Sprint at the home stretch25 May 2012
Since the establishment of the National Development Agency (NDA) in 2006, 27,000 projects have been completed across the country, each improving people’s quality of life. At the same time, the funds available for the 2007-2013 development cycle are far from being fully utilised. To speed up the payment of funding, the NDA proposed a number of regulatory changes and altered its own activities accordingly. The key is in the hand of project owners who have an additional three and a half years to implement their plans. To increase the success rate of applications for funding in a total value of HUF 8,200 billion, the institutions of public administration must also increase their efficiency.
There is only one and a half years left until the end of the EU’s development cycle, but more than HUF 5,000 billion are still awaiting use by Hungarian projects. For this reason, the NDA’s management suggested significant changes to the application system already in 2011, proposed to increase the efficiency of the regulatory environment, and focused its efforts on speeding up payments and on managing “stuck” applications. “European Union funding supports the domestic budget with HUF 1,500 billion this year. To make this amount, which is equivalent to approximately 10% of State Budget, available and even grow in the future, we introduced specific changes that can produce spectacular results even in the short run. Our objective is to use more than 95% of the funds in a total value of HUF 8,200 billion, which are available for successful projects by the end of 2015, since according to EU regulations, assistance can be absorbed within two years after the end of the cycle”, emphasised Zoltán Petykó, President of the National Development Agency.
The measures which shorten the life-cycle of projects will become really important in the remaining period, since the average life-span of a project consists of approximately 650 days from the original idea to completion. With such average time-span, a number of factors may hinder the payment of tender funds awarded, including the acquisition of various official licenses, archaeological excavations, public procurement procedures and the acquisition of certificates of completion, which alone may take months in the case of big projects. “Contrary to popular belief, tenders do not drag on because of the NDA’s processes but because of procedures, authorisations and other regulations beyond its control,” said Zoltán Petykó, who also mentioned the project management practices of beneficiaries as an additional source of problems. “It is unacceptable that a local government project can’t progress because one of its departments can’t meet the statutory deadlines. Support is only available to active applicants!”, pointed out the president of the NDA.
Therefore, the modifications introduced in the tender system so far mainly affect the administrative obligations, with fewer documents being required for concluding contracts and with a further reduction of deadlines for planning, starting and managing projects.
The simplified system also makes project implementation smoother, since what is called supplier financing and supplier advance enable beneficiaries to provide only their own contributions and not the overall project costs, since implementation accounts are settled continuously as projects progress.
As electronic processes are becoming a general practice, communication between beneficiaries and intermediary institutions is getting more comfortable and flexible. The spread of electronic services is symbolised by the change of name of the Applicant Information Surface, which will be called “e-administration” in the future.
To date the NDA has received almost 80,000 applications, which reflects the popularity of calls for applications built on EU funds; according to past experience, it is fair to say that approximately half of the applications contain ideas that are eligible for support. Through the NDA, the EU funds have so far facilitated the implementation of large projects, such as the reconstruction of the ice-skating rink in City Park, the building of Csepel’s main road, the renovation of the garden and three wings of the Royal Castle of Gödöllő, as well as the M0 motorway, which will soon be opened for the traffic. All supported projects contribute to increasing the country’s competitiveness and supporting its recovery from the economic crisis.
At the same time, the president of the NDA underlined that there is no reason for complacency. Although the value of invoices that are under processing by the agency has dropped to HUF 152 billion from the previous level of HUF 180 billion, and aids are paid to applicants no later than 45 days from receipt of the applications, project owners simply fail to submit invoices in the amount of over HUF 700 billion that are already due on a pro-rata basis. “A significant proportion of late projects belong to local governments that have struggled with a lack of funding since 2008 and have difficulty in generating their own contributions, which they undertook previously”, said Zoltán Petykó. Many local governments don’t even have the project management expertise required for implementing projects with EU funding, and this makes problems even more severe. The project doctor system that will provide professional support to beneficiaries will also assist the NDA.