Romania hires private specialists to boost absorption of EU funds

Newsroom 01/07/2013 | 08:55

With around EUR 15 billion of EU funds still available in the 2007-2013 programming period, the government has hired 39 recruitment companies in a move to bring in private experts to enhance the absorption of EU funds.

By Ovidiu Posirca

The Ministry of European Funds (MEF) says the recruited experts will work on project assessments and disbursement requests for EU-funded projects. They should also check the contracts for public acquisitions, which have in the past raised European Commission suspicions of fraud. The contracts signed between the ministry and recruiters amount to EUR 7.7 million without VAT, which can be increased if required.

EU funds specialists demand European wages

The recruiters will have to supply the managing authorities, intermediary bodies and regional development agencies with specialists on two-year contracts.

According to media reports, the private experts can earn as much as EUR 6,000 per month, dwarfing the EUR 225 monthly payment to public servants working on EU funds. The wages will be paid both from the European Regional Development Fund and the state budget.

The list of companies selected to find experts includes small firms (those headquartered in apartments) as well as large recruiters active locally such as Adecco, Lugera & Makler and the professional services firm KPMG.

Adecco Romania specialist Vlad Petcu says the MEF will inform the company periodically what experts it requires and for what period.

“We intend to recruit at least 500 specialists, to have a pool of experts large enough to ensure high-quality recruitment, depending on the location and the period for which the MEF requires them,” Petcu told BR. He did not specify how much Adecco would be paid for its recruitment services.

The company has listed a handful of jobs for experts that need at least three years of experience in the legal field, durable development, audit and public acquisitions.

Cristina Ana, senior associate at law firm Tuca Zbarcea & Asociatii and head of the firm’s structural funds practice group, commented that resorting to consultancy or temporary experts available on the private market may help increase the absorption rates where there is a lack of relevant skills or a temporary shortage in the public system.

“Such recruitment, however, should be carefully planned for, coordinated and used to technically complement rather than replace action by permanent staff,” Ana told BR. She added the recruitment of expertise from the private market is open to all EU members who can access the relevant technical assistance programs (article 46 of regulation 1083/2006). In addition, both the current and future Regulation (draft version) governing the 2014-2020 programming period allow the appointment of private bodies that could manage entire programs.

Greece has delegated an SMEs component to a private entity, while Germany handed some components of operational programs to the regional (Lands) banks.

“However, this is not what the MEF has done with the nearly EUR 8 million project; this project simply provides a quick fix for the managing authorities or intermediate bodies, delivering extra workforce for processing reimbursement requests or financing requests in the periods when the workload is excessive,” said Ana.

As the European Commission has unlocked payments in some pre-suspended operational programs (transport, regional development, human resources development), the prime minister, Victor Ponta, said the aim was to increase the wages of the approximately 2,000 managing authority employees.

“I want all the people in the managing authorities to have a decent salary… They work on projects worth EUR 4 billion and earn RON 1,000. Let’s not be surprised that they don’t work hard on them or value them,” said the PM on June 21, during a meeting with ministers on EU funds.

He added that the wages should be financed both from the structural funds – through a special technical assistance operational program – and from the state budget. However, this measure will have to be negotiated with the IMF and the European Commission.

According to Ana of Tuca Zbarcea & Asociatii, Romania’s poor absorption performance during the 2007-2013 programming period may be put down to poor human resource policies among other variables.

“More attractive salaries, better training and personal development programs, as well as less fear-based and more initiative-driven employees, friendlier environments in the private sector and in other public but more international institutions may explain why people have chosen to move out of the public system,” said Ana.

Absorption to reach 30 percent by year end

Romania has nearly doubled its absorption of EU funds in the last year to around 16 percent by June, despite the temporary blocking of payments from the Commission, and the MEF is currently working on regulations to streamline the absorption.

Although the absorption has accelerated visibly, the country is still trailing the other EU members in the CEE region, attracting around EUR 3 billion for projects.

Eugen Teodorovici, the MEF minister, recently unveiled plans to funnel the European money to project beneficiaries through the banking system, in a move to ease cumbersome procedures.

“This model has been implemented in the Czech Republic where, based on an established flow, approved by the EC, beneficiaries can go the banks and receive their payments. It fluidized the process,” Marius Radu, head of EU funds financing at UniCredit Tiriac Bank, told BR. The lender has approved financing deals of over EUR 500 million for EU-funded projects.

He added that the resumption of payments in the Transport Sectoral Operational Program means that some significant funds will come from the EC by year end, which should see the rate go up to around 30 percent.

“I hope we won’t have any more pre-suspended programs. And we hope we won’t have any issues with the Public Procurement Law in the next financial period. This was one of the main reasons for the pre-suspension of the funds. If we want a higher absorption, we have a lot of funds in Transport, Environment and Regional Development, where the authorities are the single or largest beneficiaries. When a highway is completed and we are able to receive the money from the EC, the absorption will go up,” said Radu.

In a further effort to boost absorption, the government approved last week an Emergency Government Ordinance (EGO) that extends the settlement payment claims for all beneficiaries, regardless of the contracted financing program. Up to now this option had been available only to public beneficiaries that took out financing through the Regional Operational Program. Minister Teodorovici said this measure was set to accelerate the implementation of projects and sustain gains in the absorption of EU money.

ovidiu.posirca@business-review.ro

 

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