Slow Croatian Project Processing Major Issue for EU Funding Access

Lauren Simmonds

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As Poslovni Dnevnik/Jadranka Dozan writes, when it comes to the withdrawal of money from the European Structural and Investment Funds for the previous financial period (2014-2020), Croatia has shifted to a somewhat higher speed. In one year, the country has fortunately grown by almost 20 percent in terms of utilisation, Minister Natasa Tramisak recently emphasized.

However, that means more than two-fifths of the financial envelope, worth about 80 billion kuna or 10.7 billion euros, still remains to be withdrawn. So far, more than 45 billion kuna has been paid out, ie 56 percent (with 47 percent of it having been finally certified).

A kind of fuse for the maximum use of available funds in the given deadline, which is the end of 2023, is the “stock” of contracted projects. About 20 percent more than the available “quota” was agreed upon. In addition to that, the procedures for users, including the rules for public procurement, have been facilitated, and the communication of the competent ministerial department with the European Commission (EC) has been accelerated, they claim.

With the exception of things having been skewed in the sense of the context of the ongoing pandemic, the absorption process is no longer at a snail’s pace, says Tramisak. She attributes the difference in terms of utilisation compared to some other EU member states to the fact that this was Croatia’s very first programme perspective, while others had been transferring large projects from previous ones, so they were faster in terms of money withdrawal.

In addition, in the first two years of the past period, calls and contracted funds weren’t announced at all, and this, as she points out, is difficult for Croatia to compensate for.

However, there is something obvious in the (in)efficiency of Croatia’s infamous public administration in the selection procedures for projects set to be co-financed through EU funds. The results of the recently published analysis from Jaksa Puljiz, Sanja Malekovic and Sanja Tisma from the Institute for Development and International Relations are also on this track.

They analysed about thirty calls under the Competitiveness and Cohesion Operational Programme 2014-2020 (OPCK) as the most financially important programme co-financed from the EU budget for Croatia, implemented in the period between 2014 and 2018 and worth about 12.4 billion kuna. It was confirmed that the low efficiency of the system is mostly influenced by Croatian project processing times, ie in terms of dealing with those applications. In Croatia, this implies a significantly longer time than the time prescribed by the Common National Rules, but also than the time of implementation of selection procedures that some previous studies have shown for other EU countries.

Making the first decision on funding in as many as 97 percent of the analysed calls lasted longer than 120 days for Croatia, and most often their duration was from 180 to 360 days. This is likely not a surprise to anyone who has ever tried to do, well, just about anything official here.

“These are extremely long deadlines that have numerous consequences for the absorption and the quality of project implementation. In such a long period of waiting for the beginning of their realisation, it’s clear that the circumstances which are very important for successful implementation can change significantly,” the aforementioned authors point out.

For comparison, they say that similar research once showed that in Germany, neighbouring Slovenia, Austria, the Czech Republic, the Netherlands and Slovakia, between 31 and 49 percent of respondents using EU funds waited less than three months for their project evaluation results.

The problem of the duration of these Croatian project procedures has recently been highlighted by enterprises who have faced a drastic rise in the prices of certain industrial raw materials and construction materials this year. Some argue the issue to the extent that certain projects co-financed by European Union funds could even come into question.

“It used to happen, for example, that the tender (in terms of deadline) states that the competent authority will notify the applicant of the results of the tender within four months, and 10-12 months will elapse before its conclusion,” a consultant for EU projects explains.

When it comes to tenders for businesses (not counting, therefore, public bodies and social groups), the impression, he says, is that they are better off and more consistently organised for farmers than those for enterprises or, for example, those engaged in the fishing industry.

In the Competitiveness and Cohesion Operational Programme, which was the subject of scientific work of the IRMO analysis, the duration of selection procedures is, among other things, a consequence of the large volume of documentation required in most cases from the applicants.

In almost 60 percent of these calls, Croatian applicants quite unsurprisingly had to submit at least 11 different documents, which is quite a high number, according to the authors. Sometimes that figure is even higher, with between 16 and 20 documents needing to be submitted, and in seven percent of cases, even more paperwork than that was required in Croatia.

Nearly 40 percent of applicants stated that their entire application with all of the required attachments had more than 100 pages when complete. Among the more extensive were, for example, public calls related to the energy renovation of buildings, the promotion of sustainable development and the restoration of cultural heritage, as well as the modernisation and construction of student dormitories.

Approximately the same percentage of applications had less than 50 pages in total, which is still a lot.

There is also a large number of frequently asked questions about published invitations, which suggests that the tender documentation needed is often very unclear to applicants. In more than two thirds of the analysed calls, there were more than 100 questions asked. This shows that the Croatian project procedure is not only longer than it should be, but complex and as clear as mud. That also shouldn’t come as much of a shock to most.

All this leads to changes and additions to the tender documentation, then the extension of application deadlines, and then the later contracting or later start of Croatian project implementation in relation to the original plans. In less than a quarter (23 percent) of cases, calls didn’t undergo any changes, and nearly half (47 percent) underwent two or more changes, only adding to the confusion.

This also indicates that the preparation of tender documentation for competitive tenders for the state administration was a demanding task that often resulted in its amendments and the long duration of Croatian project selection procedures.

The competent ministries and state agencies received a lot of complaints due to the request for documentation that the applicants consider to be entirely necessary.

“Among such examples is the insistence on the original excerpt from the court register instead of the competent clerk simply checking it directly over the Internet. The same is true for the original BON2 certificate from the bank instead of the “downloaded” certificate from internet banking, as well as for the tax certificate confirming the absence of tax debt instead of direct verification,” said one EU project expert.

Some changes in that direction are already being worked on, thankfully. Minister Tramisak recently said that reforms are being made so that the eFunds system is connected to all of Fina’s public services, which will reduce administrative burdens. “People will just need to give their consent for documentation to be accessed online for certain items that they had to supply themselves so far,” she assured.

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