REGIONAL COMPETITIVENESS REGIONAL COMPETITIVENESS OPERATIONAL PROGRAMMEOPERATIONAL PROGRAMME

1111THTH SECTORAL MONITORING COMMITTEE SECTORAL MONITORING COMMITTEE MEETINGMEETING

13 November 2012 – Ankara

1.Opening statements – by the Head of the Operating Structure and by the Commission (HoS + EC)2.Approval of the Minutes of the last meeting and the agenda of the Meeting (HoS + EC)3.Information on audit related issues(Audit Authority + EC)4.Information on programming (OS)- 1st project package- 2nd project package- 3rd project package (OS+EIF)- 4th project package5.Information on implementation (OS)- Tendering and contracting- Implementation-Absorption (n+3), procurement plans and disbursement forecasts-Updated payment forecast and payment cycle for 2012 (OS+NAO)6. Information on technical assistance and communication activities (OS)7. Information on Monitoring Report and Monitoring Sheets (OS)8. Information on follow-up of conferral of management audit findings of the DG REGIO (OS+EC)9.Information on the revision and extension of the Operational Program for years 2012/2013 (OS +EC+ Strategic Coordinator)10. Indicative date for the next Sectoral Monitoring Committee (HoS + EC) 11. AOB

AgendaFor the 11th Sectoral Monitoring Committee Meeting

For the Regional Competitiveness Operational Programme in Turkey(13 November 2012, 09:30)

2

PROGRAMMINGPROGRAMMING-1st project package1st project package-2nd project package2nd project package-3rd project package3rd project package-4th project package4th project package-Overall AssessmentOverall Assessment

SSTATE TATE of of PLAY PLAY - 1st PACKAGE of - 1st PACKAGE of PROJECTSPROJECTS

TOTAL BUDGET: 99.402.500 €

TOTAL OPERATIONS: 11

APPROVED OPERATIONS: 10

First Submission of the Documents – 26.02.2010 Admissibility Letter – 23.04.2010 Comments from the EC – 11.10.2010 Second Submission of the Documents – 29.07.2011 Comments from the EC – 22.03.2012 Meeting with EC representatives – 14.09.2012 Unofficial Submsission of revised docs. – 22.10.2012 Third Submission of the Documents – Q4th 2012 /

Q1st 2013

SSTATE OF PLAY TATE OF PLAY IIN SECOND N SECOND PROJECT PACKAGE PROJECT PACKAGE

Prioritized Projects by the call: 47Current Number of Projects: 38 Approved Projects: 29 OIS in Preparation: 9Total Budget ofApproved Projects: € 202,962,882

Name of Proposal Location Submission Date

Approval Date

1-Expansion of Elazığ Enterprise Development Center Elazığ 17.07.2012 30.07.2012

2-Amasya Natural Stone Centre of Excellence Amasya 24.07.2012 01.08.2012

3-Whey Powder Production Plant Trabzon 02.05.2012 11.10.2012

4-Maraş Business Development Center MaraşSent to EUD via e-mail 24.08.2012

via e-mail 29.08.2012

5-Bafra Business and Export Development Unit SamsunSent to EUD via e-mail 16.07.2012

via e-mail 27.08.2012

6-Revitalization of the Tourism Sector in Siirt SiirtSent to EUD via e-mail 17/08/2012

via e-mail 07.11.2012

7-Bitlis (Eren) Centre for Business Support Bitlis 26.09.2012 via e-mail 09.11.2012

OPERATIONS APPROVED SINCE THE LAST SMC MEETINGOPERATIONS APPROVED SINCE THE LAST SMC MEETING

8

Measure Name of the Proposal ERA Status Submission Date

1.3

Establishment and Operationalisation of an Applied R&D and Service Centre, specialised on Food Industry, at Çankırı Karatekin University

Çankırı Karatekin University

Waiting EUD’s comments 23.08.2012

1.1 Yozgat Business Support Office

Yozgat Chamber of Commerce and Industry

OIS in preparation November 2012

2.1

Establishment and Operationalisation of a Lab Services Unit at the Hazelnut Research Station in Giresun

Hazelnut Research Station OIS in preparation November 2012

SECOND PROJECT PACKAGE – PLANNING

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SECOND PROJECT PACKAGE – PLANNING

Measure Name of the Proposal ERA Estimated Submission Date

1.4 Ardahan Yalnızçam Winter Sports Tourism Development Operation

Ardahan Special Provincal Administration

1st Quarter of 2013

2.2Development of Dairy Products Cluster in Eastern Anatolia Through a Market Oriented Strategy

Governorate of Kars 1st Quarter of 2013

1.3 Erzurum Ataturk University – Design and Innovation Centre Atatürk University 1st Quarter of

2013

1.4 Kommagene Nemrut Tourism Oriented Revival Project (KN-TOC)

Governorate of Adıyaman

1st Quarter of 2013

1.1

Establishment of cold storage house by using renewable energy (soil solar) and Apricot Clustering Valley for apricot processing SMEs

Governorate of Malatya and Malatya Commodity Exchange

1st Quarter of 2013

2.1 Increasing Regional Competitiveness in Kars, Ağrı, Ardahan and Iğdır Provinces Kars Governorate 1st Quarter of

2013

SSTATE OF PLAY TATE OF PLAY IIN N THIRDTHIRDPROJECT PACKAGE PROJECT PACKAGE

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THIRD PROJECT PACKAGE - STATE OF PLAY

Results as of October 2012*Total Volume: > EUR 320 million

80% absorption on available funds

Total Number of Loans: >4,300172% of the target

Total Number of SMEs: >4,000160% of the target

* Indicative due to late reporting by FIs

SSTATE OF PLAY TATE OF PLAY IIN N THE FOURTHTHE FOURTHPROJECT PACKAGE PROJECT PACKAGE

PRIORITIZED LIST OF PROJECTS IN 4TH PACKAGE (IND. 117.000.000 €)PRIORITIZED LIST OF PROJECTS IN 4TH PACKAGE (IND. 117.000.000 €)# Measure Title of the Operation End Recipient of

Assistance Status Indicative Budget (€)

1 1.1 Processing and Storing of Sea Food North Anatolia Dev.Agency (KUZKA) Q1st of 2013 9.500.000

2 1.3 Establishment of Nanotechnology and Nonwoven R&D Centre

Silkroad Dev.Agency (İKA) Q1st of 2013 7.000.000

3 1.1 Samsun Logistics Center Middle Blacksea Dev.Agency (OKA)

Q2nd of 2013 42.000.000

4 2.2 Turkish Cluster Academy MoSIT-DG for Industrial Zones Q1st of 2013 4.500.000

5 1.1 The Common Use Workshop Project Eastern Anatolia Dev.Agency (DAKA)

Q4tht of 2012 6.668.645

6 1.3 Shoe-making Training and Design Centre and Shared-use Workshop

Eastern Mediterranian Dev.Agency (DOĞAKA) Q1st of 2013 6.471.000

7 1.1 Establishment of a Enterprise Development Center in Gümüşhane

Eastern Blacksea Dev.Agency (DOKA) Q4tht of 2012 6.000.000

8 1.1 Establishment of Enterprise Development Center (İŞGEM) in Bingöl Fırat Dev.Agency (FKA) At EUD 6.158.044

9 1.3 Carpet Incubator Centre Silkroad Dev.Agency (İKA) Q1st of 2013 5.000.000

10 1.1 Şanlıurfa Cotton Licensed Warehouse TOBB Q4tht of 2012 7.147.000

11 1.1 Sivas Industry Incubator Center Project (ISGEM)

Middle Anatolia Dev.Agency (ORAN) Q4tht of 2012 7.137.800

12 1.4 Kars City with its Historical Identity Serhat Dev.Agency (SERKA) Q1st of 2013 9.500.000

OPERATIONS SUBMITTED BY THE NATIONAL PUBLIC BODIESOPERATIONS SUBMITTED BY THE NATIONAL PUBLIC BODIES (IND. 19 mil € )(IND. 19 mil € )

# Measure Title of the Operation End Recipient of Assistance Location Indicative

Budget (€)

1 1.4 Sustainable Tourism Development in Kaçkar Mountains National Park

Ministry of Forestry and Hydraulic Works

Rize 9.500.000

2 1.4 Increasing Tourism Capactity in Şanlıurfa

Ministry of Culture and Tourism Şanlıurfa 9.500.000

OVERALL ASSESSMENTOVERALL ASSESSMENT

Total Number of Operations : 66Total Number of approved operations: 41Operations in preparation: 25 Total Volume of Budget: ind. € 575 mil.

WHOLE OPERATION PROTFOLIO WHOLE OPERATION PROTFOLIO (Total Budget: ind. 575 MEUR)

PROGRESS PROGRESS BY PRIORITY AXESBY PRIORITY AXES

Priority 1: Improvement of Business Environment(Budget. ind 530 MEUR)

PROGRESS PROGRESS BY PRIORITY AXESBY PRIORITY AXES

Priority 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship (Budget ind. 45 MEUR)

MEASURE BASED PROJECTS IN TARGET REGIONMEASURE BASED PROJECTS IN TARGET REGION

15 Growth Centers

Provinces not covered:•Artvin•Iğdır•Ağrı •Şırnak•Kilis•Tunceli

1.1 1.3 1.4 2.1 2.2

IIMPLEMENTATMPLEMENTATIIONON-Tendering and contractingTendering and contracting-ImplementationImplementation-Absorption (n+3), procurement plans and disbursement Absorption (n+3), procurement plans and disbursement forecastsforecasts-Updated payment forecast and payment cycle for 2012Updated payment forecast and payment cycle for 2012

0

20

40

60

80

100

PN Shortlisting Evaluation Award Signature

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6 6 5 6

70

47

9889

82

4 617

24

2 22012201320142015

0

5

10

15

20

25

2 2

5 46 5

18

23 22

19

11

1 2

10

2

Until Today

2013

2014

2015

87.761.650,50

158.729.201,00

51.523.063,0097.092,00

Until Today201320142015

€ 298 million is foreseen to be contracted until April, 2015.

Realised and Realised and ForeseenForeseen Contracted BudgetContracted Budget

FinalizedFinalized ContractsContracts

  Totally 7 contracts

 Type of Contracts

Works SupervisionTechnical assistance

/ FW Supply

Total(euros)

Number of Contracts

0 0 2 5 7

Budget(euros) 0 0 187.968 865.470 1.053.438

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Contracts under Implementation Contracts under Implementation

Totally 17 contracts

Type of Contracts Works Supervision Technical

assistance Supply DirectGrant

Total(euros)

Number of Contracts 6 4 5 0 2 17

Budget(euros) 18.162.683 1.947.225 18.298.195 0 48.300.000 86.708.213

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Projects coming to ImplementationProjects coming to Implementation Totally 32 project-111 components Totally 32 project-111 components

Type of Components Works Supervision Technical

assistance Supply Total # of comp. Budget (€)

2012 0 0 2 0 4 2.322.360

1st Q / 2013 0 1 1 0 2 2.788.060

2nd Q / 2013 1 2 2 1 6 14.229.924

3rd Q / 2013 14 13 7 10 44 91.159.775

4th Q / 2013 7 7 9 8 31 55.589.604

2013 22 23 19 19 83 163.767.363

2014 2 1 11 10 24 51.523.063

2015 0 0 0 2 2 97.092

Total # of comp. 24 24 32 31 111 217.709.878

Budget (€) 81.267.407 9.775.364 64.109.697 62.557.410 217.709.878

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DISBURSEMENT FORECAST AND N+3 GAP FOR RCOP 2007-2013 PROGRAMMING PERIOD

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOTAL PRIORITY I 27,200,000 13,855,000 4,756,534 44,532,876 94,465,212 20,479,394 4,977,469 0 210,266,484Measure 1.1. 1,601,961 23,886,601 67,542,485 14,965,712 4,441,933 112,438,693Measure 1.2. 27,200,000 13,855,000 41,055,000Measure 1.3. 3,154,573 16,266,288 19,772,855 3,589,687 483,438 43,266,840Measure 1.4. 4,379,987 7,149,871 1,923,994 52,098 13,505,951PRIORITY II 1,219,338 1,678,497 5,073,770 6,108,603 561,479 128,268 0 14,769,954

Measure 2.1. 380,537 1,020,000 2,582,093 2,174,728 6,157,358Measure 2.2. 838,801 658,497 2,491,677 3,933,874 561,479 128,268 8,612,596

PRIORITY III 59,577 1,636,302 1,165,757 3,485,134 1,317,339 1,103,725 574,974 9,342,807

Measure3.1. 59,577 1,636,302 1,165,757 2,807,548 676,167 462,553 396,474 7,204,377Measure 3.2. 677,586 641,172 641,172 178,500 2,138,430OHTER (non approved project)

0 0 16,284,211 0 50,000,000 105,000,000 90,404,165 0 261,688,376

1st PP 0 0 0 0 10,000,000 10,000,000 5,404,165 25,404,165

2nd PP 0 0 0 0 20,000,000 60,000,000 50,000,000 130,000,000

3rd PP 16,284,211 16,284,211

4th PP 0 0 0 0 20,000,000 35,000,000 35,000,000 90,000,000TOTAL (per year)

TOTAL (cumulative expenditure forecast )

27,259,577 43,970,217 67,855,215 120,946,995 272,838,148 399,982,746 496,067,621 496,067,621 496,067,621

Allocated fund for RCOP 41,900,000 43,500,000 54,800,000 71,430,000 88,020,000 89,016,597 91,720,588 480,387,185

N+3 Expenditure Requirements (per year)

41,900,000 43,500,000 54,800,000 71,430,000 88,020,000 89,016,598 91,720,588 0 480,387,186

Pre-finance* 42,060,000 22,215,000 64,275,000

Expenditure paid and declared cumulative

-160,000 21,125,000 75,925,000 147,355,000 235,375,000 324,391,598 416,112,186 480,387,186 480,387,186

N+3 Gap 27,419,577 22,845,217 -8,069,785 -26,408,005 37,463,148 75,591,148 79,955,435 15,680,435 15,680,435

Disbursement Forecast (EU Contribution) -October

27,259,577 16,710,640 23,884,998 53,091,780 151,891,153 127,144,598 96,084,876 496,067,621

DISBURSEMENT FORECAST GRAPHOCTOBER, 2012

TECHNICAL ASSISTANCE ACTIVITIESTECHNICAL ASSISTANCE ACTIVITIES

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Main activities July – November 2012Main activities July – November 2012

On the job support to the Departments of RCP-CID

Preparation of Tender Dossiers

Training and capacity building for RCP-CID and ERAs

Technical Technical AAssistance on ssistance on IInstitutional nstitutional BBuilding uilding for the for the IImplementation of mplementation of RCOPRCOP

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Training and capacity buildingTraining and capacity building to RCP-CID to RCP-CID

Trainings to RCP-CID: Insurance Workshop for FCD staff (29 August

2012) Procurement of Supplies Training (19 October

2012) Team Building Event (03 November 2012)

Internships2 internships delivered to PolandOrganization of additional 9 internships before the

end of 2012: four to Hungary and five to Latvia33

Training and capacity buildingTraining and capacity building to ERAs to ERAs

Trainings to ERAs Training on Procurement (24-27 September 2012)Training on Project Implementation (8- 11 October 2012)

Preparation of Guidelines for ERAs:Procurement GuidelinesImplementation Guidelines

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Planned tPlanned training and capacity buildingraining and capacity building

5 trainings for RCP-CID:Leadership & HR Management

Training (2 remaining modules – 4 days)Programme and Contract management

for works and supervision contracts IPA major projects, Feasibility and Cost-

Benefit AnalysisProject management (soft skills)

35

Main activities planned for December 2012 Main activities planned for December 2012 to June 2013to June 2013Support to the Departments of RCP-CIDCompletion of Revision of RCP-CID manualsPreparation of remaining ToRs within the new TA

Plan (2012-2017)Completion of training and capacity building for

RCP-CID staff and ERAsSupport to pipeline development (OIS)Preparation of Tender DossiersStudy visits and internshipsOrganization of the 4th and 5th Study Visits, (Ireland and Hungary)

36

COMMUNICATION ACTIVITIESCOMMUNICATION ACTIVITIES

37

MONITORING REPORT MONITORING REPORT AND MONITORING SHEETSAND MONITORING SHEETS

39

OVERALL PROGRAMME PROGRESSOVERALL PROGRAMME PROGRESS

40

YEARS 2007-2013

Total Allocation (1)

Allocation per Approved

Operations(2)

Allocation per Project

Pipeline*

% of total allocation

([2/1]*100)

Available Allocation

(3)=(1)-(2)Commitments

Rate of Commitments

(% of total allocation)

Disbursement

Rate of Disbursement

(% of commitments)

Financial Progress

(Disbursement% of total allocation)

PRIORITY 1 480,666,206 275,643,537 514,046,635 57 205,022,669 70,719,016 15 50,270,337 71 10

Measure 1.1 243,730,279 150,822,585 248,074,401 62 92,907,694 8,349,647 3 850,857 10 0.3

Measure 1.2 98,300,000 48,300,000 98,300,000 49 50,000,000 48,300,000 49 48,300,000 100 49

Measure 1.3 81,785,729 58,767,538 109,519,998 72 23,018,191 14,069,370 17 1,119,479 8 1

Measure 1.4 56,850,198 17,753,414 58,152,236 31 39,096,784 0 0 0 0 0

PRIORITY 2 58,798,737 27,387,130 37,657,080 47 31,411,607 10,761,705 18 1,754,217 16 3

Measure 2.1 26,842,945 10,749,121 14,575,321 40 16,093,824 6,874,190 26 447,690 7 2

Measure 2.2 31,955,792 16,638,009 23,081,759 52 15,317,783 3,887,515. 12 1,306,527 34 4

PRIORITY 3 25,696,477 11,464,810 23,864,120 45 14,231,667 6,280,928 24 2,666,631 42 10

Measure 3.1 21,764,120 9,364,810 21,764,120 43 12,399,310 6,280,928 29 2,666,631 42 12

Measure 3.2 3,932,357 2,100,000 2,100,000 53 1,832,357 0 0 0 0 0

TOTAL 565,161,420 314,495,477 575,567,835 56 250,665,943 87,761,649 16 54,691,184 62 10

* Project pipeline consists of both approved and non-approved projects (totally 66 projects). For non-approved projects, budgets are indicative.

FOLLOW-UP OF CONFERRAL OF FOLLOW-UP OF CONFERRAL OF MANAGEMENT AUDMANAGEMENT AUDIIT T FINDINGS OF FINDINGS OF

THE DG REGIOTHE DG REGIO

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AREA:AREA: Formal establishment of accountability, responsibility, delegated responsibility and any necessary related authority for all tasks and positions throughout the organisation.

SUMMARY FINDING RECOMMENDATI

ON/FOLLOW UP

ACTIONS

CURRENT STATUS

A smooth transition of all tendering and contracting files should be safeguarded among the MoSIT and CFCU upon the conferral of the tendering, contracting and financial management functions. According to the first addendum (December 2010) of the initial Cooperation Agreement, there were specific provisions arranging in detail the handover of the public procurement documents according to the status of the tenders/contracts managed by CFCU. However, in a second addendum (May 2011), it is stated that following the accreditation and conferral of management powers, all the contractual responsibilities should be undertaken by the Ministry of Science, Industry and Technology. This uncertainty put into question the effective functioning of the management and control system concerning tendering, contracting and financial management.

Specific provisions arranging in detail the transition of the tendering, contracting and financial management files should be laid down in an agreement between the two institutions.

The handover process of tendering files of the projects which were carried out by the CFCU has been achieved.

Following Contracts were signed by CFCU and handed over to the MoSIT with the transfer of tendering and contracting files. All these contracts totally 5 projects / 12 contracts are currently under implementation.

1- MoSIT (TA)(1 contract)

2- MoE [TA and Supply-1 (2 lots)] (3 contracts)

3- TOBB [TA and Supply-1 (3 lots)] (4 contracts)

4- KOSGEB (Supervision)(1 contract)

5- TDZs [Supervisions (Erciyes, Fırat, Gaziantep)] (3

contracts)

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AREA:AREA: Internal audit including handling of audit reports and recommendations

SUMMARY FINDING RECOMMENDATION

/FOLLOW UPACTIONS

CURRENT STATUS

The set up and functioning of theinternal audit function in theMinistry of Science, Industry andTechnology has weakened since theinitial conferral of managementdecision and is considered as animportant weakness in the currentmanagement and control system.No IPA related, internal auditactivity was carried out, norplanned, in 2011.The requirement of CommissionRegulation (EC) No 718/2007Article 28(2)(k): The operatingstructure shall be responsible formanaging and implementing theprogramme or programmesconcerned in accordance with theprinciple of sound financialmanagement. For those purposes, itshall carry out a number offunctions that include: ensuringinternal audit of its differentconstituting bodies; in the currentsituation it is not fulfilled.

Recruitment and retainment of qualified internal auditors should be given the highest priority.

Internal audit training programmes, in accordance with international internal audit standards should be implemented and further intensified.

IPA related internal audit work should be regularly performed. Relevant follow-up information should be provided to the Commission concerning- recruitment- training- audit workcarried out.

A detailed audit plan for 2012 including the follow-up of previous internal audit findings should be submitted to the Commission.

One of the two auditors who is responsible from the audit of the RCP-CID participated to a language education at a foreign country, but also three additional Auditors -who are capable to perform audits on the IPA issues as of their language skills- were recruited within the Internal Audit Unit. So, there are 5 internal auditors in the Ministry who can perform IPA audits, totally.

Studies on preparation of the Training Strategy Document for EU funded projects were finalised and submitted to the HOS. One of the internal auditors participated to a seminar on “the fight against fraud and irregularities with regard to EU funds” which was held by the Ministry of EU on 29-30 May 2012.   The audit on "Reporting Irregularities"and ‘’Follow up of Previous Internal Audit Findings’’ located in the 2012 Internal Audit Program started on 16.07.2012 and it is on-going.

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Conferral of Management Decision of the DG REGIO AREA:AREA: Security procedures (IT) and Evaluation

SUMMARY FINDING RECOMMENDATION

/FOLLOW UPACTIONS

CURRENT STATUS

At Strategic Coordinator level the horizontal Integrated Monitoring Information System (IMIS) is still not functioning and the Commission has been made aware of technical problems. In parallel, the Ministry of Science, Industry and Technology plans to develop an individual Management Information System addressing specific implementation and financial reporting needs at a measure, project and contract level. The integration between the IMIS, the MIS and the accounting system should be given a priority and proper procedures should be added in the manual of procedures. The finalisation of the MIS is foreseen for the end of 2013, in the meantime an alternative information system will be used. The requirement of Commission Regulation (EC) No 718/2007 Article 28(2)(i): The operating structure shall be responsible for managing and implementing the programme or programmes concerned in accordance with the principle of sound financial management. For those purposes, it shall carry out a number of functions that include: setting up, maintaining and updating the reporting and information system; in the current situation only partly fulfilled.

The technical problems with the IMIS system should be solved with the highest priority.

Possible interfaces should be developed between the different systems in order to prevent double entry of data and similar entry mistakes. Priority should be given to the finalisation of the MIS. Relevant follow-up information should be provided to the Commission concerning

- The functioning of the IMIS System

- the planning and progress concerning the interfaces

- progress of the MIS

- Training provided.

The Tender Notice of MIS of MoSIT was published on 21.08.2012

The ToR is designed for preventing the duplications for users while entering data for the MIS and IMIS. The shortlisting of the tender have been started on 25th September 2012. File Server was established in the RCP-CID by March 2012, which ensures data archiving and hierarchical electronic document sharing.

A training programme about the content of IMIS was delivered to the end recipients of the first project package and selected end recipients from the second project package on 11 October 2012 within the scope of the ERA Implementation Training Programme.  Currently, IMIS has been fully functional and accessible for the MoSIT and the end recipients of assistance. Up to date, operation pages have been created for 39 operations which were approved by EC/EUD and data entry has been in progress. In parallel, studies towards the improvement of Data Entry Forms are also ongoing.

In order to prepare disbursement plan and n+3 table in computerized manner a short term IT expert was recruited. A special software and trainings on usage of the software programme were delivered by the IT STE. Producing other financial reports in the same way is under process.

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THANK YOU FOR YOUR ATTENTION

Ministry of Science, Industry and TechnologyRegional Competitiveness Programme

Coordination and Implementation Directorate

e-mail: ipa@sanayi.gov.tr Web adress: ipa.sanayi.gov.tr