PREPARING TERMS OF REFERENCE FOR TECHNICAL ASSISTANCE PROJECTS FINANCED BY THE EC

Project Cycle Management Manual for End Recipients of EU Funds in the Environmental Sector

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ANNEX CPREPARING TERMS OF REFERENCE FOR TECHNICAL ASSISTANCE

PROJECTS FINANCED BY THE EC


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PurposeTerms of Reference (TOR) should provide a clear description of:

The rationale for undertaking an assignment or study

The expected methodology and work plan (activities), including timing and duration

The anticipated resource requirements, particularly in terms of personnel; and

Reporting requirements

The Terms of Reference are often a key contractual document against which the performance of contractors, consultants and / or other stakeholders can be measured.

TOR in the Project Cycle Terms of Reference are used throughout the project cycle to help specify work which needs to be carried out or to provide support. When EU funds are being used, they are usually required for:

Pre-feasibility studies

Feasibility and design studies

Appraisal / quality support missions

Implementation contracts

Monitoring and review missions / contracts

Evaluation studies

Other technical advisory / support work required at any stage of the project cycle

AuditsA copy of the standard format for TOR for EU-funded service contracts can be obtained from:

http://ec.europa.eu/europeaid/work/procedures/implementation/services/annexes_standard_documents/index_en.htm

Format and Content of TOR While the exact content of TOR will vary depending on the scope of the project and the assignment in question, the following generic format is suggested:

1. Background to the assignment

2. Study / mission objectives

3. Issues to be studied

4. Methodology

5. Expertise required

6. Reporting requirements

7. Work plan and timetable

A brief description of the type of information that might be contained in a TOR is provided in the following sub-sections. This is provided for guidance only and does not imply that all the issues listed need to be considered by every study team / mission, or that the work necessarily needs to be contracted out.

Background to the Assignment This section should provide an overview of the history behind the assignment and its rationale. It should clearly establish why the assignment is being carried out and relate it to the wider policy or programming context. This section could vary in length from a few paragraphs to one or two pages, and should generally:


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Place the assignment in the context of EC and National strategies, policies and programme priorities.

State the role of the partner government / other local stakeholders in undertaking the assignment.

Provide a brief history of the project to date. This should allow the reader to understand what important prior work has been carried out (and by whom), what formal approvals / agreements have been reached, and the current status of the project in the project cycle.

Study / Mission Objectives The purpose of the section is to state clearly and concisely what the assignment is expected to achieve, and who the target audience is, for example:

For a Pre-feasibility Study: To provide decision-makers in the [responsible Contracting Authority] and the European Commission with sufficient information to justify the acceptance, modification or rejection of the proposed project idea, and determine the scope of follow-up planning work (i.e. a feasibility / design study).

For a Feasibility Study: To provide decision-makers in the [responsible Contracting Authority] and the European Commission with sufficient information to justify the acceptance, modification or rejection of the project proposal, and if deemed feasible, to provide adequate information on which to proceed to concluding a financing agreement.

Issues to be Studied Pre-feasibility Study during the Project Identification Phase: During this phase, the following issues could be included for study / assessment:

Assess the proposed projects coherence with relevant EC and National strategies, policies and programme priorities.

Assess the proposed projects coherence with the national development policy and sector policies and expenditure plans.

Identify key stakeholders and target groups, and assess institutional capacity issues and degree of local ownership.

Identify the key problems to be addressed and development opportunities, and prepare a preliminary problem analysis.

Identify lessons learned from past experience and analyse the proposed projects coherence with current / on-going initiatives.

Analyse and as appropriate re-formulate preliminary project objectives and proposed implementation strategy.

Analyse and as appropriate formulate proposed management / coordination arrangements.

Analyse and document sustainability issues including the financial and economic sustainability of the proposed measure.

Analyse and document cross-cutting issues including gender, environmental and human rights implications.

Analyse and document likely resource / cost implications.

Prepare a draft Logframe matrix (as appropriate).

Highlight areas requiring further analysis and provide clear recommendations on the next steps (including Terms of Reference for a Feasibility / Design Study).

Feasibility / Design Study during the Project Formulation Phase: Building on the work of any previous studies, the following issues could be further assessed / analysed:

Analyse the proposed projects coherence with relevant EC and National strategies, policies and programme priorities.

Analyse the proposed projects coherence with the national development policy and sector policies and expenditure plans.


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Identify key stakeholders and target groups, and assess institutional capacity issues and degree of local ownership.

Prepare a clear and appropriately structured problem analysis.

Analyse lessons learned from past experience and ensure coherence with current / ongoing initiatives.

Provide a clear analysis of strategy options and justification for the recommended implementation strategy.

Provide a set of clear and logically coherent project objectives (goal, purpose, outputs) and a set of indicative activities for delivering each project output.

Provide a Logframe matrix with supporting activity and resource / cost schedules.

Provide a description of the proposed performance measurement (monitoring, review and evaluation) and accountability system.

Provide a description of the proposed management/coordination arrangements, which demonstrates how institutional strengthening and local ownership will be effectively supported

Provide an analysis of assumptions / risks and a risk management plan.

Provide an analysis of sustainability issues including the financial and economic sustainability of the proposed measure, environmental impact, benefits to target groups and the use of appropriate technology.

Prepare Terms of Reference for any consultants / TA to be involved in project implementation.

Prepare any other documents as may be required for supporting the preparation / conclusion of a Financing Agreement.

Methodology The section on methodology should describe how the study / mission will be carried out, including the main methods to be used to collect, analyse, record and report information.

This section should therefore include a description of:

Main phases in the study (i.e. preparatory activities, field work, analysis, report drafting, feedback, editing, report finalisation).

How stakeholders will be involved and participation promoted, including specific target groups.

The location and duration of study activities.

The data / information collection tools that will be used, including any planned surveys, questionnaires, field observations, reference to administrative records and management reports, key interviews, etc.

How data will be analysed and recorded.

How and when specific reports will be produced.

re

dividual team members are identified by title and specific duties

tenderers to be innovative in putting forward a proposed team, methodology, work plan and budget.

Expertise Required The purpose of this section is to specify the professional requirements of the individual and / or team who will undertake the assignment. There are two broad approaches to establishing the required expertise:

A skills or attributes based approach in which the skills and other qualities of the whole team aspecified, but not the exact number of team members or specific composition of the team; and

A duties approach in which inspecified for each of them.

The attributes approach may be preferred when the outputs of the mission can be clearly specified and the intention is to contract a team to undertake the task. This then allows


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However, if the outputs of the mission cannot be adequately specified (but specific tasks can), or if the Contracting Authority wishes to maintain more control over the inputs they are buying then a duties based approach may be preferred. The duties based approach would generally specify:

The exact number of team members and the their required qualifications, experience and other attributes;

The period of engagement of each team member

The exact duties and responsibilities of each team member; and

The relationship between the each team member, including team leadership roles.

Reporting Requirements This section of the TOR should clearly specify the reporting requirements, and might include details of:

The table of contents for the required report (e.g. for a feasibility / design study), including annexes;

The anticipated length of the report;

The language to be used;

The format or font to be used;

The computer software programmes to be used;

The submission date(s) for drafts and final copies;

To whom the report(s) should be submitted;

The number of copies to be produced, and whether in hard copy / and or electronic form;

Whether or not a (face to face) presentation of the contents of the report is required, when and to whom;

Responsibilities for report production and presentation Reference might also be included to relevant EC Guidelines where these provide further guidance with respect to report formats or other reporting requirements.

Work Plan and Timetable This section should provide a summary of the anticipated work plan and timetable, based on an analysis of the issues to be studied, the proposed method and the reporting requirements. This is best presented in the form of an activity schedule / Gantt chart.

The work plan may be presented in more or less detail depending on whether or not the Contracting Authority has a clear idea of how the study should be carried out, and to what extent they want bidders to propose their own methodology, team composition and / or work plan.


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ANNEX ECONTENTS OF TENDER DOSSIERS


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Tender Dossier for Service Contracts:

The Tender Dossier must contain all the provisions and information that tenderers who were invited to tender are required to provide in their tenders: the procedures to follow, the documents to provide, cases of non-compliance, award criteria and their weightings, stipulations regarding subcontracting, etc. The Implementing Body / Contracting Authority is responsible for drawing up these documents.

Tender Dossier Content: a. Instructions to Tenderers These must indicate: The type of contract (i.e. Service) The tender evaluation criteria (and any sub-criteria) and the weightings The possibility of interviews and the timetable for them Whether variants are allowed The proportion of subcontracting which may be authorised The maximum budget available for the contract The currency of the tender

b. Draft Contract and Annexes This includes: The Conditions of Contract The Terms of Reference for the project (which give instructions and guidance to the tenderers on

the tenders they will need to submit and to serve as the contractors mandate and which will become an annex of the contract), with a forecast timetable for the contract implementation and the forecast dates from which the key experts must be available

An overall structure for the Organisation and Methodology to be provided by the tenderer and which will become an annex of the contract

A standard format for the summary and CVs of key staff, to be included as an annex of the eventual contract

The format of the budget (for completion by the tenderer) which will become an annex of the eventual contract

The General Conditions for service contracts The format to be used by a bank or similar institution to provide a guarantee for the advance

payment under the contract Any additional contractual information such tax arrangements for contracts funded by the EU

c. Tender Submission Format The tender must be rejected if the format is not respected. Tenders must reach the Contracting Authority (CA) at the address, date and time given in the

letter of invitation to tender. Tenders must be sent in one envelope containing two envelopes separately sealed, one

containing the technical offers and the other the financial offer. In the tender dossier, a period of validity of tenders for 90 days from the deadlines of the

submission of the tenders is required; therefore the evaluation process must be completed in time to allow the notification of the successful tenderer within the tender validity period.

In exceptional cases, before the period of validity of the tender expires, the CA may ask tenderers to extend the period for a specific number of days, which may not exceed 40 days.

The successful tenderer must maintain its tender for a further 60 days from the date of notification of award.


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Tender Dossier for Supply Contracts:

The Tender Dossier must contain all the provisions and information that tenderers invited to tender need to present their tenders: the procedures to follow, the documents to provide, cases of non-compliance, the award criteria and their weightings, the stipulations regarding sub-contracting, etc. The Implementing Body / Contracting Authority is responsible for drawing up these documents. Given the technical complexity of many supply contracts, the preparation of tender dossier particularly the Technical Specifications may require the assistance of one or more external technical specialist(s).

Tender Dossier Content: a. Instructions to Tenderers These must indicate: The type of contract (i.e. Supply) The selection (concerning the tenderers capacity to execute similar contracts, and technical

capabilities) and award criteria (to be applied only to technically compliant tenders). The grid to be used to evaluate the tenders. Given the wide variety of supplies and their technical

nature, the grid must be individually developed for each tender in a YES/NO format to allow clear assessment whether or not the offer responds to the Technical Specifications

Whether variants are allowed Whether, and in what proportion, sub-contracting is permitted The currency of the tender The format to be used by a bank or similar institution to provide a tender guarantee (1-2% of the

budget available for the contract)

b. Draft Contract and Annexes This includes: The Conditions of Contract The technical annexes, containing any plans and the Technical Specifications (which give

instructions and guidance to the tenderers on the tenders they will need to submit, and to serve as the contractors mandate and which will become an annex of the eventual contract), as well as a provisional timetable for performance

The format of the budget (for completion by the tenderer) The General Conditions for supply contracts The formats to be used by a bank or similar institution to provide guarantees for the advance to

be paid under the contract and the performance guarantee (10% of the contract value) Any additional contractual information

c. Tender Submission Format The technical and financial offers must both be submitted in a separate sealed envelope or each

separately packed in an envelope. The technical offer must satisfy the Technical Specifications in all respects. Variant solutions must

be prepared as a separate offer and can only be considered if a fully responsive technical offer has also been submitted by the tenderer and allowed in the tender dossiers.

The financial offer must be in the currency requested in Tender Dossier and presented in the standard format to facilitate comparison of the financial offers. If this format is not respected, the tender must be rejected.

The period of validity of tenders is fixed at 90 days from the deadline for the submission of tenders.

In exceptional cases, before the period of validity expires, the Contracting Authority may ask tenderers to extend the period for a specific number of days, which may not exceed 40 days.

The successful tenderer must maintain its tender for a further 60 days from the date of notification of award.


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Tender Dossier for Works Contracts:

The Tender Dossier must contain all the provisions and information that tenderers need to present their tenders: the procedures to follow; the documents to be provided; cases of non-compliance; award criteria, etc. The Implementing Body / Contracting Authority is responsible for drawing up these documents.

Tender Dossier Content: a. Instructions to Tenderers These must indicate: The type of contract (i.e. Works) The selection and award criteria (selection criteria concern the tenderers capacity to execute

similar contracts, with particular reference to works executed in recent years. Following selection, the sole criterion for award is price)

The grid to be used to evaluate the tenders. Given the wide variety of works and their technical nature, the grid must be individually developed for each tender in a YES / NO format to allow clear assessment of whether or not the offer responds to the Technical Specifications (which give instructions and guidance to the tenderers on the tenders they will need to submit, and to serve as the contractors mandate and which will become an annex of the eventual contract)

Whether variants are allowed Whether, and in what proportion, sub-contracting is permitted The currency of the tender (Euro) The format to be used by a bank or similar institution to provide a tender guarantee (1-2% of the

budget available for the contract)

b. Draft Contract and Annexes This includes: The General Conditions for the works contract The specific contract conditions which amplify, supplement or derogate from the General

Conditions The technical annexes, containing any plans and the Technical Specifications, as well as a

provisional timetable for performance The format of the Bill Of Quantities / budget (for completion by the tenderer) The formats to be used by a bank or similar institution to provide guarantees for:

o The advance to be paid under the contract o Performance (10% of the contract value)

Any additional contractual information

c. Tender Submission Format The technical and financial offers must both be submitted in a single, sealed envelope or packet. The technical offer must satisfy the Technical Specifications in all respects. Variant solutions can

only be considered if a fully responsive technical offer has also been submitted by the tenderer. The financial offer must be in Euro and presented in the standard format to facilitate comparison

of the financial offers. If this format is not respected, the tender must be rejected. The period of validity of tenders is fixed at 90 days from the deadline for the submission of

tenders. In exceptional cases, before the period of validity expires, the Contracting Authority may ask

tenderers to extend the period for a specific number of days, which may not exceed 40 days. The successful tenderer must maintain its tender for a further 60 days from the date of notification

of award.


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ANNEX GRESPONSIBILITIES OF THE SUPERVISING ENGINEER IN RELATION

TO WORKS CONTRACTS


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FIDIC Yellow Book Design Phase:

Examination of designs with permits. Co-ordination of the tender dossier and the designs. Making proposals for necessary design modifications and consultation about design modification initiatives,

implementation and recording of the permit procedure, acquisition of necessary permits and permit modifications.

Organisation, implementation and recording of the necessary design consultations. Provision of expert control during design phase (for waste management, architectural and specialised

designs). Preparation of reports for the supporting bodies. Co struction and Hand-Over Period: n

Checking the works site reference points and their provision to the contractor. Handing over administrative and public utility permissions and statements to the contractor.

rvision and formulating opinion about the

itative and

g the deadlines and internal deadlines defined in the contract.

nd variation orders, and if necessary the issuing of the

meetings, recording ng problems.

e

ations, and provision of the

ule of defects with nominal values, ordering the immediate remedying of defects and efects

tion and the establishment of the eventual price decrease.

Take-over of work-site, work place, preparation of minutes for the contractor. Examination of officially handed-over documents, supe

modifications and supplements proposed by the contractor. Review and approval of the design drawings submitted by the contractor (yellow book only). Preparation of photographic and video records. Managing engineers designs and documents; permanent and continuous follow-up with attention to the

qualimplementation on the basis of the designs, administrative permissions, provisions;es.quantitative control; in case of defects or alterations, implementing the necessary measur

cords in due time. Supervision of site records and physical progress, making necessary re Checking and approving the reports of the contractor as set forth in the works contract. Checkin Continuous control of quality and its proof; making all necessary measures in order to provide first class

quality. Co-operation with the representatives of the contracting authority, ministries and the organisations

commissioned by the contracting authority; forwarding and presentation of their comments and requests towards the contractor.

Examination of the justification of supplementary works avariation orders within the supervising engineers scope of authority, and obtaining the approval ofcontracting authority as required.

Checking the works to be covered before covering over. ting authority. Participation in the elimination of obstacles arising from the responsibility of the contrac

Facilitation of the organisation of regular on-site consultation meetings, participation in resolviin the minutes the tasks arisen and problems to be solved, making proposals for

Preparation in technical and financial reports as required by the contracting authority. Continuous checking of the performance certificates of the contractor and its accounts. Checking the appropriateness of the works completed and to be accounted for.

The formal and substantial supervisi on of the invoices (for interim and final invoices) of the contractor. Making the necessary provisions for the transfer of the amount of approved invoices within deadline,

checking the formal requirements of invoices and that the provisions of the contracting authority and thEuropean Commission are fulfilled.

Compiling documents for the deliberation of potential invoice discussions; implementation of invoice consultations.

Arranging the technical taking-over at the time requested by the contractor, inviting all relevant parties. Checking and supervision of the documents provided by the contractor which constitute the basis for the

(technical and financial) works taking-over procedure. Taking-over and controlling of quality certificates; the evaluation of the defined quality control on the basis

of quality control results. Commissioning and evaluation of technically required control examin

qualification documentation for the contracting authority. Drawing up the sched

the establishment of the value of amortisation due to non-remediable d Quality classifica


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Issuing a taking-over certificate, handing over of the facilities taken over from the contractor to the

est at completion, authorised recording of the result. contracting authority.

Checking the tOperating Period:

Monitoring the availability of the facility to deliver the required performance levels. Ensuring that the contracted services are provided in accordance with the Operational Performance

Specification. Monitoring compliance with environmental standards and constraints. Implementation and operation of the direct monitoring system established by the Contracting Authority

itself, in addition to the analysis of the monitoring data maintained and provided by the contractor. Receiving, checking and authorising invoices for payments under the contract payment mechanism, at the

specified frequency and within the period allowed for payment, if appropriate. Ensuring that latent and inherent defects are addressed at an early stage in order to keep asset condition

up to the specified standards, joint inspection with the contractor of repair and maintenance obligations, implementation of renewals or other asset upgrading as required by the Contract.

Monitoring compliance with appropriate regulations including health and safety policies, building and fire regulations and statutory obligations.

Monitoring the implementation of quality management systems, information transfer from the contractor to the Contracting Authority and the updating of records.

lications, any approvals relating to change.

y plans in case of critical failures, loss of power

ority and the contractor, particularly at critical interfaces with other areas of the network.

Dealing with any price variation adjustments (including market benchmarking where appropriate). Monitoring the revenue generated from third parties where appropriate. Inspecting the asset register maintained by the contractor. Dealing with third party and public relations aspects in conjunction with the contractor.

Monitoring that insurances and indemnities are maintained in force.

Developing performance reports on behalf of the Contracting Authority, covering operating loads, and performance history, current and projected costs.

Managing changed conditions, considering options for dealing with change, assessing impnegotiating alterations in arrangements with the contractor, dealing with

Reviewing the development and maintenance of contingencsupply and major changes in load characteristics.

Managing the day-to-day relationship between the Contracting Auth


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ANNEX HGENERAL CHECK-LIST FOR A COHESION FUND APPLICATION


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The purpose of this general check-list for a Cohesion Fund (CF) application is to enable applicants to:

Review and verify that the application form is complete in all respects; and

Ensure that all the required information has been provided, and that relevant supporting documentation has been properly prepared and attached to the application.

A more detailed check-list relating specifically to the economic and financial aspects of an application for CF grant financing is presented in Annex I.

Yes

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General Questions:

1. Has the application form been prepared in the [English] language?

2. Have all pages in the application been numbered? Is the page numbering coherent?

3. Have all the required fields been filled in?

4. Has the application form been signed by the relevant person(s)?

5. Have the following documents been attached to the application form: 1. Feasibility study (up-to-date version, prepared in line with the

guidelines for preparation of feasibility studies for the Priority Axis of the Operational Programme). All financial tables should be presented in electronic versions (i.e. .xls with active formulae).

2. Declaration of the body responsible for the monitoring of Natura 2000 sites.

3. Map at a scale of 1:100 000 presenting the location of Natura 2000 sites.

4. Documentation relating to the EIA compliant with directives 85/337/EEC and 92/43/EEC for all project tasks (documents listed in F.3.2.2 of the application form).

5. List of valid building permits. 6. Project implementation schedule (Gantt chart). 7. List of valid location permits. 8. List of tenders to be issued, including beneficiary's declaration that

the tender specification / tender dossier are prepared. 9. Beneficiarys declaration stating that all contracts in relation to the

project will be carried out in line with the [Law on Public Procurement].

10. Statement of the beneficiary confirming the availability of financial resources for project co-financing.

11. Copy of the Municipal Companys statute with legal documents confirming registration.

12. The decision of the Municipal Council (or other body establishing the Municipal Company) confirming the agreement on project

54 VAT is eligible only when the beneficiary is not able to reclaim it.


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preparation, submission and implementation. 13. Map of the project location (recommended scale 1:25 000) 14. Documents confirming that a Project Implementation Unit has been

established. 15. Beneficiarys declaration that VAT is an eligible expense according

to the provisions of the eligibility criteria defined in the scope of the OP54.

16. Beneficiarys declaration confirming that expenses included in eligible costs, and that were incurred by another entity before submitting the application, meet the requirements of the eligibility criteria. Beneficiarys declaration that it accepts responsibility for the proper management of those expenses.

17. Beneficiarys declaration that the project is not co-financed from other EU instruments.

18. Declaration of the Municipality that the investment is reflected in the municipal multi-annual investment programme or municipal multi-year investment budget.

19. Beneficiarys declaration that it has the necessary legal rights with regard to the land designated for the project (ownership, lease, etc).

20. Beneficiarys declaration that all the information contained in the application form is true and reflects the current legal and actual status, and that all the documents attached are complete.

21. Beneficiarys declaration that the proposed technical solutions are energy efficient (if applicable).

6. Have all the annexes attached to the application been signed on each page by the person authorised to confirm validity of the information provided in the annexes?

A ADDRESSES AND REFERENCES

A.1 Has the applicant provided accurate information on the institution / authority responsible for the application (section A.1 A.1.6)

A.2 Have all the data enabling precise identification of the organisation responsible for project implementation been provided?

A.2.1 Is the name of the beneficiary compliant with court registration, commercial registration or other official documentation confirming registration?

Have tax identification and commercial registration numbers been provided?

A.2.2 Has the address of the beneficiary been provided in accordance with the registration documentation?

A.2.3 2.6

Have current contact details for the person(s) designated by the beneficiary been provided in the application form?


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B. PROJECT DETAILS

B.1 Is the project title identical in all the relevant fields?

Does the title indicate the projects geographical location?

Does the title indicate the phase of the proposed project?

Does the title conform to the limit on the number of characters (ca. 100 characters)? Is the title a single phrase or expression?

B.2.1 Is the code number provided for the priority theme dimension 44 i.e. municipal and industrial waste management (in line with Annex II to Regulation 1828/2006/EC)55

B.2.2 Is the code number provided relevant for the aid scheme for which the applicant is applying, i.e. 01 non-refundable aid

B.2.3 Is the code number provided relevant for the area in which project the will be implemented? Is this code compliant with Annex II to Regulation 1828/2006/EC?

B.2.4 Is the code number provided relevant for the type of economic activity that the project focuses on? Is this code compliant with Annex II to Regulation 1828/2006/EC?

B.2.4.1 Is the code number compliant with the type of economic activity? Is it included in the list of codes for the types of economic activity NACE-Rev.156

B.2.5 Is the code number provided compliant with the project location as stated in the Regulation of the Council of Ministers on Nomenclature of Units for Territorial Statistics (NUTS)?57

B.3.4 Has the field Cohesion Fund been marked?

B.3.5 Has the title of the Priority Axis been provided, [i.e. solid waste management and soil protection]?

B.4a Does the description present the geographical scope of the project, project scope and relevant bodies / institutions?

B.4b Where the project is a phase of an overall project, has a description of the proposed stages of implementation been provided?

55 Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund 56 Nace-Rev.1 4 digit code 57 NUTS codes: http://europa.eu.int/comm/eurostat/ramon/nuts/home_regions_en.html.


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B.4c Have the reasons and criteria for dividing the project into phases been explained?

B.4.2a Does the description of the investment contain information regarding its technical and technological features, location and related activities?

Is the descriptive part no longer than 3 pages (3 x 1,800 characters)?

B.4.2b Have output indicators been described and quantified (with regard to the project works to be carried out)?

B.4.2c Has the target group (main beneficiaries) of the infrastructure been indicated?

B.4.2d If the answer is YES, has the form of PPP been described in detail? Has detailed information been provided regarding how the infrastructure will be managed and operated after project completion?

B.4.2e If the answer is YES, has the information on trans-boundary investment been provided?

B.4.2f Has the field NO been marked?

B 5.1 Has an assessment of current infrastructure been presented (together with project implications on the development of infrastructure)?

Has the current situation been described?

Has the target status been described (in relation to the relevant strategy or national/regional plans, where applicable)?

Has the project influence on the achievement of the strategic objectives been described?

B.5.2 Has the project contribution to the achievement of socio-economic objectives been presented?

B.5.3 Has the applicant described how the project contributes to the achievement of the priorities of the Operational Programme?

Has the applicant stated what % of total and eligible costs directly relates to the achievement of the OPs objectives?

C. RESULTS OF FEASIBILITY STUDIES

C.1 Has a summary of the demand analysis been presented?

Has the methodology of the demand analysis been described?

Has the methodology for forecasting the number of users of municipal solid waste management services been presented?


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Has the method for calculating the predicted waste utilisation rate been presented?

Has household disposable income been calculated?

Has an affordability analysis been conducted?

Has the methodology for forecasting the demand from other users been presented (industry, public sector, commerce)?

Does the overall demand assessment include a statement on changes (if any) in the level of services provided compared to the current status?

C.2 Have alternative project options for meeting strategic policy objectives and legal requirements been identified?

Have the assumptions for carrying out the options analysis been presented (including assumptions regarding investment and operating costs)?

Are the assumptions for comparing different options consistent?

Is the selected project option based on a cost-effectiveness analysis (i.e. Average Incremental Cost)?

C.3 Have the main findings of the feasibility study been presented? Has a justification for the selected option been included?

If the feasibility study was financed with EU assistance, has the required information been presented? Is this information consistent with section I.1.4?

D. TIMETABLE

D.1 Has a project timetable been provided, and a summary schedule of the main categories of works been attached to the application form?

Does the timetable include all relevant phases of the project?

Is the information included in the timetable consistent with the Gantt chart?

Has a brief description of the main categories of works been attached to the summary schedule?

D.2 Has progress to date with regard to the technical and financial components of the project been described?

D.2.1 Has progress with respect to all project components relevant from a technical standpoint been described?

D.2.2 Has the current status with respect to administrative issues


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(authorisations, EIA, land purchase, invitations to tender, etc.) been described?

D.2.3 Have all the sources of project financing been indicated and described?

Is the information presented in section D.2.3 consistent with the information presented in section H.2.2 and I.1.3 58 ?

D.2.4 Has project implementation already started? If yes, has the current status of works been described?

E. COST-BENEFIT ANALYSIS

E.1 Financial Analysis

E.1.1. Have the methodology and assumptions used in the analysis been described?

E.1.2. Have the main elements and parameters used in the CBA been presented in the appropriate fields of the application form?

E.1.3 Have the main results of the CBA been presented in the appropriate fields of the application form?

Has an overall interpretation of the CBA results been presented?

E.1.4. Have data on the project-related user charges and revenues been presented?

E.1.4a Has information on the levels of user charges and the related revenues been presented (including justification)?

E.1.4b Has information on the differentiation of the charges between user groups been provided?

For projects that do not involves user charges: Has the way in which operating and maintaining costs will be covered been described?

E.2 Socio-Economic Analysis

E.2.1 Has the methodology used for the socio-economic analysis been presented?

Have the main conclusions from the analysis been presented?

E.2.2 Have quantifiable and non-quantifiable socio-economic benefits and costs been listed?

E.2.3 Have the parameters and main indicators for the economic analysis

58 A common mistake made by applicants is that information regarding the size of the project (total project costs, eligible costs) varies in different sections of the application form.


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been presented?

E.2.4. Has the project impact on employment been presented?

E.2.5 Have non-quantifiable benefits and costs of the project been presented?

E.3 Risk and Sensitivity Analysis

E.3.1 Has a brief description of the methodology and summary results been presented?

E.3.2 Has the scope of variation in project revenues been described?

Have switching values for the variables been calculated?

Has the impact of changes in selected project variables on basic project parameters been presented?

E.3.3 Have the quantitative outcomes of the risk analysis been presented

F ANALYSIS OF THE ENVIRONMENTAL IMPACT

F.1 Has it been explained: - How the project contributes to environmental sustainability? - How the project respects the principle of preventive action and ensures that environmental damage is rectified at source? - How the project applies the polluter pays principle?

F.2 Has information on the consultation with the environmental protection authorities been presented for all relevant investment tasks?

If yes have the addresses of those authorities been provided?

If information regarding consultations with the environmental protection authorities has not been presented, has the applicant explained the reasons for that?

F.3.1.2 If the development consent has been given for the project, has the date of issuing this consent been provided?

F.3.1.3 If the development consent has NOT been given, has the applicant provided the date when a formal request for development consent was submitted to the competent authority or authorities?

F.3.1.4 Has the applicant provided an expected date for the final decision? Remark: when a decision has not been obtained, the substantive assessment criteria in this respect have not been met!

F.3.2 Application of Directive 85/337/EEC on the Assessment of the Effects of Certain Public and Private Projects on the Environment:


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F.3.2.1 Has the applicant indicated whether the project falls under Annex I, Annex II or is not-covered by the scope of Directive 85/337/EEC?

F.3.2.2 If the project is covered by Annex I of Directive 85/337/EEC, have all the relevant documents been attached?

F.3.2.3 If the project is covered by Annex II of Directive 85/337/EEC and an EIA has been carried out, has the applicant attached all the required documents?

If the project is not covered by Annex II of Directive 85/337/EEC and an EIA has not been carried out, has a justification been provided (with regard to project characteristics, location and potential impacts)?

F.3.3 Application of the Strategic Environmental Assessment Directive 2001/42/EC (SEA Directive):

F.3.3.1 If the applicant has indicated that the project does not result from a plan or programme falling within the scope of the SEA Directive, has an explanation for that been provided?

If the applicant has indicated that the project results from a plan or programme falling within the scope of the SEA Directive, has a reference to the SEA report been provided?

Has a link to the web-page where the non-technical summary of the SEA report carried out for the plan or programme is published been provided (or has an electronic version of the document been attached)?

F.4 Assessment of Effects on Natura 2000 Sites:

If the project is likely to have significant negative effects on Natura 2000 sites, have the conclusions of the relevant assessment been provided?

If the project is not expected to have significant negative effects on Natura 2000 sites, has the applicant attached Annex I, i.e. a declaration of the authority responsible for monitoring Natura 2000 sites?

Has the declaration been signed by the competent authority?

F.5 Additional Environmental Integration Measures:

Have additional measures been incorporated within the scope of the project with respect to environmental aspects (such as environmental audit, environmental management, special monitoring, etc.)?

If additional measures have been incorporated, has the applicant provided information regarding the activities for integrating environmental aspects (such as environmental audit, environmental management, special monitoring, etc.)?

F.6 Where the total project costs include costs for mitigation and/or


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compensation measures for negative environmental impacts, has the estimated proportion (%) of these costs in total costs been provided?

Where the total project costs include costs for mitigation and/or compensation measures for negative environmental impacts, has the applicant provided a brief explanation?

F.7 Has the applicant explained whether the project is consistent with the sectoral/integrated plan and programme associated with the implementation of Community policy or legislation in those areas?

G. JUSTIFICATION FOR THE PUBLIC CONTRIBUTION

G.1 Has the applicant indicated if the project involves State Aid?

If the project involves State Aid, has the amount of aid been indicated? Has the reference number of any relevant documentation approving the aid been provided?

In the case of State Aid falling within the scope of a block exemption, has the relevant reference number been provided?

If the project is awaiting a decision on notified aid, has the relevant reference number been provided?

G.2 Has a description of the impact of Community assistance on project implementation been provided?

H. FINANCING PLAN

H.1 Have the data for all the cost categories listed in the table been provided?

Have the data on all eligible costs been provided?

Confirm that table H1 does not contain any calculation errors!

H.2.1 Is the sum of eligible costs in table H.1 (point 12.C) identical with the sum provided in point H.2.1 of the application form?

Is the funding gap rate presented in table H.2.1.2 the same as the funding gap rate presented in E.1.2.11?

Is the value in field no 3 of table H.2.1 calculated according to the formula presented in the table?

Is the co-financing rate in table H.2.1 (point 4) equal to 75%?

H.2.2 Have all the sources of co-financing the total investment costs been presented?

Is the total investment cost provided in section H.2.2a of the application


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equal to the value provided in section H.1A, item 12?

H.3 Has an annual financing plan of the Community contribution been presented?

I. COMPATIBILITY WITH COMMUNITY POLICIES AND LAW

I.1.1 Has the applicant stated whether it has applied for financial assistance from other Community sources?

If YES, has the applicant provided details (i.e. EU fund, reference number, amounts requested/granted, date of sending the application)

I.1.2 Has the applicant indicated if the project is complementary with other projects financed (planned to be financed) from EU funds?

If YES, have the all the necessary details been provided (reference no, dates, amounts requested/granted, etc.)?

Has the projects complementarity with other measures which were, are or will be co-financed from other Community sources been described?

I.1.3 Has it been indicated whether an application for a loan or equity support by the EIB/EIF has been submitted?

If yes, have details been provided (relevant financial instrument, reference numbers, dates, amounts included in the application, granted amounts, etc.)?

I.1.4 Has it been indicated whether an application has been submitted for assistance from another Community source for an earlier stage of the project?

Is the information provided in Section I 1.4 consistent with the data in Section H.2.2.?

If YES, have the required details been provided (type of financial instrument, reference numbers, date of application submission, amounts requested / granted)?

Has it been indicated whether the project is subject to a legal procedure within the scope of compliance with Community law?

If the project is subject to a legal procedure within the scope of compliance with Community law, have the required details been provided (i.e. verifying compliance of the projects objectives with the objectives of the Cohesion Fund, compliance with the provisions on environmental protection, in particular provisions regarding the Natura 2000 programme, correct breakdown of project eligible costs, correct calculation of the grant)?

I.3 Has information been provided with respect to the proposed measures


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aimed at publicising Community assistance (i.e. type of measure, short description, estimated costs, duration, etc.)?

Has the information been presented in a tabular form?

Have all the fields in the table been completed?

Are the eligible costs set out in the table consistent with the costs provided in Table H1, Section 8.C?

I.4 Has it been indicated whether technical assistance provided by JASPERS contributed to the preparation of any part of the project?

If technical assistance has been provided by JASPERS, have the project elements where JASPERS had an input been described?

Have the main conclusions and recommendations of the JASPERS contribution been described, and were these taken into account during project finalisation?

I.5 Has the table been completed for every contract notice published in the Official Journal of the European Communities (OJEU)?

If the table was completed, does each reference number actually refer to the contract notice published in the OJEU (attention the contract number should be verified on the website)?

Has an answer been provided to all the questions included in the check-list presented above?

YES/NO

Are all the answers yes or not related YES/NO


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ANNEX ICHECK-LIST FOR THE ECONOMIC AND FINANCIAL ASPECTS OF A

CF APPLICATION


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The application form should be examined within the context of detailed references to the feasibility study, the Cost-Benefit Analysis (CBA) report and the relevant functioning CBA model (with active links and formulae). The focus of this check-list is on Sections E1, H1 and H2 of the application form, these being of particular importance in defining the amount of EU grant.

Application Form Section E: Cost-Benefit Analysis

E.1. Financial Analysis

E1.1 Short Description of Methodology and Specific Assumptions Made The description properly describes the methodology used and the methodology is consistent with EU guidance.

All key assumptions on which the analysis and its results depend are properly identified in the text.

Items to check:

The project is properly defined in accordance with the requirements of the OP.

The project is defined on an incremental basis, i.e. as the difference between the system with the project and the system without the project.

The incremental approach is recognised in terms of incremental investment costs, incremental operating costs, and incremental revenues and benefits59.

All project investment costs over the reference period identified in the feasibility study are properly reflected in the cash flow analysis, e.g. new landfill cells, cell closure; reinvestment (asset replacement).

Specific parameters to check: General: - The Reference period matches the economic life of the project's longest-life asset (typically

between 20 and 30 years). - Discount rates (real rate of 5% for financial analysis; real rate of 5.5% for economic analysis).

Statistical (national and territorial) data and justification of projections - Projections of inflation over the project implementation period. - Projections of real income growth over the implementation period. - Projections of currency exchange rates over the implementation period (if applicable).

Cost data and justification of projections - Unit operating costs are realistic. - Projections of real increases in construction costs over the implementation period are

realistic. - Projections of real increases in the costs of other critical project inputs (including energy costs

and labour costs) are realistic.

Municipal sources - Assumptions regarding per capita water consumption and waste generation are realistic and

based on plausible and defensible data. - Assumptions regarding waste collection coverage are realistic. - Assumptions related to waste recycling and recovery are realistic. - Projected charge collection ratios are realistic. - Data for current receivables (for water) and for WMC revenue are realistic.

59 However, when the project falls under a pre-existing revenue-generating infrastructure, the application of the incremental approach may prove to be difficult or even unworkable. In such cases, the Commission suggests that the method of remaining historical costs is used in the financial analysis. For further information, see Working Document No. 4 Guidance on the Methodology for Carrying out the Cost Benefit Analysis.


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E1.2 Main Elements and Parameters Used for Financial Analysis The reference period as indicated is the same as that actually used in the analysis.

The financial discount rate is the same as that actually used in the analysis.

The financial discount rate is used properly: - Has a constant value discount rate been used? - If yes, has it been used to discount cash flows presented in constant values? - Has a nominal value discount rate been used? - If yes, has it been used to discount cash flows presented in nominal values?

The discounting procedure has been applied properly.

Total initial investment costs before discounting have been calculated properly.

Total initial investment costs after discounting have been calculated properly.

Total initial investment costs used to calculate the funding gap rate exclude physical contingencies (see Working Document 4, English version, page 6).

Depreciation is not included in the cash flows for calculation of the financial indicators (FRR, FNPV) and the funding gap, as this does not constitute a cash outflow.

Reinvestment costs associated with the initial investment are treated as operating costs in the grant calculation formula.

Total eligible costs (undiscounted) have been calculated properly.

If physical contingences are included in the eligible cost (WD4, Page 6) they do not exceed 10% of the total investment cost net of physical contingencies.

The residual value been calculated properly.

The discounted value of the residual value has been calculated properly.

The discounted revenue covers discounted operational costs.

The discounted revenue has been calculated properly.

The discounted operating costs have been calculated properly (including any reinvestment costs).

The discounted net revenue has been calculated properly.

The net revenue is greater than or equal to zero.

The eligible expenditure (discounted investment cost net of physical contingencies minus y.

The maximum contribution from the Funds has been calculated properly.

isd properly:

unt rate

y debt service payments converted to constant year values: unt rate

lue is not taken into account (unless the asset is actually liquidated in the last year of analysis).

discounted net revenue) has been calculated properl

The funding gap rate has been calculated properly.

E1.3 Main Results of the Financial Analys FRR/C and FNPV/C are calculate

- FRR/C < disco- FNPV/C < 0.

FRR/K and FNPV/K are calculated properly on the basis of national capital, excluding the EUgrant and any loans, and including an- FRR/C < FRR/K < disco- FNPV/C < FNPV/K < 0

The project is shown to be financially sustainable. Cumulative (undiscounted) net cash flows are positive over the entire reference period. Net cash flows considered for this purpose take into account investment costs, all (national and EU) financial resources and net revenues. The residual va


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The project operator (i.e. the company or institution operating the project assets) is shown to be financially sustainable. Cumulative (undiscounted) net cash flows are positive over the entire reference period. Net cash flows considered for this purpose take into account all the costs incurred and revenues received by the operator.

E1.4 Revenue Generated over the Life of the Project The structure and components of the revenue generation stream have been properly described.

Differentiated tariffs are properly described and are appropriate.

Annual revenue covers annual operating costs.

Charges for waste disposal, water supply, sewerage and wastewater treatment are defined on a unit basis (e.g. cost/m3; cost per tonne).

Charges are proportional to the quantity of water consumed/treated or waste disposed of.

Supportable reasons are provided if the above is not the case.

Charges are proportional to pollution caused.

Supportable reasons are given if the above is not the case.

Charges conform to the Water Supply and Sewerage Regulation Act.

A detailed affordability analysis has been undertaken and assumptions made about the ability of users to pay for services are realistic in the context of socio-economic conditions of the project area.

User charges are close to or equal to the affordability threshold (but no higher); a threshold of approximately 1% of average regional household income is typically considered as appropriate for the waste sector.

Charges are not defined to be so low that revenues deliberately cover operational costs only and do not contribute towards investment cost recovery.

E.2. Socio-Economic Analysis (Economic Analysis) Note: only applicable to projects exceeding 10 million (excluding VAT).

E.2.1. Provide a Short Description of Methodology The methodology described conforms to EU requirements.

E.2.2. Details of Main Economic Costs and Benefits ai alculated and reflected in the table: M n economic costs and benefits have been properly c

- Adjustments to financial prices are made properly. d.- External costs and benefits are properly defined, quantified and monetise

d.- Resource costs savings are properly defined, quantified and monetiseropriate. - Fiscal distortions are properly identified and adjusted as app

- Price distortions are identified and adjusted as appropriate.

E.2.3. Main Indicators of the Economic Analysis ai ct justification have been properly calculated: M n economic parameters for proje

te of 5.5% is used. - Discount ra- ENPV > 0

1 - Economic benefit - cost ratio >- EIRR > 5.5% (discount rate)


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E.3. Risk and Sensitivity Analysis

E.3.1 Short Description of Methodology and Summary Results Methodology is properly described, is appropriate and conforms to the risk and sensitivity analysis

actually undertaken.

E.3.2 Sensitivity Analysis The sensitivity analysis has been prepared in accordance with the methodology and there is

evidence that its findings have been used in the final definition of the project.

E.3.3 Risk Analysis The risk analysis has been prepared in accordance with the methodology and there is evidence

that its findings have been used in the final definition of the project.

Application Form Section H: Financing Plan

H.1. Cost Breakdown Costs are properly divided between eligible and ineligible costs.

Each of the cost categories has been reported in accordance with the guidelines and with the footnotes contained in the table: - Planning/design fees, technical assistance and supervision do not represent more than 10%

of total building and construction costs. - Price corrections are incorporated either in each individual cost item or are consolidated in a

separate line for total price adjustment (in which case individual cost items are shown in constant values).

H.2. Total Planned Resources and Planned Contribution from the Funds The sources of funds and planned contribution from the Funds have been properly documented.

H.2.1. Community Contribution Calculation The table is consistent with earlier tables E1.2 and H1.

The correct co-financing rate for the priority axis has been used.

The EU contribution has been calculated properly.

H.2.2. Sources of Co-financing Co-financing requirements have been identified to cover investment costs not covered by the EU

grant.

National co-financing resources are shown between their sources (central government, municipal own funds, EMEPA).

Loans are identified properly with evidence provided of agreements reached for the raising of such loans.

These items are shown in nominal values (i.e., after price adjustments).

H.3. Annual Financing Plan of Community Contribution Drawdown period for the EU grant is consistent with any guidelines set out in the call for

proposals.

The plan amounts are shown in nominal values.


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ANNEX JABBREVIATIONS & ACRONYMS


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AA Audit Authority AIC Average Incremental Cost AP Accession Partnership BAT Best Available Techniques BoQ Bill of Quantities BPEO Best Practicable Environmental Option BREF BAT Reference Document CA Contracting Authority CARDS Community Assistance for Reconstruction, Development and Stabilization CBA Cost-Benefit Analysis CC Candidate Country CEA Cost-Effectiveness Analysis CF Cohesion Fund CFCA Central Finance and Contracting Agency for EU Programmes and Projects CODEF Central Office for Development Strategy and Coordination of EU Funds DA Decision Amount DAB Dispute Adjudication Board DCF Discounted Cash Flow DIC Discounted Investment Costs DNR Discounted Net Revenue DSCR Debt Service Coverage Ratio EBRD European Bank for Reconstruction and Development EC European Commission ECD European Commission Delegation EDF European Development Fund EEA European Environment Agency EIA Environmental Impact Assessment EIB European Investment Bank EIRR Economic Internal Rate of Return ENPV Economic Net Present Value EPEEF Environmental Protection and Energy Efficiency Fund EPOP Environmental Protection Operational Programme ER End Recipient ERDF European Regional Development Fund ERR Economic Rate of Return ESF European Social Fund EU European Union EUR Euro FDR Financial Discount Rate FIDIC French - Fdration Internationale des Ingnieurs-Conseils - International Federation

of Consulting Engineers FIRR Financial Internal Rate of Return FRR/C Financial Rate of Return without Community assistance FRR/K Financial Rate of Return with Community assistance FNPV Financial Net Present Value FNPV/C Financial Net Present Value without Community assistance FNPV/K Financial Net Present Value with Community assistance FRR Financial Rate of Return IB Implementing Body


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IFI International Financial Institution IPA Instrument for Pre-Accession Assistance IPPC Integrated Pollution Prevention and Control IRR Internal Rate of Return ISPA Instrument for Structural Policies for Pre-Accession ITT Instructions to Tenderers IWG Inter-Ministerial Working Group LCA Least Cost Analysis LRMC Long Run Marginal Cost MA Managing Authority MRDFWM Ministry of Regional Development, Forestry and Water Management MBT Mechanical Biological Treatment MCA Multi-Criteria Analysis MEPPPC Ministry of Environmental Protection, Physical Planning and Construction MIFF Multi-Annual Financial Framework MIPD Multi-Annual Indicative Planning Document MS Member State MSW Municipal Solid Waste NAO National Authorising Officer NES National Environmental Strategy NF National Fund NGO Non-Governmental Organization NIPAC National IPA Coordinator NPV Net Present Value NUTS French - Nomenclature des Units Territoriales Statistiques - Nomenclature of

Territorial Units for Statistics O&M Operating and Maintenance OP Operational Programme OS Operating Structure PA Priority Axes PCC Potential Candidate Country PIU Project Implementation Unit PPP Public Private Partnership PRAG Practical Guide to Contract Procedures for EC External Actions RDF Refuse Derived Fuel RWMC Regional Waste Management Centre SAA Stabilisation and Association Agreement SAPARD Special Accession Programme for Agriculture and Rural Development SCF Strategic Coherence Framework SDF Strategic Development Framework for 2006-2013 SDR Social Discount Rate SEA Strategic Environmental Assessment SER Shadow Exchange Rate SF Structural Funds SWOT Strengths-Weaknesses-Opportunities-Threats TA Technical Assistance TOR Terms of Reference VAT Value Added Tax WMC Waste Management Centre


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ANNEX KGLOSSARY OF KEY TERMS


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Accounting Period: The interval between successive entries in an account. In project analysis, the accounting period is generally one year, but it could be any other convenient time period.

Accounting Prices: The economic opportunity cost to society of goods or services, which is sometimes different from actual market prices and from regulated tariffs. They are used in economic analysis to better reflect the real costs of inputs to society, and the real benefits of the outputs. Often used as a synonym for shadow prices.

Accounting Unit: The unit of account that makes it possible to add and subtract unlike items. The Euro is the unit of account for the appraisal of EU financed projects.

Accreditation: Where specific persons have been given responsibility for an activity in relation to the management, implementation and control of programmes, the Beneficiary Country shall enable such persons to exercise the duties associated with that responsibility, including in cases where there is no hierarchical link between them and the bodies participating in that activity. The Beneficiary Country shall, in particular, provide those persons with the authority to establish, through formal working arrangements between them and the bodies concerned:

An appropriate system for the exchange of information, including the power to require information and a right of access to documents and staff on the spot if necessary;

The standards to be met;

The procedures to be followed

Regulation (EC) No 718/2007 (IPA Implementing Regulation), Article 11.

Acquis Communautaire or Acquis: The Community acquis is the body of common rights and obligations which bind all the Member States together within the European Union. Applicant countries have to accept the acquis before they can join the Union. Derogations from the acquis are granted only in exceptional circumstances and are limited in scope. To integrate into the European Union, applicant countries will have to transpose the acquis into their national legislation and implement it from the moment of their accession.

Appraisal: An examination of the merit and acceptability of a proposed policy or investment project based on an analysis of its economic, financial, environmental and other effects. Policy / project appraisal is sometimes called ex ante evaluation.

Assets: Property functioning as a store of value from which economic benefits may be derived by holding them or using them over a period of time. Tangible assets may either be financial (e.g. cash or government securities) or physical (e.g. buildings, roads, vehicles, equipment, etc.). Assets may also be intangible such as copyright or mineral exploitation rights.

Assumptions: External factors which could affect the progress or success of the project, but over which the project manager has no direct control. They form the 4th column of the Logframe, and are formulated in a positive way. If formulated as negative statements, assumptions become risks.

Audit: An expert examination of legal and financial compliance or performance, carried out either internally to satisfy the requirements of management (internal audit), or by an external audit entity to meet contractual or statutory obligations (external audit).

Audit Authority: An audit authority, functionally independent from all actors in the management and control systems (of IPA) and complying with internationally accepted audit standards, shall be designated by the beneficiary country. The audit authority shall be responsible for verifying the effective and sound functioning of the management and control systems.

Regulation (EC) No 718/2007 (IPA Implementing Regulation), Article 29

Beneficiary: In relation to the Cohesion Fund, a Beneficiary is defined as "An operator, body or firm, whether public or private, responsible for initiating or initiating and implementing operations. In the context of aid schemes under Article 87 of the Treaty [establishing the European Community], beneficiaries are public or private firms carrying out an individual project and receiving public aid".

Council Regulation (EC) No 1083/2006 laying down provisions on the ERDF, ESF and CF, Article 2(4).

Beneficiary Countries: The Beneficiary Countries are:

Candidate Countries: Croatia, Turkey, the Former Yugoslav Republic of Macedonia


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Potential Candidate Countries: Albania, Bosnia, Montenegro, Serbia, including Kosovo (as defined in UNSCR 1244).

Regulation (EC) No 1085/2006, Annexes 1 and 2.

Benefits: The positive advantages or outcomes of a project which justify its implementation. Benefits may be measurable / tangible or unquantifiable / intangible.

Benefit-Cost Ratio: The net present value of project benefits divided by the net present value of project costs. A project is accepted if the benefit-cost ratio is equal to or greater than one. It is used to accept independent projects, but it may give incorrect rankings and often cannot be used for choosing among mutually exclusive alternatives.

Budgetary Commitment: A budgetary commitment corresponds to the amount of the legal commitment, which shall take the form of a Financing Agreement with the Beneficiary Country concerned. Such commitment shall be adopted on the basis of financing decisions adopting annual programmes.


Business-as-usual Scenario: A reference scenario which assumes that future evolution is an extension of the current trends. See also do nothing scenario.

Candidate Country: Applicant countries for European Union membership are granted Candidate Country status from the day their application is officially accepted by the European Council.

Capital (capital assets): A stock of physical or financial assets.

Cash Flow: Cash flow refers to the flow of money to or from a firm or economic agent. Income is a positive cash flow and expenses are negative cash flows.

Centralised and Decentralised Management Transitional Approach: Under the Transitional arrangements, an Operating Structure is set up in each CC/PCC, which is mainly in charge of programming and implementation. The CC/PCC Operating Structures set up a Joint Technical Secretariat. However, there are differences, according to the management model chosen:

Centralised management: The Operating Structure is in charge of programme implementation with the exclusion of tendering, contracting and payments, which are the responsibility of the Commission (EC Delegation, as Contracting Authority).

Decentralised management: The EC Delegation plays no formal role; the Operating Structure includes an Implementing Agency led by a Programme Authorising Officer who is nominated by the National Authorising Officer. The Implementing Agency is the Contracting Authority and thus responsible for tendering and contracting, payments accounting and financial reporting aspects of the procurement of services, supplies, works and grants for the part the cross-border programme concerning the respective country.

Regulation (EC) No 718/2007 (IPA Implementing Regulation)

Commitment: A formal decision taken by the European Commission to set aside a certain amount of money for a particular purpose. No expenditure can be incurred in excess of the authorised commitment.

Community Contribution: The part of the eligible expenditure which is financed by the Community.

Regulation (EC) No 718/2007 (IPA Implementing Regulation), Article 2(9).

Competent Accrediting Officer: The Competent Accrediting Officer is to be appointed by the Beneficiary Country. He / she is responsible for issuing, monitoring and suspending or withdrawing the accreditation of the National Authorising Officer and the National Fund.


Competitive Tender: A procurement process whereby several organisations are invited to prepare proposals to provide a particular project or service on the basis of quality and price.

Constant Prices: Prices that have been deflated by an appropriate price index based on prices prevailing in a given base year. They should be distinguished from current or nominal prices.

Consumer Surplus: The value consumers receive over and above what they actually have to pay.


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Contract: An agreement, between two or more persons or entities, with specific, legally-binding terms and an undertaking to provide services, supplies and / or works in return for a financial consideration.

Contract Manager: An expression commonly used to refer to the person responsible for the day-to-day management and administration of a contract to provide services, supplies and / or works (see also Supervising Engineer).

Contracting Authority: Under transitional arrangements, the Contracting Authority in each CC / PCC may be:

The Operating Structure, in particular its Implementing Agency, in the case of decentralised management;

The European Commission in the case of centralised management.

The Contracting Authority is responsible for awarding grants, tendering, contracting and payments.

Contractor: Any natural or legal person or public entity or consortium of such persons and / or bodies with whom the Contracting Authority enters into a contract following a procedure for the tendering and award of a contract. The successful tenderer, once parties have signed a contract.

Conversion Factor: The factor that converts the domestic market price or value of a good or production factor to an accounting price.

Cost-Benefit Analysis: A systematic, quantitative appraisal of a public or private project to determine whether, or to what extent, that project is worthwhile from a social perspective. Cost-benefit analysis differs from a straightforward financial analysis in that it considers all gains (benefits) and losses (costs) to social agents. CBA usually implies the use of accounting prices.

Cost-Effectiveness Analysis: An examination of the cost and the outcomes of alternative means of accomplishing an objective, in order to select the one with the highest effectiveness relative to its cost. Also used to compare options for which major outputs can be identified but not valued. Cost-effectiveness indicators include the cost per unit of output, or units of output per unit of cost, and are aimed at identifying the least costly method of achieving a particular outcome or objective.

Current Prices (Nominal Prices): Prices as actually observed at a given time. They refer to prices that include the effects of general inflation and should be contrasted with constant prices.

Cut-off Rate: The rate below which a project is considered unacceptable. It is often taken to be the opportunity cost of capital. The cut-off rate would be the minimum acceptable internal rate of return for a project or the discount rate used to calculate the net present value, the net-benefit investment ratio, or the benefit-cost ratio.

Defects Notification Period: The period of time within which the Contractor is liable for repairing or remedying any defects notified by, or on behalf of, the Employer (Contracting Authority) typically between 12 and 24 months.

Depreciation: The reduction in the value of an asset over time that is brought about through physical use or obsolescence.

Discounting: The process of adjusting the future values of project inflows and outflows to current values using a discount rate, i.e. by multiplying the future value by a coefficient that decreases with time.

Discount Factor: A discount factor is a number that reflects the value in the present of a unit of money received in the future. A discount factor of 0.95 for money received in a years time indicates that the value of a monetary unit received in a years time is worth only 95 cents today. The discount factor is related to the discount rate through the following equation: 1 = (1+i)n, where i is the rate of interest (discount rate) and n is the number of years.

Discount Rate: The rate at which future values are discounted to the present. The financial discount rate and economic discount rate may differ, in the same way that market prices may differ from accounting prices. The financial discount rate usually represents the cost of capital for the person or entity calculating the present values.

Do Nothing: The baseline scenario, business as usual, against which the additional benefits and costs of the with project scenario can be measured (often a synonym for the without project scenario).


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Do Minimum: The project option that includes all the necessary realistic level of maintenance costs and a minimum amount of investment costs or necessary improvements, in order to avoid or delay serious deterioration or to comply with safety standards.

Do Something: The scenario(s) in which investment projects are considered, different from do nothing and do minimum - see above.

Economic Analysis: Analysis that is undertaken using economic values, reflecting the values that society would be willing to pay for a good or service. In general, economic analysis values all items at their value in use or their opportunity cost to society (often a border price for tradable items). It has the same meaning as social cost-benefit analysis.

Economic Cost: The economic cost of an activity or resource is the cost to society of that activity or resource. Economic costs include the private costs borne directly by economic agents undertaking the activity, and all other costs borne by other economic agents. For example, the economic costs of collecting and transporting waste include the costs of fuel and wear and tear on the vehicle borne by the vehicle operator, plus the additional costs of congestion, borne by other users of the roads, plus the costs of pollution, borne by society in general.

Economic Impact Analysis: The analysis of the total effects on the level of economic activity (output, income, employment) associated with an intervention. This kind of analysis focuses on macroeconomic indicators and forecasts the influence of the project on these indicators. It goes beyond CBA when very large projects are considered in relatively small economies.

Economic Rate of Return: ERR, the internal rate of return (see definition below) calculated using the economic values and expressing the socio-economic profitability of a project.

Effectiveness: The contribution made by a projects results to the achievement of the project purpose.

Efficiency: The extent to which means and activities are converted into results and the quality of the results achieved.

Eligible Costs: Any expenses considered as eligible under a Financing Agreement concluded between a Beneficiary Country and the European Commission. In the case of IPA, eligible costs are defined in accordance with Article 34 of the IPA Implementing Regulation and Article 19 of The Framework Agreement between the Commission and Government of the Republic of Croatia, and the detailed rules on eligible expenditure subsequent to the Financing Agreement.

End Recipient: According to the Operational Agreement for the Management and Implementation of the Environmental Operational Programme 20072009, "An End Recipient is a beneficiary of Community funding: the limited liability company for waste management in the ownership of local / regional self-government units for Priority Axis 1, the MEPPPC for Priority Axis 3, and limited liability utility company for water supply, sewerage and waste water treatment in the ownership of local self-government units for Priority Axis 2". The relationships between an End Recipient and the Final Beneficiary (Implementing Body) are regulated by a special contract.

Enlargement Package: A set of documents presented each year to the Council and the European Parliament by the Commission, the strategic and political part of which consists of the revisions, where appropriate, of the accession partnerships and the European partnerships, the regular reports established by country and the Commission's strategy paper. A Multi-Annual Indicative Financial Framework completes the package.

Environmental Impact Assessment: An analysis leading to a statement of the likely direct and indirect environmental effects of a project and related activities on human beings; fauna, flora, soil, water, air, climate, landscape; material assets, cultural heritage; and the interaction between those effects. This would include the forecasting of potential pollution emissions, loss of visual amenity, and so on.

European Commission: The executive arm of the European Union. It initiates European Union policy and implements programmes and policies established by the EU legislative and budgetary authorities.

Ex-ante Evaluation see Appraisal: Such an evaluation may be used to select the best option for achieving the project objectives from both a socio-economic and financial point of view (ensuring that, wherever possible, the objectives are quantified), and to provide a baseline for project monitoring and subsequent evaluations.


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Expenditures: The cost of goods and services acquired, regardless of the timing of related payments. Expenditures on goods and services occur at times when buyers incur liabilities to sellers, i.e. when either (i) the ownership of the goods and services concerned is transferred from the seller to the new owner; or (b) when delivery of the goods and services is completed to the satisfaction of the buyer.

Ex-post Evaluation: An evaluation carried out a certain length of time after the implementation or conclusion of a project or initiative. It consists of describing the impact actually achieved by the project compared to the overall project objectives and purpose.

Externality: An externality is said to exist when the production or consumption of a good in one market affects the welfare of a third party without any payment or compensation being made. In project an