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FIDIC MDB Conference Brussels June 2012 © European Bank for Reconstruction and Development 2010 | EBRD Procurement considerations when financing.

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Presentation on theme: "FIDIC MDB Conference Brussels June 2012 © European Bank for Reconstruction and Development 2010 | EBRD Procurement considerations when financing."— Presentation transcript:

1 FIDIC MDB Conference Brussels June 2012 © European Bank for Reconstruction and Development 2010 | EBRD Procurement considerations when financing contracts also financed by the EU Cohesion Fund (as an example of joint co-financing) Jan Jackholt Director Procurement

2 2 EU Cohesion Fund The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90% of the Community average. It serves to reduce their economic and social shortfall, as well as to stabilise their economy. For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. The Cohesion Fund finances activities under the following categories: trans-European transport networks, environment; on the latter, Cohesion Fund can also support projects related to energy or transport, as long as they clearly present a benefit to the environment: energy efficiency, use of renewable energy, developing rail transport, supporting intermodality, strengthening public transport, etc.

3 3 EBRD EBRD is committed to support clients in countries where the EU funds absorption rate is especially low due to weak institutional capacity, slow generation of projects following EU accession and constraints in co-financing from national resources. This support includes not only co-financing of projects but also with preparation of projects through initiatives like JASPER and JESSICA, jointly supported by EIB and EU A key consideration for the Bank: To be eligible for disbursement, EU stipulates that contracts must be procured in accordance with national law (aligned to the EU Procurement Directive). 05/10/2015

4 4 EBRD CONSIDERATIONS Whilst the Bank is called the “European Bank” it is owned by 63 countries plus the European Union and the European Investment Bank including a number of countries that are not EU members such as USA, Canada, Japan, Korea, Australia etc. Furthermore, the Bank’s countries of operations are also including non EU countries such as Russian Federation, Turkey, Mongolia etc. Non EU countries concerns are that firms from their countries will have a disadvantage during the tendering process if national law applies and that the fiduciary control of the Bank is undermined. 05/10/2015

5 5 EBRD CONSIDERATIONS The Agreement establishing the EBRD includes statements that procurement shall be conducted in a fair and transparent manner and that no eligibility restrictions or preferences may apply. Furthermore the Bank has a fiduciary obligation in the procurement process and to ensure that costs are in line with market value

6 6 EBRD Procurement Policies and Rules revised May 2009 Paragraph 2.4. When projects are co-financed on a joint basis, the Bank’s procurement policies and rules will apply for co-financed contracts. However, in exceptional cases the Bank may agree, on a case by case basis and subject to the approval of the Board of Directors, to the application of alternative procurement rules, provided the Bank is satisfied that those alternative procedures are fair and transparent, and that acceptable alternative monitoring procedures are in place. Such exceptions could also be envisaged in the case of projects jointly co-financed with the EC Cohesion and Structural Funds, subject to Board approval.

7 7 Alternative Procurement Procedures Considerations: Notification - Tender notices shall be published in the Official Journal of the EU (OJEU) and a GPN with a full list of contract on the EBRD website. Fairness and Competition – Only open or restricted tendering is allowed to enable Bank financing. Contract administration and performance – Tender and contract conditions include clear responsibilities and liabilities for both parties and should be fair and reasonable. Accountability – Awarding entities are responsible for their actions during the procurement process. Any tenderer may use the complaint and appeals procedure and all complaints are referred to an independent dispute review body or local courts and can be referred to the higher courts on appeal. Utilities Directive provisions –The Bank would not finance contracts where reciprocity provisions as per the GPA have been used in the evaluation of tenderers.

8 8 Alternative Monitoring Procedures The Commission is involved in programme monitoring, commits and pays out approved expenditures and verifies the control system and applies its auditing function For each Sector Operational Programme (SOP), the Member States appoints: a Managing Authority (a national, regional or local public authority or public/private body to manage the operational programme); a Certification Body (a national, regional or local public authority or body to certify the statement of expenditure and the payment applications before their transmission to the Commission); an Auditing Body (a national, regional or local public authority or body for each operational programme to oversee the efficient running of the management and monitoring system). EBRD will conduct client capacity assessment, review the progress of the project etc. but will not review the procurement process.

9 9 Last but not least The Bank’s Enforcement Policy and Procedures will apply and the Bank’s legal documentation will provide that EBRD loan proceeds will not be available for financing contracts with any entity appearing on the EBRD list of debarred entities; Disbursement may only be made against receipt of signed eligible contracts (up to 15%). The Loan Documentation Disbursement Application Form has a special annex for information on each contract and the tender and award process. The Bank’s right to audit use of loan proceeds regulated in Legal Documents. The Bank’s retroactive financing policy may in specific cases also need to be derogated from.

10 10 Thank you

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