Restoring Accountability and Supporting Transformation (RAST)
Restoring Accountability and Supporting Transformation (RAST)
Award Number: AID-168-A16-00002
Final Report
September 26, 2016 – December 26, 2018 Catholic Relief Services – Bosnia-Herzegovina
Contact Person: Debbie Shomberg Country Representative CRS/Bosnia and Herzegovina Zagrebačka 18 71000 Sarajevo BOSNIA AND HERZEGOVINA Tel.: (387 33) 33 726 800 Fax: (387 33) 726 824 Email: [email protected]
List of Acronyms
BFC Business Friendly Certification BiH Bosnia and Herzegovina CIP Capital Investment Plan CoC Chamber of Commerce CRS Catholic Relief Services DQA Data Quality Assessment DRR Disaster Risk Reduction ERC Environmental Review Checklist FBiH Federation of Bosnia and Herzegovina FIPA Foreign Investment Promotion Agency of BiH GIZ German Development Agency MALSG Ministry of Administration and Local Self-Government of Republika Srpska IS Information system with a web portal of industrial/business zones in FBiH LEAP Local Employment Action Plan LED Local Economic Development MDEC Federal Ministry of Development, Entrepreneurial and Craft MEAL Monitoring, Evaluation, Accountability and Learning MWG Municipal Working Groups NALED National Alliance for Local Economic Development of Serbia RAST Restoring Accountability and Supporting Transformation REDAH Regional Economic Development Agency Herzegovina RS Republika Srpska SEE South East Europe SME Small and Medium Enterprise
RAST – Final Report 2 Table of Contents
1. INTRODUCTION ...... 4
2. PROGRAM DESCRIPTION ...... 4
3. ACHIEVEMENT HIGHLIGHTS ...... 6
3.1. Objective 1: Businesses use upgraded infrastructure to expand economic activity ...... 6
3.2. Objective 2: Improved BFC-related local government services to expand economic activity 6
4. ANALYSIS OF PROGRESS AND RESULTS ...... 9
4.1. Objective 1: Businesses use upgraded infrastructure to expand economic activity ...... 9
4.1.1. Impact and Results ...... 9
4.1.2. Findings from the Survey of Infrastructure Users ...... 14
4.1.3. Implementation Strategy and Approach ...... 16
4.2. Objective 2: Improved BFC-related local government services to expand economic activity 18
4.2.1. Impact and Results ...... 20
4.2.2. Implementation Strategy and Approach ...... 26
5. MONITORING AND EVALUATION ...... 29
5.1. Indicator Performance Tracking Table (IPTT) ...... 29
6. CHALLENGES ...... 33
6.1. Small Infrastructure Projects ...... 33
6.2. BFC certification ...... 34
7. LESSONS LEARNED ...... 34
8. VISIBILITY ...... 36
9. EXPENDITURES...... 37
10. LIST OF ANNEXES ...... 38
RAST – Final Report 3 1. INTRODUCTION Catholic Relief Services (CRS), with the support and funding of the United States Agency for International Development (USAID), implemented a two-year project (2016-2018) called “Restoring Accountability and Supporting Transformation” (RAST). The project lasted for 27 months due to a no cost extension, and all project targets have been met or exceeded during this timeframe, with many of the activities being continued as a result of effective collaboration with local authorities.
This final report covers the period from September 2016 through December 2018. The report summarizes the approach and key impact achieved in each of the two objectives. The report also discusses key lessons learned with implications for future interventions aiming at strengthening local economic development in Bosnia and Herzegovina (BiH).
2. PROGRAM DESCRIPTION The main goal of the RAST project was to enable citizens from BiH to benefit from increased economic opportunities in their municipalities. In order to achieve this goal, CRS developed the following theory of change:
If municipalities adopt a more strategic approach to local economic development and support for local businesses, including upgrading key community infrastructure and improving preparedness to respond to future disasters, and if this business-friendly environment is more effectively marketed domestically and internationally, then public and private investment in their communities will increase, leading to increased job opportunities for youth and other citizens.
The project was guided by the following objectives:
Objective 1: Businesses use upgraded infrastructure to expand economic activity.
Within this first objective, the project supported municipalities to design and implement key infrastructure projects that helped municipalities to create new employment opportunities, to open new businesses in industrial zones and municipalities, and to create additional opportunities for future economic activity. The implementation was organized in close partnership with municipalities that were part of the planning, design and decision-making process. This process insured full municipality participation in a transparent and accountable manner to support local economic development (LED). In this way, local governments were helped to ensure that they invest resources from their budget to co- finance infrastructure upgrades and improve the business and employment environment.
Objective 2: Improved BFC-related local government services to expand economic activity
RAST provided technical and financial assistance to selected municipalities to secure or renew Business Friendly Certification (BFC) and improve their business environment, in compliance with the BFC South East Europe (SEE) program.1 The project also supported municipalities in marketing their BFC status and improved services domestically and internationally.
The USAID/CRS Cooperative Agreement AID–168–A16–00002 was signed on September 27, 2016. In May 2018, USAID and CRS signed Cost Modification No. 2. The new total USAID committed contribution was
1 The BFC SEE program improves the quality of services and information that municipalities in the South East Europe region offer to companies. The program provides municipalities with a clear roadmap for creating a favorable business environment and introducing internationally recognized standards of efficient and transparent local administration. RAST – Final Report 4 $2,550,000 while CRS’s cost share of $120,000 was increased to $145,000. In year 2 quarter 4, RAST was granted a 3-month no cost extension, ending December 26, 2018. The project secured BAM 1,167,370 ($705,445) in municipal co-funding for infrastructure projects which is 61% more than the planned BAM 713,000, and BAM 15,880 ($9,596) for BFC activities making a total of BAM 1,183,250 ($715,042) as well as in-kind contribution from local authorities of an estimated BAM 1,543,704 ($932,865).
RAST worked with the 25 municipalities across BiH presented in the map below. While the context varies in each municipality, RAST adopted a variety of participatory approaches and activities that met the various needs of municipalities to strengthen local economic development.
RAST Project Partner Municipalities
RAST – Final Report 5 3. ACHIEVEMENT HIGHLIGHTS 3.1. Objective 1: Businesses use upgraded infrastructure to expand economic activity
• Six infrastructure projects were completed in industrial zones which resulted in improved conditions for doing business The completed infrastructure projects have been used by 58 Small and Medium Enterprises (SME), 23 of which export their products. In addition, conditions were provided for 124 building plots / potential investors within 6 industrial zones among which thirty new investors have purchased building plots and some of them are already in the process of building their production facilities. The current number of employees in six industrial zones is 2600 and we estimate that these new investors will create more than 1000 new jobs in 2019. (See graph Overview of the number of current and potential future beneficiaries, page 10).
• Four social and health infrastructure projects were completed that had a direct impact on 4,614 individuals in need of social and/or healthcare assistance Working with municipalities, the RAST project identified municipal social infrastructure as a way to increase their capacities to improve social and healthcare services for their citizens. The 4,614 individuals use and benefit from the upgraded infrastructure and basic public services.
• BAM 1,183,250 ($715,042) was secured in local municipal co-funding and BAM 1,543,704 ($932,685) as in-kind contributions
• $145,000 was contributed by CRS as a cost share to the RAST project supporting the construction of 10 infrastructure projects and to implement disaster risk reduction (DRR) measures.
3.2. Objective 2: Improved BFC-related local government services to expand economic activity During the project, thirteen municipalities achieved Business Friendly Certification. The result of the certification process is that municipalities applied BFC standards of efficient and transparent municipal administration. They also improved the quality of services and information that municipalities offer to the business community as well the promotion of their resources and capacities.
The project worked with 17 municipalities out of which 13 successfully completed the BFC process (9 municipalities achieved BFC and 4 municipalities2 received positive BFC Final evaluation reports and will be certified in February 2019. The RAST project therefore achieved 130% of its target of 10 municipalities to be certified and recertified.
• Thirteen municipalities were BFC certified by the end of the project, leading to new investments During the BFC process, the municipalities applied several systematic changes in the work and behavior of municipal administrations, thereby increasing their own capacity to lead LED more efficiently. This improvement can be seen in the progress from preliminary to verification reports prepared by the BFC commission. The assisted municipalities increased
2 The National Alliance for Local Economic Development of Serbia (NALED) experienced some delays to train verificators on the revised BFC criteria. As a result, the municipalities of Brod, Bijeljina, Kakanj and Zavidovici will be certified in February 2019. RAST – Final Report 6 their fulfillment of the BFC criteria by an average of 28%. Some of these systematic changes are:
o Establishing and staffing a LED unit as a one-stop-shop for the business community, and establishing a mechanism for monitoring and reporting on implementation of the municipal development strategy. As a result of the new approach in working with investors, LED offices have supported expanding existing and attracting new investors. For example, the LED office in Zenica enabled ten companies to expand and LED offices in Brod and Trebinje attracted companies from Austria and Serbia to open factories in these municipalities.
o Establishing and maintaining public-private dialog as a foundation for LED via a Local Economic Council (LEC) which serves as the mayors' advisory body for all business development issues.
o Adopting and implementing a participatory methodology for developing a Capital Investment Plan (CIP) which increases the efficiency and transparency of spending municipal budgets and ensures the balanced development of the municipality.
o Developing a Local Employment Action Plan (LEAP) as a basic document that demonstrates active participation and a systematic approach of municipalities and other stakeholders to reducing unemployment.
o Continuous monitoring and simplification of the procedure for issuing building permits. Good examples are Prijedor and Bijeljina (BFC municipalities) which were ranked in the Financial Times’s Top 10 European Small and Micro Cities of the Future for cost- effectiveness, which contributes to increasing investors’ interest in these municipalities.
o Thirty-four municipal LED staff from 17 municipalities increased their capacities for local economic development in the following areas: analysis of the local economy, determination of competitive sectors and exploring LED opportunities, creation and implementation of an LED strategy and promoting and attracting investments. These staff were trained which included working directly with a potential investor who was searching for a new investment location in BiH, more than 90 coaching sessions, and bilateral meetings. The transferred knowledge, skills and experience in local economic development become a permanent resource and the capital of the municipalities which they used to prepare 25 investment projects which were offered to 370 potential investors through the Foreign Investment Promotion Agency of BiH (FIPA) communication channels. Communication regarding these projects with potential investors is ongoing.
• Municipalities are more attractive to potential investors The certified municipalities promoted their economic opportunities in order to attract new investments. Their skills and knowledge were improved through upgraded municipal web portals and four promotional events organized with BFC municipalities. These events were well attended by media which promoted the municipalities as investment locations and the BFC program. Prijedor was also recognized by the Financial Times as one of the top 10
RAST – Final Report 7 European cities with the best strategy for attracting foreign direct investment.3 BFC municipalities are also supported by FIPA which attracts foreign investors to visit investment locations in BFC municipalities.4
• A new web portal of industrial/business zones in FBiH now facilitates private sector and government investments The first web-based Information system of industrial zones in FBiH was developed which provides comprehensive data about the capacities of industrial zones in FBiH. The data is integrated with three other government institutions that use it to track and support investors. The information system serves as a platform to present consolidated, comprehensive, and up-to-date information on investment locations to interested investors. Municipalities use the Information system to improve the planning, construction, management and promotion of industrial zones. The Federal Ministry of Development, Entrepreneurial and Craft (MDEC) uses the information system as a tool for conducting comprehensive analysis, which enables more transparent spending of public funds and better planning for the development of industrial zones.
• Municipalities are more committed to LED Mayors and municipal council members expressed increased support for active engagement of the municipalities in LED. All municipalities previously certified have started the recertification process. In addition, new municipalities are interested to pursue BFC certification.
• BFC Networks in BiH are stronger A pool of qualified experts was created for long-term support to municipalities in implementation of LED activities. The consultants engaged by RAST increased their knowledge and skills and gained experience in the practical implementation of their theoretical knowledge. Cooperation among domestic and international institutions and organizations was also fostered. Following the Information system on industrial zones, UNDP committed to train municipalities to use the information system and collect and insert initial data on industrial zones in FBiH. BFC was also recognized by the Regional Cooperation Council (RCC) and included in its SEE 2020 Strategy as a priority activity. Cooperation among members of the entity BFC networks, including relevant ministries, has intensified.
3 The Financial Times, 2018. “FDI European Cities and Regions of the Future 2018/19: With Europe in Flux, Which Locations Have Investment Potential for the Long Haul?” (link). 4 In the last months, FIPA supported 3 BFC municipalities (Pususje, Bijeljina, Laktasi) to attract companies from China (China Energy Group), USA (AMG International) and Austria (Ze RAST – Final Report 8 4. ANALYSIS OF PROGRESS AND RESULTS 4.1. Objective 1: Businesses use upgraded infrastructure to expand economic activity Key economic infrastructure was upgraded in seven municipalities while social infrastructure projects were implemented in three municipalities. The total number of small infrastructure projects was 10 in nine municipalities. Details about each infrastructure project are presented in Annex 1. This section will focus on the results that were achieved, the findings of a survey of industrial zone businesses, local government, and residents about its impact on economic development.
4.1.1. Impact and Results RAST has made significant progress surpassing the expected results. The infrastructure projects implemented across the country enable municipalities to boost their local economy and increase ownership of their development. Fifty-three businesses are now using the new infrastructure in the industrial zones while 5 businesses are using other infrastructure (Pale Bridge and Brus pedestrian path). The final number of companies and potential locations/building plots attracted and benefitting from the project is much higher given that the data does not include industrial facilities that are under construction or building plots purchased in the meantime by future investors. The total number of business using and potentially using the infrastructure is 182, which is 82% more than planned.
During and after completing the infrastructure in six industrial zones there was significant investment and land acquisition by new investors. Each municipality increased their capacities for new business and employment in industrial zones, on average by 38%. This proved that infrastructure is one of the most important pre-conditions for attracting new investors and expansion of existing businesses. Many investors in industrial zones are in the process of building their facilities, and some are starting production.
Upgraded infrastructure supported the creation of new jobs A newly-prepared building plot in the business zone Ramici - Banja Luka was sold to a new investor, the metal processing company „Elas Metalexpert“ LLC which currently employs 150 workers. The company invested 370.000 BAM for land acquisition (approx. 13,500 m2). A second parcel was sold to the investor "Tenen" d.o.o. Banja Luka. In addition to these two new investors, 10 companies use the newly-built infrastructure and are in different phases of staring their business as follows: Sim Impex LLC, TTB “TENZO“ LLC, “MODUL“ LLC, “MADACO“ LLC, and “TERMOMONTAZA” JSC. Based on the available information, there are currently 76 employees in the Ramici business zone and new investors are expected to employ more than 100 new employees, which will be an increase of 131%.
In an effort to pre-prepare industrial zones for accepting investors and to enable them to have better business conditions, the RAST project provided the construction of roads with accompanying infrastructure in the industrial zone Celpak in Prijedor. Among other benefits, this resulted in new investments along these roads. Namely, new investors bought land and will soon start building production facilities. One of them is the metalworking company Kolektor, a Slovenian company with more than 5,000 employees, which will soon start building a production facility (about 2800 m2) for about 200 employees. The plan is to finally employ 400 to 500 people in the near future. Besides the company Kolektor, the companies MM Plastic which is planning to expand and STOMIL LLC, Edna Metalworking LLC bought land directly linked to infrastructure provided with the RAST project. Including the new investors, the estimated number of new employees is more than 500.
RAST – Final Report 9
Cornerstone-laying ceremony for a new Kolektor production facility in Celpak Prijedor and preparatory works on the construction of the first of three production facilities of the Slovenian concern Kolektor CCL, directly linked to the road C105 built within the RAST project
In Vitkovici Gorazde, RAST provided an upgrade of the „Starac“ water supply system thus introducing additional quantities of water and enabling secure and reliable water supply to the businesses of the Industrial zone Vitkovici and neighborhood settlement Lastavice. The settlement has 40 households and 200 residents which have a reliable water supply for the first time. During project implementation in Gorazde, two production facilities were built in the industrial zone Vitkovici in Gorazde. Both production facilities were built with investments by existing companies in the industrial zone, ‘Prevent’ and ‘Bekto Precisa’ as a result of the expansion of their production capacities in accordance with market requirements. This demonstrates how the construction of the water system through the RAST project supports a favorable business environment, creates new jobs and promotes better living conditions. The existing investor built a new 11,000 m2 production facility for the production and processing of plastic and polyurethane products. The plan is to employ an additional 200 workers.
The construction on the wastewater treatment facility in the Agroindustrial zone Nova Topola in Gradiska improved environment measures for six existing business. There was also a significant investment by the Italian Company Calzedonia in the zone. Italian Calzedonia is Europe's leading chain for socks, leggings, stockings and beachwear for women, which started construction of a 1,000 m2 production facility where 350 to 400 workers will be employed. The new company will be connected to the built infrastructure as well as the other businesses in the Agroindustrial zone. In addition to six businesses currently operating, 10 new investors bought land and are in varied stages of starting their businesses RAST supported Gradiska to more than double the number of investors. This is not just a result of the project, but the project provided the tools and skills for good promotion and advertising of capacities.
RAST – Final Report 10 New investment – Calzedonia new production facility under construction in the Agroindustrial zone Nova Topola which will be connected to the wastewater treatment facility built within the RAST project
In the small infrastructure project in Teslic where the RAST project provided final works on two streets in the Lanara industrial zone, five investors bought plots and some of them started building their production facilities. The company Export service LLC started construction of a production facility. This company bought two plots during the first public auction in June 2017 with a total area of 10,700 m2. The company plans to hire 35 employees. The total expected number of employees due to new investments is 55.
In Bihac, CRS and the City of Bihac jointly built the main water distribution pipeline in the Kombiteks business zone with a length of 650 m and cost of ca. 150,000 BAM which improved conditions for doing business for existing companies including safety and environmental regulations. Most of the facilities were sold to interested investors before RAST, while two investors bought available facilities during RAST project implementation. The RAST project also initiated the construction of a secondary Contract signing for the construction of a secondary water water supply network that will be financed supply network between the businesses of the Kombiteks jointly by businessmen in the Kombiteks business zone business zone. This project was designed as a public-private partnership. During RAST, several facilities were sold to interested investors in accordance with the Law on Bankruptcy Procedure. The infrastructure will serve more than 20 companies with 150 employees in FY19.
According to the responsible entity ministries, co-financing of infrastructure works in industrial zones and successful start-ups resulting in new jobs have had a significant impact on the growing number of industrial zones in which local government allocate capital infrastructure funds. This was confirmed by increased investments in industrial infrastructure which municipalities and the Federal Ministry of Development, Entrepreneurial and Crafts made over the last three years (total investment was BAM 12.3 mil).
Projects in Bihac, Gradiska, Prijedor and Teslic were crucial to retaining investors who were about to leave
RAST – Final Report 11 the industrial zones due to the lacking and poor infrastructure. The infrastructure upgrades in Gradiska and Ramici-Banja Luka created the conditions to attract two important investors, Calzedonia and Elas. In many of these zones, there was an increase in the level of land purchase by investors and construction of new facilities. RAST supported municipalities to build momentum that encouraged existing and new investors to increase their investments and to create new jobs.
By the Numbers The chart below provides an overview of the number of current beneficiaries per infrastructure project, as well as a forecast of future users (building plots for future facilities).
73
17 14 13 12 9 10 10 5 6 3 1
Gorazde BL Ramici Teslic Prijedor Gradiska Bihac
New building plots / facilities Existing businessess using upgraded infrastrucutre
Overview of the number of current and potential future beneficiaries (building plots and potential investors) per infrastructure project in six industrial zones
USAID defined a minimum amount of municipal co-funding to be secured by the RAST project. The project exceeded this target and secured BAM 1,167,370 ($705,445) in municipal co-funding for infrastructure projects which is for 61% more than the target of BAM 713,000. In addition, BAM 15,880 ($9,596) of local cash contributions were made for BFC activities, yielding a total of BAM 1,183,250 ($715,042) local cash contributions. Local in-kind contributions are estimated at BAM 1,543,704 ($932,865).
The following graph gives an overview of the source of funds for infrastructure projects per municipality.5
5 Amounts in Annex 1 – Overview of infrastructure projects RAST – Final Report 12
Local In-kind contributions were also provided by municipalities. These contributions related mostly to funding part of construction necessary in order to complete the works and put the infrastructure into operation. In-kind contributions also included the costs related to technical inspection, handover, detailed design development, taxes etc. In addition, CRS cost share was also provided for some infrastructure projects and mostly for the DRR measures.
The following chart summarizes USAID total investment, municipalities’ cash/in-kind contribution as well as CRS cost share for RAST infrastructure projects.
Each infrastructure project considered environment and occupational health and safety. Each project
RAST – Final Report 13 was analyzed and approved by USAID/AOR after the development of Environmental Review Checklists (ERC) with Environmental Mitigation Monitoring Plan (EMMP) by CRS. Analysis was done in the line with USAID environmental procedures after approval by USAID/AOR and mitigation procedures were communicated to the responsible parties. None of the completed infrastructure projects had any potentially significant adverse environmental, health, or safety effects. In fact, some of the implemented projects will have a long-term positive effect for preventing possible negative environmental and human impact health caused by improperly designed septic systems. An example is the construction of the wastewater treatment facility (WWTF) in the Nova Topola Agroindustrial zone in Gradiska. The installed equipment has sufficient capacity for future business entities as well as the entire Nova Topola settlement, thus promoting positive impact on environmental/health protection. Social infrastructure is lacking across the country which prevents citizens from accessing vital services such as health, education, housing, recreation, among others. Beyond improving the quality of life and standard of living in communities, social infrastructure also has the potential to enhance economic growth. At the donor's request, the RAST project identified municipal social infrastructure as a way to increase their capacities to improve social and healthcare services for their citizens. This is primarily about projects in Zepce (the outpatient clinic Ozimica), Banja Luka (a daily center for people with disabilities), and bridge construction at Dvorista, Pale Municipality (see Annex 1. Overview of infrastructure projects for more details). CRS allocated funds for disaster risk reduction (DRR) and mitigation measures precisely for the projects in Zepce, Gradiska, Prijedor and Pale. CRS allocated funds for construction of a retaining wall next to the Ozimica outpatient clinic in Zepce as a DRR measure to protect the building from erosion and flooding and which was a mitigation measure included in the USAID-approved Environmental Mitigation Monitoring Plan. Also, due to extreme heavy precipitation events in June and July, CRS allocated funds for water pumping/dewatering of construction pits for the projects in Gradiska, Prijedor and Pale in order to enable the continuation and completion of construction.
4.1.2. Findings from the Survey of Infrastructure Users A survey of industrial zones users, local government, and the population was conducted in April 2018, to capture early signs of impact and to inform management decisions. The most important findings were:
1. Businesses are optimistic that the expanded infrastructure will have positive impact on business within the zone Impact of built infrastructure on business operations (by businesses representatives)
Yes Partially No Increased number of new jobs 67% 17% 6% Increased revenue 28% 50% 28% Further development of the company 39% 44% 17% Expansion of the industrial zone 88% 12% 17% Improved condition for existing and future businesses 94% 6% 0%
RAST – Final Report 14 2. Infrastructure development contributes significantly to local economic development
The expected impact of the constructed infrastructure on development of the Infrastructure contributes to the local community economic developement industrial zone and the local community is (all respondent groups) I do not high. Ninety-four percent of respondents Contribute a know claimed infrastructure, “contributes a lot” lot 1% 57% or “contributes” to the development of A litlle bit the local community. Only a small fraction 4% thinks there is a little contribution (4%)
In addition, 56% of companies claim it will have positive effect on their operations.
Local administrations believe that the Contributes newly built infrastructures will have a big 37% influence (93%) on the further extension and development of industrial zones.
3. Holistic approaches to LED are necessary and should go beyond infrastructure to include: a) strategies to attract investors, b) assistance in production/procurement of raw materials, c) enhancing local administration capacities, and d) continuous support for infrastructure development
A difference in perspective/perception on economic development was identified between companies and local administrations. There are noticeable discrepancies among the responses from local administration and companies in several aspects: a) Contribution of infrastructure to local community development, b) Satisfaction with the infrastructure works within the zones, c) Priority of reconstructed infrastructure, d) Foreseen increased number of new jobs because of the built infrastructure.
In the above aspects, the local administration has considerably more positive responses than the companies. The main reasons for such a discrepancy are different perspectives of the target groups. For example, from the perspective of the businesses, infrastructure is only one of the factors that makes production successful, while local administration considers infrastructure as the most important factor for business operations.
The administrative changes most desired by businesses are: a) simpler, more favorable and transparent administrative procedures, especially regarding building permits, b) introduction of various types of incentives for businesses, c) reduction of payments, taxes, para-fiscal charges and costs of electricity for production, d) improvement of overall conditions to run a business, e) enhancement of local administrative capacities, f) support to retrain the workforce.
4. The overall satisfaction with the expanded infrastructure is high
Satisfaction is higher in the local administration (88% “satisfied” or “very satisfied” responses) than in the companies (61%). The level of satisfaction with infrastructure is also high among residents (71% satisfied” or “very satisfied” responses).
This data is quite encouraging, especially since the views of the companies and local administration are very similar, what is not the case for most of the questions. It clearly shows that development of infrastructure in the industrial zone is an appropriate course of action.
RAST – Final Report 15 4.1.3. Implementation Strategy and Approach Prior to the RAST project, USAID had pre-identified a few municipalities and locations that could benefit from assistance to upgrade infrastructure to expand their economic activity. As a result, CRS initiated project activities in Gorazde, Trebinje and Prijedor at the beginning of the project. In close cooperation with USAID/AOR, construction activities were successfully implemented in two municipalities while the project in Trebinje was cancelled due to risks that were identified.
During project start-up, additional monitoring efforts were carried out to identify municipalities and locations where upgraded infrastructure would contribute to the project goals. The identified local communities were either already involved in the BFC process or actively engaged in other USAID-funded projects. All municipalities involved in the RAST project proved to be very cooperative and committed to bring social changes and improve living conditions of the population.
The main criteria for the analysis and selection of infrastructure projects was to prioritize projects that would attract and retain investors through improved conditions for business operations. As an indirect result, new jobs will be created, and workers will benefit from improved working conditions, as well as greater satisfaction of the rest of the local population.
For each small infrastructure project, the RAST project formed Municipal Working Groups (MWG) and jointly implemented projects through four stages: signing of protocols of cooperation with municipalities and selection and design of small infrastructure projects; pre-qualification process, selection of the sub- contractor(s) for technical documentation, building works and technical supervision of the works; groundbreaking and technical acceptance of the works and handover of small infrastructure projects. Implementation organized in this way ensured full transparency and accountability of selected projects, implemented procurement, and provided a legal framework for local communities to provide significant co-funding in projects. Ten municipal working groups were established in 9 municipalities (two MWGs were established in Banja Luka for two different projects). Handover of construction works was completed for all infrastructure projects.
Municipal Working Groups is a proven CRS methodology for implementation of projects in communities. The aim is to involve relevant representatives of local authorities and communities jointly and with full participation in the process. In this way we increased ownership within the project and later maintenance and management. MWG were established in each municipality to analyze and jointly prepare the proposed infrastructure project in the form of a project proposal in order to obtain donor approval and to prepare for its implementation. Each working group signed a Protocol of the Work, which defined the rules of the work, frequency of meetings, obligations of members, etc. The working groups included participation of both men (31) and women (11).
An important role of the working groups was to collect and provide monitoring data related to the project indicators. Working group members were very active and helpful during the technical assessment stage and during the construction phase. It is worth mentioning that the last project (water supply in Bihac) was approved in May 2018 and the MWG had to work under strict deadlines. All MWG members were very active during the technical assessment and construction phases resulting in a successful and timely completion of the project.
After the preliminary technical assessment, analysis of project proposals and pre-approval from USAID, the next official step was the signing of a Protocol of Cooperation for each project and with each municipality. Beside the municipalities, this Protocol was also signed with other stakeholders when
RAST – Final Report 16 necessary, e.g. in Bihac - the municipal water supply company, Institute for Spatial Planning in Bihac and owners of building plots. The Protocols regulated the obligations throughout the entire implementation period of the projects between CRS and municipalities, or other stakeholders.
A pre-qualification process was conducted for construction, design and supervision companies for each infrastructure project in compliance with national contracting legislation. Calls for pre-qualification were announced in the newspapers “Dnevni list”, “Oslobođenje” or “Nezavisne novine” in cooperation with MWG members. In the later stage of the tender process, CRS directly asked companies with good references and experience in the required conditions to send offers for specified work or technical fees on the defined infrastructure project.
Some of the services performed by contractors were contracted prior to project approvals as they related to project design, project documentation audit or expert-technical supervision of the execution of works. In such cases, CRS and local municipalities developed lists of potential contractors with strong reputations and experience in the desired services.
After analyzing submitted offers, CRS selected the best bidders and signed contracts with these companies. All selected companies were successfully vetted against a database that ensures that U.S. Government resources are not being channeled to or through banned individuals and organizations.
Overall, a relatively low number of companies responded to the calls published in newspapers. This could be explained by the large number of departures of skilled labor to EU countries, especially skilled construction workers. This phenomenon has been ongoing and increasing for several years and has significantly reduced the capacities of all companies, especially those that meet the eligibility criteria and contractual obligations to work with international organizations.
After the completion of tender procedures and definition of initial contractual obligations, CRS and municipalities signed co-financing agreements with details previously defined by the Protocols on Cooperation. All projects included co-funding from municipalities resulting in a significant local contribution in cash and in-kind of $1,638,310. Apart from the pre-approved projects in Gradiska and Zepce which already included a defined co-funding ratio, CRS worked with each municipality to define an ambitious and yet realistic ratio.
Unanticipated needs on the ground required Annexes to the agreements and often changes were necessary in the co-financing terms. In some cases, unforeseen circumstances resulted in the need for of the use of CRS’s discretionary funds in order to meet the planned scope of works and to ensure that infrastructure facilities meet all safety requirements.
Monitoring and progress of project activities was conducted by checking designs, following the works on-site, and finally technical acceptance and handover.
The checking of detailed designs was performed by CRS’s engineering team and appointed competent members of the MWG. Based on each project’s specificities and whenever legally mandated, experienced companies or consultants were engaged for specific purposes (e.g. for the wastewater treatment facility in Gradiska), but with the strict coordination and oversight of CRS to ensure application of the approved technical solutions and required environmental measures. In some cases, professional companies were engaged to provide additional design services or modification of existing documentation.
During the execution of construction works, monitoring efforts were coordinated by CRS and performed by 1) external companies (Banja Luka), 2) municipalities (Pale, Gradiska, Zepce, Bihac), 3) consultants, and
RAST – Final Report 17 4) CRS engineers (all projects). During the monitoring of the execution of works, supervisory engineers and CRS engineers also supervised the application of environmental protection measures defined in the Environmental Review Checklist - Environmental Mitigation & Monitoring Plans (ERC-EMMP).
The nature of infrastructure projects often implies that unforeseen technical, administrative and budgetary issues may affect implementation. In many cases, adjustments are necessary to ensure timely, safe and effective implementation. Almost all infrastructure projects experienced unexpected issues and delays. In addition to the above, inadequate technical solutions or estimates of underground conditions affected implementation in several municipalities, while some projects experienced administrative barriers in certain phases of implementation. More details on challenges are presented in Section 5.
Despite some challenges, all infrastructure projects were successfully completed, and all constructed facilities are now operating and serving their intended purpose with proper management and maintenance.
Depending on the type of infrastructure, management is carried out by designated companies and competent services within the municipal local administration which are performing these tasks by themselves or engaging experienced companies. Budgetary funds are foreseen for the management and maintenance of built facilities each year, if facilities are not self-sustainable after project implementation, such as, for example, the water supply system in Gorazde.
Technical inceptions were organized based on BIH building legislation, which means that municipality formed a special technical commission of different technical experts that checked the documentation and the work performed. All small infrastructure projects were accepted by technical commissions and municipalities and issued a usage permit. After that for each small infrastructure projects, the project team organized handover of the works and organized opening events.
4.2. Objective 2: Improved BFC-related local government services to expand economic activity Business Friendly Certification South East Europe (BFC SEE) is a program for improving the quality of services and information that municipalities in the SEE region offer to companies. BFC SEE provides municipalities with a clear roadmap for creating a favorable business environment and introducing internationally recognized standards of efficient and transparent local administration. For investors looking to move or expand their operations in South East Europe, BFC SEE serves as a standardized tool for assessing the local conditions for doing business, indicating which municipalities in the region provide the best investment climate. Ensuring a stable and predictable business environment guarantees investors that all certified municipalities in the region provide a premium level of services.
Since 2013, 45 municipalities have become certified across four countries in South East Europe. Forty- seven percent of these municipalities are from BiH while the rest are from Croatia (20%), Serbia (18%) and Macedonia (15%). Montenegro joined BFC in 2016 but no municipalities have yet achieved certification. BiH hosts the majority of BFC municipalities largely due to the external support provided by USAID.6
The goal of certification is to encourage quality management in local governments and recognize and promote examples of best practices in LED, but also strengthen competition among municipalities in the country and the region in attracting new investments. Municipalities entering the program set benchmarks, positioning themselves against the most progressive ones in SEE and secure stronger support
6 In addition to RAST, Growth-Oriented Local Development (GOLD) was a USAID- and SIDA-funded project (2013- 2016) which aimed to increase the level of economic activity in selected municipalities in BiH. RAST – Final Report 18 from national and international institutions and donors. The BFC SEE program improves and harmonizes business conditions in the region, strengthens the image of SEE as an investment destination, and encourages economic cooperation.
BFC certification is performed based on a clearly defined process. The process is conducted in several phases, and in each of them local governments need to fulfil certain criteria, classified into three groups: eliminatory, very influential, and important. The conditions for obtaining a certificate is to have in total at least 75% of all criteria fulfilled, all 17 eliminatory criteria have to be 100% fulfilled and each criteria has to be fulfilled higher than 50%. A Business Friendly Certificate is valid for 3 years. A ceremonial certificate award is organized once a year and is performed in the presence of prime ministers, ministers, mayors, municipal representatives, supporting institutions, as well as business representatives.
BFC SEE uses 67 certification criteria to evaluate the quality of the local business environment. The implementation process of the BFC standards is designed to last about one year. However, during the project it usually lasted 18 months. The length depends on the capacity of LED Office, municipal BFC teams and other municipal departments as well as municipal leadership commitment to improve the business environment.
Phases of the BFC certification process
In order to implement the BFC program in BiH and ensure its sustainability, two BFC networks are established, one in FBiH and one in Republika Srpska (RS). BFC networks are led by competent entity ministries.7
7 There are two BFC Networks in BiH, one in each entity. In Republika Srpska, the BFC Network is composed of: the RS Ministry of Economic Relations and Regional Cooperation, RS Ministry of Administration and Local Self- Government, RS Chamber of Commerce, EDA Development Agency and RS Association of Municipalities and Cities. In FBiH it is composed of the Federal Ministry of Development, Entrepreneurship and Crafts, Regional Development Agencies (REDAH, SERDA, REZ, NERDA), and FBiH Chamber of Commerce.
RAST – Final Report 19 Throughout the RAST project, CRS used BFC standards as a foundation and guideline for improving municipal economic governance systems capable to support and motivate municipalities to boost local economic development using all available resources and comparative advantages. It was important to raise the awareness of municipalities regarding their greater engagement in development activities and that BFC is not one more process of standardization, but rather the foundation of LED presented below.
RAST’s approach to Local Economic Development The LED concept is relatively new in BiH and was mainly introduced and supported by international projects, primarily by USAID. There was often a misunderstanding of LED principles even among certified municipalities. Most mayors had not understood the basic principles of LED and they had in mind a huge amount of funding. LED is instead a participatory process through which local actors (municipalities, business community, and civil society) create durable partnerships to efficiently and effectively utilize local available resources to stimulate economic activity. This in turn supports the local economy by preserving existing and creating new jobs, thus improving people’s quality of life. LED is the process of increasing the strength and effectiveness of local communities and enabling the business community and people to participate in the decision-making process.
CRS developed the model of LED presented at the figure below based on what is written above and experience gained from working with 17 municipalities. The model was presented to ministries, mayors, and others on many occasions and was very well accepted. The three basic pillars of LED are a municipal development strategy, a LED office and public-private partnerships. At the same these pillars are also the first three BFC eliminatory criteria, which municipalities must fully fulfill.
4.2.1. Impact and Results Thirteen municipalities were BFC certified by the end of the project, leading to new investments
As a result of RAST support, 17 participating municipalities achieved substantial progress toward BFC
RAST – Final Report 20 certification with nine certified and four in the final stages of certification within the life of the project.8 One municipality is in process, since the municipality of Novi Grad received a BFC Preliminary evaluation report in late September 2018 and the deadline for implementation of recommendations is the end of February 2019. Three municipalities did not successfully complete the BFC process as result of a lack of internal organization and capacity (see Annex 2 for additional info).
With RAST support, municipalities have successfully established key LED policies and procedures and developed strategic planning documents that rarely exist in any municipality in the country (capital investment plan, strategic marketing plan, branding manual, local employment action plan, monitoring procedure for issuance of building permits, investment promotion video, and sectoral strategy).
Preliminary evidence shows Average level of BFC criteria improvement that the establishment of a LED (by BFC Criteria) office as one of the key BFC steps, and the most Information Technology 9% responsible for a business- Building permits 18% friendly environment and for Public finance 19% fulfillment of all other BFC criteria (marketing and Public-Private Partnership 21% promotion, infrastructure and LED Office 24% utility development, Economic Council 25% entrepreneurship and Transparency 28% workforce development, and creation of a LED database). LED database 31% The activities of a LED office Strategy 32% result in new investments. For Labor market 35% example, the LED office in Promotion 39% Zenica enabled ten companies Capital Investment Plan 43% to expand. The LED office in Brod attracted company from Austria (Antun Parr) to open a new factory. LED office in Teslic sold construction land plots to five domestic investors, while the LED office in Trebinje attracted investors from Serbia to open a new textile factory.
The RAST project supported municipalities in fulfilling 225 BFC evaluator recommendations and enabled them to receive a positive final evaluation reports, which means that they fulfilled more than 107% of the target. The assisted municipalities increased their fulfillment of the BFC criteria by an average of 28%. The table below shows the improvement rate for made each of the BFC criteria/areas.
Municipalities are more attractive to potential investors
Municipalities significantly increased their promotion by 84 promotional activities that raised awareness of private investors, entity ministries for economy and SMEs and FIPA about their potential and capacities. This indicator target was exceeded, with 153% fulfilled. As a result, municipalities reported a 30% increase in visitors to their redesigned and regularly updated web pages. This also resulted in direct communication
8 The Municipalities of Brod, Bijeljina, Kakanj and Zavidovici received positive BFC Final evaluation reports in December 2018. Due to NALED’s delay, the verification visit, as a last step in the certification process, is scheduled for February 2019. RAST – Final Report 21 with more than 10 institutions and organizations from two countries which participated in the promotion events organized by NALED and RAST project in Serbia. This helped them enhance regional cooperation among ministries, chambers of commerce, associations of municipalities, development agencies, and CSOs and also to see the successful examples of mechanism and instruments that support LED, organizational structure of industrial zones, and functional private-public dialogue.
Investments by municipalities in BFC certification are being rewarded with international recognition, making the municipalities more attractive to investors. 80% of all 12 municipalities from the region listed on the Financial Times list of top investment destinations in Europe (FDI Cities of the Future) are BFC certified and the number has doubled since 2012.9 Bijeljina and Prijedor are municipalities from BiH.
The Mayor of Prijedor, the first BFC municipality in BiH (2013) explained that since Prijedor achieved BFC, over 15 additional companies became registered and contributed to the economic development and creation of 2000 jobs.10 The mayor of Bijeljina related that the interest of investors significantly increased after Bijeljina received a BFC Certificate and the city was listed on the Financial Times list.11
RAST worked to strengthen promotion by a two-day workshop called “How to attract media attention” for public relations and LED experts from 13 BFC-certified municipalities. The workshop was organized in close cooperation with two BFC Technical Secretariats (REDAH -Regional Economic Development Agency Herzegovina and RS Chamber of Commerce (CoC)). The workshop aimed to strengthen municipal capacities to promote economic potential. Through individual and group work, participants acquired new knowledge and skills and learned good practices regarding media relations and promotion of economic opportunities from their municipalities.
To promote BFC certified municipalities, RAST also ensured larger visibility of the BFC logo through manufacturing specifically designed BFC signs for nine certified municipalities. A consultant developed a design which also contains each municipal slogan oriented to potential investors as well as USAID’s and CRS’s logos. The signs are placed at the entrances and exits of each municipality.
A one-day workshop was organized in September 2017 to prepare journalists to report more accurately about BFC-related topics and focus on local communities and their successes in fulfilling BFC standards and improving their business environment. The workshop gathered journalists from seven media, including entity news agencies FENA and SRNA, as well as media outlets specialized in economic topics. Sessions on LED were facilitated by competent experts, including representatives from the RS CoC, MDEC, business sector and economic experts.
During March-September 2018, Biznis.info produced 14 articles on six BFC certified municipalities (Gradacac, Gradiska, Bijeljina, Zenica, Prijedor and Trebinje), which included stories of successful local companies. These articles had 31,962 views and a reach of 524,697 on Facebook. Biznis.info also covered project activities, such as regional promotion of BFC municipalities and study visit to Serbia. The total reach of stories on BFC communities and BFC related topics is bigger, as the articles published by Biznis.info were also republished by numerous regional media.During the RAST project, municipalities served more than 1,100 businesses. This is 80% more than the target. Between 2016 (prior to certification) and 2017, the number of building permits issued by municipalities increased by 29%. This number continued to increase by an additional 12% between 2017 and 2018.
9 Data from NALED (2018) 10 Interview of mayor of Prijedor for portal BiznisInfo (www.biznisinfo.ba/prijedor_mayor) 11 Interview of mayor of Bijeljina for portal BiznisInfo (www.biznisinfo.ba/bijeljina_mayor) RAST – Final Report 22 Municipalities have increased capacity to lead LED
RAST organized a LED training as well as a study visit to Serbia which significantly contributed to strengthening the capacity of key actors. The training resulted in 25 investment projects which were distributed to 370 potential investors. In addition, there is interest of the RS Ministry of Administration and Local Self-Government (MALSG) to incorporate the training into regular professional development offered by the RS to mayors, council members, and municipal staff. The study visit resulted in new ideas for LED and strengthened regional cooperation.
CRS designed and facilitated the first-ever LED training in BiH, building the capacity of 34 municipal representatives from 17 municipalities as well as representatives from FIPA. The municipalities involved in the training were either already BFC certified or progressing towards BFC. The aim of the training was to improve the capacity of municipal LED representatives to manage LED activities in a more efficient and professional way in order to increase the functionality and sustainability of the mechanisms and procedures established through the BFC process, ultimately improving the municipalities’ probability for BFC re-certification. Workshop participants had the opportunity to work directly with a potential investor who was searching for a new investment location in BiH.
As a result of the LED training, municipalities prepared 25 investment projects. Projects' profiles were submitted to FIPA to be shared with potential investors using its channels. Communication with interested investors will be continued by FIPA and municipalities. Since the training, FIPA disseminated municipalities' projects profile to 370 potential investors. Examples include an investor from Turkey (CFC Elektrik Enerjisi Toptan Satis A.S.) interested in developing projects in Gradiska (construction of production facility for processing vegetables), Jablanica (bottling of water) and Zavidovici (construction of a mini hydro-plant).
The LED training was the first of its kind and the deputy minister of MALSG expressed interest in including this type of training in the annual system of trainings for municipalities/cities. By including this type of training in their system, the LED training will become obligatory for representatives of municipalities/cities including mayors and council members.
In May 2018, the RAST project organized a three-day study visit to Serbia (Belgrade, Novi Sad and Sabac) for 21 mayors and representatives from nine BFC-certified municipalities, MDEC, MALSG, RS CoC and FIPA. The main goal of the study visit was to exchange good practices and share experiences on LED activities. The main discussion focused on establishing a favorable business environment at the local level, instruments and mechanisms for support to business community, and on efficiently using available resources for local economic development. Representatives of BiH municipalities had the opportunity to participate in discussions with counterparts from Serbia on the topic “Creation of competitive business climate through cooperation of public and private sector”.
“I believe that I share the opinions and impressions of all participants in the study visit to Belgrade, Novi Sad, and Sabac that the visit was, on the one hand, extremely useful in terms of good practice, and on the other hand, perfectly professionally organized by CRS and NALED, host cities, and other institutions. On behalf of the representatives of the City of Doboj, I sincerely thank CRS and the RAST project for the provided opportunity to gain this wonderful and practical experience.” Rado Djurdjevic, city of Doboj
RAST – Final Report 23 A new web portal of industrial/business zones in FBiH now facilitates private sector and government investments
RAST provided technical and financial assistance to the Federal Ministry of Development, Entrepreneurship and Crafts to develop the first-ever web-based information system (www.zonefbih.gov.ba) in BiH that enables national and international investors to search for investment locations in the Federation Bosnia and Herzegovina (FBiH). The tool serves as a platform to present consolidated, comprehensive, and up-to-date information on investment locations to potential investors, providing improved services to the business community and showcasing municipalities that are actively promoting LED. Some of the key information available in the Information system (IS) includes data on the available infrastructure, size of the industrial and business zones, list of companies operating.
Municipalities use the IS to improve the planning, construction, management and promotion of business zones. The Ministry uses the IS as a basis for conducting comprehensive analysis, which enables better planning of the development of business zones. The integration of the IS with the Federal Administration for Geodetic and Property-Legal Affairs, the FBiH Tax Administration and the Financial-Information Agency provides an added-value to the IS as it supports enhanced cooperation among government institutions.
In September 2018, the Ministry held a public presentation of the IS which included the Federal Prime Minister, mayors, municipal representatives, the business community, and various local and international organizations. This event was widely covered by electronic and print media.
On the Ministry’s request, almost all municipalities in FBiH which have industrial/business zones appointed a contact person to ensure ongoing communication with the Ministry in order to provide updated information on their zones. To ensure sustainability of the information system, the Federal Ministry reached an agreement that UNDP would take over the responsibility for training of municipal teams to work with the IS and to collect and enter initial data on industrial zones.
Web-based information system of industrial zone in FBiH “I have to admit that this was a fairly complicated work and the developed IS will greatly contribute to better planning and development of industrial zones in FBiH. The big challenge was the integration of this system with other federal institutions. The federal government's goal is that each municipality has an industrial zone ready to accept new investors. In order to achieve that, we need to support municipalities
RAST – Final Report 24 to invest in industrial zone infrastructure.” Fadil Novalic, Prime Minister of FBiH.
Municipalities are more committed to LED
The project was successful at increasing the awareness of mayors about what LED means and the importance of a participatory process. RAST organized various events to motivate certified municipalities to remain committed to improving their local business environment and promote the BFC program to other municipalities.
The RAST project organized a one-day promotional event in the premises of the Foreign Trade Chamber of BiH in Sarajevo in November 2017 on the topic “Local economic development and creation of business- friendly environment in line with BFC standards”. The event aimed to promote BFC-certified municipalities and to emphasize improvements in the business environment as a result of alignment with BFC standards. Mayors, municipal officials, MDEC, representatives of USAID, BFC Regional Technical secretariat (NALED), representatives of both BFC Technical secretariats in BiH, German Development Agency (GIZ), regional and local development agencies, private sector representatives, academia and media participated in the event. Mayors and representatives from six with RAST support certified municipalities (Doboj, Gradacac, Jablanica, Novi Grad Sarajevo, Posusje and Zenica) participated in a panel discussion and presented key improvements and best practices made throughout this process and identified LED challenges in their municipalities/cities.
The event resulted in a set of recommendations, including: better promotion of LED using BFC standards; acknowledgement of the crucial role of higher-government leaders in the promotion and implementation of BFC standards; the need for strengthened dialogue among businesses and governments; the need to utilize BFC support to strengthen municipal LED capacities; and continuation of close cooperation and support among BFC-certified municipalities to create and pursue joint investment opportunities.
RAST supported the municipality of Zepce and the local Development Agency Zepce to organize a Business forum in October 2017 to promote the establishment of a business-friendly environment. Over 60 municipal representatives, LED agencies, private sector, international organizations, associations of businesses, chamber of commerce and civil society sector from the country and region (Croatia, Serbia, and Montenegro) participated in this event (www.postaja.ba/zepce_biznis_forum). After the forum, several municipalities (Maglaj, Zivinice, Zvornik, Derventa) have begun fulfilling the criteria (for example - development of spatial planning documentation, etc.) as a precondition to joining the BFC process.
BFC Networks in BiH are stronger
In order to strengthen the capacity of BFC networks in both BiH entities, RAST organized the first-ever joint workshop to train current and new BFC evaluators in the use of a new edition of BFC standards and new e-platform. The e-platform was developed with the support of the Regional Cooperation Council and GIZ Open Regional Fund for Modernization of Municipal Services to facilitate the process of communication between BFC evaluators and municipal teams.
This was a unique opportunity for 35 representatives from both BFC networks in BiH to meet, exchange experiences, harmonize their approaches to LED, and become familiar with the current and new BFC standards through presentations and practical examples given by NALED experts. Also, it is important to point out that RAST brought together BFC evaluators not only to build their capacity but also to create synergies between the different teams as they had never worked together in the past.
RAST – Final Report 25 4.2.2. Implementation Strategy and Approach Through comprehensive support for all stages of the BFC process, RAST strengthened Municipal Development by supporting municipalities to establish and/or strengthen a unit for economic development (LED office) and to develop several strategic documents. These mandatory BFC criteria introduce systematic changes in processes and procedures of municipal administrations. Some of these systematic changes are: Development of strategic documents and introducing mechanisms for monitoring their implementation; Establishment and staffing of an LED office; Establishment and maintaining of public-private dialog in the form of a local economic council; Adoption and implementation of a participatory methodology for development of a capital investment plan; Development of a local employment action plan; Simplification of the procedure for issuing building permits. RAST supported the development of strategic documents in municipalities where such documents expired or did not exist at all. Strategic documents were developed using the MiPRO methodology12 which is widely accepted as a relevant guideline in BiH. An overview of the technical support that was provided for BFC criteria in each municipality is presented in Annex 2.
In municipalities which had valid strategic documents, we noticed that there was often no established mechanism (team, body, person, etc.) responsible for implementation of programs and projects from the strategy. Consequently, there was no reliable data and information regarding implementation of the strategy. RAST supported mayors to establish mechanisms for monitoring and reporting on implementation of the municipal development strategy. Also, mayors were supported in development of annual plans with prioritized projects from the strategic documents.
A Municipal LED Office is a unit of the local government tasked with planning and monitoring economic development. Within the BFC process it forms the most important pillar because it establishes ongoing capacity and an institutional structure for ongoing improvement regarding LED. A LED office has various tasks and responsibilities including: strategic planning; serves as a one-stop shop for the business community; markets and promotes municipal business conditions and economic potential to potential investors and business associations; creating an LED database; continuous contacts with the business community, potential investors, business associations; analysis of the local business environment; designing and implementing programs for entrepreneurship development and start-ups; developing the labor force - cooperating with employment services, educational institutions; contacts with institutions at the regional level as well as with higher levels of government in charge of economic development. LED office can be established in various organizational forms inside or outside the municipal administration (department, sub-department, center for investors, cabinet, local economic development agency). Strengthening the organizational and institutional capacity of LED offices enables municipalities to be more successful in providing support to existing businesses, attract new investors and create new jobs.
Taking into account the wide range of activities to be carried out by the LED office and based on experience in working with BFC-certified municipalities as well as analysis of the BFC reports and the fulfilment of criteria for which the LED office is in charge, it can be clearly concluded that the efficiency in implementation of overall municipal LED activities is very dependent on the capacity of the LED office.
The foundation of local economic development lies in the creation and maintenance of public-private dialogue through the establishing and functioning of a Local Economic Council (LEC). An LEC serves as an
12 Methodology for Integrated Local Development Planning. Available online at http://www.ba.undp.org/mipro.methodology RAST – Final Report 26 advisory body of mayors about all issues relevant for improving conditions for doing business and represents the voice of the business community. According to the BFC criteria, municipal administrations should consult the business community before or in the process of making decisions which have influence on its work. Municipality must prove that it takes into serious consideration suggestions and recommendations provided by the LEC in the decision-making process at the local level. A secretariat is responsible to monitor the status and implementation of LEC recommendations. As a result, municipalities adopted more than 20 recommendations/suggestions provided by LECs in terms of decreasing municipal administrative fees and costs of utility services, supporting workforce retraining to match the needs of companies, and introducing new education programs in school for private sector needs.
Capital Investment Plan (CIP) (infrastructure development plan) is medium-term (3-5 years) integral plan and includes joint investments from the municipal budget and investments by all local public enterprises in infrastructure, public facilities and equipment throughout the municipality. In most municipalities, the infrastructure plan, if it exists at all, was developed by mayors and a small group of people without clear criteria and procedures for selection of infrastructure to be financed. A lack of a CIP causes mayors and local councilors to form unrealistic assessments of investment needs, poor cooperation with local public companies, and often too many projects for which the municipality does not have sufficient financial and technical capacities.
RAST provided support to municipalities in all steps of the CIP development process, which usually takes four months. This supported mayors and their teams adopt and implement a participatory (public sector, business community, civil society) methodology for CIP development. This methodology resulted in changed behavior of local administration and local public companies and increased efficiency and transparency of spending municipal budget to ensure balanced development of the municipality. Once adopted, the CIP development methodology should be applied each year for updating the CIP for the determined period of time.
Local Employment Action Plan demonstrates active participation and a systematic approach of municipalities and other stakeholders (private sector, chambers of commerce, employment offices, education sector, civil society, etc.) to reduce unemployment. Knowing local economic circumstances allows program planning and measures that can most effectively reduce the number of unemployed. In addition, the private sector gets support from the local administration in this way to improving its own competitiveness. This is also an effective measure to slow down the departure of skilled workforce from BiH to Western countries. However, municipalities, employment offices, and higher government levels need to allocate more funds to implement the programs contained in LEAP.
This activity is complementary and synchronized with the municipal activities on the project "Support to local employment partnerships in BiH," implemented by the International Labour Organization (ILO) and financed by the EU.13
One of the administrative procedures for which the private sector is most interested is to simplify the procedure for issuing building permits. RAST supported six municipalities to streamline this procedure in order to reduce its complexity, time, and costs of investors. RAST helped municipalities to adopt the practice of monitoring this procedure continuously in close cooperation with the business community and
13 The municipalities of Zenica, Novi Grad Sarajevo and Laktasi are partners in this ILO program RAST – Final Report 27 to take steps for its optimization.
In BFC municipalities this procedure is fairly efficient when it comes to municipal administration, but the process is slowed down by inefficient public companies which municipalities do not supervise (electrical energy companies, telecommunication, water agency, etc.) and higher government levels (ecological and other permits). Despite this fact, improvement is visible when comparing the number of building permits issued by BFC municipalities for 2016, 2017, 2018.
RAST high rate of success across 17 participating municipalities with diverse capacities and needs was rooted in an adaptive technical management approach whereby CRS tailored support to the unique needs and stage of progress amongst the municipalities. An additional challenge was that BFC standards were revised which led to delays in the BFC process for municipalities. Instead of 18 months for certification we had 12 months. The cooperation with these municipalities was formalized through signing protocols of cooperation. The protocols outlined the justification for municipal requests, the possibilities of implementation, the anticipated level of technical assistance from CRS, and the mutual obligations of the municipalities and the RAST project during the BFC process.
RAST provided assistance to municipal representatives (mayors, BFC teams, municipal officials), representatives of public companies and institutions/organizations and private sector in multiple forms which consisted of over 90 trainings, consultations, coaching sessions, peer-to-peer cooperation and meetings to support the local administrations to fulfill the criteria, improve their local economy, and obtain the prestigious certificate.
CRS worked to foster accountability and transparency between CRS, the municipality and local stakeholders. This was done by close cooperation with the BFC networks and BFC technical secretariats in both entities, regional BFC technical secretariat (NALED), MDEC and FIPA. Cooperation was formalized by a memorandum of understanding with all of the above-mentioned stakeholders. This cooperation resulted in better understanding of the BFC criteria and process by municipalities. RAST also worked with BFC technical secretaries that organized additional trainings for evaluators in order to have similar criteria during the preliminary and final evaluation which was identified as a gap during the certification process in Year 1. NALED and the BFC networks took this finding very seriously and improved the evaluators’ approach during year two, they even increased the number of evaluators.
RAST also worked to coordinate and harmonize efforts with other implementers of economic development projects in the country, including International Finance Corporation and the British Embassy in BiH LIFE (Local Investment-friendly Environment) Project and EU and GIZ ProLocal Project (Program for Local-Self Government and Economic Development).
CRS provided assistance to municipalities using internal and external resources. Based on a very specific and long list of RAST activities requiring various type of expertise, CRS created a pool of potential consultants using a pre-qualification procedure and a public call. CRS conducted a pre-qualification procedure for potential subcontractors for implementation of specific BFC related activities in 16 areas. As a result, 35 consultants (including companies and individuals) were selected in RAST tenders.
RAST – Final Report 28 5. MONITORING AND EVALUATION 5.1. Indicator Performance Tracking Table (IPTT)
EOP EOP % Indicator Explanation of Deviation Target Actual Achieved Activity Goal: 2.1. Improved capacity of private sector to compete in market economy Activity Purpose: Businesses use upgraded infrastructure and improved BFC-related local government services to expand economic activity Upon USAID’s request, the number of infrastructure projects was increased from 5 Number of businesses using and potentially using 100 182 182% to 6, resulting in a higher achievement than initially planned. Also, the value infrastructure upgraded with RAST support includes the available new building plots for the projects in Istocni Stari Grad. In Y1, three documents (building permits, urban permits, permits for use) were Number of businesses using improved BFC-related 610 1102 180% counted to calculate the indicator. In Y2, the indicator counted one document local government services (building permits). Number of promotional activities implemented by Most certified municipalities initiated promotional activities on their own and BFC-certified local governments with RAST’s 55 84 153% received support from RAST. support to attract private investments The initial plan only included one project contributing to the wellbeing of individuals Number of individuals in social or health need using with social and health needs. Upon USAID’s request, the outpatient clinic in Zepce 25 4614 18,456% infrastructure upgraded with RAST support was added to the project, increasing the total number of beneficiaries as well as beneficiaries of constructed bridge in municipality of Pale. Number of industrial facilities directly supported by 50 58 116% Number of infrastructure projects increased upon USAID’s request. USAID - funded infrastructure Number of industrial facilities directly supported by USAID - funded infrastructure that export their 15 23 153% Number of infrastructure projects increased upon USAID’s request. products
RAST – Final Report 29 EOP EOP % Indicator Explanation of Deviation Target Actual Achieved Activity Sub-Purpose: 2.1.2.2. Improved government services and regulations relevant for business activity As explained above, the number of infrastructure projects increased, thus increasing Value of investments in local infrastructure the amount of local government co-funding. In addition, the projects in Gradiška upgrades supported by RAST, including local 713,000 2,769,915 388% and Bihać, significantly increased the amount of contributions due to the high government co-funding (BAM) project costs. This indicator includes financial and in-kind contributions of local governments as well as CRS cost share for infrastructure upgrades. Nine municipalities were certified by EOP. In addition, four municipalities fulfilled all conditions for certification as per the positive BFC Final evaluation report but are Number of certificates/standards obtained by the not yet certified pending issuance of the verification reports. The process will be 10 13 130% public-sector organizations completed by NALED in February 2019. As per the MEL plan. this indicator counts both certified municipalities and the ones that fulfilled all conditions for certification per the BFC Final evaluation report. Activity Outcome/Output 1.1: Small infrastructure projects implemented Number of RAST small infrastructure projects 10 10 100% completed Activity Outcome/Output 1.2: Municipalities implement BFC standards Number of BFC evaluators’ recommendations 210 225 107% fulfilled with RAST’s assistance
RAST – Final Report 30 MEAL System CRS developed a Monitoring, Evaluation, Accountability and Learning14 (MEAL) system to track progress and demonstrate impact of the RAST project. The MEAL system helped tracking and documenting progress in order to inform decision-making and adapting strategies to maximize impact. In October 2016, CRS organized a workshop to develop the project’s MEAL system. Later on, a log-frame and initial MEL plan was developed with support from the MEASURE unit.
In July 2017, the RAST team organized a reflection workshop to foster learning and ensure efficient planning for Y2 implementation. The goal of the workshop was to reflect on results-to-date and lessons learned in order to develop a realistic work plan for Y2.
Data was collected through official municipal letters and documentation for infrastructure projects and BFC certification agency documentation. Whenever deemed necessary, data would be validated directly with relevant stakeholders. RAST maintained reporting through the BIH PERFORM online system. The project PIRS, targets, locations, and approximate expenditures were entered regularly.
Data Quality Assessment A Data Quality Assessment (DQA) was conducted with USAID and MEASURE BiH on September 26th, 2017 to assess four indicators: • Number of BFC evaluators’ recommendations fulfilled with RAST’s assistance, • Number of certificates/standards attained by public-sector organizations (RAST will contribute to this indicator by tracking municipalities/cities with renewed/new BFCs), • Number of businesses using improved BFC-related local government services, • Number of businesses using infrastructure upgraded with RAST support. The RAST team addressed all recommendations by adjusting all indicators according to DQA standards and introducing new indicators and targets. All changes were entered into the BIH PERFORM GIS mapping application.
MEL Plan Revisions The MEL was revised twice, in October 2017 and July 2018. October 2017: • New targets for Y2 were adjusted to reflect project changes. • New indicator: "Number of individuals in social or health need using infrastructure upgraded with RAST support", was introduced to count users of reconstructed infrastructure that are not business related. • The name, definition, and calculation methods of several indicators were revised based on MEASURE BiH DQA recommendations.
July 2018:
• EOP targets for several indicators were revised. • Two new indicators were introduced, along with PIRS developed for those indicators: 1) “Number of industrial facilities directly supported by USAID – funded infrastructure”
14 MEAL is CRS’ worldwide set of policies and procedures designed to enable integrated monitoring of project implementation, evaluation of the project outputs and outcomes, ensuring accountability to the donor and beneficiaries as well as enabling learning from the implementation process. RAST – Final Report 31 2) “Number of industrial facilities directly supported by USAID – funded infrastructure that export their products (breakdown on EU and other markets)” Both revisions of the MEL plan along with PIRS developed for the new indicators were approved by USAID and uploaded to BIH PERFORM.
Data Collection Several methods were used for data collection within the RAST MEL system:
a) Survey of infrastructure users. To collect qualitative data and capture early signs of impact, CRS developed a survey of infrastructure users. This survey collected qualitative data regarding the impact of the small infrastructure projects in industrial zones. They survey also served to help municipalities have useful data to design any future interventions. During April 2018, the survey on infrastructure upgrade was conducted in the industrial zones in five towns: Gorazde, Banja Luka, Prijedor, Teslic, and Gradiska. The goal was to gather information that will be used for further programmatic steps and management decision to be used in those or in other locations. A specific questionnaire was developed for each target group which considered the specific relationship of the target group with the zone. The survey targeted three groups: a) Companies operating in the industrial zone (response rate 42%, 19 respondents out of 45), b) Local administration connected to the industrial zone (response rate 68%, 32 respondents out of 47) c) Residents living next to the industrial zone (19 responses out of 20 surveyed).
b) Data collection for new indicators. Data collection tools to inform indicators introduced in Y2Q3 were also developed. A field visit monitoring form was developed to inform the indicator “Number of industrial facilities directly supported by USAID funded infrastructure”. Field visits to count and verify active industrial facilities were conducted during quarter 4. Findings were cross-checked with data provided by municipalities, i.e. list of active businesses within the industrial zone.
Data for the indicator “Number of industrial facilities directly supported by USAID – funded infrastructure that export their products” was collected from municipalities through official letters and confirmed with the producers during field visits.
c) Data collection for the BFC component. For this component, data sources are official document from the certification agency and official data from municipalities. NALED (certification agency) provided official confirmation on certification of the municipality and evaluation reports to inform 2 indicators: a) Number of certificates/standards obtained by public-sector organizations and b) Number of BFC evaluators’ recommendations fulfilled with RAST’s assistance.
In addition, BFC requires municipalities to conduct an annual private sector survey about the quality of the business conditions/environment. Out of 13 certified RAST municipalities, 8 (or 62%) conducted this survey in 2018. When those municipalities repeat the survey in 2019, local communities will be able to compare data and determine the trend regarding general quality of the business environment but also: satisfaction of entrepreneurs with infrastructure, municipal services, number of registered businesses/employees, etc.
d) Municipality representatives provided data through official letters regarding the number of issued buildings permits that informs the indicator: Number of businesses using improved BFC-related local government services. Municipalities provided additional data such as the number of registered businesses and employed people, budget of the capital investment plan to enable the project team
RAST – Final Report 32 to assess early signs of the impact of BFC certification on local administrations. This was complemented by results from entrepreneur satisfaction surveys conducted by municipalities, part of the BFC certification process.
6. CHALLENGES 6.1. Small Infrastructure Projects Unplanned poor weather
Extremely frequent and long-lasting summer rains caused significant implementation delays. The rain created difficult working conditions for contractors and resulted in regular changes to the technical design of infrastructure projects. These barriers were addressed through regular communication with USAID and adaptive management, in order to help us to reallocate funds for the necessary changes in project design. In some cases like Gradiska, USAID AOR closely worked with us to find the best possible solution for waste treatment and in order to obtain ERC approval.
Complex cooperation with local governments during elections
RAST started ahead of the municipal elections that took place in October 2016. Project start-up required enhanced coordination between outgoing and incoming mayors, municipal councils and other relevant departments. Furthermore, staffing changes within different municipalities created some barriers to effectively start the RAST project in a timely manner.
In October 2018, the Bosnian general election took place resulting in slower implementation. Although the parliamentary elections were not linked to the municipalities, it became evident that local government authorities played a key role and spent significant time to support their political parties during the campaign.
During election periods, politicians and political parties maximize their efforts to improve local infrastructure and get more voters to turn out for elections. During RAST implementation, we had two elections on the local and state levels. RAST experienced some difficulties to engage companies and to procure some building materials during the elections because most of them were reserved for infrastructure projects that promote political parties and individuals.
Internal government bureaucratic delays
The upgrade and construction of infrastructure required a lot of coordination and procedures to ensure compliance with local and national legal frameworks, to satisfy all parties involved (municipalities, local institutions, contractors, businesses, USAID) and to ensure quality and timely implementation. At the local level, RAST faced unexpected barriers in Prijedor and Istocni Stari Grad that caused implementation delays.
In Prijedor, the issuance of the Use Permit was delayed for several months due to coordination issues between the city’s Urban Planning Department, the Department of Property Affairs and the Institute for Construction. Back and forth decisions to prepare documentation and issue approvals resulted in multiple revisions of the project design as well as increased project costs.
In Istocni Stari Grad during construction of a pedestrian/biking trail in Brus, work was completely stopped because of a conflict between the municipality and entity Forestry Agencies related to the local regulatory plan and building permit. RAST coordinated multiple mediation efforts, including bilateral and joint meetings with both actors, leading to approval of the urban plan in April 2018 and creating conditions for implantation and completion of the project that beside tourist benefits also connected people from two entities and
RAST – Final Report 33 potentially influenced reconciliation.
6.2. BFC certification Pre- and post-elections period
Project implementation began in the 2016 local post-election period and implementation continued in the general 2018 pre- and post-election period resulted in some new mayors and BFC team members. This meant it was necessary to conduct additional training about BFC standards and implementation process and motivate new municipal staff and to start some projects almost from the beginning. It was also challenging to meet deadlines defined by the BFC process during the pre- and post-election period.
Slow introduction of the new edition of BFC standards and e-platform (online system)
NALED experienced delays in finalizing and launching the new edition of the BFC standards among all regional partners. This prevented several municipalities from uploading the necessary documentation to the e- platform in a timely manner. It also prevented the municipalities of Brod and Novi Grad from starting the BFC process in November 2017 as initially planned.
Lack of support from higher government levels
Authorities at higher government levels have been passive regarding BFC certification and as result of a lack of knowledge in some cases they presented barriers for municipalities to fulfill the requirements. RAST project identified this gap and built awareness about the benefits of BFC for BiH through different promotional events, training, and meetings. A result of this proactive approach was increased awareness regarding the importance of activities on improving the business environment to attract investors and generate new jobs. The information system and web portal on industrial zone capacities in FBiH came about as result.
Motivation of non-BFC municipalities to work on LED
Higher government levels do not actively motivate municipalities which are not in the BFC process to work on creating better conditions for doing business by implementation some key BFC criteria like establishing a LED office, establishing a local economic council, etc.
7. LESSONS LEARNED Infrastructure construction requires adaptive management due to the constantly evolving context
As explained in the previous section, several unexpected factors caused implementation delays. While some infrastructure projects were implemented quickly, local market conditions, weather, and legal/administrative barriers influenced the RAST project and required multiple adjustments. A key lesson learned is that the initial technical evaluations for each project should more carefully assess the actual capacities and commitment of the municipalities and all other parties involved, including regulatory agencies at the local and entity level. In addition, more flexible implementation timeframes are necessary to address potential implementation delays. The timelines developed during the initial project design were often revised due to unexpected barriers.
Municipalities need technical assistance to improve the management of industrial zones
Inadequate development and management of industrial zones significantly hinders economic growth. Throughout RAST, CRS conducted key informant interviews and a survey to better understand the barriers to LED in industrial zones. An industrial zone management system was never officially established in any of the
RAST – Final Report 34 six industrial zones where infrastructure was upgraded through RAST. While this was beyond the project’s scope, there is significantly higher potential for these zones to attract investors if a management system is established. RAST conducted a survey of industrial zone management practices in 13 municipalities which revealed that only four local administrations had established management structures but even these did not have a clear mandate and competencies regarding the development and management of industrial zones. In these 13 municipalities there is low experience, skills, and funds for promoting industrial zones to attract new investors. Well-managed industrial zones have the potential to more effectively retain and attract businesses.
Municipalities can improve their business environment and achieve BFC with appropriate external support
Forty-seven percent of the municipalities that have become certified since 2013 are from BiH. BiH hosts the majority of BFC municipalities largely due to the external support provided by USAID through the GOLD (2013- 2016) and RAST (2016-2018) projects. In the other countries, municipalities receive limited support from their respective BFC Technical Secretariats, but no external technical support is provided. The results to date show that most municipalities are not able to independently improve their business environment in accordance with internationally recognized standards. Projects such as RAST are key to boost LED and to empower local authorities to improve their business environment.
Support from higher government levels is necessary to strengthen LED
RAST has proven that implementing BFC standards contributes to improving the business environment and boosting economic growth at the local level. Yet, regulatory reforms and support from higher government institutions are needed to harmonize business conditions and support municipalities in their efforts to promote LED. At the entity level, BFC Network members are mandated to advocate for improving the business environment through reforms and the elimination of barriers to economic growth. However, results- to-date from RAST have confirmed that BFC Network members lack technical capacities to support LED. This lack makes it difficult for municipal authorities to initiate or sustain efforts to create a favorable investment climate. Key areas of improvement include: providing direct support to municipalities to fulfil BFC criteria, to identify and design quality investment projects, and to foster public-private partnerships. Municipalities engaged in the BFC process explained that they receive limited support from entity authorities and are unable to improve their business environment without appropriate external support. Building the capacities of entity authorities to lead the BFC process across the country will guarantee the program’s sustainability.
RAST – Final Report 35 8. VISIBILITY All program activities were implemented in accordance with the approved Branding and Marking. Throughout the project, a total of 115 media reports were recorded by the project team. Most reports covered the launch of infrastructure projects as well as public events related to BFC. RAST organized nine public events to promote infrastructure projects (see Annex 5 – Public Events). Most events involved key stakeholders, including local authority representatives, USAID, business actors, among others. All events were widely covered by the media.
Two major events were organized to promote the BFC program and its impact. Both events were organized in Sarajevo and attracting significant public and media attention. One of the vents included the promotion of 6 BFC municipalities in the BiH Chamber of Commerce and resulted in 31 media reports, including including TV coverage by BHRT, FTV, ATV, TV Hayat, and several local TV stations, but also reports published by printed and online media, such is Oslobodjenje. The event was also reported in English by Sarajevotimes. A key project output was the development and launch of the Information System of Business and Industirla Zones. This event was covered in 16 media reports.
Additional media reports covered some project events, including a certificate award ceremony by NALED, a study visit to Serbia, a LED training for municipalities, meetings with FIPA, etc. All the above- mentioned activities were promote according to the branding and marking plan.
In Serbia, several media reports covered a RAST-led study visit of BFC municipalities. More than 10 media reports were recorded from TV channels and web portals.
The project was also positioned on USAID’s Facebook page.
RAST – Final Report 36 9. EXPENDITURES Financial Narrative Report
The USAID/CRS Cooperative Agreement AID–168–A16–00002 was signed on September 27, 2016. In May 2018, USAID and CRS signed Cost Modification No. 2. The new total USAID committed contribution was $2,550,000 while CRS’s cost share of $120,000 was increased to $145,000. In year 2 quarter 4, RAST was granted a 3-month no cost extension, ending December 26, 2018.
The following changes occurred throughout the project:
Construction: Small Infrastructure Projects The total estimated amount for infrastructure works was $931,044 for five small infrastructure projects. In April 2018, CRS submitted a budget revision which included an additional $550,000 (total $2,550,000) from USAID and $25,000 from CRS (total $145,000). The main purpose of the proposed budget increase was related to the scope of small infrastructure works from five to ten infrastructure projects in the amount of $445,784. The total estimated value of infrastructure works after budget rebalance was $1,390,200. After completion of all infrastructure works, CRS spent $1,417,026 as result of unexpected works for which new technical solutions were approved by USAID.
BFC Activities: Contractual - BFC The total estimated amount for contracted BFC activities was $246,195. In April 2018, the revised budget was submitted. The new total estimated budget for BFC contracted activities was decreased to $171,070. After completion of all BFC activities, CRS spent $131,805. CRS also decreased the original budget for this objective as BFC activities were cheaper on the market than forecasted and as a result of CRS’s competitive tender processes that resulted in cost-effective prices.
Other Direct Costs - BFC The total estimated amount for other BFC activities which supported the BFC municipal fund for certification and BFC marketing fund was $96,192. The revised budget was submitted in April 2018.
The new total estimated budget for other BFC activities after budget revision was increased to $113,012. After completion of all other BFC activities, CRS spent $100,853. This was a result of CRS’s competitive tender processes that resulted in cost-effective prices.
Personnel-National Staff Despite the increased scope of work, CRS only increased staffing by 0.7 FTE for the project manager and senior project officer for communication by 0.1 FTE. With a three month no-cost extension and new positions in FY'18, the total increase under this budget line/cost was $55,492. All activities were implemented with high efficiency, cost-effectiveness and high quality.
Local Contribution Local government expenses for the reporting period September 26, 2016 – December 26, 2018 were 1,167,370 BAM (approximately $705,445) in municipal co-funding for infrastructure projects which is 61% more than the planned BAM 713,000, and BAM 15,880 ($9,596) for BFC activities making a total of BAM 1,183,250 ($715,042). The local government in-kind contribution was BAM 1,543,704 ($932,865), this was the amount reported by local governments as their obligation within the Agreements for Cooperation.
RAST – Final Report 37 Annex 8 contains the standard form SF 270 "Request for Reimbursement", while Annex 9 contains form SF 1034.
The final financial report covering the period September 26, 2016 – December 26, 2018 is attached to this report as Annex 6.
During the last reporting period, CRS received a decision from UIO (Indirect tax authority) regarding reimbursement of VAT in the total amount of 159.287,55 BAM (approximately $96,540). We will submit a final request to UIO for 277,117.04 BAM (approximately $167,950). Total value of reimbursed VAT will be 436,404.59 BAM (approximately $264,490).
10. LIST OF ANNEXES Annex 1: Overview of Infrastructure projects
Annex 2: Overview of technical support provided to municipalities (BFC)
Annex 3: Level of fulfillment of BFC criteria
Annex 4: Success stories
Annex 5: Public events
Annex 6: FY19 Q1 CRS 8424 Bosnia & Herzegovina AID-168-A-16-00002
Annex 7: USAID Expenditure Report Q1 FY'19 - RAST Project
Annex 8: SF 270_RAST_Q1 FY'19
Annex 9: SF 1034_RAST_Q1 FY'19
Annex 10: Bank Details
RAST – Final Report 38 ANNEX 1: Overview of Infrastructure Projects #01 Vitkovici water supply system upgrade, City of Gorazde Purpose of the project: The industrial zone of Vitkovici is located in the suburbs of the City of Gorazde. Due to the constant increase in industrial production in Vitkovici, there was a need for the provision of appropriate public and communal infrastructure, including regular water supply. Since the Industrial zone Vitkovici was expanding, the capacity of the old water tank (50 m3) was no longer sufficient to meet the needs of the established companies. At peak hour, the demand was so high that most of the settlements in higher zones had no access to water. The purpose of the project was to upgrade the water supply system „Starac” in order to meet the water supply needs of the industrial zone Vitkovici and the nearby settlement of Lastavice. Implementation: From the beginning of the project, municipal authorities expressed their willingness to create the optimal conditions for the upgrade of the water supply “Starac”. The excellent synergies among all parties involved, including USAID, the City of Gorazde and CRS, enabled a satisfactory completion of works. Businesses established in the industrial zones and inhabitants of the Lastavice settlement now count on a regular and reliable water supply. Scope of the reconstruction works: The scope of the reconstruction works consisted of three phase that were successfully implemented. 1. upgrade of the existing water tank with new water tank chamber with capacity of 150 m3, 2. construction of the water supply pipeline in length of 4832 m to connect the new reservoir Vitkovici to reservoir Dzindici as part of the water supply network Starac, 3. construction of the new water distribution pipeline in length of 2013 m from the reservoir Vitkovici 2 to the end of the settlement Lastavice. Investment: Total investment was $355,864; USAID contribution was $242,397 (68%); City of Gorazde provided cash and in-kind contribution in the amount of $113,467 (32%). Beneficiaries: 14 SMEs with 2000 employees, 40 households directly benefit from the repaired infrastructure. Implemented timeline: Preparation of the project (Geotechnical investigation works, Design, Environmental Review Checklist): September 2016 - April 2017, Execution of works: May 2017-December 2017, Handover: November 2018.
*Note: All amounts include VAT RAST Final Report ANNEX 1: Overview of infrastructure projects 1
#02 Completion of the public infrastructure in the Industrial zone Ramici in Banja Luka Purpose of the project: The City of Banja Luka has constructed and upgraded key infrastructure in the business zone “Ramici-Banja Luka” to create the conditions for uninterrupted and quality business activities to all business actors. The City aims to offer spaces for businesses to invest in the construction and operation of production facilities. Following the completion of the works on the first phase, the City of Banja Luka applied to USAID for the implementation of a second phase which became part of the RAST project. The project aimed to complete public infrastructure, including two roads, to facilitate business operations. Implementation: The construction started with the hiring of an expert supervising engineer and a contractor for the execution of works as the Detailed Design had been previously developed by the City of Banja Luka. The difficult winter conditions caused some delays with the works on the building land development between the two roads were postponed until the spring of 2018. The works were then completed in April 2018. Scope of the construction works: The activity consisted of the following construction works: • public lighting for the entire business zone Ramici, • construction of approximately 450 m of undeveloped roads (with two asphalt layers) which allows transport of heavy commercial vehicles in the business zone with complete supporting infrastructure (water supply, sewerage, drainage and cable installation), • building land development between the two built roads in the business zone Ramici. The roads in the business zone are 7m wide with a pedestrian crossing on each side, of 1.8 m wide. Investment: Total investment was $585,074; USAID contribution was $320,998 (55%); City of Banja Luka provided cash and in-kind contribution in the amount of $264,077 (45%). Beneficiaries: 10 SMEs with 76 employees benefit from the repaired infrastructure. Additional 4 building plots are available for new investors. Implementation period: Preparation of the project: April 2017- July 2017, Execution of works: August 2017- November 2017, Handover: February 2018.
*Note: All amounts include VAT
RAST Final Report ANNEX 1: Overview of infrastructure projects 2
#03 Construction of the road C105 with accompanying infrastructure in the business zone Celpak in Prijedor Purpose of the project: The industrial zone “CELPAK” is owned by the City of Prijedor and key to its economic development. However, a long period of bankruptcy procedure and lack of maintenance resulted in poor infrastructure and lack of interest from investors. The project consisted in the construction of a road and accompanying infrastructure to support existing businesses and provide improved access for investors to new building plots. Implementation: After the City of Prijedor provided the project documentation, the contractors and expert technical supervisor were selected. The project’s implementation was delayed for several reasons. Firstly, the developed design (performed by the Institute for Construction of the City of Prijedor) did not consider the existing and future business entities and their accessibility/ exit to the road C105. This required a new technical solution and correction of the project documentation. Also, the location of the sewage connection had to be changed, which was followed by an unexpected need to solve several property-legislation issues. Scope of the construction works: The construction on the road C105 included: • the construction of a 403m long road (with two asphalt layers) which allows transport of heavy commercial vehicles with supporting infrastructure (public lighting, plumbing, sewerage, electrical installation and cable infrastructure), • construction of infrastructure connections outside the road construction area, • the City of Prijedor also provided additional funding for the road C106 in order to enable new investors to access their building plots and thus start building their facilities. The road C105 is 8m wide with a 2m wide pedestrian crossing on one side. Investment: Total investment was $555,302; USAID contribution was $254,142 (46%); cash and in-kind contribution of the City of Prijedor was $292,958 (53%); CRS cost share $8,202 (1%). Beneficiaries: 5 SMEs, 120 employees, conditions were made for 8 free building plots ready for new investors. Five new investors are in the process of building production facilities. One of the biggest investor is the company Kolektor from Slovenia which will start building their production facility. They are planning to employ 500 employees. Some of the agencies, associations, and City’s Departments are located inside the Business Center in Prijedor which are also directly benefitting from the project. Implementation period: Preparation of the project: February 2017- March 2018, Execution of works: April 2018- September 2018, Handover: November 2018
*Note: All amounts include VAT
RAST Final Report ANNEX 1: Overview of infrastructure projects 3
#04 Completion of the infrastructure in the Lanara Business Zone in Teslic Purpose of the project:
The Lanara Industrial Zone is considered as one of the key instruments to support sustainable economic growth in this catchment area. Lanara is the urban area of the town of Teslic, 2 km away from the city center and covers a surface of 14 hectares. In 2015, the Municipality of Teslic conducted an Economic Feasibility Study in co-operation with the European Commission. The study concluded that “Lanara” was a significant and high-quality potential for the Municipality’s development. The zone is foreseen for business construction, housing construction and infrastructure development. Since 2016, the Municipality carried out infrastructure projects focusing on the construction of roads. The designed length of the road in the industrial zone is a total of 1955m and the municipality had made progress on 521m. The RAST project provided assistance to the municipality in terms of final works on asphalting of two streets in length of 521 m thus completing the infrastructure works previously started by the municipality. The RAST project enabled investors who had purchased land to access their building plots and start building their facilities. Implementation: After the Municipality of Teslic provided the project documentation, the work performance contractors and expert technical supervisors were selected. Scope of the construction works: RAST supported the: - construction of the upper bearing course of the pavement from crushed stone aggregate of 0/31mm on the streets “Nova 2” and “Nova 6”. - incorporation of the bituminized supporting layer BNS 22 (with a thickness of 7cm on the road section, and with a thickness of 5cm on the sidewalks) on both streets. - incorporation of wearing course of the carriageway from AB11 asphalt with the thickness of 4cm in the part of the roads sections and with the thickness of 3 cm on the sidewalks on both streets. The streets through the industrial zone are intended for heavy commercial vehicles, 6m wide with a pedestrian crossing on each side, of 1.5m wide. Concrete curbs were already placed and are segregating roads and walking land from building plots. Investment: Total investment was $350,499; USAID contributed $73,452 (21%); and Teslic Municipality cash and in- kind contribution was $277,047 (79%). Beneficiaries: 1 SME currently operating and 5 new investors that have bought land and are in the process of building their business facilities. The infrastructure works created conditions to offer 8 additional free building plots to new investors. Implementation period: Preparation of the project: June 2017- October 2017, Execution of works: November 2017- December 2017, Handover: December 2017.
*Note: All amounts include VAT RAST Final Report ANNEX 1: Overview of infrastructure projects 4
#05 Construction of wastewater treatment facility in the agro-industrial zone Nova Topola in Gradiska Purpose of the project: In order to support existing businesses and to attract new investors, the priority of the Municipality of Gradiska was to solve the issue of wastewater treatment. One of the basic forms of pollution is water pollution and one way of addressing this issue is through collection, removal and treatment of wastewater. The municipality had planned the construction of the wastewater treatment device based on the extender aeration, as a method of sewage treatment using modified activated sludge procedures. The project provided the first phase of the construction of the wastewater treatment facility with a capacity of 800 P.E. (population equivalent) based on the current existing users with the possibility to upgrade up to 5000 P.E. for higher purification requirements, taking into account that the plan is to connect future business entities in the zone as well as the entire settlement Nova Topola to the wastewater treatment facility. Equipment was provided for the final upgrade phase. Implementation: The implementation started with geotechnical investigation works for the site which were performed in February 2018 followed by the development of the Detailed Design and audit. Construction works started in June 2018 and were completed in October 2018. There was a small delay in construction works due to bad weather conditions. Daily rains in early July created significant delays in groundworks due to high level of groundwaters. Scope of the construction works: • completion of the sewage system with HDPE pipes DN 400 mm and DN 500 mm in length of 975 m and two sewage pumping stations in order to bring the future wastewater treatment facility into operation. These works were funded and implemented by the Municipality of Gradiska. • construction of the wastewater treatment facility: works on the first phase were funded by USAID through the RAST project and part of the works were funded by the Municipality of Gradiska. Investment: Total investment was $856,336; USAID’s contribution was $361,927 (42%); Municipality of Gradiska in kind contribution was $481,528 (56%) and CRS provided funds in the amount of $12,881 (2%). Beneficiaries: Six SMEs are currently operating in the Agro-Industrial Zone Nova Topola with approximately 250 employees. Also, many investors are in the process of building their business facilities. One of the largest new investor is the Italian company “Calzedonia” that produces underwear and socks, which is building a production facility in the Agro-industrial zone of Nova Topola of 11,000 m2, which will employ 350 to 400 workers. There are 63 building plots above 2000m2 available for new investors. Implementation period: Preparation of the project (Geotechnical investigation works, Detailed Design development, Detailed Design audit, ERC, selection of the contractor): August 2017 - May 2018, Execution of works: June 2018 - October 2018, Handover: November 2018.
*Note: All amounts include VAT
RAST Final Report ANNEX 1: Overview of infrastructure projects 5
#06 Reconstruction of the Daily center for people with disabilities in Banja Luka Purpose of the project: In 2000, the Ministry of Foreign Affairs of Switzerland supported the construction of facilities to accommodate children without parental care. The grant Agreement envisioned that after 10 years, the built facilities (abbreviated: DEZA 1 and DEZA 2) could be used for other social purposes. The needs for such use of residential buildings ended in 2015, when the City Administration, i.e. Department for Culture, Tourism and Social Policy initiated the process of conversion of facilities. In 2016, the Municipality decided that the DEZA 2 facility would be converted to a Daily Care Center for Youth and Adults with mental disabilities as well as a reception center for children at risk. In mid-2017, the City contacted USAID with a request for assistance in rehabilitating the DEZA 2 facility and putting it into operation as a "Daily Care Center for Youth and Adults with Disabilities". Implementation: The City of Banja Luka had previously developed the project documentation for the works on the facility. Based on the identified needs of future beneficiaries, CRS revised the design to ensure an appropriate response. After revision of the project documentation and selection of the expert-technical supervisor, the contractor was selected. The City of Banja Luka provided additional funds for part of the works and furniture.
Scope of the reconstruction works: Painting and decorating works, flooring works, pellet heating system, solar system for sanitary water heating, installation of an elevator for persons with disabilities, windows frames replacement/incorporation of PVC windows, roof trim renewal, installation of roof ventilation fittings, roof foil insulation, gutters, customization of bathrooms for people with special needs on the ground floor, façade and external wall thermal insulation works, wheelchair ramp and external works on landscaping and playground for special needs individuals of all ages.
Investment: Total investment was $108,842; USAID’s contribution was $86,581 (80%); City of Banja Luka provided cash and in-kind contribution in the amount of $22,260 (20%). Beneficiaries: 20 people with developmental disabilities (over 18 years). Parents are given the opportunity to perform other tasks, including employment, after leaving the children in the Day care center. Implementation period: Preparation of the project: February 2018 - April 2018, Execution of works: May 2018- August 2018, Handover: November 2018. *Note: All amounts include VAT RAST Final Report ANNEX 1: Overview of infrastructure projects 6
#07 Construction of the Ozimica outpatient clinic in Zepce
Purpose of the project: In recent years, the Municipality of Zepce invested a lot of efforts to create a favorable business environment and strategically plan the construction of business zones. However, given the poor social conditions and lack of adequate medical services, the Municipality decided to primarily invest in health infrastructure. The premise was that if people have basic wellbeing, they will more likely be interested to engage in business activities thus contributing to local economic development. Citizens often had to travel long distances to access medical services in health centers that could not provide adequate care to everyone because of the greater number of patients. Thanks to the cooperation between the Municipality and relevant institutions, the outpatient clinic now has all conditions and professional staff to provide medical services, including blood tests, dentist and pharmacy. The location of the outpatient clinic is key and helps citizens to avoid long distance travel to access medical services and medication. Also, the parents of children from a neighboring school will be able to quickly access medical services for their children. The medical facility will serve a large number of poor and elderly people in a professional manner, supporting their well-being and dignity. Implementation: The RAST project carried out the finishing works on the facility (see scope of construction works). The Municipality of Zepce was responsible for the development and revision of the project design, execution of part of the works as well as supervision of construction works. The local authorities successfully leveraged additional funding to support this much-need infrastructure. The Municipality of Zepce contributed $12,000 for the construction of concrete slab foundation for the building while the Embassy of the Republic of Croatia provided $32,000 to support the overall facility and roof covering. Additional funding supported asphalting and other works. The construction of the medical facility was co-funded by the RAST project, while CRS matched around $8,000 with the Municipality to construct a concrete wall to protect the facility from a nearby stream, thus enabling its long duration and stability, which is considered as a Disaster Risk Reduction (DRR) measure. All works were executed in high quality with satisfaction of all stakeholders. Scope of the construction works: Flooring works (waterproofing, thermal insulation, floor screed, floor coating), works on the façade, interior walls and ceiling works (plastering and painting), tilling works, facade openings (windows with trims), internal and external works, thermo-mechanical installations works (radiators, boiler room), electrical installation works (weak current, strong current, fire protection alarm, lightning protection and earthing), plumbing and sewerage inside the facility with fire protection, solar water heating system incorporated in a standard water heating system, plumbing and sewage outside the facility (septic tank). Investment: Total investment was $204,719; USAID contributed $117,034 (57%), Municipality of Zepce provided in-kind contribution of $77,230 (38%) and the CRS provided additional $10,454 (5%). Beneficiaries: 7000 inhabitants from 11 settlements (4094 are already registered as regular patients) benefit from the infrastructure.
Implementation period: Preparation of the project: January 2018 - April 2018, Execution of works: May 2018 - September 2018, Handover: November 2018 *Note: All amounts include VAT RAST Final Report ANNEX 1: Overview of infrastructure projects 7
#08 Construction of a hike-bike trail on the sports and recreation center Brus, Municipality of Istocni Stari Grad Purpose of the project: The Municipality of Istocni Stari Grad contacted USAID to support the construction of a cycling and hiking route linking the Brus locality with the existing asphalt road leading towards the viewpoint and towards the cable car station. The trail passes by a mountainous area characterized by forest. The track path was selected to minimize the destruction of the existing forest. For these reasons, some of the tracks are extremely steep, suitable for sport and cycling. Implementation: As the Municipality of Istocni Stari Grad provided CRS with the project documentation, CRS made certain corrections in the design based on the identified needs and site visits. The works started in June 2018 once the expert technical supervisor and contractor were selected. CRS also had to resolve unforeseen administrative barriers with the competent Public Enterprise “Sume Republike Srpske” (Forests of RS). There was a little delay with the construction works due to bad weather conditions and rainy summer season.
Scope of the construction works: The path goes in two directions, in a total length of 913m, 2.5m wide with 40 cm banks on both sides and channel for drainage of surface waters from the path. The path was constructed with a final 5 cm thick asphalt layer, and two sections (in length of 85 m) with largest longitudinal grade additional layer of 3cm was incorporated in order to enable durability and sustainability of the path. In addition, traffic signs were placed at defined locations and resting places with street furniture were provided along the trail. Street furniture were provided by the Municipality. Investment: Total investment was $126,578; USAID contributed $102,013 (81%) and Municipality of Istocni Stari Grad provided cash and in-kind contribution in the amount of $24,565 (19%). Beneficiaries: 4 businesses and many pedestrians and athletes. Implementation period: Preparation of the project: July 2017- May 2018, Execution of works: June 2018 - September 2018, Handover: October 2018.
*Note: All amounts include VAT RAST Final Report ANNEX 1: Overview of infrastructure projects 8
#09 Reconstruction of the bridge on the river Bistrica, Municipality of Pale
Purpose of the project: The bridge reconstruction on the river Bistrica became part of the RAST Project in order to help the local community to create optimal conditions to support the European Youth Olympics Festival (EYOF 2019). The reconstruction is expected to have a positive economic effect on the local economy directly during the EYOF 2019 but also by facilitating continuous mobility and maintenance of the local road. Implementation: During implementation, seasonal rainfall resulted in important delays due to the flooding of the bridge. The works lasted a little longer than expected but in the end all works were completed with satisfaction of all stakeholders. The Municipality of Pale greatly contributed to this infrastructure project. Scope of the reconstruction works: The construction works provided a new bridge construction - a box culvert designed for heavy vehicles considering the everyday traffic to the settlement Dvorista, with a diameter 4.00 x 3.00 m in the total length of 10m, with road which consists of two vehicle lanes and two sidewalks separated by concrete curbs. Works were also performed on the regulating of the riverbed by arranging the surrounding terrain with earthworks and protecting the banks of the river near the new crossing 10m upstream and downstream. Key works performed included: • removal/demolition of old bridge structure, • earth works on the restoration/regulation of the riverbed and excavation of construction pits, • the construction and rehabilitation of access roads, which includes concrete works and paving, concrete and reinforcement works on the construction of the box culvert as a river crossing and wing walls in order to secure the coast, • the protection of the riverbanks in the regulated part of the river was carried out with stone in the concrete base, stone and concrete masonry works on rip-rap river bank protection upstream and downstream of the river crossing, • bridge fencing works and construction of a panel that indicates the significance of the area in sports and recreational sense and works on notice boards markings. Investment: Total investment was $78,649; USAID contributed $48,125 (61%) and Municipality of Pale provided cash and in-kind contribution in the amount of $26,504 (34%). CRS provided additional $4,020 (5%). Beneficiaries: The bridge will be used by 1 SME and local community- Dvorista settlement with more than 500 residents and will be used for EYOF 2019. The bridge leads to the Nordic Ski Center Dvorista. Implementation period: Preparation of the project: April 2018 - May 2018, Execution of works: June 2018 - October 2018, Handover: November 2018.
*Note: All amounts include VAT
RAST Final Report ANNEX 1: Overview of infrastructure projects 9 #10 Construction of the main water supply pipeline in the Industrial zone Kombiteks, Bihac Purpose of the project: The DD Kombiteks company was a key economic actor in the processing and production of textile. The company went bankrupt having a total of 13.5 ha of land on which 55.000 m2 of facilities were built - production, warehouse and office space. 31,000 m2 of space was reconstructed or is in phase of reconstruction, one part of the remaining 24,000m2 is in the process of public sale. The bankruptcy procedure of Kombiteks was launched in 2017 with much more success than previous years. More than 20 investors have expressed interest in purchasing or renting built facilities that were in an abandoned state. Many of them signed contracts that required the local administration and Kombiteks to provide basic infrastructure in the following period. In order to start this planned development of the Industrial Zone, it became essential to develop a water supply project with a satisfactory connection to the water supply network, to enable existing and future investors to effectively operate in the industrial zone. Implementation: After the City of Bihac provided the Detailed Design, which was funded jointly by the business entities in the Kombiteks business zone, and after appointing the expert-technical supervisor and issuing the Building permit the works started on September 2018 and were completed on October 2018. The City of Bihac played a key role in this project. The short implementation timeframe required quick provision of all necessary approvals and the almost immediate directional drilling of the road structure for laying the new main water distribution pipeline through the roadbed. These works were completed by the City of Bihac during the works on the main distribution pipeline. Also, the City of Bihac co-financed part of construction works on the main water distribution pipeline. The works were successfully completed with satisfaction of all stakeholders. A key impact and success of this infrastructure project was the initiation of a secondary water supply network to be funded by all businesses operating in the industrial zone. Agreements were officially signed in the premises of the City Administration between the business entities operating in the Kombiteks business zone and the selected contractor. As a result of the RAST project, businesses in Kombiteks will contribute BAM 140,000 in order to build the secondary water supply network. Scope of the construction works: • construction of 650m of pipeline DN 250 NP 10 bar from HDPE pipes, connection to existing pipelines to the main road - DN 300 from PVC and distribution pipeline DN 90 mm in the settlement Hatinac • construction of 5 distribution manholes from the main distribution line that created the conditions for the expansion of the secondary network and the construction of water supply connections. Investment: Total investment was $104,098; USAID contributed $45,424 (44%) and the City of Bihac provided cash and in-kind contribution in the amount of $58,675 (56%).
Beneficiaries: 20 investors in the Kombiteks business zone. Implementation period: Preparation of the project: June 2018 - August 2018, Execution of works: September 2018 – October 2018, Handover: November 2018.
*Note: All amounts include VAT
RAST Final Report ANNEX 1: Overview of infrastructure projects 10 ANNEX 2: OVERVIEW OF PROVIDED TECHNICAL SUPPORT - BFC
OVERVIEW OF PROVIDED TECHNICAL SUPPORT TO MUNICIPALITIES
RAST worked with 17 partner municipalities and supported them in the implementation of BFC standards. At the beginning of the project, the RAST team developed action plans for 11 municipalities (Doboj, Gradacac, Gradiska, Jablanica, Laktasi, Novi Grad Sarajevo, Posusje, Trebinje, Tuzla, Ugljevik, and Zenica) that had joined the BFC process prior to the RAST project. These 11 municipalities had already received Preliminary Evaluation Reports which formed the basis for CRS’s tailored technical support. In the second year of RAST implementation, six new municipalities (Bijeljina, Brod, Centar Sarajevo, Kakanj, Novi Grad, and Zavidovici) joined the BFC process and were technically and financially1 supported by RAST to achieve BFC.
The municipalities engaged in the project had varying levels of expertise in LED and therefore varying need for support. RAST identified the most critical/eliminatory BFC criteria and assessed the internal capacity of each municipality to develop tailored plans. In addition to the technical needs, CRS also took into account the timeline of each municipality to achieve BFC (according to the BFC calendar) and the level of importance of criteria to be fulfilled by each municipality. RAST provided technical support to municipalities in almost all BFC criteria. Yet, priority was given to eliminatory criteria as municipal teams often lack sufficient experience and expertise to fulfil those. In addition, eliminatory criteria introduce systematic changes in the processes and procedures of municipal administrations and are therefore crucial.
RAST worked with each mayor and municipal BFC team to develop action plan for the implementation of BFC standards. Action plans were developed based on a RAST-led assessment of municipal capacities, analysis of the BFC evaluation reports, the BFC calendar, and assessment of the eliminatory criteria to be fulfilled.
The table and the text below provide an overview of the technical support provided for each BFC criteria and to each municipality.
Table 1: Overview of Provided Technical Support to Municipalities BFC Criteria2 Brief Description of the Support Municipalities
• Developing a municipal integrated development strategy • Developing a Local Ecological Action Plan • Bijeljina • Preparation of an agriculture development Strategic • Doboj strategy approach to local • Jablanica 1. • Developing a Strategic Marketing Plan economic • Trebinje • Developing procedures for monitoring projects development • Ugljevik which have an ecological impact • Zenica • Appointment of a team for monitoring and reporting on implementation of the municipal development strategy
1 RAST financed 50% of the municipal certification fee 2 The previous version of the BFC standard has 12 criteria, but the new version (Edition III) has 10 criteria 1
Table 1: Overview of Provided Technical Support to Municipalities BFC Criteria2 Brief Description of the Support Municipalities • Defining the appropriate organizational model of the LED office within the municipal administration • Creating and adjusting the internal structure of • Brod LED office to local economic needs • Doboj Local economic • Preparing the basic responsibilities for the LED • Novi Grad 2. development office and for each position in it • Trebinje (LED) office • Establishing efficient internal horizontal and • Tuzla vertical communication channels • Zavidovici • Supporting mayors in institutionalization of • Zenica the LED office within the municipal organizational structure • Training the LED office staff • Selecting LEC members • Creating Rulebook for LEC’s work • Raising awareness of the public and private • Brod sectors on the importance of working in • Doboj Cooperation partnership • Kakanj between the • Improving capacity of the technical secretariat • Laktasi public and the to properly run LEC work (preparing agenda 3. • Novi Grad private sector for LEC meetings with relevant discussion • Trebinje (Local Economic topics - budget, Capital Investment Plan, • Tuzla Council) administrative and utility fees, costs and • Ugljevik quality of utility services, incentives, spatial • Zavidovici planning documentation) • Creating guidelines for preparing a business plan and reports on the work of the LEC • Doboj • Improving administrative procedures for • Gradacac issuing building permits Efficient system • Gradiska • Designing system for monitoring the status of 4. for issuing • Laktasi building permit applications building permits • Posusje • Developing a guide for issuing building, urban, • Tuzla and usage permits • Zenica • Brod • Creating a database of municipal SMEs • Doboj Analytical • Collecting information on the total costs of • Gradacac database for establishing a business on the state, entity, • Jablanica supporting the and cantonal levels • Novi Grad 5. local business • Providing information on available incentives • Posusje community and at the state, entity, and cantonal levels • Trebinje attracting • Creating a questionnaire for private sector • Tuzla investments survey about the quality of business • Zavidovici conditions/environment • Zenica
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Table 1: Overview of Provided Technical Support to Municipalities BFC Criteria2 Brief Description of the Support Municipalities • Brod • Developing a promotional film on potential • Doboj investment • Gradacac • Developing a website for investors • Gradiska Activities on • Developing a guide to entrepreneurship and • Jablanica promotion of company registration • Kakanj investments • Revising, designing, and printing an investment • Laktasi 6. and quality of guide, general leaflets, and promotional • Novi Grad business materials • Novi Grad environment in • Preparing and revising the marketing, Sarajevo municipality promotion, and communication plan • Posusje • Developing a book of graphic standards – • Trebinje municipal visual identity • Ugljevik • Developing sectoral promotional materials • Zavidovici • Zenica Predictability of • Brod operating • Doboj expenses and • Understanding credit solvency calculation 7. • Jablanica responsible methodology • Zavidovici management of • Zenica public finances • Brod • Doboj • Developing a Local Employment Action Plan • Gradacac Monitoring of (LEAP) • Gradiska local labour • Creating a questionnaire for survey of private • Jablanica market sector needs for workforce, workforce quality, • Kakanj dynamics and and availability of utility services 8. • Novi Grad active attitude • Analyzing private sector survey • Novi Grad towards actual • Establishing cooperation with the cantonal Sarajevo companies Employment Bureaus • Posusje needs • Creating a database of municipal SMEs and • Trebinje people employed • Tuzla • Zenica Municipality • Brod supports • Doboj development of • Organizing joint meetings of municipal officials • Jablanica 9. entrepreneurship and LED office representatives with the • Kakanj and small/ business community • Tuzla medium • Zavidovici enterprises • Zenica
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Table 1: Overview of Provided Technical Support to Municipalities BFC Criteria2 Brief Description of the Support Municipalities • Brod • Doboj • Gradacac • Gradiska Adequate • Developing an integrated mid/long-term • Jablanica infrastructure Capital Investment Plan • Kakanj and reliable 10. • Developing an online application for • Novi Grad utility services businesses and citizens to monitor requests • Novi Grad (Capital regarding utility services Sarajevo Investment Plan) • Posusje • Trebinje • Zavidovici • Zenica Municipality provides • Brod • Establishing procedure for involving the transparent tax • Doboj 11. business community in the process of making and charging fees • Zavidovici decisions on municipal fees and taxes policy to • Zenica stimulate LED • Establishing and developing application for Information and "72-hour system" for reports, evidence, communication • Doboj 12. monitoring, and display of problems/ technology (e- • Gradacac suggestions/complaints submitted by government) businesses and citizens
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The graph below describes the number of municipalities that received a specific type of technical assistance.
Number of municipalites provided with technical BFC support
Use of information technologies (e-government) 2 Transparent tax policy and policy of charging fees to stimulate local economy 4 Adequate infrastructure and reliable utility services 12 Support development of entrepreneurship and small/ medium enterprises 7 Monitoring local labor market dynamics and active attitude towards actual companies needs 12 Predictability of operating expenses and responsible management of public finances 5 Promotion of investments and business environment quality 14 Analytical base for supporting local business community and attracting investments 10 Efficient system for issuing building permits 7
Local Economic Council 9
Local economic development office 7
Strategic approach to local economic development 6
A) BFC Certified Municipalities
As a result of RAST, 13 municipalities successfully implemented BFC standards and are officially municipalities with a business-friendly environment.3 One municipality is in the process of implementation of the BFC standards.
Municipality of NOVI GRAD SARAJEVO
RAST provided assistance to Novi Grad Sarajevo to meet BFC criteria regarding developing Capital Investment Plan, developing a Local Employment Action Plan, developing a website for investors, design of an investor’s guide and guidelines for registration of business. Novi Grad Sarajevo is the first municipality that fulfilled BFC criteria and conditions to be BFC certified with RAST support and the first BFC-certified in the Sarajevo Canton (link). The Local Employment Action Plan once developed helped the municipality to be selected by the International Labour Organization (ILO) as a partner for implementation of the project "Support to local
3 Municipalities of Brod, Bijeljina, Kakanj and Zavidovici received positive BFC Final Evaluation Reports in December 2018. Due to NALED’s delay, the verification visit, as a last step in the certification process, is scheduled for February 2019 5 employment partnerships in BiH," financed by the EU.
Mr. Efendic, mayor of Novi Grad Sarajevo, and Mr. Bejic, president of the BFC network of FBiH, present the BFC plaque on the municipal building (July 2017)
City of DOBOJ
With comprehensive RAST project support, Doboj fulfilled the BFC criteria and conditions, thus becoming the first BFC-certified city within RAST (link). RAST supported the BFC team to properly understand the recommendations from the BFC evaluation reports and provided support in fulfilling almost all criteria.
RAST provided substantial support to the city team in all phases of developing the Capital Investment Plan because this was one of the most difficult BFC eliminatory criteria to fulfill. The plan was adopted by the city assembly in May 2017. Per RAST advice, the mayor established a team for more systematic monitoring and reporting on implementation of projects from the city strategy.
With RAST support, the internal organizational structure of the Department for Strategic Planning and Investments, which serves as a Local Economic Development (LED) office, was improved (appropriate staffing was determined, and scope of work was reviewed for all positions). The project also supported the mayor and his team to re-establish the Local Economic Council (LEC) and provide guidance for establishing and maintaining a more efficient partnership between the city administration and private sector.
Support was provided to simplify the process of issuing building permits by providing precise recommendations for improving the existing procedure and supporting the mayor in implementing the recommendations. The Local Employment Council was established according to RAST instructions. It took a leading role in organizing four workshops for creation of a Local Employment Action Plan, a document that demonstrates a systemic approach to reducing unemployment in the city.
RAST paid particular attention to the lowest-scored critical area in the BFC Preliminary Evaluation Report in which the local BFC team needed support: promotion – creation of a city profile; designing guides for investors, business registration and issuing building permits; designing sectoral leaflets for agriculture, tourism, and geothermal energy; restructuring the website for investors; developing a "72-hour system" as a web-based application for citizens and businesspeople to send inquiries and complaints to the city administration; and developing a promotion and communication plan (link).
City of ZENICA
The City of Zenica fulfilled the BFC criteria and conditions with well-structured RAST support, thus becoming the second BFC-certified city within RAST (link). In order to present the investment potential of Zenica, its business environment and systematic strengthening of entrepreneurship, RAST assisted the BFC team, business community, and civil society representatives in developing a Strategic Marketing Plan. Zenica is among a few local communities in BiH which has such a strategic document.
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RAST supported the newly appointed mayor to determine the most appropriate position of the newly established LED office within the administration organizational structure. Also, substantial support was provided in the creation of the internal organizational structure and job classification within the LED office. The mayor adopted the decision on internal organizational structure, so the LED office was established in line with RAST’s recommendations.
RAST gave substantial support to the city team in all phases of developing the Capital Investment Plan because this was one of the most difficult BFC eliminatory criteria to fulfill.
In order to strengthen public-private partnerships and systematic interaction between the public and private sectors, RAST designed and provided to the BFC team samples of two survey questionnaires for the private sector regarding the quality of the local business environment, workforce needs, and the quality of utility services.
Fuad Kasumovic, Zenica Mayor and Mr. Bejic, president of the BFC network of FBiH promoted the new BFC sign
RAST supported investment promotional activities through making a film about business opportunities for investors in Zenica (link). Support was also provided for designing and developing sectoral leaflets for metal, services, construction, agricultural, and food processing sectors. RAST also assisted in reviewing and printing promotional materials: Investors' Guide, Business Registration Guide, Guide for Issuing Permits (building, urban, usage).
Municipality of GRADACAC
Gradacac was BFC certified with RAST support in June 2017 (link). RAST supported the municipality in the following areas: streamlining the administrative procedure for issuing building permits, developing an electronic system for monitoring the status of construction permit applications, developing a web based "72- hour system" application, developing a Capital Investment Plan, creating a database for business community support (database regarding the procedure and total costs of establishing a business entity and its operating costs, as well as state incentives for entrepreneurs), developing an Investment Guide and printing promotional materials. RAST supported the BFC team in conducting a survey of the private sector regarding workforce needs and quality of utility services.
Streamlining the administrative procedure for building permits helped the municipality to simplify the
7 procedure and make it more cost-effective. The technical support involved analysis of current procedures, review of applicable legislation, organization of a focus group discussion with representatives of the business community and municipal departments responsible for issuing building permits, analysis of the findings collected during the discussion, providing detailed recommendations for simplify the procedure, and drafting documents/decisions adopted by the local council.
RAST helped the municipality to develop an SMS module as an efficient solution for providing information to applicants about the status of their application/request regarding building permits. When an applicant texts the reference number of the request, the system replies with a message providing information about the status of the request, the name of the applicant, the number of requests, the date of application submission, the person in charge of handling the application, the legal deadline for response, and possible missing documents.
Additionally, Gradacac received assistance for developing a web-based "72-hour system" application on the municipal website. Using the web portal, citizens and businesspeople can send questions, requests, and complaints to which the municipality is obligated to respond within 72 hours.
Municipality of POSUSJE
The municipality of Posusje became the first BFC-certified municipality in the West-Herzegovina Canton (link) and generally the first in the Herzegovina region.
RAST supported the municipality to simplify the administrative procedure for issuing building permits by providing detailed recommendations on improving the procedure and supporting implementation of the recommendations by establishing new procedures.
RAST supported the municipality in establishing formal communication with the Employment Bureau of the West-Herzegovina Canton for the purpose of formulizing data exchange and information on unemployed persons. Additionally, the Employment Bureau provided a member to the municipal Employment Council, which is composed of representatives of public administration, private sector, education sector, and civil society. RAST support the Council to develop a Local Employment Action Plan for the period 2017-2020. The plan provides programs and measures that the municipality will implement to support workforce development, thus decreasing the number of unemployed persons (link).
RAST supported the municipality in creating a LED database and provided data on municipal SMEs and employed persons. In addition, RAST advised the municipal team on how to develop mid-term and annual Capital Investment Plans. RAST supported the municipality in the review of promotional materials.
Municipality of JABLANICA
The Municipality of Jablanica fulfilled BFC criteria and became the first BFC-certified municipality in Herzegovina-Neretva Canton (link).
The project advised the municipal team on developing a Capital Investment Plan and in developing a book of graphic standards. Jablanica is among only two municipalities in the country that have a book of graphic standards as a promotional tool. RAST designed and provided to the municipal BFC team a questionnaire for surveying the private sector regarding the quality of the municipal business environment, as a baseline to design possible interventions on improving the local business environment.
The project advised the municipal BFC team on developing the administrative procedure for supervision of projects that could have negative ecological impact. The project reviewed and provided recommendations 8 to improve the municipal communication plan. The municipality was assisted in design of promotional materials (presentation of municipal investment potential, Investment Guide, and sectoral leaflets).
RAST supported the municipality to establish formal communication with the Employment Bureau of the Herzegovina-Neretva Canton to ensure efficient exchange of data and information between them. A representative of the Bureau was appointed to the municipal Employment Council, established to develop a Local Employment Action Plan with RAST support.
Meeting with mayor for developing a Local Employment Action Plan in Jablanica
Municipality of GRADISKA
Gradiska was BFC certified in November 2017 with overall RAST assistance to the municipal BFC team in completing and creating the documentation and fulfillment of BFC criteria and conditions (link).
RAST provided extensive support to the municipal coordination team in all phases of developing a Capital Investment Plan, including training in CIP development methodology, definition of the evaluation criteria for project proposals, and implementation of the methodology for evaluating the project proposals. Samples of all documents were provided.
Support was provided to simplify the process for issuing building permits, including organization of a focus group discussion with investors who have received building permits in the last two years, thus providing precise recommendations to improve existing procedures and supporting the mayor to implement the recommendations.
RAST provided the municipal BFC team with a questionnaire for a survey of the private sector regarding the quality of the local business environment and workforce needs in the private sector. The collected data is a baseline for supporting the municipal Employment and Education Council, in cooperation with other stakeholders, in developing a Local Employment Action Plan aimed at reducing unemployment in the municipality. Advice was also provided for design of promotion materials.
Municipality of LAKTASI
Laktasi was BFC certified in December 2017 (link). RAST supported the mayor by providing recommendations on strengthening public-private partnership through sustainable communication and cooperation with the local economic council. By strengthening the work of the LEC with a defined plan and methodology adjusted to local economic needs, the municipality has a body that would be able to more precisely identify the 9 barriers facing the business community and constructively partner with the municipality to eliminate them.
RAST assisted the municipality in simplifying the administrative procedure for issuing building permits. This technical support involved analyzing current procedures, reviewing applicable legislation, a focus group discussion with representatives of the business community and the municipal department responsible for building permits, analyzing the findings collected during the discussion, providing detailed recommendations to simplify current procedures, and drafting documents/decisions which were adopted by the mayor.
RAST supported Laktasi to restructure its website for existing and potential investors. Also, support was provided in the revising, designing, and printing a catalogue of companies.
Presentation of recommendations for strengthening public-private dialog to Laktasi mayor
City of TREBINJE
The city of Trebinje successfully fulfilled BFC criteria and conditions and became BFC certified in June 2018. Through this BFC process, RAST technically and financially supported Trebinje in developing two documents, both BFC eliminatory criteria: the Trebinje Development Strategy for the period 2018–2027 and the Capital Investment Plan for 2017–2022. The Strategy was adopted by the city assembly in November 2017 (link) and the CIP was adopted in September 2017.
Also, the city BFC team was given advice with best practices for many other BFC criteria, like strengthening the LED office, establishing public-private dialogue, creating an analytical database relevant to LED, preparing promotion materials, the structure of investor website, and conducting a survey of the private sector.
Mayor of Trebinje - Strategy development - focus group discussion in Trebinje
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City of BIJELJINA
Bijeljina was certified with USAID GOLD project support in 2015. After the BFC certificate expired, the city signed a contract with the RS Chamber of Commerce on re-certification in June 2017. Bijeljina received the BFC Final Evaluation Report with a score of 94.33% fulfillment of BFC criteria in September 20184.
The mayor specifically requested the support of RAST in developing a Local Ecological Action Plan which was completed in July 2018. RAST prepared the scope of works, tender documentation, issued a tender, and selected a consultant to develop the Plan. The consultant developed the Plan following all steps for developing strategic documents (wider consultation with relevant stakeholders, preparation and presentation of a draft, analysis of suggestions, amending the draft, conducting public debate, and final draft).
Municipality of KAKANJ
The municipality of Kakanj received a BFC Final Evaluation Report in November 2018 with 90% fulfillment of BFC criteria.
RAST supported the municipality of Kakanj through engaging a company (Source, Sarajevo) to develop a video to promote municipal investment potential to attract investors, as promotion criteria was among lowest scored in the BFC Preliminary Evaluation Reports (see link to the video below).
Promotional video for Municipality of Kakanj (www.youtube.com/kakanj_promo_video)
RAST supported the municipal BFC team to develop an action plan to implement the recommendations from the BFC Preliminary Evaluation Report. RAST provided technical assistance in developing a Capital Investment Plan which included training the team appointed by the mayor, and guidance in developing criteria for evaluation of investment project proposals, the creation of forms for collection of project proposals, sharing the best practice of communication with all stakeholders, the evaluation of project proposals, and preparing a ranking list of project proposals. The local council adopted the CIP in July 2018.
4 The municipalities of Brod, Bijeljina, Kakanj, and Zavidovici received positive BFC Final Evaluation Reports by the end of the RAST project. Due to NALED’s delay in education of verificators on the new edition of the BFC standards, verificators’ visit to these four municipalities, as the last step in the certification process, is planned for February 2019.
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RAST supported the BFC team in Kakanj in creating a questionnaire for conducting a private sector survey on conditions for doing business, their workforce needs and the quality, costs, and availability of utility services in the municipality. RAST also helped the mayor of Kakanj to establish a Local Economic Council through providing advice on how to compose the LEC and how to strengthen public-private dialog.
Municipality of ZAVIDOVICI
The municipality of Zavidovici received the BFC Final Evaluation Report in November 2018 with 91% fulfillment of BFC criteria. The verificators’ visit was organized in February 2019 and they issued a positive report. In March the municipality was BFC certified.
RAST, together with a representative from the BFC Technical Secretariat for FBiH, trained members of the municipal team on the BFC process and criteria. RAST also supported the mayor and his team in the presentation of the BFC process and criteria to the municipal Economic Council and benefits of the BFC standards for the local business community.
RAST advised and guided the municipal team on the methodology for developing an integrated mid-term Capital Investment Plan as a BFC eliminatory criteria with the focus on defining the evaluation criteria and supporting the team in evaluating project proposals. The local council adopted the plan in January 2018.
RAST provided assistance to the municipal BFC team in the two lowest-scored criteria from the BFC Preliminary Evaluation Report: Promotion activities (40.0%) and improvement of LED unit structure (45.45%). RAST supported the BFC team to collect data and information to design promotion materials / flyers, including: Guide to Issuing Building Permits, Guide to Issuing Urban Permits, Guide to Issuing Use Permits, Guide to Entrepreneurship and Company Registration, and Investment Guides for the Wood, Metal, Textile, Agriculture, and Tourism sectors. RAST also assisted the BFC team in restructuring the existing website for investors.
Examples of promotional materials prepared for the municipality of Zavidovici
In July 2018, the mayor made changes to the current "Rulebook on Internal Organization and Job Classification of the LED Sub-Department" and the "Decision on Establishing Zavidovici Development Agency (RAZ)" in line with suggestions provided by the RAST project. In an effort to avoid overlap between municipal institutions, RAST supported the municipality to establish a clear description of roles and responsibilities between the administrative LED unit and RAZ. These suggestions were presented to the mayor and the RAZ director.
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Municipality of BROD
The municipality of Brod received the BFC Final Evaluation Report in December 2018 with 91% fulfilment of BFC criteria. The verificators’ visit was organized in February 2019 and they issued a positive report. In March the municipality was BFC certified.
RAST trained the whole municipal BFC team on the BFC process and criteria. RAST supported the mayor and deputy mayor in presentation of the BFC process and criteria to the Local Economic Council and benefits of BFC standards for local business community.
RAST supported the municipality of Brod to develop a video to promote municipal investment potential to attract investors, as promotion criteria was among the lowest scored in the BFC Preliminary Evaluation Reports (link).
RAST trained the municipal team to develop a mid-term Capital Investment Plan with the focus on organizing the entire development process, identifying relevant evaluation criteria for project proposals, and creating and distributing the project proposal templates. The municipal team was trained to analyze and evaluate the collected project proposals. The Capital Investment Plan was adopted by the local council in May 2018.
After reviewing the BFC Preliminary Evaluation Report, RAST organized a meeting with the mayor and the municipal BFC team to prepare an action plan for implementing the recommendations from the report. RAST focused its technical assistance on three criteria that scored zero points: promotion activities, local labor market and support of entrepreneurship.
RAST assisted the municipal BFC team to create promotion materials / flyers, including: Guide to Issuing Building Permits, Guide to Issuing Urban Permits, Guide to Issuing Use Permits, Guide to Entrepreneurship and Company Registration, Investment Guides for the Agriculture and Metal sectors. RAST assisted Brod in the design of a website for investors by selecting an IT company for developing a website and closely coordinating and monitoring activities between the municipality and IT company.
Website of municipality Brod “Invest in Brod” (http://investinbrod.com)
In terms of the local labor market, RAST helped the municipality to create a questionnaire and conduct a private sector survey on its workforce needs. An important part of this criterion is also municipal participation in creating and implementing a training/education program for workforce development. The methodology for establishing partnerships with relevant stakeholders in this field (private sector, high school, employment 13 bureau) was presented and the mayor established the Council for Employment and Education with the main responsibility to coordinate activities between the local administration, private and education sectors to decrease unemployment.
After the survey was completed, RAST helped the municipality to analyze the collected data and prepare conclusions with recommendations for the mayor as to how the municipality can support workforce development in line with the private sector needs. Upon the RAST recommendation, the mayor allocated 20,000 BAM in the 2018 revised budget to support start-ups and self-employment (BFC requirements). RAST also advised how to strengthen the LED office to establish sustainable public-private partnerships.
B) Municipality in the BFC Process
Municipality of NOVI GRAD
RAST trained the entire municipal BFC team on the BFC process and criteria. RAST supported the mayor, deputy mayor and his team in presentation of the BFC process and criteria to the Local Economic Council and benefits of BFC standards for the local business community.
RAST supported the municipality of Novi Grad to develop a video to promote municipal investment potential to attract investors (link) as the promotion criteria was among lowest scored in the BFC Preliminary Evaluation Report.
RAST trained the municipal team in the methodology to develop an integrated mid-term Capital Investment Plan. More specifically, the support was provided in preparing a template for the collection of project proposals, defining the evaluation criteria, and training of team members in the evaluation of project proposals. The plan was adopted by the local council in March 2018.
The municipality of Novi Grad received the BFC Preliminary Evaluation Report in late September as the last municipality of all municipalities in the BFC process. The current level of fulfilment of BFC criteria is 50.67%. RAST assisted mayor and his team to analyze findings provided in the evaluation report and to prepare an action plan for implementation of the recommendation in line with the BFC calendar.
In November 2018, the mayor made necessary changes in the systematization of staff positions in the municipal Department for Economy and in the LED office to strengthen this office in line with RAST recommendations. Namely, evaluators noticed in the report that there are overlapping responsibilities between the Department and LED office as well as lack of responsibilities to meet certain BFC criteria.
RAST assisted Novi Grad in the design of a website for investors by selecting an IT company for developing this website (link).
RAST supported the municipal BFC team to conduct a survey of the private sector. After the survey was completed, RAST helped to analyze the collected data and prepare conclusions with recommendations for the mayor on measures to support workforce development and further improvement in conditions for doing business in line with companies’ needs.
C) Municipalities that Failed to Implement BFC Standards
Municipality of CENTAR SARAJEVO
In the preparatory phase of the process, RAST helped the mayor to appoint the municipal BFC team and
14 assisted in training all members to correctly understand all criteria and sub-criteria as well as the certification process.
Centar Sarajevo received the BFC Preliminary Evaluation Report in April 2018 with very low fulfillment of BFC criteria (30.33%). The main reasons for such a low score are in the lack of municipal practice in documenting its processes and procedures, the lack of updated LED data and promotion materials, and in very weak cooperation with the business community.
Despite RAST’s numerous offers to provide support in developing an action plan for implementation of recommendations provided in the Preliminary Evaluation Report and to take a systematic approach in implementation of BFC standards, there were no active engagement of the municipal BFC team. Their approach was ad-hoc, the municipal BFC coordinator has no authority over other members of the BFC team and support of the mayor to the BFC team was not sufficient.
In November 2018 Centar Sarajevo received a BFC Final Evaluation Report with 68.3% of fulfillment of BFC criteria (threshold is 75.0% with 100% of all eliminatory criteria). Centar Sarajevo did not meet three eliminatory criteria: a) CIP was not developed in a transparent procedure, b) Local Economic Council does not function, c) Guide for Issuing Construction Permit is not properly prepared. So, the process was completed unsuccessfully.
City of TUZLA
RAST supported the BFC team coordinator in Tuzla to improve the internal organization of the LED office and create a LED database. Support was also provided in simplification of the process of issuing building permits RAST assisted in collecting information on the procedure and total costs of establishing a business entity and its operating costs, as well as information on available incentives and subsidies for entrepreneurs at the cantonal/entity/state level.
The project provided a sample of a survey questionnaire for the private sector regarding the quality of the local business environment and utility services and another questionnaire to survey the private sector on workforce needs. RAST improved the awareness of the public and private sectors on the importance of working in partnership through strengthen the work of the Local Economic Council.
The BFC Technical secretariat prepared a negative Final Evaluation Report despite RAST’s efforts to support the BFC team in Tuzla, because of the mayor's poor support and commitment5 to implementing BFC standards, and the lack of authority of the BFC coordinator. Although the improvements made in the BFC process were recognized, specifically in the criteria where RAST provided support, the Report indicated that 61.0% of the BFC criteria had been met (threshold is 75.0%) and Tuzla failed to successfully implement the BFC standards.
Municipality of UGLJEVIK
RAST supported the municipality to prepare an Agricultural Development Strategy for the period 2018-2022, aimed at identifying strategic and operational goals and programs for a systematic approach to municipal agriculture development. The Strategy with strategic goals, action plan, and a financial framework including incentive plan were presented to municipal representatives and other municipal stakeholders in July 2017 (link). Support was also provided in revision of a municipal promotion and communication plan.
5 The mayor was engaged in the local election 2016 and after that he was engaged in internal party elections (was an unsuccessful candidate for the party leader). 15
RAST efforts to provide timely support were inadequate because of the BFC team's poor capacity (only one person). In addition, the municipality did not start on time with fulfillment of several eliminatory BFC criteria, e.g. developing a Capital Investment Plan and reorganizing the municipal Economic Council. The municipality asked the RS BFC Technical secretariat two times for a deadline extension and got it (first until the end of 2017 and a second extension until the end of May 2018), but in this period there were no visible activities regarding fulfilling of BFC criteria.
In consultation with RAST, the RS BFC Technical secretariat concluded that Ugljevik currently does not have political support and technical capacity to successfully implement BFC standards, and the process finished unsuccessfully.
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ANNEX 3: LEVEL OF FULFILLMENT OF BFC CRITERIA
LEVEL OF FULFILLMENT OF BFC CRITERIA IN PRELIMINARY AND VERIFICATION REPORTS
Table 1 compares evaluation results presented in the BFC preliminary and verification reports per each criteria and for all 13 BFC certified municipalities. The preliminary reports revealed that the average fulfillment of all BFC criteria for all municipalities was 59.5%. The three lowest scored municipalities were Brod (25.3%), Doboj (40.9%) and Novi Grad Sarajevo (53.5%). The most advanced one was Bijeljina, but this can be explained by the fact that the municipality was in a re-certification phase.
RAST provided significant support to all 13 municipalities to implement recommendations from preliminary evaluation reports. As a result, the average fulfillment of BFC criteria increased to 87.5% as reflected in the verification reports. Results for municipalities Bijeljina, Brod, Kakanj and Zavidovici have been retrie from the Final evaluation reports. Verification reports for these municipalities will be issued in February 2019 as the Regional BFC technical secretariat (NALED) experienced some delays to train verificators on the new edition of BFC standards. The municipalities of Bijeljina (94.3%), Laktasi (92.5%) and Zavidovici (91.3%) achieved the highest score.
Table 1: Comparison Results from Preliminary and Verification Reports (by municipalities) Report Municipality Increased Preliminary Verification Novi Grad 53.5% 79.6% 26.1% 1 Sarajevo 2 Posusje 67.8% 81.4% 13.6% 3 Jablanica 54.9% 88.2% 33.3% 4 Gradacac 67.9% 87.2% 19.3% 5 Zenica 64.4% 87.2% 22.8% 6 Doboj 40.9% 87.0% 46.1% 7 Gradiska 72.5% 88.1% 15.6% 8 Laktasi 60.2% 92.5% 32.3% 9 Trebinje 54.3% 89.2% 34.9% 10 Bijeljina** 85.0% 94.3% 9.3% 11 Kakanj* 65.0% 89.7% 24.7% 12 Zavidovici* 62.0% 91.3% 29.3% 13 Brod* 25.3% 82.7% 57.4% Average 59.5% 87.5% 28.0% *Final evaluation report **Recertification
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On average, BFC municipalities improved their score by 28% between preliminary and verification reports. The most significant improvement was made in Brod (57.4%), Doboj (46.1%) and Trebinje (34.9%) as these municipalities had among the lowest scores in the preliminary evaluation reports. Bijeljina made the lowest improvement because it was in a process of recertification and achieved very good scoring in evaluation reports (Graph 1).
Graph 1. Average level of BFC criteria improvement (by municipalities)
Bijeljina 9.30% Posusje 13.60% Gradiska 15.60% Gradacac 19.30% Zenica 22.80% Kakanj 24.70% Novi Grad Sarajevo 26.10% Zavidovici 29.30% Laktasi 32.30% Jablanica 33.30% Trebinje 34.90% Doboj 46.10% Brod 57.40%
Table 2 shows the average level of fulfilment under each BFC criteria for all 13 BFC municipalities. The Preliminary evaluation reports indicated that the three lowest scored criteria were: Adequate infrastructure (capital investment plan) and reliable utility services (41.2%); Monitoring of local labour market dynamics and active attitude towards actual companies’ needs (46%); and Activities on promotion of investments and quality of business environment in municipality (48.8%).
RAST focused its extensive assistance to the lowest scored criteria in the Preliminary evaluation reports which introduced systematic changes in the work of the municipal administration and required support from mayors, the entire administration and local public companies. As a result, the most significant improvements were observed in these three criteria: Adequate infrastructure (capital investment plan) and reliable utility services (43.0%); Activities on promotion of investments and quality of business environment in municipality (40.4%), and Monitoring of local labour market dynamics and active attitude towards actual companies’ needs (35.9%)
By the end of the certification process, the Verification reports revealed that the following criteria scored the least: Cooperation between the public and the private sector (Local Economic Council) (81.7%); Monitoring of local labour market dynamics and active attitude towards actual companies’ needs (81.9%) and System for issuing building permits (82.7%). Despite the important improvements in these areas, municipalities will need to continue concentrating their efforts on those three aspects of LED.
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Table 2: Average Level Fulfilment (by BFC Criteria) Preliminary Verification BFC Criteria Improvement Report Report Strategic approach to local economic 62.0% 92.4% 30.5% development Local economic development office 65.2% 88.7% 23.5% Cooperation between the public and the private sector (Local Economic 57.5% 81.7% 24.4% Council)
System for issuing building permits 64.7% 82.7% 18.0% Analytical base for supporting local business community and attracting 54.1% 84.2% 30.1% investments Activities on promotion of investments and quality of business 48.8% 89.2% 40.4% environment in municipality Predictability of operating expenses and responsible management of 74.7% 93.7% 19.0% public finances Monitoring of local labour market dynamics and active attitude 46.0% 81.9% 35.9% towards actual companies needs Municipality supports development of entrepreneurship and small/medium 64.7% 88.4% 23.7% enterprises Adequate infrastructure and reliable utility services 41.2% 84.2% 43.0% (Capital Investment Plan) Municipality provides transparent tax and charging fees policy to stimulate 55.8% 83.6% 27.8% LED Information and communication 86.8% 95.8% 9.0% technology
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Table 3 shows the level of fulfillment of all BFC criteria for all municipalities in Preliminary evaluation and Final/Verification reports.
Table 3: Fulfillment of all BFC Criteria in Preliminary and Verification Reports
Novi Grad Sarajevo Doboj Zenica Gradacac Posusje Jablanica
BFC Criteria PER VR PER VR PER VR PER VR PER VR PER VR
1 Strategy 66.7% 86.7% 66.7% 86.7% 73.3% 90.0% 80.0% 93.3% 100.0% 100.0% 43.3% 93.3% 2 LED Office 70.8% 83.3% 50.0% 87.5% 72.9% 95.8% 62.5% 85.4% 60.4% 79.2% 52.1% 91.7% Economic 3 55.6% 55.6% 33.3% 88.9% 55.6% 88.9% 100.0% 100.0% 83.3% 77.8% 77.8% 100.0% Council 4 Building permits 52.7% 67.6% 54.1% 83.8% 67.6% 78.4% 55.4% 86.5% 59.5% 70.3% 73.0% 91.9% 5 LED database 61.5% 84.6% 19.2% 80.8% 50.0% 80.8% 34.6% 65.4% 73.1% 76.9% 61.5% 73.1% 6 Promotion 37.5% 87.5% 0.0% 96.9% 50.0% 87.5% 75.0% 87.5% 56.3% 75.0% 28.1% 96.9% 7 Public finance 75.0% 100.0% 50.0% 100.0% 100.0% 100.0% 75.0% 100.0% 100.0% 75.0% 50.0% 75.0% 8 Labor market 16.7% 77.8% 33.3% 77.8% 50.0% 66.7% 50.0% 66.7% 38.9% 66.7% 22.2% 77.8% 9 PPP 50.0% 77.8% 61.1% 94.4% 55.6% 88.9% 72.2% 88.9% 66.7% 88.9% 33.3% 77.8% 10 CIP 19.4% 55.6% 19.4% 72.2% 47.2% 77.8% 55.6% 97.2% 50.0% 83.3% 44.4% 94.4% 11 Transparency 41.7% 91.7% 41.7% 75.0% 50.0% 91.7% 66.7% 75.0% 25.0% 83.3% 85.7% 92.9% 12 ITC 93.8% 87.5% 62.5% 100.0% 100.0% 100.0% 87.5% 100.0% 100.0% 100.0% 87.5% 93.8% Total fulfillment of 53.5% 79.6% 40.9% 87.0% 64.4% 87.2% 67.9% 87.2% 67.8% 81.4% 54.9% 88.2% BFC criteria
PER – Preliminary Evaluation Report; VR – Verification Report;
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Table 3: Fulfillment of BFC Criteria in Preliminary and Verification Reports (continuation)
Gradiska Laktasi Trebinje Bijeljina* Kakanj* Zavidovici* Brod*
BFC Criteria PER VR PER VR PER VR PER FER PER FER PER FER PER FER
1 Strategy 63.3% 88.7% 66.7% 100.0% 26.7% 93.3% 80.3% 91.7% 25.0% 100% 52.0% 83.3% 41.7% 91.7% 2 LED Office 70.8% 95.8% 70.8% 91.7% 62.5% 75.0% 88.5% 95.5% 77.3% 90.9% 45.5% 86.4% 63.6% 95.5% Economic 3 66.7% 79.8% 0.0% 88.9% 77.8% 88.9% 75.8% 85.2% 38.9% 66.7% 44.4% 72.2% 27.8% 77.8% Council Building 4 66.2% 83.8% 68.9% 79.7% 70.3% 89.2% 84.5% 86.5% 81.2% 100% 75.0% 87.5% 31.3% 62.5% permits 5 LED database 57.7% 84.6% 65.4% 88.5% 34.6% 88.5% 84.6% 100.0% 66.7% 83.3% 66.7% 100% 16.7% 83.3% 6 Promotion 78.1% 96.9% 40.6% 87.5% 34.4% 71.9% 93.9% 100.0% 100.0% 100% 40.0% 90.0% 0 60.0% 7 Public finance 100.0% 100.0% 100.0% 100.0% 50.0% 100.0% 85.4% 93.8% 81.3% 87.5% 93.8% 100% 6.3% 81.3% 8 Labor market 61.1% 87.9% 55.6% 100.0% 55.6% 94.4% 88.2% 100.0% 58.3% 75.0% 68.7% 91.7% 0 66.7% 9 PPP 100.0% 87.7% 66.7% 94.4% 77.8% 88.9% 82.7% 87.5% 100.0% 100% 75.0% 100% 0 50.0% 10 CIP 41.7% 86.8% 33.3% 94.4% 38.9% 88.9% 86.4% 92.9% 21.4% 71.4% 59.1% 92.9% 14.3% 85.7% 11 Transparency 83.3% 77.6% 66.7% 91.7% 41.7% 91.7% 12 ITC 81.3% 87.5% 87.5% 93.8% 81.3% 100.0% Total fulfillment of 72.5% 88.1% 60.2% 92.6% 54.3% 89.2% 85.0% 94.3% 65.0% 89.7% 62.0% 91.3% 25.3% 82.7% BFC criteria PER – Preliminary Evaluation Report; VR – Verification Report; FER – Final Evaluation report
*New Edition of BFC standards include ten criteria. Old version included 12 criteria. Verification reports, as the last step in the certification process, will be prepared in February 2019.
As explained in the narrative report, RAST provided comprehensive support to 13 municipalities to achieve all BFC criteria and sub-criteria. However, some of the criteria required more extensive technical support from the RAST team. Table 4 shows a comparison of scoring results between Preliminary and Verification reports for BFC criteria and sub–criteria that required extensive technical support from RAST. The average increase was 36.3% for these criteria and for all municipalities. The biggest improvement was made in Brod (54.7%), Doboj (53%) and Laktasi (48.9%).
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Ave- Table 4: Comparison of Scoring Results from Preliminary and Verification Reports for Criteria Directly Supported by RAST rage BFC Certified PER VR PER VR PER VR PER VR PER VR PER VR PER VR PER VR 36.3% Municipality Supported Criteria 2.1 3 4.8 5 6 8.5 10.1 12.2 Novi Grad 50.0% 100% 0% 50.0% Sarajevo Total Criteria 61.5% 80.8% 37.5% 75% 16.7% 66.7% 19.4% 58.3% Increased 19.3% 37.5% 50.0% 38.9% 36.4% Posusje 0% 50.0% 0% 50.0% 50.0% 100% Total Criteria 59.5% 75.7% 73.1% 88.5% 56.3% 90.6% 38.9% 66.7% 50.0% 72.9% Increased 16.2% 15.4% 34.3% 27.8% 22.9% 23.3% Jablanica 0% 50.0% 50.0% 100% Total Criteria 28.1% 90.6% 22.5% 50.0% 44.4% 94.4% Increased 62.5% 27.5% 50.0% 46.7% Gradacac 0% 100% 50.0% 100% 50.0% 100% Total Criteria 55.4% 91.9% 34.6% 73.1% 75% 100% 55.6% 100% 87.5% 100% Increased 36.5% 38.5% 25.0% 44.4% 12.5% 31.4% Zenica 50.0% 100% 50.0% 100% Total criteria 72.9% 95.8% 50.0% 87.5% 47.2% 72.2% Increased 22.9% 37.5% 25.0% 28.5% Doboj 50.0% 100% 0% 100% 0% 50.0% 50.0% 100% Total criteria 50.0% 91.7% 33.3% 77.8% 0% 96.9% 33.3% 77.8% 19.4% 72.2% 62.5% 100% Increased 41.7% 44.5% 96.9% 44.5% 52.8% 37.5% 53.0% Gradiska 50.0% 100% 50.0% 100% 0% 100% Total Criteria 66.2% 83.8% 61.1% 88.9% 41.7% 77.8% Increased 17.6% 27.8% 36.1% 27.2%
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Ave- Table 4: Comparison of Scoring Results from Preliminary and Verification Reports for Criteria Directly Supported by RAST rage BFC Certified PER VR PER VR PER VR PER VR PER VR PER VR PER VR PER VR 36.3% Municipalit y Supported Criteria 1 3 4.8 5 6 8.5 10.1 12.2 Laktasi 0.0% 50.0% 50.0% 100% Total 0.0% 88.9% 68.9% 79.7% 40.6% 87.5% Criteria Increased 88.9% 10.8% 46.9% 48.9% Trebinje 0 50.0% 0 50.0% 0 100% Total 26.7% 93.3% 77.8% 88.9% 34.6% 88.5% 34.4% 71.9% 55.6% 94.4% 38.9% 88.9% Criteria Increased 66.6% 11.1% 53.9% 37.5% 38.8% 50.0% 43.0% Bijeljina* Total 80.3% 91.7% Criteria Increased 11.4% 11.4% 2.5 3 6.2 8.2 10.1 10.5 Kakanj* 0.0% 100% 50.0% 100% 0 100% 50.0% 100% 0 100% Total 77.3% 90.9% 38.9% 66.7% 96.0% 100% 58.3% 75.0% 21.4% 71.4% 21.4% 71.4% Criteria Increased 13.6% 27.8% 4% 16.7% 50.0% 50.0% 27.0% 2 3 4.2 6 Zavidovici* 50.0% 100% 50.0% 100% Total 45.5% 86.4% 44.4% 72.2% 50.0% 100% 40.0% 90.0% 57.1% 92.9% Criteria Increased 40.9% 27.8% 50.0% 50.0% 35.8% 40.9% 2.5 4.2 6.2 8 9.1 10.1 10.5 Brod* 0 100% 0 100% 0 100% 0 100% 0 100% 0 100% Total 63.6% 95.5% 31.3% 62.5% 0.0% 60.0% 0.0% 66.7% 0.0% 50.0% 14.3% 85.7% 14.3% 85.7% Criteria Increased 31.9% 31.2% 60.0% 66.7% 50.0% 71.4% 71.4% 54.7% * Final evaluation report
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ANNEX 4: Succes stories
Gradiška – An infrastructure investment that perfectly fits into the municipal development strategy “This is a very significant project for the Agro-Industrial zone in Nova Topola, where we intend to attract new investors and create new jobs. By constructing the waste-water treatment system, we created the conditions for further construction of sewage system in the zone and local community Nova Topola”, said the mayor of Gradiska Zoran Adzic. The RAST project supported the Municipality of Gradiska to improve the infrastructure conditions in the Agro-Industrial zone Nova Topola, which will attract new investors and enhance the conditions for existing companies. Between June and October 2018, RAST constructed a facility for waste-water treatment. To support existing businesses and to attract new investors, the priority of the Municipality of Gradiska was to solve the issue of wastewater treatment. One of the basic forms of pollution is water pollution and the most effective way to address this issue consists in the collection, removal and treatment of wastewater. Prior to the RAST project, the municipality had planned the construction of the wastewater treatment device using an extender aeration, as a method of sewage treatment using modified activated sludge procedures. They invested municipal funds and constructed the sewage system with pumps to bring the future wastewater treatment facility into operation. RAST supported the municipality to construct the wastewater treatment facility. There are 6 businesses currently operating in the Agro-Industrial Zone Nova Topola with approx. 250 employees. New investors are coming and building new facilities. The built infrastructure created the optimal conditions to attract new investors. One of the most recent and largest investor is the Italian company “Calzedonia”, a large multinational producers of underwear and socks. The company is now building a 11,000 m2factory and will employ 350 to 400 workers. “We want to use our advantage – the fact that we are located at the entrance of the European Union, and that we have a strategic position and vicinity with airports in Zagreb and Belgrade. We want to catch the trend of knowledge and technology transfer from EU and to bring it to Gradiska. We must intensify our efforts to attract the investments, to bring as many companies as possible, those that can make successful business in our municipality. We need to bring all infrastructure to be at the top level – water, sewage, roads. We will soon prepare all parcels for potential investors.” – said the mayor Adzic.
RAST also supported the Municipality of Gradiska to become Business-Friendly certified, in compliance with the Business Friendly Certification South East Europe program. As part of its efforts to improve the municipality’s business environment, the local government decreased several taxes. Also, new businesses may now register for free to operate in the Municipality. Effective and efficient administrative procedures are key to retain and attract investors. The Municipality of Gradiska established a municipal agency responsible for local economic development. This has considerably simplified all administrative procedures for existing and new businesses. Representatives from Calzedonia explained that they were surprised by the efficiency of the local government to issue the necessary permit and other documentation. They further claimed that it would have taken much longer in Italy!
From local level efforts to promotion of the country’s investment potential
“…we will finally have all industrial zones in Federation managed and presented in one place. We all need this and similar information, but also the examples from other industrial zones, which will give us an opportunity to improve our presentations and additionally make the approach to the investors easier.” (Muhamed Ramovic, Mayor of Gorazde)
The RAST project supported eleven municipalities across Bosnia and Herzegovina (BiH) to improve their business environment by becoming business-friendly certified in compliance with the BFC south East Europe program. Besides securing the prestigious certification, RAST built the capacities of all municipalities in local economic development and strategic communication and promotion. However, when the project was initially designed, there were no signs that the support provided to municipalities would lead to a higher-level engagement and motivation to strengthen the potential of Entity institutions to improve the business environment.
The project established trustful cooperation with multiple At the first glance, this is very useful entity bodies, including the Federation Ministry of Development, Entrepreneurship and Craft. The Ministry was move, and that everyone will benefit motivated by the project successes at the local level and from the new data basis and web wanted to explore ways to more widely promote investment portal. (Banke & Biznis magazine) locations. The idea of creating an Information System (IS) emerged. Close collaboration between multiple entity authorities and RAST resulted in the development of the first-ever web-based IS (www.zonefbih.gob.ba) in BiH that enables national and international investors to search for investment locations in Federation Bosnia and Herzegovina. The tool now serves as a platform to present consolidated, comprehensive and up-to-date information on investment locations, providing improves services to the business community.
The platform was successfully handed over to the Ministry which is already in the process of training 80
The Information system is useful t existing and future investors and serves as a source of information on investment opportunities. Municipalities will use the system to improve planning, construction, management and promotion of business/industrial zones. The Ministry will use it as a basis to conduct comprehensive analysis to better plan the development of business/industrial zones.
municipalities to ensure proper data entry, use and regular updates of the platform. UNDP provides technical assistance to the Ministry in this process.
Moreover, the impact of this system also motivated the other Entity, Republika Srpska, to replicate this model. Bilateral discussions are ongoing with the Entity Ministry of Industry, Energecy and Mining to explore the possibility of developing a similar system.
We expect that the new information system will help us, as we will link all business zones not only in Federation of BiH, but also with other economic actors in this system, in wider area, and maybe with neighboring countries. (Branko Bago, Mayor of Posusje)
Annex 3 - Public events
When appropriate, RAST organized public events to mark project commencements and inaugurations for infrastructure projects. Also, there were two major public events organized to promote the BFC process.
November 27, 2018 – Inauguration of the system for waste-water treatment in Agro-Industrial zone Nova Topola, Municipality of Gradiska
November 23, 2018 – Inauguration of pedestrian-bycicling path in Brus, Municipality of Istočni Stari Grad
November 23, 2018 – Inauguration of bridge on river Bistrica, Jahorina, Municipality of Pale
October 10, 2018 – Inauguration of health facility in Zepce Municipality
September 26, 2018 - Presentation of Information System and web portal of business and industrial zones in Federation of BiH
June 20, 2018 - Signing of Contracts on joint funding with municipalities of Pale and Istočni Stari Grad
May 30, 2018 – Work commencement on construction of system for waste-water treatment in Nova Topola, Municipality of Gradiska
May 29, 2018 – Work commencement on Daily center for people with disabilities in Banja Luka
April 19, 2018 – Commencement of work in Industrial zone Celpak, Town of Prijedor
November 3, 2017 – Promotion of six BFC municipalities in BiH Chamber of Commerce
September 4, 2017 – Work commencement on the road – infrastructure improvement in business zone Ramici, Banja Luka
May 22, 2017 – Marking commencement of the work on water-supply Vitkovici, Municipality of Gorazde
FEDERAL FINANCIAL REPORT OMB Number: 4040-0014 (Follow form instructions) Expiration Date: 1/31/2019
COUNTRY: Bosnia & Herzegovina VOUCHER # 10 1. Federal Agency and Organizational Element to Which Report is Submitted 2. Federal Grant or Other Identifying Number Assigned by Federal Agency (To report multiple grants, use FFR Attachment) U.S. Agency for International Development AID-168-A-16-00002
3. Recipient Organization (Name and complete address including Zip code) Recipient Organization Name: Catholic Relief Services - USCCB Street1: 228 West Lexington Street City: Baltimore County: State: Maryland Province: Country: USA: United States ZIP / Postal Code: 21201 4a. DUNS Number 4b. EIN 5. Recipient Account Number or Identifying Number 06-820-5541 13-5563422 (To report multiple grants, use FFR Attachment) 8424 6. Report Type 7. Basis of Accounting 8. Project/Grant Period 9. Reporting Period End Date From: To: ■ Quarterly □ Cash □ Semi-Annual Accrual □ Annual ■ 9/27/2016 12/26/2018 12/31/2018 □ Final 10. Transactions Cumulative (Use lines a-c for single or multiple grant reporting) Federal Cash (To report multiple grants, also use FFR Attachment): a. Cash Receipts 2,373,980.05 b. Cash Disbursements 2,550,000.00 c. Cash on Hand (line a minus b) (176,019.95) (Use lines d-o for single grant reporting) Federal Expenditures and Unobligated Balance: d. Total Federal funds authorized 2,550,000.00 e. Federal share of expenditures 2,550,000.00 f. Federal share of unliquidated obligations - g. Total Federal share (sum of lines e and f) 2,550,000.00 h. Unobligated balance of Federal funds (line d minus g) - Recipient Share: i. Total recipient share required 145,000.00 j. Recipient share of expenditures 144,853.36 k. Remaining recipient share to be provided (line i minus j) 146.64 Program Income: l. Total Federal program income earned - m. Program income expended in accordance with the deduction alternative - n. Program income expended in accordance with the addition alternative - o. Unexpended program income (line l minus line m or line n) - 11. Indirect Expense a. Type b. Rate c. Period From Period To d. Base e. Amount Charged f. Federal Share Provisional 2,163,951.12 386,048.88 386,048.88
g. Totals: 2,163,951.12 386,048.88 386,048.88 12. Remarks: Attach any explanations deemed necessary or information required by Federal sponsoring agency in compliance with governing legislation:
13. Certification: By signing this report, I certify that it is true, complete, and accurate to the best of my knowledge. I am aware that any false, fictitious, or fraudulent information may subject me to criminal, civil, or administrative penalties. (U.S. Code, Title 4921, Section 4901) a. Name and Title of Authorized Certifying Official Prefix: First Name: Amy Middle Name: L. Last Name: Mowrey Suffix: Title: Manager, USG Reporting b. Signature of Authorized Certifying Official c. Telephone (Area code, number and extension) (410) 951-7311 d. Email address e. Date Report Submitted 14. Agency use only: [email protected] 1/30/2019
Standard Form 425 USAID funds Reporting Form
Award Number: AID-168-A-16-00002 Award Amount: $2,550,000 Award Period: September 26, 2016 - December 26, 2018 Cost Share Amount: $145,000 Reporting Period: October 1, 2018 -December 26, 2018
Fulfilled USAID funds for the Reporting Period Period: October 1, 2018 -December 26, 2018 USAID funds (salary, office Budgeted USAID funds for Budget Category In-Kind Cash Variance Comments space, etc.) the Reporting Period 1. International Staff Salaries and Benefits (9,150.45) 1,807.34 - (9,150.45) 10,957.79 2. National Staff Salaries and Benefits (5,511.68) 53,721.78 - (5,511.68) 59,233.46 3. Travel and Transporation 5,341.44 7,023.28 - 5,341.44 1,681.84 4. Supplies (522.97) 531.77 - (522.97) 1,054.74 5. Contractual (228.15) 20,394.75 - (228.15) 20,622.90 6. Construction 153,239.46 170,134.44 - 153,239.46 16,894.98 7. Other direct costs 5,931.45 16,818.44 - 5,931.45 10,886.99 8. Indirect Costs - NICRA 26,920.85 48,318.19 - 26,920.85 21,397.34 176,019.95 318,749.99 - 176,019.95 142,730.04 CRS Cost share was in amount of $144,853 until -september 30, 2018. Beside cost share, CRS contributed additional amount of $35,764 in period October 1, 2018 - December 26, 2018 Total local contribution in period October 01,2016 - Decembar 26,2018 was in amount of $715,043 OMB APPROVAL NO. PAGE OF 0348-0004 1 1 REQUEST FOR ADVANCE OR REIMBURSEMENT 1. TYPE OF 2. BASIS OF REQUEST PAYMENT Advance Reimbursement X Cash REQUESTED Final Partial X Accrual X 3. FEDERAL SPONSORING AGENCY AND ORGANIZATIONAL 4. FEDERAL GRANT OF OTHER INDENTIFYING NUMBER 5. PARTIAL PAYMENT ELEMENT TO WHICH THIS REPORT IS SUBMITTED REQUEST NUMBER
USAID Bosnia and Herzegovina AID-168-A-16-00002 1
6. EMPLOYER 7 RECIPIENT'S ACCOUNT 8. PERIOD COVERED BY THIS REQUEST IDENTIFICATION NUMBER NUMBER OR ID NUMBER FROM TO 10/1/2018 12/26/18 13-5563422 8424 9. RECIPIENT ORGANIZATION 10. PAYEE
Catholic Relief Services Name: Catholic Relief Services, Account #4467060469
228 West Lexington Street Bank of America, 100 S. Charles Street Baltimore, MD 21201 City, State and ZIP Baltimore, Maryland 21201 Code
11. COMPUTATION OF AMOUNT OF REIMBURSEMENTS / ADVANCES REQUESTED
PROGRAMS/FUNCTIONS/ACTIVITIES (a) (b) (c ) TOTAL
a. Total program outlays to date 2,694,853.36 $2,694,853.36 b. Less: Cumulative program income $0.00 $0.00
c. Net program outlays (line a minus line b) $2,694,853.36 $2,694,853.36 d. Estimated net cash outlays for advance period $0.00 $0.00
e. Total (sum of lines c & d) $2,694,853.36 $2,694,853.36
f. Non-Federal share of amount on line e 144,853.36 $144,853.36
g. Federal share of amount on line e $2,550,000.00 $2,550,000.00
h. Federal payments previously requested $2,373,980.05 $2,373,980.05 i. Fedral share now requested (line g minus line h) $176,019.95 $176,019.95 j. Advances required by month, when 1st month requested by Federal grantor agency 2nd month 3rd month
12. ALTERNATE COMPUTATION FOR ADVANCES ONLY
$0.00 a. Estimated Federal cash outlays that will be made during period covered by the advance
b. Less: Estimated balance of Federal cash on hand as of beginning of advance period $0.00 c. Amount requested (Line a minus line b) $0.00
13. Typed or printed Name and Title: Debbie Shomberg, Country Representative Telephone (Area code, number and extension) 387 33 812 401
Signature of Authorized Certifying Official Date Report Submitted 31-Jan-19
I certify that to the the best of my knowlwdge and belief the date on the reverse are corect and that all outlays were made in accordance with the grant conditions or other agreement and that payment is due STANDARD FORM 270 (Rev. 7-97) and has not been previously requested. Prescribed by OMB Cirlulars A - 102 and A110. Z PUBLIC VOUCHER FOR PURCHASES AND VOUCHER NO. SERVICES OTHER THAN PERSONAL 1 U.S. DEPARTMENT, BUREAU, OR DATE VOUCHER PREPARED SCHEDULE NO. ESTABLISHMENT AND LOCATION 10/31/18 CONTRACT NUMBER AND DATE PAID BY USAID/RFMC/Bosnia and Herzegovina AID-168-A-16-00002 Roberta C. Frasurea 1 REQUISITION NUMBER AND 71000 Sarajevo PAYEE’S NAME AND ADDRESS DATE INVOICE RECEIVED
Catholic Relief Services Bank: Bank of America, 100 S. Charles Street, Baltimore, MD 21201 DISCOUNT TERMS Account No. 4467060469 Swift code: BOFAUS3N PAYEE’S ACCOUNT NUMBER ABA/Routing Number: 026009593 SHIPPED FROM: TO: WEIGHT: GOVERNMENT B/L NUMBER
NUMBER DATE OF ARTICLES OR SERVICES QUAN- UNIT PRICE AMOUNT(1) AND DATE DELIVERY (Enter description, item # of contract or Federal TITY OR SERVICE OF ORDER supply schedule, and other information deemed COST PER necessary)
1 Request for Reimbursement for the period $176,019.95 $176,019.95 10/01/18 – 12/26/18
PLEASE PROCESS THE PAYMENT IN USD
(Use continuation sheet(s) if necessary) (Payee must NOT use the space below) TOTAL $176,019.95 PAYMENT: APPROVED FOR EXCHANGE RATE DIFFERENCES
P PROVISIONAL BY: AMOUNT VERIFIED; A PARTIAL X CORRECT FOR I FINAL D B PROGRESS TITLE (SIGNATURE OR INITIALS) Y ADVANCE PURSUANT TO AUTHORITY VESTED IN ME, I CERTIFY THIS VOUCHER IS CORRECT AND PROPER FOR PAYMENT.
(DATE) (AUTHORIZED CERTIFYING OFFICER) (TITLE) ACCOUNTING CLASSIFICATION DOC NO EARMARK CURRCODE CURRENCY FUNDING
CHECK NUMBER ON ACCOUNT OF U.S. CHECK NUMBER ON (Name of Bank) NTREASURY CASH DATE PAYEE
1When stated in foreign currency, insert name of currency. PER 2 If the ability to certify and authority to approve are combined in one person, one signature only is necessary. Otherwise the approving officer will sign in the space provided, over his official title. 3When a voucher is receipted in the name of a company or corporation, the name of the person writing the company or corporate name, as well as the capacity in which he signs, must appear. For example: "John Doe Company, per John TITLE Smith, Secretary", or "Treasurer", as the case may be. Previous edition usable NSN 7540-00-900-2234 PRIVACY ACT STATEMENT The information requested on this form is required under the provisions of 31 U.S.C. 82b and 82c, for the purpose of disbursing Federal money. the information requested is to identify the particular creditor and the amounts to be paid. Failure to furnish this information will hinder discharge of the payment obligation. Standard Form 1034 1987Department of the Treasury Revised October 1987 1 TFM 4-2000 1034-121