BUSINESS PEOPLE ABOUT THE EUROPEAN GRANTS The management system is flawed

• Some businesspeople are less interested in European money

Due to various reasons (unclear guides, the accelerated dynamic of the market changes, the lack of financing), the businesspeople are becoming less interested in resorting directly to European funds, the officials of the AOAR say: "these funds will continue to be accessed by the multinational companies which have both the expertise, the human resources and the co-financing ability, meaning those funds would contribute to the growth of those companies which would grow anyway".

When it comes to European funds, there are many and varied problems, specific to each Operational Program, says Cristian Pârvan: "I think that all the activity should be focused on aggressive management, exacting but effective in accomplishing all the approved projects, the reaching of the assumed ratios, and the billing of the works to be settled by the EU. I have addressed letters to prime minister Ungureanu, who didn't deign to answer even after 60 days, to prime-minister Ponta, to the minister of Finance, and to the Minister of the Economy, showing that there are still about 80 projects approved by the evaluators, but which can't be financed by the EU. The AOAR supports their funding from the state budget, since we are talking about industrial competitiveness the creation of industrial jobs, and basically an essential engine for a future sustainable economic growth".

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• The effect of the POSDRU funds will be visible in the future

"Since the POS DRU program is a soft program, which has no real possibility of achieving firm numbers, will raise problems under any circumstances and it will always be possible to make all kinds of statements, all of them being 50% true", says Cristian Pârvan, who went on to say: "Obviously the wages of 10,000-12,000 Euros per month are nonsensical, but so is the idea of paying 400 Euros a month. What we are talking here is involving in these projects people whose < wealth > are brains and knowledge. if they do not get paid, they will no longer accept to participate in projects which involve so many bureaucratic activities, responsibility, arguments over the correct interpretations and constant accusations. Training a large number of people from different walks of life - unemployed, youth, women, managers, entrepreneurs - is a necessity in Romania, where the rate of training for a competitive economy is basically zero all over the educational road (from kindergarten to the doctorate)".

The representatives of the AOAR also consider that the cases of fraud should be sanctioned legally, but that the constant changes caused by the management authorities should be sanctioned as well: "It is a difficult program and has rarely emphasized features: since they are paid, many of the activities included in those projects have led to extremely interesting meetings and talks between social categories which are currently evolving separately: the pre-college, college and business environments, institutions of the state. It is impossible to assess the impact of these clashes of ideas, interests, knowledge, which have generated many contacts and collaborations which will indirectly produce effects in the future. The overly aggressive public statements, with generalized recriminations, do not encourage future participation in such projects, which can't be completed with a few kilometers of road or of sewer grid".

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• Problems and solutions uncovered by the Advisory Board for the Business Environment

The Advisory Board for The Business Environment (CCMA) has identified both concrete problems with ongoing projects, such as the lack of coordination between the financing and payment sources, EU funds, commercial banks, the EIB, the EBRD, the absence of a department which is responsible with the simplification and unlocking of processes, the lack of financing for completing the project, the faulty implementation of the projects , as well as structural problems, such as the absence of a central coordination entity, the lack of clarity in the decision making processes, between the Ministry of Finance, other ministries, various entities tasked with handling the EU funds, the European Commission and the local authorities, the lack of clarity in the financing priorities, the lack of a single point of for the management of an application, insufficiently specialized human resources and which have limited project management abilities, in particular at the key points of the processes.

The council has submitted proposal for dealing with all those deficiencies, according to Ionel Blănculescu. Aside from the creation of a PMO (Project Management Office) central unit, by having the Ministry of European Affairs take over, among other things, the Management Authorities, and the coordination of the processes for absorbing European funds, in one point, he gave us as an example the introduction of bridge loans, for ensuring the financial resources of the national budget, until the settlement of the requests by the European Commission: "They would act like a financial instrument, perhaps a revolving one, in order to ensure the resources in order to allow the making of payments to the beneficiaries within the committed delay of 45 days and until the recouping of the amounts from the European Commission. This type of working instrument is behind Poland's performance in the absorption of European funds, aside from the fact that they manage all the processes from a single decision point".

Another proposal, which could be implemented as a pilot at first, is the outsourcing of the assessment and selection of the projects by IPOs, that is Private Intermediate Organisms, from among banks, consulting firms, which could create consortiums, with the consultants/experts or, as an alternative, the banks with state capital. An absorption of the European funds, simultaneously, through Public and Private Intermediate Organisms, would undoubtedly lead to the maximization of the absorption over the same period of time.

Mr. Blănculescu also emphasizes the fact that the incorrect prioritization of the financing programs, by setting too many priorities, has led to the dissipation of the multiplier factor expected in the economy: "Neither the real needs or the effective absorption capability was considered when setting the priorities. It is very important, for the 2014-2020 period at least, to set the priorities very carefully, so that Romania's economy will stand to benefit, through added value and the multiplier effect".

In his opinion, the bureaucracy which the financing applicant is faced with, has a negative influence particularly on the effective implementation of the project. The lack of motivating wages for the employees of the Management Authorities/intermediate Organisms, in direct proportion with the volume of work and the importance of their work, together with the insufficient number of employees of these institutions makes the worsening of these institutions complicates the evaluation/reimbursement procedures, Mr. Blănculescu considers.

The late repayment of the amounts pertaining to the reimbursement amounts generate serious cash flow problems, by worsening the implementation of the projects and immobilizing the funds of those who apply for financing, sometimes by months on end. The reaction of the Government is to shift the blame to the beneficiaries, starting from the idea that an applicant should have more means of financing than the government, Mr. Blănculescu said. "The delays in the transfer of the pre-financing of the contracted projects and the abusive modification of the pre-financing terms for some of the operating programs, is however a reason for the failure of absorbing the European funds".

As for the low degree of absorption through the major environment and transport operational programs, the main problems come from the incompetence of the beneficiaries, "who are incapable of writing eligible projects and who do not take advantage of the free assistance like Jaspers, Jeremie, Jessica etc. Another problem would be the eligibility of the applicants, especially on the Transports Sectoral Operational Program. Considering the fact that the major beneficiaries (CNADNR, CN CFR SA) are colossi which owe billions of Euros to the state budget, their ability to ensure the sustainability of the projects is extremely low. The small beneficiaries, such as the local public administrations, are not eligible for the Transport Sectoral Operational Program. The funds for this type of infrastructure are granted through the Regional Operational Program and have proven to be insufficient".

In the opinion of Ionel Blănculescu, a better implementation, and implicitly, a better absorption of the European funds, could be achieved through the preparation of documentation of indisputable quality (Feasibility Studies, Technical Specifications, Reference Terms, Technical and Economic Indicators, various related studies, Awarding Documentation, Contract with specific clauses intended to facilitate the oversight activity of the Contracting Authority), the improvement of the communication and implementation process by elaborating plans, manuals and guides according to the European regulations, and, last but not least, the increase of the subsequent pace of implementation of the contracts for each work, by drafting a clear, a clear and concise contract when it comes to the available means of pressure which the beneficiary will have on the developer.