1. REGIONAL COMPETITIVENESS OPERATIONAL PROGRAMME 7 TH SECTORAL MONITORING COMMITTEE MEETING 14 October 2010 – Ankara

2. Draft Agenda For the Seventh Sectoral Monitoring Committee Meeting For the Regional Competitiveness Operational Programme in Turkey (14 October 2010, 09:30 / MoIT) 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 (HoS + EC) 3. Approval of the agenda of the Sectoral Monitoring Committee Meeting (HoS + EC) 4. Information on the activities of the Audit Authority in the preparation of the Annual Audit Activity Report for the RCOP (Audit Authority) 5. Information on state of play in first package of strategic projects (OS) 6. Information on state of play in second project package (OS) 7. Information on state of play in Measure 1.2 (financial engineering) (OS) 8. Information on Monitoring Report and Monitoring Sheets (OS) 9. Information on absorption (n+3), procurement plans and disbursement forecasts (OS) 10. Information on technical assistance activities (OS) 11. Information on new institutional set-up and preparations for Accreditation of Finance and Contracts Unit in RCP CIC (OS) 12. Information on the implementation of the Communication Action Plan (OS) 13. Information on the adoption of the modifying decision for the revisions and extension of the Operational Program and on the revision of the Financing Agreement, information on supplementary advance payment (EC) 14. Information on the preparation of mid-term evaluation (HoS + Strategic Coordinator + NIPAC + EC) 15. Indicative date for the next Sectoral Monitoring Committee (HoS + EC) 16. AOB

3. STATE OF PLAY IN FIRST PACKAGE OF STRATEGIC PROJECTS

4. 1 st PROJECT PACKAGE 1 st Project Package consists of 10 projects of the following Beneficiaries: KOSGEB, KOSGEB, Small and Medium Enterprises Development Organization TUBITAK, TUBITAK, The Scientific and Technological Research Council of Turkey MoIT-DG for R&D, MoIT-DG for R&D, Ministry of Industry and Trade DG for Industrial Research and Development (3 projects) MoCT, MoCT, Ministry of Culture and Tourism TOBB, TOBB, The Union of Chambers and Commodity Exchanges of Turkey UoFT, UoFT, Undersecretariat of the Prime Ministry for Foreign Trade MoIT – RCP-CIC MoIT – RCP-CIC, Technical Assistance + Publicity

5. 1 st PROJECT PACKAGE Under 10 projects, there are 32 contracts : From the 1st Project Package: -19 Forecast Notice Published -8 Procurement Notice Published -1 Framework Contract awarded -3 Contracts will be signed until the end of 2010. -8 Contracts are expected to be signed within 2011.

6. 01- Establishment of Business Incubators and Development of a Network among Incubators in Turkey (Kastamonu, Malatya, Tokat) Beneficiary: KOSGEB Type of Contract (Budget €) Date of Submission to CFCU Indicative Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Works (8.487.392) March 2010November 2010June 2011 The Forecast Notice for the Works was published on 14 July 2009. The tender dossier has been sent to the EUD for ex- ante approval in late September, 2010. The Procurement Notice (PN) is expected to be published in the middle of November 2010. Service (Supervision) (939.500) March 2010 Published (03.08.2010) June 2011 The Procurement Notice for the Supervision was published on 03 August 2010. The tender evaluation has been going on and Short- List Notice is expected to be published in the middle of November. 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

7. 01- Establishment of Business Incubators and Development of a Network among Incubators in Turkey (Kastamonu, Malatya, Tokat) Beneficiary: KOSGEB Type of Contract (Budget €) Date of Submission to CFCU Indicative Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Technical Assistance (Institutional Building) (4.000.000) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 The OIS document has been approved by the EUD in June 2010 and the ToR document will be submitted to the CFCU in January 2011. Supply (195.000) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 The OIS document has been approved by the EUD in June 2010 and the ToR document will be submitted to the CFCU in the first quarter of 2011. 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

8. 02- Establishment of Innovation Centre For Food – INNOFOOD CENTER (Kocaeli, G.Antep, Şanlıurfa, Giresun) Beneficiary: TÜBİTAK Type of Contract (Budget €) Date of Submission to CFCU (indicative) Publication Date of Procurement Notice (indicative) Date for signature of Contract (indicative) State of Play Technical Assistance (Institutional Building) (1.978.350) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 In February 2010, the Major Project Application Form was submitted to the Commission. The admissibility letter from the Commission has been received. The first comments of the Commission has not been received yet. According to the comments of the Commission, the Major Application Form, Feasibility Report and Cost- Benefit Analysis of the project will be revised. The procurement plan for this project will be prepared accordingly and more accurately. Works (2.387.000) The Third Quarter of 2011 The First Quarter of 2012 The Third Quarter of 2012 Service (Supervision) (143.220) The Second Quarter of 2011 The Fourth Quarter of 2011 The Second Quarter of 2012 Supply (16.033.683) The Third Quarter of 2011 The Second Quarter of 2012 The Fourth Quarter of 2012 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

9. 03-04-05-TECHNOLOGY DEVELOPMENT ZONES (Gaziantep, Kayseri, Elazığ) Beneficiary: MoIT, DG for R&D Type of Contract (Budget €) Date of Submission to CFCU Indicative Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Technical Assistance (Institutional Building) (2.095.750 Gaziantep) (1.215.176 Kayseri) (1.116.860 Elazığ) April 2009 November 2010 October 2011 There will be 3 separate tenders for each TDZ. The Forecast Notices for the Service were published on 9th and 24th of June 2009. The last revision of the TA tender documents was submitted to the CFCU in the beginning of this month. The revised OIS document is going to be submitted to the EUD within this month by the CFCU. Supply (1.471.405 Gaziantep) (553.970 Kayseri) (521.000 Elazığ) April 2009 The first quarter of 2011 May 2011 The technical documents (Supply TS and Market Research) of the Technology Development Zones (TDZs) for Supply were merged in one Supply TS document upon the CFCU’s recommendation. The Tender Dossier is under examination of the CFCU and their comments are expected in the near future. 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

10. 03-04-05-TECHNOLOGY DEVELOPMENT ZONES ( Gaziantep, Kayseri, Elazığ) Beneficiary: MoIT, DG for R&D Type of Contract (Budget €) Date of Submission to CFCU Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Works (3.848.294 Gaziantep) (5.601.131 Kayseri) (4.764.826 Elazığ) April 2009 Published (07.08.2010) March 2011 The technical documents of the Technology Development Zones (TDZs) for Works were merged in one Works TS document. The PN has been published on 7th of August, 2010. The deadline for submission of tenders is on 23rd of November, 2010. The first site visits in the framework of tender evaluation has been paid on 11th of October to Elazig TDZ and all the site visits will be completed within this month. Service (Supervision) (366.000 Gaziantep) (454.500 Kayseri) (366.000 Elazığ) April 2009 Published (10.05.2010) May 2011 The PN has been published in the beginning of May, 2010. The tender evaluation process has been going on; the Short-List Notice is expected to be published in the beginning of November, 2010. 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

11. 06-Winter Tourism Corridor in Erzurum, Erzincan and Kars Beneficiary: Ministry of Culture and Tourism (MoCT) Type of Contract (Budget €) Date of Submission to CFCU (Indicative ) Publication Date of Procurement Notice (Indicative ) Indicative Date for signature of Contract (Indicative ) State of Play Technical Assistance (Institutional Building) (1.876.000) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 The comments from the EUD for the OIS document, Feasibility Report, Cost-Benefit Analysis and Environmental Impact Analysis have been received in April 2010. All the documents have been revised accordingly; but the single absent document of the programming stage is the results of drinking water analysis for Erzincan-Ergan Region, which is expected to be submitted by the MoCT within this month. According to those results, either the concerned documents are again going to be submitted to the EUD or the project design is going to be discussed to come up with the solution by all parties. The MoCT has already sent the tender documents for works and TA and the MoIT examined the documents twice and the documents are ready to be submitted to the CFCU provided that the programming stage finalized soon. Works (5.492.033) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 Technical Assistance (Supervision) (720.500) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 Supply (101.377) The First Quarter of 2011 The Third Quarter of 2011 The First Quarter of 2012 1 st Project Package Priority Axes 1:Improvement of Business Environment Priority Axes 1:Improvement of Business Environment

12. 07- Enlargement of the European Turkish Business Centres Network to Sivas, Antakya, Batman, Van Beneficiary: TOBB Type of Contract (Budget €) Date of Submission to CFCU Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Technical Assistance (Institutional Building) (7.500.000) 31 March 2009 Published 21.01.2010 January 2011 The contract signature is expected to be finalized in November, 2010. Supply (600.000) 31 March 2009 Published 19.05.2010 November 2010 The contract signature is expected to be finalized in November, 2010. Supply (400.000) The First/Second Quarterof 2011 December 2011 (indicative) May 2012TS will be prepared in further phases. 1 st Project Package Priority Axes 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship Priority Axes 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship

13. 08-Strengthening of SMEs for Networking and Regional Cooperation (Samsun, Trabzon, Gaziantep, Kahramanmaraş, Çorum) Beneficiary: UFT Type of Contract (Budget €) Date of Submission to CFCU Publication Date of Procurement Notice Indicative Date for signature of Contract State of Play Technical Assistance (Institutional Building) (3.500.000) 31 March 2009 Published 04.02.2010November 2010 The contract signature is expected to be finalized in November, 2010 Supply (500.000) 31 March 2009 Published 18.08.2010 January 2011 The First PN and TD were published in March 2010, but the tender was cancelled by the CFCU. The second PN has been published in August this year and the deadline for submission of tenders is 1st of November, 2010. The contract signature date is expected to be in January 2011. Supply (300.000 ) The Third Quarter of 2011 (indicative) The First Quarter of 2012 (indicative) The Third Quarter of 2012 (indicative) Tender documents will be prepared in further phases. Supply (700.000) The First Quarter of 2012 (indicative) The Third Quarter of 2012 (indicative) The First Quarter of 2013 (indicative) 1 st Project Package Priority Axes 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship Priority Axes 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship

14. STATE OF PLAY IN SECOND PROJECT PACKAGE

15. June 2010 July 2010 August 2010 September 2010 October 2010 Identification of Sector Specific Experts within the UNDP TC Project Trilateral Kick- off Meetings Site visits Submission of First Draft Reports Mid-Term Review Meetings Submission of 6 OISs to EUD for Final Approval Rejection of 6 OISs by EUD Submission of 9 OIS Site visits Extension of UNDP TC Project SECOND PACKAGE OF PROJECTS PROGRESS OR NOT? Timelines and Methodology of UNDP Technical Cooperation (TC) Project

16. November 2010 December 2010 January 2011 February 2011 Finalization of 8 OISs Finalization of 9 OISs Finalization of 6 OISs Handover-Takeover Process (UNDP TC Project – RCOP TA Project) Identification of Operations subject to RCOP-Technical Assistance (TA) Operation Finalisation of 11-13 OISs SECOND PACKAGE OF PROJECTS PROGRESS OR NOT? Timelines and Methodology of UNDP Technical Cooperation (TC) Project

17. DELAY? YES NEED FOR RE-EVALUATION OF OPERATIONS UNDER NEW CONDITIONS  Amendment of IPA Implementing Regulation  Delay in the operationalisation of UNDP TC Project  Different and complex approaches for the operations under Measure 1.4  Comprehensive list of annexes and supporting documents of OIS  Difficulty at designing and diversifying TA components of OISs.  Overlap with previous EU supported operations  Low capacity of beneficiaries and slow reaction timeline  Lack of human resource capacity of whole IPA system  Amendment of IPA Implementing Regulation  Delay in the operationalisation of UNDP TC Project  Different and complex approaches for the operations under Measure 1.4  Comprehensive list of annexes and supporting documents of OIS  Difficulty at designing and diversifying TA components of OISs.  Overlap with previous EU supported operations  Low capacity of beneficiaries and slow reaction timeline  Lack of human resource capacity of whole IPA system  Finalized by trilateral consultation  Multi-lateral consultation and settlement  Still under discussion  Simplify and standardise the preperation methodology of relevant documents.  Identification of necessary generic activities  Exclusion of similar activities  Continuously inform  Increase the number of RCP-CIC staff  Finalized by trilateral consultation  Multi-lateral consultation and settlement  Still under discussion  Simplify and standardise the preperation methodology of relevant documents.  Identification of necessary generic activities  Exclusion of similar activities  Continuously inform  Increase the number of RCP-CIC staff SOLUTION FACTOR

18. RE- EVALUATION OF MATURITY OR LEVEL OF PROGRESS RE-EVALUATION METHODOLOGY LEVEL OF PROGRESS ABSORPTION (Indicative) ABSORPTION (Indicative) 67 M.€ 44 M.€ 47M.€ 27 M.€ 20 M.€

19. STATE OF PLAY IN MEASURE 1.2

20. MEASURE 1.2 FINANCIAL ENGINEERING INSTRUMENTS PROJECT 1: GREATER ANATOLIA GUARANTEE FACILITY (GAGF) Official Application (MoIT) 22 March 2010 No objection letter (EC – DG Regio) 19 April 2010 Official Approval Letter (EUD) 11 May 2010 Launch Event Ankara 16 July 2010 Transfer of funds to EIF Accounts 9 August 2010 Signing Ceremony with Intermediary Banks 22 October 2010

21. MEASURE 1.2 FINANCIAL ENGINEERING INSTRUMENTS PROJECT 1: GREATER ANATOLIA GUARANTEE FACILITY (GAGF) Credit Guarantee 1.500 micro enterprises (25.000 €) EIF-KGF Partnership 5 mil.€ 1 st Pillar Credit by risk sharing 25 mil.€ leverage 2.500 SMEs (200.000€) 5 intermediate banks (IB) (250 mil.€) EIB (250 mil.€) IPA-EIB-IB partnership 500 mil.€ credit volume 2 nd Pillar Contribution to KGF capacity building Technical assistance to IB-MoIT Publicity&promotional activites 2 mil.€ 3 rd Pillar

22. MEASURE 1.2 FINANCIAL ENGINEERING INSTRUMENTS PROJECT 2: GAP (Southeastern Anatolia Project) Venture Capital (GAP-VC) Official Application of Beneficiary (KOSGEB) 12 October 2010 Official Application of MoIT Last Quarter of October (Tentative) KOSGEB-IVCI-EIF Partnership 16 mil.€ 75% of total budget dedicated to GAP Region 7-9 investment Launch of project first quarter of 2011 at the latest

23. ABSORPTION CAPACITY (N+3) AND DISBURSEMENT FORECASTS

24. ALLOCATED BUDGET FOR RCOP YearEU Contribution (EUR) National Contribution (EUR) Total EUR 200741.900.0007.394.118 49.294.118 200843.500.0007.676.471 51.176.471 200954.800.0009.670.588 64.470.588 201071.430.00012.605.294 84.035.294 201188.020.00015.532.941 103.552.941 TOTAL299.650.00052.879.412 352.529.412

25. TOTAL BUDGET OF THE PACKAGES PackageNumber of the projects EU Contribution (EUR) National Contribution (EUR) Total EUR First Project Package (%85-%15) 10 75.999.00513.411.58989.410.594 Second Project Package (%82-%18)* 44 168.100.00036.900.000205.000.000 Third Project Package (%85-%15) 2 40.800.0007.200.00048.000.000 TOTAL 5656 284.899.00557.511.589342.410.594 * Average of the sustainability analysis of several projects in second package

26. DISBURSEMENT FORECAST AND N+3 GAP Expenditure Estimations (EU Contribution) 20102011201220132014TOTAL First Package 2.151.19536.119.86830.541.5237.018.259168.16075.999.005 Second Package 03.936.000117.342.00035.588.00011.234.000168.100.000 Third Package (Mea.1.2) 27.200.00013.600.00000040.800.000 TOTAL (per year) 29.351.19553.655.868147.883.52242.606.25911.402.160284.899.005 TOTAL (cumulative) 29.351.19583.007.063230.890.586273.496.845284.899.005 N+3 Expenditure Requirements 41.900.00043.500.00054.800.00071.430.00088.020.000299.650.000 Expenditure paid and declared* (A.P. 64.275.000) -22.375.00021.125.00075.925.000147.355.000235.375.000299.650.000 N+3 Gap (cumulative) 6.976.19561.882.063154.965.586126.141.84549.524.005-14.750.995 *Figures also include the advance payment which is equal to 64.275.000€. **It should be paid and declared to the EC by the end of 2017.

27. INFORMATION ON TECHNICAL ASSISTANCE (TA) ACTIVITIES INFORMATION ON TECHNICAL ASSISTANCE (TA) ACTIVITIES

28. TA Operation (2007 TR 16I PO 003. 3.1. 01) Components of the OperationCorresponding ContractBudget (Euro) Component 1 – Capacity building in programme and project level: training and support in management and implementation functions to the RCP – CIC and final recipients Service contract 1 TR07R3.01-01Technical Assistance on Institutional Building for the Implementation of RCOP 6.770.000 Component 2 – Supporting the establishment of the RCP – CIC Finance and Contracts Department (FCD) Component 3 – Establishment of the MIS System within the RCP-CIC Service contract 1 TR07R3.01-02Technical Assistance on MIS for the Implementation of RCOP 1.743.500 Component 4 – Supply component Supply contract TR07R3.01-10Supply of IT Equipment for Management Information System 251.310 Component 5 – Support for programme and operations monitoring and implementation (lump- sum) Direct contract Lump-sum covering of the per-diem, transportation and accommodation charges of experts and staff who are on mission) 200.000 Component 6- Framework contracts (lump-sum) FWC 1 (Road map for the Establishment of the FCD within RCP-CIC) FWC2 (Study for Compliance Assessment Audit of MoIT) 400.000 GRAND TOTAL 9.364.810

29. TA Operation (2007 TR 16I PO 003. 3.1. 01) ContractsState of Play 1 TR07R3.01-01 Technical Assistance on Institutional Building for the Implementation of RCOP The P/N published on 29th of Jan. 2010 and the tender evaluation process was launched. Short list notice was published on 4 th of June 2010. Evaluation of technical offers has been completed by the Evaluation Committee (second half of September 2010) The expected date for the official commencement of this operation is November 2010. 2 TR07R3.01-02 Technical Assistance on MIS for the Implementation of RCOP Forecast Notice published on 04.06.2009. ToR is revised by MoIT and sent to CFCU on 6th July 2010

30. TA Operation (2007 TR 16I PO 003. 3.1. 01) ContractsState of Play 3TR07R3.01-10 Supply of IT Equipment for Management Information System Forecast Notice published on 04.06.2009. TS is revised by MoIT and sent to CFCU on 6th July 2010 4 TR07R3.01-03 FWC (Road map for the Establishment of the FCD within RCP-CIC) has been awarded on 24.06.2010 with a budget of 116.818€ implementation has been launched in the beginning of July 2010. to be finalised by November 2010 5TR07R3.01-07 FWC ( Study for Compliance Assessment Audit of MoIT ) ToR is prepared and sent to CFCU on 28 Sept. 2010 by MoIT Direct contract An official letter sent to DG REGIO on 13th July 2010 asking for an instruction note defining the methodology to sign a direct grant contract

31. Other TA Activities MATRA Project (Support to MoIT for the proper implementation of the RCOP (G2G EVD Project)) Finalised in June 2010. Final Report is submitted to RCP-CIC. UNDP TC (for reviewing and revision of OIS for 2nd project package) Ongoing.

32. NEW INSTITUTIONAL SET-UP AND PREPERATIONS FOR ACCREDITATION OF FINANCE AND CONTRACTS DEPARTMENT UNDER RCP-CIC NEW INSTITUTIONAL SET-UP AND PREPERATIONS FOR ACCREDITATION OF FINANCE AND CONTRACTS DEPARTMENT UNDER RCP-CIC

33. 33 REGIONAL COMPETITIVENESS PROGRAMME COORDINATION AND IMPLEMENTATION CENTER Head of Operating Structure (HOS) Deputy Undersecretary Head of Center Programming Department Technical Implementation Department Quality Assurance and Control Department Monitoring and Evaluation Department Finance and Contracts Department Programming Division TA&HR Division Publicity Division Planning Division Implementation Division Control Division Risk Management Division Monitoring Division Evaluation Division Finance Division Contracts Division 10 3 3 3 3 9 9 13 2 2 5 5 1 1 18

34. FINANCE AND CONTRACTS DEPARTMENT

35. According to the New Agreement with CFCU, the delegated tasks will be taken on board gradually. FINANCE AND CONTRACTS DEPARTMENT

36. Activities for Capacity Building under FCD FwC Contract Under the ongoing FwC Contract a Road Map Document for the establishment of a Finance and Contracts Department under RCP-CIC will be prepared. Service Contract for Capacity Building under RCP-CIC Not only under FCD but under the whole RCP-CIC, Training of recruited staff and capacity building for taking back and conducting the tasks delegated to CFCU. MIS Service Contract The design of Tendering, Finance, and Accounting Modules under the Management Information System. MIS Suply Contract The establishment of IT Infrastructure of FCD and suply of required hardware and software. FINANCE AND CONTRACTS DEPARTMENT

37. Work Load of FCD in terms of Project and Contract Numbers Number of Projects Number of Contracts Resp. Inst. 1. Pack.2. Pack.3. Pack.TOTAL1. Pack.2. Pack.3. Pack.TOTAL CFCU 101322532 52 (Appr.) 2 86 (Appr.) FCD RCP- CIC -31- - 124 (Appr.) - 124 (Appr.) * Following April 2012 FINANCE AND CONTRACTS DEPARTMENT

38. Spatial Needs Taking the fact that the tendering, contracting, payment and accounting procedures of totally 124 contracts will be carried out by the FCD following April 2012 in to account … ; Totally 7 Rooms for Tendering and 10 Rooms for office is needed. FINANCE AND CONTRACTS DEPARTMENT

39. ACTION PLAN FOR THE ESTABLISHMENT OF FCD UNDER RCP-CIC 20112012 Action Resp. JanuaryFebruaryMarchAprilMayJuneJulyAugustSept.OctoberNov.Dec.JanuaryFebruaryMarchApril 1234123412341234123412341234123412341234123412341234123412341234 Application to NAO for Accreditation MoIT Compliance Assesment TA Submission of the ToR to the CFCU MoIT Submission of the FwC ToR to the EU Delegation after the Revision CFCU Preperations and the Publication of the Tender CFCU Tender Process and the Signature of the Contract CFCU Preperation and submission of draft Assesment Report TA Preperation and submission of final Assesment Report TA Implementation of the Assesment Findings MoIT NAO Akrediatasyonu NAO Application to EC for Accreditation NAU Assesment of the EC EC Submission of the Draft Report EC Submission of the Final Report EC Conferral of Management to the Ministry EC FINANCE AND CONTRACTS DEPARTMENT

40. THANK YOU FOR YOUR ATTENTION Ministry of Industry and Trade Regional Competitiveness Programme Coordination and Implementation Centre e-mail: ipa@sanayi.gov.tr Web adress: ipaweb.sanayi.gov.tr ipa.stb.gov.tr