How became the most water-projects-intensive country in EU

Executive overview of EU funded projects

AUSTRIAN WEBINAR 14.12.2020

1 EU PROGRAM PERIOD 2014.-2020.

STRUCTURAL INSTRUMENTS IN THE PROGRAM PERIOD 2014-2020 In the 2014-2014 programming period, the total financial envelope for the Republic of Croatia from the Structural Instruments is 10.676 billion euros. Of this, EUR 6.881 billion for investment in growth and development is available through OP Competitiveness and Cohesion and EUR 4.321 billion from the European Regional Development Fund and EUR 2.599 billion from the Cohesion Fund:

2014.-2020. Cohesion Fund 1.049.340.216 € Water Comunal reform European Regional Development Fund 215.000.000 € Flood protection 150.000.000 €

2 A) WATER SUPPLY AND WASTE WATER PROJECTS

3 OBLIGATIONS OF REPUBLIC OF CROATIA

• Water Framework Directive 2000/60/EC • Directive 98/83/EC on the quality of water intended for human consumption achieving the prescribed water quality in terms of microbiological indicators on public water supply systems in 70 identified water supply zones by the end of 2018 • Directive 91/271/EEC concerning urban waste water treatment construction of drainage and wastewater treatment systems in 281 agglomerations with a load of more than 2,000 ES with completion of all works by the end of 2023 with transition deadlines by 2018 and 2020 depending on the size of the agglomeration and receiver sensitivity • Revised implementation plan for water utilitiy directives an integral part of the documentation of the EU accession negotiations in Chapter 27. Environment. Transitional periods have also entered into the Treaty of Accession of the Republic of Croatia to the European Union • Multi annual program of construction of municipal water facilities

4 CURRENT STATUS OF APPROVAL – OPCC 14 -20 (1)

Total eligible expenditure EU GRANT Number of projects (BN HRK) (BN HRK)

APPROVED PROJECTS 20,09 14,07 60

IN PRE-APPROVAL PROCEDURE 1,69 1,17 5

TOTAL 21,78 15,24 65

5 CURRENT STATUS OF APPROVAL – OPCC 14-20 (2)

County Projects in implementation Projects in approval Total planned value of investment (BN HRK) (7) - , RVS Osijek, -Belišće, Đakovo, Našice, Beli Osijek - Baranja - 1,58 Manastir, Semeljci

(7) - , , -, , - 2,4 RVS Zagreb Istok, Zaprešić, Ivanić Grad

(6) - Split-, Kaštela-, , Otok-, Jelsa- Split – - 3,68 ,

Primorje – Gorski (4) - Krk, Novi Vinodolski, , Cres-Lošinj - 3,03 Kotar - Moslavina (3) - , , - 0,83 Varaždin (3) - Varaždin, Varaždinske Toplice, - 0,91

Koprivnica – Križevci (3) - , Križevci, Đurđevac - 0,95

Virovitica – (3) - , Pitomača, Slatina - 0,55

(3) - , Požega, - Požega - - 0,46

Šibenik – (3) - Vodice-Tribunj-Srima, Šibenik, Betina- - 0,6

6 CURRENT STATUS OF APPROVAL – OPCC 14-20 (3)

County( Projects in implementation Projects in approval Total planned value of investment (BN HRK)

Vukovar – (3) - , , Županja 0,82

Istria (3) - , Poreč, (1) – Sjever 1,3

Dubrovnik – Neretva (3) - , Ploče, Metković 1,2

Zadar (2) – Nin-Privlaka-Vrsi, (1) – Biograd na Moru 1,32

Međimurje (2) - Donja Dubrava, Mursko Središće 0,37

Krapina - Zagorje (1) - Zabok – Zlatar 0,48

Karlovac (1) - – 0,33

Bjelovar – Bilogora (1) - 0,2

Lika – (1) - Novalja (1) - Plitvička Jezera 0,56

Brod – (1) – Nova Gradiška (1) – 0,61

TOTAL 60 PROJECTS IN IMPLEMENTATION 4 PROJECTS IN APPROVAL 21,7

7 PUBLIC PROCUREMENT PROGRESS – OPCC 14 – 20 SECONDARY CONTRACTING OPCC 2014 - 2020 22 000 000 000 200,00% 183,79% 179,52% 20 000 000 000 180,00%

18 000 000 000 160,00% 140,95% 16 000 000 000 140,00% 14 000 000 000 120,00% 12 000 000 000 93,06% 100,00% HRK 10 000 000 000 80,00% 8 000 000 000 49,82% 60,00% 6 000 000 000 40,00% 4 000 000 000 25,34% 16,16% 2 000 000 000 8,22% 20,00% 0 0 0 0,00% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Ukupni prihvatljivi trošak (HRK) Kumulativno Ugovorenost %

8 PUBLIC PROCUREMENT PROBLEMS (1)

The biggest problem in the realization of EU projects is the procurement procedures. The new Law on Public Procurement tried to meet the Employers and shorten the procedure itself, but it should be noted that the implementation identified a number of problems that slow down this procedure:

 the preliminary consultation procedure did not produce the desired result: instead of tenderers seeking clarification of tender conditions or technical specifications for the purpose of market research and simpler implementation of the procurement procedure and obtaining better offers, professional complainants on behalf of potential tenderers seek only certain parts of the documentation to which they will file appeals;  Frequent filing of appeals about documentation (outside the deadline for appeals) of the procurement, which prolongs the bidding time. In some procurement procedures, new appeals to the tender dossier (TD) occur even after the State Commision (SC) Decision has been adopted and the amendments to the TD have been partially amended and the new deadline for submission of the bid has been determined, which further extends the bidding time.

 the TD appeal fee is 700 EUR regardless of the value of the procurement

 Frequent extension of the deadline for submission of the offer by the Employer - NEW TREND

 frequent filing of appeals against the award decision which prolongs the duration of the procurement process;

 An appeal can be made by an economic entity, regardless of whether it has a legal interest (eg TD complaint - Appellant is a company registered for:  preparing meals, drinks and beverages for consumption elsewhere with or without service  production of perfumes and toiletries etc.)

 Public Procurement duration (from publication to execution of the award Decision): The average duration of the public procurement procedure for works is 9-10 months The average duration of the procurement process for services is 6-7 months

9 PUBLIC PROCUREMENT PROBLEMS (2)

LAW PROVIDED PERIOD FROM PUBLICATION TO OPENING OF BID IS 35 DAYS (MINIMUM) FOR OPEN PROCEDURE WITH LARGE VALUE

Project Donja Dubrava – TD appeal (sewage)

• Estimated tender value: 15.923.815,79 EUR • 8.6.2018. – Initial tender notice released • 10 TD APPEALS– 9 dismissed as unfounded / untimely • 16.4.2019. – Tender opening • Conclusion: From Tender Notice till Tender opening 10,5 months passed

Project Mursko Središće – TD appeal (sewage)

• Estimated tender value: 15.001.434,21 EUR • 12.11.2018. - Initial tender notice released • 6 TD APPEALS – ALL dismissed as unfounded / untimely • 16.4.2019. - Tender opening • Conclusion: From Tender Notice till Tender opening 5 months passed

Project Rijeka – TD appeal (sewage)

• Estimated tender value : 106.952.368,42 HRK • 3.12.2018. - Initial tender notice released • 3 TD APPEALS – ALL dismissed as unfounded / untimely • Predicted date of tender opening - unknown • Conclusion: From Tender Notice till (potential) Tender opening 9 months passed 9 mjeseci (and still counting)

10 PUBLIC PROCUREMENT PROBLEMS (3)

LAW PROVIDED PERIOD OF IMPLEMENTATION FROM PUBLICATION TO EXECUTION OF AWARD DECISION IS 80 DAYS (MINIMUM) FOR OPEN PROCEDURE WITH LARGE VALUE

Project Jastrebarsko – duration of procurement (WWTP)

• Estimated tender value : 4.124.373,03 EUR • 20.4.2018 - Initial tender notice released • TD APPEAL – Adopted (33 days for SC Decision) • 9.8.2018. – Tender opening • 30.10.2018. – 1st Award decision • APPEAL ON 1st AWARD DECISION – Adopted (73 days for SC Decision) • 12.4.2019. – 2nd Award decision • APPEAL ON 2nd AWARD DECISION– dismissed on 18.6.2019. (67 days for SC Decision) • Conclusion : 14 months duration of procurement

Projekct Varaždin – duration of procurement (WWTP)

• Estimated tender value : 162.448.000 HRK • 28.5.2018 - Initial tender notice released • 24.8.2018. – Tender opening • 21.12.2018. – 1st Award decision • APPEAL ON 1st AWARD DECISION – Adopted (56 days for SC Decision) • 10.4.2019. – 2nd Award decision • APPEAL ON 2nd AWARD DECISION– Adopted (65 days for SC Decision) • 16.7.2019. – 3rd Award decision • Conclusion : 14 months duration of procurement

11 INCREASING OF PROJECT COSTS

MOST RECENT PROBLEM: SIGNIFICANT INCREASE OF PROJECTS COSTS (application costs ≠ tender costs)

Current statistics:

1. Sewage system – 28,5% above the estimated tender budget

2. Sewage system Dunav River Basin – 21% above the estimated tender budget

3. Sewage system Adriatic River Basin – 46% above the estimated tender budget

4. WWTP – within the estimated tender budget

12 PROBLEMS IN CONTRACTING AND IMPLEMENTATION

 Problems:

 Delayed award decision making due to increased bids  Delaying award decision making because of fear of financial corrections  Slow dynamics of work execution than planned (all projects)  Bankruptcy of contractors (Vukovar and Osijek projects),  Financial corrections as a result of ex-post control of the procurement process.

 Measures:

 HV and MZOE employers in the beneficiaries evaluation commitee  Ammendment of Grant Contracts, in justified cases  Transfer of knowledge in order to avoid possible financial corrections  Daily meetings

13 PLANNED CONTRACTING IN FOLLOWING PERIOD

SECONDARY CONTRACTING – TOTAL ELIGIBLE COST PERIOD: 2021 - 2023 25 000 000 000 120,00%

20 454 742 863 20 944 850 524 100,00% 20 000 000 000

16 037 150 587 80,00% 15 000 000 000

60,00% HRK 10 557 663 302 10 000 000 000 40,00% 5 479 487 286 5 000 000 000 4 417 592 275 20,00%

490 107 661 0 0,00% 2020 2021 2022 2023

Ukupni prihvatljivi trošak (HRK) Godina Ukupni prihvatljivi trošak (HRK) Kumulativno

14 PLANNED PAYMENT IN FOLLOWING PERIOD

PLANNED PAYMENTS – TOTAL ELIGIBLE COST PERIOD: 2021 - 2023 16 000 000 000 120,00%

14 006 193 923 14 000 000 000 100,00%

12 000 000 000

80,00% 10 000 000 000 8 828 525 923

8 000 000 000 60,00%

6 000 000 000 5 075 930 923 5 177 668 000 40,00% 3 752 595 000 4 000 000 000 3 018 830 923 2 057 100 000 20,00% 2 000 000 000

0 0,00% 2020 2021 2022 2023

Ukupni prihvatljivi trošak (HRK) Godina Ukupni prihvatljivi trošak (HRK) Kumulativno

15 RECOVERY AND RESILIANCE FUND (2021 – 2026)

Type of investments Value (BN HRK) Aglomerations 7,27 Small interventions (waste water) 1,56 Small interventions (water supply) 2,26 TOTAL 11,1

16 B) FLOOD PROJECTS

17 APPROVED PROJECTS (1)

 PREPARATION OF STUDIES FOR FLOOD RISK MANAGEMENT PROJECTS (38 MIL HRK) – Preparation of basin-level studies for 12 river basins with significant flood risks, for the River in Croatia, and preparation of studies for the VEPAR Project

 MODERNIZATION OF LEFT-BANK SAVA DIKES FROM RAČINOVCI TO NOVA GRADIŠKA (369 MIL HRK) – The project on a 236 km section foresees emergency "no regret" measures to increase the safety of flood dikes and hinterland with the construction of hinterland berms with drains and service roads (155.0 km); development of 8 separate projects in total length of 17.5 km with the construction of a water tight curtain to protect against hydraulic collapse of foundation soil at critical sections; and the formation of 17 excavation sites to provide all the material required for the said works

Zadubravlje-Klakar-Ruščica Jaruge-Svilaj

18 APPROVED PROJECTS (2)

 IMPROVEMENT OF NON-STRUCTURAL FLOOD RISK MANAGEMENT MEASURES IN CROATIA (VEPAR) 353 MIL HRK – The project is implemented in cooperation with DHMZ. It consists of the improvement of non-structural flood risk management measures in Croatia to achieve flood risk reduction and provide and systematize the missing data related to basins, watercourses, water regulation and protection structures; modernize and upgrade the network of hydrological gauging stations; develop or improve forecasting mathematical models; prepare or improve flood risk management studies; procure the equipment required for more efficient operational flood defence; educate and inform the public about flood risks.

19 APPROVED PROJECTS (3)

FLOOD PROTECTION PROJECT (183 MIL HRK) – Foreseen works at the location where the retention reservoir is dammed; construction of railway protection facilities along the retention reservoir area; construction of a facility protecting fishpond on the Vitunjčica River; and the construction of the Ogulin retention reservoir dam with the associated facilities

20 APPROVED PROJECTS (4)

 KARLOVAC-SISAK FLOOD PROTECTION PROJECT – It will provide the required flood protection to the town of Karlovac and other settlements along the Kupa River from Karlovac to Sisak which are frequently and heavily flooded. It will also improve the capacity and operation of the natural Kupčina retention reservoir with the construction of facilities at the Brodarci dam upstream of Karlovac and extend the natural flood storage area of Odransko polje. The project foresees the reconstruction of dikes and construction of other facilities of the flood protection system to improve the functionality of the system as a whole.

21 APPROVED PROJECTS (4)

 KARLOVAC-SISAK FLOOD PROTECTION PROJECT – It will provide the required flood protection to the town of Karlovac and other settlements along the Kupa River from Karlovac to Sisak which are frequently and heavily flooded. It will also improve the capacity and operation of the natural Kupčina retention reservoir with the construction of facilities at the Brodarci dam upstream of Karlovac and extend the natural flood storage area of Odransko polje. The project foresees the reconstruction of dikes and construction of other facilities of the flood protection system to improve the functionality of the system as a whole.

22 RECOVERY AND RESILIANCE FUND (2021 – 2026)

Type of investments Value (BN HRK) Flood protection projects 1,34 Neretva salting protection 0,51 TOTAL 1,85

23 PROBLEMS IN CONTRACTING AND IMPLEMENTATION

 Problems:

 Complex projects and associated Tender Documents (TD);  procurement of specific goods; lengthy contracting procedure, including frequent appeals against TD filed to the State Commission for the Supervision of Public Procurement Procedures and appeals against the award decisions, eventually slowing down the contracting procedure

24 Thanks for your attention

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