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Value Engineering in Hungary Orlando, June 11 2012
Zsuzsanna Kondor Director GeneralCoordination Managing Authority
National Development Agency , HUNGARY
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• The European Union and its Cohesion Policy
• Value engineering in Hungary • The role of the National Development
Agency in financing development programmes
• Value engineering case studies • Challenges: preparing for 2014+
Cohesion Policy
Content of the presentation
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• The European Union and its Cohesion Policy
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<50
50 - 75
75 - 90
90 - 100
100 - 125
³ 125
Differences in development in the
EU-27GDP per head as a % of the
community average
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Disparities across the European Union
Hi Lo Ratio
GDP per cap (% EU27 average)
Luxembourg251%
Bulgaria33% 7.6*
Population Germany82.5 million
Malta404,000 204
*In US, this difference is only 2.5 and Japan 2
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How much does it cost? One third of the EU budget 2007-2013
€347 billion over 7 years*
*1 EUR = 1,31 USD in January 2007
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What does the EU citizen get for this?
The three funds target:
• ERDF (€201 billion): regional development, economic decline in industrial or rural areas, competitiveness and co-operation
• ESF (€76 billion): employment, social inclusion and tackling discrimination
• Cohesion Fund (€70 billion): environment and transport
……with overarching aim of “boosting growth and employment”
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Research/Innovation
EnvironmentTransport
Information societySocial infrastructureEnergy
TourismCultureInstitutional capacity
Human capital
Employment
Adaptability of workers and firmsSocial inclusionCapacity buildingTechnical assistance
What do we spend the money on?European Regional Development Fundand Cohesion Fund (€271 billion)
European Social Fund (€76 billion)
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Who gets what?• Convergence 81.9% (regions lagging behind the
most)
• Competitiveness 15.7%
• Territorial co-operation 2.4%
• Total budget €347bn, which will unlock up to €700bn
A method based on what works: Programming, Partnership and Decentralised Management
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Index EU 25 = 100 Source: Eurostat
Geographical Eligibility for Structural Funds Support 2007-2013
Objective 'RegionalCompetitiveness and Employment'Phasing-in regions, "naturally" above 75%
Convergence objectivestatistically affected regions
Objective 'RegionalCompetitiveness and Employment'
Convergence objective(Regions < 75% in EU 25)
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• Value engineering in Hungary
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HungaryKnown of:
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HungaryKnown of:
• 20 CVS• 19 PVM• over 1000 AVS• 11 Universities• 20-30 VM projects/year
• SHVA 70 members
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VM & the Government19
49
L. D. Miles: VE
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VM & the Government19
49
1968
L. D. Miles: VEVE in Hungary
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VM & the Government19
49
1968
1991
L. D. Miles: VEVE in HungarySociety of Hungarian Value Analysts
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VM & the Government19
49
1968
1991
1996
L. D. Miles: VEVE in HungarySociety of Hungarian Value AnalystsVE in Hungarian Public Procurement Act
“The tender-owner might oblige the tenderer to utilize Value Engineering…”
Hungarian Public Procurement Act, 2003. CXXIX. 53. § (4)
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VM & the Government19
49
1968
1991
1997
1996
L. D. Miles: VEVE in HungarySociety of Hungarian Value AnalystsVE in Hungarian Public Procurement ActVE in Hungarian Highway Design Act
Prime Ministers Office – Preparation of legislation
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Entities utilising VEPUBLIC SECTOR PRIVATE SECTOR
NON-PROFIT SECTOR
• National Bank of Hungary• Nuclear Power Plant• Ministry of Social Affairs• Transport Agencies• National Development
Agency• Hospitals
• Telecommunication• Construction• Banks• Pharmaceutical• Many others
• Autism• Mentally Handicapped• Blind People• Hearing Impairment
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• The role of the National Development Agency in financing development programmes
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EU funds, 1989-2013
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Phare Phare + ISPA + Sapard SFs + CF ERDF + ESF + CF
Distributing EU funds…
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NSRF operational programmes (2007-2013)
Implementation OP
1,3%
State Reform OP
0,6%
Social Infrastructure
OP7,8%
E-Admin. OP1,4%
Economic Development
OP10%
Transport OP25%
Environment and Energy OP
16,8%
Social Renewal OP
14%
ROPs23,2%
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• coordination of implementing Structural and Cohesion Funds in Hungary
• USD billion 32,75 for the period 2007-2013• 15 operational programmes - economic,
social, public administration, regional, European territorial cooperation development programmes etc.
• 52,000 projects approved since 2004
National Development Agency
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• Value engineering case studies
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• National Strategy of Supporting Autistic People, 2008
• Implementation rules for EU funds, 2005• Data and documents handling, 2009• Public procurement control system, 2010• Comperative assessment of EU and national
level regulations, 2012
Successful projects
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National Strategy of Supporting Autistic People, 2008
Focus on supporting the autistic children
BEFORE AFTER
Project Owner: Ministry of Social and Labor AffairsProject Subject: Institute Development Conception 2008-2013
Focus both on suporting the autistic children and
adults
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Implementation rules for EU funds, 2005
Focus on individual, institutional interests
BEFORE AFTER
Project Owner: National Development AgencyProject Subject: Revision of Implementation Rules for EU funded projects
Focus on programme objectives and common
interests
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Data and documents handling, 2009
Focus on various sources of information
BEFORE AFTER
Project Owner: National Development Agency Project Subject: Purchase of Sophisticated IT tool
No change in focus!!!
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Public procurement control system, 2010
Focus on large projects and established,
institutional practices
BEFORE AFTER
Project Owner: National Development Agency Project Subject: Redesign of Public Procurement Control System (reduce risks)
Focus on risky public procurements and unified
approach
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Comperative assessment of EU and national level regulations, 2012
Focus on
BEFORE AFTER
Project Owner: National Development Agency Project Subject: Reduce administrative burden, restrictions and speed up absorption of funds
Focus on
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• Reinforces institutional knowledge • Enhances intraorganisational cooperation
and team work • Top and middle management level support
is a must• Implementation of recommendations is also
a credibility issue• Changes the way we think
Experience
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• Challenges: preparing for 2014+ Cohesion Policy
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Current context• Crisis, austerity measures in many
Member States, less monies to be better spent
• Use of public funds, accountability, error rate to be reduced
• Need for increased effectiveness
Challenges: preparing for 2014+ Cohesion Policy
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The role of the EU 2020 strategy
• Principles of the reformed Cohesion Policy • Thematic concentration• Result orientation (negative and positive
sanctions) • Integrated approach, strenghtened
partnership
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Thank you for your attention!
Any questions?