailed provisions on financial management and control are set out in
Annex III4.
Section
VIIIMonitoring
The
beneficiary countries and the Commission shall ensure that the implementation
of the measure is monitored and evaluated in accordance with the following
provisions:
(1)
Monitoring committees are to be set up by arrangement between the beneficiary
country concerned and the Commission. The authorities or bodies designated by
the beneficiary country, the Commission and where appropriate, the EIB and/or
other co-financing institution will be represented on the committees. Where
regional and local authorities and private enterprises are competent for the
execution of a project and where they are directly concerned by a project they
will also be represented on such committees.
(2)
Monitoring is to be carried out by means of jointly agreed reporting
procedures, sample checks and, if appropriate by the establishment of ad hoc
committees. It is to be carried out by reference to physical and financial
indicators. The indicators will relate to the specific character of the project
and its objectives. They will be arranged in such a way as to show the stage
reached in the measure in relation to the plan and objectives originally laid
down and the progress achieved on the management side and any related problems.
(3)
(a) For each measure, the National ISPA Coordinator is to submit progress
reports to the Commission within three months of the end of each full year of
implementation.
(b)
For the meetings of the monitoring committees the National ISPA Coordinator is
to submit progress reports according to the standard model provided by the
Commission. The report has to be in the hands of the Commission 15 working days
ahead of the scheduled meeting.
(4)
On the basis of the results of monitoring and taking account of the comments of
the monitoring committee, the Commission is to adjust the amounts and conditions
for granting assistance as initially approved, as well as the financing plan
envisaged, if necessary on a proposal by the beneficiary countries.
The
Commission will define the appropriate arrangements for these adjustments
differentiating them according to their nature and importance.
Section
IXTransparency in the award of contracts
(1)
The procedure to be followed for the award of works, supply or service
contracts will respect the key principles enshrined in Title IV of the
Financial Regulation (external actions) applicable to the general budget of the
European Union.
(2)
(a) Participation in tendering procedures shall be open on equal terms to all
natural and legal persons coming within the scope of application of the Treaty
and to all natural and legal persons in the beneficiary countries of ISPA and
from Turkey, Albania, Bosnia and Herzegovina, The Federal Republic of
Yugoslavia and the Former Yugoslav Republic of Macedonia.
The
specifications shall therefore require tenders to state their nationality and
to present the supporting evidence normally acceptable under their own law.
(b)
In duly justified cases such as co-financing with International Financing
Institutions and after early examination by the ISPA Management Committee, the
Commission may allow nationals of third countries to tender for contracts.
(3)
(a) The beneficiary countries shall take the necessary measures to guarantee as
wide a participation as possible. To this end and when required by the value of
the contracts, they shall ensure an advance publication of invitation to tender
in the Official Journal of the European Communities and the official gazette in
the beneficiary country.
(b)
They will also eliminate any discriminatory practice or technical
specifications liable to hamper wide participation on equal terms by all
natural or legal persons of the Member States and of beneficiary countries.
(c)
In addition information has to be launched in a transparent form on Internet.
(4)
Detailed procedure for tendering and contracts to be followed as a general rule
are laid down in the Practical Guide to Phare ISPA and Sapard contract
procedures.
Section
XTransparency in Accounting and project reports
The
beneficiary country shall ensure that, for the measure to which the financing
memorandum relates, all public or private bodies involved in the management and
implementation of the operations maintain either a separate accounting system
or an adequate accounting codification of all transactions concerned which will
facilitate the verification of expenditure by the Community and by national
control authorities. They must also ensure that all expenditure is correctly
attributed to the project concerned.
The
responsible authorities are to keep available all the supporting documents
regarding expenditure on any project for a period of five years following the
last payment in respect of a project.
Section
XIEx-post Evaluation
Ex-post
evaluation is to cover the utilisation of resources and the effectiveness and
efficiency of assistance and its impact. It is to cover the factors
contributing to the success or failure of implementation of measures and the
achievements and results
After
the completion of measures, the Commission and the beneficiary countries will
therefore evaluate the manner, including the efficient and effective use of
resources, in which they have been carried out. The evaluation will also cover
the actual impact of their implementation in order to assess whether the
original objectives have been achieved. This evaluation will, inter alia,
address the contribution made by measures to the implementation of Community
policies on the environment or its contribution to extended Trans-European
networks and common transport policies. They will also assess the environmental
impact of the measures.
Annex III2
Provisions
governing eligibility of expenditure for measures assisted by ISPA
Section
I
Domain
of expenditure
The
ISPA provides assistance for the following measures:
(1)
Environmental projects enabling the beneficiary countries to comply with the
requirements of Community environmental law and with the objectives of the
Accession Partnerships;
(2)
Transport infrastructure projects which promote sustainable mobility and in
particular those that constitute projects of common interest based on the
criteria of Decision N° 1692/96/EC 3 and those which enable the beneficiary
countries to comply with the objectives of the Accession Partnerships; this
includes interconnection and interoperability of national networks as well as
with the Trans-European Networks together with access to such networks;
(3)
Preliminary studies, appraisals, and technical support measures including
information and publicity actions related to eligible projects. This includes
technical and administrative assistance to the mutual benefit of the Commission
and the beneficiary countries which do not fall within the standing remit of
the national public administration, covering the identification, preparation,
management, monitoring, audit and supervision of projects.
The
rules specified in sections II to XII below relate to projects listed under
items 1 and 2 above they are, however, applied by analogy to decisions for
projects listed under item 3.
Section
IIBasic definitions and concepts
(1)
Concept of project, stage of a project and group of projects
For
the purpose of this document, the following definitions shall apply:
a)
a «project» shall be an economically indivisible series of works fulfilling a
precise technical function and with clearly identified aims.
b)
a «technically and financially independent stage» shall be a stage which can be
identified as operational in its own right.
A
stage may also cover preliminary, feasibility and technical studies needed for
carrying out a project.
c)
projects meeting the following three conditions may be grouped:
–
they must be located in the same water course or catchment area or situated
along the same transport corridor;
–
they must be carried out under an overall plan for the water course or
catchment area or corridor with clearly identified goals;
–
they must be supervised by a body responsible for co-ordinating and monitoring
the group of projects in cases where the projects are carried out by different
competent authorities.
(2)
The «body responsible for implementation»
(a)
For projects assisted by ISPA the «body responsible for implementation» is the
body responsible for the tenders and contracting. This body is indicated in
Annex I, point 3, of the financing memorandum.
As
a consequence, any change of the «body responsible for implementation» of a
project has to be approved by the Commission in a financing memorandum.
This
body is normally referred to as the final beneficiary of the financial
assistance from ISPA. Only this body executes eligible expenditure.
(b)
However this body may delegate the implementation to another body who can also
execute eligible expenditure. In such cases the Commission must be informed of
the type of delegation proposed and must receive a copy of the relevant
documents.
(3)
The concept of «public administration»
Public
administration is meant to embrace the following three levels of general government:
–
Central government bodies, (national level);
–
Regional government bodies;
–
Local government bodies.
In
addition this concept may include bodies whose activities are undertaken within
an administrative and legal framework by virtue of which they are regarded as
equivalent to public bodies.
(4)
Implementation and period of implementation of a project
(a)
The implementation of a project is considered to cover all stages from
preliminary planning (including the study of alternatives) to the completion of
the approved project and publicity measures for an assisted project.
(b)
The financing memorandum can apply to one or several of the above stages.
(c)
The implementation period of a project concerns, as a general rule, the period
necessary for the completion of the above stages until the point in time at
which a project becomes fully operational and at which the physical object
described in the financing memorandum has been completed.
(5)
Transparency and documentary evidence
Any
expenditure declared to the Commission should be based on legally binding
agreements and/or documents. Appropriate documentary evidence is imperative.
In
order to maximize transparency and to permit the audit of expenditure by the
Commission and/or by the competent national financial control authority, each
beneficiary country must ensure that any body involved into the management and
the implementation of projects has set up a separate accounting record covering
the project described in the financing memorandum.
(6)
Expenditure
Expenditure
must relate to payments certified and actually made by the body responsible for
implementation, supported by receipted invoices or accounting documents of
equivalent probative value.
«Accounting
document of equivalent probative value» means any document submitted by the
authority defined in point 2 of this section to prove that the book entry gives
a true and fair view of the actually implied transactions in accordance with
standard accountancy practices. Prior agreement of the Commission is necessary
when accounting document of equivalent probative value are used.
Section
IIIMain categories of eligible expenditure
As
a general rule expenditure relating to
–
feasibility studies,
–
planning and design including environmental impact assessment,
–
site preparation,
–
building and construction,
–
plant and machinery permanently installed in the project,
–
testing and training,
–
project management,
–
compensatory or mitigation measures of the environmental impact,
–
other types of expenditure specified in a financing memorandum,
–
measures undertaken pursuant to the provisions of Annex III 6 on information
and publicity
–
are eligible subject to the qualifications specified hereafter.
Section
IVFeasibility studies, project planning and design
(1)
Expenditure related to feasibility studies, planning and design of projects
(a)
Expenditure related to feasibility studies, planning including environmental
impact assessment studies, project-related expertise and design of projects
are, as a general rule, eligible, provided that such expenditure is directly
linked to one or several projects and specifically approved by a financing
memorandum.
(b)
In those cases where several projects are covered by a contract or where the
body responsible for implementation is executing the above functions on its own
account, costs have to be imputed by means of a transparent and separate
project accounting system based on accounting documents or documents of
equivalent probative value (e.g. by means of a time allocation system).
(2)
Involvement of public administration
In
those cases where employees from the public administration, are involved in the
activities mentioned under point 1 (a) of this section, expenditure can only be
accepted by the Commission as eligible in duly justified cases according to all
of the following criteria:
–
the employee must have temporarily left his statutory employment in the public
administration;
–
expenditure must be based on a contract related to one or several specified
project; in the case where a contract relates to several projects, costs have
to be allocated in a transparent manner (e.g. by means of time sheets);
–
expenditure must be directly linked to one or more individual projects
concerned;
–
the contract must be limited in time and must not exceed the time limit set for
the completion of the project;
–
the tasks to be executed under that contract must not cover general
administrative functions, as specified herein under section VIII, point 1;
–
this provision must not be used to circumvent community public procurement
procedures.
Section
VSite preparation and construction
(1)
In those cases where the body responsible for implementation is executing site
preparation or construction works, or parts thereof, on its own account, costs
have to be imputed by means of a transparent and separate project accounting
system based on accounting documents or documents of equivalent probative
value.
In
cases where public administration employees are involved the provisions
specified in section IV, point 2, apply.
(2)
Eligible costs shall include only costs actually borne after the dates
specified in section X, point 1, and related directly to the project. Eligible
cost may include all or any of the following categories:
–
labour costs (gross wages and salaries);
–
charges for using durable equipment during construction;
–
cost of products used for the implementation of the project;
–
overheads and other cost items, if specifically justified; they are to be
allocated in an equitable manner, in accordance with generally recognised
accounting standards.
–
imputed overheads are not eligible in the case where the body mentioned under
(a) above is a public administration.
(3)
As a general rule, cost should be valued at market prices.
Section
VIPurchase, lease of equipment and intangible assets
(1)
Durable equipment that is part of capital expenditure of the project
(a)
Expenditure on purchase or production of plant and equipment that is to be
permanently installed and fixed in the project is eligible, provided that it is
placed under inventory of durable equipment of the body specified under Section
II (2) and that it is treated as capital expenditure in accordance with
standard accounting conventions.
(b)
Without prejudice to Section IX (3), the lease of such equipment is considered
as part of the operation cost and is not eligible.
(2)
The purchase of intangible assets
The
purchase and use of intangible assets, as for example patents, are eligible if
they are necessary for the implementation of the project.
(3)
Durable equipment used for the implementation of a project
(a)
In the cases where the body responsible for implementation is executing site
preparation or construction works, or parts thereof on its own account,
expenditure on the purchase or production of durable equipment that is employed
during the implementation phase of a project is not eligible. This concerns
heavy construction machines as well as office and other types of equipment.
(b)
Durable equipment that is expressly purchased or produced for implementing a
project can be considered eligible if it is without economic value or scrapped
after use and if so specified in the financing memorandum.
(4)
Durable equipment used by public administrations
(a)
Expenditure on the purchase and leasing of durable equipment used by public
administration is not eligible.
(b)
Without prejudice to Section VIII (2) and (3), expenditure on equipment and
leasing charges for equipment used by a public administration in the pursuit of
its monitoring and supervision task can be eligible with the agreement of the
Commission.
Section
VIILand purchase and Value Added Tax
Land
purchase and value Added tax (VAT) are not eligible.
Section
VIIIAdministrative expenditure
(1)
General principle
As
a general rule, expenditure incurred by public administrations, including
salaries of national, regional and local statutory employees are not eligible
for assistance (including technical assistance) except for dully documented
expenditure arising from the obligation to carry out financial cheeks,
financial and physical monitoring, evaluation and prevention of irregularities
and expenditure entered into under the obligation to recover amounts lost.
With
the exception of the National Fund, costs including salaries linked to the
temporary employment, at the initiative of the Commission, of staff whether
temporary civil servants or staff from the private sector for work involving
management, follow up, evaluation and control are eligible under the technical
support measure as defined in Section I (3).
Equipment
for monitoring purposes may be eligible if specifically allowed by a technical
assistance measure mentioned within the financing memorandum.
(2)
Organisation of Monitoring Committees
(a)
Without prejudice to point 1 above expenditure incurred for the organization of
statutory monitoring is eligible on presentation of documentary evidence.
(b)
Allowable costs may, as general rule, include one or more of the following
categories:
–
interpreter services,
–
lease of meeting room and ancillary arrangements,
–
lease of audio-visual and other necessary electronic equipment,
–
provision of documentation and related facilities,
–
fees for participation of experts,
–
travel expenditure.
(c)
Salaries and allowances of public administration employees incurred in this
context are not eligible.
(3)
Meetings upon request of the Commission
The
rules specified in point 2 above may be applied by analogy for the organisation
of ad hoc meetings upon the request of the Commission.
Section
IXOther types of expenditure
(1)
Project management and project supervision
Expenditure
related to project management and project supervision is, as a general rule,
eligible. The provisions specified in Section IV (1) and (2) apply.
(2)
Financial charges
Any
type of financial charge linked to the realization of a project is not
eligible; this concerns in particular interest on interim financing, bank fees,
provision fees, etc.
Bank
guarantees related to bank loans used for the financing of project can be eligible
with the agreement of the Commission.
(3)
Financing techniques not implying an immediate transfer of asset ownership
Without
prejudice to point 2, financing techniques, which do not necessarily imply an
immediate transfer of asset ownership, can be considered eligible, if justified
and approved in the financing memorandum.
The
beneficiary country has to demonstrate through a risk analysis that the
technique used is economically more advantageous than outright acquisition of
an asset.
(4)
Operating expenditure, running costs of assisted projects
(a)
Any type of operating cost incurred after the completion of a project is not
eligible.
(b)
Notwithstanding point (a) above training of operating personnel and testing of
a project and of its equipment may be taken into consideration as eligible
expenditure for a necessary period defined in a financing memorandum.
(c)
The principles defined in points (a) and (b) above hold also for a completed
individual part of a project or a grouped project, albeit the total project has
not yet been completed.
(5)
Publicity and information measures
Expenditure
for measures undertaken pursuant to the provisions of Annex III.6 on
information and publicity is eligible.
Section
XPeriod of Eligibility
(1)
Initial time limit on eligibility
The
initial time limit on eligibility is assessed differently according the two
following situations:
(a)
when project selection, tendering and contracting by applicant countries is
subject to ex-ante approval by the Commission4, expenditure is eligible for
assistance from the date the financing memorandum related to this project is
signed by the Commission.
In
exceptional cases and when project funding is made up of a combination of loan
either from the EIB or another financial institution and ISPA grant,
expenditure is eligible for assistance from the date of the agreement of the
EIB or of the other financial institution on the particular project. As a
general rule this date should not be earlier than 6 months from the date
mentioned under the first sub paragraph. The following conditions are a
prerequisite:
–
The works and the contracts for which the provision shall apply must be
identified in the financing memorandum;
–
The EIB or other financial institution certify that the provisions of Articles
167 and 168 (1) of the Council Regulation (EC, Euratom) n° 1605/2002 and
provisions of Article 239 and 240 of Commission Regulation (EC, Euratom) n°
2342/2002 are respected;
In
the above cases the Commission is, as a general rule, disposed to apply after
examination by the ISPA Management Committee the provision of Article 168 (2)
of the Financial Regulation applicable to the general budget of the European
Communities.
(b)
after the decision of the Commission to confer aid on implementing agencies in
applicant countries on a decentralized basis5, expenditure is eligible for
assistance from the date on which the application reaches the Commission (ISPA
service) provided that the application can be considered complete.
Payments
made before the dates specified in (a) and (b) above are not eligible.
(2)
Modification of projects
(a)
Any modification of an approved project, which equals or is above EUR 5 million
or 20% of its total cost whatever is the lowest, is deemed to be a
«substantial» modification of the project. Major modifications to the physical
objects of a project that are such that the nature of this project is changed
are also treated as «substantial».
The
rules set up under paragraph 1 apply for the eligibility of expenditure related
to those modifications as defined above.
(b)
For any other modification of a project, expenditure related to the new
additional or extended physical elements are eligible from the time at which
the request for modification reaches the Commission (ISPA service).
(c)
Request for modifications and the relevant information attached to it can be
presented at a Monitoring Committee. A record of the request and of the
deposition of material must be made in the minutes of the meeting.
(3)
Final time limit on eligibility
(a)
The final date of eligibility is specified, as a general rule, in Article 4,
paragraph 3 of the financing memorandum.
(b)
The final date relates to payments made by the body responsible for
implementation.
(c)
The final date of eligibility is laid down in the relevant financing
memorandum. After that date has expired the beneficiary state disposes of a
period of six months to submit to the Commission the final payment claim
together with the final report and a statement as specified in Section III (6)
of Annex III.1 and in Annex III. 4.C to the financing memorandum.
(d)
The Commission cannot extend this six–months period.
Section
XIPayment claims
Payment
claims presented to the Commission by beneficiary countries are based on
declarations of expenditure actually paid out as defined in section II point 6.
In
the case of work undertaken by a concessionaire or equivalent body, the
responsible government authority must certify the correctness of the
expenditure.
Payment
claims must be registered and certified by the National Authorising Officer.
Claims are then forwarded to the Commission via the Commission Delegation.
Section
XIIOther items not specifically specified
(1)
Whenever questions arise which are not specifically dealt with in these
principles governing eligibility of expenditure in the framework of projects
assisted by ISPA the matter shall be discussed with the Commission. The
Commission will endeavor to handle open questions in the spirit enshrined in these
principles and with due reference to the principles established for the
Cohesion Fund.
(2)
In case of a conflict between these principles and those under national
eligibility rules the above-mentioned principles shall take precedence.
Annex III4
Management and control
systems for assistance granted from ISPA and the procedure for making financial
corrections
Section
I
This
Annex lays down detailed rules as regards the management and control systems
for assistance granted from ISPA and as regards the procedure for making
financial corrections to such assistance.
Section
2
Management
and control systems
1.
Each Beneficiary Country shall ensure that:
(i)
the National ISPA Co-ordinator,
(ii)
the National Fund and the National Authorising Officer,
(iii)
the Implementing Agencies and the Sectoral Authorising Officers, and
(iv)
the Final Beneficiaries
as
defined in the ISPA Memorandum of Understanding on the utilisation of the
National Fund for ISPA receive adequate guidance on the provision of management
and control systems necessary to ensure the sound management of ISPA in
accordance with generally accepted principles and standards, and in particular
to provide adequate assurance of the correctness, regularity and eligibility of
claims on ISPA assistance but also to ensure that measures are carried out in
accordance with the terms of the Financing Memorandum and with the objectives
assigned to the measure.
2.
For the purposes of this Annex, the «implementing agencies» shall include bodies
others than the final beneficiaries to which the implementation of measures
assisted by ISPA is delegated by the implementing agency or sectoral
authorising officer (hereinafter called «delegated bodies»).
3.
For the purposes of this Annex, except where otherwise stated «measures» mean
individual projects, stages of projects or groups of projects falling within
Annex III.2, section II (1) which is the subject of a Financing Memorandum.
Section
3
1.
The management and control systems of the National ISPA Co-ordinator, the
National Fund, the implementing agencies, the delegated bodies and the final
beneficiaries shall, subject to proportionality in relation to the volume of
assistance administered, provide for:
(a)
a clear definition, a clear allocation and, insofar as it is necessary for
sound management, an adequate separation of functions within the organisation
concerned;
(b)
effective systems for ensuring that the functions are performed in a
satisfactory manner;
(c)
in the case of delegated bodies and final beneficiaries, reporting to the
authority responsible on the performance of their tasks and the means employed.
Section
4
1.
The management and control systems referred to Section 3 shall include
procedures to verify the authenticity of the expenditure claimed and execution
of the measure from its preparatory stage through to the entry into service of
the financed investment in accordance with the terms of the relevant Financing
Memorandum, with the objectives assigned to the measure, and with applicable
national and Community rules on, in particular, the eligibility of expenditure
for support from ISPA, protection of the environment, transport (including
trans-European networks), competition and the award of public contracts.
Verifications
shall cover all aspects, whether of a financial, technical or administrative
nature, that determine the effective utilisation of the assistance committed.
2.
The procedures shall require the recording of verifications of measures on the
spot. The records shall state the work done, the results of the verification
and the measures taken in respect of discrepancies. Where any physical or
administrative verifications are not exhaustive, but performed on a sample of
works or transactions, the records shall identify the works or transactions
selected and describe the sampling method.
Section
5
1.
The Beneficiary Country shall inform the Commission, within three months of the
entry into force of the Financing Memorandum, of the organisation of the
National ISPA Co-ordinator, the National Fund, the implementing agencies and
delegated bodies responsible for ISPA measures as identified in Section 2, of
the management and control systems in place in these authorities or bodies and
of improvements planned pursuant to the guidance referred to in Section 2 (1).
2.
The communication shall contain the following information in respect of the
National ISPA Co-ordinator, the National Fund, implementing agencies and
delegated bodies:
(a)
the functions vested in them,
(b)
the allocation of functions between or within their departments,
(c)
the procedures for the inspection and acceptance of works and by which claims
for reimbursement of expenditure are received, verified and validated, and by
which payments to beneficiaries are authorised, executed and accounted for, and
(d)
the provisions for the audit of management and control systems.
3.
The Commission shall, in co-operation with the Beneficiary Country, satisfy
itself that the management and control systems presented under paragraphs 1 and
2 meet the standards required by this Annex, and shall make known any obstacles
which they present to the transparency of checks on the operation of ISPA and
to the Commission’s discharge of its responsibilities. Reviews of the operation
of the systems shall be undertaken on a regular basis.
Section
6
1.
The management and control systems for measures shall provide a sufficient
audit trail.
2.
An audit trail shall be considered sufficient where it permits:
(a)
reconciliation of the summary amounts certified to the Commission with the
individual expenditure records and supporting documents held at the various
administrative levels, by the implementing agencies and the final
beneficiaries;
(b)
verification of the allocation and transfer of the available Community and
national funds;
(c)
verification of the correctness of the information supplied on the execution of
the measure in accordance with the terms of the Financing Memorandum granting
the assistance and the objectives assigned to the measure.
3.
An indicative description of the information requirements for a sufficient
audit trail is given in Annex III4A.
4.
The Beneficiary Country shall satisfy itself on the following points:
(a)
that there are procedures to ensure that documents that are relevant to
specific items of expenditure incurred, payments made, works undertaken and
verification of them carried out in connection with the measure, and which are
required for a sufficient audit trail, are held in accordance with the requirements
of Section X of Annex III.1 and with Annex III.4 A;
(b)
that a record is maintained of the body holding them and its location;
(c)
that the documents are made available for inspection by the persons and bodies
who would normally have the right to inspect such documents.
5.
The persons and bodies referred to in paragraph 4 (c) shall be:
(a)
the staff of the National ISPA Co-ordinator, the National Fund, implementing
agencies and delegated bodies who process payment claims;
(b)
the services undertaking audits of management and control systems;
(c)
the National Authorising Officer as person responsible for certifying interim
and final payment claims under Section III (8) of Annex III.1 and the person or
department which issues declarations at winding-up of measures as attached in
Annex III.4.C,
(d)
mandated officials of national audit institutions and of the Community.
They
may require that extracts or copies of the documents or accounting records
referred to in paragraph 4 be supplied to them.
Section
7
The
National Fund shall keep an account of amounts recoverable from payments of
ISPA assistance already made, and ensure that the amounts are recovered without
unjustified delay. After recovery, it shall repay the irregular payments
recovered, together with interest received on account of late payment, by
deducting the amounts concerned from its next statement of expenditure and
request for payment to the Commission in respect of the measure concerned. If
this is insufficient, the Commission may request that the excess amount be
refunded to it.
The
National Fund shall send the Commission once a year, in annex to the fourth
quarterly report on recoveries supplied under Annex III.5, a statement of the
amounts awaiting recovery from ISPA measures at that date, classified by the
year of initiation of the recovery proceedings.
Section
8
Certification
of expenditure
1.
The certificates and statement of interim and final expenditure referred to in
Annex III.1, section III (6), fifth indent and (8) shall be drawn up in the
form prescribed in Annex III.4.B by the National Authorising Officer that is
functionally independent of any services that approve claims.
2.
Before certifying a given statement of expenditure, the National Authorising
officer shall satisfy itself that the following conditions are fulfilled:
(a)
the National ISPA Co-ordinator, the implementing agencies, the delegated bodies
and the final beneficiaries have fulfilled the requirements of Sections III (3)
and (6), VII of Annex III.1 and observed the terms of the Financing Memorandum;
(b)
the statement of expenditure includes only expenditure:
(i)
that has been actually effected within the eligibility period laid down in the
Financing Memorandum granting the assistance and can be supported by receipted
invoices or accounting documents of equivalent probative value,
(ii)
relating to works that had not been essentially completed at the time the
application for assistance was lodged,
(iii)
that are justified by the progress or completion of the measure in accordance
with the terms of the Financing Memorandum granting the assistance and to the
objectives assigned to the measure.
3.
So that the sufficiency of the control systems and the audit trail can always
be taken into account before a statement of expenditure is presented to the
Commission, the Beneficiary Country shall ensure that the National Fund is kept
informed of the procedures operated by the National ISPA Co-ordinator, by the
implementing agencies and by delegated bodies to:
(a)
verify the authenticity of expenditure claimed and execution of the measure in
accordance with the terms of the Financing Memorandum and the objectives
assigned to the measure;
(b)
ensure compliance with the applicable rules; and
(c)
maintain the audit trail.
Section
9
Sample
checks
1.
The Beneficiary Country shall organise checks on measures on an appropriate
sampling basis, designed in particular to:
(a)
verify the effectiveness of the management and control systems in place;
(b)
verify selectively, on the basis of risk analysis, expenditure declarations
made at the various levels concerned.
2.
The checks carried out for the period covered by ISPA assistance shall cover at
least 15 % of the total eligible expenditure incurred on measures approved
during that period. This percentage may be reduced in proportion to the
expenditure incurred before the 1 January 2003. The checks shall be based on a
representative sample of transactions, taking account of the requirements of
paragraph 3.
The
Beneficiary Country shall endeavour to spread the implementation of the checks
evenly over the period concerned. They shall ensure an appropriate separation
of tasks as between such checks and implementation or payment procedures
concerning measures.
3.
The selection of the sample of transactions to be checked shall take into
account:
(a)
the need to check an appropriate mix of types and sizes of measures;
(b)
any risk factors which have been identified by national or Community checks;
(c)
the need to ensure that the different types of body involved in the management
and implementation of measures and the two sectors of activity (transport and
the environment) are satisfactorily checked.
Section
10
Through
the checks, the Beneficiary Country shall endeavour to verify the following:
(a)
the practical application and effectiveness of the management and control
systems;
(b)
the execution of the measure in accordance with the terms of the Financing
Memorandum granting the assistance and the objectives assigned to the measure;
(c)
for an adequate number of accounting records, the correspondence of those
records with supporting documents held by the implementing agencies, delegated
bodies and final beneficiaries;
(d)
the presence of a sufficient audit trail;
(e)
for an adequate number of expenditure items, that the nature and timing of the
relevant expenditure comply with Community provisions and correspond to the
approved specifications of the measure and the works actually executed;
(f)
that the appropriate national co-financing has in fact been made available; and
(g)
that the co-financed measures have been implemented in accordance with
Community rules and policies as required by Article 5 of the Financing
Memorandum.
Section
11
The
checks shall establish whether any problems encountered are of a systemic
character, entailing a risk for other or all measures carried out by the same
implementing agencies or in the Beneficiary Country concerned. They shall also
identify the causes of such situations, any further examination which may be
required and the necessary corrective and preventive action.
Section
12
Each
Beneficiary Country and the Commission shall consult at least once a year with
a view to co-ordinating their programmes of controls so as to maximise the
useful effect of the overall resources devoted to controls at national and
Community level. These consultations shall cover the risk analysis techniques
to be applied and shall take account of recent controls, reports and
communications by national authorities, the Commission and the European Court
of Auditors.
Section
13
In
accordance with Section 12, the Beneficiary Country shall inform the Commission
by 30 June each year, and for the first time by 30 June 2002, of their
application of Sections 9 to 11 of this Annex in the previous calendar year and
in addition provide any necessary completion or updating of the description of
their management and control systems communicated under Section 5(1).
Section
14
Declaration
of winding-up of projects
The
person or department designated to issue declarations on the winding-up of
measures under Annex III4C shall have a function independent of the National
ISPA Co-ordinator, the National Authorising Officer, National Fund,
implementing agencies, delegated bodies and final beneficiaries.
It
shall conduct its examination according to internationally accepted auditing
standards. It shall be supplied by the National ISPA Co-ordinator, the National
Fund, implementing agencies, delegated bodies and final beneficiaries with all
information required and shall be given access to the records and supporting
evidence necessary for drawing up the declaration.
Section
15
Declarations
shall be based on an examination of the management and control systems, of the
findings of checks already carried out and, where necessary, of a further
sample check of transactions and of the final report drawn up under Section V
of Annex III.1. The person or department issuing the declaration shall make all
necessary enquiries to obtain reasonable assurance that the certified statement
of expenditure is correct, that the underlying transactions are legal and
regular and that the measure has been carried out in accordance with the terms
of the Financing Memorandum and the objectives assigned to the measure.
Declarations
shall be drawn up on the basis of the indicative model in Annex III4C and shall
be accompanied by a report which shall include all relevant information to
justify the declaration, including a summary of the findings of all checks
carried out by national and Community bodies to which the declarant has had
access.
Section
16
If
the presence of important management or control weaknesses, or the high
frequency of irregularities encountered or doubts about whether the measure has
been properly implemented does not allow the provision of a positive overall
assurance as to the validity of the request for payment of the final balance
and the final certificate of expenditure, the declaration shall refer to these
circumstances and shall estimate the extent of the problem and its financial
impact.
In
such a case the Commission may ask that a further check be carried out with a
view to the identification and rectification of irregularities within a
specified period of time.
Section
17
Accounting
information to be held and communicated to the Commission on request
1.
The accounting records on measures referred to in Annex III.4.A shall as far as
possible be held in computerised form. Such records shall be made available to
the Commission on specific request for the purpose of carrying out documentary
and on-the-spot checks, without prejudice to the requirements to supply
progress reports under Section VIII of Annex III.1.
2.
At the written request of the Commission, the Beneficiary Country shall deliver
to the Commission the records referred to in paragraph 1 within 10 working days
of receipt of the request. A different period may be agreed between the
Commission and the Beneficiary Country, particularly where the records are not
available in computerised form.
3.
The Commission shall ensure that the information forwarded by the Beneficiary
Country or collected by it in the course of on-the-spot inspections is kept
confidential and secure.
4.
Subject to the relevant national laws, Commission officials shall have access
to all documents prepared either with a view to or following controls carried
out under this Annex and to the data held, including those stored in computer
systems.
Section
18
Financial
corrections
1.
If, after completing the necessary verifications, the Commission concludes
that:
(a)
the implementation of a measure does not justify either part or the whole of
the assistance granted to it, including a failure to comply with one of the
conditions in the Financing Memorandum to grant assistance and in particular
any significant change affecting the nature or conditions of implementation of
the measure for which the Commission’s approval has not been sought, or
(b)
there is an irregularity with regard to assistance from ISPA and that the
Beneficiary Country concerned has not taken the necessary corrective measures,
the
Commission shall suspend the assistance in respect of the measure concerned and
stating its reason, request that the Beneficiary Country submits its comments
within a specified period of time.
If
the Beneficiary Country objects to the observations made by the Commission, the
Beneficiary Country shall be invited to a hearing by the Commission, in which
both sides make efforts to reach an agreement about the observations and the
conclusions to be drawn from them.
2.
At the end of the period set by the Commission, the Commission shall, subject
to the respect of due procedure, if no agreement has been reached within three
months, taking into account any comments made by the Beneficiary Country,
decide to:
(a)
reduce the advance payment referred to in Section III (2) of Annex III.1, or
(b)
make the financial corrections required. This shall mean cancelling all or part
of the assistance granted to the measure.
These
decisions shall respect the principle of proportionality. The Commission shall,
when deciding the amount of a correction, take account of the type of
irregularity or change and the extent of the potential financial impact of any
shortcomings in the management or control systems. Any reduction or
cancellation shall give rise to recovery of the sums paid.
3.
Any sum received unduly and to be recovered shall be paid to the Commission.
Interest on account of late repayment shall be charged in accordance with the
rules laid down in Section 21.
Section
19
1.
The amount of financial corrections made by the Commission under Section 18 (2)
for individual or systemic irregularities shall be assessed wherever this is
possible and practicable on the basis of individual files and shall be equal to
the amount of expenditure wrongly charged to ISPA, having regard to the
principle of proportionality.
2.
When it is not possible or practicable to quantify the amount of irregular
expenditure precisely, or when it would be disproportionate to cancel entirely
the expenditure in question, and the Commission therefore bases its financial
corrections on extrapolation or a flat rate, it shall proceed as follows:
(a)
in the case of extrapolation, it shall use a representative sample of
transactions with like characteristics;
(b)
in the case of a flat rate, it shall assess the importance of the infringement
of rules and the extent and financial implications of any shortcomings in the
management and control system that have led to the irregularity established.
3.
Where the Commission bases its position on the facts established by auditors
other than those of its own services, it shall draw its own conclusions
regarding their financial consequences, after examining the measures taken by
the Beneficiary Country concerned under Section VII of Annex III.1, Sections 18
(1) and (2) of this Annex, the reports supplied under Annex III.5 and any
replies from the Beneficiary Country.
Section
20
1.
The period of time within which the Beneficiary Country concerned may respond
to a request under Section 18.(1), submit its comments and, where appropriate,
make corrections, shall be two months, except in duly justified cases where a
longer period may be agreed by the Commission.
2.
Where the Commission proposes financial corrections on the basis of
extrapolation or at a flat rate, the Beneficiary Country shall be given the
opportunity to demonstrate, through an examination of the files concerned, that
the actual extent of irregularity was less than the Commission’s assessment. In
agreement with the Commission, the Beneficiary Country may limit the scope of
this examination to an appropriate proportion or sample of the files concerned.
Except
in duly justified cases, the time allowed for this examination shall not exceed
a further period of two months after the two-month period referred to in
paragraph 1. The results of such examination shall be examined in the manner
specified in the second subparagraph of Section 18 (1). The Commission shall
take account of any evidence supplied by the Beneficiary Country within the
time limits.
3.
Whenever the Beneficiary Country objects to the observations made by the
Commission and a hearing takes place under the second subparagraph of Section
18 (1), the three-month period within which the Commission may take a decision
shall begin to run from the date of the hearing.
Section
21
1.
Any repayment due to be made to the Commission pursuant to Section 18.3 shall
be effected before the due date indicated in the request sent to the National
Authorising Officer. This due date shall be the last day of the second month
following the date of transmission of the request for repayment.
2.
Any delay in effecting repayment shall give rise to interest on account of late
payment, starting on the due date referred to in paragraph 1 and ending on the
date of actual payment. The rate of such interest shall be one and a half
percentage points above the rate applied by the European Central Bank in its
main refinancing operations on the first working day of the month in which the
due date falls.
3.
A financial correction under Section 18 (2) shall not prejudice the Beneficiary
Country’s obligation to pursue recoveries under Section VII of Annex III.1.
4.
When amounts are to be recovered following a financial correction, the
competent service or body shall initiate recovery proceedings and notify the
National ISPA Co-ordinator, the National Fund and the implementing agencies
thereof.
Section
22
Nothing
in this Annex shall prevent the Beneficiary Country applying rules more
rigorous than those prescribed herein.
ANNEX
III4A
INDICATIVE
DESCRIPTION OF INFORMATION REQUIREMENTS FOR A SUFFICIENT AUDIT TRAIL (Section
6)
A
sufficient audit trail, as referred to in Section 6(2), is present when, for a
given measure, including individual projects within a group of projects:
1.
Accounting records kept at the appropriate management level provide detailed
information about expenditure actually incurred in the co-financed measure by the
implementing agency, including where the latter is not the final recipient of
funding, the bodies and firms involved in the implementation of the measure,
whether as concession-holders, delegatees or otherwise. The accounting records
show the date they were created, the amount of each item of expenditure, the
nature of the supporting documents and the date and method of payment. The
necessary documentary evidence (e.g., invoices) is attached.
2
For items of expenditure relating only partly to the co-financed measure, the
accuracy of the allocation of the expenditure between the co-financed measure
and the rest is demonstrated. The same applies to types of expenditure that are
considered eligible only within certain limits or in proportion to other costs.
3.
The technical specifications and financial plan of the measure, progress
reports, documents concerning tendering and contracting procedures, and reports
on inspections of the execution of the measure in accordance with Section 4 are
also kept at the appropriate management level.
4.
For declaring expenditure actually incurred in the co-financed measure to the
National Fund, the information referred to in paragraph 1 is aggregated into a
detailed statement of expenditure broken down by category. The detailed
statements of expenditure constitute supporting documents for the accounting
records of the National Fund and are the basis for the preparation of
declarations of expenditure to the Commission.
5.
Where there is one or more delegated bodies between the implementing agency or
the bodies or firms involved in implementation of the measure and the National
Fund, each delegated body for its area of responsibility requires detailed
statements of expenditure from the body below it as supporting documentation
for its own accounting records, from which it provides at least a summary of
the expenditure incurred on the measure to the body above it.
6.
In the case of computerised transfer of accounting data, all the authorities
and bodies concerned obtain sufficient information from the lower level to
justify their accounting records and the sums reported upwards, so as to ensure
a sufficient audit trail from the total summary amounts certified to the
Commission down to the individual expenditure items and the supporting
documents at the level of the implementing agency and the other bodies and
firms involved in the implementation of the measure.
ANNEX
III4B
INTERIM/FINAL
CERTIFICATE AND STATEMENT OF EXPENDITURE AND APPLICATION FOR PAYMENT
EUROPEAN
COMMISSION ISPA
Interim/final
certificate and statement of expenditure and application for payment
(to
be sent to Unit … of DG REGIO through official channels)
Name
of measure: ____________________________________
Financing
Memorandum No __________ of ________________
Commission
Reference (CCI No) _________________________
CERTIFICATE
I,
the undersigned ___________________________________, representing the National
Fund designated by6
_________________________________________________________________, hereby certify
that all eligible expenditure included in the attached statement, representing
the contributions of the ISPA and national funding, was paid in line with the
progress of the measure after7: 2 0 EUR
d d m m y y y y (exact
amount to two decimal places)
The
attached statement of expenditure broken down by category of expenditure, and
by measure in the case of a group of projects, covers expenditure up to
2 0 (dd/mm/yyyy)
and
is an integral part of this certificate, as is the accompanying report on
progress of the measure compared with plans/final report.
I
also certify that the measure is making satisfactory progress towards
completion/has been completed in accordance with the objectives and that the
information given in the progress report/final report is correct.
I
further certify that the measure is being/has been implemented in accordance
with the terms of the Financing Memorandum, in particular as regards:
(1) compliance with the rules on protection
of the environment, transport (including trans-European networks), competition,
and the award of public contracts (Practical Guide to Phare, ISPA and Sapard);
(2) application of management and control
procedures to the measure, in particular to verify the reality of expenditure
claimed and the proper execution of the measure in accordance with Section 4
and to prevent, detect and correct irregularities, pursue fraud, and recover
unduly paid amounts (Annex III.5 thereto).
In
accordance with Section X of Annex III1, the supporting documents are and will
continue to be available for a minimum period of five years following payment
of the balance by the Commission.
I
certify that:
(1) the statement of expenditure is accurate
and results from accounting systems based on verifiable supporting documents;
(2) the statement of expenditure and the
application for payment take account of any recoveries made and interest
received thereon;
(3) details of the underlying transactions
are recorded, where possible, on computer files and are available on request to
the Commission departments responsible
Datum 2 0 (dd/mm/yyyy)
___________________________
___________________________
Name
in capitals, stamp, position and signature of competent authority
ANNEX III.4.C
INDICATIVE MODEL FOR THE
DECLARATION AT THE WINDING UP OF A MEASURE11(Section 14)
To
the European Commission, Directorate-General for Regional Policy
INTRODUCTION
1. I,................... (state name in
capitals, title and department), have examined the final statement of
expenditure for................... (name and CCI reference number of ISPA
measure) and the application to the Commission for payment of the balance of
the Community aid.
SCOPE
OF THE EXAMINATION
2. I conducted the examination in
accordance with the provisions of Section 14, 15 and 16 of Annex III.4. I
planned and performed the examination with a view to obtaining reasonable
assurance about whether the final statement of expenditure and application for
payment of the balance of the Community aid and the final report are free of
material misstatement, particularly as regards the execution of the measure12
in accordance with the terms and conditions of the decision and the objectives
assigned to it. The procedure followed and the information used in the
examination, including the conclusions of checks carried out in previous years,
are summarized in the attached report.
OBSERVATIONS
3. The scope of the examination has been
limited by the following:
(a)
(b)
(c), etc.
(Indicate any obstacles encountered
in the examination, for example systemic problems, management weaknesses, lack
of audit trail, lack of supporting documentation, cases under legal
proceedings, etc.; estimate the amounts of expenditure affected by these
obstacles and the corresponding Community aid).
4. The examination, together with the
conclusions of other national or Community controls to which I have had access,
revealed a low/high (indicate as appropriate; if high, explain) frequency of
errors/irregularities. The errors/irregularities reported have been
satisfactorily dealt with by the responsible authorities and they do not appear
to affect the amount of the Community aid payable, with the following
exceptions:
(a)
(b)
(c) etc.
(Indicate the errors/irregularities
which have not been satisfactorily dealt with, and for each case, the possible
systemic character and extent of the problem and the amounts of Community aid
which appear to be affected).
CONCLUSION
Either
If
no obstacles were encountered in the examination, the frequency of errors found
is low and all problems have been satisfactorily dealt with:
5(a) In the light of the examination and the
conclusions of other national or Community checks to which I have had access,
it is my opinion that the final statement of expenditure and the final report
present fairly, in all material respects, the expenditure incurred and the work
carried out, in accordance with the Financing Memorandum related to the measure
and its objectives, and that the application to the Commission for payment of
the balance of the Community aid appears to be valid.
Or
If
certain obstacles were encountered in the examination but the frequency of
errors is not high, or if some problems have not been satisfactorily dealt
with:
5(b) Except for the matters referred to at point
3 above (and) the errors/irregularities referred to at point 4 which do not
appear to have been satisfactorily dealt with, it is my opinion, based on the
examination and the conclusions of other national or Community checks to which
I have had access, that the final statement of expenditure and the final report
present fairly, in all material respects, the expenditure incurred and the work
carried out, in accordance with the Financing Memorandum related to the measure
and its objectives, and that the application to the Commission for payment of
the balance of the Community aid appears to be valid.
Or
If
major obstacles were encountered in the examination or the frequency of errors
found is high, even if the reported errors/irregularities have been
satisfactorily dealt with:
5(c) In view of the matters referred to at
point 3 (and) given the high frequency of errors reported at point 4, I am not
in a position to express an opinion on the final statement of expenditure,
final report and application to the Commission for payment of the balance of
the Community aid.
Date,
signature
Annex III5
Agreement with respect
to Irregularities, Recovery of Sums Wrongly Received under ISPA and
on--the-spot checks
Section
1
This
agreement shall not affect the application in the beneficiary countries of
rules relating to criminal proceedings or judicial co-operation between
beneficiary countries, the Commission and beneficiary countries in criminal
matters.
Section
2
(1)
Beneficiary countries shall communicate to the Commission within 3 months of
the entry in force of the Financing Memorandum:
–
the provisions laid down by law, regulation or administrative action for the
application of the measures assisted under ISPA;
–
the list of authorities and bodies responsible for the application of the
measures, the main provisions relating to the role and functioning of those
authorities and bodies and to the procedures which they are responsible for
applying.
(2)
Beneficiary countries shall communicate forthwith to the Commission any
amendments to the information supplied in pursuance of paragraph 1.
(3)
The Commission shall study beneficiary countries’ communications and shall
inform them of the conclusions, which it intends to draw therefrom. It shall
remain in contact with the beneficiary countries to the extent necessary for
the application of this Section.
Section
3
«Irregularity»
shall mean any infringement of a provision of the financing memorandum, or of
the relevant national law, resulting from an act or omission by an economic
operator, which has, or would have, the effect of prejudicing the general
budget of the Communities by an unjustified item of expenditure.
Section
4
(1)
During the two months following the end of each quarter, beneficiary countries
shall report to the Commission, the European anti-fraud office, any
irregularities, which have been the subject of initial administrative or
judicial investigations.
To
this end they shall as far as possible give details concerning:
–
the details of the measure assisted by ISPA,
–
the provision which has been infringed, the nature and amount of the
expenditure; in cases where no payment has been made, the amounts which would
have been wrongly paid had the irregularity not been discovered, except where
the error or negligence is detected before payment and does not result in any
administrative or judicial penalty,
–
the total amount and its distribution between the different sources of
financing,
–
the period during which, or the moment at which, the irregularity was
committed,
–
the practices employed in committing the irregularity,
–
the manner in which the irregularity was discovered,
–
the national authorities or bodies which drew up the official report on the
irregularity,
–
the financial consequences, the suspension if any of payments and the
possibilities of recovery,
–
the date and source of the first information leading to suspicion that an
irregularity was in evidence, the date on which the official report on the
irregularity was drawn up, where appropriate, the beneficiary country and the
third countries involved,
–
the identity of the natural and legal persons involved, save in cases where
such information is of no relevance in combating irregularities on account of
the character of the irregularity concerned.
(2)
Where some of the information referred to in paragraph 1, and in particular
that concerning the practices employed in committing the irregularity and the
manner in which it was discovered, is not available, beneficiary countries
shall as far as possible supply the missing information when forwarding
subsequent quarterly reports of irregularities to the Commission.
(3)
If national provisions provide for the confidentiality of investigations,
communication of the information shall be subject to the authorisation of the
competent court of tribunal.
Section
5
Each
beneficiary country shall forthwith report to the Commission and, where necessary,
to the member states concerned, any irregularities discovered or supposed to
have occurred, where it is feared that:
–
They may very quickly have repercussions outside its territory and/or,
–
They show that a new mal-practice has been employed.
Section
6
During
the two months following the end of each quarter, beneficiary countries shall
inform the Commission, with reference back to any previous report made under
Section 4, of the procedures instituted following all irregularities previously
notified and of important changes resulting therefrom, including:
–
the amounts, which have been, or are expected to be, recovered,
–
the interim measures taken by beneficiary countries to safeguard recovery of
sums wrongly paid,
–
the judicial and administrative procedures instituted with a view to recovering
sums wrongly paid and to imposing sanctions,
–
the reasons for any abandonment of recovery procedures; the Commission shall,
as far as possible, be notified before a decision is taken,
–
any abandonment of criminal prosecutions.
Beneficiary
countries shall notify the Commission of administrative or judicial decisions
or the main points thereof, concerning the termination of these procedures.
Section
7
Should
there be no irregularities to report in the reference period beneficiary
countries shall inform the Commission of this fact within the same time limit
as is set out in Section 4 (1).
Section
8
Where
the competent authorities of a beneficiary country decide, at the express
request of the Commission, to initiate or continue legal proceedings with a
view to recovering amounts wrongly paid, the Commission may undertake to
reimburse to the beneficiary countries all or part of the legal costs and costs
arising directly from the legal proceedings, on presentation of documentary
evidence, even if the proceedings are unsuccessful.
Section
9
(1)
The Commission shall maintain appropriate contacts with the beneficiary country
concerned for the purpose of supplementing the information supplied on the
irregularities referred to in Section 4, on the procedure referred to in
Section 6, and, in particular, on the possibility of recovery.
(2)
Independently of the contacts mentioned in paragraph 1 the Commission shall
inform beneficiary countries where the nature of the irregularity is such as to
suggest that identical or similar practices could occur in other beneficiary
countries.
(3)
The Commission shall organise information meetings at Community level for
representatives of the beneficiary countries in order to examine with them the
information obtained pursuant to Sections 4, 5 and 6, and pursuant to paragraph
1 of this Section, in particular with regard to the lessons to be learned
therefrom in connection with irregularities, preventive measures and legal proceedings.
(4)
At the request of a beneficiary country or of the Commission, the beneficiary
countries and the Commission shall consult each other for the purpose of
closing any loopholes prejudicial to Community interests, which become apparent
in the course of the enforcement of provisions in force.
Section
10
The
Commission shall regularly inform the beneficiary countries, in the framework
of fraud prevention, of the order of magnitude of the funds involved in the
irregularities, which have been discovered and of the various categories of
irregularity, broken down by type and counted up.
Section
11
(1)
Beneficiary countries and the Commission shall take all necessary precautions
to ensure that the information, which they exchange, remains confidential.
(2)
The information referred to in this agreement may not, in particular, be sent
to persons other than those in the beneficiary countries or within the
Community institutions whose duties require that they have access to it, unless
the beneficiary countries supplying it has expressly so agreed.
(3)
The names of natural or legal persons may be disclosed to another beneficiary
countries or Community institution only where this is necessary in order to
prevent or prosecute an irregularity or to establish whether an alleged
irregularity has taken place.
(4)
Information communicated, or acquired in any form whatever pursuant to this
agreement shall be covered by professional confidentiality and be protected in
the same way as similar information is protected by the national legislation of
the beneficiary countries that received it and by the corresponding provisions
applicable to the Community institutions.
In
addition, that information may not be used for any purposes other than those
provided for in this agreement unless the authorities that have provided it
have given their express consent, and provided that the provisions in force in
the beneficiary countries in which the recipient authority is to be found do
not prohibit such communication or use.
(5)
Paragraphs 1 to 4 shall not impede the use, in any legal actions or proceedings
subsequently instituted for non-compliance with Community rules in the area of
pre-accession aid, of information obtained pursuant to this agreement. The
competent authority of the beneficiary countries, which supplied this
information, shall be informed forthwith of such use.
(6)
Where a beneficiary country notifies the Commission that a natural or legal
person whose name has been communicated to the Commission pursuant to this
agreement proves on further inquiry not to be involved in any irregularity, the
Commission shall forthwith inform all those to whom it disclosed that name
pursuant to this agreement of that fact. Such person shall thereupon cease to
be treated, by virtue of the earlier notification, as a person involved in the
irregularity in question.
Section
12
The
amounts recovered shall be shared by the beneficiary countries and the
Community according to the joint co-financing rates in proportion to the
expenditure already incurred by them.
Section
13
On-the-spot
checks and inspections carried out in order to protect the financial interest
of the Community against irregularities as defined at section 3 shall be
prepared and conducted by the Commission in close co-operation with the
competent authorities of the beneficiary country concerned, which shall be
notified in good time of the object and purpose of the checks and inspections
by reference to this Annex, so that they can provide all the requisite help. To
that end, the officials of the beneficiary country concerned may participate in
the on-the-spot checks and inspections.
In
addition, if the beneficiary country concerned so wishes, the on-the-spot
checks and inspections may be carried out jointly by the Commission and the
beneficiary country’s competent authorities.
Section
14
On-the-spot
checks and inspections shall be carried out by the Commission on economic
operators, namely the natural or legal persons and the other entities on which
national confers legal capacity, where there are reasons to think that
irregularities have been committed.
In
order to make it easier for the Commission to carry out such checks and
inspections, economic operators shall be required to grant access to premises,
land, means of transport or other areas, used for business purposes.
Where
strictly necessary in order to establish whether and irregularity exists, the
Commission may carry out on-the-spot checks and inspections on other economic
operators concerned, in order to have access to pertinent information held by
those operators on facts subject to on-the-spot checks and inspections.
Section
15
(1)
On-the-spot checks and inspections shall be carried out on the Commission’s
authority and responsibility by its officials or other servants, duly empowered
by the relevant Commission regulations, hereinafter called ‘Commission
inspectors’. Persons placed at the disposal of the Commission by the
beneficiary country as national experts on secondment may assist in such checks
and inspections.
Commission
inspectors shall exercise their powers on production of a written authorisation
showing their identity and position, together with a document indicating the
subject-matter and purpose of the on-the-spot check or inspection.
Subject
to the Community law applicable, they shall be required to comply, with the
rules of procedure laid down by the law of the beneficiary country concerned.
(2)
Subject to the agreement of the beneficiary country concerned, the Commission
may seek the assistance of officials from the beneficiary countries as
observers and call on outside bodies acting under its responsibility to provide
technical assistance.
The
Commission shall ensure that the aforementioned officials and bodies give every
guarantee as regards technical competence, independence and observance of
professional secrecy.
Section
16
(1)
Commission inspectors shall have access, under the same conditions as national
administrative inspectors and in compliance with national legislation, to all the
information and documentation on the operations concerned which are required
for the proper conduct of the on-the-spot checks and inspections. They may
avail themselves of the same inspection facilities as national administrative
inspectors and in particular copy relevant documents.
On-the-spot
checks and inspections may concern, in particular:
–
professional books and documents such as invoices, lists of terms and
conditions, pay slips, statements of materials used and work done, and bank
statements held by economic operators,
–
computer data,
–
production, packaging and dispatching systems and methods,
–
physical checks as to the nature and quantity of goods or completed operations,
–
the taking and checking of samples,
–
the progress of works and investments for which financing has been provided,
and the use made of completed investments,
–
budgetary and accounting documents,
–
the financial and technical implementation of subsidised projects.
(2)
Where necessary, it shall be for the beneficiary country, at the Commission’s
request, to take the appropriate precautionary measures under national law, in
particular in order to safeguard evidence.
Section
17
(1)
Information communicated or acquired in any form under this Annex shall be
covered by professional secrecy and protected in the same way as similar
information is protected by the national legislation of the beneficiary country
that received it and by the corresponding provisions applicable to the
Community institutions.
Such
information may not be communicated to persons other than those within the
Community institutions or in the beneficiary country whose functions require
them to know it nor may it be used by Community institutions for purposes other
than to ensure effective protection of the Communities’ financial interests in
all beneficiary countries. Where a beneficiary country intends to use for other
purposes information obtained by officials participating under its authority as
observers in on-the-spot checks and inspections, it shall seek the agreement of
the beneficiary country where that information was obtained.
(2)
The Commission shall report as soon as possible to the competent authority of
the country within whose territory an on-the-spot check or inspection has been
performed any fact or suspicion relating to an irregularity which has come to
its notice in the course of the on-the-spot check or inspection. In any event
the Commission shall be required to inform the aforementioned authority of the
result of such checks and inspections.
(3)
Commission inspectors shall ensure that in drawing up their reports account is
taken of the procedural requirements laid down in the national law of the
beneficiary country concerned. The material and supporting documents as
referred to in Section 16 shall be annexed to the said reports. The reports
thus prepared may be used as (admissible) evidence in administrative or
judicial proceedings of the beneficiary country in which their use proves
necessary, in the same way and under the same conditions as administrative
reports drawn up by national administrative inspectors. They shall be subject
to the same evaluation rules as those applicable to administrative reports
drawn up by national administrative inspectors and shall be of identical value
to such reports. Where an inspection is carried out jointly, the national
inspectors who took part in the operation shall be asked to countersigned the
report drawn up by the Commission inspectors.
Section
18
Where
the economic operators referred to in Section 14 resist an on-the-spot check or
inspection, the beneficiary country concerned, acting in accordance with
national rules, shall give Commission inspectors such assistance as they need
to allow them to discharge their duty in carrying out an on-the-spot check or
inspection.
It
shall be for the beneficiary country to take any necessary measures in
conformity with national law.
Annex
III6
Information
and publicity requirements
RULES
ON DETAILED ARRANGEMENTS FOR INFORMATION AND PUBLICITY
1.
Objectives and scope
Information
and publicity measures concerning assistance from ISPA are intended:
–
to increase public awareness and transparency of the activities of the European
Community,
–
to inform the potential beneficiaries and professional organisations about ISPA
possibilities.
Information
and publicity shall concern all measures for which ISPA provides financial
assistance.
The
aim of information and publicity measures shall be to inform the general public
and also potential and final beneficiaries, including:
–
regional, local and any other public authorities,
–
the economic and social partners,
–
non-governmental organisations,
–
project operators and promoters,
–
any other interested parties of the opportunities offered by ISPA.
2.
General principles
The
body responsible for implementing an ISPA project (hereinafter defined as the
«body responsible») shall be accountable for all publicity measures on the
spot. Publicity shall be carried out in co-operation with the Commission
departments, which shall be informed of measures taken for this purpose.
The
body responsible shall take all the appropriate administrative steps to ensure
the effective application of these arrangements and to collaborate with the
Commission departments.
Information
and publicity measures shall be taken in due time, once the assistance of ISPA
is decided. The Commission reserves its right to initiate a procedure for a
reduction, suspension or cancellation of the ISPA assistance, if a beneficiary
country does not fulfil its obligations under the present Annex. In such cases
the procedure specified in Annex III.1 section VIII of the ISPA Financing
Memorandum concluded with each beneficiary country applies.
3.
Guidelines for information and publicity activities
Notwithstanding
the detailed rules laid down under point 4, the following principles shall be
applied in accordance with all information and publicity measures:
3.1
The media
The
body responsible shall inform the media in the most appropriate manner about actions
co-financed by ISPA. European Community participation shall be fairly reflected
in this information.
To
this end, the formal launch of projects and important phases in their
implementation shall be the subject of information measures, particularly in
respect of regional media (press, radio, and television). Appropriate
collaboration must be ensured with the Commission delegations in the
beneficiary countries concerned.
3.2
Information events
The
organisers of information events such as conferences, seminars, fairs and
exhibitions in connection with the implementation of projects part-financed by
ISPA shall make explicit the participation of the European Community. The
opportunity should be taken of displaying the European Community flag in meeting
rooms and the European Community emblem on documents. The Commission
delegations in the beneficiary countries shall assist, if necessary, in the
preparation and implementation of such events.
3.3
Information material
Publications
(such as brochures and pamphlets) about projects or similar measures should
contain on the title page a clear indication of the European Community emblem
where the national, regional or local emblem is used.
Where
publication includes a preface, it should be signed by both the person
responsible in the beneficiary country and, for the Commission, the responsible
Member of the Commission or a designated representative, to ensure that
European Community participation is made clear. Such publications shall refer
to the body responsible for informing interested parties.
The
above-mentioned principles shall also apply to audio-visual and web-site
material.
4.
Obligations of the beneficiary countries
Information
and publicity shall be the subject of a coherent set of measures defined by the
body responsible in collaboration with the Commission for the duration of the
project. Beneficiary countries shall ensure that representatives of the
Commission including its delegations are duly involved in the most important
public activities connected with ISPA.
When
projects are implemented, the body responsible shall take the following
measures to indicate the participation of ISPA in the said project:
a)
Project-related information
On
the spot information and publicity measures shall be taken in order to make the
general public aware of European Community assistance through ISPA. The body
responsible should publish the content of the projects in the most appropriate
form and ensure that such documents are disseminated to the local, regional
media and shall hold them available for interested parties. On the spot
measures should include:
–
billboards erected on the sites,
–
permanent commemorative plaques for infrastructures accessible to the general
public
both
to be installed in accordance with the Special arrangements concerning on site
information detailed hereafter.
b)
General ISPA-related information
In
addition to (a), the National ISPA Co-ordinator shall produce regularly a
general information on ISPA assistance allocated in the country, highlighting
the implementation of projects and results achieved. This general information
should be produced at least once a year and be made available to the Commission
for its annual report. This information will take the form of brochures of general
interest, professional audio-visual material (e.g. videoclip) and news
conferences at appropriate level. This information shall group projects by
nature and / or focus on projects of relevant interest. It should delivered to
national, regional televisions and radio stations, to the Commission and, on
demand, to other interested parties as defined in paragraph 1.
5.
The work of the Monitoring Committees
–
The Commission representatives in the Monitoring Committee, in collaboration
with the National ISPA co-ordinator, shall ensure compliance with the
provisions adopted concerning publicity, particularly those concerning
billboards and commemorative plaques (see special arrangements hereafter).
–
Information on publicity measures and suitable evidence such as photographs
shall be submitted to the Chairman of the Monitoring Committees by the body
responsible. Copies of such material shall be transmitted to the Commission.
–
The Chairman of the Committees shall forward to the Commission all the
information needed to take into account for its annual report.
–
The Monitoring Committees shall ensure that there is adequate information
concerning their work. To this end, each Monitoring Committee shall inform the
media, as often as considered necessary, of the progress of the project(s), for
which it is responsible. The Chairman is responsible for contacts with the
media and the Commission representative shall assist him.
–
Appropriate arrangements shall also be made, in collaboration with the
Commission and its delegations in the beneficiary countries, when important
events, such as high level meetings or inaugurations, are held.
6.
Final provisions
The
Commission may initiate specific additional measures as deemed appropriate
after discussion with the National ISPA co-ordinator and the body responsible.
The
body responsible may, in any event, carry out additional measures. It shall
consult the Commission and inform it of the initiatives it takes so that the
Commission may participate adequately in their realisation.
In
order to facilitate the implementation of these provisions, the Commission may
provide suitable assistance and may issue guidelines.
Special
arrangements concerning billboards and commemorative plaques
In
order to assure the visibility of ISPA projects, beneficiary countries shall
ensure that the following information and publicity measures are complied with
1.
Billboards
Billboards
shall be erected on the sites of projects assisted by ISPA. Such billboards
shall include a space reserved for the indication of the European Community
participation.
Billboards
must be of a size, which is appropriate to the scale of the operation.
The
section of the billboard reserved for the European Community must meet the
following criteria:
–
it shall take up at least 50% of the total area of the billboard,
–
it shall bear the standardised European Community emblem and the following text
to be presented as in the attached example.
Where
the body responsible does not erect a billboard announcing their own
involvement in the financing of a project, the European Community assistance
must be announced on a special billboard. In such cases, the above provisions
concerning the European Community part apply by analogy.
Billboards
shall be removed no earlier than 6 months after the completion of the work and
replaced by a commemorative plaque in accordance with the provisions under
point 2.
2.
Commemorative plaques
Permanent
commemorative plaques shall be placed at sites accessible to the general
public. In addition to the European Community emblem, such plaques must mention
the European Community contribution to the project.
The
following text should be used as a guideline to the contents required:
«This
project has been co-financed at % by the European Community. Upon completion in
….. (state year), the total cost of the project was …. (national currency), and
the total contribution of the European Community was of….. (national
currency).»
–
EXAMPLE –
Title
of the Project
Location
European
emblem
Financed by:
European Union (grant) …
… € (local currency)
IFI (loan) … € …
(local
currency)
Implementingauthority: {Ministry of …}
{Agency
of …}
Vlasnik: {Name of the owner}
Nadzor
i upravljanje: {Name of the Company}
Izvođač: {Name of the contractor}