ACTIVITY REPORT

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• ACTIVITY REPORT
• on EU Funds absorption
• May 2008 May 2009

Meglena Plugtschieva Deputy Prime Minister
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PHARE ProgramMay 2008

• Total budget of PHARE Program 2000-2006 1480
  mln EUR breakdown
• EU funding Financing Memorandum 2000-2006 1152
  mln EUR
• National co-financing 327 mln EUR
• Four PHARE Program Implementing Agencies (IAs)
  at Ministry of Finance (MF), Ministry of
  Regional Development and Public Works (MRDPW),
  Ministry of Economy and Energy (MEE), Ministry of
  Labor and Social Policy (MLSP).

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PHARE ProgramMay 2008

• In March 2008 the EC suspended payments to the
  PHARE Implementing Agency at the MF the CFCU,
  and to the PHARE Implementing Agency at the
  MRDPW.
• The suspension of payments affected the CFCU (MF)
  36.6 mln EUR and the MRDPW 14.1 mln EUR.
• The total budget of the two IAs under 2005
  Financing Agreements amounts to 102 mln EUR and
  under 2006 Financing Agreements, to 0.7 mln EUR.
• Real risk that the accreditation of the IAs at
  the MF and MRDPW might be withdrawn.
• Problems were identified in
• Public procurement procedures
• Project management
• Administrative capacity
• Backup and storage of documents
• The system of timely reporting suspicions of
  fraud and irregularities, etc.

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PHARE ProgramMay 2008

• As of May 2008 of the total budget of the active
  Financing Memoranda (2001-2006) amounting to 966
  mln EUR for the 4 PHARE IAs, 553 mln EUR were
  contracted and 296 mln EUR were paid.
• To be contracted till 30.11.2008
• under Financing Agreements (2005 and 2006) - 311
  mln EUR.
• Outstanding payments
• on the active Financing Memoranda and Financing
  Agreements (2001-2006) - 567 mln EUR till end
  2010.
• When the accreditation was withdrawn in July
  2008 323 mln EUR were frozen, the breakdown
  being
• 197 mln EUR for contracts made in conditions
  subject to control by the EC Delegation in
  Bulgaria and
• 126 mln EUR for contracts made after 29.06.2007.

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PHARE Program May 2009

• Actions taken following the EC July 2008 report
  and decision to take away the accreditation of
  the CFCU and the IA at the MRDPW
• The EC noted the positive steps taken by the
  Bulgarian institutions to improve the programme
  management systems in line of transparency,
  competency and firm will to overcome problems
  from the past.
• Further to the European Commissions
  recommendations, measures were taken to
  strengthen the management and control systems,
  i.e. Senior Programme Officers were appointed in
  every beneficiary institution to take charge of
  on-going projects, and Operating Agreements were
  signed between the Senior Programme Officers and
  the Programme Authorizing Officers (PAOs).
• The Bulgarian administration implemented and
  reported to the EC its Action Plan with specific
  measures corresponding to the ones outlined in
  Appendix No. 1 to the Decision.
• Additional monitoring controls were introduced.
  Measures, addressed at the management levels,
  aiming to ensure the functioning of the systems
  in accordance with good financial management
  principles.
• The Instructions of the National Authorizing
  Officer (NAO) to all PAOs were updated to
  regulate the entry of information in the Early
  Warning System.
• The NAOs instructions are being followed and
  procedures for reporting irregularities are
  published on the web-page of the respective
  Ministry and are included in the tender dossier.

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PHARE Program May 2009

• Strengthened administrative capacity,
• ?he role and functions of the NAO was amended
  expanding the NAOs powers in order to guarantee
  and strengthen the NAOs leading role in the
  process of managing the PHARE funds.
• Personnel changes were made within the management
  of the CFCU and the PHARE IA at the MRDPW.
• The programme implementation is regularly
  reported to the Council of Ministers.
• Day-to-day monitoring of problem projects
  according to a project implementation schedule.
• The NAOs supervisory role in the control
  architecture was stepped up through amendments to
  several normative acts. The regulatory framework
  was amended with respect to the human resource
  management policy in the PHARE sector.

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PHARE Program May 2009

• Implementation of the coordinated and uniform
  policy on irregularities has been ensured by
  protection of the persons who report
  irregularities. Immediate investigation of such
  cases is encouraged whereas the use of public
  means for personal benefit is precluded.
• Priority is given to sensitive issues of great
  public significance such as public procurement
  transparency, the approval of a Law on the
  Detection and Prevention of Conflicts of
  Interest, administrative capacity strengthening,
  improving the process of irregularity treatment
  and rejection of contractors involved in cases
  of irregularities under contracts co-financed by
  EU funds.
• Management and control systems have been
  strengthened on the basis of best practices to
  find a lasting solution in the prevention of
  established irregularities and the achievement of
  convincing results with guaranteed stability and
  irrevocability in the long run.

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PHARE Program May 2009

• The other two IAs at the MLSP and the MEE, which
  had only contracted a total of 5 under the 2006
  FA until June 2008, have reported contracting
  almost 90 of the funds.
• As at May 2008, out of the total budget of Euro
  966 million under the FM for the four PHARE IAs,
  Euro 553 million had been contracted and Euro 296
  million had been disbursed.
• As at May 2009 , Euro 1008 million have been
  contracted and Euro 796 million have been
  disbursed.
• To have the payments suspension measure lifted,
  the Bulgarian administration prepared and sent
  the EC detailed information, an analysis and
  assessment of the legality of contracts, signed
  prior to the Extended Decentralized System. The
  EC is expected to react to the Payment Requests
  sent in by the MF for contracts signed prior to
  the EDIS.
• The Bulgarian administration has implemented the
  recommended corrective measures and has thus
  proven the firmly declared will of the Bulgarian
  government to ensure transparency, control and
  reliability of the programme management systems.
  The Management and Control Systems have been
  changed and improved.
• The National Fund has sent in 5 Payment Requests
  to the EC in connection with contracts signed
  prior to the EDIS
• The national co-financing component for payments
  under PHARE-FA 2006 has been ensured by Council
  of Ministers Decree (CMD) 243/2008 and CMD
  89/2009.

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SAPARD ProgramMay 2008

• Total budget 591 mln. EUR (AFA 2000-2006).
• Completion of the Program scheduled for end
  2008.
• Bulgaria asked for an extension of the period of
  payments end 2009 however, the Commission did
  not reply.
• There was a real risk to lose some of the AFA
  financing for 2005 and 2006.
• As of May 2008 just 23 mln. EUR were paid out of
  the AFA 2005 and 2006 total budget amounting to
  210 mln. EUR.

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SAPARD ProgramMay 2008

• Suspension of payments for 3 measures and one
  sub-measure
• Measure 1 investment in farms (270 projects,
  cost 96 mln BGN)
• Measure 2 improvement of the processing and
  marketing of agricultural and fish products (47
  projects, cost 77.5 mln BGN)
• Measure 3 promotion and diversification of
  economic activities, multiple activities and
  alternative income (302 projects, cost 86.7 mln
  BGN)
• Measure 5 (sub-measure) wholesale markets (4
  projects, cost 12 mln BGN).
• Prior to the suspension of payments for the
  measures, 623 contracts had been signed worth
  272.2 mln BGN (139 mln EUR).

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SAPARD PROGRAMME May 2009

• Status of the SAPARD Programme as of May 2009
• The programme management and control systems have
  been improved in line with the EC recommendations
  of June 2008
• The effective period of the 2006 Annual Financial
  Agreement has been extended until the end of 2009
  in order to make all payments to the programme
  beneficiaries
• Payments under the four suspended measures of the
  SAPARD programme have been resumed. As of May
  2009, the total amount of the European subsidy
  due for approved projects under such measures
  amounts to approximately Euro 76 million (148,6
  million levs).

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SAPARD PROGRAMME May 2009

• Based on the positive results from the Action
  Plan implementation and the assurance of the
  audit company Ernst Young, payments to end
  beneficiaries under the suspended 3 measures and
  1 sub-measure were resumed in the middle of
  October 2008.
• From the programme start (2000) to 15 May 2009, a
  total of 3,509 projects were approved under
  SAPARD with a subsidy of BGN 1,375,931,680. Of
  these, full payments were made under 2,218
  projects with a subsidy of BGN 757,387,340.
• Council of Ministers Decree No. 74 of 30 March
  2009 on Payments out of the Agriculture State
  Fund under Contracts with End Beneficiaries to
  the SAPARD Programme allowed the Agriculture
  State Fund to expend BGN 100 million.
• After the meetings in the EC in May some tasks
  remain to be finalized

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ISPA ProgramMay 2008

• ISPA period of implementation from 2000 to 2010.
• Total budget 1,603 mln EUR (EU financing 880
  mln EUR, national co-financing 723 mln EUR).
• The ISPA Program is implemented in two sectors
  Transport and Environment.
• In May 2008 the Monitoring Committee on Cohesion
  Fund assistance (Regulation 1164/94) identified
  14 projects at risk of which 3 in the Transport
  sector and 11 in the Environment sector.

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ISPA Program Transport sector May 2008.

• The total number of FMs for CF/ISPA Transport
  sector is 11.
• The total sum of the FM is 909 mln EUR.
• The ISPA Program Monitoring Committee identified
  3 projects at risk in the Transport sector
• - Construction of a new cross-border combined
  road/railway bridge at Vidin-Calafat on the
  Danube
• - Laying a second track and electrification of
  the Plovdiv-Svilengrad railway
• - Construction of Lyulin Motorway Sofia
  Bypass Daskalovo Road Junction.

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ISPA Program Environment sectorMay 2008

• The total number of FMs for CF/ISPA Environment
  sector is 25, the breakdown being
• Water sector 19
• Waste sector 2
• Protection of the environment 1 (flue gas
  desulphurization plant at TPP Maritsa East 2)
• Technical assistance 3
• The FM sum total is 639 mln EUR.
• In June 2008 a total of 12 risk projects were
  identified (7 in the Water sector, 1 in the
  Protection of the Environment sector, 1 in the
  Waste sector and 2 Technical Assistance
  projects).
• As of May 2008 the amount of the non-contracted
  funds is 196 mln. EURO

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ISPA Program - Transport Sector

• Status of the ISPA Programme, Transport Sector as
  at May 2009
• Contracted Euro 793 mln Paid Euro 309 mln
  (39).
• Completed Projects which have to a very high
  degree cached up with the delay in
  implementation
• Sofia Airport Reconstruction, Modernization and
  Expansion
• Transit Roads ??? Lots 3, 4, 8 and 9.
• On-going Projects
• Construction of a New Cross-Border Combined
  Road/Railway Bridge over the Danube at
  Vidin-Calafat. Doubling and Electrification of
  the Plovdiv Svilengrad Railway Connection
• Construction of Lyulin Motorway Sofia Bypass
  Daskalovo Road Junction
• Technical Assistance for the Modernization of the
  Railway Lines along Pan-European Transport
  Corridors (TEN-T)
• Technical Assistance for the Reconstruction of
  the Plovdiv-Burgas and Mezdra-Gorna Oryahovitsa
  Railway Lines in Bulgaria
• Technical Assistance for the Modernization of the
  Vidin-Sofia Railway Connection
• Technical Assistance for Preparation of Road
  Projects along Pan-European Transport Corridors
  (TEN-T) located in Bulgaria.
• Substantial progress in the organization and
  implementation of the projects is registered

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ISPA Program Transport Sector May 2009

• THE EC RELEASED EURO 115 MLN UNDER THE ISPA
  PROGRAMME ON 12 MAY 2009
• THE EC REACHED THIS DECISION FURTHER TO THE
  FOLLOWING ACTIONS TAKEN BY BULGARIA
• Amendments to the existing legislation (Roads
  Act, Detection and Prevention of Conflicts of
  Interests Act, Public Procurement Act, Rules and
  Regulations of the National Road Infrastructure
  Agency etc.).
• Changes in the existing administrative structures
  (The National Road Infrastructure Fund was
  transformed into the National Road Infrastructure
  Agency (NRIA) a new Executive Director and
  Supervisory Board were appointed NRIF was
  transformed into an intermediate body reporting
  to the Managing Authority at the Ministry of
  Transport. Agreements signed between the Managing
  Authority at the MT and the Intermediate Body at
  NRIF)
• The administrative capacity of the National Road
  Infrastructure Agency was enhanced by the
  appointment of new staff members and the conduct
  of training.
• External audits were made, which confirmed the
  absence of conflicts of interest and the
  effective functioning of the management and
  control systems in this field.
• An advisor from the Federal Ministry of
  Transport, Construction and Urban Development of
  the Federal Republic of Germany was appointed in
  support of the management of the National Road
  Infrastructure Agency.

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ISPA Program Transport Sector May 2009

• On 12 May 2009, the European Commission
  officially announced the release of Euro 115 mln.
  under the ISPA programme for Bulgaria.
• Pending
• Visit of EC DG Regional Policy Director General
  Mr. Dirk Ahner, 26-28 May 2009.
• Visit of Commissioner for Regional Policy, Ms.
  Danuta Hübner, 17-19 June 2009.

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ISPA PROGRAMME Environment Sector May 2009

• Waste water treatment installations were built
  and put into operation in Pazardjik and
  Blagoevgrad.
• All tender procedures for the selection of
  contractors under approved projects have been
  conducted, and the final tender procedure for the
  selection of a contractor for the Development of
  the Sofia Water Supply and Sewerage Grid, Tender
  2 has been announced.
• As of May 2008 there are non-contracted funds of
  196 mln. EURO
• CMD 267/03.11.2008 approved the allocation of
  earmarked additional national co-financing for
  the successful completion of ISPA projects in the
  Environment Sector in 2008 to the amount of BGN
  11.49 mln, and another BGN 45.28 mln for 2009 and
  2010.

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SCHENGEN FACILITY May 2008

• National Indicative Program (2007-2009) cost
  161 mln EUR.
• Deadline for contracting 31.12.2009.
• As of May 2008 3 contracts, total cost 44,000
  EUR.
• Shortage of capacity to prepare and hold
  tendering procedures for the Schengen Facility as
  the CFCU at the MF had to complete in parallel
  the contracting under PHARE 2005 and PHARE 2006.
• Late start of the tendering procedures scheduled
  for 2007 and 2008.

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SCHENGEN FACILITY May 2009 .

• Contracts have been signed to the amount of over
  Euro 7 mln. These are 7 procurement contracts
  (among which for the delivery of two 200-ton
  ships, 6 river-going vessels, 200 vehicles) and 6
  contracts for the hiring of independent experts.
• A tender organization timetable is observed. So
  far 25 selection procedures have been completed
  to the amount of approximately Euro 101 mln.
• The Central Financing and Contracts Unit at the
  Ministry of Finance received documentation from
  the beneficiaries for tender procedures to the
  amount of Euro 90 million. Projects for over Euro
  37 mln more are ready to submit to the CFCU.
• In 2009, public procurement and contracting
  procedures are expected to take place in the
  fields of aerial surveillance of the borders (3
  helicopters), special police operation equipment,
  automobile equipment, renovation of the Border
  Police Directorate General buildings and
  construction of a specialized hostel for illegal
  immigrants near the border with the Republic of
  Turkey, means of communication, technical
  equipment and software for joining the Schengen
  Information System and Visa Information System,
  raising the qualifications of employees in
  implementing the Schengen legislation.

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OPERATIONAL PROGRAMMES AS OF MAY 2008

• Overall delay of OPs.
• Contracts concluded from 1.01.2007 till May 2008
  amount to BGN 93,132,149 (EUR 47,617,712).
• Problems with the administrative capacity
• UMIS tendering procedure has failed
• Need to strengthen the capacity of the Audit
  Authority (Audit of EU Funds Directorate, MoF)
• Speeding up the acquisition of positive
  compliance assessment of management and control
  systems.
• Completion of UMIS.
• Insufficient control
• Complex and clumsy procedures
• Insufficient transparency
• Lack of public feedback
• The preparation of starting FLAG Fund was
  blocked

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OPERATIONAL PROGRAMMES May 2009

• Contracting under all OPs is expedited
• The contracts concluded as of May 2009 amount to
• BGN 2,435,726,077 (EUR 1,245,366,968)
• The Administrative capacity of the units is
  strengthened
• The Audit Authoritys capacity is restructured
  and strengthened
• Work on the conformity assessment is expedited
• A UMIS is in operation
• Procedures are streamlined and the time frames
  for conducting and decision-making are shortened
• Transparency, communication and relation with the
  public are enhanced

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OPERATIONAL PROGRAMMES May 2009

• Control mechanisms are improved
• A number of legislative amendments are made to
  the primary and secondary legislation
• The interaction and cooperation with the European
  Anti-fraud Office (OLAF), SANS, Supreme cassation
  Prosecutors Office, State Receivables Agency,
  Agency Public Financial Control Inspectorate is
  improved

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Operational Programmes Implementation (2007-
2013) May 2009
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RURAL DEVELOPMENT PROGRAMME (RDP) AS OF MAY 2008

• RDP (2007-2013) was approved on 19 February
  2008 by European Commission Decision No. 755.
• As of May 2008 8 measures out of 22 in total
  have been launched.
• The RDP budget for 2007 and 2008 amounts to EUR
  722,713,481 which have to be paid by the end
  2010.
• The amount paid as of May 2009 is EUR 56 million.
  

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RURAL DEVELOPMENT PROGRAMME (RDP) - M?? 2009

• 20 ordinances for implementation of the RDP, out
  of 22, were published. The remaining two measures
  are scheduled to be launched by the end of 2009.
  20 measure have been launched.
• Regulatory amendments were made for streamlining
  of procedures of applying for, approval, and
  funding of projects reduced number of required
  documents, ex officio provision of some of them,
  and shorter time frames. These amendments will
  come into effect from 1 June 2009.
• With Decree No. 53 of 4 March 2009 of the
  Council of Ministers the reimbursement of VAT
  expenses of public beneficiaries under RDP
  projects was approved for 2009.
• With regard to the measures related to
  compensatory payments for underprivileged
  regions, a total of 67756 applications were
  accepted for the 2007 and 2008 campaigns, and
  1462 applications under the measure of
  agro-ecological payments.
• As of 11 May 2009, a total of BGN 345.618 million
  were paid to the farmers, which is 24. 8 of the
  budget (BGN 1,414 million) which is to be paid
  out by the end of 2010.
• Interface with UMIS is under construction

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RURAL DEVELOPMENT PROGRAMME (RDP) - M?? 2009
Data not included in Total
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Funds paid under the RDP - M?? 2009
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DIRECT PAYMENTS, MARKET MECHANISMS AND TECHNICAL
INSPECTORATE OF THE PAYING AGENCY MAY 2008

• Direct payments are received under an upward
  scheme expressed in of the level applied to
  such payments in EU15
• 25 - 2007 40 - 2010 70 - 2013
  100 - 2016
• 30 - 2008 50 - 2011 80 - 2014
  
• 35 - 2009 60 - 2012 90 - 2015
  
• Payment per hectare EUR 53.1 for 2007 and EUR
  65.38 for 2008
• As of May 2008 73,792 producers received
  direct payments to the amount of BGN 321,287
  million (EUR 164,271 million)
• The on the spot checks performed by the
  Technical Inspectorate are on track.
• The schemes under the market mechanisms are
  functioning.
• The 2008 Single Area Payment Scheme (direct
  payments) budget amounts to EUR 240 million from
  the European Agricultural Guarantee Fund. The
  national co-financing budget is EUR 140 million
  of which EUR 75 from RDP and EUR 75 million from
  the national budget.
• The Paying Agency is in a probation period.

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DIRECT PAYMENTS, MARKET MECHANISMS AND TECHNICAL
INSPECTORATE OF THE PAYING AGENCY MAY 2009

• Under the Single Area Payment Scheme, the
  National Co-Financing Scheme and the measures for
  the disadvantaged regions the total budget
  amounts to 428 714 055 EUR. By 30 April 2009 the
  resources paid under this budget for the campaign
  2008 amount to 668 345 722.51 BGN (341 719 528
  EUR)
• The sums paid under SAPS for the period from 1
  December 2008 to 30 April 2009 under the campaign
  2008 in EUR amount to 199 266 055.00 (389 730
  527.66 BGN) or 85,4 of the annual budget, and
  those under NCFS - 129 371 146.00 EUR (253 027
  968.04 BGN) or 91,84 of the 2008 budget

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OPERATIONAL PROGRAMME FISHERIES SECTOR
DEVELOPMENT

• OP Fisheries Sector Development (2007-2013)
  provides funding for measures for adaptation of
  the Bulgarian fishing fleet, developing of
  aquacultures, inland fishing, processing and
  marketing of fishery and aquaculture products,
  sustainable development of fisheries areas,
  technical assistance.
• Total budget EUR 107 million (EU funding EUR
  80 million national co-financing EUR 27
  million)
• Managing Authority National Executive Agency of
  Fisheries and Aquaculture (NAFA)
• Intermediate Body State Fund Agriculture as a
  Paying Agency

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OPERATIONAL PROGRAMME FISHERIES SECTOR
DEVELOPMENT May 2008

• The Programme was approved on 14.12.2007
• Managing Authority appointed
• Communication Strategy prepared
• No launched procedures.
• No legislation (ordinances) on the terms and
  procedure for extending grants under the
  measures.
• No project selection criteria endorsed.
• National Agency of Fisheries and Aquaculture
  units not adequately staffed.

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OPERATIONAL PROGRAMME FISHERIES SECTOR
DEVELOPMENT ??? 2009

• On 6 December 2008, the call of project proposals
  was launched under
• Measure 1.3 Investments on Board Fishing
  Vessels and Selectivity in the amount of EUR 1,2
  million, of which EUR 0,9 million from ?FF.
• Measure 2.1 Productive Investment in Aquaculture
  in the amount of EUR 6.3 million, of which EUR
  4.725 million from EFF
• 9 project proposals under measure 2.1 were
  submitted
• Ordinances on the implementation of 7 measures
  under this OP were published, the remaining ones
  are in the process of approval by the MAF
• Activities started on Priority Axis Technical
  Assistance for a total value of EUR 5.334
  million, of which EUR 4 million from the EFF
• On 8 May 2009, the European Commission approved
  the Audit Strategy for OP Fisheries Sector
  Development
• A new website www.oprsr.government.bg is in
  operation. There is an effective electronic data
  exchange agreement with UMIS and IACS
• The communication plan and the publicity
  campaign are actively implemented

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OPERATIONAL PROGRAMME "TRANSPORT"
GENERAL INFORMATION

• OP Transport (2007-2013) finances large-scale
  infrastructure projects
• Total budget EUR 2,003 million, of which EUR
  1,624 million EU funds and EUR 379 million
  national co-financing.
• Managing authority Programme and Project
  Coordination Directorate at the Ministry of
  Transport.
• Beneficiaries National Railway Infrastructure
  Company, National Road Infrastructure Agency,
  Executive Agency for Exploration and Maintenance
  of the Danube River Maritime Administration
  Executive Agency, Metropoliten EAD

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OPERATIONAL PROGRAMME TRANSPORT
CURRENT STATUS

• As of May 2008
• A contract was concluded for a grant at total
  value of BGN 7,027,200 (EUR 3,592,950)
• As of May 2009
• 19 contracts were concluded for grants totalling
  approx. BGN 601,112,943 (EUR 307,344,168)
• 5 operating agreements were concluded for the
  preparation, selection, management,
  implementation, monitoring and control of
  projects/operations funded under OPT with all
  beneficiaries under the programme

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OPERATIONAL PROGRAMME TRANSPORT

• Contracts were concluded between Metropoliten
  EAD, Metro Trace" Consortium and Dogus Insaat ve
  Ticaret A.S. for the construction of the Sofia
  Metro extension along the route Nadezhda
  Interchange Central Railway Station St.
  Nedelya Square - NDK Cherni Vrah blvd.
• A tender procedure for selection of a contractor
  for design and construction of the railway
  section Svilengrad Turkish Border is underway.
  The deadline for the evaluation committee to
  complete the evaluation is 22 May 2009
• The National Road Infrastructure Agency, as the
  beneficiary under Priority Axis 2 of OP
  Transport, was completely restructured and its
  administrative capacity was strengthened
• The National Road Infrastructure Agency concluded
  an operating agreement with the Managing
  Authority at the Ministry of Transport, thus
  ensuring better control over the implementation
  of the projects

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OPERATIONAL PROGRAMME ENVIRONMENT
GENERAL INFORMATION

• OP Environment (2007-2013) provides the funding
  for the preparation and construction of
  infrastructure projects for treatment of wastes,
  drinking and waste water projects for
  preservation and restoration of biodiversity.
• Total budget EUR 1,800 million or BGN 3,520
  million (EU financing EUR 1,466 million
  national co-financing EUR 334 million)
• Managing Authority Cohesion Policy for
  Environment Directorate at the MOEW
• Intermediate Body EU Funds for Environment
  Directorate at the MOEW
• Beneficiaries municipalities water companies
  basin directorates regional associations
  regional MOEW structures and the State Forestry
  Agency administrations managing NATURA 2000
  NGOs

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OPERATIONAL PROGRAMME ENVIRONMENT
PROGRESS OF IMPLEMENTATION OF OP "ENVIRONMENT" AS
OF MAY 2008

• As of May 2008, 3 procedures were opened for
  providing grants under OPE
• 2 procedures under Priority 1 - Waters a
  procedure for Technical Assistance for
  Preparation of Investment Projects and a
  procedure for Improvement and Development of
  Drinking and Waste Water Infrastructure
• 1 procedure under Priority 2 Wastes
  Management a procedure for Technical Assistance
  for Preparation of Investment Projects

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OPERATIONAL PROGRAMME ENVIRONMENT
PROGRESS OF IMPLEMENTATION OF OP "ENVIRONMENT"
(MAY 2008 - MAY 2009) I

• As of May 2009, a total of 252 contracts were
  concluded under the programme for a total value
  of BGN 734,671,429 (EUR 375,631,537).
• Priority Axis 1 - Waters
• Under a procedure of Technical Assistance for
  Preparation of Investment Projects 157 contracts
  were signed at a total value of approx. BGN 154
  million
• Under a procedure of Improvement and Development
  of Drinking and Waste Water Infrastructure 32
  projects were approved at a total value of
  approx. BGN 586 million, and 29 contracts were
  concluded at a total value of approx. BGN 536
  million. Two major projects of the Vratsa and
  Gabrovo municipalities were approved at a total
  value of BGN 260 million
• 2 new procedures were announced for selection of
  investment projects for agglomeration communities
  with more than 10,000 equivalent inhabitants and
  agglomeration communities with 2,000 to 10,000
  equivalent inhabitants. The procedures are at the
  stage of evaluation of the proposals submitted
• Under a direct provision procedure for
  Development of River Basin Management Plans a
  decision was issued for a grant of BGN 36
  million.

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OPERATIONAL PROGRAMME ENVIRONMENT
PROGRESS OF IMPLEMENTATION OF OP "ENVIRONMENT"
(MAY 2008 - MAY 2009) II

• Priority Axis 2 Wastes Management
• Under a procedure of Technical Assistance for
  Preparation of Investment Projects 35 contracts
  were concluded at a total value of approx. BGN 25
  million.
• At an extraordinary session on 24 March 2009, the
  OPE Monitoring Committee approved by a consensus
  a concept of direct provision of funding by a
  grant under this priority axis.
• Priority Axis 3 Preservation and Restoration of
  Biodiversity 24 projects approved for 18 BGN
  million.
• Priority Axis 4 Technical Assistance
• 30 orders were issued under a direct provision
  procedure at a total value of BGN 8,056 million.

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OPERATIONAL PROGRAMME ENVIRONMENT
Legislative Amendments

• MOEW has prepared and submitted to the Parliament
  a proposal for amendment of the Environmental
  Protection Act aiming at establishing a legal
  ground for repeated procedures for preparation of
  environmental impact assessment of road projects
• A National position for the water sector is
  prepared
• Amendments to the existing legislation in
  relation to the water supply sector reform were
  submitted to the Parliament and their adoption
  at second reading is pending.

43
OPERATIONAL PROGRAMME COMPETITIVENESS
GENERAL INFORMATION

• OP Competitiveness (2007-2013) provides funding
  in support of innovations, assists Bulgarian
  companies, improves the conditions for the
  development of business, provides funding
  opportunities, strengthens the position of the
  Bulgarian economy in the international market.
• Total budget EUR 1,162 million, of which EU
  funding of EUR 988 million and national
  co-financing of EUR 174 million.
• Managing Authority
• European Funds for Competitiveness
  Directorate at the MEE
• Intermediate Body
• Executive Agency for Encouragement of SMEs.
• Beneficiaries small and medium enterprises,
  large companies, universities, scientific and
  research centres, NGOs, etc.

44
OPERATIONAL PROGRAMME COMPETITIVENESS
CURRENT STATUS

• As of May 2008, a serious delay was reported in
  the implementation of the Operational Programme,
  as a total of 0 projects at a value of BGN 0 were
  approved. Significant delay was also reported in
  the organisation of the evaluation committees.
• As of May 2009, a total of 341 projects were
  approved, and 327 contracts at a total value of
  BGN 246,303,865.33 were concluded, and
• Three procedures are in the process of
  implementation
• 2007BG161PO003/1.1.1-01/2007 Support for the
  Creation and Development of Innovative Start-up
  Companies
• 2007BG161PO003/2.1.1-01/2007 Upgrade of
  Technologies in Enterprises
• 2007BG161PO003/2.1.2-01/2007 Achieving
  Compliance with Internationally Recognized
  Standards
• In May 2009, four evaluation committees completed
  their work on the following procedures
• BG161PO003-1.1.02 Support for Commercialization
  of Innovative Products, Processes and Services
• BG161PO003-2.1.03 Achieving Compliance with
  Internationally Recognized Standards
• BG161PO003-2.1.04 Upgrade of Technologies in
  SMEs
• BG161PO003-2.1.05 Upgrade of Technologies in
  Large Enterprises
• The approval of the evaluation reports by the
  Managing Authority is pending.

45
OPERATIONAL PROGRAMME COMPETITIVENESS
THE JEREMIE INITIATIVE

• Operations under Priority axis 3 of the
  Operational Programme will be implemented by
  establishing a Holding Fund to be managed by the
  European Investment Fund (EIF) in accordance with
  the JEREMIE Initiative. The Holding Fund will be
  registered in Bulgaria as a Special Purpose
  Vehicle (SPV). The budget allocated under this
  priority axis for the programme period amounts to
  BGN 391,166,000.
• The Framework and the Funding Agreements under
  the JEREMIE Initiative should be signed on 27 May
  2009 in Sofia. The ratification of the agreements
  by the Parliament of the Republic of Bulgaria is
  pending in due time.

46
OPERATIONAL PROGRAMME HUMAN RESOURCES
GENERAL INFORMATION

• OPHuman Resources (2007-2013) is aimed at
  improving the quality of life of people in
  Bulgaria through improving the human capital,
  achieving high levels of employment, increasing
  productivity, access to high quality education
  and life-long learning, and strengthening of
  social inclusion.
• Total budget EUR 1,213,869,575
• Managing Authority
• General Directorate European Funds,
  International Programmes and Projects at the
  Ministry of Labour and Social Policy
• Intermediate Bodies
• Ministry of Education and Science,
  Employment Agency, Social Assistance Agency
• Beneficiaries municipalities, NGOs, government
  institutions, social enterprises, representatives
  of various communities, educational, training and
  research institutions, scientific organisations,
  employers, industry and sectoral organisations,
  etc.

47
OPERATIONAL PROGRAMME HUMAN RESOURCES

• As of May 2008, 6 procedures were opened for
  provision of grants at a total value of BGN
  87,718,976 (EUR 44,850,000)
• As of May 2009, 39 procedures were opened for
  provision of grants at a total value of approx.
  BGN 660 million (EUR 337.4 million)
• The Monitoring Committee of the Operational
  Programme has approved selection criteria for 57
  operations in the amount of BGN 1.314 billion.
  (EUR 0.672 million)

48
OPERATIONAL PROGRAMME HUMAN RESOURCES

• As of May 2009, a total of 797 contracts
  amounting to BGN 254.4 million (EUR 130.07
  million) are concluded.
• Funding is provided for the following
• 84 municipal projects
• 180 NGO projects
• 203 projects in high schools
• 37 projects in higher education establishments
• 6 projects in extra-curricular educational
  establishments
• 14 projects in institutes of the Bulgarian
  Academy of Sciences
• 16 projects in government institutions
• 255 projects in companies of various sectors and
  industries.
• In 2008 only, about 100,000 people benefited from
  various activities funded under the programme.
• The health programme for 76 mln EURO has started
  and will be implemented by the Ministry of
  Health

49

OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013
GENERAL INFORMATION

• OP Regional Development (2007-2013) provides
  funding for infrastructure projects for
  integrated urban development regional and local
  infrastructure, including health infrastructure
  sustainable development of tourism regional and
  local cooperation networks.
• Total budget EUR 2,601million, of which EU
  funding - EUR 1.361 billion and national
  co-financing EUR 240 million
• Managing Authority General Directorate
  Programming of Regional Development at the
  MRDPW, which has 6 divisions in the planning
  regions
• Beneficiaries municipalities, municipal
  companies, associations of municipalities,
  locally represented NGOs, individual
  beneficiaries

50

OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013

• As of May 2008
• There were no concluded contracts
• As of May 2009
• There are 236 concluded contracts amounting to
• BGN 472,483,184 (EUR 241,576,816)
• Paid out funds are
• BGN 13,792,558.60 (EUR 7,052 023)

51
OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013

• CONTRACTS CONCLUDED WITH BENEFICIARIES BY
  PLANNING REGION AND MUNICIPALITY - ?AY 2009

52
FORECAST OF PAYMENTS IN 2009 UNDER OP REGIONAL
DEVELOPMENT BY PRIORITY AXIS AND A REPORT ON THE
I-ST QUARTER OF 2009
OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013
53
OPERATION OF FLAG
OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013
APPROVED APPLICATIONS FOR LOANS FROM THE FLAG
FUND FOR IMPLEMENTATION OF PROJECTS UNDER OPRD
May 2009
54
OPERATION OF FLAG (2)
OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT
2007-2013
APPROVED APPLICATIONS FOR LOANS FROM THE FLAG
FUND FOR IMPLEMENTATION OF PROJECTS UNDER OPRD
May 2009
55
OPERATIONAL PROGRAMME ADMINISTRATIVE CAPACITY
GENERAL INFORMATION
OP Administrative Capacity provides funding in
support of good governance, development of human
resources in the government administration
structures, the judiciary, and the civil society,
improving the quality of administrative services
and development of electronic government. Total
budget (2007-2013) EUR 181 million, of which EU
funding EUR 154 million and national
co-financing EUR 27 million. Beneficiaries
public administration, the judiciary, civil
society. Managing Authority Projects and
Programmes Management Directorate, MSAAR.
???? ??????????
56
OPERATIONAL PROGRAMME ADMINISTRATIVE CAPACITY

CURRENT STATUS

• As of May 2009
• A total of 25 procedures opened
• 202 approved projects for BGN 108,266,404 (EUR
  55,355,734)
• 181 beneficiaries under the programme
• 197 concluded contracts for BGN 105,088,673 (EUR
  53,730,985)
• 591 applications for payment considered
• BGN 43,149,647 (EUR 22,062,064) actually
  disbursed funds, or 100 of the 2007 funds and
  46.31 of the 2008 funds

56
57
Operational ProgrammeTechnical Assistance

• Subject The programme provides funding for
  strengthening the capacity of the EU funds
  management structures on national level
  setting-up of UMIS enhancing awareness of the EU
  cohesion policy.
• Total budget EUR 56,8 million, of which EU funds
  amounting to EUR 48,3 million, and national
  co-financing amounting to EUR 8,5 million.
• Managing Authority Department Operational
  Programme Technical Assistance in the MoF
  Management of EU Funds Directorate.
• Beneficiaries specific beneficiaries the
  entities under the MoF and the entities under the
  Council of Ministers Administration

58
Operational ProgrammeTechnical Assistance
CURRENT STATUS

• As of May 2008, 11 contracts were concluded at a
  total value of BGN 13,302,020.
• As of May 2009, 21 contracts were concluded at a
  total value of BGN 25,914,612, as payments amount
  to a total of BGN 2,381,735.
• In the third quarter of 2009 the approval of a
  project currently under development for
  setting-up of information centres for publicity
  of the EU cohesion policy is forthcoming.

59
AUDIT AUTHORITY

• To strengthen the independence of the Audit
  Authority, Council of Ministers Decree No. 305
  of 11 December 2008 transformed the Audit of EU
  Funds Directorate into an Audit of EU Funds
  Executive Agency reporting to the Minister of
  Finance, as of 1 January 2009
• Council of Ministers Decree No. 346 of 30
  December 2008 approved the Rules and Regulations
  of the Audit of EU Funds Executive Agency. The
  Rules and Regulations envisage the setting up of
  an Audit Committee with the Agency to act as the
  Agencys specialized support body for monitoring
  and advisory purposes. The Audit Committee was
  appointed by an order of the Minister of Finance
  of 30 January 2009 and is made up of three
  members, one of whom is the chair
• To strengthen the capacity of the Audit Authority
  and to improve its functions, in January 2009
  contracts were signed with the international
  audit companies Pricewaterhouse Coopers,
  Deloitte, Ernst Young and KPMG. The contracts
  were designed to support the audit approach and
  methods to conduct qualification and
  requalification training for the audit authority
  staff in accordance with the European and
  national legislation and with the international
  standards and best practices to guarantee the
  hiring of international experts on the joint
  audit teams for audits of the Structural and
  Cohesion Funds organized jointly with the Audit
  Authority

?????????? ???????? ???????? ????, ?????????? ?
??????????
59
60
AUDIT AUTHORITY

• The revised audit strategies of the Operational
  Programmes were sent to the European Commission
  in April 2009 via the SFC 2007 system.
• The process of updating the description of
  management and control systems, of the conformity
  assessment reports and of the opinions under the
  seven OPs is still under way. The updated
  documents will be presented to the EC by the end
  of May and beginning of June 2009

?????????? ???????? ???????? ????, ?????????? ?
??????????
60
61
Unified Management Information System

• The UMIS functional capabilities, which comply
  with the requirements of Regulation 1083/2006 and
  Regulation 1828/2006, were developed and put into
  operation. They include the following modules
• Registration
• Evaluation of project proposals
• Contracts
• Project management
• Financial module, the component Payment Request
  and Financial Report (on the contract level)
• Inspections and Management of Irregularities,
  the component On-the Spot Inspection and
  Suspected Irregularities
• Monitoring.
• The Council of Ministers adopted Decree
  322/6.1.2009, which provides the conditions,
  process and mechanism of operation of the UMIS in
  Bulgaria
• On 21 January 2009 a Help Desk was opened, which
  gives assistance on work with the UMIS

?????????? ???????? ???????? ????, ?????????? ?
??????????
61
62
Unified Management Information System

• Tests were successfully completed and on 6 April
  2009, the interface between the Unified
  Management Information System (for monitoring and
  control of funds from the EU Structural and
  Cohesion Funds) and the SAP/R3 system was put in
  operation
• In accordance with Art. 10, par. 1 of the
  Council of Ministers Decree No. 322 of 19
  December 2008 on the Conditions, Procedures and
  Mechanism of IMUS Operation, an Agreement on the
  electronic exchange of data between the UMIS, the
  Integrated Administration and Control System
  (IACS) under the Rural Development Program and
  the Project Monitoring System under the Fisheries
  OP (Axter Popeye) was drafted and signed by the
  Minister of Finance and the Minister of
  Agriculture and Foods
• The authorized personnel at the managing
  authorities and the intermediate bodies is still
  feeding information into the UMIS. As at 22 April
  2009 there were 1,701 contracts, 6,494
  applicants, 1,869 beneficiaries and 117 grant
  procedures registered in the system.

?????????? ???????? ???????? ????, ?????????? ?
??????????
62
63
LOTAR

• An Excel-based system was developed in
  cooperation with the EC for the elaboration of
  financial forecasts about the absorption of funds
  from the Structural instruments
• An Operational Programme Financial Implementation
  Forecast Tracking Mechanism was developed and put
  in place
• The LOTAR implementation has given results which
  reflect progress on the OP financial
  implementation
•  The results achieved and the reported progress
  have been forwarded to the EC.

?????????? ???????? ???????? ????, ?????????? ?
??????????
63
64
REGULATORY FRAMEWORK (1)

• Law on Amendment and Supplementation of the
  Public Procurement Act, passed by the National
  Assembly on 16 October 2008.
• Takes into account the Action Plan as per Annex
  1 to the EC Decision (? 2008) 3937/2 of 23 July
  2008 concerning the measures with respect to
  financial control structures and procedures
• Creates registers of persons, who by an
  effective court ruling have been found guilty of
  default on contract under an OP creates a
  central data-base of applicants or participants
  in tender procedures in accordance with Art. 95
  of the EU Council Regulation (?C, Euratom) No.
  1605 of 25 June 2002.
• Law on the Prevention and Detection of Conflicts
  of Interest, passed by the National Assembly on
  16 October 2008.
• Main objectives to guarantee the government and
  public interest to prevent the actions of
  persons in a managing position being influenced
  by their personal interests or by the interests
  of other related persons to create conditions
  for the prevention and curbing of corruption
• Limitations and bans on participation in OP
  procedures or in procedures related to the
  provision of EU funds.

64
65
REGULATORY FRAMEWORK (2)

• Law on Amendment and Supplementation of the
  State Financial Inspectorate Act, passed by the
  National Assembly in November 2008
• Stepping up control over the absorption of
  funds, provided out of the EU budget
• Improving communication and cooperation with EU
  institutions and authorities.
• Creating a regime and procedures for the
  application of the respective provisions of
  Council Regulation ? 2185/96 (Euratom, ?C) of 11
  November 1996 concerning control and inspections
  on site, performed by EC controllers.
• Ordinance on preliminary control over public
  procurement procedures, financed in full or in
  part out of European funds, adopted by the
  Council of Ministers on 23 April 2009.
• Preliminary control main objectives to ensure
  the legality of public procurement, financed out
  of European funds.

65
66
REGUALTORY FRAMEWORK (3)

• CM Decree No. 197 of 5 August 2008 on the
  provision of material incentives to employees,
  which perform functions related to the
  utilization of structural funds and of funding
  under the EU pre-accession programmes
• CM Decree No. 224 of 10 September 2008 on the
  creation of a Council for Coordination and
  Operational Monitoring of EU Funding
• CM Decision No. 319 of 7 May 2009 approving the
  Report on the Implementation of the JASPERS
  (Joint Assistance to Support Projects in European
  Regions) Action Plan in the Republic of Bulgaria
  in 2008 and the Implementation of the JASPERS
  Action Plan in the Republic of Bulgaria in 2009.

66
67
AFCOS AND COMMISSION FOR PREVENTING AND
COUNTERING CORRUPTION

• Transferring AFCOS from the Ministry of Interior
  to the Council of Ministers
• Amendments to Decree of the Council of Ministers
  N 18/ 2003 adopted by the Council of Ministers on
  April 30th 2009
• New members of AFCOS
• New mechanism for reporting irregularities to
  OLAF in force as of October 1st 2009
• Executing administrative control and checks by
  AFCOS Directorate in force as of October 1st
  2009
• The AFCOS Directorate will be the national
  liaison body in compliance with Regulation /EC,
  Euroatom/ N 1302/2008 of the Commission, dated
  December 17th 2008 referring to the central data
  base on elimination.
• With Decree 145/12.03.2009 of the Council of
  Ministers the Deputy Prime Minister Mrs. M.
  Plugtschieva became the head of the Commission
  for Preventing and Countering Corruption.
• OLAF missions since June 2008.

68
VI. Transparency and public awareness May 2008
May 2009

• 295 Information days dedicated to the
  Operational Programs
• 62 discussions with beneficiaries
• 6 public awareness campaigns with more than 17
  thousand participants
• 29 press conferences on the Operational programs
• 42 workshops
• 6 polls

69
Transparency and public awareness May 2008
May 2009

• Public Council to the Deputy Prime Minister
  consisting of employers, trade unions, media and
  NGOs discusses on a monthly basis the most
  important topics in the EU funds management
  agenda
• Open door days at all Operational programs
  facilitated the access to the state experts
• Mobile teams explained the measures within the
  framework of the Rural Development Program
  regions
• Hot line to the Deputy Prime Minister answers all
  questions, signals and complaints related to the
  use of EU funds
• New web sites of the Operational Programs provide
  more information and transparency

70
Transparency and publicit awarenessMay 2008
May 2009

• Public presentations of the communication plans
  of the Operational Programs
• Consultations office on the OPs opened in the
  National Association of the Municipalities in
  Bulgaria
• Public awareness campaigns together with the
  BNTv, BNR, Darik Radio, BTA presenting the good
  pre-accession programs practices
• Regular press conferences of the Deputy Prime
  Minister reporting on the current problems and
  progress achieved
• Monthly information bulletin presenting Bulgaria
  in the EU
• A national campaign is being launched to make
  the public aware of EU Structural instruments in
  Bulgaria
• JASPERS office opened in Sofia

71
Measures in response to the global economic and
financial crisis

• FLAG FUND
• Signing of JEREMIE and JESSICA on 27.05.2009
• Credit agreement with the EIB for 700 mln. ????
• Bridging financing facility for the
  beneficiaries
• Bulgaria received from the EC around 88 million
  Euros additional advance payments for the OP for
  2009 as an anti-crisis measure. 64 million Euro
  out of this sum were provided by the European
  Regional Development Fund while 23 709 197 Euro
  come from the European Social Fund within the
  framework of the cohesion package for 2007-2013.
  The additional advance resources envisaged for
  Bulgaria make up 2. The total amount received by
  the country under the form of advance payments is
  547 million Euro.
• By Decree of the Council of Ministers 143/2009
  the advance payments for projects and activities
  of beneficiaries of OP Regional Development and
  OP Environment were increased. The
  municipalities receive advance payments that
  amount up to 20 of the EU financial support as
  well as national co-financing for infrastructure
  projects to the amount of 1 million and more and
  up to 30 of the EU financial support as well as
  national co-funding for all other operations they
  are beneficiaries of. The NRIA (National Road
  Infrastructure Agency) receives advance payments
  that amount up to 20 of the EU financial support
  and national co-financing for projects it is a
  beneficiary of.
• 28 million Euro were provided within the
  framework of Rural Development Program (RDP) as
  an additional package for the funding of
  renewable energy sources
• Reduced deadline for the interim payments (15
  days).

72
USE AND CONTROL OF EUROFUNDSHIGHLIGHTS FOR 2009

• Infrastructure development transportation,
  environment, regional development
• Support for small and medium size enterprises in
  a global economic crisis environment
• Speeding up the project implementations and
  achieving synergy effect in the OPs.
• Guaranteeing of transparency and effective
  control
• Achieving positive Compliance assessment of the
  management and control systems of the OP

73
European funds
74

• Not that is difficult we do not try,
• it is difficult because
• we do not try
• SENECA