Report from the Commission - Annual Report of the Instrument for Structural Policy for Pre-Accession (ISPA) 2006 {SEC(2007)1467}
Date: 2007-11-07
Institutions: European Commission
Subjects: activity report, pre-accession aid

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 7.11.2007 
COM(2007) 685 final 

REPORT FROM THE COMMISSION 

Annual Report of the Instrument for Structural Policy for Pre-Accession (ISPA) 2006 

{SEC(2007)1467} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

6.1. 

6.2. 

6.3. 

7. 

8. 

Introduction .................................................................................................................. 3 

ISPA budget ................................................................................................................. 3 

Project funding ............................................................................................................. 3 

New ISPA projects....................................................................................................... 3 

Projects funded during 2000-2006 ............................................................................... 4 

Payments ...................................................................................................................... 5 

Technical assistance ..................................................................................................... 5 

Technical assistance on the initiative of the beneficiary country ................................ 5 

Technical assistance (TA) on the initiative of the Commission .................................. 6 

Management and implementation ................................................................................ 7 

Project monitoring........................................................................................................ 7 

Financial management and control – incl. EDIS ......................................................... 7 

European Court of Auditors findings........................................................................... 8 

Co-financing partners – EIB, EBRD and KfW............................................................ 8 

Contribution to Community policies............................................................................ 9 

Public procurement ...................................................................................................... 9 

Environment policy...................................................................................................... 9 

Transport policy ........................................................................................................... 9 

Co-ordination among pre-accession instruments ....................................................... 10 

Seven years of ISPA: Some Lessons Learned ........................................................... 10 

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REPORT FROM THE COMMISSION 

Annual Report of the Instrument for Structural Policy for Pre-Accession (ISPA) 2006 

1. 

INTRODUCTION 

This report is presented in accordance with Article 12 of the ISPA Regulation. It is 
the  7th  Annual  Report  covering  the  ISPA  activities  during  2006.  In  addition  to 
Bulgaria and Romania, which are receiving ISPA assistance since the launch of this 
instrument  in  2000,  the  present  report  also  covers  Croatia,  which  became  an  ISPA 
beneficiary country following the June 2004 European Council decision to award her 
the status of candidate country. 

For  all  these  countries,  2006  entailed  various  challenges.  Whereas  for  Croatia  the 
major  goal  was  to  fully  commit  its  ISPA  allocation,  Bulgaria  and  Romania  had  to 
accelerate and improve further implementation of ISPA funds while at the same time 
they  had  to  start  preparing  future  projects  for  the  Cohesion  and  Structural  funds  to 
which  they  are  entitled  upon  accession.  The  report  analyses  progress  in  project 
funding,  management  and  implementation  and  contribution  to  EU  policies, 
concluding that 2006 has seen important progress. As 2006 was the last year of ISPA 
assistance, except for Croatia, the concluding section also offers an assessment of the 
lessons learned over its seven years of implementation. 

2. 

ISPA BUDGET 

In  the  Commission  budget  for  2006,  €585  million  was  allocated  to  the  ISPA 
instrument.  The  appropriations  covered  all  expenses  for  co-financing  projects 
(measures)  in  the  field  of  environment  and  transport,  as  well  as  for  providing 
technical assistance (TA), irrespective whether the TA measures were initiated by the 
beneficiary countries or by the Commission. 

Table 1: ISPA budget in 2006 – in Euro  

Budget line 

Functional budget 
line B13.01.04.02 
Operational budget 
line B13.05.01.01 

Commitment 
appropriations 

Commitments 
consumed 

Payments 
implemented 

4,500,000 

2,338,712 

2,154,419 

580,500,000 

580,350,000 

175,579,778 

Total 

585,000,000 

582,688,712 

177,734,197 

3. 

PROJECT FUNDING 

3.1. 

New ISPA projects 

In  2006,  the  Commission  approved  11  new  ISPA  measures.  The  total  ISPA 
contribution  for  the  year  amounted  to  €89.9  million,  representing  an  average  grant 
rate  of  82.8%  of  a  total  eligible  project  cost  of  €134.5  million.  Commitments 

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totalling €89.96 million were used for the new projects and €490.3 million was used 
for ongoing projects.  

Of  the  11  new  ISPA  projects  for  2006,  4  concerned  environmental  protection  -
1 project for water and waste water, including treatment and 1 solid waste project, as 
well as 2 horizontal environmental measures for the preparation of future Cohesion 
Fund and IPA projects.  

There were 5 new projects in the transport sector – 1 for improvements to navigation 
on the Danube River and 4 horizontal transport projects were approved for preparing 
future IPA and Cohesion fund projects in the transport sector covering, strengthening 
institutional capacity and providing technical assistance with railway modernisation 
measures.  

Finally,  2  technical  assistance  projects  provided  support  the  National  ISPA 
Coordinator  in  Croatia  and  ISPA  Monitoring  Committee  meetings  in  Romania. 
Nearly 64.5% of the total ISPA contribution was awarded to the environment sector. 

Table 2: New projects approved in 2006 – in Euro 

Project 
decisions 

Eligible cost 

ISPA 
contribution 

Grant 

rate 

% 

Commitments 

81,540,109 

58,097,883 

71.5 

58,097,883 

52,732,558 

31,557,040 

312,335 

312,335 

77 

100 

31,557,040 

312,335 

Environment 

Transport 

Horizontal TA 

n° 

4 

5 

2 

Total 

11 

134,585,002 

89,967,258 

82.8 

89,967,258 

3.2. 

Projects funded during 2000-2006 

Between  2000  and  2006,  the  Commission  co-financed  107  projects  submitted  by 
Bulgaria,  Croatia  and  Romania:  69  in  the  environment  sector,  33  in  the  transport 
for  achieving  decentralised 
sector,  and  5  horizontal  TA  measures 
implementation  (EDIS)  and  four  for  organising  monitoring  committees  and 
supporting  implementing  agencies).  These  projects  represent  a  total  project  cost  of 
€4.81  billion,  of  which  €4.43  billion  are  eligible  for  ISPA  funding.  ISPA  funds 
contributed  67.36%,  or  €2.98  billion,  to  these  eligible  investment  costs.  A  strict 
balance between both sectors was maintained. 

(one 

By the end of 2006, more than €2.981 billion of ISPA funds had been allocated for 
the three beneficiary countries for the period 2000–2006. Out of this amount 100% 
has been committed. 

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Table 3: Projects approved in 2000-2006 – in Euro 

Project 
decisions 

Sector 

Eligible cost 

ISPA 
contribution 

Average 
grant rate 

% 

Commitments 

Environment 

Transport 

Horizontal TA 

n° 

69 

33 

5 

2,079,790,226 

1,497,166,495 

71.99 

1,497,166,495 

2,344,434,543 

1,482,548,029 

63.24 

1,482,548,029 

1,945,643 

1,945,643 

100 

1,945,643 

Total 

107 

4,426,170,412 

2,981,660,167 

67.3 

2,981,660,167 

3.3. 

Payments 

Between 2000 and 2006, €2.981bn was committed for a total of 107 projects in the 
three beneficiary countries. Payments at the end of 2006 equate to 24.6% (amounting 
to €733 mln) of the total ISPA funds allocated, consequently, €2.248 bn still remain 
to be paid out in the years to come. The development of payments in 2004, 2005 and 
2006  was  €132.3  mln  in  2004  and  €229.1  mln  in  2005,  but  payments  declined  to 
€174.3  mln  in  2006.  Reflecting  the  substantial  acceleration  of  payments  between 
2004  and  2005,  all  payment  credits  initially  foreseen  in  the  Commission's  2005 
budget were absorbed. The decline of payments to 2006 resulted in unused payment 
appropriations of about € 46 mln.  

The reason why payments for Bulgaria and Romania decreased in the 2005/06 period 
in  relation  to  those  made  in  the  2004/05  period  is  that  projects  had  not  progressed 
sufficiently to give rise to significant intermediate payments. Payments in the period 
up  to  2004/05  were  boosted  by  some  large  first  instalments  of  the  advances. 
Thereafter,  the  second  instalments  depend  on  contracts  being  signed  while  the  first 
intermediate  payments  depend  on  actual  expenditure  on  the  ground.  For  Croatia, 
which joined the ISPA family in 2005, the first payments (first advances) were made 
in 2006. 

Table 4: Payments – in Euro 

Sector 

2000-2005 

2006 

Total 

Environment 

255,243,502.98 

87,328,724.24 

342,572,227.22 

Transport 

302,711,402.35 

86,490,276.60 

389,201,678.95 

TA 

Total 

987,324.40 

482,691.08 

1,470,015.48 

558,942,229.73 

174,301,691..92 

733,243,921.65 

4. 

TECHNICAL ASSISTANCE 

4.1. 

Technical assistance on the initiative of the beneficiary country 

TA  measures  for  project  preparation  have  to  ensure  that  beneficiary  countries 
present  a  sufficient  number  of  quality  projects  in  time  for  funding,  incl.  for  future 

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funding from the Cohesion Fund and IPA. Similarly, TA measures for institutional 
strengthening  aim  at  enhancing  the  capacity  of  the  beneficiary’s  administration  to 
manage and monitor the implementation of large-scale infrastructure investments.  

In 2006, 4 applications concerning project preparation in the transport sector and two 
applications concerning project preparation in the environment sector were approved. 
A further 2 TA projects were approved for institutional capacity building. 

When considering the period 2000-2006, ISPA awarded over €149 million to more 
than 29 projects concerning institutional building or the preparation of projects.  

Table 5: Technical assistance on the initiative of the beneficiary country 
2000-2006 - in Euro 

Sector 

N° of projects 

Eligible cost 

ISPA contribution 

Environment 

Transport 

Horizontal TA 

Total 

9 

15 

5 

29 

87,791,848 

99,493,298 

1,945,643 

64,434,542 

82,833,250 

1,945,643 

189,230,789 

149,213,435 

4.2. 

Technical assistance (TA) on the initiative of the Commission 

TA  at  the  Commission's  initiative  essentially  provides  for  funds  either  to 
Commission  services  for  performing  essential  control  and  programme  management 
functions,  or  directly  to  beneficiaries  for  certain  critical  horizontal  services.  The 
activities fall into three categories: 

•  local technical intra-muros assistance (to cover salaries for contracted staff in EC 
Delegations in Bulgaria, Romania and Croatia, as well as their overhead costs);  

•  extra-muros support to EC Delegations (essentially to cover contracted expertise 
necessary for performing ex-ante control tasks on procurement documents, and to 
cover training activities); and 

•  Service contracts and grants for project appraisal assistance, policy development, 
strategic  analysis,  advisory  services,  monitoring  and  similar  implementation 
activities. 

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Table 6: Technical assistance on the initiative of the Commission 2006 
in Euro 

Activity 

Commitments consumed 

Payments1 

Intra-muros support 

1,880,800 

Extra-muros support 

Service contracts and grants2 

Total 

457,912 

80,000 

2,418,712 

1,478,984 

675,435 

1,278,086 

3,432,505 

(1) include all payments made in 2006, of which some relate to commitments predating 2006 

(2) Including some activities relating to ISPA beneficiary countries which became Member state in 2004  

5. 

MANAGEMENT AND IMPLEMENTATION  

5.1. 

Project monitoring 

After  EDIS,  which  was  granted  to  Romanian  implementing  agencies  in  summer 
2006, the Delegation continued to monitor tendering and contracting activities until 
accession. Apart from exerting the Commission powers for endorsing tendering and 
contracting  (prior  to  EDIS),  it  is  best  placed  to  ensure  progress  on  the  ground  and 
liaise with national authorities and final beneficiaries on any problem that may arise.  

While  for  Bulgaria  and  Romania  the  first  ISPA  projects  were  approved  by  the 
Commission  in  2000,  implementation  of  these  projects  started  at  best  in  2001, 
generally, by tendering the service contracts  for supervision of the implementation. 
However,  due  to  delays  in  the  tendering  and  contracting  process,  the  first  actual 
works  contracts  were  not  signed  until  2002.  Progress  on  the  ground  has  slowly 
gained pace since then, which is witnessed by the progress in the payments made by 
the Commission to the national authorities of these two acceding countries. 

With regard to Croatia, by the end of 2006 implementation had not yet commenced 
on any project. However, the first two tenders for service contracts were announced 
in January 2007.  

5.2. 

Financial management and control – incl. EDIS 

The  principal  requirements  for  both  the  financial  management  and  control  and  the 
treatment of irregularities are governed by the provisions of the ISPA Regulation and 
of Annex III of the Financing Memoranda, as applicable under the regime of ex ante 
control by the Commission. The key elements relate to the establishment of internal 
financial  control  systems  and  procedures  that  can  ensure  transparent  and  non-
discriminatory  procurement  procedures,  the  accuracy  of  declared  expenditure, 
adequate internal audit capability, sufficient audit trail and appropriate treatment of 
irregularities. 

In 2006, four audit missions were carried out in Romania and Bulgaria in the context 
of  the  EDIS  process  where  the  final  stage  consists  of  a  verification  audit  by  the 

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Commission  auditors  with  the  objective  to  assess  the  readiness  of  the  acceding 
countries to assume full responsibility for tendering and contracting by waiving the 
ex-ante controls made by the EC delegations.  

In  parallel  with  EDIS,  a  number  of  project  audits  were  carried  out  in  Romania  in 
order to verify the legality and regularity of the expenditure declarations submitted to 
the Commission and the related payments. The main issues in this respect concerned 
ineligible  expenditure  certified  to  the  Commission,  lack  of  supporting  documents, 
verification  of  eligibility  of  expenditure  which  was  incompletely  or  not  adequately 
documented,  addenda  to  contracts  not  correctly  processed  and  publicity  and 
information measures not fully complied with.  

A  number  of  project  audits  were  also  carried  out  in  Bulgaria.  In  general,  the  main 
findings were reflecting the shortcomings identified during the system audits, namely 
the insufficient quality of tendering and contracting dossiers, particularly in relation 
to  modifications  of  contracts,  the  need  to  improve  the  verification  of  expenditure 
declarations and the incomplete adherence to publicity and information requirements. 
Due  to  very  slow  progress  of  ISPA  projects  in  Croatia  in  2006,  the  audit  work 
consisted of desk work in relation to issues outstanding after the system audits which 
were carried out during the second half of 2005 and which effectively supported the 
Commission's  decision  to  grant  DIS  to  Croatia  in  February  2006.  The  main 
outstanding deficiency relates to the development of an effective and coherent staff 
retention policy. 

5.3. 

European Court of Auditors findings  

The  Court  of  Auditors  performed  a  limited  review  at  the  Commission  involving 
mainly an examination of Commission activities concerning management and control 
systems  in  one  of  the  candidate  countries  (Croatia)  and  in  the  accession  countries 
(Bulgaria  and  Romania),  including  an  examination  of  the  progress  of  EDIS  for  the 
latter countries. 

The conclusion of the Court was that, overall, taking into account the audit scope, the 
transactions  audited  were  not  materially  affected  by  error.  While  the  Court  noted 
improvements in the supervisory and control systems at the level of the Commission, 
important weaknesses were noted at national level. In the case of ISPA projects, the 
relatively high frequency of these weaknesses was compensated by corrective action 
resulting from the Delegation’s ex-ante controls. 

5.4. 

Co-financing partners – EIB, EBRD and KfW  

Given  their  expertise  in  project  preparation  and  implementation,  the  Commission 
regularly met these lending institutions and, where possible,  organised  joint  project 
identification  and  appraisal  missions  for  projects  for  which  loan  financing  was 
sought. In 2006 one loan was provided for a project by the EIB. 

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6. 

CONTRIBUTION TO COMMUNITY POLICIES 

6.1. 

Public procurement 

The  fulfilment  of  legal  requirements  for  sound,  fair  and  transparent  public 
procurement  as  enshrined  in  the  PRAG  (Practical  Guide  to  contract  procedures  for 
EC external actions) has proved to be a major challenge for the acceding beneficiary 
countries. This results from the fact that the qualifications of staff in these countries 
are  not  always  up  to  the  level  of  skills  required  to  manage  complex  infrastructure 
projects, in particular as far as tendering and contracting are concerned. Because of 
the  difficulties  encountered  in  this  area,  the  Commission  has  put  many  efforts  into 
developing technical assistance activities which focused on strengthening recipients’ 
procurement skills, systems and procedures. Amongst others, it continued to organise 
various seminars  and training sessions, including  the  dissemination  of  manuals  and 
practical guides. 

6.2. 

Environment policy 

By providing direct assistance to priority projects for environment, ISPA facilitates 
the  implementation  of  environmental  policy  and  compliance  with  EU  standards  in 
the beneficiary countries. In particular, administrative capacity has been strengthened 
in  regard  to  environmental  investment  planning  and  prioritization,  and  steady 
progress  has  also  been  made  in  proper  implementation  of  the  EIA  directive, 
including aspects related to public consultation. However, problems in relation to the 
difficulties  of  the  environmental  authorities  in  obtaining  adequate  funding  and 
staffing  as  well  as  the  lack  of  co-ordination  between  policy  fields  and  of  strategic 
planning need to be addressed further by these countries. 

6.3. 

Transport policy 

The  transport  networks  in  the  beneficiary  countries,  in  the  case  of  Bulgaria  and 
Romania,  agreed  in  accordance  with  TINA  (Transport  Infrastructure  Needs 
Assessment),  were  constructed  around  the  framework  of  pan-European  corridors. 
These networks are used as the planning basis for the national transport strategies for 
ISPA  purposes,  i.e.  concern  the  construction  or  rehabilitation  of  a  section,  nodal 
point  or  access  relating  to  the  networks.  Six  of  the  afore-mentioned  corridors  run 
across  the  territory  of  Bulgaria,  Croatia  and  Romania.  Under  the  new  Community 
guidelines  for  the  development  of  the  trans-European  transport  network  (TEN-T), 
three  of  the  network’s  priority  projects  (motorway  axis  Igoumenitsa/Patra-Athina-
Sofia-Budapest,  inland  waterway  axis  Rhine/Meuse-Main-Danube  and  railway  axis 
Athina-Sofia-Budapest-Wien-Praha-Nürnberg/Dresden) concern axes which include 
Bulgaria  and  Romania,  and  one  includes  Croatia  (railway  axis  Lyon-Trieste-
Divaca/Koper-Divaca-Ljubljana-Budapest-Ukranian  border.  In  the  case  of  Croatia, 
which was not included in the TINA Study, transport infrastructure needs have been 
established  in  accordance  with  the  priorities  identified  in  the  REBIS  (Regional 
Balkans  Infrastructure  Study  –  Transport)  study.  Accordingly  an  additional  railway 
axis (Salzburg - Ljubljana - Zagreb - Beograd - Nis - Skopje – Thessaloniki) has been 
identified as a priority project. 

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7. 

CO-ORDINATION AMONG PRE-ACCESSION INSTRUMENTS 

As  required  by  the  Coordination  Regulation,  the  Commission  ensures  close  co-
ordination  between  the  three  pre-accession  instruments  PHARE,  SAPARD  and 
ISPA.  The  Regulation  carefully  specifies  the  fields  to  which  each  instrument 
provides  assistance,  thereby  minimising  potential  overlaps  between  the  different 
instruments. 

The  PHARE  Management  Committee  ensures  co-ordination  among  these  three 
instruments,  whereas  further  co-ordination  is  implemented  through  the  (PHARE) 
Joint  Monitoring  Committee,  the  inter-services  Co-ordination  Committee  and 
periodic meetings with the EC Delegations in the beneficiary countries. 

8. 

SEVEN YEARS OF ISPA: SOME LESSONS LEARNED 

Since 2006 was the last year for ISPA – at least for the vast majority of the projects 
and  beneficiary  countries  (only  the  6  Croatian  projects  will  be  continued  to  be 
implemented under the ISPA Council Regulation) – it is appropriate to draw a few 
lessons from the experience gained over the last 7 years. 

ISPA  was  conceived  in  1999  with  the  view  to  provide  funding  for  infrastructure 
upgrading and to prepare the Eastern and Central European Candidate Countries for 
the absorption of Cohesion policy instruments, more precisely the Cohesion Fund for 
which  less  developed  Member  States  are  eligible.  Consequently,  the  ISPA  Council 
Regulation was closely tailored after the Cohesion Fund Regulation as far as areas of 
eligibility  (environment  and  transport)  and  the  management  and  control  system  are 
concerned. Regarding the latter, it must be noted that differences in the management 
system  mainly  relate  to  the  fact  that  certain  essential  provisions  for  public 
procurement and financial control need to comply with external aid rules.  

ISPA  provided  grant  funding  of  key  infrastructure  on  an  unprecedented  scale. 
For Romania, Bulgaria and Croatia alone, 107 projects are being financed, benefiting 
from Community grants of €3 billion and mobilising €4.8 billion of total funds. 

Beneficiary countries were requested to prepare ISPA investment strategies covering 
seven years. These were national documents, but their contents and quality needed to 
be accepted by the Commission service prior to financing. As such, ISPA introduced 
strategic planning for obtaining Community funds in two sectors which are key for 
fostering economic development and cohesion. 

Strategic planning and project implementation are an invaluable "learning by doing" 
experience  which  will  help  beneficiary  countries  to  become  better  prepared  for 
absorbing Structural and Cohesion Funds upon accession and – in the case of Croatia 
– IPA. 

Over  the  years,  beneficiary  countries  generally  improved  the  quality  of  project 
preparation,  reducing  the  time  –  and  resources  –  necessary  for  the  Commission  to 
approve  projects  for  funding.  With  the  assistance  of  the  Commission  -  and 
international  consultants  –  beneficiary  countries  learned  to  comply  with  essential 
EU law, like the EIA Directives or other relevant environmental norms and acquis, 

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or  public  procurement;  they  developed  capabilities  for  project  preparation  like 
financial analysis, technical studies, design, tendering and contracting, as well as for 
project  implementation.  ISPA  helped  beneficiary  countries  to  become  better 
acquainted  with  new  ways  of  financing  (e.g.  public-private  partnerships),  modern 
planning principles (e.g. sustainable development, environmental impact assessment 
including  public  consultation),  sector  policies  (e.g. 
integrated  water  sector 
investment),  or  modified  national  law  in  areas  essential  for  project  implementation 
(e.g. land acquisition). 

Under  ISPA,  beneficiary  countries  –  and  the  Commission  –  developed  a  close 
relationship with International Financial Institutions (IFIs), in particular the EIB. 
A  significant  number  of  ISPA  projects  are  co-financed  with  IFIs;  IFIs  also 
participated,  where  appropriate,  in  programming  and  appraisal  missions.  Bilateral 
donors  provide assistance, in particular in the early years of ISPA, both for project 
preparation  and  for  investment  financing.  The  synergies  developed  with  IFIs  under 
ISPA contributed to the Commission's decision to set up JASPERS as an instrument 
to assist new Member States in project preparation. 

ISPA  provided  significant  amounts  of  funds  for  technical  assistance  (TA)  for 
project  preparation,  administrative  capacity  building  and  strategic  studies.  TA 
played  a  particularly  important  role  in  providing  funds  for  the  preparation  of 
Cohesion  Fund  projects  for  new  Member  States,  as  well  as  for  IPA  in  the  case  of 
Croatia. 

Most of the ISPA projects in new Member States will be completed under Cohesion 
Fund rules. The similarities of ISPA rules with those of the Cohesion Fund allowed 
beneficiary  countries  who  became  Member  States  in  2004  and  2007,  to  transfer 
without any difficulties from ISPA to the Cohesion Fund.  

Experience  gained  under  ISPA  was  also  taken  on  board  when  the  Commission 
drafted  the  IPA  Council  Regulation  and  related  implementing  provisions.  The 
Regional  Development  Component  of  IPA  unifies  those  areas  of  funding  which  in 
the  2000-  2006  period  were  programmed  under  different  instruments  (ISPA  and 
Phare)  and  managed  by  different  Directorate-Generals  and  puts  responsibility  with 
the  Directorate General for  Regional  Policy. Strategic planning, project preparation 
methodologies,  TA  assistance,  capacity  building  were 
features  developed 
successfully under ISPA and which are now introduced in IPA. 

Last but not least the very active role of Member States in the ISPA Management 
Committee  and  the  competence  of  their  experts  was  an  important  factor  for 
enhancing  the  quality  of  ISPA  projects.  It  underlined  the  cooperative  approach 
developed during ISPA between Member States and Candidate countries.  

On  the  downside,  actual  implementation  progress  on  the  ground  is  far  behind 
(initial) expectations. Given the unprecedented scale and scope of ISPA – as well as 
the  weakness  of  the  national  administrations,  it  could  not  have  been  expected  that 
ISPA would have an easy start. But the fact is that Bulgaria and Romania need more 
than 4 years to pay out the financial commitment of year "n"; and that Croatia, after 
more than 2 years of ISPA, needs yet to sign the first works contract. By the end of 
2006,  only  one  quarter  of  the  funds  that  were  committed  during  the  whole  ISPA 
period have been paid out. In essence, these implementation delays are a result of a 

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lack  of  adequate  capacity,  as  manifested  by  poorly  prepared  projects,  non-
compliance  with  relevant  EU  norms  like  EIA  or  public  procurement,  poor  contract 
management, unclear landownership and delayed land acquisition. 

While  EDIS  was  granted  to  Romanian  Implementing  Agencies  in  June  2006  (the 
largest portfolio ever EDIS-ised before accession) and to some agencies in Bulgaria 
in  November  2006,  EDIS  nevertheless  came  rather  late.  Fully  decentralised 
management before accession is a valuable benchmark for assessing the readiness of 
beneficiary  countries  to  absorb  funds  and  comply  with  financial  management 
requirements, in particular on public procurement. 

While  systems  and  structures  for  programming  and  implementation  are  important 
and  essential,  it  is  staffing  at  an  adequate  level  and  competence  that  makes  them 
operate efficiently. Absence of sustainability of public administration dealing with 
ISPA  was  a  serious  concern  for  a  significant  number  of  implementing  bodies. 
Training  and  project  management  experience  acquired  "on  the  job"  made  experts 
attractive  for  the  private  sector,  thus  leading  to  high  staff  turnover  and  continuous 
concern about vacancies and adequate recruitment ("training for leaving syndrome").  

Preparation for and implementation of ISPA relied heavily on external assistance. 
International  consultants  were  required  to  prepare  projects  of  adequate  quality, 
international  consultants  and  external  advisors  were  needed  to  assist  in  complex 
tender evaluations and implementation supervision, the ex-ante role of the delegation 
was  an  essential  safety  net  to  ensure  compliance  with  procurement  rules.  This 
reliance on external assistance and advice reduces ownership  by  and accountability 
of  the  national  authorities  and  local  bodies,  which  are  an  essential  prerequisite  for 
successful programming and implementation. 

EN 

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   EN