formats envisaged in the common provisions regulation for major projects 11 th meeting of the expert...
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Formats envisaged in the Common Provisions Regulation for majorprojects
11th meeting of the Expert Group on Delegated and Implementing Acts for the ESI Funds
25 June 2013
SECOND DRAFT OF APPLICATION FORM - MAIN CHANGES
• GENERAL:• - THE ORDER OF SECTIONS CHANGED AS DISCUSSED AT
1ST MEETING
• A. THE BODY RESPONSIBLE FOR IMPLEMENTATION OF THE MAJOR PROJECT, AND ITS CAPACITY
Issue raised MS which raised the issue Change in the AF
Re-consider section of capacity of the body responsible, avoid duplications with other parts of the application form (AF)
PL, EE, RO, CRO, EL, HU Capacity of the body responsible is specifically mentioned in CPR
Re-drafted for better clarity and to ensure no duplication of information requested; more guidance to be provided in application form guidelines
B. A DESCRIPTION OF THE INVESTMENT AND ITS LOCATION
Issue raised MS which raised the issue Change in the AF
Avoid duplication or requesting unnecessary information
General remark 2 questions instead of 5 on project identification
See above See above Categorisation table: clarified and simplified
More guidance on what information to provide in project description
EL, HU Re-drafted instruction for project description
More clarity on how to present information on projects in phases
CZ, CRO Clarifications provided, additional questions included to cover for different scenarios
Move demand analysis to section on feasibility studies
EE, BG, CRO, CZ Agreed; demand analysis now in section D – feasibility studies
Add justification of project scope and size in the demand analysis
PL Agreed; added in D2 (demand analysis)
C. TOTAL COST AND TOTAL ELIGIBLE COST
Issue raised MS which raised the issue Change in the AF
Clarifications needed for project budget (headings and explanation points)
EE, PT, CRO, HU Clarifications provided, 10% limit on land purchase added to explanation points, new column added with % of total eligible costs for all budget items, explanation box added for providing additional information; info re: exchange rate and reference moved to section C
D. FEASIBILITY STUDIES CARRIED OUT, INCLUDING OPTION ANALYSIS, AND THE RESULTS
Issue raised MS which raised the issue Change in the AF
Avoid duplication or unnecessary information requested
General Feasibility studies information limited to institutional, technical, environmental and risks
NOTE: Instruction to be revised to be in line with information requested in sub-sections
Clarify information required for feasibility studies, demand analysis and option analysis
PL, EE Clarifications provided in section D
E. A COST-BENEFIT ANALYSIS, INCLUDING A FINANCIAL AND AN ECONOMIC ANALYSIS, AND A RISK ASSESSMENT
Issue raised MS which raised the issue Change in the AF
Avoid duplication or unnecessary information requested
General Instruction for financial and economic analysis clarified and aligned; questions duplicating information requested are deleted
Imprecise definitions of financial indicators
PL Agreed; definitions provided in E.1.3., footnotes
Erase text box concerning financial profitability
PL Aligned to Implementing Act on CBA methodology
Re-introduce information on jobs created during implementation phase
EL Agreed; info maintained in E.2.4
F. AN ANALYSIS OF THE ENVIRONMENTAL IMPACTIssue raised MS which raised the issue Change in the AF
Remove/clarify the condition 'Projects in construction phase and without development consent at the time of their submission to the European Commission are not admissible by the Commission'
What if more than one development consent is required?
PL, PT, EE, LV, CZ Clarification: development consent is needed only if the project is in construction, where building permit is required (requirement of the legislation)
If the project is not in construction and there is no development consent the project can be admissible
The question concerns 'at least one works contract'
Add in section F.3.2.2. the information referred to in Article 4.4 of the Directive on how the determination made by the competent authorities is made available to the public
PL Agreed; question added in F.3.2.2. (d)
Re-structure F.5. Additional environmental integration measures to cover both measures resulting from EIA and any additional measures
PL Agreed (now two sub-questions in section F.5.)
In F.4.1. 'Is the project likely to have significant negative effects on sites included or intended to be included in the NATURA 2000 network' add…
General Question added 'did the competent authority request the performance of an Appropriate Assessment for the project in F.4.1.
F. AN ANALYSIS OF THE ENVIRONMENTAL IMPACT, TAKING INTO ACCOUNT CLIMATE CHANGE
Issue raised MS which raised the issue Change in the AF
Clearer instruction/guidance needed for filling in climate change section
PL, EL Agreed; additional guidance provided in section F
G. STATE AID
Issue raised MS which raised the issue
Change in the AF
No reference to SGEI decision
PL Agreed; reference provided table in section G
H. THE FINANCING PLAN
Issue raised MS which raised the issue Change in the AF
Clarify reference to flat rates
PL New wording 'Net revenue flat rate as specified in the delegated act establishing flat rates for sectors or subsectors' in H.1.1. (relevant method)
Clarify reference to state aid
PL Clarified; the practice of adjusting the co-financing rate according to state aid rules will need to continue
In 'decreased co-financing rate method' add words 'of the priority axis'
LT Agreed; added in H.1.1. (relevant method)
Time line in the annual financing plan of Union contribution should be extended until 2023
EE, LV, LT, EL Title changed to annual plan of total eligible expenditure to be declared to the Commission until 2023
Remove result indicators PL, EE, RO, BG Agreed; table re-structured, result indicators are removed
Format for Notification
• - Changes for Application Form made also in Notification (where same information is required)
• - Minor wording suggestions taken on board
IMPLEMENTING ACT ON THE GUIDANCE FOR THE METHODOLOGY FOR THE COST-BENEFIT ANALYSIS OF MAJOR PROJECTS
11th meeting of the Expert Group on Delegated and Implementing Acts for the ESI Funds
25 June 2013
OBJECTIVE OF THE IMPLEMENTING ACT
• - Implementing Act• to present a set of working rules to ensure consistency and
rigour in preparing CBAs and in their assessment• to set out a methodology for the calculation on discounted
net revenue (in accordance with Article 54 CPR)
• - Practical guide to CBA (update of 2008 guide)• to provide project promoters with practice-oriented
methodological guidance for the preparation of CBA
MAIN ELEMENTS
• 1 GENERAL PRINCIPLES• Objectives of CBA• Methodological principles• Elements of CBA
• 2 STAGES OF CBA• 1) Presentation of the socio-economic context and definition of objectives;• 2) Identification of the project;• 3) Results of feasibility studies with demand and option analysis;• 4) Financial analysis;• 5) Economic analysis;• 6) Risk assessment.
STAGES OF CBA
• 2.1 Presentation of the socio-economic context and definition of objectives, identification of the project, feasibility of the project with demand and option analysis
• 2.2 Financial analysis• - Discounted cash flow methodology (5% FDR in real terms)• - Other principles: incremental method, reference periods by sector,
residual value• - Data required: Investment costs, Re-investment costs, Replacement
costs, Operating costs, Revenues (plus polluter-pays principle, full-cost recovery, affordability), Source of funding
• - Results of the financial analysis: evaluation of financial profitability, determination of the contribution from the Funds, financial sustainability
• - Financial analysis in Public Private Partnership
STAGES OF CBA – cont'ed2.3 Economic analysis- Key steps of economic analysis: conversion of market to shadow prices, fiscal corrections, corrections for externalities, discounting of the estimated costs and benefits (social discount rate of 5,5% and 3,5%)- Calculation of the economic performance indicators (ENPV, ERR and B/C)- The minimum economic benefits by sector to be considered- Climate change considerations - Application of cost-effectiveness analysis
2.4 Risk assessment- Sensitivity analysis- Qualitative risk analysis including measures for risk mitigation- Additional: probability distributions and quantitative risk analysis- The minimum risks to be taken into account
Main changes to CBA methodology2014-2020 Implementing Act on CBA methodology
2007-2013 Working Document No. 4 Reason for change
Reference periods provided for all main sectors
Reference periods missing for some sectors such as research and innovation, broadband
Complete sectoral coverage
Typical economic benefits per sector to be considered as a minimum
No minimum Ensure consistency and rigour in the economic analysis
Cost-effectiveness analysis as an option for certain projects
No such option Simplification for certain types of projects, mainly those driven by compliance with EU legislation, where benefits are very difficult to measure
Compulsory steps of risk assessment: sensitivity analysis and qualitative risk analysis and non-compulsory steps such as probability distributions and quantitative risk analysis
All steps compulsory, less focus on qualitative risk analysis
Simplification to focus on qualitative analysis and risk prevention
Typical risks per sector to be considered as a minimum
No minimum Ensure consistency and rigour in the risk assessment and enhance its value in the process