Programme for Development of the Regions 2021 – 2027 INDEPENDENT REVIEWS OF THE STRATEGIC APPROACH TO THE PROGRAMME EUROPEAN UNION European Regional Development Fund Programme for Development of the Regions 2021 – 2027 INDEPENDENT REVIEWS OF THE STRATEGIC APPROACH TO THE PROGRAMME EUROPEAN UNION European Regional Development Fund This report is a product of the International Bank for Reconstruction and Development / the World Bank. The findings, interpretation, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. This report has been prepared under the Advisory Ser- vices Agreement on Enhancing the Regional Devel- opment Process in Bulgaria and supporting Min- istry of Regional Development and Public Works in the programming process for the period 2021- 2027, signed between MRDPW of the Republic of Bul- garia and the International Bank for Reconstruction and Development on April 8, 2019. This report con- stitutes Output 6 — a Report documenting the ongo- ing reviews of the strategic approach adopted by the Client towards the new operational programme for regional development for the new period (2021-2027) of the above-mentioned agreement. Budget line BG16RFOP001-8.002-0005 “Budget line of “Strategic planning and pro- gramming” Unit, GD “SPPRD” Cover design: Wojciech Wolocznik, Cambridge, United Kingdom Interior design and typesetting: Piotr Ruczyński, London, United Kingdom CONTENTS Acknowledgements   5 Abbreviations and Acronyms   6 PART 1  Introduction   9 PART 2 Overview of independent reviews undertaken in the period 06.2019 – 11.2020   13 PART 3 Full reviews undertaken 06.2019 – 11.2020   17 Review of the broader operational framework for the implementation of the integrated territorial approach (Partnership Agreement 2021 – 2027, PDR 2021 – 2027, sectoral programs 2021 – 2027) (30/11/2020)   18 Suggestion for solutions: review of the framework for the development and implementation of ITI concepts (19/07/2020)   28 Review of the draft Integrated Territorial Strategies for the Development of NUTS 2 regions (24/04/2020)   32 Independent review of the first draft of Operational Program Development of Regions 2021 – 2027 (15/04/2020)   40 Review of guidelines for the preparation of ITI concepts — independent opinion and recommendations (26/02/2020)   50 Review of the draft National Concept for Spatial Development in Bulgaria during the period 2020 – 2025 (14/02/2020)    56 Review of the draft concept for the evaluation and selection of concepts for Integrated Territorial Investments at the level of Regional Development Councils (RDCs) during the programming period 2021 – 2027 (10/02/2020)   69 Proposal of survey on ideas for territorial investments to be financed from EU Structural Funds under the 2021 – 2027 programming period (16/01/2020)   74 ANNEX 1 Draft questionnaire   78 ANNEX 2 Proposal for a questionnaire for MAs (16/01/2020)   80 ANNEX 3 Review of the OPDR 2021 – 2027: Suggestions on an alternative structure for priority axes and the implementation mechanisms for the new regional approach (08/10/2019)   82 ANNEX 4 Review of the first draft IP guidelines prepared by MRDPW (30/09/2019)   89 ANNEX 5 Report summarizing initial findings from strategic consultations (26/09/2019)   91 ANNEX 6 Review of the proposed RDC structure and composition prepared by MRDPW (26/09/2019)   105 ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs — discussion note for SC meeting (13/06/2019)   112 FIGURES FIGURE 3.1 NCSD Tourist Regions   59 FIGURE 3.2 Characteristics of Municipalities with Population having less than 20,000 citizens   60 FIGURE 3.3 Social Targeted Support Zones under ITI    61 FIGURE 3.4 Mountain Municipalities and Mountain Border Municipalities   63 FIGURE 3.5 Border Municipalities   63 FIGURE 3.6 Zones for Stimulated Development   68 FIGURE 3.7 Regional Scheme for Spatial Development   68 FIGURE 3.8  Municipalities with deteriorated public services   69 FIGURE A6.1 Project Assessment — Scenario 1   108 FIGURE A6.2 Project Assessment — Scenario 2.1   108 TABLES TABLE 2.1 Overview of all reviews and proposals undertaken   14 TABLE 3.1 Urban municipalities eligible under the OPDR and potential to form groupings   46 TABLE 3.2 Proposal for restructuring of the draft NCSD strategic goals section   66 TABLE A3.1 Priority Axes, (Sub)Measures, and Eligibility   84 TABLE A7.1 RDC Strengths and Weaknesses   115 5 ACKNOWLEDGEMENTS This report is delivered under the provisions of the Reimbursable Advisory Services Agreement on Enhancing the Regional Development Process in Bulgaria and supporting Ministry of Regional Development and Public Works in the programming process for the period 2021 – 2027. It was prepared under the supervision Christoph Pusch (Practice Manager, Urban, Land, and Disaster Risk Management, Europe and Central Asia), David Sislen (former Practice Manager for Urban and Disaster Risk Management, Europe and Central Asia) and Fabrizio Zarcone (Country Manager, Bulgaria, the Czech Republic, and Slovakia) and technical guid- ance from Paul Kriss (Lead Urban Specialist, Europe and Central Asia). This report was authored by a team led by Joanna Masic, Senior Urban Specialist (Task Team Leader) comprising Grzegorz Wolszczak (Operations Specialist), Anna Banaszczyk (Senior Regional Planning Specialist), Yana Georgieva (Senior Public Administration Specialist), Atanas Kirchev (Senior Legal Consultant), Alex Hinov (Senior Public Administration Specialist), Zdravko Petrov (Urban Planning Expert), and Solene Dengler (Urban and Regional Analyst). Administrative support was ably provided by Albena Samsonova. The team would like to express its gratitude for the excellent cooperation, guidance and feed- back provided by the representatives of the Ministry of Regional Development and Public Works of the Republic of Bulgaria, the Central Coordination Unit of the Council of Ministers, Members of the RAS Steering Committee, and other stakeholders who provided ideas and inspiration during the Steering Committee meetings and through regular exchanges. Country Manager: Fabrizio Zarcone Practice Manager: Christoph Pusch Task Team Leader: Joanna Masic 6 Independent reviews of the strategic approach to the Programme ABBREVIATIONS AND ACRONYMS CLLD Community Led Local Development CCU Central Coordination Unit CoM Council of Ministers CPR Common Provision Regulation DDS District Development Strategy DIC District Information Council EC European Commission ESF European Social Fund ERDF European Regional Development Fund ESIF European Structural Investment Fund EU European Union GFA General Framework Agreement FUAs Functional Urban Areas ITI Integrated Territorial Investments (in early reviews referred to as IP — Integrated Projects) ITSDs Integrated Territorial Strategies for the Development of NUTS 2 regions LAU Local Administrative Unit MA Managing Authority MDP Municipal Development Plan MRDPW Ministry of Regional Development and Public Works NCSD National Concept for Spatial Development NCTD National Center for Territorial Development OECD Organization for Economic Cooperation and Development OP Operational Programme OPRG Operational Programme Regions in Growth 2014 – 2020 PA Priority Axis PO Policy Objective PDR Programme for the Development of Regions (new title for 2021 – 2027 regional programme) RAS Reimbursable Advisory Services RDA Regional Development Act RDC Regional Development Council SC Steering Committee TAIEX Technical Assistance and Information Exchange ToR Terms of Reference UMIS Unified Management Information Systems (for EU structural instruments in Bulgaria) WB World Bank PART 1  INTRODUCTION 10 Independent reviews of the strategic approach to the Programme This report documents the ongoing reviews territorial approach based on the analy- of the strategic approach adopted by the Min- sis of best practices from Bulgaria and oth- istry of Regional Development and Public er EU Member States and the team’s analyt- Works (MRDPW) towards the new operation- ical and advisory experience. al programme for regional development for the new period (2021 – 2027). These reviews Since June 2019 throughout the duration of were carried out by the WB team in the peri- the regional development RAS, upon MRDPW’s od June 2019 – November 2020 under Com- request, the team has reviewed a broad spec- ponent 3 of the RAS agreement entitled “Tech- trum of documents encompassing differ- nical assistance and reviews”. ent elements of the strategic approach and implementation framework : from strate- The process of MRDPW formulating the stra- gic documents (e.g. draft of the updated Na- tegic approach and its operational modali- tional Concept for Spatial Development and ties is a dynamic one and is influenced by drafts of Integrated Territorial Strategies for on-going political and technical discussions the Development of NUTS 2 regions), through and the views of a broad range of stakehold- key operational documents (e.g. two versions ers beyond the Ministry itself. The new inte- of draft Program Development of the Re- grated territorial approach being devised for gions 2021 – 2027, draft Partnership Agreement the next regional development programme, as 2021 – 2027, draft sectoral Programs 2021 – 2027 a result of its multisector nature, can be seen contributing to the implementation of the as a ‘joint-initiative’ across Bulgarian govern- integrated territorial approach, draft Guide- ment ministries who have a ‘shared respon- lines for the Elaboration and Implementation sibility’ for ensuring it is well-designed and of Integrated Projects (ITIs — under Priori- implementable. The new integrated territori- ty Axis 2 of PDR), to more technical documents al approach also aims to effectively bring to- (e.g. draft mechanism for the evaluation and gether all line ministries involved in its imple- selection of ITIs, template documents relat- mentation as set out in a dedicated Council of ed to the ITI application process). Ministers (CoM) decision (Decree #335). At the same time, it requires a substantial amount It should be noted that the team has also of back-and-forth exchange between differ- extensively reviewed the MRDPW’s pro- ent institutions and efforts towards contin- posals for the project selection criteria ued consensus building to ensure there is uni- to be applied under both Priority Axes of versal buy-in for the approach. Beyond this, the PDR, as well as the project selection it will also require that the strategic and op- mechanism for Priority Axis 1, however erational arrangements MRDPW puts in place these reviews were included in Output 7 will be conducive not only to meeting regional report — together with the team’s own pro- development objectives, but also to ensuring posals for these criteria — to collate all infor- the sound management of EU funds during mation pertaining to the project selection the upcoming programming period. mechanism under PDR 2021 – 2027 in one report for easier reference. The underlying rationale for the technical as- sistance under RAS Component 3 was twofold: The team has also formulated and shared with MRDPW proposals and recommendations • to provide MRDPW with a just-in-time, on-re- with regard to the mechanism for the in- quest support to adjust guideline docu- volvement of Regional Development Coun- ments, the strategic framework and leg- cils (RDCs) in the implementation of the new islative documents related to the planned integrated approach, and the structure of the implementation of the new integrated territo- PDR 2021 – 2027 to name just a few. rial approach to EU-funded investments, and The applicability of the advisory assistance • to provide MRDPW with new ideas and in- provided to MRDPW has been the team’s key sights, proposals and recommendations focus and firm commitment. The ongoing re- with the aim of fine-tuning the opera- views and proposals have enabled the WB team tional modalities of the new integrated to support the GoB/MRDPW with regard to: Part 1 Introduction 11 • improving the strategic framework to component. In doing so the team has strong- more effectively promote the integrated ly relied on good communication with the territorial approach and to establish sol- MRDPW’s team ensuring timely exchange id groundwork for formulating and imple- of documents, and regular opportunities to menting integrated investments in select- discuss topics under review to better under- ed intermunicipal territorial units; stand the MRDPW’s approach and objectives, as well as of the other key stakeholders. Start- • undertaking a phased approach to the ing in March 20202, COVID-19 pandemic and empowerment of RDCs to allow sufficient its implications have negatively impacted time to build capacity considering various the possibility to meet with MRDPW team, opinions, concerns and ideas from a broad and with other stakeholders in RAS Steer- spectrum of national and subnational level ing Committee, as well as other formats, stakeholders at an early stage of the devel- but regular on-line exchanges continued opment of RDC structure and roles; supporting the review process. It is import- ant to underline that the provision of regu- • streamlining the mechanism for the in- lar feedback and adequate guidance from volvement of RDCs in regional policymak- MRDPW was crucial to ensure that adviso- ing and their structure while safeguarding ry assistance was tailor-made to the specif- against potential conflicts of interest; ic needs of the Ministry, adequately reflect- ing the key assumptions, objectives and de- • considering a more targeted approach to velopments regarding the conceptualization planning support measures under PDR of the new policy paradigm and its foreseen 2021 – 2027 conducive to effectively tack- implementation framework. ling territorial development disparities and imbalances; Given that the formulation of MRDPW’s stra- tegic approach is heavily influenced by the • supporting the process of formulating the EC’s objectives and modalities of the cohe- operational modalities of the new inte- sion policy for the years 2021 – 2027, the World grated approach through the fine-tuning of Bank team aimed to acknowledge and flex- ITI Guidelines and the mechanism for eval- ibly adjust to internal dynamics of the pro- uation and selection of ITI concepts. gramming process. The provision of high quality, comprehen- The next section of the report provides an over- sive, and just-in-time advisory assistance view of all conducted reviews. It is followed remains at the core of the team’s approach by the full content of all reviews undertaken to fulfilling tasks under this particular RAS in the period of June 2019 to November 2020. PART 2 OVERVIEW OF INDEPENDENT REVIEWS UNDERTAKEN IN THE PERIOD 06.2019 – 11.2020 14 Independent reviews of the strategic approach to the Programme The table below provides an overview of all reviews, and proposals undertaken from June 2019 until November 2020 . TABLE 2.1 Overview of all reviews and proposals undertaken Date of submis- No. Title of the document sion to MRDPW 1. Review of the broader operational framework for the implementation of the 30/11/2020 integrated territorial approach (Partnership Agreement 2021 – 2027, PDR 2021 – 2027, sectoral Programs 2021 – 2027) 2. Suggestion for solutions. Review of the framework for the development and 19/07/2020 implementation of ITI concepts 1. Review of the draft Integrated Territorial Strategies for the Development of 24/04/2020 NUTS 2 regions 2. Independent review of the first draft of the Program Development of the Regions 15/04/2020 2021 – 2027 3. Review of guidelines for the preparation of ITI concepts — independent opinions 26/02/2020 and recommendations 4. Review of the draft of the updated National Concept for Spatial Development of 14/02/2020 Bulgaria during the period 2020 – 2025 5. Review of the draft concept for the evaluation and selection of concepts for 10/02/2020 Integrated Territorial Investments at the level of Regional Development Councils (RDCs) during the programming period 2021 – 2027 6. Proposal of survey on ideas for territorial investments to be financed from EU 16/01/2020 Structural Funds under the 2021 – 2027 programming period 7. Proposal of questionnaire for MAs 16/01/2020 8. Review of the PDR 2021 – 2027: Suggestions on an alternative structure for prior- 08/10/2019 ity axes and the implementation mechanisms for the new regional approach 9. Review of the first draft ITI guidelines prepared by the MRDPW 30/09/2019 10. Report summarizing initial findings from strategic consultations 26/09/2019 11. Review of the proposed RDC structure and composition prepared by MRDPW 26/09/2019 12. Proposal of possible options for structuring Bulgaria’s regional level / scenarios 13/06/2019 for RDCs — discussion note for SC meeting PART 3 FULL REVIEWS UNDERTAKEN 06.2019 – 11.2020 18 Independent reviews of the strategic approach to the Programme Review of the broader together seamlessly to support the implemen- tation of impactful, multi-sectoral, and terri- operational framework torially-sensitive investments. for the implementation of the integrated The aim of this review is to understand how the key assumptions of the new regional pol- territorial approach icy paradigm are reflected in relevant oper- (Partnership Agreement ational documents, and what arrangements 2021 – 2027, PDR are envisaged to support territorial invest- ments across Programs to maximize their de- 2021 – 2027, sectoral velopment impact for the regions. The find- programs 2021 – 2027) ings from this review lead into a set of rec- (30/11/2020) ommendations aimed at supporting MRDPW in the ongoing programming process. Introduction I. Draft Partnership Agreement The Bank team has conducted an indepen- 2021 – 2027 dent review of the latest drafts of the op- erational documents, which will consti- 1. The description of the new integrated tute the framework for the implementa- territorial approach tion of the integrated territorial approach in Bulgaria during the programming period The integrated territorial approach as a 2021 – 2027. The scope of this review covers: new paradigm of regional policy support- the Partnership Agreement between Bulgar- ed through EU Cohesion Policy funding ia and the EC, the Program Development of and its key, strategic modalities is still the Regions (PDR), and five1 out of seven Pro- to be sufficiently described in draft Part- grams contributing to the implementation of nership Agreement (PA). This missing ele- the integrated approach (Program for Edu- ment from the draft PA makes it difficult for cation (PE), Human Resources Development the reader to understand the nature of the Program (HRDP), Program for Environment new approach (territorial, multi-fund with (PEnv), Competitiveness and Innovation in earmarked funding from contributing Pro- Enterprises Program (PCIE), and Research, In- grams), as well as the scope and objectives of novation and Digitalization Program (RIDP)). interventions envisaged under Policy Objec- The drafts were provided by the MRDPW. tive 5, and thus also misses the importance of a sound cross-Program coordination mecha- This was the first opportunity for the Bank nism to ensure good management of EU funds team to analyze drafts of relevant opera- and their smooth absorption. The draft PA also tional documents in detail, as previously only doesn’t yet present the added value of the new the draft PDR was the subject of a thorough approach and its potential to generate con- review by the Bank team in Spring 2020, as siderable development stimulus for Bulgari- other drafts were not yet available. The Bank an regions, which will be important consid- team would like to highlight the importance ering the well-known growing inter-and in- of such a horizontal review given the new in- traregional-disparities, and generally chal- tegrated territorial approach is a first major lenging development trends. attempt at bringing different Programs and Funds together to synergistically generate Recommendation: substantial development benefits for Bulgar- ian regions. A coherent and well-aligned op- It is recommended to expand the descrip- erational framework is crucial for ensuring tion of the strategic objectives and horizon- that this ‘system of connected vessels’ works tal operational modalities of the integrated 1. Draft Strategic Plan for Agriculture and Rural Development (SPARD) and Maritime, Fisheries and Acquaculture Program were not provided for the review. Part 3 Full reviews undertaken 06.2019 – 11.2020 19 territorial approach to clearly show how the be clarified. On the one hand, the Integrated Government of Bulgaria intends to tack- Territorial Strategies for the Development of le the challenges of territorial disparities, NUTS 2 regions (ITSDs) are identified as the key actively seek complementarities between strategic framework that those investments Funds and Programs, and generate devel- must comply with and contribute to their ob- opment synergies. jectives, and this approach is in line with ter- ritorial, bottom-up character of PO5. On the other hand, it is stated that road infrastruc- 2. The description of the coordination ture, education, healthcare, social policy and mechanism for the new integrated culture the interventions will be financed territorial approach only if they are consistent with a prior map- ping conducted by the relevant authority for The description of the coordination mech- the needs in the sector. However, the sourc- anism for the integrated approach is still to es for this sectoral mapping are not identi- be described in the draft PA. In order to be fied, and it is not clear if it has already taken in line with the stipulations of art. 8 of new place or whether it has been duly reflected in CPR, the PA should include the description of ITSDs. The issue here is twofold: coordination, demarcation and complemen- tarities between Funds and Programs. The 1. This may lead to questions regarding issue of demarcation is still to be addressed in the territorial nature of PO5 interven- the document; at present there are only gen- tions as they may be perceived as a tool for eral statements informing that complemen- supporting primarily sectoral objectives, tarities between funds and programs will be which — in a way — defeats the purpose of looked for, which does not seem to sufficiently introducing this new territorial policy, and address this key issue. Given the significant multi-Fund and multi-Program nature of the 2. this internal contradiction in the ap- new integrated approach it will be important proach may generate considerable chal- that these aspects are adequately addressed lenges for the prospective beneficiaries in future versions of the PA. with regard to investment planning, as they will have to prove their projects comply Recommendation: with the sectoral mapping to be deemed eligible for funding. It is recommended to include a description of the envisaged coordination mechanism Recommendation: for the new integrated territorial approach. This would help provide the evidence base for It is recommended to clarify that the ITSDs a well-thought out and effective implemen- and PIDMs — as the relevant territorial strat- tation framework to support this novel and egies in the understanding of art. 23 of the challenging approach, ensuring sound man- new CPR — constitute the primary strategic agement of EU funds and supporting smooth point of reference for all investments financed absorption of available financial resources to under PO5. Sectoral objectives should be pri- the benefit of targeted territories. oritized with regard to investments financed under the remaining four policy objectives from the contributing Programs, as the sec- 3. Territorial vs. sectoral needs toral mapping of needs under those programs, and objectives if available, is to be used as the official source of information on sectoral mapping compli- There appears to be an incongruence in ance by prospective beneficiaries. We believe the described approach to the mapping of this approach would ensure an appropriate needs to be supported via territorial inte- mix of bottom-up (territorial) and top-down grated investments (territorial/bottom-up (sectoral) measures to support the develop- vs. sectoral/top-down), which will need to ment of regions. 20 Independent reviews of the strategic approach to the Programme 4. The contribution of the Strategic • It is recommended to adapt UMIS to also Plan for Agriculture and Rural Develop- cover integrated territorial investments fi- ment to the new integrated territorial nanced from the SPARD to ensure effective approach and its broader implications management of funds and the monitoring processes. Introducing the Strategic Plan for Agricul- ture and Rural Development (SPARD) as one • It is recommended to put in place arrange- of the Programs contributing to the inte- ments that will enable prospective benefi- grated approach is a significant and wel- ciaries from rural municipalities to become come development. This can considerably partners under partnerships with the 10 big- strengthen the impact of integrated invest- gest urban municipalities (PA1 of PDR) and ments for different territories, help support ITI partnerships (PA2 of PDR) to ensure that functional linkages and encourage trickle the advantages stemming from their eligibil- down or multiplier effects for rural munici- ity under PDR are fully exploited to the ben- palities tackling challenges stemming from efit of targeted territories. So far, the latest the rural-urban divide. It also effectively ad- versions of PA1 and PA2 guidance for ben- dresses the problem of ‘white spots’ (present eficiaries do not envisage such a possibili- in the previous programming period) and en- ty. Conversely, it is recommended that the suring a comprehensive territorial coverage relevant parties consider if and to what ex- of all municipalities in terms of access to fi- tent joint urban-rural partnerships could be nancing for the implementation of the inte- supported under SPARD to strengthen func- grated approach. It is envisioned that the PDR tional linkages and to address challenges re- and SPARD will fund mirror infrastructural lated to the rural-urban divide. measures, and the demarcation between the two will be territorial (SPARD will support 215 • It is important to ensure that a sound coor- rural municipalities, and PDR the remaining dination mechanism is put in place to avoid 50 urban municipalities). As the draft SPARD any risk of the double financing of invest- was not provided to the Bank team as part of ments in rural municipalities under the PDR the package of draft Programs to review, this and the SPARD, to monitor contracting, and review does not cover an assessment of how implementation of projects, and to support the integrated approach is reflected in the monitoring and evaluation of project pack- Program document, what exactly will be ages, as well as the overall integrated terri- the SPARD’s contribution to its objectives, torial approach. and how this new approach will be consid- ered vis a vis the CLLD instrument which is similar in nature to the ITI concepts under 5. Extra funding for the North West the PDR (territorial, multi-Fund). and North Central regions Recommendations: The draft PA foresees providing the North- West and the North-Central regions with The inclusion of the SPARD as one of the instru- extra financing on a priority basis. Consid- ments supporting the integrated approach ering the socio-economic situation observed should be reflected in the cross-Program coor- in these regions and development trends it dination mechanism to ensure swift and coor- appears to be a justified approach, and this dinated implementation of the envisaged sup- additional funding has been reflected in the port measures. financial tables provided in draft PDR. • It is recommended that SPARD MA is repre- Recommendation: sented in the Coordination Council for the Territorial Approach (CCTA), and actively It is recommended to closely monitor how ef- involved in coordination, implementation, fective the beneficiaries from the two North- monitoring and evaluation of the new inte- ern regions are in absorbing funds to support grated approach. the implementation of impactful investments. Part 3 Full reviews undertaken 06.2019 – 11.2020 21 Providing extra funding will not suffice if conducted a comprehensive review of the first the potential beneficiaries lack the capacity draft of PDR in April 2020, and formulated rec- to correctly identify partners, reach consen- ommendations with a view to support MRDPW sus and develop and implement joint invest- in the programming process. Together with ment packages. External advisory support will the findings and recommendations that can be required to support them in this endeav- be found below they constitute a comprehen- or to reap full development benefits from the sive independent review of the strategic ap- available funds. proach adopted by the MRDPW for the pur- poses of the upcoming programming period. 6. Technical Assistance under PA: capacity building measures targeted 1. Description of the new integrated at Regional Development Councils and approach and the mechanism adaptation of UMIS for its implementation The section on Technical Assistance (TA) pro- The description of the new integrated ap- vides important information about the types proach does not yet fully take into account of bodies and processes that will be supported the novel character of the new policy para- to ensure sound management of EU funds and digm, and its broad application under the PDR. strengthen the capacity of key stakeholders. The following key information about the mo- It does not, however, refer to the need for dalities of the new approach was not included: targeted capacity building measures for the restructured Regional Development Councils • exactly which programs will contribute to (RDCs) and the much-needed adaptation of the new approach; UMIS to support implementation of the inte- grated territorial approach. • how big is their contribution (as % of Pro- gram allocation, and exact figure per Pro- Recommendations: gram and in total); • Given the importance of building the capac- • what is the idea behind the integration of ity of RDCs as important territorial bodies projects under an ITI concept and how strict/ involved in the implementation of the inte- flexible this is going to be assessed during grated approach, it is recommended to ex- the selection and implementation stages; plicitly mention the need to support their ca- pacity as part of the horizontal TA measures. • how the implementation process will be coordinated across Programs and in coop- • When referring to the TA for the required eration with relevant territorial bodies to development of UMIS to effectively support ensure good management of EU funds and the management of EU funds during the their timely absorption. upcoming programming period, it is also recommended to include a reference to the Recommendation: need for its adaptation to effectively man- age the implementation of integrated proj- It is recommended that the abovementioned ects and the overall new territorial approach. elements are clearly described in the next ver- sion of the PDR to clearly present the inter- vention logic supported by a robust coordi- II. PDR 2021 – 2027 nation mechanism. The PDR 2021 – 2027 introduces a new integrat- ed regional approach to financing regional de- 2. Rural municipalities and their eligi- velopment. This takes the form of Integrated bility under the PDR Territorial Investments comprising a package of projects funded from different Operational The draft PDR provides opportunities for the Programmes in Bulgaria. The Bank team has inclusion of rural municipalities in integrated 22 Independent reviews of the strategic approach to the Programme projects under Priority Axis 1 (PA1) and Pri- in project partnerships with their infra- ority Axis 2 (PA2): structural projects under the SPARD. The list of rural municipalities eligible for fund- • the functional zones, identified in the ITSDs ing under PA1 and PA2 should be provided and the links between different territories in the draft PDR to better define the territo- and settlements will be in the investment rial scope of envisaged investments depend- focus of integrated investments; ing on their thematic scope (e.g. with regard to investments in health infrastructure it is • PA1 and PA2 introduce the possibility to fi- envisaged that all rural municipalities will nance under PDR investments in industri- be eligible, not just the ones neighboring ur- al zones / parks, road infrastructure and ban municipalities). sustainable urban mobility for neighboring rural municipalities to develop functional zones and to strengthen functional links. 3. Inter-jurisdictional / inter-municipal cooperation and functional zones However, the participation of the rural mu- nicipalities in the integrated approach is Although the fundamental idea behind the still not fully clear according to the stipula- integrated approach implies a strong regional tions of draft PDR. PA1 and PA2 do not specifi- dimension and socio-economic impact reach- cally identify the partnerships between urban ing beyond a single municipality, there is a rural municipalities as an instrument for de- limited description of the process for in- velopment. The draft PDR only identifies cer- ter-municipal cooperation in the draft PDR. tain types of investments that can be support- Only one sentence directly refers to this is- ed in neighboring rural areas. The definitions sue: ‘Partnership between different municipalities of the integrated territorial approach are fo- is not a mandatory condition, but it is necessary cused specifically on different sectors and and will be applied to projects targeting wider areas’ stakeholders rather than certain types of ter- (p. 19). The target value of the output indica- ritories. Their scope remains abstract — they tor regarding the expected number of inte- are said to be targeting territories with com- grated projects under PA2 may imply that in- mon characteristics and/or development po- terjurisdictional cooperation will in fact be tential, including the most appropriate com- necessary to take advantage of the available bination of resources and measures to be used funding (there are 40 eligible urban munici- to achieve a specific objective or a priority of palities — plus an undisclosed number of ru- an ITSD. This mentioned contribution to the ral municipalities, and just 24 integrated proj- regional strategies implies the idea of inte- ects envisaged). grated projects in support of larger function- al territories including both urban and rural When reflecting on the mentioned ‘wider ar- municipalities, going beyond only ‘adjacent’ eas’, the reference to functional zones could rural municipalities. shed more light on the potential inter-mu- nicipal scope of integrated investments. The Recommendation: draft PDR introduces them without a precise definition and their role in shaping the scope The Bank team recommend that the PDR in- of partnerships, types of investments and clude a more detailed explanation of the en- boundaries of targeted territories remains visaged eligibility of selected rural municipal- largely unclear. ities for funding under PDR. As such, it is rec- ommended that both the strategic part of draft Recommendations: PDR strategy, as well as the descriptions of the two priority axes are complemented with short • For the sake of the internal coherence of the paragraphs, providing more details about PDR it is recommended to either reassess the potential territorial scope of integrat- the approach to inter-municipal coopera- ed projects. These paragraphs should also tion making it an obligatory requirement provide clear information about the pos- for PA2 or to change the target value of sible participation of rural municipalities the mentioned output indicator from 24 Part 3 Full reviews undertaken 06.2019 – 11.2020 23 to 40 to envisage at least one ITI concept infrastructure investments in a group of ur- per eligible municipality. Taking into ac- ban-rural municipalities under a given devel- count the challenging and largely untest- opment axis according to the NCSD and the ed nature of inter-municipal cooperation ITSDs. It remains unclear which program it is advised to choose the second option, will finance which infrastructural measures as the ITI concepts with supra-municipal and where and who will be the beneficiary. territorial scope could still be prioritized through PA2 project selection criteria. Recommendation: • It is recommended that the first mention The issues regarding specific modalities for of ‘functional zones’ is accompanied by the demarcation mechanism should be co- a simple definition and information on ordinated between the two Programs and whether these implied zones coincide with clearly addressed in the next versions of the the zones identified in the NCSD and ITSDs; PDR and SPARD. and whether they can be modified especially in relation with the social zones, which in- clude only rural municipalities which may 4.2 PDR and other contributing question their applicability for the integrat- Programs ed approach. The demarcation line between PDR and the rest of the contributing Programs has been 4. Demarcation between Programs referred to in draft PDR in the following way: involved in the implementation of the ‘Appropriate demarcation and complementarity be- integrated approach tween programs and the lack of double funding will be ensured at the level of pre-selection of ITI con- 4.1 PDR and SPARD cepts in the regional development councils and ad- ditionally during the project selection process carried The demarcation between the two programs out by each MA’. It is recommended that the is not fully addressed, and a clear demarca- demarcation line is established as a hori- tion line between the PDR and the SPARD is zontal arrangement for all Programs con- still to be provided. The draft PDR stipulates tributing to the integrated approach, and that interventions under PA1 and PA2 of PDR the compliance of individual projects un- will finance roads of I, II, III and IV class on der ITI concepts is only verified at the lev- the territory of urban municipalities and the el of RDCs (1st stage of assessment) and MAs SPARD will finance municipal roads. But as (2nd stage of assessment). This recommenda- already noted the draft PDR will support in- tion was already formulated and shared with vestments in industrial zones/parks, road in- MRDPW in April 2020, which supported it, but frastructure (without specification about the these changes were not yet introduced to the category of the road) and sustainable urban latest draft of PDR. mobility in neighboring rural areas. In terms of demarcation between the dif- There are also discrepancies between the ferent programs the latest version of PA2 texts of the draft PDR and PA2 Guidelines. Guidance for beneficiaries provides a much In the draft PDR it is stated that the Program more comprehensive scope of information in will support investments in industrial zones/ comparison with the draft PDR. For the time parks, road infrastructure and sustainable ur- being the draft PDR provides only fragmented ban mobility while the PA2 Guidelines list in- descriptions addressing this issue regarding dustrial zones, road infrastructure, urban mo- several thematic types of interventions. bility and additionally healthcare infrastructure. The draft PDR states that these investments Recommendation: will be located in the neighboring rural ar- eas while there is no such limitation in the It is recommended to align the scope of in- PA2 Guidelines. It is recommended that in- formation with regard to demarcation be- deed there are no such limitations preventing tween the draft PDR and PA2 Guidance for 24 Independent reviews of the strategic approach to the Programme beneficiaries. It is recognized that the mo- healthcare will be similar to that dedicated dalities of the demarcation mechanism may to public spaces. Moreover, the total alloca- require further adjustments as the program- tion of EUR 32.3 million for healthcare in- ming processes continue. vestments under PA1 does not seem suffi- cient taking into account that there are ten eligible large urban municipalities, as well 5. Thematic scope of interventions as rural municipalities. under PDR It is recognized that MRDPW’s intention was PA1 and PA2 Guidance for beneficiaries pro- to provide future beneficiaries with a broad vide more comprehensive information on range of types of interventions to choose from the thematic scope and types of interven- to formulate their ITI concepts, which would tions envisaged under the PDR than the adequately reflect their territorial needs and draft Program itself. It might be worth con- objectives. This approach however has certain sidering aligning these two types of docu- implications for MRDPW as it could be held ments as far as the level of detail is concerned accountable by the EC for meeting target val- to facilitate effective communication about ues of all Program indicators. the envisaged scope of interventions. The comments below are formulated based on the Recommendations: review of both the draft PDR and PA2 Guidance for beneficiaries. It is recommended to: The thematic scope of interventions to be • reconsider the approach to Program in- funded under PDR is broad, and it covers dicators and reduce their number and/or diverse sectors, including energy efficien- lower their target values; cy, health infrastructure, tourism, measures supporting economic activity, educational • reconsider allocation dedicated to prior- infrastructure, tourism and cultural heri- ity sectors to meaningfully support im- tage to name just a few. Moreover, it is envis- pactful investments through substantial aged that future investments in these the- funding or — if it is not possible — to de- matic areas will support national sectoral lete references to those sectors as priority objectives formulated by relevant central ones (without sufficient funding such state- level bodies and covered by an appropriate ments are not well substantiated). set of Program indicators. The variety of thematic areas for intervention coupled with a relatively small number of fore- 6. Number of integrated projects  seen integrated projects under PA2 (just — target values 24) might suggest that the scope of a model ITI concept would have to resemble a ‘mini The rationale behind the estimated target- Operational Program’ in terms of the com- ed values for integrated territorial develop- plexity of included interventions and their ment projects under PA1 and PA2 needs fur- thematic and territorial coverage to help ther review or explanation. The target for PA1 achieve the objectives of PDR . Additionally, is 33 and for PA2 is 24 although the financial the investment needs in those sectors are framework of PA1 amounts to 404,460,600 EUR substantial, and it is not likely that the PA2 and for PA2 to 1,094,409,400 EUR; the num- allocation will be sufficient to make a major ber of beneficiaries under PA1 is 10 (which impact for all eligible municipalities (urban translates into roughly 3 integrated projects and rural). A good example is the foreseen per 1 municipality) and for PA2 is 40 (4 inte- support for the healthcare sector. It is iden- grated projects per region, and not all eligi- tified as a key priority for PDR along with en- ble municipalities may be able to implement ergy efficiency, and extensive analysis of the their own ITI concepts, unless they have an challenges identified in this sector is provid- inter-municipal scope); the PA1 provides the ed. However, the actual allocation under PA1 possibility to fund individual projects while and PA2 shows that the expected funding for PA2 does not. Part 3 Full reviews undertaken 06.2019 – 11.2020 25 Recommendation: the establishment of partnerships, etc.); • activities related to the implementation It is recommended to reconsider the meth- of the RDC Public Consultations Unit odology for estimating the target values for functions (conducting public consulta- the above-mentioned indicators as they seem tions and presentations related to the dis- too low. cussion of the submitted ITI concepts); • obtaining additional external expertise within the RDC Pre-selection Unit when 7. The scope of measures to be assessing ITI concepts.  financed under PDR Technical Assis- tance (TA) priority Axis 2. Offices and material equipment  • adequate office spaces and office furni- The TA priority under the draft PDR does not ture (including. offices for meetings with sufficiently cover all required measures with potential beneficiaries); regard to the capacity building needs of key • office equipment (including. laptops, stakeholders (primarily RDCs and prospec- scanners, printers, video conferencing tive beneficiaries). (VC) equipment, etc.); • relevant information and communica- Recommendations: tion resources (including Internet con- nection); • It is recommended to include targeted TA • capabilities for regional travelling, etc. for PDR beneficiaries to support the de- velopment stage of ITI concepts/integrat- 3. Strengthening the administrative ca- ed projects — in line with the stipulations pacity of RDCs from the draft PA. The proposal for an Ad- • trainings according to an approved RDC visory Hub — as formulated by the Bank annual training plan for the RDC mem- team and submitted to MRDPW on Novem- bers of the core and the extended team, ber 13, 2020 — may also be used to further as well as of RDC Expert Units (training develop this section. courses, seminars, exchange of experi- ence with other institutions with rele- • It is recommended to delete reference to vant national and international experi- TA for IBs as the current draft implementa- ence, etc.). tion structure of PDR does not envisage IBs. • It is recommended to include funding • It is recommended that the scope of the through TA for measures to support ben- PDR TA priority is supplemented with a de- eficiaries in the development and imple- tailed description of the following activ- mentation of ITI concepts, such as: external ities envisaged to support the capacity technical assistance throughout all stages of building of RDCs: the ITI concept lifecycle, financing of staff cost and running cost of the ITI partner- 1. Operations of the RDCs, such as: ship, for which a partnership management • organizing and holding the RDC sessions;  body should be established (mirroring the • activities of the RDC Secretariat;  TA approach for the CLLD where TA is avail- • RDC documentation archiving;  able for the establishment and running of • activities with regards the implementa- Local Action Groups). tion of the RDC Mediation Unit functions (incl. activities for the implementation of the RDC Information Strategy; awareness/ 8. The establishment of a coordinating information campaigns and information body for the integrated approach activities in connection with ITI; orga- nizing trainings, public discussions, etc.;  As already mentioned under point 1 in this • preparation and publishing of materials section, the coordination mechanism for the in mass media and social media; activi- new integrated territorial approach is not de- ties for coordination and facilitation for scribed in the draft PDR. However, in a section 26 Independent reviews of the strategic approach to the Programme dedicated to the legal framework relevant for implementation of the new approach that the implementation of the PDR it is stated that might be worth considering as the program- an amendment of the Law for Managing EU ming process continues, and the modalities Funds (ESIF) is envisaged that will be related of the implementation framework are fur- to the establishment of a coordination body ther developed. and a mechanism for the implementation of integrated territorial investments in the pro- • Implementation modalities of the inte- gramming period 2021 – 2027. grated territorial approach do not seem to be sufficiently described in contribut- Recommendations: ing Programs, which makes the assessment of their robustness difficult. For example: • In line with the recommendations already formulated under point 1, it is recommended • It is not mentioned whether the alloca- to describe in more detail the key modal- tion dedicated to integrated territorial ities of the coordination mechanism, as investments will be divided into regional its sound design and smooth implementa- envelopes to create a level playing field tion will be one of the key success factors for all regions; for the new integrated approach. • There is not mention of how the selec- • It is recommended to clearly describe what tion process will be organized in order sort of a coordinating body is planned to to support timely contracting of projects be established (CCTA?) and what will be its which constitute elements of integrated added value for the coordination mechanism. packages of investments; and • Additionally, it is recommended to clarify • there are no indicators related to track- why a dedicated CoM Decree is not men- ing performance of integrated projects. tioned as the key regulation laying down the modalities of the coordination mech- It would be useful to reflect on these issues anism, but instead the amendment of ESIF in the next versions of the draft Programs Act. If these two legal regulations will be to provide a fuller picture of the implemen- interrelated it would be useful to refer to tation modalities for the integrated territo- both of them in order to exhaustively iden- rial investments. tify the scope of required legal changes and pending new regulations. • Investments envisaged under the inte- grated territorial approach are not pro- grammed under dedicated priority axes III. Contributing Programs but are embedded in ‘regular’ priority 2021 – 2027 (excluding SPARD axis/axes of the contributing Programs which was not provided in the as one of the possible options for funding package of drafts Programs projects. Such an arrangement could make made available by MRDPW) these interventions less ‘trackable’, there- fore incorporating the following solutions might be considered: 1. General remarks • fast-track the application process of The review of draft Programs contributing project proposals constituting elements to the implementation of the integrated ter- of ITI concepts to ensure that their eval- ritorial approach revealed how the relevant uation, and contracting is not delayed as Managing Authorities intend to support in- it could put entire ITI concepts at a risk of tegrated investments envisaged under PA2 of non-performance due to the integrated PDR through the funding of individual proj- nature of investments; ects under ITI concepts. The Bank team would like to share the following key findings and • track the absorption of the dedicated their potential implications for the effective allocation (10%) by regions to monitor Part 3 Full reviews undertaken 06.2019 – 11.2020 27 the performance and progress of regional clearly incentivized by e.g. prioritizing such stakeholders in applying and absorbing project proposals during the selection pro- funds, to identify non-performing ter- cess (awarding extra points under so-called ritories and consider undertaking tar- conclusive selection criteria or providing geted remedial actions. higher volume of maximum funding etc.). • It is not always clear whether the measures to be supported under a given Program as 2. Specific issues regarding individual part of the integrated approach can sole- Programs contributing to the imple- ly be implemented as part of an ITI con- mentation of the integrated approach cept or also as individual projects, so in- cluding them into ITI concepts is just an Program for Competitiveness and Innovation option. It is important to clearly commu- in Enterprises (PCIE) nicate it in Programs, as the difference for future beneficiaries is substantial and may There is no demarcation with PDR with respect significantly impact their decision-mak- to investments in industrial parks. Such an ing about seeking ways to fund their proj- overlap was identified between these two ects. It is likely that if the beneficiaries had Programs, as they both support the develop- an option to either apply for funding with ment of such parks under the integrated ap- a project proposal under an ITI concept, or proach covered by PDR PA2. This issue should apply with the same project proposal but be addressed and resolved in the next ver- individually, they would settle for the lat- sions of Programs. ter. This option might also be more favor- able for participating MAs, as it would mean There is a general question with regard to the less involvement with the evaluation of ITI coordination between CLLD interventions concepts at the level of RDCs (as individu- and ITI concepts. In particular, under PCIE al projects would be submitted directly to two types of measures which will be financed them), and less risk if an ITI concepts fails under the ITI approach (the ones attributed due to the non-performance of one of its to Policy Objective 1/Specific Objective (i) constituting projects, and all other grant and Policy Objective 1/Specific Objective (vi)) contracts must be terminated as a result which will be financed under the CLLD ap- (in line with MRDPW’s intended approach proach as well. The CLLD 2021 – 2027 approach of strong integration of the projects under will be implemented on the whole territory an ITI concept during the implementation of the country (including rural areas and ar- stage). But of course, it would not be bene- eas with specific characteristics defined in the ficial for the integrated approach, which re- NCSD 2013 – 2025), except for the cities with lies on multi-sectoral investments financed a population of over 30,000 inhabitants. It is from different Programs to generate expect- therefore imperative that effective coordi- ed development outcomes for the regions. nation and complementarity between both territorial approaches is ensured, in par- As the new approach will be challenging for ticular in the context of PA2 of PDR. beneficiaries it seems justified to provide incentives to encourage their involvement Program for Education (PE) and Human Re - with integrated projects. Two options can sources Development Program (HRDP) be considered: PE and HRDP will support important long- • Option 1: specific types of interventions can term policies in sensitive areas such as the solely be funded if they constitute projects labor market, social inclusion and inclusive under ITI concepts, or education of specific and vulnerable target groups. These measures are to be implement- • Option 2: there are two possibilities to fund ed solely by applying the integrated approach. projects: (i) as individual, standalone proj- In light of that, attention should be drawn to ects and (ii) as project constituting an ele- the potential negative effects that could ment of an ITI concept. The latter should be occur in terms of achieving the objectives 28 Independent reviews of the strategic approach to the Programme of the policies envisaged in the described under the described specific policy areas. programs, if such an arrangement is indeed The establishment of an appropriate coor- put in place. Two major risks were identified: dination and control mechanism between MRDPW and the PE and HRDP MAs would be • the envisaged measures will not be proper- essential. It could help ensure both the bal- ly implemented by beneficiaries of ITI con- ance between the types of integrated projects cepts; or to be included in the ITI concepts as well as the types of ITI concepts to be implement- • the envisaged measures will not be recog- ed at the level of NUTS 2 regions. nized as a priority by the stakeholders in the regions and therefore not sufficiently • it is recommended that ITI concepts in the supported under ITI concepts to meet the applicable areas supported by the two pro- national objectives. grams are defined in advance. In this respect, to support the investment planning pro- In practice, this would mean that long-term cess it is recommended that a comprehen- policies in the described sensitive areas would sive analysis of regional needs and potential be left to be implemented relying solely on within the scope of the mentioned policy the own initiative of local stakeholders, such areas is provided in the ITSDs. as the local authorities. This could put at risk the chances for impactful interventions in • in the framework of the PDR, and in coor- support of the labor market, social inclusion dination with the Ministry of Labor and and inclusive education of specific and vul- Social Policy, the envisaged funds for social nerable target groups. infrastructure should be fixed, and there should be a requirement for each ITI con- A similar scenario could play out with respect cept to include a project with a social focus; to interventions in the field of inclusive edu- cation, including adult literacy, as well as the • the inclusion of projects, from the applica- dual education system, which is also intended ble areas of the described programs, into ITI to be extensively supported only by applying concepts should be incentivized through the the integrated approach. awarding of additional bonus points during the evaluation of ITI concepts. It is recommended to consider the follow- ing options for addressing these risks: • the establishment of a mechanism which Suggestion for solutions: would guarantee — through the appropriate review of the framework application of the “top-down” approach — the for the development and recognition of the described specific mea- sures under the two programs, as important implementation of ITI for the development of Bulgarian regions concepts (19/07/2020) Gaps/Risks Solutions / Questions Description / Justification ITI Development 1.1. Lack of compli- Defining the scope of ITI Concept Preparatory Stage ance of ITI Concepts and division of tasks The ITI concept development process will be carried out in 2 stages: an informal towards the strate- under the ITI Concept i) preparatory stage, followed by a ii) formal stage, which starts with the signing of gically prioritized Preparatory Stage the ITI Partnership Agreement. This 2-stage process could be appropriate to ensure regional needs/devel- preceding the formal that the ITI concept is established based on common needs/potential for development opment potential. establishment of the of the respective NUTS 2 Region Territory. It includes the public engagement / consul - ITI partnership tations as a building block for the development of the idea for an ITI Concept. Starting point The ideas for ITI concepts are based on the common needs and potential for develop- ment of a defined territory within a NUTS 2 Region in compliance with those prioritized in the ITDS and the respective Integrated Municipal Plans for Development and sec - toral strategies. Part 3 Full reviews undertaken 06.2019 – 11.2020 29 Gaps/Risks Solutions / Questions Description / Justification Who The idea of an ITI Concept could be initiated by eligible municipality/ies or other stake- holders who are potential partners — district authorities, civil society (NGOs, employ - ers’ organisations, syndicates, etc.), academia, business. The municipal authorities of the territories targeted by an ITI Concept should be encouraged to participate in the ITI Concept and are expected to play an active role in its development. How 1. Identify, for a defined territory of the NUTS 2 Region, common needs and poten - tial for development. 2. Based on the identified common needs/potential for development define the ITI Concept objectives. 3. Identify project ideasa which would best contribute to addressing the needs and unlocking the development potential based on: • Pre-defined projects prioritized in the ITDS • Own analysis and • results of public consultations. 4. Identify the potential partners to implement the ITI Concept projects ideas. In the context of compliance with the state aid rules, the projects to be implemented by partners — economic operators, will be selected, where applicable (unless the eco - nomic operator is unique), following a competitive procedure*. *Note: The legal issues related to the involvement of economic operators as ITI partners are rather complex and complicated. They require an in-depth legal analysis and would probably need the development of dedicated instructions to potential ITI applicants and relevant templates, which tasks are however beyond the scope of the WB Team’s assignment. So, the options of involvement of economic operators as ITI partners listed below should be considered to contain only a brief outline of the relevant issues. We can expect 3 cases (types) of involvement of economic operators as ITI partners, as each of these implies a different type of selection procedure: A) involvement of private economic operators who will — within the ITI con - cept — take part in the development of (public) infrastructure and/or the deliv- ery of public services (related or not related to such infrastructure). This type of involvement will constitute a public-private partnership (PPP) regulated by the Concessions Act. That is why, this type of involvement of private economic opera - tor should comply with the formal rules of the Concessions Act. This would imply that the selection of that private partner should be carried out in the preparatory phase of the ITI concept development under the formal rules of that Act by the pub- lic body in charge of that concession award. Under the Act the ownership of the assets to be thus developed can belong to the state, municipality or be private. This type of involvement raises additional questions, such as: i) should the public body in charge of that infrastructure and/or the delivery of that public service also be an ITI partner?; ii) to the extent that such project will be a profit-generating one, the grant funding envisaged under the ITI concept for this particular project should comply with the CPR rules on funding profit-generating projects; iii) in case of financial instruments shall be also involved – the manager of that financial instru - ment should also be involved in the selection of that economic operator. B) public or private economic operator who possesses an exclusive right to develop and operate certain public infrastructure or services. In such case on the grounds of the exclusivity of the latter there would be no need for a competitive selection procedure (the rules on profit-generation projects will still have to be met). C) In the specific case where an economic operator will be involved in develop - ing infrastructure and/or delivering services which are not covered by the Concessions Act, then this economic operator could — in principle — be selected without a competitive procedure (the grant award that economic operator would constitute ad hoc aid which is allowed by the State Aid rules). In this case, although competitive selection of those partners is not required, the WB team recommends a simplified competitive selection procedure based on objective selection criteria to be anyway applied, for the sake of transparency, fair competition and equal treat- ment of potential wanna-be partners. If MRDPW would like to follow this recom - mendation, the WB team could draft a sample of such procedure. The above forms of involvement of economic operators as ITI partners should be dif- ferentiated from the cases where economic operators who are not ITI partners will receive grant aid under the ITI. In that case, unless those economic operators are not explicitly included as ‘predefined beneficiaries’ in the relevant OP, the grant aid envis - aged under the ITI for those economic operators should be structured as and imple- mented through an aid scheme (a grant scheme). The RDC could take part in the assessment of project applications under that grant scheme, but the relevant OP MA will be the ultimate grant scheme operator. So, the involvement of the RDCs in that pro - cess should be subject to specific arrangements between the OP MA and the RDC (specific project assessment functions which will need to be explicitly included in the Delegation Agreement between the OP MA and the RDC). The ITI Concept Preparatory Stage finishes with the signature of the ITI Partnership Agreement. 30 Independent reviews of the strategic approach to the Programme Gaps/Risks Solutions / Questions Description / Justification 1.2 ITI Concept devel- RDC Mediation Unit The owners of the process of the ITI concept development are the potential partners. opment process is not provides support but They are responsible for and coordinate the ITI concept development process. clearly defined: role is not the owner of The RDC Mediation Unit provides support to the stakeholders and potential part- of the RDC Mediation the ITI development ners during the phase of ITI concept development through implementation of RDC Unit (MU) and objec - process. Information Strategy, supporting the communication between the potential partners, tive of the public con- identifying sources of financing, etc. sultations are not clear. 1.3 Risk of compro- Advisory Hub — focal Advisory Hub for Municipalities mising the RDC mech - point for expertise The suggested Advisory Hub is a solution mitigating the risks resulting from: anism and delaying and systemic ‘advo- the ITI application as cate’ of the local • the low capacity of the RDC Mediation Unit and identified risk with respect to conflict a result of Mediation government of interest situations arising from the foreseen direct engagement with ITI applicants Unit’s low capacity at the ITI concept preparatory stage, and and conflict of interest • the low capacity and lack of experience of prospective ITI applicants due to the nov- elty of the new integrated approach If the Advisory Hub were to be introduced as a systemic provider of expert support to municipalities — prospective ITI applicants the RDC Mediation Units would retain their functions with regard to the provision of procedural guidance and support to prospec- tive ITI applicants throughout the ITI concept development phase without advising on the substance of the prospective ITI concepts. Through a sustainable and comprehensive support mechanism ensuring sufficiently high and standardized quality, the Advisory Hub would also help to avoid potentially fragmented approaches of the support provided by the different RDC Mediation Units across regions. Who could be entrusted with the role of an Advisory Hub: I. An already existing suitable entity (e. g. National Association of the Municipalities in Bulgaria, others) or II. A new entity — NUTS 2 (or NUTS 3) Regional Development Agencies, to be estab - lished by interested district administrations and municipalities. Those could be financed under the TA axis of OPDR. III. Select Advisory Hub units through a public procurement tender, as the different regions will constitute separate advisory service lots. This option would enable to select the most qualified advisory service providers at the best price/quality ratio. The period of the procured advisory services could cover the whole programming period. Roles of the Advisory Hub: Focal point for expertise for municipalities during the ITI concept development: • seeking expert support in elaborating their ITI concepts: • strategic planning, and investment planning • legal advice • advise on financial engineering and potential financing schemes of investments • advise with regard to prefeasibility and feasibility studies, environmental impact assessment, sustainability etc. • looking for ways to share experience and knowledge, and network with other municipalities across the country to identify and solve common problems, look for inspiration, exchange experience with regard to ITI concept development and imple - mentation, search for potential partners etc. • seeking advice on how to combine different financing streams to support their planned investments (JTF, recovery facility, other OPs 2021 – 2027, including the Rural Development Program) to create synergies and seek complementarities. Academy for Partnerships’ to support the ITI Concepts implementation through: • centrally managed list of FAQs/Q&As that would standardize some solutions at the implementation stage • Inventory of ITIs allowing for sharing experience of other ITIs and copy/improve/ conceptualize own ITI ideas • suggesting new projects to be added to replacing the failed ones • legal disputes may arise between ITI partners that will require mediation, etc. Advocate’ of the local government, identifying systemic problems, challenges and potentials and proposing adequate policy responses to MRDPW and other key players at the central level.  RDC Mediation Unit functions (if Advisory Hub is established and takes on the pro - posed competences): • to support ITI applicants by providing guidance only with regard to the formalities of establishing an ITI partnership (including the competitive procedure for selecting partners – if applicable) and of submitting the ITI concept application. • would not support beneficiaries in terms of substance of the ITI concepts the RDC Mediation Units will remain impartial, credible, and avoid conflict of interest situa - tions, while still providing valuable advice to prospective ITI applicants. Part 3 Full reviews undertaken 06.2019 – 11.2020 31 Gaps/Risks Solutions / Questions Description / Justification Potential future role of the Advisory Hub: The Advisory Hub could over time establish its regional offices in NUTS 2 regions, which could either be the cornerstone of: • fully fledged RDC Offices (if decentralization is to materialize as a major policy reform) or • professional Regional Development Agencies (that could later on assert the role of regional IBs with deconcentrating processes taking place - instead of decentralization). 1.4 Lack of rele- Targeted TA for ITI Provision of a comprehensive and adequately targeted Technical Assistance (TA) vant experience development pro- support for: and uneven capac- cess — considering • Advisory Hub (if established) ity within the poten- and using the capac- • Eligible municipal authorities for ITI concept development tial ITI beneficia - ity of the current 29 • RDC Mediation Units ries could negatively IBs eligible under PA2 • RDC Selection Units impact the absorption • MRDPW regional branches rate under PA2 OPDR • ITI partners during the ITI concept implementation and coordination. 2021 – 2027 and Targeted, two-pronged TA support to municipalities: result in failure to gen- • Good performing cities (current IBs under OPRG 2014 – 2020) — ‘fast track’ erate expected devel- approach to ‘refreshing’ their integrated plans to facilitate the formulation of ITI con- opment outcomes. cepts in cooperation with relevant partners • New 11 eligible municipalities and lagging behind cities — IBs under OPRG 2014-2020. Train the trainers • Training of Trainers approach with good performing 2014 – 2020 OPRG IB cities training the less capacity next generation municipalities; using leading international experience Making good use of the capacity and expertise accumulated by 29 IBs under OPRG 2014 – 2020 The IBs have the potential to become natural leaders of the integrated approach because they already have: • integrated development plans in place on which they can build on new investments and identify ways of engaging other stakeholders as partners • administrative capacity accumulated as IBs • experience with planning and implementing EU-funded investments How could this potential be used to kickstart the new programming period and ensure swift uptake of funds under PA2 of OPDR 2021 – 2027? • putting in place a ‘fast track’ approach requiring tailor-made TA to the IBs • providing targeted advisory support to ‘refresh’ integrated plans to include partners and ideas for integrated investments • This would allow the less experienced 11 municipalities (also supported by tai- lor-made TA), more time to prepare their ITI concepts and build sufficient capacity for their implementation. 1.5 Lack of sufficient Pre-defined ITI flag - Introducing pre-defined flagship ITIs with earmarked funding could incentivize pro - incentives for pro- ship projects spective applicants by reducing uncertainty and encourage more ambitious and spective beneficiaries impactful scope of ITI concepts significantly contributing to meeting regional devel - to apply for funding opment objectives. Proposals for flagship ITIs will be formulated by the Bank team as under ITI mechanism part of the task related to the preparation of a proposal for strategic evaluation criteria and to promote coop- for ITI concepts. eration instead of competition 2. ITI Concept and Project Selection 2.1 Lack of compli- WB Proposal for The Bank team has prepared the first proposal for the strategic evaluation criteria of ance of ITI Concepts Selection and ITI concepts that will facilitate the assessment of submitted ITI concept applications towards the strate- Evaluation Criteria against key regional development objectives. gically prioritized regional needs/devel- ITI Implementation Each ITI Concept will have to include an ITI Concept Implementation Plan setting out opment potential. Plan crucial programming elements, including: • budget — level and sources of financing, participating funds, OPs and priority axes; • timeline for all projects • specific objectives to be included in the ITI concept, expected territorial results and indicators for measuring their achievement • coordination with other elements of the OPs and with the actions using the CLLD approach, projects under EAFRD and EMFF, etc. • description of the implementation and management system — structures and proce - dures at the level of the ITI partnership. 32 Independent reviews of the strategic approach to the Programme Gaps/Risks Solutions / Questions Description / Justification Once approved within The scope of competence of MAs OP at 2nd stage of assessment should be clearly the ITI Concept, the defined — the prerogative to reject project applications that constitute elements projects can only be of already positively assessed ITI concept only on the basis of identified formal subject to rejection inconsistencies. by the MAs at the 2nd stage assessment only because of for- mal inconsistencies 3. ITI Implementation and coordination 3.1 The mechanism The Lead Partner The ITI Coordination Team headed by the Lead Partner and responsible for coordina- for maintaining the and ITI Coordina- tion and monitoring operationally the ITI implementation should receive targeted TA. integrated nature of tion Team are respon- What will be the mechanism for the internal monitoring at the level of ITI the ITI concept imple- sible for coordinat- concept? — MRDPW mentation is not ing and monitoring What is the state of play of the National Platform in ISUN meant to support the clearly defined, which operationally the ITI ITI? — MRDPW creates risks for inef- implementation. fective coordination between the various Development of a The MAs should have at place a mechanism for coordination and synchronization actions and monitor- mechanism of co- during the ITI implementation to ensure smooth implementation of ITI concepts ing the ITI Concept ordination and syn- financed from different OPs, and to help maintain the integrated nature of ITI concepts implementation. chronization between should any problems arise with regard to any of the projects during the implementa - 3.2 Requirements with MAs during the ITI tion phase. regards to the sustain- implementation. ability of ITI results are missing. Establishment of re - Requirements regarding the sustainability of ITI Concept results should be estab- quirements with re- lished. The ITI Concept should include provisions ensuring the sustainability of ITI gards to the sustain- Concept results. A criterion enabling the evaluation of these provisions was included in ability of ITI Concept the proposed set of strategic evaluation criteria of ITI concepts. results. Establishing a mech- Defining a mechanism for maintaining the integrated nature of the ITI concept during anism for main- its implementation while ensuring flexibility in the context of the probable risk of some taining the integrat- projects failing to be successfully implemented. ed nature of the ITI Should there be ‘key projects/key features’ of the ITI concept that constitute the concept during its core of the ITI concept and without which it doesn’t make sense to implement the implementation. concept? — MRDPW What would be the MRDPW procedure for prelimi- nary coordination with the respective MAs of the economic oper- ator’s projects about their compliance with the State Aid Rulers? Will there be require - MRDPW ments envisaged by MAs for performance evaluation at the lev- el of individual project and at the level of ITI? a. The ITI Concept objectives and the project/project ideas included in it should follow the ITDS’, Integrated Municipal Plans for Development’s priorities as well as to sectoral strategies. Review of the draft regions (ITSDs), with April 20, 2020 indicat- ed as the deadline for submitting comments. Integrated Territorial Taking into account the prominent role ITSDs Strategies for the will play in the new integrated territorial ap- Development of NUTS 2 proach for the next programming perspective and that MRDPW intends to finalize the ITDS regions (24/04/2020) preparation by end of June 20202, the Bank team has reviewed the draft ITSDs and would Introduction like to provide our initial findings and rec- ommendations for MRDPW’s consideration. In March 2020 MRDPW launched public con- The review ends with a list of questions for sultations of six Draft Integrated Territori- MRDPW aimed to clarify some issues identi- al Strategies for the Development of NUTS 2 fied during the review. The Bank team would 2. When the strategies are to be endorsed by the Council of Ministers. Part 3 Full reviews undertaken 06.2019 – 11.2020 33 appreciate receiving feedback from MRDPW development interventions financed from on our review findings and these questions EU funds. to better guide future work under this Re- imbursable Advisory Services (RAS). This is It is stated in the draft Operational Programme important because the approach adopted un- that all types of activities to be supported un- der the ITSDs, with regard to the strategic de- der Priority Axis 2 of OPDR 2021 – 2027 (with velopment objectives of the NUTS 2 regions, the focus on territorial development of the NUTS 2 will influence future RAS tasks related to the regions) need to be identified in the ITSDs evaluation and selection mechanism for In- based on the mapping of territorial (‘bot- tegrated Territorial Investment (ITI) concepts tom-up’) and sectoral (‘top-down’) develop- and guidelines for both ITI beneficiaries and ment needs. The goal behind this approach is Managing Authorities (MA). to ensure a stronger place-based investment focus, more effective interventions, and en- The Bank team are submitting this initial re- hanced cross-sectoral dialogue between stake- view to ensure that there is time for MRDPW holders — which are all key elements of the to arrange the potential fine-tuning of the new integrated territorial approach to be im- draft ITSDs prior to their adoption, should plemented in Bulgaria. the recommendations be accepted by MRDPW. A thorough review of the ITSDs will be includ- Therefore, this review primarily aims to assess ed in the future RAS deliverable report which to what extent the current drafts of ITSDs will comprehensively analyze the possibilities can be viewed as an effective tool for pro- for implementing territorial instruments in moting and guiding integrated investments Bulgaria (output 5 under RAS Component 3). to be elaborated and implemented by stake- holders at subnational level. 1. Approach to the review Additionally, the Bank team would like to take of draft ITSDs this opportunity to bring to MRDPW’s atten- tion other issues resulting from our assess- ITSDs are a crucial part of the recently re- ment of the compliance of draft ITSDs with newed Bulgarian planning system, defined the amended RDA and draft CPR . by the Regional Development Act (as amend- ed on March 13, 2020). The newly introduced The note ends with a list of questions to system integrates spatial and socio-economic MRDPW and the Bank team kindly request a re- planning to promote a more holistic approach sponse to these to clarify several issues, which to development processes. It also streamlines are important for future work under the RAS. and simplifies the planning framework in- troducing a three-level system of planning documents (national, regional, and munici- 2. ITSDs as a tool for promoting pal), of which the ITSDs are an integral part. integrated investments Their role is to define priorities and areas for in NUTS 2 regions intervention and provide strategic guidance for development interventions to be imple- • Draft ITSDs share a common structure built mented at regional (NUTS 2) level as part of upon three main priorities: the new regional policy paradigm. 1. economic development; The significance of ITSDs as the strategic en- 2. human resources and social infrastruc- abler of the integrated territorial approach ture; and is further reinforced in the first draft of the 3. spatial development, Operational Programme for the Development of Regions (OPDR 2021 – 2027), which clearly These are described through specific objec- asserts the prominent role that ITSDs — as tives under each priority and specific activ- ‘territorial strategies’ described under Art. ities that should be supported during the 23 of draft Common Provisions Regulation period 2021 – 2027. They also display a similar (CPR) — will play in programming integrated approach to formulating trends, conclusions 34 Independent reviews of the strategic approach to the Programme and proposals. All six drafts are based on approach (municipalities with under 30,000 the same set of principles, including the population) is too extensive and has to be need to integrate different sectoral policies limited. Two different approaches are sug- and to achieve alignment with the National gested in the documents:3 Concept for Spatial Development (NCSD). • to define the rural municipalities accord- • Ideally, the drafts should identify the ing to the theoretical model based on needs for ITIs (common development is- three categories — highly, medium and sues, problems and potentials) and pre-de- weakly urbanized territories. Weakly ur- fine proposals for ITIs (scope of municipal- banized territories can then effective- ities with similar characteristics, priority ly outnumber rural municipalities (153 areas; specific, ‘flagship’ integrated projects municipalities); with major impact on the development of a given region). To some extent this task is • to define the municipalities with under achieved, but not in a uniform way across 20,000 population as rural areas (225 mu- regions and across specific objectives, where nicipalities). specific regional dimension is sometimes difficult to pinpoint. Draft ITSDs repeat the thesis that the rural areas can be defined as weakly urbanized • The most problematic aspect seems to be municipalities (peripheral) — with small the insufficient identification of inter- towns or villages, where more than 50 per- municipal areas which share common cent of the population lives in settlements characteristics and where integrated in- under 5000 or the municipal centers are vestments could specifically be promot- smaller than 5000 inhabitants. But in lat- ed to meet regional development objec- ter parts of the spatial analysis, the drafts tives. The annexes to all draft ITSDs include define the specific territories and at this a map that defines groups of municipali- point they define rural areas as munic- ties with the potential to cooperate, but it ipalities with under 20,000 population. is not mentioned in the main text of drafts. Clarity on the definition of ‘rural munic- The applicability of the map for the pur- ipality’ is strongly advised as it has major poses of elaborating ITIs is questionable as implications for regional policy under the these groupings are (a) not in alignment with 2021 – 2027 programming perspective and the specific zones as defined in the updat- eligibility of municipalities for support ed NCSD, (b) the criteria for their delimita- under different instruments. tion are not explained, and (c) they cover the entire territory of the region, which raises • Draft ITSDs would benefit from a stronger ori- doubts whether sufficient territorial focus entation towards the integrated approach, can be achieved, and (d) no profiles for de- which requires establishing a stronger link velopment of the groups of municipalities or between the challenges and potentials of the priorities for inter-municipal partnerships region and their specific spatial, territorial di- are provided. The maps should be reviewed mension (groupings of municipalities). This to ensure their applicability and accuracy as would be conducive to determining the scope a tool for targeting integrated investments. and dimensions of inter-municipal coopera- tion, which in turn should generate ITI con- • There seems to be confusion regarding the cepts. The new development model requires definition of ‘rural municipalities’ for the focusing attention not only on the level of purposes of the strategic planning frame- the entire region and its districts, but also on work. NCSD has not given a decisive decision one more level — groups of municipalities on the scope of rural municipalities, how- which share common characteristics and ever it stressed that the previously applied challenges and ITSDs should reflect that. 3. In fact, according to the EC’s degrees of urbanization classification, it is important look at both how many people live in an area but also the density, which is required to understand what is needed to deliver urban services. Part 3 Full reviews undertaken 06.2019 – 11.2020 35 • Methodological Guidelines for the Prepara- disparities as it will effectively promote tion of ITSDs require a specific section — ‘De- the most active municipalities. This in turn scription of the integrated approach, which could undermine the overall strategic goal tackles the needs and potentials’ — which of regional policy in Bulgaria, which is to is to present actions to support integrated counteract regional disparities. territorial and urban development. The pro- posed integrated approach should include • Broadly defined objectives might not be both integrated sectoral measures and mea- sufficient to effectively promote — among sures targeted towards specific settlements prospective beneficiaries — the elabora- or territories, also including more than one tion of ITI concepts with the biggest im- municipality. This approach (and identified pact on socio-economic development of measures) have to be in line with the strate- the region. This broad approach will also gic goals of the ITSDs. Moreover, this section be a challenge with regard to the formula- should include identified projects with re- tion of ITI concept selection criteria that gional importance/dimension with financial could adequately assess ITI concepts against parameters. In the reviewed drafts of ITSDs regional goals and put those that generate such a separate and dedicated section on the most profound socio-economic impact the integrated approach was not includ- on a regional scale on top of the ranking list. ed, and references to fragmented aspects of the integrated approach can be found in the • The accuracy and applicability of the ap- description of different strategic goals and proach proposed in draft ITSDs to inte- priorities of draft ITSDs. grated investments largely depends on the extent to which these are understood • As draft ITSDs do not provide sufficient and properly utilized by prospective ben- guidance on the areas and thematic scope eficiaries for the elaboration of such bun- of integrated investments that could effec- dles of projects. Given the fact that MRDPW tively address development bottlenecks in has launched a survey on integrated proj- each region there seems to be strong re- ect ideas in parallel with public consulta- liance on bottom-up activation of pro- tions of draft ITSDs the results of this survey spective local stakeholders and their own present an excellent opportunity to: (i) iden- initiative to elaborate integrated projects. tify the level of understanding at the local This is of course a legitimate approach that and regional level by assessing submitted could generate good quality projects well- project ideas, (ii) assess to what extent these tuned to the actual development needs of concepts are in line with ITSDs, and (iii) es- prospective beneficiaries. However, given timate potential demand for support under the limited experience of Bulgarian mu- Priority Axis 2 of OPDR 2021 – 2027. nicipalities with integrated investments and cooperation more broadly, this ap- Submitted project ideas were supposed to meet proach — if not accompanied by intensive, the following requirements set out in the an- hands-on technical assistance to municipal- nouncement of the survey: ities — may negatively impact the prospects • take into account local characteristics, needs for smooth elaboration and implementa- and resources; tion of territorial instruments. In fact, on • meet the priorities identified in draft ITSDs the contrary it could promote fragmented for the development of the respective region; and not very impactful projects, benefit- • have impact on the socio-economic develop- ting accidental partnerships. ment of more than one municipality/district; • contribute to the economic development of the region, to create new jobs and improve • it should also be noted that the lack of tar- its competitiveness, to support the techni - geted support to municipalities that re- cal and business infrastructure; quire it most (i.e. those that are least de- • integrate economic, social and environmen - veloped, with insufficient administrative tal components; and capacity, lack of experience with integrat- • be discussed in public forums and support- ed, intermunicipal projects) would like- ed by local communities and businesses. ly further exacerbate already observed 36 Independent reviews of the strategic approach to the Programme Preparation of these project concepts must • an overall assessment of the resourc- have been a very complex and challenging es needed to implement the each of the task given time constraints (only one moth strategies, specified by years according to prepare) and lack of specific guidance. It to the optimal timetable for the imple- is highly recommended to carefully exam- mentation of project ideas should be in- ine the outcomes of the survey, as submitted cluded in drafts; feedback could be instrumental in: • findings from monitoring and ex-post • estimating the level of awareness of evaluations of the regional schemes stakeholders on the practical dimen- currently in place should be reflected sion of integrated approach and identi- in draft ITSDs as an important element fying knowledge deficits which should of the evidence-based policy planning. be addressed through a  targeted infor- mation campaign; • Methodological Guidelines for Preparation of ITSDs require the strategic objectives of • assessing how adequate proposed invest- the ITSD to be presented with a spatial ments are in terms of their territorial dimension as they are oriented to one of coverage and thematic scope with re- the ‘strategic thematic directions’ such gard to strategic development objectives as ‘functional-hierarchical structure of as defined in draft ITSDs; the network of urban centres’; ‘axes for development’; ‘transport corridors and • estimating the volume of required fi- other infrastructural networks’; etc. The nancing per region; Guidelines propose a clear interrelation between the strategic and spatial dimen- • identifying areas where feedback was sions of the ITSDs, and although for some of non-existent or very limited to un- the strategic priorities and objectives that dertake specific actions to effectively relation is reflected, in general the strate- activate potential for generating ITI gic objectives are not bound to the spatial concepts of prospective beneficiaries categories. What is more, the Guidelines located in those territories; define the need for ‘models for spatial de- velopment including alternative scenar- • supporting the process of formulating ios’ — a combination of a thematic map guidelines for prospective applicants with a description. Every map has to illus- on the elaboration of ITI concepts and trate the current and the projected state, evaluation and selection mechanism. corresponding to the strategic objectives. The ITSDs consist of annexes with vari- • Some other aspects that require more re- ous maps which reflect the defined spatial visions and adjustments before finalizing categories but still not entirely fulfil the ITSDs are the following: requirement for combination of current and projected state, as well as not clearly • specific measures and activities to mit- showing the reflection of the strategic ob- igate and adapt to climate change and jectives. At the current state there are not to reduce the risk of disasters should be any alternative scenarios, and only some included in drafts and be to each of the of the components of the analysis consists six regions; of forecasts (e.g. demographic component). • each draft should be supplemented with • It might be useful to also refer to the pos- an indicative list of project ideas im- sible district level “territorial” transition portant with indicative budgets and an plans (planned for 11 Districts) under the optimal timetable for their implemen- Just Transition Mechanism and Green tation; Deal when finalizing the ITSDs. Part 3 Full reviews undertaken 06.2019 – 11.2020 37 3. Recommendations needs and potentials’, and be useful for the elaboration and implementation of ITI con- • Overall a more ITI-oriented planning ap- cepts to be further financed under OPDR proach to the ITSDs is recommended. The 2021 – 2027 and other relevant OPs analytical part should provide more infor- mation about the development problems and potentials shared by groups of municipal- 4. Compliance of Draft ITSDs ities to clearly show the spatial dimension with amended RDA of observed socio-economic phenomena. and draft CPR • The three strategic priorities for develop- RDA ment of the regions could also reflect the concept of inter-municipal cooperation. Twelve specific requirements for the con- For example, the third priority for spatial tents of ITSDs are described under Art. 11 of development could be complemented with RDA. Upon the conducted assessment it can a single specific objective for inter-mu- be observed that the following five require- nicipal cooperation with regard to ITIs; ments seem to not have been entirely ful- filled in draft ITSDs: • If thematic and territorial concentration is to be achieved to maximize development 1. forecasts, alternative scenarios and spatial outcomes of planned investments the zones models for development; for ITIs should be clearly defined and tar- get specific territories, not the entirety 2. functional-hierarchical structure of the of regions. Transparent criteria should be network of settlements with urban cen- applied to define these zones, which should ters and with identified zones for indus- be in line with the functional zones as iden- trial development and business, for recre- tified in the NCSD. To ensure a sufficient and ation and tourism, for the implementation consistent planning base for ITIs both NCSD of integrated territorial investments; and the RSSD should uniformly apply the same strategic approach, but with a differ- 3. measures for integrated territorial renew- ent degree of detail. al and development; • It is also worth considering to supplement 4. indicative list of important project ideas draft ITSDs with a dedicated section (or sub- from the NUTS 2 planning region with in- sections) on ITIs, comprising of: (i) zones dicative budgets and an optimal timetable for ITIs with the criteria for their definition; for implementation; and (ii) development profiles/priorities for zones for ITIs; (iii) other details such as financial 5. general assessment of the resources re- resources; time planning; partnerships be- quired for the implementation of the strat- tween public and private sectors within the egy, specified by years according to the op- zones, etc., (iv) indicative list of integrated timal schedule for the implementation of investments per region; (v) a set of dedicat- the project ideas. ed indicators for it is, which would facilitate monitoring and evaluation of their effective- As these elements are conducive to the ef- ness in meeting regional development objec- fective implementation of the new integrat- tives. This set of criteria could then be used ed approach and meeting territorial and sec- as an element of the ITI concept evaluation toral development objectives of the regions, and selection mechanism. Such dedicated it is highly recommended to revise the con- section would meet the requirements from tents of the drafts in the indicated areas and Methodological Guidelines for the Preparation of introduce adequate adjustments and additions ITSDs regarding the section ‘Description of to make sure they effectively address all the the integrated approach, which tackles the required elements before their endorsement. 38 Independent reviews of the strategic approach to the Programme Draft CPR process and provide information on the spe- cific nature and scope of their actual in- Two issues have been identified with regard to puts to draft ITSDs with a description of the compliance of draft ITSDs with draft CPR: how these documents changes as the result of the involvement of partners. This is spe- 1. under Art. 23.2 (on territorial strategies)4 and cifically important with regard to RDCs — as 2. under Art. 23.1(d) (on description of in- the regional, territorial ownership of ITSDs volvement of partners). might be put into question it is of key im- portance to show how significant the RDCs’ According to Art. 23.2 territorial strategies influence of the final shape of the strate- (ITSDs) should be drawn up under the respon- gies really was. sibility of the relevant urban, local or other territorial authorities. In the case of ITSDs un- • the description of the involvement of der review they are commissioned by MRDPW, partners in the implementation of ITSDs prepared by the National Center for Ter- should also be substantially expanded as ritorial Development with inputs from Re- in the current drafts there is just one sen- gional Development Councils, approved by tence that refers to this key aspect without Regional Development Councils, but effec- sufficient detail ( The established system of re- tively endorsed by the Council of Ministers. gional coordination based on effective partner- The key risk identified in this regard — which ships and wide awareness and publicity of actions, also resurfaced during the peer review pro- including between operational programs operat- cess of RAS Deliverable 3.1 — is the refusal by ing in the area, plays a key role in the implemen- the EC to recognize ITSDs as territorial strat- tation of the ITSDs.). egies according to Art. 23 of draft CPR due to the actual role of RDCs in the process of ITSDs • it is the Bank team’s understanding that preparation and implementation and the cur- the subsection on results of public con- rent composition of RDCs which could result sultations as indicated in the title of sec- in ineligibility of integrated projects for fi- tion no 2 will be supplemented at a later nancing under Policy Objective 5 from Pri- stage once MRDPW finalizes the analysis of ority Axis 2 of OPDR 2021 – 2027. The gravity of feedback and adjusts the drafts accordingly. the risk substantiates the WB team’s recom- mendation to MRDPW to engage in commu- nication with the EC to reach a clear under- 5. Questions to MRDPW standing of the EC’s position in this respect. regarding draft ITSDs: Art. 23.1(d) of draft CPR stipulates that territo- Completeness of drafts rial strategies shall contain a description of the involvement of partners in accordance The conducted review led to the identifica- with Article 6 in the preparation and in the tion of several elements of drafts required by implementation of the strategy. Each draft the RDA that seem to be missing (e.g. indica- ITSD has a very similar short, 2-page section tive list of important project ideas from the no. 4 titled ‘Description of participation of NUTS 2 planning region with indicative bud- partners in the preparation and implemen- gets and an optimal timetable for implemen- tation of ITSDs and the results of public con- tation; general assessment of the resources sultations. With regard to this section the fol- required for the implementation of schemes, lowing recommendations can be formulated: specified by years according to the optimal schedule for the implementation of the proj- • the description of the involvement of part- ect ideas). ners in the elaboration of ITSDs should go beyond just listing those formally in- Questions: could you please inform us whether these volved and meetings they attended in the elements will be added to draft ITSDs and when? 4. This issue has already been brought to the attention of MRDPW in a letter from Mr. Fabrizio Zarcone, WB Country Manager for Bulgaria to Ms. Denitsa Nikolova, Deputy Minister at MRDPW. Part 3 Full reviews undertaken 06.2019 – 11.2020 39 Also, will there be a section/subsection of the doc- and that the central government intends to rely on uments concerning ITIs application within each of bottom-up approach to identification and elabora- the NUTS 2 regions? tion of ITIs? Or does MRDPW envisage the identi- fication of targeted zones with highest priority for ITIs and defined priorities for development in ITSDs? Rationale behind identification of groupings of municipalities (present- ed only in the annexed maps) Rural vs. urban municipalities  — definition Draft ITSDs present different results of the process of grouping municipalities then the There seems to be confusion regarding the ones presents in draft updated NCSD. The lat- definition of ‘rural municipalities’ for the ter defines two types of informal zones — so- purposes of the strategic planning frame- cial zones and zones for stimulated develop- work — draft ITSDs repeat the thesis from ment. Although the draft ITSDs include parts the NCSD that the rural areas can be de- of these zones within the corresponding re- fined as weakly urbanized municipalities gion, they also introduce different groupings (peripheral) — with small towns or villag- of municipalities. However, the rationale, log- es, where more than 50% of the population ic and applicability of these groupings are not lives in settlements under 5000 or the mu- entirely clear and may be confusing to the nicipal centers are smaller than 5000 inhab- ‘end-users’ of ITSDs, namely local stakehold- itants. In latter parts of the spatial analysis, ers and potential ITI applicants. the drafts define the specific territories and at this point they define rural areas as mu- Questions: Could you please explain the rationale nicipalities with under 20,000 population.5 behind the conducted groupings and explain if and how will it impact the process of elaborating ITI con- Questions: Could you please clarify whether a single, cepts? Could you please inform us whether actions will horizontal approach to defining ‘rural municipalities’ be taken to align the zones from the NCSD with the will be applied in ITSDs? If not — and optional ap- groupings in the draft ITSDs for the sake of consisten- proaches will remain in ITSDs — in which other stra- cy of the strategic approach to planning investments? tegic document will this issue be decided or resolved? Choice of approach towards intermu- Current state of play with regard to nicipal cooperation within the frame- draft ITSDs work of ITIs Question: Could you please provide us with an update The draft ITSDs have a largely ‘untargeted’ way on the planned timeline of the elaboration of draft of identifying the thematic and territorial ITSDs? scope of potential integrated investments and the groupings of municipalities cover the entire NUTS 2 regions with no specific devel- Results of the survey on integrated opment priorities identified for the different project ideas groups. Thus, it appears that the approach adopted by MRDPW to intermunicipal coop- Question: Could MRDPW would share with us feed- eration will primarily rely on bottom-up acti- back received as the result of the survey. It will be vation of prospective local partners and their useful for completing upcoming tasks under RAS initiative only. Component 3 (evaluation and selection mechanism for ITI concepts, guidelines for applicants and bene- Questions: Could you please confirm that our under- ficiaries of ITI concepts and future reviews of upcom- standing of MRDPW’s strategic approach is correct ing drafts of OP DR 2021 – 2027)? 5. A key question is at what point does a concentration of people in an area mean there is a need for urban type services such as water systems and not wells for example. In future it will be important to think about the types of places and what services they need as they grow (or decline). 40 Independent reviews of the strategic approach to the Programme Independent review of the 2. OPDR as a tool for operationalizing the new integrated territorial approach first draft of Operational Program Development 3. Prospects for effective implementation of Regions 2021 – 2027 of EU funds under arrangements pro- posed in the draft OPDR (15/04/2020) These three aspects seem to be fundamentally Introduction important for ensuring that OPDR effectively functions as a vehicle for integration and coor- On March 27, 2020 MRDPW shared with the dination of investments, which accurately World Bank (the Bank) team the first draft reflect regional needs. At the same time are of the Operational Program Development necessary for facilitating good management of Regions 2021 – 2027 (OPDR). In parallel, the and full utilization of available EU funds for draft was sent to members of the OPDR Work- the benefit of Bulgarian regions. ing Group for comments to be submitted to MRDPW by March 31, 2020. In early April 2020 MRDPW shared an updated draft with 1. Intervention logic of draft the EC and awaits initial comments in the OPDR and its orientation coming weeks. towards results Reviewing the strategic approach adopted by • One of the prerequisites of any effective public MRDPW constitutes an important task to be policy tool is a sound and compelling inter- performed by the Bank team under RAS Com- vention logic, which adequately reflects key ponent 3. Therefore, the Bank team would assumptions of the adopted theory of change like to share for MRDPW’s consideration ini- behind the program, oriented towards re- tial comments and recommendations based sults and accurately aligned with strategic on the team’s review of the first draft OPDR. goals. Program strategy should clearly ex- plain how and why a complex change pro- moted by OPDR (namely the new integrat- Scope of initial review ed territorial approach) will succeed under specific circumstances identified in Bul- The submitted draft OPDR presents the first garia, generating expected socio-economic opportunity to see how MRDPW intends outcomes. In the case of development pol- to operationalize the new policy approach icy instruments supported from EU Cohe- to regional development, namely the inte- sion Policy funds it is also vital to take into grated territorial approach. This paradigm account investment guidance on expected change marks a crucial policy shift to ensure scope of foreseen interventions during the more place-based, bottom-up, cross-sectoral, upcoming programming period provided to coordinated investments across Bulgarian the Government of Bulgaria by the Europe- regions. It also envisages a more prominent an Commission under Annex D of Coun- role for regional bodies operating at NUTS 2 try Report Bulgaria 2019. level (Regional Development Councils, RDCs) in the selection of operations. All of these ele- • Based on the analysis of the draft, the funda- ments are a novelty in Bulgaria for stakehold- mental assumptions used by MRDPW for for- ers both at the central as well as regional, dis- mulating the intervention logic of OPDR are trict and local level. the following (the points presented below are citations from the draft OPDR): To provide MRDPW with feedback for further fine-tuning the draft, the Bank team applied • the approach used so far to determine EU the following three angles to conduct the financing based on sectoral priorities and to initial review: define urban and rural areas has led to un- healthy competition between municipal- 1. Intervention logic of draft OPDR ities and exacerbated existing problems Part 3 Full reviews undertaken 06.2019 – 11.2020 41 (deepened interregional, intra-regional and network at lower territorial levels too, es- even municipal disparities and imbalances); pecially in small municipalities; • therefore, significant policy shift was in- • regional development policy should clearly troduced in form of the new integrated ter- affect the underdevelopment and depop- ritorial approach to ensure effective use of ulation of certain regions, using different the potential of each territory; instruments to this end. Supporting less developed areas requires a systematic and • the main objective of the regional devel- integrated focus by creating appropriate opment policy in Bulgaria is to create vi- models and instruments; tal, economically strong and sustainable regions as a response to adverse demograph- • “new development” of certain parts of the ic trends and deepening inter- and intra- country (municipalities, cities, urban areas) regional disparities; can be observed. They can be identified as positive trends, and this new development • the specific objectives of this policy include: should be ‘spread’ across larger spatial struc- (i) addressing negative demographic trends and re- tures and cover more regions. This develop- ducing regional disparities in terms of population; ment leads to the “unlocking of new regional (ii) enhancing the economic growth of the Bulgar- potentials’; ian regions, and (iii) promoting balanced territori- al development through polycentric network of cit- • it is important for each sectoral policy to ies and towns supported by integrated investments; adequately acknowledge the territorial di- mension of development policy and ade- • all regions of the country should be sub- quately reflect relevant territorial aspects ject to regional policy according to their in the formulation of sectoral objectives.. potentials and opportunities for growth and Creating a set of territorial development development; objectives of regional policy in goals at national level that translate na- each of the NUTS 2 regions should be deter- tional priorities in relation to different mined by the necessary impact to improve regions (territories) and different types its potential, accelerate socio-economic of sectors is a fundamental aspect of ter- growth and to eliminate regional disparities; ritorial coordination. • investment in regional development must Based on these assumptions the following be concentrated in a more individualized thematic and territorial scope of interven- way, reflecting the level of development and tion under OPDR was proposed in the draft: the need for improving the well-being of population. Investments should be better • OPDR will finance interventions under one linked to the local context, potential and territorial policy objective “Europe closer problems, to support both developed and to the citizens” (PO5) through two terri- peripheral and lagging regions, creating torial priorities: better rural — urban linkages. • for integrated urban development (Pri- • the development of the regions is main- ority Axis 1, PA1) and ly due to strong urban centers (largest and medium cities) • for integrated territorial development of the NUTS 2 level regions (Priority Axis 2, • the potential of rural areas, agriculture PA2), and rural settlements remains underval- ued. The automatic separation of urban and • The third priority is dedicated to tech- rural settlements without paying attention nical assistance (Priority Axis 3, PA3). to their location, proximity to large cities, linkages and first-class infrastructure and • 50 urban municipalities will be eligible services poses a risk to fragile stability, in- for support under OPDR (10 under PA1, and stead of applying the similar polycentric 40 under PA2) 42 Independent reviews of the strategic approach to the Programme PA1: territorial and thematic scope • eligible municipalities: remaining 40 ur- of intervention ban municipalities in Bulgaria • dedicated to the development of urban areas • measures to be funded under PA2 must meet the following two basic requirements: • eligible municipalities: 10 city municipal- ities — major growth poles (Vidin, Plev- • types of activities to be supported need en, Rousse, Veliko Turnovo, Varna, Burgas, to be pre-identified in the integrated Stara Zagora, Plovdiv, Sofia and Blagoevgrad), territorial strategies for development which form 4 urban clusters of the NUTS 2 regions (“bottom-up” approach). • each urban cluster has a separate budget to implement joint projects and cooperate • measures related to implementation of with each other in order to achieve greater some sectoral policies to be supported results for the relevant territory must be based on pre-mapping of needs at national and regional level, execut- • measures to be funded must meet the fol- ed by the state institutions and agen- lowing two basic requirements: cies responsible for those policies and duly reflected in the integrated terri- • types of activities to be supported have torial strategies for development of the to be pre-identified in the integrated NUTS 2 regions and included in the in- municipal development plans, elabo- tegrated territorial strategies of the re- rated by the local municipal authorities gions (“top-down” approach) (“bottom-up” approach). • investments for integrated territorial • measures related to sectoral policies have development of the NUTS 2 regions in to be based on the pre-mapping of needs Bulgaria will be supported in the peri- at national level by the state institu- od 2021 – 2027 through implementation tions and agencies responsible for de- of ITI concepts with combined funding of velopment of those policies and duly different OPs, Strategic plan for the De- reflected within the integrated mu- velopment of Agriculture and Rural Ar- nicipal development plans (“top-down” eas and other sources of financing. OPDR approach). will support all ERDF-eligible measures according to the specific needs and po- • urban municipalities eligible under PA1 tentials of the territory that cannot be 1 can participate in ITI concepts imple- financed under the sectoral programs. mented under PA2 — either as a project partner, responsible for implementation • demarcation between the operational of “soft” measures (e.g. exchange of expe- programs and lack of double funding will rience, good practices, knowledge trans- be ensured at the level of preselection fer) or with a project financed by their of the ITI concepts by RDCs and addi- own contribution (financial instruments tionally during the project selection pro- or funds available under PA1). cess implemented by each MA before sign- ing the grant contract agreements. PA2: territorial and thematic scope of • OPDR will be implemented though integrat- intervention ed territorial development instruments, in- cluding Integrated Territorial Investments • dedicated to the development of different (ITI) (in accordance with article 22 of the than urban areas (smaller economic cen- draft CPR), aiming to achieve a better in- ters and their links with the large centers of vestment focus, more effective and efficient economic activity based on integrated ter- interventions, enhanced cross-sectoral dia- ritorial development strategies for NUTS 2 logue between different stakeholders and an regions) integrated territorial development approach. Part 3 Full reviews undertaken 06.2019 – 11.2020 43 The Bank team’s examination of the draft needs and challenges to maximize effects OPDR raised a number of issues that require of planned interventions. further elaboration. The Bank team deem the issues described below to be the most signifi- • The limited territorial scope of OPDR’s in- cant, but this list is not exhaustive. tervention is inconsistent with program strategy and investment guidance provid- • Insufficient evidence-base for the radical ed by the EC. According to program’s strategy, paradigm change. OPDR negatively assesses all regions of the country should be sub- the approach applied so far to financing de- ject to regional policy according to their poten- velopment investments with EU funds and tials and opportunities for growth and development its implications for the effectiveness of re- and regional development policy should gional policy and proposes a radical para- clearly affect the underdevelopment and digm shift. Since the mid-term evaluation depopulation of certain regions using dif- of OP RG 2014 – 2020 has not been conducted ferent instruments to this end, as supporting so far, this major policy change might not less developed areas requires a systematic and feel sufficiently substantiated. integrated focus by creating appropriate mod- els and instruments. Taking into account that Recommendation: It is therefore recom- only 50 out of the total of 265 municipalities mended to provide some additional ex- (roughly 1/5 of all municipalities) in Bulgaria planation as to the specific elements of the will be eligible for funding under OPDR — and current approach that have proven ineffec- these municipalities do not constitute the least tive or even counterproductive in promot- developed ones in Bulgaria — the coverage of ing regional development, and describe in the program will be limited and might not more detail how the new approach will tack- be conducive to achieving objectives set out le those problems and challenges to achieve in program’s strategy. It should also be noted better results. that only 19 out of the total of 50 urban mu- nicipalities eligible for support under OPDR • Unclear theory of change behind OPDR. are located in North Bulgaria, which — tak- The diagnosis of problems and challenges ing into account the visible North-South di- for regions is very broad, all-encompassing vide in terms of development — may even as it covers a multitude of socio-economic further exacerbate unbalanced growth. The problems and challenges (e.g. demographic limited territorial scope of OPDR is also not trends, energy efficiency, connectivity, labor entirely in line with the EC’s investment market, education, innovativeness, healthcare, guidance for PO5 in Bulgaria. Based on the environmental hazards), as well as different analysis of regional disparities in Bulgaria, spatial configurations. It is not determined the EC formulated high priority investment which aspects of the policy response to diag- needs for different types of territories. Two nosed problems and challenges will be car- types mentioned by the EC — namely major ried out under OPDR, and program’s specif- cities and smaller cities — are eligible for sup- ic outcomes/results are not clearly defined. port under PA1 and PA2 of the draft OPDR. The problematic issue are rural areas and most Recommendation: It is recommended to ap- deprived regions which should also benefit ply a more focused approach to program’s from investments under PO5, aiming to re- scope of intervention, and describe the duce urban-rural divide and address challeng- expected OPDR’s impact on the envisaged es related to access to basic public services. achievement of clearly defined outcomes/ It is also unclear which municipalities will results to provide more clarity on inter- be eligible for funding from other OPs in- vention logic and enable the monitoring of volved in the implementation of the new in- program’s performance and progress. OPDR tegrated territorial approach — exactly the should not be a catalogue of all problems same ones as under OPDR or all municipalities already defined in sectoral and territori- (urban? rural? Total of 265 Bulgarian munic- al strategies, but more of an action plan ipalities?). This is a vital question to address to face the most critical problems selected as it has a number of profound implications upon adequate prioritization of development for regional policy in Bulgaria. 44 Independent reviews of the strategic approach to the Programme Recommendation: If OPDR is to effectively investments in line with the strategic objec- support the achievement of these objectives, tives of regional development in Bulgaria. and a more transparent and evidence-based theory of change is to be applied as a rationale It is also the EC’s expectation voiced in the behind the program, it is recommended to: investment guidance for PO5 interventions that functional areas are to be subject of • describe in more detail how the con- integrated support . Investments strength- centrated support provided under OPDR ening linkages between different economic to a limited number of municipalities activity poles (major and smaller cities) are can positively impact the prospects to be one of priorities under PO5. of socio-economic development of all regions (specifically addressing the sit- uation of rural areas and most deprived Priority 1 Integrated Urban parts of the country), what are the en- Development visaged growth diffusion mechanisms that will create and reinforce positive • PA1 is dedicated to the 10 most developed trickle-down or multiplier effects for Bulgarian urban municipalities. The ap- larger parts of the country; some ideas how plied notion of ‘urban areas’ raises ques- to enhance the effectiveness of OPDR in ad- tions whether these 10 municipalities can dressing development challenges through receive funds for projects to be implement- a more inclusive territorial scope of inter- ed on their entire territory or only in the vention have been provided in section 2; city itself. This issue should be clearly stat- ed and it is recommended to allow the fi- • provide more information on the envis- nancing of projects on the whole territory aged complementarities and synergies of of eligible municipalities. OPDR with other policy instruments (e.g. Rural Development Program, other oper- • At the same time, these 10 municipalities ational programs involved in the imple- are grouped into four regional clusters with mentation of the new integrated approach) a view to promote inter-municipal coopera- that are designed to promote a more bal- tion between the constituent municipalities. anced, and inclusive development of all The idea behind grouping municipalities lagging behind municipalities — not just into clusters remains unclear, as it is not the 50 urban municipalities eligible under likely to help establish cooperation be- OPDR — to achieve the common goal of re- tween territorially distant units. It seems ducing inter and intraregional disparities. that the fundamental idea for integrated More recommendations on potential ways urban development under PA1 is to sup- of strengthening the integrated approach port the core urban centers and not the are presented in section 2 axes/linkages between them. That mix be- tween these two dimensions of development undertakings — individual and inter-mu- 2. OPRD as a tool for nicipal — could complicate the effective im- operationalizing the new plementation of PA1 and the achievement of integrated territorial approach expected results. One of the key angles for the Bank team’s review was to assess how accurately and ad- Priority 2 Integrated Territorial equately the draft OPDR reflects and trans- Development of regions lates the strategic framework for the new ap- proach as described in the CoM Decree #335 • the remaining 40 urban municipalities will and fundamental planning documents6 into be eligible for financing under PA2. The no- an operational mechanism aimed at selecting tion of ‘different than urban areas’ referred 6. Draft of the updated National Concept for Spatial Development and drafts of Integrated Territorial Strategies for Development of NUTS 2 regions. Part 3 Full reviews undertaken 06.2019 – 11.2020 45 to in the description of the territorial scope opportunities to partnering municipali- of PA2 is confusing — it is not entirely clear ties non-eligible under OPDR from other what territories fall under this new category. sources — namely the OPs involved in the Furthermore, there is no mention of these implementation of the new integrated ter- types of territories neither in the updated ritorial approach and contributing 10% of National Concept for Spatial Development their respective allocations to this end. How- nor in six Integrated Territorial Strategies ever, the specific arrangements ensuring for Development of NUTS 2 regions. complementarities and synergies between OPDR and other OPs are not elaborated in • It is suggested to replace it with a description draft OPDR, so at this point this consider- of the category of territory already used in ation is merely a theoretical one. It should strategic documents or to rephrase it to pro- however be noted that if this issue of eligi- vide clarity (e.g. subregional growth poles). bility for financing investments of partner- ing municipalities is not clearly addressed • as was the case with PA1, it is unclear wheth- the potential for effective promotion of in- er these 40 urban municipalities will be able tegrated approach through OPDR might be to receive funds under PA2 for projects im- significantly diminished, with municipali- plemented on their entire territory, or just ties concentrating instead on intra-munici- in core towns/cities. This issue should be pal investments with limited socio-economic clearly stated, and it is recommended to al- impact due to ineligibility of their poten- low the financing of projects on the whole tial municipal partners for joint projects. territory of eligible municipalities. The most important issue regarding PA2 is the extent • It seems difficult to achieve real regional in- to which it is in line with the new integrat- tegration and coordination of investments ed territorial approach. In theory, this ap- and generate impact for the entire regions if proach should promote the integration of ter- only a small number of municipalities can ritories with specific challenges that exceed be project beneficiaries. Such an approach the borders of a single municipality. Hence also contradicts the need to change the fo- the priority is closely linked with the strate- cus from support of settlements to sup- gic framework shaped by ITSDs and the pro- port of territories and from sectoral ori- spective role of the RDCs. However, PA2 does ented investments to integrated territorial not introduce the integration between investments advocated in the program strat- different territorial units — municipali- egy section of draft OPDR. If implemented it ties — and it is not equipped with the de- will also result in RDCs evaluating ITI con- sired strong regional dimension. The first cepts which lack strategic importance for the version of the initial draft OPDR limited the region, as they may be in many cases limit- integrated territorial development merely to ed to just one municipality, and therefore be the integration of interventions from differ- rather ‘local’ as far as their socio-economic ent funding sources and to partnerships be- impact is concerned. tween different stakeholders. Although the second version (shared by MRDPW with the • the merging of Integrated Territorial In- EC) promotes a slightly different approach vestments (ITIs) at regional level and the and stipulates that partnerships between inter-municipal cooperation is promot- different municipalities are ‘not obligato- ed both by the NCSD and the six ITSDs of ry, however necessary’ in case of projects NUTS 2 regions -although to different ex- targeting broader territories this arrange- tents. NCSD defines two types of function- ment does not seem sufficient or even fea- al zones (social and for stimulated develop- sible taking into account the fact that a sig- ment) which are to concentrate ITIs. At the nificant number of eligible municipalities same time, ITSDs define completely dif- are isolated (as described in more detail be- ferent zones for inter-municipal cooper- low) and therefore unable to partner with ation, but still the regional ITIs are clearly municipalities outside their immediate ad- seen as vehicles for inter-municipal coop- ministrative boundaries. This problem could eration. In addition, the OPDR strategy un- potentially be solved by providing funding derlines the importance of creating better 46 Independent reviews of the strategic approach to the Programme urban-rural links, better links between to form groupings of adjacent municipalities the smaller and bigger urban centers and within the district and the NUTS 2 region. In thus to develop functional areas and net- 19 of 28 Bulgarian districts there will not works of cities, but this is not in any way be any neighboring municipalities eligi- reflected in PA2, which undermines the ble for support under OPDR which will cer- achievement of program’s objectives as tainly limit the perspectives for coopera- set out in the OPDR’s strategy. Assuming tion, elaboration and implementation of that the neighboring municipalities will be joint projects. It is most visible in the North able to prepare joint projects (which is not East where there are four municipalities el- directly stated in the draft OP) there will igible for support under OPDR: Varna under still be examples of isolated municipali- PA1 and Shumen, Dobrich and Targovishte ties that will not be able to e.g. implement from PA2 — and all of these municipalities infrastructural projects with adjacent mu- are not adjacent. In most cases, the potential nicipalities. It seems like the territorial inte- groups of municipalities that can generate gration covering more than one municipali- integrated project ideas to be funded under ty could be achieved only via ‘soft measures’ OPDR are up to three on regional level with in partnership with municipalities eligible only one example of five (Haskovo, Dimitro- under PA1, which would significantly limit vgrad, Harmanli, Svilengrad and Kirdzhali). the regional dimension of OPDR. Some municipalities are isolated and un- able to partner with a neighboring munic- • the table below lists all urban municipalities ipality within a region (Dobrich, Silistra, eligible under the OPDR and their potential Smolyan, Kyustendil, Vidin, etc.). TABLE 3.1 Urban municipalities eligible under the OPDR and potential to form groupings Partners from 10 GDP per capita municipalities Groups of neighboring municipalities District (in BGN) in 2018 Beneficiaries under PA2 under PA1 (beneficiaries and partners) North East 12,506.00 3 1 0 Varna 15,479.00 0 1 — Varna 0 Shumen 9,397.00 1 — Shumen 0 0 Dobrich 9,176.00 1 — Dobrich 0 0 Targovishte 9,981.00 1 — Targovishte 0 0 1 — Gabrovo, Sevlievo, Veliko Tarnovo North Central 10,654.00 6 2 and Gorna Oryahovitsa (total 4) Silistra 7,029.00 1 — Silistra 0 0 Ruse 11,769.00 0 1 — Ruse 0 Razgrad 9,709.00 1 — Razgrad 0 0 Gabrovo 13,510.00 2- Gabrovo and Sevlievo 0 1 — Gabrovo and Sevlievo Veliko 2 — Svishtov and Gorna 1 — Veliko Tarnovo and Gorna 10,434.00 1 — Veliko Tarnovo Tarnovo Oryahovitsa Oryahovitsa North West 10,244.00 5 2 1 — Pleven, Lovech and Troyan (total 3) Pleven 8,795.00 0 1 — Pleven 0 Montana 9,033.00 2 — Montana and Lom 0 0 Lovech 9,653.00 2 — Lovech and Troyan 0 1 — Lovech and Troyan Vratza 15,018.00 1 — Vratsa 0 0 Vidin 7,926.00 0 1 — Vidin 0 Part 3 Full reviews undertaken 06.2019 – 11.2020 47 Partners from 10 GDP per capita municipalities Groups of neighboring municipalities District (in BGN) in 2018 Beneficiaries under PA2 under PA1 (beneficiaries and partners) 2 — Kazanlyk, Stara Zagora, Sliven and South East 12,787.00 6 2 Nova Zagora (total 4); Aytos, Karnobat and Burgas (total 3) Yambol 9,694.00 1 — Yambol 0 0 Stara Zagora 17,273.00 1 — Kazanlyk 1 — Stara Zagora 1 — Kazanlyk and Stara Zagora Sliven 7,600.00 2 — Sliven and Nova Zagora 0 1 — Sliven and Nova Zagora Burgas 12,585.00 2 — Aytos and Karnobat 1 — Burgas 1 — Aytos, Karnobat and Burgas 2 — Haskovo, Dimitrovgrad, Harmanli, Svilengrad and Kirdzhali (total 5); South Central 10,988.00 12 1 Pazardzhik, Peshtera, Panagyurishte (total 3) 4 — Haskovo, Dimitrovgrad, 1 — Haskovo, Dimitrovgrad, Harmanli Haskovo 8,545.00 0 Harmanli and Svilengrad and Svilengrad Smolyan 10,597.00 1 — Smolyan 0 0 Plovdiv 13,141.00 2 — Asenovgrad and Karlovo 1 — Plovdiv 0 4 — Pazardzhik, Peshtera, 1 — Pazardzhik, Peshtera, Pazardzhik 9,213.00 0 Panagyurishte and Velingrad Panagyurishte Kirdzhali 8,472.00 1 — Kirdzhali 0 0 1 — Gotse Delchev, Sandanski, Petrich South West 25,261.00 8 2 (total 3) Sofia city 33,437.00 0 1 — Sofia 0 Sofia 15,654.00 2 — Botevgrad, Samokov 0 0 Pernik 9,153.00 1 — Pernik 0 0 Kyustedil 9,285.00 2 — Kyustendil, Dupnitsa 0 0 3 — Gotse Delchev, Sandanski, Blagoevgrad 9,736.00 1 — Blagoevgrad 1 — Gotse Delchev, Sandanski, Petrich Petrich Source: National Statistical Institute, https://monitorstat.nsi.bg/ • moreover, as long as the criterion for the important industrial axis of Varna-Devnya demarcation of urban and rural municipali- in the North East will not be able to obtain ties will be solely the number of inhabitants, financing under PA2 for integrated projects. most of the urban municipalities will be Varna will be able to finance projects under located in the more developed South. Only PA1, but Aksakovo, Beloslav and Devnya will 14 out 40 urban municipalities eligible un- not be eligible to become OPDR beneficia- der PA2 will be in the North with limited ries. This means lack of access to resources opportunities for cooperation except for for the development of business and indus- ‘soft measures’ and projects without spa- trial zones along the entire industrial axis; tial proximity. This could lead to concen- for education and trainings in the differ- tration of investments in the South, fur- ent municipalities; for a unified marketing ther exacerbating development disparities strategy for attracting foreign investments, between the Southern and Northern parts etc., although that axis is part of the func- of the country. tional zone between Varna and Shumen as defined in the NCSD. • spatial distance can be a serious limita- tion in planning integrated investments, Recommendation: One of the potential solu- as for example, the municipalities along the tions to this problem is the restructuring 48 Independent reviews of the strategic approach to the Programme of OPDR to provide financing for individual ITI concepts to EU funds under PO5. Two key municipal projects of the 40 urban munici- questions arise in this respect: palities recognizing their importance as lo- cal/subregional centers of growth, but addi- • can the RDCs be considered ‘territorial tionally to dedicate a new PA to regional bodies’ and development via inter-municipal projects, where integrated projects of more than one • are the ITSDs sufficiently ‘bottom-up’ in municipality could be supported. 50 urban nature and in terms of their ownership. municipalities already eligible for support under OPDR would be supplemented with a These concerns and their implications for set of rural municipalities, and the scope of the programming exercise were described in these zones could be determined based on e.g. more detailed in a note summarizing the find- the functional zones as defined in the NCSD. ings from the peer review of RAS Deliverable Such a change would add value in two regards: 3.1., which was recently submitted to MRDPW, and specific actions are being recommended i. generate more investments in the less to mitigate the identified risks as part of the developed rural territories, and revised deliverable. ii. provide more municipalities and more groupings of neighboring municipal- Implications of the lack of demarca- ities with opportunity to cooperate. tion line between OPs As a result, this additional priority with a According to the draft, demarcation between clear integrated approach and targeted zones the operational programs and lack of double (groups of municipalities) for inter-municipal funding will be ensured at the level of pre- cooperation could boost the territorial inte- selection of the ITI concepts by RDCs and gration and more balanced regional develop- additionally during the project selection pro- ment in Bulgaria. cess implemented by each MA before signing the grant contract agreements. Lack of clear demarcation line at the level of Partnership 3. Prospects for effective Agreement may result in demarcation being implementation of EU funds considered on case by case basis at the level under arrangements proposed of RDCs, which could lead to different inter- in draft OPDR pretations, and lack of standardized approach applied uniformly across regions. This lack Recognizing the fact that programming pro- of clarity may translate into delays in evalu- cess is in its early stages, the Bank team would ation of project applications and of contract- like to take this opportunity to draw atten- ing of projects, double financing of operations, tion to several issues identified in the draft and failure to make most of complementari- that — if not addressed — may negatively im- ties and synergies between OPs. pact prospects for effective implementation of OPDR. Recommendation: It is recommended that the demarcation line is established as a hor- izontal arrangement for all OPs, and the com- Risk of ineligibility of operations pliance of individual projects under ITI con- under PA2 of OPDR due to potential cepts is only verified at the level of RDCs (1st non-compliance of territorial strate- stage of assessment) and MAs (2nd stage of gies with requirements under Art. 23 assessment). of the draft CPR The Bank team is aware that due to a very The most fundamental issue is ensuring that broad thematic scope of interventions envis- all criteria pertaining to territorial strategies aged under PO5 demarcation of interventions as laid down in Article 23 of draft CPR are ef- might pose a significant challenge and stands fectively met to enable access of projects under ready to assist MRDPW in this task. Part 3 Full reviews undertaken 06.2019 – 11.2020 49 Insufficient capacity of prospective due to rising unemployment, more expendi- beneficiaries to elaborate and imple- ture on health care etc. This will also seri- ment integrated projects ously affect the provision of social services at the local level as well as municipal invest- As observed by the Bank team during strate- ments that are supposed to be the driver of gic consultations held in summer of 2019 and the new approach. The potential implications described in more detail in Strategic Consul- of the pandemic further reinforce the need tations report (Deliverable 2 under RAS Com- for integrated approach to investments to ponent 1), prospective beneficiaries under PA2 effectively pool resources and reap full ben- of OPDR appear to lack experience with inte- efits of inter-municipal cooperation. grated investments and the administrative ca- pacity to prepare integrated projects. The elab- The situation currently unraveling will re- oration of ITI concepts at the local level thus quire swift, targeted actions, adequately re- requires targeted actions to provide benefi- flecting specific local context . A clear im- ciaries with hands-on assistance to facilitate plementation framework with adequate assis- an inclusive and evidence-based process of tance provided to local stakeholders will be identifying investment needs, selecting proj- needed as early as possible to ensure that ad- ect partners, establishing partnerships, and equately prepared municipalities (and their elaborating the integrated package of proj- partners) can take full advantage of the ter- ects as well as individual project applications. ritorial approach to address their most press- ing development challenges. Recommendation: To ensure that the imple- mentation framework for integrated invest- The new challenges created by the pandemic ments is tested and adequately fine-tuned be- might also substantiate the need to reexam- fore being launched, a pilot action should be ine the definition of ‘rural municipality’ seriously considered, which could lead to which directly translates into the eligibility of the establishment of a ‘good practice’ mod- municipalities for funding or to further rein- el and a formulation of a comprehensive force and strengthen complementarities ‘user’s manual’ to be applied by prospective and synergies between OPs financed from EU beneficiaries. Additionally — to ensure swift Cohesion Policy with the Rural Development uptake of funds from the onset of the new pro- Program and other development instruments. gramming period — the creation of a project Cohesion policy and territorial instruments pipeline for integrated investments is also financed from its sources should constitute highly recommended. The Bank team stand an important tool of active, targeted develop- ready to provide MRDPW with additional sug- ment policy making, complementary to and gestions and proposals in this respect. reinforcing recovery efforts that will surely be initiated on the national level. Negative implications of the COVID-19 pandemic on development prospects Other risks for Bulgarian regions and implemen- tation of the new integrated territorial As already remarked by the Bank team in a approach note sent to MRDPW in October 2019 with a proposal for the restructuring of OPDR, the It is highly probable that Bulgaria — as many very design of the program generates specific other countries — will suffer as a result of the risks for its effective implementation. The fol- coronavirus outbreak and urgent actions will lowing risks are still valid taking into account be needed ‘to resuscitate’ the Bulgarian econ- the current scope and structure of the OPDR: omy. It is not just the fate of enterprises that is at stake, but also of the entire public sec- i. low absorption rates of OPDR — delayed tor. The investment potential of the latter is uptake of funds (which could be expect- very likely to be significantly reduced due to ed due to the complexity and untested na- decreased personal and corporate tax reve- ture of the new regional approach based on nues, increased number of people on welfare integrated projects) will negatively impact 50 Independent reviews of the strategic approach to the Programme OPDR’s absorption rate; this risk is espe- at the level of Managing Authorities of the cially serious due to the significant por- relevant Operational Programs. Therefore, tion of OPDR allocation earmarked for PA 2; WB team applauds MRDPW’s efforts to engage central-level stakeholders in elaborating oper- ii. limited internal flexibility within the ational modalities for the ITI concepts at this OPDR — while seemingly providing flex- early stage. Feedback on draft ITI Guidelines ibility, the approach to PA2 actually re- clearly shows that MAs have scrutinized the duces the possibility to conduct internal draft and provided MRDPW with a compre- transfer(s) of allocation in case of un- hensive range of comments and suggestions, satisfactory absorption rates under PA2. which should be very useful in enhancing Transfers will be limited to take place the approach. only between regional envelopes under PA2 and/or between PA1 and PA2, which It is the WB team’s understanding — also in could potentially further exacerbate re- light of the responses that MRDPW provided gional disparities. to MAs’ comments — that the work on the draft ITI Guidelines is an ongoing process. iii. limited possibility to monitor and assess Therefore, the assumption of the WB’s review progress on achieving development ob- and independent opinion is not to formulate jectives in selected types of territories specific proposals for rewording of selected due to the thematically untargeted na- parts of the draft Guidelines and the set of ture of PA2, and as a result limited possi- template documents, but rather to provide bility to introduce necessary policy shifts ideas and recommendations for their desired or adjustments. scope for MRDPW’s further consideration. Review of guidelines General remarks for the preparation of ITI 1. Scope of ITI Guidelines concepts — independent opinion and recommen- The current scope of information provid- ed in the draft is not yet sufficient for the dations (26/02/2020) purposes of ITI concept preparation by pro- spective beneficiaries. Examples of missing Introduction information which constitute significant pa- rameters for ITI concept preparation include: MRDPW has provided WB team with the sec- volume of financing available per region, min- ond draft ITI guidelines for review togeth- imum and maximum scope of funding per ITI er with a package of draft document tem- concept, ITI concept selection criteria, eligible plates to be used for the purposes of ITI con- types of projects, strategic framework for the cept preparation by prospective beneficiaries. elaboration of ITI concepts, namely Regional MRDPW consulted on the draft guidelines with Spatial Development Schemes, which are to MA OPs and other entities deemed to be im- include indicative lists of priority investments. portant central level stakeholders in the pro- Taking into account that the programming for cess of implementation of the new integrated 2021 – 2027 is still in its very early stage it will approach (e.g. MoF, Fund of Funds, Rural De- be difficult to fill in all these blanks in the velopment Program MA). MRDPW shared the coming weeks. Therefore changing the title received feedback with WB and these were of the draft to “General rules for implementa- also analyzed for the purposes of this review. tion of the integrated territorial approach in NUTS 2 regions with ESIF funding under the The success of the new integrated territori- 2021 – 2027 programming period’ and conse- al approach depends heavily on a common quently adjusting their scope might enhance understanding of shared strategic objec- the usefulness of the document by providing tives as well as efficient coordination and stakeholders with much needed information synchronization of activities undertaken on the modalities of the new approach. Part 3 Full reviews undertaken 06.2019 – 11.2020 51 I. Description of the new integrated terri- those representing OP Managing Authorities torial approach — rationale behind its in- under the ‘10% rule’. The thematic scope of troduction, its main assumptions and ex- comments and detailed questions provided by pected development outcomes these institutions — in many cases exceeding the contents of the consulted draft — clear- II. Strategic framework (national — regional ly show that there is a deficit on informa- — municipal — functional development tion on the implementation framework of strategies) the new approach, which creates consider- able confusion and misunderstanding among III. Legal, thematic and financial framework key stakeholders. for the implementation of the integrat- ed territorial approach (policy objectives WB team identified the following issues which covered and scope of available funding were simultaneously raised by at least 3 stake- under all relevant OPs, regional finan- holders, which could signal their significance cial envelopes with description of ap- for the overall implementation framework: plied algorithm) i. Risks for meeting N+2 rule generated IV. ITI concepts: by complicated mechanism for ITI con- a. Definition, objectives and expected de- cept elaboration, selection and imple- velopment outcomes mentation (lengthy procedures, addi- b. Thematic scope of intervention tional administrative burden, negative c. Eligible municipalities (criteria and experiences with integrated projects list/map) and CLLD etc.) d. Scope of available funding per ITI con- cept (min-max) ii. Evaluation and selection criteria for ITI e. ITI Partnerships (requirements related concepts — their scope, degree to which to composition, legal form, mechanism they will reflect regional and sectoral de- for selecting partners etc.) velopment priorities, timing of prepara- f. Evaluation and selection mechanism tion, entity responsible for their endorse- (two stages), including selection criteria ment, scope of RDC involvement in ITI g. Measures minimizing risks of delay concept evaluation vs. MAs responsibil- and nonperformance at the stage of ITI ities for project selection implementation h. Institutional and expert support for ITI iii. Approach to measuring public support applicants/beneficiaries as part of the ITI concept evaluation and i. Road map for implementation selection process to minimize subjectiv- ity of assessment V. Description of the coordination mecha- nism between MAs related to implemen- iv. Integration of projects under ITI con- tation of projects under ITI and the role cept during implementation phase and of Steering Committee risks related to delays and nonperfor- mance — what mechanism will be in place to address these issues? 2. Scope of comments from central level stakeholders and implications for v. Coordination and synchronization of draft ITI Guidelines activities between OP MAs in the stage of project selection and implementation The volume of MA comments received (over to ensure smooth contracting 100) on the draft shows that the operational modalities of the new integrated approach, RDC vi. Sources of financing of restructured involvement, ITI concepts elaboration and se- RDCs and specifically of RDC expert ca- lection, as well as implementation of projects pacity to be involved in RDC Preselec- under ITI concepts generate a lot of interest tion Unit — a number of MAs advocate from central level stakeholders, specifically one source, namely TA OPRG 52 Independent reviews of the strategic approach to the Programme vii. Regional financial envelopes (per each ITI concept elaboration for prospective ben- NUTS 2 region) should be calculated to eficiaries (or at least make them a second estimate the size and volume of ITIs per priority) and focus on designing arrange- region and adjust the implementation ments that will be conducive to achieving framework more clarity on the overall framework. A recommended chronology of actions is pre- viii. Specific measures and types of projects sented in the next section. for ITIs under individual OPs — how should they be designed to ensure com- plementarity and synergies between OPs? 3. Recommended steps forward ix. Status of projects constituting ITI con- WB team recommends prioritizing in the com- cept selected for financing: predefined ing weeks two processes related to elabora- project or project proposal to be assessed tion of the implementation framework for within the framework of a competitive the new approach: call for proposals? 1. drafting a dedicated CoM Decree spec- When reflecting upon these comments it might ifying rules and implementation modal- seem that for a number of stakeholders ‘ITI ities of the new integrated approach and concepts’ are merely a theoretical notion ex- isting in some sort of ‘a vacuum’ as — for the 2. identifying prospective ITI concepts time being — there are a lot of unknowns: through broad consultations of draft Re- gional Spatial Development Schemes and • there is no clarity as to the criteria based conducting a survey on ITI concepts on which they will be assessed and selected; Dedicated CoM Decree • there is no strategic point of reference as the Regional Spatial Development Schemes It seems already agreed between the main ac- are not yet available; tors (MRDPW and CCU) that the rules and im- plementation modalities of the new integrat- • there is no clarity on the scope of financing ed approach are to be regulated in a dedicated and tentative number of ITIs per region; CoM Decree. This decree should cover com- prehensively the preparation, grant award • there is no clarity on the status of indi- and implementation process of ITI and reg- vidual projects and mechanism ensuring ulate all important aspects related to the el- their integration during implementation igibility, selection, contracting and imple- mentation of the projects thereof. This spe- • there is no clarity on expert capacity of cific regulatory framework is to serve as the RDCs to conduct evaluation and selection basis for the contractual framework of the of ITI concepts new integrated approach, as the latter should comply with the essentials of the former. The • there is no clarity on thematic measures to contractual framework is to detail only those be designed under each OP to provide fund- aspects of the ITI implementation modalities ing for integrated approach. which are not covered by imperative rules of the regulatory framework, i.e. are left for the This, of course, is an interim situation and involved parties to agree on and specify. as the programming process progresses one by one these ‘unknowns’ will be replaced by Therefore, instead of developing first that con- specific arrangements constituting the com- tractual framework, WB team recommends prehensive implementation framework of the MRDPW to focus first on the preparation of new approach. However due to the signifi- the dedicated CoM Decree and then build on it cance of the currently identified ‘unknowns’ the ITI contractual framework. Otherwise the WB team recommends MRDPW to temporarily contractual framework may require numerous halt the process of preparing guidelines on amendments to reflect the changing essentials Part 3 Full reviews undertaken 06.2019 – 11.2020 53 of the draft regulatory framework until the demand for assistance (e.g. providing TA fi- latter is finally adopted. nancing for preparatory works, undertaking targeted capacity building efforts, provid- Identification of prospective ITI concepts ing advisory assistance by certified/accred- ited experts in areas — both in terms of the- Indicative lists of priority investments in- matic scope and territory — where it is most cluded in drafts of six Regional Spatial Devel- needed, etc.). opment Schemes will play an important role in selecting ITI concepts for funding, as — ac- Moreover, survey findings could better inform cording to MRDPW’s position — ITI concepts, MRDPW on information required by prospec- which will include investment specified in Re- tive beneficiaries to effectively elaborate ITI gional Spatial Development Schemes — will concepts, which could and should influence be awarded extra points during evaluation. the eventual scope of Guidelines for Preparing Therefore, WB team recommends that broad ITI Concepts. consultations of draft Regional Schemes are conducted to ensure that these indicative in- WB team recommends that the survey be con- vestments adequately reflect regional de- ducted in parallel with public consultations of velopment needs and have the potential draft Regional Spatial Development Schemes to mobilize public support . to ensure stakeholder engagement and effec- tively promote the new approach. With a view to facilitating the process of plan- ning interventions for the upcoming pro- gramming period, WB team has already rec- 4. Comments on draft ITI template ommended the MRDPW to conduct an inter- document drafts net survey to identify possible investment ideas to be addressed through integrated a. Partnership Agreement and General projects among potential beneficiaries on the Framework Agreement subnational level. MRDPW accepted this recom- mendation and in January 2020 — upon MRD- The Partnership Agreement (PA) covers the PW’s request — WB team provided a draft ques- internal relations between the ITI concept tionnaire to be utilized for the purposes of the partners, related to the preparation and sub- survey. This survey constitutes a practical tool mission of the ITI concept, and – in case of that could add significant value to the process concept approval - the subsequent applica- of programming of OPs with funds earmarked tion and implementation of the individual for the new approach. Survey feedback could projects included in that concept. There is no be used for addressing some of the knowledge doubt that the PA is needed to streamline the deficits that OP MAs have reported, such as: efforts of the ITI partners to prepare and sub- mit the ITI concept, and later on to develop • estimating demand for funding for ITIs and implement the related bundle of projects. across regions; The General Framework Agreement (GFA) is • estimating prevalent thematic scope and intended to cover the mutual obligations of types of projects; the OP MAs and the ITI partners, related to the preparation, submission, approval, contracting • finetuning the scheme for processing ITI and implementation of the projects covered by concept applications (size of proposed ITIs the ITI concept after the approval of the latter. and their thematic scope may have impact In contrast to the PA, it is the WB team’s opin- on the selection process and required expert ion that the GFA is not needed as an element capacity) and template documents (e.g. part- of the ITI contractual framework. Why? The nership agreement, ITI concepts proposals); responsibilities of the ITI partners to prepare and submit the individual projects they are in • identifying required scope of assistance charge of, as well as their obligation to lawfully required by potential beneficiaries and de- implement their approved and contracted proj- signing adequate tools to effectively meet ects, stem from the applicable legislation on ESIF and 54 Independent reviews of the strategic approach to the Programme ITI implementation7. A dedicated CoM decree will but a kind of good-will declaration of no le- regulate all important aspects related to the gal value. If the specific terms and conditions eligibility, selection, contracting and imple- for the preparation and submission of the in- mentation of the ITI projects, there will be no dividual projects under the approved ITI con- need to reproduce those rules in a contractual cept are specified in the act for the approv- document and thus create an additional paper- al of the ITI concept, the GFA would have no work for the ITI partners and the OP MAs. In own added value and could be removed from this context the only added value of the GFA the ITI contractual framework. is to specify the terms and conditions for the preparation and submission of the individual b. Weaknesses of the template drafts projects by the ITI partners. There are two aspects of the drafts that add Instead in the GFA, the specific terms and value: i) the envisaged mandatory set-up of a conditions for the preparation and submis- Coordinating Team by the ITI partners to sup- sion of the individual projects under the ap- port the development and submission of the proved ITI concept could be specified in the ITI concept and its subsequent implementa- act for the approval of the ITI concept; sup- tion upon approval; ii) the envisaged set-up of posedly this formal act will be issued by the a Steering Committee by the OP MAs involved, OPRG MA after carrying out a compliance ver- as an umbrella body to steer and co-ordinate ification of the RDC decision to select the ITI the implementation of the integrated approach. concept for funding. This act could indicate the terms and conditions, addressed to the Apart from that, from legal perspective both ITI partners, under which the ITI concept is drafts are rather blank documents of a gen- approved for funding, i.e. the terms, condi- eral nature. There are some core issues of the tions and responsibilities for the submission integrated approach which are not covered of the individual projects by the ITI partners, by the drafts. This is probably due to the fact and the consequences in case of a project fail- that those issues are neither (yet) regulated ure for the rest of the ‘integrated’ projects8. (by the dedicated CoM decree), nor (yet) agreed To the other end, the ‘obligations’ of the OP between the involved institutions (OPRG MA, MAs under the GFA are to open relevant Calls other OP MAS and CCU). for Projects covering the approved ITI con- cepts and process those applications until Those two inter-related core issues are the grant award and contracting. Those powers of following: the OP MAs stem from the CoM Decree where those shall be regulated in detail, and there 1. the extent of integration of the ITI individ- is no need to reproduce these in another doc- ual projects throughout the project cycle, ument too. It should be also noted that such i.e. will the failure of a single project fail- a document shall have no legal value, as far as ure at the ITI implementation stage lead to the rights and obligations of any of the par- failure of all projects included in the ap- ties vis-à-vis the other party are not enforce- proved ITI concept; able in case of non-performance9. 2. the 3rd party liability problem, i.e. the neg- So, as far as the obligations of the parties cov- ative consequences for ITI partners from ered by the GFA i) will directly stem from the project application and/or implementation relevant legislation (the dedicated CoM de- failures of other ITI partners. cree), and ii) are not enforceable in case of non-performance, the GFA actually does not Those issues not covered by the two agree- constitute an agreement in the legal sense, ment drafts are commented below. 7. The dedicated CoM Decree on the new integrated approach. 8. The consequences of a single project failure for the rest of the projects under the approved ITI concept shall anyway be regulated in the dedicated CoM decree as this is a key issue for the integrated territorial approach. 9. Neither the ITI partners could enforce the OP MAs to open the Call for Projects specified in the GFA and award grants to them, nor the OP MAs could enforce the ITI partners against their will to prepare, submit and implement their projects. Part 3 Full reviews undertaken 06.2019 – 11.2020 55 c. Integration of projects and 3rd party an ITI project to apply, get contracted and be liability problems successfully implemented would lead to a com- plete failure of all other ITI projects. As far as As seen from the termination clauses of the two various ITI projects would apply to the OP MAs draft agreements, MRDPW supports the approach and be implemented under various time sched- of strict integration of the individual project un- ules, it may happen that even already success- der the approved ITI concept throughout the com- fully implemented projects will be retroac- plete project cycle. Under this strict approach tively cancelled and their beneficiaries will the failure of any single project under the ap- have to return the grant funds already paid to proved ITI concept at any stage of the project them. Thus any failure of an ITI partner (ir- cycle10 shall automatically lead to failure of the respective of the reasons) to prepare, apply, other projects under the ITI concept regardless get contracted and successfully implement of their current status (‘one-for-all’ approach). their own project(s) would lead to negative consequences, i.e. a liability for all the oth- MRDPW justified this approach with two rea- er partners, even for successfully perform- sonable arguments: ing ones for reasons completely beyond their control (so-called ‘3rd party liability’). 1. The ITI concept has been approved for fund- ing with respect to the integrated effect of the The 3rd party liability of ITI partners could bundle of projects as such, where each and any strongly discourage potential project part- of those inter-related projects will have its ners to involve in an ITI partnership, there- own contribution to the achievement the fore this risk needs be addressed properly. common development objective. It is the bundle of ITI projects as such that was eval- WB team again recommends MRDPW to con- uated and selected for funding in view of its sider applying a softer approach to integra- contribution for the implementation of the tion of the ITI projects, aimed at reconcil- integrated territorial strategy. If the approved ing the aim to guarantee the implementation ITI concept is allowed to continue implemen- of the OP performance framework indicators tation in spite of the failure of one or more with the need to provide enough legal cer- of the individual projects, this would retro- tainty to potential ITI partners that their 3rd actively compromise the ITI evaluation and party liability will apply in exceptional cases selection process, as it would constitute an only, so that they will have enough motivation unequal treatment of that concept vis-à-vis to get involved in an ITI partnership. the rest of the submitted ITI concepts which were not selected for funding; Possible options for a ‘soft integration‘’ of the ITI individual projects 2. The OPRG 2021 – 2027 performance frame- work could be negatively affected in case In our opinion there are two options to en- the strict integration approach is not ap- able a softer integration approach with re- plied. The failure of one or more projects spect to the ITI individual projects: under the approved ITI concept will lead to under-performance of already contract- 1. define different categories of projects ed programme indicators which may en- within the ITI project bundle danger the timely and adequate achieve- ment of the OP performance framework For example, two project classifications could be used: (a) core projects (‘ITI pillar While those arguments are legitimate, it should projects’) and non-core projects. Core proj- however be noted that the ‘strict integration’ ects will be those that are definitive for the of the projects of the approved ITI concept ITI concept’s contribution to the integrated at their application and/or implementation territorial strategy (e.g. a project for the recon- stages may have severe negative consequenc- struction of an industrial zone will be a core (pil- es on the overall implementation of the in- lar) project for an ITI concept focused on industrial tegrated territorial approach. Any failure of recovery through industrial zone redevelopment). 10. At project application, contracting or implementation phase. 56 Independent reviews of the strategic approach to the Programme The failure of a core ITI project would by MRDPW was reviewed by the WB team with lead to failure of the whole ITI concept, a view to determining the extent to which while the failure of the non-core ones this strategic document facilitates the pro- will not; (b) split projects into main and gramming of measures and identification of complementary (subordinated) ones (e.g. specific investment priorities for regions un- an infrastructure development project will be the’ der the new integrated territorial approach. main’ project, while the soft vocational training projects complementary to main one will be con- The aim of the review was to determine wheth- sidered a ‘subordinated’ project).The failure of er draft NCSD defines the following elements, the main project will automatically lead which the WB team deems as important for to the failure of the complementary (sub- establishing the strategic planning framework ordinated) ones, but not vice versa. of the new integrated approach: 2. allow for a certain flexibility of the ap- • specific areas/sector/topics for inter-munic- proved ITI concept implementation ipal partnerships; framework. • common development problems/threats for For example, within the individual proj- groups of municipalities; common potentials/ ect direct grant award procedure the OP opportunities for groups of municipalities; MA and the project beneficiary could ne- gotiate and explicitly agree an ‘under-per- • classification of municipalities into func- formance tolerance range’ for the proj- tional-spatial categories/zones with com- ect-specific output and result indica- mon characteristics/profiles for development; tors and specify the conditions under which the beneficiary will be allowed • inter-municipal priorities for spatial devel- to under-perform. Any implementation opment; examples of integrated projects and within that ‘tolerance range’ would not investments. constitute a project failure. Based on the outcomes of the conducted re- view recommendations were formulated for 5. Draft ITI Guidelines increasing the usefulness of NCSD in facilitat- ing the implementation of the new approach. Additional specific comments on draft ITI WB encourages MRDPW to consider the valid- Guidelines were inserted directly in the ity of these recommendations within the on- enclosed file for MRDPW’s reference and going process of public consultations of the consideration. draft NCSD. Review of the draft Key findings of the draft NCSD in relation to the integrated National Concept territorial approach for Spatial Development in Bulgaria during Analytical part of draft NCSD the period 2020 – 2025 Thematic scope of inter-municipal (14/02/2020) cooperation Approach for review The draft NCSD identifies the following areas of the draft National Concept were inter-municipal cooperation and cre- for Spatial Development ation of inter-municipal partnerships should be encouraged: The draft National Concept for Spatial Devel- opment (NCSD) prepared by the National Centre • provision of social infrastructure and ser- for Territorial Development as commissioned vices in peripheral areas (page 4); Part 3 Full reviews undertaken 06.2019 – 11.2020 57 • use of information and communication tech- packages of measures (page 36) and defines nologies for education in remote and depop- the new approach to defining informal areas ulated areas — although without specifying with specific characteristics that should con- these areas (page 13); centrate financial support (page 37 and 38). Im- plementation of integrated investment pack- • construction of gas pipelines for the neigh- ages supporting the development of these in- boring municipalities Bansko and Razlog, as formal areas is envisaged and the role of Re- well as the neighboring Panagyurishte and gional Development Councils (RDCs) in this Pirdop (page 22); regard described (page 38). • coordinated development of the municipal- Identified common inter-municipal ities within the 18 functional urban areas in problems/threats Bulgaria; however clear reference is made only with regard to four currently operat- The draft NCSP identifies the following de- ing areas — Sofia, Plovdiv, Varna and Bur- velopment challenges for inter-municipal gas (page 29); groupings: • promotion of polycentric and balanced ter- • lack of sufficient educational, healthcare, ritorial development: integrated develop- cultural, administrative and social services ment in cities, in rural areas and in regions along with the corresponding lack of the ade- with specific characteristics; improving ter- quate experts in the peripheral areas (page 4); ritorial connectivity; management of envi- ronmental, landscape and cultural values • negative trends in population ageing, as well (page 32); as the reduction of the working-age popu- lation are worst in North West region and • increasing integration between urban and Vidin district, however specific municipal- rural areas based on partnerships between ities or areas affected were not identified the centers of FUAs and the other munici- (page 12); palities (page 33); • intense depopulation in rural areas with • strengthening links between urban and ru- negative natural growth three times lower ral areas at all levels by improving accessi- than urban areas (-13.5 ‰ vs -4.1‰ for 2018); bility and opportunities for employment through planning specific measures to sup- • very low population in 73 municipalities port peripheral and sparsely populated ru- with population under 6000 which puts at ral areas (page 33); risk the very existence of these municipal- ities (page 13); • territorial integration in the border areas of the country — it is not specified however • the lowest economic activity rates along with whether this objective is to be met through the highest unemployment rates in North inter-municipal cooperation, cross-border West region and within the districts of Vi- cooperation or combined (page 33); din (14.9% unemployment in 2018), Vratza (12.9%), Montana (12.1%). Outside this re- • spatial integrity and equal accessibility of gion are districts of Silistra (12.2%), Razgrad public service systems (with emphasis on (10.3%), Targovishte (10.8%), Shumen (10.3%) education, healthcare, culture and sport) and Sliven (10.3%). Draft NCSD also identifies (page 36); that 7 municipalities have more than 40% unemployment rate and 23 municipalities • development of common investment zones are with rates between 25% and 40%. There by partnerships of municipalities (page 42). is not any specification about the type or location of these municipalities (page 14); The draft NSCD also advocates improving the status of specific territories with unfavor- • lack of healthcare services in remote and able socio-economic characteristics through inaccessible areas (page 16); 58 Independent reviews of the strategic approach to the Programme • very low investments for research and de- a partnership of 9 municipalities — Plovdiv, velopment in the districts of Vidin, Vrat- Asenovgrad, Kaloyanovo, Kuklen, Maritza, za, Montana, Haskovo, Targovishte — less Parvomaiy, Rakovski, Rodopi and Stamoli- than 0.3% share of the total national val- yski (page 41); ue (page 18); • several successful examples of inter-munici- • very low foreign investments in the districts pal cooperation with regard to the construc- of Montana and Silistra (page 18); tion of industrial zones are mentioned: Sim- itli — Blagoevgrad, Sliven — Yambol, Gabrovo  • several rural or untransformed industri- — Sevlievo. Four new industrial zones are al areas that lack sufficient transport con- planned to be built in Sofia, with the largest nectivity and labor resources and should be to be located in the northern regions of the a focus for restructuring measures. These ar- capital — Kremikovtsi, Novi Iskar and Vrub- eas are not specified in draft NCSD (page 19); nitsa. The Black Sea Economic Zone Clus- ter is another important initiative based on • insufficient development of high-class road PPP, contributing to the implementation of network in the northern, peripheral and the Accelerated Plan for Economic Devel- border areas of the country (page 21); opment and Revival of Northeastern Bul- garia 2019 – 2030 (page 42). • entire districts of Vidin, Smolyan and Kirdzh- ali are isolated form gas pipelines (page 22); Strategic part of NCSD • lack of internet connections in the districts of Kirdzhali, Pernik, Vidin and Haskovo Classification of municipalities into function - (page 23); highest air pollution in the cities of al spatial categories/zones with common Vidin, Plovdiv, Sofia and Galabovo (page 24); development characteristics/profiles • coastal water pollution in Varna and Burgas The macro-spatial structure of the national on the Black Sea coast (page 24); territory is formed by the basic territorial module — the municipality. Draft NCSD pres- Identified common inter-municipal ents several approaches for grouping munici- potentials/opportunities palities into areas with specific characteristics, e.g. central and peripheral; highly, medium The draft NCSP identifies the following de- and weakly urbanized areas; developed and velopment potentials for inter-municipal deteriorating; coastal, border and mountain. groupings: The nomenclature of areas with specific char- acteristics is open and will be shaped by the • more favorable trends in population ageing nature and purpose of the planned interven- observed in the districts of Sofia-city and tions (page 53). Varna without specifying municipalities or areas (page 12); The main territorial typology applied in draft NCSD is based on the European methodology • concentration of investments for research for determining the degree of urbanization: and development in the districts of Sofia- city(68.5% share of the total national val- • highly urbanized (central) municipalities ue) and Plovdiv (6.1%) (page 18); (more than 50% of the population is con- centrated in settlements over 50,000 inhab- • 6 municipalities with high tourist potential itants or the municipal center has popula- (Nesebar, Varna, Balchik, Sofia, Primorsko tion over 50,000 inhabitants). There are 16 and Sozopol) concentrate more than 67% of municipalities with centers in big cities; the total nights spent by visitors (page 19); • medium-sized urban (intermediate) munic- • huge success of the cluster Thracia economic ipalities — in medium-sized cities where zone for industry and logistics — a result of more than 50% of the population lives in Part 3 Full reviews undertaken 06.2019 – 11.2020 59 settlements from 5,000 to 50,000 inhabi- Europe, which link some of the most valuable tants or the municipal cultural monuments in Bulgaria (page 54). FUAs have significant role for integration between • center has from 5,000 to 50,000 inhabitants. different municipalities (page 55). The emerg- There are 96 municipalities with centers in ing touristic agglomeration areas are also an medium and small cities; important part of the territorial structure of Bulgaria (page 65). Municipalities with limit- • weakly urbanized municipalities (periph- ed access to public services, including neigh- eral) — in small towns or villages, where boring municipalities which can form groups more than 50% of the population lives in are outlined (map on page 89). Draft NCSD re- settlements under 5000 inhabitants or the flects the National concept for tourist zoning municipal centers are smaller than 5000 and defines 9 different tourist regions. These inhabitants. There are 153 municipalities with regions should be the base for the implemen- centers in small towns and villages (page 54); tation of programs and projects for the devel- opment of regional tourist products. High-level hierarchical city centers exert func- tional and spatial influence on neighboring set- The draft NCSD defines a set of territories with tlements and thus begin to form fields of in- specific characteristics. Their borders are out- fluence or agglomeration units of the FUA type lined based on specific geographical charac- (page 54). The axes of urban development are teristics as well as a specific location or on the polycentric linear zones formed by the inte- base of reported demographic, economic, eco- gration of development poles (large and medi- logic, and climate risks (page 110): um-sized cities) with the country’s transport and communication network. These axes also coin- • coastal (on the Black Sea and on the Danube) cide with the cultural corridors in Southeastern (page 120); FIGURE 3.1 NCSD Tourist Regions 60 Independent reviews of the strategic approach to the Programme • mountain (page 123); territories for protection of landscape, natu- • border (page 124); ral and cultural heritage — they cover protect- • rural. ed territories (as defined by national criteria) and protected zones (NATURA 2000) and con- The NCSD provides initial information about stitute 35% of the national territory. The mu- the process of defining the rural municipal- nicipalities with abundance of protected ter- ities under the Rural Development Program ritories are mostly neighboring ones and are and the delimitation with OPRG for the peri- highly spatially concentrated (map on page od 2021 – 2027. Different approaches can be ad- 112). The most important territories with cul- opted for this purpose, including (i) applying tural heritage are presented as zones with con- the category of weakly urbanized municipali- centration of cultural heritage sites. In addi- ties (currently 152) or (ii) grouping all munic- tion, these zones are defined in the context ipalities without an urban centre with more of 9 tourist regions which creates potential than 20,000 inhabitants. The final decision for integration of investments and for achiev- is yet to be made and the draft NCSD includes ing synergies between investments in tour- a map which reflects the 20,000 inhabitants’ ism and cultural heritage (map on page 116). approach (page 125). The draft NCSD defines these types of terri- Territories are affected by different types of tories as informal areas (page 111). It builds risks, e.g. ecological risks (climate, hydrolog- upon the identified territories with specif- ical and geological dangers (page 126); demo- ic characteristics to define functional zones graphic risks (characterized by level of de- for targeted support. According to the defi- population of over 30% for 10-year period nition, a functional zone is a compact spatial (page 127); economic disadvantages (mostly system of integrated territories with com- overlapping with the previous category). The mon or similar conditions and goals (page FIGURE 3.2 Characteristics of Municipalities with Population having less than 20,000 citizens Part 3 Full reviews undertaken 06.2019 – 11.2020 61 129). The concept proposes two types of func- biggest cities. The draft NCSD concludes that the tional zones — 1. very stagnant (social zones) zones defined for the period 2021 – 27 should be which require mainly social measures and 2. provided with concentrated and targeted sup- zones for stimulated development which re- port. Some of the zones overlap which can stim- quire mainly economic measures. ulate the creation of development synergies. Social zones are outlined following a selec- Identification of inter-municipal priorities tion process that consists of four steps: 1. eval- in the domain of spatial development uating three criteria for demographic growth, production and unemployment; 2. summariz- The draft NCSP identifies several priorities ing a common index and defining 90 of the in this respect: weakest municipalities; 3. excluding of munic- ipalities, close to core urban centres; 4. final • common activities and partnership for spa- identification of the zones for targeted support tial planning and urban management be- which consist of 3 or more municipalities. The tween municipalities which are part of FUA result is 8 groups covering 55 municipalities around big and medium cities (page 64); (page 130). These zones are defined for social targeted support under integrated territorial • stabilization of the cities from Level 4 that investment. Zones for stimulated development will support the development and services represent continuous urban axes. Most of them in the rural areas and especially in border include FUA and urban centres for integrated areas (page 65); urban development. Four axes are defined. • cohesion measures will have three dimen- Two types of informal areas are presented into sions: European — with other regions of combined map on page 133 along with the 10 EU Member States; national — between the FIGURE 3.3 Social Targeted Support Zones under ITI 62 Independent reviews of the strategic approach to the Programme Bulgarian NUTS 2 regions; and intra-region- territories with specific characteristics like al — between the districts and municipali- coastal, border, mountain and peripheral. ties in the regions. 5 priorities under this objective include: • envisaged scope of intervention should i) integrated management and sustain- promote: able development of the Black Sea coast and maritime areas, including through • territorial cohesion — by improving con- cross-border cooperation with neigh- nectivity at all levels, strengthening the boring countries from Black Sea re- network of city centres and developing gion for the implementation of the In- cross-border, interregional and transna- tegrated Maritime Policy through the tional cooperation; instruments for spatial planning and ecosystem approach; • economic cohesion — by supporting the development and enhancement of ii) inclusion of Bulgarian Danube munic- regional potential and environmental ipalities and districts in the pan-Euro- protection; pean Danube region and the develop- ment of cross-border partnerships and • social cohesion — by creating equal con- Euroregions for an integrated river ba- ditions for the development of human sin management; protection of water, capital (page 68). soils and biodiversity; and stimulating economic development, communica- • connection of Bulgarian cities in urban de- tion and cultural exchange; velopment axes, integrated in the pan-Eu- ropean network of cities of transnational iii) support for mountain border territo- significance and in the pan-European de- ries through the development of or- velopment axes (page 68); ganic farming in municipalities with irrigation, organic farming in certified • linking significant sites of national cultural areas, ecotourism in its most econom- heritage in regional and pan-European cul- ical forms, tax preferences for conven- tural corridors (page 69); tional industries (food, sewing, wood- working) and more; • strategic framework of draft NCSD includes development priorities for the following iv) implementation of the European Green types of territories: Belt Initiative for Sustainable Develop- ment and nature conservation in the • Priority 1.2.6. Supporting the weakest in- mountain border territories by creat- formal areas (groups of municipalities) ing and management of cross-border through measures with social orienta- protected areas; and tion. This priority is part of Specific ob- jective 1.2. Polycentric territorial devel- restoration of ecological balance and bio- opment (page 70); diversity, adaptation to climate change and risk reduction from natural disas- • Priority 1.2.7. Definition of informal areas ters. The maps below reflect the fol- (functional zones) as balancers of spa- lowing types of identified territories: tial development and their stimulation coastal, mountains, the Danube river. with public investments for leading eco- nomic orientation. This priority is part The draft NCSD also formulates six key objec- of Specific objective 1.2. Polycentric ter- tives of spatial development in Bulgaria: ritorial development (page 70); • stimulating the development of a polycen- • Specific objective 2.2. Stimulated devel- tric network of city-centers by improving opment of specific territories aiming at their connectivity and increasing their eco- integrated planning and development of nomic potential (page 74); Part 3 Full reviews undertaken 06.2019 – 11.2020 63 FIGURE 3.4 Mountain Municipalities and Mountain Border Municipalities FIGURE 3.5 Border Municipalities 64 Independent reviews of the strategic approach to the Programme • improving the quality of urban environ- • equal relations between rural areas and ment in the core support centers of the cities — while retaining their autonomy, cit- polycentric network through integrated ies and rural areas should cooperate through reconstruction and development (page 74); means of integrated spatial development to achieve sustainable growth. The specific • creating universal conditions for econom- tangible and intangible assets of cities and ic growth through optimal utilization of rural areas should be incorporated into plan- local resources, stimulation of alternative ning documents and in the implementation employment and development of new skills of sectoral policies at all levels (page 148); and knowledge (page 74); • strengthening the territorial impact of • improving the quality and maintenance of sectoral policies — spatial development is the spatial integrity of education, health a direct function of sectoral planning, and care, social and cultural services through co- this is especially true for transport and tour- operation between municipalities (page 75); ism infrastructure, electricity transmission networks, and product pipelines. A common • reconstruction and upgrading of the trans- spatial orientation of sectoral policies is ad- port and engineering infrastructure to vocated (but no details provided) (page 149); improve mobility, communication and ac- cess to services (page 75); • partnerships as the new driving force in spatial development (page 149). • utilizing the potential of small settlements with characteristic natural and cultural Examples of integrated projects values and using it as a catalyst for eco- and investments nomic development (page 75). Integrated projects with regional impact should The predefinition of the Spatial Planning Act so be defined in the Regional Schemes for Spa- that Master spatial plans of municipalities will tial Development (RSSD) — this constitutes one cover not only the municipality itself, but also of the most important strategic guidelines the complete extent of the corresponding FUA, of draft NCSD for the development of RSSDs. which should promote and facilitate a more in- There are in total 13 requirements for the for- tegrated approach to planning development in- mulation of RSSDs, which include among oth- terventions (page 76). The cooperation and part- ers the following ones which are strictly re- nership between municipalities with core cen- lated to integrated approach: ters of Level 4 is advocated in order to provide shared services in healthcare, education, culture • integration of regional and spatial planning; and social support (page 77). The need for coor- dinating the development of economical clus- • formulation of medium-term goals, prior- ters and the informal areas with specific prob- ities and perspectives in accordance with lems and potentials is also recognized (page 110); regional specifics and NCSD; The draft NCSD also defines four objectives • coordination and adequate reflection of dif- regarding the sectoral policies and their ferent sectoral objectives (healthcare, edu- implementation in Bulgaria: cation, transport, etc.); • agglomeration as one of the desired forms • planning and implementing integrated ap- of cooperation — at the heart of the imple- proaches for territorial development of the mentation of the NCSD and the key to effec- regions (not explained in detail); tive absorption of EU-financed investments. The policy for stimulating development of • Regional Development Councils should take agglomerations, as associations of equal mu- part in the development process; nicipalities, can be implemented by regulat- ing coordinated joint actions for achieving • Identification of integrated projects (with common development (page 148); regional impact) based on partnerships; Part 3 Full reviews undertaken 06.2019 – 11.2020 65 • identification of measures related to the de- • joint implementation of key infrastruc- velopment of administrative capacity for the tural projects, including improvement of purposes of the new regional policy with transport access, gasification and construc- the help from the central government, the tion of industrial zones; set of integrated projects identified in RSSDs having to be accompanied by initiatives for • development of regional tourist products attracting labor force (page 145); based on natural resources and concentra- tion of cultural heritage, covering groups The draft NCSD suggest the need for elab- of municipalities. orating master spatial plans for groups of municipalities (page 148). 18 FUAs are highlighted as main territorial units for cooperation between municipali- ties. The lack of sufficient legal framework Conclusions of the review for coordinated planning and management and recommendations in agglomerations is highlighted. for changes in draft NCSD Another approach applied in draft NCSD for The draft NCSD defines the basic model for defining investment zones as well as for coop- polycentric development of Bulgaria which eration are the informal areas, which are integrates the different levels of urban centers divided in two types of functional zones: and axes for development into a single spatial system. It also identifies different territories i. very stagnant (social zones) and with specific characteristics based on geo- ii. zones for stimulated development. graphical or socio-economic criteria. With all these spatial layers accounted for, draft NCSD Functional zones are to a certain extent a clearly identifies the complex of develop- prioritization of wide-ranging territories ment problems and potentials throughout with specific characteristics, also defined in the national territory and thus defines the NCSD. In practice, draft NCSD defines the ag- spatial framework for development invest- glomeration areas, and in particular the 10 ments in the country. largest cities, together with the two types of functional zones as focal points for in- It should be underlined that draft NCSD makes vestments for the period 2021 – 2027. This is a decisive and very welcome step towards a decisive step towards achieving a signifi- more focus and concentration of regional cantly greater concentration of resources development measures by providing for the and increasing potential for complementa- first time a transition between the exten- ry results and effects, based on a compre- sive specific territories to much more limit- hensive methodological approach. ed functional zones defined for the purpos- es of targeted and integrated support. Draft There is a need for a more decisive approach NCSD clearly implies the idea of integrat- to promoting integrated territorial devel- ed approach and promotes cooperation be- opment for different groups of municipal- tween municipalities. ities. This goal can be achieved through the inclusion of a special objective into the In both the analytical and strategic part of draft NCSD together with a clear definition draft NCSD, the need for a unified approach of zones and measures for investments. In and inter-municipal cooperation has been this regard, the following recommendations repeatedly presented and promoted. Iden- can be made. tified sectors and topics for integrated ap- proach are primarily: Recommendation 1 • provision of quality and accessible health, educational, cultural, social and admin- Complementing the strategic goals of draft istrative services in peripheral and weak- NCSD with a specific objective for the imple- ly-urbanized areas; mentation of the integrated approach. The 66 Independent reviews of the strategic approach to the Programme topic is currently split between Specific objec- areas, functional zones and specific territo- tive 1.2. Polycentric territorial development ries which somewhat blurs the idea of inte- (Priority 1.2.6. Supporting the weakest infor- grated approach towards groups of munici- mal areas (groups of municipalities) through palities. A single specific objective could be measures with social orientation and Priority formulated under the first strategic objective 1.2.7. Definition of informal areas (functional with the necessary priorities to support the areas) as balancers of spatial development and integrated approach in the designated FUAs their stimulation with public investments for and selected zones. leading economic orientation) and Specific objective 2.2. Stimulated development of spe- The table below presents the proposal for re- cific territories. There is also a mix of differ- structuring of the draft NCSD strategic goals ent terminology applied to describe informal section while maintaining its original structure. TABLE 3.2 Proposal for restructuring of the draft NCSD strategic goals section Strategic goals of NCSD (current version) Proposal for changes Strategic goal 1: Territorial cohesion — by improving connectivity Strategic goal 1: Territorial cohesion — by improving connectivity at all levels, strengthening the network of city centers and devel - at all levels, strengthening the network of city centers and devel - oping cross-border, interregional and transnational cooperation oping cross-border, interregional and transnational cooperation Specific objective 1.1. Integration into the European space — 5 Specific objective 1.1. Integration into the European space — 5 priorities; priorities; Specific objective 1.2. Polycentric territorial development — 7 pri - Specific objective 1.2. Polycentric territorial development — 5 orities including: priorities; 1.2.6. Supporting the weakest informal areas (groups of munici- 1.2.6. Supporting the weakest informal areas (groups of munici- palities) through measures with social orientation; palities) through measures with social orientation; 1.2.7. Definition of informal areas (functional areas) as balanc - 1.2.7. Definition of informal areas (functional areas) as balanc - ers of spatial development and their stimulation with public ers of spatial development and their stimulation with public investments for leading economic orientation) investments for leading economic orientation) Specific objective 1.3. Preserved natural and cultural heritage — 5 Specific objective 1.3. Preserved natural and cultural heritage — 5 priorities; priorities; Specific objective 1.4. Integrated territorial development for groups of municipalities — 3 priorities: 1.4.1. Establishment of functional zones for integrated territo - rial investments by grouping municipalities with common characteristics and goals; 1.4.2. Providing financial support for integrated packages of projects; 1.4.3. Developing administrative capacity for integrated territo - rial investments; Strategic goal 2: Economic cohesion — by supporting the devel - Strategic goal 2: Economic cohesion — by supporting the devel - opment and enhancement of regional potential and environmen- opment and enhancement of regional potential and environmen- tal protection tal protection Specific objective 2.1. Regional competitiveness in support of Specific objective 2.1. Regional competitiveness in support of growth — 7 priorities; growth — 7 priorities; Specific objective 2.2. Stimulated development of specific territo - Specific objective 2.2. Stimulated development of specific ter- ries — 5 priorities: ritories — 6 priorities: 2.2.1. Integrated management and sustainable development of 2.2.1. Integrated management and sustainable development of the Black Sea coast and maritime spaces, incl. through the Black Sea coast and maritime spaces, incl. through cross-border cooperation with neighboring countries from cross-border cooperation with neighboring countries from Black Sea region for the implementation of the Integrated Black Sea region for the implementation of the Integrated Maritime Policy through the instruments for spatial plan- Maritime Policy through the instruments for spatial plan- ning and ecosystem approach; ning and ecosystem approach; 2.2.2. Inclusion of Bulgarian Danube municipalities and districts 2.2.2. Inclusion of Bulgarian Danube municipalities and districts in the pan-European Danube region and the development in the pan-European Danube region and the development of cross border partnerships and Euroregions for an inte - of cross border partnerships and Euroregions for an inte - grated river basin management; protection of water, soils grated river basin management; protection of water, soils and biodiversity; and stimulating economic development, and biodiversity; and stimulating economic development, communication and cultural exchange; communication and cultural exchange; 2.2.3. Support for mountain border territories through the devel- 2.2.3. Support for mountain border territories through the devel- opment of organic farming in municipalities with irrigation, opment of organic farming in municipalities with irrigation, organic farming in certified areas, ecotourism in its most organic farming in certified areas, ecotourism in its most economical forms, tax preferences for conventional indus - economical forms, tax preferences for conventional indus - tries (food, sewing, woodworking) and more; tries (food, sewing, woodworking) and more; Part 3 Full reviews undertaken 06.2019 – 11.2020 67 Strategic goals of NCSD (current version) Proposal for changes 2.2.4. Implementation of the European Green Belt Initiative for 2.2.4. Implementation of the European Green Belt Initiative for Sustainable Development and nature conservation in the Sustainable Development and nature conservation in the mountain border territories by creating and management mountain border territories by creating and management of cross-border protected areas; of cross-border protected areas; 2.2.5. Restoration of ecological balance and biodiversity, adap - 2.2.5. Restoration of ecological balance and biodiversity, adaptation tation to climate change and risk reduction from natural to climate change and risk reduction from natural disasters disasters 2.2.6. Supporting functional zones for integrated development as balancers of spatial development and their stimula- tion with public investments; Strategic goal 3: Social cohesion - by creating equal conditions Strategic goal 3: Social cohesion - by creating equal conditions for the development and realization of human capital for the development and realization of human capital Specific objective 3.1. Spatial connectivity and access to services Specific objective 3.1. Spatial connectivity and access to ser- – 3 priorities; vices – 4 priorities including: 3.1.4. Supporting functional zones for integrated development for better access and quality of public services; Specific objective 3.2. The quality of educational, health, social Specific objective 3.2. The quality of educational, health, social and cultural services – 4 priorities. and cultural services – 4 priorities. Recommendation 2 Considering that the different types of func- tional zones and agglomerations overlap and Complementing the section on informal areas draft NCSD promotes projects creating devel- with specific characteristics, problems and opment synergies, the most appropriate ar- potentials with a map and description of the eas to be covered by integrated projects can appropriate zones for the implementation of be obtained as a result of a cross-section the integrated approach. A specific proposal between different zones characterized by for zones (groups of municipalities) for an in- certain development problems or poten- tegrated approach and inter-municipal cooper- tials. Such a map could be a synthesis of the ation will emphasize the importance of the new map on page 133 and the maps with agglom- policy paradigm and facilitate its implementa- eration areas, tourist areas, concentrations tion. The proposed comprehensive map would of cultural heritage, territories with natu- clarify and refine the idea of integrated ap- ral heritage and territories with deteriorat- proach along the functional zones. It would ing public services. The map should not be also give a very clear guidance for the work of a mechanical overlay of the individual lay- the Regional Development Councils. ers, but rather an identification of clear groups of municipalities for the purpos- The current map from draft NCSD includes es of the implementation of the integrated zones for stimulated development, however approach . It should be based on the func- they are not zones delimited based on munic- tional zones, but also reflect other import- ipal units but rather axes, which means the ant conditions such as boundaries of the precise territorial scope is not defined. It also planning regions. defines social zones (8 groups with 55 munici- palities). Some of these groups consists of mu- At the same time, the currently defined zones nicipalities located in two different NUTS 2 re- can be supplemented by elements of other gions, which could pose certain difficulties in maps. For example, at present, Priority axis terms of planning and implementing invest- III for stimulated development between Varna ments. Despite the idea of flexible design of and Burgas does not include Municipality of zones, the proposed leading role of RDCs in Balchik, although it is Varna and Balchik that the integrated project packages predetermines are part of a concentration of cultural heritage, the compliance of zones with boundaries of respectively, to form a regional tourist prod- planning regions (NUTS 2). Also, draft NCSD uct. Another example — the social zones are defines these supra-regional zones, but this now defined based on three criteria includ- is not reflected in RSSDs which are confined ing demographic growth, productivity and to abovementioned boundaries (see Figure unemployment, but they do not cover the 3.6: the map from draft NCSD, and Figure 3.7 very important issue related to access to pub- from the draft RSSD for North East Region). lic services (see Figure 6.8). 68 Independent reviews of the strategic approach to the Programme FIGURE 3.6 Zones for Stimulated Development FIGURE 3.7 Regional Scheme for Spatial Development Part 3 Full reviews undertaken 06.2019 – 11.2020 69 FIGURE 3.8  Municipalities with deteriorated public services Recommendation 3 zones; optimizing the use of natural and cul- tural heritage potential; development of hu- Alternatively, draft NCSD may be supple- man resources and increase of economic ac- mented not with a specific map, but with tivity and employment. guidelines for defining integrated approach zones within the RSSDs, including taking into account the conclusions of the draft NCSD Review of the draft con- on the role of agglomeration areas, the two types of functional zones, cultural-tourist cept for the evaluation and natural potentials, as well as the formal and selection of concepts boundaries of regions. for Integrated Territorial Investments at the level Recommendation 4 of Regional Development Councils (RDCs) during The guidelines mentioned in recommenda- tion 3 guidelines may additionally be supple- the programming period mented by identification of key development 2021 – 2027 (10/02/2020) profiles/priorities in the groups of munic- ipalities that will ensure coherence between On January 24, 2020 MRDPW shared with the the common national development goals and World Bank (WB) team the Draft Concept for the the more specific decisions at regional and lo- Evaluation and Selection of Concepts for Integrat- cal level. For example, these priorities could ed Territorial Investments (ITI) to be conducted cover the provision of high-quality public ser- at the level of RDCs for review. The draft out- vices; construction of industrial and economic lines: the modalities of the evaluation and 70 Independent reviews of the strategic approach to the Programme selection process, including its timeline and criteria for ITI project packages at the level chronology; the scope of engagement and re- of individual OPs and the RDCs customizing sponsibility of the RDC expert and manage- them to reflect specific regional development ment tiers; the role of the general public; ideas priorities. for the selection criteria system; and the scor- ing mechanism. A. WB team’s assumptions for The significance of this document cannot be the preliminary review of the underestimated, as its assumptions will lead draft concept to the elaboration of a fully-fledged evalu- ation and selection system for ITI concepts It is the WB team’s understanding that the to be applied during the next Operational evaluation and selection mechanism set out Program Regions in Growth (OPRG) and by in the concept would aim to meet two key respective OPs with funds earmarked for the strategic objectives: new integrated territorial approach. The fact that the process of elaborating the framework 1. ensure the selection of high quality ITI for evaluating and selecting ITI concepts has concepts with the potential to have the already commenced highlights that MRDPW highest regional impact. Such ITI con- fully acknowledges the importance of this cept would consist of integrated and com- task in setting the foundation for future pro- plementary projects eligible for funding gramming activities. The WB team commends under individual OPs that could be suc- these efforts and stands ready to provide any cessfully implemented by respective ben- assistance and advise required to fine-tune the eficiaries — members of ITI concept part- modalities of the framework and as per the nerships; and terms of the reimbursable advisory agreement signed between MRDPW and the WB. 2. build the capacity and credibility of RDCs as important and efficient elements of the The WB team fully acknowledges the positive EU funds management framework, contrib- steps MRDPW is taking to effectively involve uting to the effective implementation of the RDC management tier in the ITI concept place-based interventions under the new selection process. However, there are serious integrated territorial approach. short, medium and long-term risks associat- ed with the mechanism as proposed, which An important consideration is the need to de- are described in this note. Therefore, the WB sign and enforce a transparent, workable and team suggest MRDPW consider an alterna- efficient operational framework for involv- tive approach. Such approach would need ing RDCs, conducive to strengthening their to reconcile the need for giving greater in- legitimacy and credibility over time. volvement of the regional tier in ITI con- cept selection with the need for a transpar- These assumptions were applied for the pur- ent and credible mechanism calibrated to poses of the WB team’s preliminary review ensure high quality projects are selected. and led to the formulation of the following comments. If MRDPW agree, the WB team can formulate recommendations for an evaluation and selection mechanism for MRDPW’s further B. Initial comments on the consideration. These recommendations could proposed evaluation and be provided after the WB team completes the selection mechanism ongoing review of the draft Regional Spatial Schemes and complementing this with an General comments analysis of the modalities used in other EU countries for the evaluation and selection The WB team acknowledges the need to effec- mechanisms where regional tiers are involved. tively engage RDCs in the evaluation and selec- One of the options could entail involving the tion of ITI concepts and increase the regional RDCs in the process of formulating selection impact of interventions while ensuring public Part 3 Full reviews undertaken 06.2019 – 11.2020 71 support for their implementation. However, of operations to be selected with a view the draft Concept appears to include an ex- to maximize the contribution of Union cess level of subjectivity to the evaluation funding to the achievement of the ob- and selection of ITI concepts, which raises jectives of the programme.” a number of serious concerns. According to the proposed mechanism 30% of the over- 2. In selecting operations, the managing all score will stem from the expert evalua- authority shall: (c) ensure that selected tion conducted by RDC Pre-selection Units, operations present the best relationship and the remaining 70% is to consist of: in- between the amount of support, the ac- dication of public support (20%); individual tivities undertaken and the achieve- evaluation (scoring) by members of RDC man- ment of objectives. agement tier (45%); and concluded with their vote (5%). The evaluation by the RDC man- These two provisions imply the require- agement tier can be regarded as de facto dis- ment for a transparent selection through cretional political decision-making based on quality-based competition between eligi- subjective personal preferences, rather than ble operations. The proposed mechanism an objective quality-based evaluation. Pro- for the selection of ITI concepts through a viding the public with the possibility to eval- primarily discretional political decision of uate project concepts is highly unusual and the RDC management tier covers neither could also be subject to misuse. The predom- the transparency (both of the actual pro- inantly subjective scope of evaluation pro- cess in terms of procedural arrangements, posed in the mechanism will also make the as well the criteria applied for the purpos- task of providing applicants of rejected con- es of evaluation and eventual selection of cepts with well-substantiated feedback con- ITI concepts), nor the quality-based selec- ducive to improving the quality of a concept tion requirements of the above provisions. very difficult, if not impossible. • Bulgarian ESIF Management Act Identified risks related to the proposed This Act provides for two options of grant evaluation and selection mechanism award: (i) direct grant award (i.e. without competitive selection — ad hoc aid) to named 1. Formal legal inconsistence with the EU beneficiaries or (ii) grant award through a and national regulatory framework competitive selection of operations. Named beneficiaries are entities explicitly identi- The WB team identified two sets of legal risks fied either in (a) a relevant OP or (b) a docu- related to the proposed mechanism: ment adopted by the Monitoring Commit- tee of an OP (cf. Art. 43, para. 1) as the ben- a. Risk of formal legal inconsistency with eficiary of a defined action. the draft CPR stipulations and Bulgarian ESIF Management Act; and Under the draft concept, the project bene- ficiaries shall not be identified in advance b. OP MAs cannot delegate discretional deci- by the relevant OPs but selected by the RDCs sion-making powers to the RDCs related within the framework of ITI concept evalu- to the selection of ITI concepts. ation and selection process, therefore those beneficiaries cannot be regarded as “direct • Draft CPR 2021 – 2027 beneficiaries”. If the ESIF Management Act would remain as is, this would mean that Under Article 67 of draft CPR: aid beneficiaries under the ITI would have to be selected through a competitive grant “For the selection of operations, the man- 1. award procedure. Such procedure — if opt- aging authority shall establish and ap- ed for by MRDPW — should comply with the ply criteria and procedures which are principles of free competition, equal treat- .... transparent [...]. The criteria and pro- ment, transparency (cf. Art. 29, para. 1 of the cedures shall ensure the prioritisation ESIF Management Act). 72 Independent reviews of the strategic approach to the Programme Taking into account current stipulations of • Head of MRDPW’s Regional Department, s/ the ESIF Management Act, there seems to be he should be a manager/head of only one a legal vacuum’ in which ITI concepts and of the relevant RDC units to ensure a clear prospective project beneficiaries currently functional separation of the responsibilities exist according to the assumptions of the along the different stages of the ITI project draft mechanism, which creates uncertain- cycle, in order to rule out potential con- ty from the legal perspective. flicts of interest. • Delegation of discretional decision-mak- • The draft RDC Involvement Mechanism pro- ing powers by OP MAs to RDCs poses a new structure for the RDC expert units to ensure functional separation be- As far as the involvement of RDCs in the se- tween the different expert units. The pro- lection of ITI concepts shall be based on del- posal needs to be further developed, as it egation from the OP MAs, the proposed se- seems that public consultation is intended lection mechanism implies that OP MAs will to constitute a part of the ITI concept for- practically have to delegate to the RDCs dis- mal evaluation. The proposed single Medi- cretional project selection powers, which the ation & Public Consultation Unit with Me- OP MAs themselves do not possess. OP MAs are diation and Public Consultation sub-units not authorized to take discretional decisions will need to be revised, as the two functions not based on objective quality-based project need to be implemented by separate units evaluation, related to the selection of opera- (as originally envisaged by MRDPW). tions to be funded. This is potentially a prob- lem, as OP MAs are ultimately responsible • It is not yet known if there will be any hi- for the lawful selection of funded opera- erarchical subordination between the Head tions in line with the principles of trans- of MRDPW’s Regional Department and the parency and efficiency; however, under the RDC expert unit involved in the ITI con- draft ITI selection concept OP MAs will not cept selection; and RDC management level dispose of a mechanism to ensure that. (including the RDC Chairman) and the RDC expert units. If any such hierarchical sub- 2. Risks related to potential conflict ordination would exist, then it will be an- of interest other area of potential conflict of interest, which will need to be mitigated (possibly The proposed mechanism generates several through the RDC’s Internal Rules). areas for the potential emergence of con- flict of interest, which can negatively impact 3. Adverse effects of political discretion the transparency and credibility of the eval- in the ITI concept selection process uation and selection process. The WB team for quality of supported operations identified the following areas of potential conflict of interest, which would require ade- The predominance of political and subjective quate mitigation mechanisms: factors in the evaluation and selection pro- cess may impede the creation of a mechanism • District Information Center (DIC) experts that would maximize the selection for fund- are envisaged to perform two separate func- ing of only operations that have the highest tions related to ITI concepts: (i) ITI promotion potential to maximize (based on evaluation and support (Mediation Unit); and (ii) public conducted on the grounds of objective, tech- consultations as a part of the formal evalua- nical criteria) the contribution of EU fund- tion procedure (Public Consultation Unit). If ing to the achievement of the objectives of a DIC has a formal Head/Manager, then the OPs and effectively support socio-economic fact that two groups of DIC experts are hier- development processes at the regional level. archically subject to that common superior The proposed mechanism generates the risk [who could potentially influence their deci- of selecting projects that rely on sufficient sions] gives rise to a potential conflict of in- political backing, instead of their objec- terest between the two performed functions; tively verified merits. Part 3 Full reviews undertaken 06.2019 – 11.2020 73 The predominance of political and subjective of implementing the new regional integrated factors might also result in prospective ben- approach. OP Managing Authorities, if dissat- eficiaries making more effort to effectively isfied with quality of projects selected at the solicit the political support of the RDC man- level of RDCs may want to return to a ‘busi- agement tier rather than to improve the ness as usual’ approach to financing frag- quality of their project proposals. mented, non-integrated operations. This may put at risk the objective of the new in- 4. Adverse effects of political discretion tegrated approach and may result in perpet- in the ITI concept selection process uating and exacerbating negative trends for implementation of OPRG 2021 – 2027 related to regional disparities observed and other OPs involved in the integrated across Bulgaria. regional approach 6. Adverse effects of political discretion As described in point 3, the proposed mech- in the ITI concept selection process anism may not ensure the selection of the for strengthening RDCs and prospects best quality projects, which is likely to gen- for longer-term decentralization erate a number of risks for the performance of involved OPs. For OPRG 2021 – 2027 the Bank The proposed mechanism is likely to highly team estimate this risk as very high due to ‘politicize’ the ITI concept selection process the large size of allocation dedicated to ITIs; at RDC level and in turn diminish the value for other involved OPs this risk is moderate of expert assessment, which was supposed as it is only 10% of their respective program to be the cornerstone of the new RDC role at stake. These risks are both qualitative and and a focal point for their capacity build- quantitative, as: ing in the coming years. The willingness of central and local level stakeholders to • insufficient quality of projects might neg- invest in continuous capacity building of atively impact implementation and result RDCs might be significantly reduced, as the in failure to generate expected outcomes, RDC expert level is likely to be perceived as which constitutes a risk for meeting OP largely irrelevant, due to the predominant performance indicators; impact of subjective, political factors pre- dominant in the ITI concept selection pro- • insufficient quality of project proposals may cess. This perception may have a negative prevent them from acquiring funding from impact on plans for building the credibil- respective OPs or may result in their termi- ity of RDCs in the short-term, and vital, cred- nation by dissolving grant agreements due to ible and professional entities at NUTS 2 level non-performance (also in cases when just one in the long term. project under ITI concept fails — if MRDPW upholds its current approach to integration The potential failure to put in a place a mech- of projects under ITI concept during imple- anism that could maximize the probability of mentation, which foresees failure or termi- selecting good quality operations for financ- nation (?) of all projects in the integrated ing due to the predominantly political nature package in case one fails). This in turn may of the proposed assessment process at the RDC result in low levels of contracting and pro- level may have a detrimental impact on any tracted contracting and disbursement, con- decentralization plans, as it will provide stituting risks to meeting goals related to a viable argument proving the incompetence the financial progress of OPs; of RDCs and their inability to effectively perform new functions under the integrated 5. Adverse effects of political discretion in the territorial approach. ITI concept selection process for implemen- tation of the new integrated regional approach The risks for OPs implementation as described in point 4 may negatively impact the prospects 74 Independent reviews of the strategic approach to the Programme Proposal of survey on programming period, WB team recommended the MRDPW to conduct an internet survey to iden- ideas for territorial in- tify possible investment ideas to be addressed through vestments to be financed integrated projects (IP survey) among potential from EU Structural Funds beneficiaries on the subnational level. The MRDPW accepted this recommendation and under the 2021 – 2027 requested WB team to prepare a draft of the programming period questionnaire to be utilized for the purpos- (16/01/2020) es of the survey subject to MRDPW’s approval. Introduction Assumptions for the survey In light of the findings of strategic consulta- Draft questionnaire (enclosed to this note as tions and with a view to facilitating the process annex 1) was elaborated by WB team apply- of planning interventions for the upcoming ing the following assumptions. Objectives • promoting and raising awareness of local, district and regional stakehold - of the survey ers about the new integrated territorial approach and main tool for its imple- mentation, namely integrated projects; • activating prospective beneficiaries and motivating them to start elaborat- ing project concepts and identifying possible partners; • estimating demand for funding for IPs across regions and prevalent types and thematic scope of projects; • identifying potential bottlenecks (e.g. misperception of IPs’ nature and objective, deficit of ideas for IPs, unclarity about partnership formation); • identifying areas where potential applicants need specific assistance (e.g. training, project pipeline, advisory assistance, document templates, additional efforts to effectively promote IPs) • creating a repository of ideas for investments (‘bank of ideas’) for future reference and identifying sectors and territories with highest demand for financing. Timing The survey will a part of a broader information campaign run by MRDPW and of the survey CCU to promote the new approach and to raise awareness of key stakeholders across the country. Potential timeframe for the survey: February – March 2020 Survey respondents Three options to consider: Option 1 (broad approach) Prospective beneficiaries of IPs under 2021 – 2027 programming period: local and district authorities in all 6 NUTS 2 regions, NGOs, business community, schools and universities, R&D centers, social services providers etc. Option 2 (targeted approach) Selected group of ca. 50 potential IP beneficiaries across 6 NUTS 2 regions. Option 3 (phased approach: targeted + broad) Stage 1: selected group of ca. 50 potential, most ‘mature’ IP beneficiaries (pos - sibly with a good track record of already implemented EU-financed develop - ment interventions) across 6 NUTS 2 regions and analysis of the received feed - back ( à potential adjustments of the questionnaire to follow). Stage 2: broad group of prospective beneficiaries across 6 NUTS 2 regions from different sectors (as in Option 1 minus the ones already surveyed during Stage 1) Scope of survey • collecting information on IP ideas, including thematic scope, expected socio-economic results, estimated volume of funding to finance the pro - ject(s), expected timeline, potential partners etc.; • obtaining information about assistance required by respondents to advance preparatory work on project concepts Institution responsible MRDPW for running the survey Survey duration 30 days (from launch) Part 3 Full reviews undertaken 06.2019 – 11.2020 75 Utilizing survey findings Issues for consideration The intention of the WB team is to provide Timing of the survey launch the MRDPW with a practical tool that — when and end date applied — could add value to the process of programming. Therefore, the questionnaire It is recommended to synchronize the tim- was designed in such a way to use the feed- ing of the survey with other CCU/MRDPW-led back received from stakeholders for the pur- information activities related to the intro- poses of: duction of the new regional approach and regional policy programming post-2021 • designing a more targeted information cam- envisaged by the MRDPW in 1Q 2020 (e.g. paign aimed at tackling identified knowledge the launch of public consultations of the deficits among stakeholders and reaching draft Regional Development Schemes) to out to those that either did not participate promote the survey and encourage stake- in the survey or their participation was holder participation. insufficient; • estimating the volume of required financing; Technical aspects of the survey • determining thematic scope and types of Technical instructions for respondents will projects; to be added to the questionnaire once the fol- lowing issues are determined: • identifying required scope of assistance required by potential beneficiaries and de- • how the questionnaire will be made avail- signing adequate tools to effectively meet able to respondents — link sent via email demand for assistance (e.g. providing TA fi- and questionnaire filled in and submitted nancing for preparatory works, undertaking online? Word document to be filled in and targeted capacity building efforts, provid- sent back — where (email address)? Dedi- ing advisory assistance by certified/accred- cated web page with the survey and any ad- ited experts in areas — both in terms of the- ditional information MRDPW may wish to matic scope and territory — where it is most share and use for future updates regarding needed, etc.) the implementation of the new approach? Any other arrangements? • designing a scheme for processing IP appli- cations (size of proposed IPs and their the- • email address where technical and other matic scope may have impact on the selec- queries related to the survey can be sent by tion process). respondents While the response rate will influence the rep- resentativeness of the survey, it might con- Additional information to be shared stitute a valuable input to the programming with respondents process and help triangulate the IP concept that will be applied during the next program- MRDPW may wish to share additional infor- ming period. The survey will also help create mation as part of the survey effort (e.g. con- a pool of proactive prospective beneficiaries, cise description of the new approach includ- who could be potentially engaged in consult- ing IP definition and requirements related ing various elements of the foreseen imple- to partnership formation and adequate divi- mentation framework shall such a need arise sion of responsibilities among partners; ex- in the future. amples of integrated packages of projects to 76 Independent reviews of the strategic approach to the Programme direct respondents in their thinking about Specific topics for discussion with MRDW ideas for projects, etc.). Once this is decid- during January 24, 2020 meeting ed, relevant information will be included in WB team would like to take the opportunity to the survey information provided to poten- discuss the following specific issues related to the survey during the upcoming meeting with tial respondents. MRDPW team: • scope and timeframe of other MRDPW/CCU promotional/information activities that the MRDPW and WB team responsibilities survey is to be a part of and preferred tim- related to the survey ing of the survey • selected option for determining survey re- spondents (Option 1, 2, 3 or any other) It is important to clearly define roles of MRD- • scope of information (e.g. presentations, doc- PW and WB team at all stages of the survey, uments, examples of IPs, draft IP guidelines) including: on the new approach and IPs that MRDPW would wish to share with survey respondents to raise their awareness • promotional activities (to ensure high stake- • preferred technical arrangements for the holder engagement) and survey • division of responsibilities and tasks relat- ed to IP survey preparation and promotion, • the analysis of received feedback (to ensure launch, collecting of feedback, analysis of the findings are actually utilized for the ben- submitted inputs etc. between MRDPW efit of the programming process and the pro- and WB team spective beneficiaries). 78 Independent reviews of the strategic approach to the Programme ANNEX 1 DRAFT QUESTIONNAIRE Invitation to participate in a survey on ideas for territorial investments to be financed from EU Structural Funds under the 2021 – 2027 programming period You are kindly invited to participate in a sur- framework to ensure swift uptake of available vey organized by the Ministry of Regional funding and ensure effective implementation. Development and Public Works on ideas for territorial investments in regions to be co-fi- Please note that if an idea for a package of in- nanced from the EU structural funds in years vestments is to be recognized as ‘integrated’, 2021 – 2027. The Government of Bulgaria it will require: will dedicate XXX million LEV to co-finance • the identification of a minimum of … part- these types of investments and your inputs ners (i.e. local administration, business en - terprise, education facility, NGO etc.); to this survey will help inform modalities • the identification of a minimum of …. proj - of how these resources will be distributed. ects that form a package and • the formulation of a joint development ob - The Ministry of Regional Development and jective(s) to be met through the implemen - Public Works is currently engaged in the tation of the package. process of elaborating the implementation framework of the new integrated territorial approach to be applied under the 2021 – 2027 Please note that your participation in the sur- programming period. The main goal of the vey is voluntary. You can submit as many ideas new approach is to tackle territorial needs for integrated packages of projects as you wish. in a more effective way and to generate sub- You are not in any way bound by your sub- stantial socio-economic effects for supported mitted idea(s). The submitted idea(s) do not territories, stimulating growth, and improv- prejudge the scope of the package(s) you may ing the quality of life of citizens. In order to wish to elaborate in the future. meet these goals, an integrated approach to investments will be promoted to adequately address territorial development needs, en- Questions: courage cooperation between stakeholders and effectively pool resources. Stakeholders Your name: across regions will be encouraged to establish Your organization: partnerships and elaborate and implement Your contact information (e-mail address integrated packages of development projects. and telephone number): Your region: (please choose from a list) The purpose of this survey is to collect infor- mation on investment needs from prospec- 1. What is/are the development problem(s)/ tive beneficiaries: local and district authori- challenge(s) or development potential(s) ties in all six NUTS 2 regions in Bulgaria, NGOs, of your region you wish to address through business community, schools and universi- an integrated package of projects? ties, R&D centers, social services providers etc. The survey will help identify the scope of Describe the thematic scope of those prob- assistance required by respondents and conse- lems/challenges (e.g. difficult access to, or quently the results will be used to support the low level of, basic services available, e.g. elaboration of an adequate implementation healthcare, social services, etc.; low level Annex 1 Draft questionnaire 79 of economic activity, resulting in high of the investments from the package (i.e. unemployment, etc.). Please refer to rel- feasibility study, environmental impact evant socio-economic data to substanti- assessment, cost analysis, public consulta- ate your choice. tions, socio-economic analysis, legal anal- ysis, letter of intent etc.). 2. What projects would you propose to tackle the abovementioned problems/challenges? 7. Specify assistance you would like to re- ceive to advance your idea for an integrat- Describe the projects one by one, by the- ed package of investments to the stage of matic scope (corresponding to the iden- a project application for financing (please tified problems/challenges), the expect- choose from a list): ed results of the implementation (quan- titative and qualitative), as well as explain a. Eligibility of project ideas why you consider those projects inter-relat- ed (integrated), i.e. contributing to a com- b. Legal assistance in establishing proj- mon development objective(s). ect partnership 3. Identify your potential partners and c. Capacity building for project partners briefly describe their expected roles in the delivery of the integrated package of d. Financing of preparatory work (e.g. investments. feasibility study, legal analysis, finan- cial analysis) 4. Approximate the required volume of fi- nancing to implement the integrated pack- e. Advisory support in determining the age of investments. scope of the integrated package of in- vestments 5. Specify the estimated period required to implement the integrated package of f. Collecting and analyzing specific so- investments cio-economic data about your locality/ region 6. Specify any preparatory work done so far to enable the implementation of any g. Any other — please specify. 80 Independent reviews of the strategic approach to the Programme ANNEX 2 PROPOSAL FOR A QUESTIONNAIRE FOR MAS (16/01/2020) All the proposed questions relate to the expe- 4. Did you undertake any activities aimed at rience of MAs in selecting for financing and activating potential beneficiaries specifi- implementing operations under the current cally targeting those on the subnational programming period and their ideas for ter- level (e.g. information campaign(s), train- ritorial investments in the future. The input ing, preferential approach at the stage of will be useful for preparing the implementa- project selection)? tion framework of the new integrated approach under the 2021 – 2027 programming period. 5. Could you identify any types of interven- tions currently implemented under your respective OP that could benefit from a Questions related more integrated approach in terms of in- creasing their socio-economic impact? to 2014 – 2020 programming period Questions related 1. Please share which sets of selection crite- ria for specific OP (sub)measures have prov- to 2021 – 2027 en to be most conducive to selecting ade- programming period quate operations to obtain financing from your respective OP. 1. Please share your ideas on types and the- matic scope of projects to be eligible for fi- 2. Please share the types of subnational en- nancing under OP within the framework tities/stakeholders (e.g. local and district of the new integrated approach (‘10%”) administration, NGOs, education facili- ties, social services providers, business 2. Can you specify which types of entities entities) who were beneficiaries of project (on subnational level) are most likely to co-financed from your respective. Which be beneficiaries of projects to be financed of the types was predominant? How would under OP within the framework of the new you assess your experience in interacting integrated approach (‘10%”)? with these entities (i) at the stage of proj- ect selection, (b) at the stage of project im- 3. How do you assess the capacity of those plementation, and (c) at the stage of proj- entities to successfully apply for finding ect closure/ex post audits? How would you and implement projects? Do you identi- assess the capacity and responsiveness of fy any potential problems, bottlenecks? these entities throughout the process of What are they related to (e.g. insufficient project selection/implementation/closure? capacity, lack of experience in project im- plementation, lack of potential to gener- 3. Could you describe whether you have en- ate adequate project ideas)? countered problems at any stages of proj- ect implementation that were specific to 4. What would be your preferred way of se- these types of beneficiaries? If so — what lecting projects for financing under the kind of problems? Were you successful in 10% rule — calls for project proposals or adequately addressing them? How? an indicative list of pre-selected projects? Annex 2 Proposal for a questionnaire for MAs (16/01/2020) 81 A hybrid approach incorporating both share which of them and when should be mechanisms? Please elaborate on the se- put in place to facilitate: lected approach. a. the process of OP preparation and 5. What are the vital prerequisites for success- ful implementation of the new integrated b. the process of OP implementation approach horizontally across OPs and spe- cifically under your OP? Are these prereq- with regardto the 10% put aside for the uisites currently in place? If not — please new policy approach. 82 Independent reviews of the strategic approach to the Programme ANNEX 3 REVIEW OF THE OPDR 2021 – 2027: SUGGESTIONS ON AN ALTERNATIVE STRUCTURE FOR PRIORITY AXES AND THE IMPLEMENTATION MECHANISMS FOR THE NEW REGIONAL APPROACH (08/10/2019) Background (some restrictions apply to municipalities supported under PA 1). The PA would be fi- The World Bank (the bank) team conducted nanced with 94% of OPRG funds plus 10% a review of the proposed priority axes and im- from each of the other OPs,11 except Trans- plementation mechanism for the Operational port and Food Provision (in total approxi- Programme (OP) Regions in Growth (OPRG) mately Euro 2.9 million12. for 2021 – 2027. Based on this review and the findings and recommendations that came out At this stage, specific measures or sub mea- from the strategic consultations, the bank sures are not foreseen under the proposed team would like to share some preliminary OPRG structure to allow for maximum flexi- comments and suggestions for the Ministry bility, which in principle is an understand- of Regional Development and Public Works able and sensible approach. (MRDPW) and the Central Coordination Unit (CCU) consideration. General Assessment Introduction The Bank team welcomes the scope of inter- vention envisaged under the proposed struc- MRDPW has proposed a future structure of ture of the future OPRG, which is a sign of the OPRG consisting of two priority axes (PA): the commitment of MRDPW to consolidate a critical mass of financing to support the • PA 1 dedicated to Integrated Urban Devel- implementation of the proposed new ter- opment with 8 – 10 major Bulgarian cites el- ritorial approach with the ultimate aim of igible for funding (6% of OP allocation). This addressing regional inequalities. It should would be financed by OPRG only; and be noted that the proposed OP structure marks a clear departure from that of OPRG • PA 2 dedicated to the new Territorial Ap- 2014 – 2020, which consists of seven PAs offer- proach that would finance relevant com- ing a broad, but also clearly defined scope of ponents of integrated projects (IPs) with all financing for selected types of investments Bulgarian municipalities eligible for funding and municipalities. 11. As per the Common Provisions Regulation (CoM(2018) 375 final) — Article 106 (May 2018). 12. The estimated funds (EU and national co-financing) planned to be utilized under the new regional approach are approximately 2.8 billion EUR: 1.9 billion Euro (94% OPRD) and 0.9 billion Euro (10% of the other operational programmes except OP Transport and OP for the Most Deprived; Rural Development Programme, as not been part of the scope of the CMD of June 2019, is not included). This constitutes more than 20% of the total budget of all EU co-financed programmes for Bulgaria under Investment for Jobs and Growth goal for the 2021 – 2027 financial perspective. Annex 3 Review of the OPDR 2021 – 2027: Suggestions on an alternative structure for priority axes 83 Specifically focusing on the proposed PA 2, the between two thematic objectives under Bank team recognizes the merits of the con- one PA. This contributed to the OP achiev- centrated and seemingly very flexible (funds in ing the mid-term indicators. ‘one big basket’) approach adopted by MRDPW. However, the team would like to draw atten- 4. limited possibility to monitor and assess tion to some risks this creates. These risks are progress on achieving development ob- multifaceted — they effect key stakeholders jectives in selected types of territories (both beneficiaries and OP Managing Author- due to the untargeted nature of PA2, and ity) and processes (grant contracting and im- as a result limited possibility to introduce plementation, including absorption rates), as necessary policy shifts or adjustments. well as the prospects of meeting the broader development objectives in the domain of re- 5. uneven competition between funding gional policy. The Bank team have formulated opportunities at the expense of OPRG. some key proposals for consideration, which At this moment it is not clear what type would address the key risks as set out below. of measures will be financed by other OPs under the territorial approach. If they are the same as the measures the OPs will con- Key Risks tinue to finance themselves (outside the territorial approach) and/or there is no a The key risks foreseen with the proposed ap- “fast track” for grant contracting for these proach for the future OPRG are described be- measures under the proposed ‘integrated low by key stakeholder. projects’, there may be limited incentive for beneficiaries to prepare and submit such projects by going through a difficult pro- Risks for the OPRG cesses of partnership establishment and Managing Authority project preparation. 1. A lack of targeted approach to specific 6. need to increase the MA capacity to fa- territories (as recommended by the EC in cilitate the processes of projects iden- Annex D of the Country Report Bulgaria tification and partnership establish- 2019), which could result in continued un- ment — this will put more pressure on the balanced growth on the regional level and MA’s staff, especially on regional branch- further deterioration of socio-economic es, who will need to actively participate situation of deprived, marginalized, or in new concept implementation. The es- lagging behind territories. tablishment of human resources and ca- pacity will need to be well managed to 2. low absorption rates — delayed uptake avoid jeopardizing the processes of clos- of funds (which could be expected due to ing OPRG 2014 – 2020 and the start-up of the complexity and untested nature of the next OP 2021 – 2027. new regional approach based on integrat- ed projects) will negatively impact OP’s ab- sorption rate; this risk is especially seri- Key risks for potential ous due to the significant portion of OPRG beneficiaries (stakeholders at allocation (ca. 94%) earmarked for PA 2. local, district and regional level) 3. limited internal flexibility within the 1. uneven competition preventing potential OP — while seemingly providing flexibil- beneficiaries from fair access to EU fund- ity, the approach to PA2 actually reduces ing and potentially discouraging them from the possibility to conduct internal trans- applying (e.g. an Integrated Project led by fer(s) of allocation in case of unsatisfacto- a big municipality is much more likely to ry absorption rates under PA2. Transfers be able to be in a position to apply for, and will be limited to take place between only obtain, financing than that of a grouping of 2 PAs. The current OP was modified at the smaller, marginalized communities with end of 2018 and resources were allocated limited capacity and experience). 84 Independent reviews of the strategic approach to the Programme 2. limited interest of potential beneficia- OPRG 2014 – 2020 but will no longer eligi- ries as under the ‘one basket financing ble for earmarked funding under PA 1 of approach’ they will not see measures ad- OPRG 2021 – 2027. The proposed new struc- dressed specifically to them, which may ture will enable a smooth ‘phasing out’ of be read by them as a signal that ‘there is the EU funding model for those cities from nothing here for us’ and this would be IPURD-based to an ITI-based one, as well further emphasized by the lack of specif- as preserve and continue to use the ad- ic support measures for less advantaged ministrative capacity built in them to act municipalities. as subregional growth centers engaging in active cooperation within their func- 3. lack of possibility to bridge remaining tional areas and beyond. Because of the infrastructure where it is needed, espe- maturity of these cities acting as subre- cially for those municipalities which due to gional champions of the new approach it formal restrictions (i.e. the ‘white spots’) could be possible to generate a number of could not take advantage of EU funded in- supra-municipal flagship Integrated Proj- vestments under OPRG 2014 – 2020. ects in these localities that would enable a relatively fast uptake of funds under PA 2 (measure 2.1). Possible alternative 3. addresses some problems of a systemic structure for OPRG nature related to the process of provision 2021 – 2027 of social services and asset management (operation and maintenance of existing Taking into account these risks described assets and services) on the local level giv- above, the Bank team propose a possible al- en the realities of the demographic crisis ternative structure for the OPRG 2021 – 2027 (measures 4.1 and 4.2). that addresses and mitigates these risks and which could be considered in parts or whole 4. provide MRDPW with flexibility to test by the Managing Authority as it further elab- new instruments as needs arise (measure 4.3). orates the approach (see table below). 5. systematically addresses the problem of The alternative OP structure also generates limited availability of socio-economic additional value as it aims to: indicators for the purposes of elaborat- ing and implementing evidence-based pol- 1. effectively promote the new integrated icies on the municipal level (measure 4.4). approach, but in a more targeted way suited to the specific situations of differ- 6. supports the elaboration of territorial ent types of territories in Bulgaria. strategies for functional areas and In- tegrated Projects (measure 5.1). 2. provides a smooth transition of the ESIF funding framework for the 27 – 29 cities 7. address substantial capacity building (no longer part of PA1) to become subre- and networking needs of local stakehold- gional champions of the new integrat- ers crucial for the effective implementa- ed approach. These 27 – 29 cities, which tion of the new regional approach (mea- have been IBs implementing IPURDs1 under sures 5.2 and 5.3). TABLE A3.1 Priority Axes, (Sub)Measures, and Eligibility No Priority Axis (Sub) Measures Eligibility 1. Integrated Urban Development ————— 8 – 10 major cities 2. Territorial — Integrated 2.1. Subregional IPs 27 – 29 subregional cities and their functional Projects (IPs) (ITI approach) areas (surrounding municipalities) 2.2. Supra-municipal IPs All municipalities — excluding 39 cities Annex 3 Review of the OPDR 2021 – 2027: Suggestions on an alternative structure for priority axes 85 No Priority Axis (Sub) Measures Eligibility 2.3. Marginalized/deprived area IPs Municipalities lagging behind in terms of (CLLD approach) socio-economic development and with accumu- lation of development challenges 3. Local infrastructure The scope of supported interven- For further discussion for development tions could be modeled after OPRG Possible ideas: 2014 – 2020 — for further consideration Selected municipalities (‘white spot’ municipali- depending on the assessment of progress ties under the 2014 – 2020 programming period? achieved and remaining investment needs Marginalized municipalities according to the new National Spatial Concept (under preparation)? 4. Enhancing potential for growth 4.1. Optimization of public service provi - sion at the local level 4.2. Optimization of municipal asset management, including operation and maintenance 4.3. Elaboration and testing of new devel - opment instruments (pilots) 4.4. Systemic project for the National Statistical Institute — socio-economic indicators on the local level 5. Building capacity and promo - 5.1 TA for supporting elaboration of inte- tion of integrated approach grated territorial strategies for functional areas and IPs 5.2 TA for capacity building 5.3 TA for financing networking at the local, district and regional level 6. TA for OPRG management Scope of intervention as foreseen under PA3 of the draft OPRG structure elaborated by MRDPW Scope specific project proposals as a clear frame- work would be in place addressing the issues of Integrated Projects raised by municipalities in terms of how they fit in the process of programming the funds; The decision on the structure of OPRG 2021 – 2027 should be closely followed by the strategic se- • more accurate monitoring and assess- lection of the types of projects that would be ment of the progress of the OP’s imple- eligible for funding under the respective mea- mentation due to the more targeted nature sures. Determining this will be conducive to: of the framework. • defining the thematic scope and — conse- quently — the selection of relevant policy ob- Mechanism jectives supported under the OPRG 2021 – 20207 (expanding from just two policy objectives for the implementation currently envisaged by MRDPW — namely 2 of the new regional and 5 — might be necessary); approach — a proposal • defining the demarcation lines between OPs to effectively support the new region- In light of the findings from strategic consul- al approach through complementary inter- tations, discussions held in the RAS Steering ventions with a potential to create develop- Committee meeting on October 1, 2019 and ment synergies; based on preliminary conclusions from WB team’s independent review, an alternate pro- • encouraging potential beneficiaries to start posal for the implementation mechanism of elaborating and applying for the financing of the new regional approach was formulated for 86 Independent reviews of the strategic approach to the Programme further consideration by MRDPW and CCU. It Taking into account that roughly 20 percent is the intention of the Bank team to propose of Bulgaria’s EU Cohesion Policy funding for an arrangement that would have the potential the years 2021 – 2027 has been earmarked for to effectively promote the new integrated ap- the purpose of financing integrated projects proach to regional development while recon- (including ca. 90% of the allocation of OPRG ciling sometimes opposing views on the spe- 2021 – 2027 plus 10% from each of the partici- cific modalities of the implementation mech- pating OPs) and that adopting this approach anism expressed by different stakeholders. seems to be highly experimental given the very limited previous experience with inte- According to MRDPW’s vision, integrated proj- grate projects (that would result in ‘learning by ects are the heart of the new regional ap- doing’ on a large scale), it is the opinion of the proach. Their implementation is conducive to Bank team that it is likely to generate signifi- generating substantial socio-economic bene- cant risks, related to all phases of integrated fits and changing the attitude of many stake- project elaboration and implementation, that holders to development initiatives, proving could jeopardize the new regional approach. that development is not ‘a zero-sum game’, but rather a ‘team sport’, where pooling re- These risks are mainly associated with the sources, planning and implementing invest- ambitious and broad definition of an Inte- ments in a coordinated and synchronized grated Project adopted by MRDPW and CCU, way can yield substantial development effects which requires an integrated project to con- surpassing those generated by isolated, frag- stitute at least three interconnected compo- mented projects. In more succinct words, ‘the nents financed from different OPs with only whole is greater than the sum of its parts’. one grant agreement signed by the lead part- ner for the entire integrated project. The integrated approach requires a num- ber of ‘enabling conditions’ to be effective- While recognizing the merits stemming from ly implemented: the new integrated territorial approach, the Bank team have formulated an initial proposal • First, an accurate recognition of common for a more phased, gradual mechanism to its development goals among prospective ben- implementation. The aim is to mitigate the so eficiaries of integrated projects far identified risks, while still effectively pro- moting the integrated territorial approach. For • Second, a cooperation platform, with capa- the purposes of designing this mechanism the ble staff responsible for integrated project definition of an integrated project has been proposal preparation, changed from one that includes multi-sector components to one where there is an ‘umbrel- • Third, the ability to formulate bundles of la agreement’ between partners as the in- inter-related and sequenced projects that tegrating element (instead of the one grant help achieve the common goals (and can agreement for all IP components). More than demonstrate this); one ‘umbrella agreement’ would be required per NUTS 2 region according the needs of each • Third, streamlined assessment and con- region; one municipality could participate in tracting of projects, and more than one ‘umbrella agreement’ and more than one grant agreement (see details below). • Lastly but just as important, a clear imple- mentation framework. Key elements of the new ‘phasing in’ imple- mentation mechanism for the integrated Since the integrated approach has been only approach are described below: tested in Bulgaria on a very limited scale (mainly under the CLLD approach and with- 1. Partnership agreement (an ‘umbrella in the framework of the CBC programs) the agreement’) above-mentioned prerequisites will have to be put in place in the coming months to en- • This would be signed between partners sure its smooth implementation. (and prospective beneficiaries) (no public Annex 3 Review of the OPDR 2021 – 2027: Suggestions on an alternative structure for priority axes 87 procurement procedure or any other competi- package of projects under the terms of tive one needed to select them); the overall partnership agreement, and • the agreement would determine: • would facilitate networking between part- • the common development objective(s) ners and knowledge transfer. of the partnership, • specific actions to be undertaken by 4. MRDPW (different roles depending on the each of the partners to ensure the objec- measure under PA2) would be responsible for: tives are successfully met, • a timeline and chronology of actions, • coordinating ‘fast track’ with MAs of rel- and evant OPs to ensure smooth implementa- • a list of projects to be implemented by tion of integrated projects, but no need for each of the partners. the MRDPW (or any other entity) to act as a central Intermediary Body as the OP 2. Projects identified in the ‘umbrella agree- MAs would not relinquish their competence ment’: for project assessment and contracting; • would be financed from different OPs in- • assessing and contracting projects fi- volved in the new integrated approach; nanced from OPRG 2021 – 2027; • the would be assessed against selection • capacity building at the regional/local criteria specific to the relevant OP (ex- level; cept for assessment of strategic region- al importance conducted by the respec- • collecting and disseminating good prac- tive RDC); tices to promote and facilitate implemen- tation of the integrated approach; • projects would be assessed as a bundle or package of projects, which together • project pipeline for integrated projects; and well-sequenced, can demonstrate how they help achieve the common de- • hands-on monitoring of indicative flag- velopment objectives ship integrated projects (if any); • separate grant agreements for each of • hands-on support in elaboration and im- the projects would be signed by part- plementation of integrated projects in ners with relevant MA OPs (or its Inter- marginalized areas; mediate Bodies — according to each of the OPs implementation system), which • monitoring the progress in implementing also reduces the risk that one failed proj- integrated territorial approach across OPs. ect substantially affects the others ; and 5. Managing Authorities of relevant OPs: • full responsibility of the beneficiary for the project implementation and its af- • responsible for establishing and maintaining termath (no delegation of responsibili- of a ‘fast track’ mechanism for assessing and ties to lead partner). contracting projects under the integrated approach (ongoing calls for proposals under 3. Partnership leader (lead partner): the territorial TAs of relevant sectoral OPs); • would act as the ‘interface’ of the inte- • providing ongoing expert engagement grated project to the external world and in MRDPW’s project pipeline to support main counterpart for MRDPW and the prospective beneficiaries; respective RDC; • working closely with the MRDPW to en- • would monitor the implementation of sure smooth implementation of the in- the ‘umbrella agreement’ and each of its tegrated approach. 88 Independent reviews of the strategic approach to the Programme 6. RDCs (would have all the new roles as envisaged 7. CCU by MRDPW; no preselection of projects): • political oversight to ensure smooth • organizing public consultations/hear- implementation of integrated approach ings for integrated projects; across OPs. • assessing strategic importance of proj- The proposed mechanism is envisaged to pro- ect proposals against regional develop- vide all key stakeholders — both on central, as ment objectives and deciding on a rank- well as local, district and regional level — with ing list of project proposals based on ample opportunity to test, learn, build ca- these criteria; pacity for, internalize, and fine-tune (if nec- essary) the integrated approach. This ‘phas- • identifying potential integrated projects ing-in’ process will lead to the establishment and partners, networking; of a tried and tested implementation frame- work that in the coming years will be condu- • facilitating elaboration of ‘umbrella agree- cive to reaping development benefits of the in- ments. tegrated approach across Bulgaria. The proposed approach could be implemented with or with- out a central Intermediary Body for the system. 89 ANNEX 4 REVIEW OF THE FIRST DRAFT IP GUIDELINES PREPARED BY MRDPW (30/09/2019) Introduction to avoid misunderstandings about the lev- el of information necessary for beneficiaries MRDPW prepared a first draft of the guidelines to use this, as it stands, to prepare integrat- for integrated projects (IPs) to the WB team ed projects. on September 20, 2019 for feedback by Sep- tember 30, 2019. Given the time available, the comments below are preliminary and subject Structure and logic to further discussion and review but aim to provide some initial feedback. The WB team We recommend the revised version of the has also formulated proposals for next steps document be structured in such a way as to to be taken to facilitate the elaboration of IP be more useful to the potential beneficiaries guidelines for consideration by MRDPW. to understand the approach proposed. Thus, it is suggested it be based on the chronologi- IP guidelines will constitute a significant ele- cal stages of the process of IP preparation, de- ment of the implementation framework of the scribing respective requirements and resourc- new regional approach envisaged for the years es. These stages were very clearly described in 2021 – 2027 and — as the outcomes of strategic the last MRDPW comment on the Preliminary consultations have proven — are in high de- Review of the RDC structure note, which could be mand by the prospective IP beneficiaries. By extended to: identification of project ideas/ preparing the first draft the MRDPW has ac- concept; establishment of partnership; pub- knowledged the importance of the IP guidelines lic consultations; project selection and the as a useful tool for local stakeholders — the WB RDC decision; detailed assessment, and con- team welcomes this positive development and tracting by the MAs; implementation by part- notes that it clarifies some key points. ners (this is particularly important as a num- ber of problematic issues can arise once the The elaboration of the final version of IP guide- IP is contracted and the implementation pro- lines will have to be preceded by a number of cess begins). decisions of strategic, institutional and tech- nical nature. It is also important to note that The guidelines should provide practical ad- the IP guidelines should be prepared in such vice for potential beneficiaries on how to ad- a way as to ensure a horizontal approach to vance from one stage to the next, as well as IPs across MAs is uniformly applied under the references to available support (incl. Techni- 2021 – 2027 programming period. Therefore, cal Assistance/project pipeline/ etc.). The IP the WB team perceives the draft as a work in guidelines should also aim to avoid ambigu- progress — it is understood that that MRDPW ous or unclear statements that can be open will be further elaborating the IP guidelines to interpretation or potentially misleading. as the process moves forward, so they can ac- curately reflect the final conclusions on the implementation of the new regional approach. Rationale and specifics Since the guidelines are still general it may It would be helpful to provide the rationale be useful to title the document as a General or objective for some of the decisions set out Approach to the Preparation of Integrated Projects (i.e. number of partners, components). 90 Independent reviews of the strategic approach to the Programme The next version should ideally include infor- the preparation of partnerships and projects? mation on: It would be useful to add as the annex the pilot application form that was being prepared for 1. how many projects will be considered in the Rodoppi mountains, once completed, as each NUTS 2 region; an example. More guidance on how to imple- 2. (indicative) regional financial envelopes; ment the Integrated Projects will be needed 3. indicative IP budgets (minimum and max- to elaborate the other sections. imum volume of financing); 4. indicative project list (if foreseen); 5. plans for competitive calls (if foreseen), and Relation with other 6. project pipeline. funding sources There is a need for a clear definition of IP, as The relation to other activities or regular the one formulated in the draft is not exhaus- business of the OPs that are contributing 10% tive and is unambiguous. The examples are should be clarified. There may also need to useful, but a more refined definition would be information on specific cases, such as sup- be helpful. port for PPP projects, combination of grant aid with assistance from financial instruments, State Aid aspects, etc. Partnership agreements There should be clearer information on the Proposals for next steps expectation of key stakeholders and per- haps an outline of the types of information The WB team recommends: that would form the partnership agreement (not the agreement itself). On the partner- 1. establishing a working group for IP guide- ships, there is a need for more information lines preparation consisting of represen- on how that will be facilitated and managed, tatives of all MAs involved in the imple- is it limited to three or a minimum of three mentation of the new regional concept partners, could there be flexibility for part- (coordinated by the MRDPW) ners to join in future? 2. launching a public survey (i.e. at MRDPW website) aimed at identifying potential Project Preparation concepts for IPs across the country and Implementation 3. involving a sample of local stakeholders We understand that one of the key reasons (potential IP beneficiaries and IP part- the integrated projects that were prepared ners) in the process of elaborating and re- in 2015 (with support from the NTCD) did not viewing draft IP guidelines to ensure they go ahead was that the funding for preparing are clear, exhaustive, and comprehensive the projects, including feasibility studies, did not materialize. Will the guidelines cover any 4. reviewing guidelines for integrated proj- information on how the projects will be pre- ects (ITI, CLLD, CBC, and other) from select- pared (and project pipeline developed)? Will ed EU countries to identify good practices include the source of possible financing for to be considered for IP guidelines. 91 ANNEX 5 REPORT SUMMARIZING INITIAL FINDINGS FROM STRATEGIC CONSULTATIONS (26/09/2019) Overview: being generally more preferred. Even though Scenario 1 was perceived as a more pragmatic Key Messages choice because of the swiftness and the rela- tive simplicity of its implementation, the ad- A. The new regional concept vantage seen with Scenario 2 is that it could potentially create a stronger foundation to- The new regional concept understood as wards building fully operational administra- adding a more territorial dimension to devel- tive structures at NUTS 2 level and a more ex- opment policy in Bulgaria, and earmarking pedient route to greater delegation of respon- to this end a portion of sectoral funds under sibilities in future. 2021 – 2027 Operational Programs (OPs), gen- erated substantial support . Also, the idea Decentralization was a recurring issue of integrated projects (IPs) received gener- raised throughout the consultations and ally positive feedback as a potentially useful municipalities, in particular, raised their ex- tool for effectively tackling territorial devel- pectations for a renewed effort in this domain. opment challenges. The RDCs are broadly perceived as ineffec- Insufficient information on the implemen- tive, devoid of competences and capacity, tation framework for the new regional con- and therefore incapable of playing any sub- cept and a limited understanding of the stantial role under the new regional con- nature of IPs were raised across stakeholder cept in their current form. To take on the groups. Much greater clarity in these two functions and role envisaged under the new areas will be needed to motivate potential regional concept their capacity would have beneficiaries to elaborate IPs and apply for to be built from a low base, which constitutes funds and to create greater and broader-based a significant challenge given time constraints. support for the new regional concept. Progress in these two areas will be needed to reduce Stakeholders expect that preparations for possible risks to the effective implementation the 2021 – 2027 programming period would of EU Cohesion Policy in Bulgaria. need to begin promptly given the sophistica- tion of the new regional concept. Specific ex- pectations include establishing a project pipe- B. Regional Development line and running an intensive training and Councils: new roles and functions, coaching program dedicated to key local and composition, capacity regional stakeholders and, in the longer-term, provision of hands-on technical support for Delegation of more authority to the region- the creation of partnerships and the formu- al (sub-national) level was broadly accept- lation of IPs. Additionally, at the central lev- ed, however there was no unequivocal con- el, efforts to combine guidelines of Managing sensus on a single optimal ‘regional model’. Authorities (MAs) (and operational manuals) Both Scenario 1 and 2 for Regional Devel- was seen as almost insurmountable by some opment Councils (RDCs) gained traction MAs and the adaption of the UMIS a critical during the consultations, with the latter but especially time-consuming task. 92 Independent reviews of the strategic approach to the Programme C. Coordination of regional Methodology for policy planning and EU funds programming Strategic Consultations Stakeholders perceive that there is substan- The goal of the strategic consultations was to tial scope to improve the coordination of obtain feedback from municipal, district, regional policy planning with EU funds pro- regional and national level stakehold- gramming, as currently these two domains ers on three main topics: (1) MRDPW’s new are seen as not adequately aligned, failing to regional concept for 2021 – 2027, (2) possible create synergies and not sufficiently integrat- new functions of the Regional Development ing local stakeholders. This results in perpet- Councils (RDC) under the new regional con- uating a top-down approach to programming, cept, and (3) coordination of regional plan- which is not complemented yet by such a more ning with the programming of the new finan- bottom-up approach as being advocated as part cial perspective 2021 – 2027. The aim was not of the new concept for regional development. to receive the official written position of any There was call from local stakeholders to bet- given stakeholder but rather to collect dif- ter assess local needs and create regional strate- ferent opinions shared during open dis- gies that could bridge between locally prepared cussion. The strategic consultations were municipal and district plans with centrally also an instrument by which MRDPW and commissioned regional plans and schemes. CCU could raise awareness about the new regional concept. Introduction MRDPW’s aim was to engage a wide range of stakeholders from municipal, district, re- In July 2019, the Ministry of Regional Devel- gional and national level administrations, opment and Public Works (MRDPW) conduct- as well as social and economic partners, to ed national and regional level strategic con- ensure an inclusive nature of the strategic sultations with the participation of the Cen- consultations and collate sufficiently rich tral Coordination Unit (CCU) of the Council of feedback from different stakeholders. The Ministers (CoM) and support from the World World Bank team supported MRDPW in de- Bank team. This note summarizes the pre- veloping a representative list of stakehold- liminary findings from these consultations. ers to be consulted and formulating a de- A more detailed report outlining the findings tailed questionnaire to be applied through- from the strategic consultations and recom- out the consultations. mendations for future actions will be elabo- rated by the end of October 2019 as one of the During three weeks of consultations a to- key deliverables under the RAS (Component 1). tal of 61 consultation meetings (including over 500 people) took place attended by par- The specific purpose of this note is to provide ticipants interested in sharing their views on the RAS Steering Committee with initial feed- the topics under consultation. The meetings back on key findings from the consultations: took place at the central level and in differ- ent locations in all six NUTS 2 regions, which 1. to support already ongoing processes (e.g. made participation in the consultation pro- MRDPW’s preparation of draft guidelines cess easier, especially for subnational stake- on IPs for beneficiaries and the formula- holders. MRDPW made significant effort to tion of legal amendments) with relevant arrange all the meetings with the stakehold- information, ers and set up a schedule to allow the team to meet as many stakeholders as possible. The 2. to draw attention to issues that require fur- consultation meetings themselves were led ther consideration or specific actions, and by the MRDPW and CCU as champions of the new regional concept and were facilitated by 3. to seek strategic guidance from the Steer- the WB team. MRDPW and CCU participated ing Committee on selected issues to pro- in the meetings explaining the rationale be- ceed with RAS Components 2 and 3. hind the new regional concept and providing Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 93 additional information requested on the spot A. The new regional concept by the stakeholders. for the 2021 – 2027 EU programming perspective With a view to providing MRDPW and CCU with additional information on the initial attitudes General opinion towards the proposed policy change across and stakeholder awareness different stakeholder categories, grouped by selected attributes, a stakeholder mapping The new regional concept understood as exercise was conducted by the World Bank adding more of a territorial dimension to team. Applying the method of content analy- development policy in Bulgaria and ear- sis, all completed questionnaires from meet- marking to this end sectoral funds under ings were thoroughly examined in order to 2021 – 2027 OPs seems to generate substan- identify stakeholders’ interests or ‘stakes’ in tial support , although the level of aware- the newly adopted regional approach, detect ness of the new regional concept is mixed. potential misunderstandings and even op- There appears to be widespread conviction position, and provide MRDPW with informa- across all categories of stakeholders, only tion to have more targeted discussions with with some minor exceptions, that the cur- specific stakeholders. rent top-down model of planning and im- plementing development interventions in Bulgaria is not generating the desired re- Summary findings from sults particularly with regards to address- ing regional disparities. Stakeholders gen- strategic consultations erally agree that there is need for paradigm shift in approach for Bulgaria to fully reap This summary is organized around the three the benefits of EU funding under cohesion key topics of the consultation process, name- policy. There is general consensus that the ly the new regional concept (including IPs complexity and gravity of development chal- as a vital element of this), the new roles lenges for the regional tier in Bulgaria call and functions for Regional Development for a more integrated, intersectoral approach Councils (at NUTS 2 level), and coordina- in planning and implementation of projects, tion of regional policy planning with EU more territorial sensitivity (bottom-up) and funds programming. Key findings from more actors (both government and non-gov- the strategic consultations and stakehold- ernment) acting in concert to successfully er mapping are presented — and where rel- address them. IPs also received generally evant — together with recommendations positive feedback as a potentially useful tool for possible future actions for MRDPW and for effectively tackling territorial develop- CCU consideration, which have been formu- ment challenges, however since the concept lated by the WB team. Additionally, a sepa- has yet to be fleshed out these raised ques- rate section is devoted to other issues that tions and concerns especially from prospec- were raised in the process of strategic con- tive IP beneficiaries. sultations to bring them to the attention of MRDPW, CCU, and the RAS Steering Commit- Some stakeholders at the local level assessed tee. The closing part of the summary con- the proposed policy change as too radical sists of a proposal for issues to be discussed (as compared to the existing approach), as in the upcoming meeting of the RAS Steer- some of the most basic infrastructure needs ing Committee (on October 1, 2019) and next observed at the municipal level were still steps to be taken for the purposes of deliv- unmet . For this group, a preferred arrange- ering the objectives of the RAS. The summa- ment would be to keep a substantial part of ry is complemented by a set of appendices to budget for 2021 – 2027 under the current im- provide MRDPW with a full package of rele- plementation mode (i.e. pre-defined benefi- vant materials related to the strategic con- ciaries and projects), projects, budget alloca- sultations process. tions — e.g. 50%). 94 Independent reviews of the strategic approach to the Programme For a number of stakeholders, the goal of the the stakeholder mapping exercise could be current reform was not fully clear — there utilized to design and implement a compre- was uncertainty or confusion whether this hensive information campaign geared to meet was a part of a broader decentralization pro- the specific needs and expectations of differ- cess or restricted to attempts to increase the ent stakeholders, as well as the general public. efficiency of EU funded development inter- ventions and regional policy. Recommendation 2 MRDPW and CCU could consider continuing the consultation process into the process of plan- Key findings of the stakeholder mapping ning of the regional development reform to a greater extent as many stakeholders expressed The results show that most of the stakehold- interest in being more involved in, and in- er groups are moderate supporters of the new formed about, planned changes. The consul- regional concept (27 out of 61 stakeholders tations could take various forms, from regular consulted) or at least hold a neutral position meetings, stakeholder working groups, to an (20 out 61). Absolute supporter and opponents online webpage with current information etc. are relatively small in number. Clustering of stakeholders at neutral and moderate sup- porter positions is a sign that there is poten- Potential risks for implementation iden- tial to switch their positions. tified by the consulted stakeholders The group of moderate supporters consists The following potential risks were identi- mostly of municipalities, as well as the Na- fied during the strategic consultation process: tional Association of municipalities, 3 RDCs, FLAG, Regional Urban Development Fund, • the time available until the start of the next NGOs, and academia. Most of the Managing programming period may not be sufficient Authorities are grouped in neutral position. to allow for the creation of new structures at One third of moderate supporters endorse the the regional level as the new arrangements new regional concept even though they do not would have to be ready from the onset of the identify direct advantages for their institu- 2021 – 2027 programming period, tions/organizations. This shows that there is substantial room to mobilize more sustain- • focusing on IPs is perceived as risky from able support and to convert those stakehold- the disbursement viewpoint1 (if — possibly ers into advocates of the new approach if ap- large in terms of volume of financing and propriate communication efforts are made. complex — IPs are to be the only modus ope- randi for the territorial priority axis (PA) and Level of knowledge of the new regional con- OPRG 2021 – 2027 these resources may not be cept appears likely to be correlated or relat- fully-utilized) ed with the current position of stakeholders towards the concept. Almost one-third of all • reduced budget commitment periods (N+2); stakeholders have little knowledge of the new regional concept and the most knowledgeable • higher national co-financing (15% -> 30%);2 (25% of the total) are those that either have experience with Community-led Local Devel- • complexity of the IPs elaboration and imple- opment approach (CLLD) or are active players mentation process (creation of partnerships, within the EU-funds-management framework. design of multi-fund project components); Recommendation 1 • expected delays in project assessment and Additional efforts by MRDWP and CCU to dis- implementation due to the proposed new seminate information on the new regional project approval process; and concept and to raise awareness among nation- al, regional and local stakeholders would be • the risk of letting go of experienced and conducive to ensuring a higher level of stake- knowledgeable municipal expert staff (re- holder engagement and buy-in. Findings from duced capacity) as a potential consequence Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 95 of the forthcoming local elections (October Stakeholders representing the municipal and 2019) and loss of staff due to the disbanding district level were also concerned about the of intermediary bodies at municipal level. implementation framework, but — as prospec- tive beneficiaries of IPs — they also raised spe- cific questions related to the nature of IPs Implementation framework and modalities for their elaboration and implementation in partnership with other As much as ‘the philosophy’ behind the new entities. The very notion of an IP and its regional concept and the rationale for its in- scope of intervention is unclear to, and dif- troduction seem to be endorsed by almost all ferently interpreted by, consulted stakeholders, of the stakeholders it is the feasibility of its which created confusion and uncertainty as to implementation that generates concern. exactly what types of projects will be eligible for funding under the new regional concept. The majority of national level stakeholders (MAs of OPs set to earmark 10% of their pro- As set out by MRDPW the structure of IPs may spective allocations for the purposes of the encompass components eligible for financing new regional concept) raised concerns relat- under different sectoral OPs, which generated ed to the potential implementation frame- concern among stakeholders, who fear addi- work. They identified a number of signif- tional bureaucratic burden and coordina- icant risks that — if not mitigated — could tion inefficiencies resulting from the need impact the effectiveness of the absorption of to comply with different and often inconsis- EU funding in Bulgaria under the 2021 – 2027 tent implementation frameworks of sectoral programming period. The MAs’ attitude to OPs (eligibility criteria, procedures, financing the new regional concept is based on their systems, targets etc.). negative experience with multi-OP proj- ects so far: their complicated nature requires All crucial phases of an IP — project concept, disproportionally higher administrative re- project preparation, project assessment and sources in comparison to the funds managed, implementation — are generally perceived which can lead to inefficiencies and distrac- by the municipal and district stakeholders tion of the MAs from their main tasks. With- as complicated, burdensome, and charac- out the MAs embracing the new regional con- terized by a long and sophisticated decision cept, the potential IP beneficiaries could face chain. Lack of a comprehensive and detailed additional risks of heavier communication implementation framework for IPs, tack- and need to balance the MAs coordination ling the challenges of multi-OP funding, as inefficiencies. well as minimal experience (primarily lim- ited to undertakings within the framework Another factor negatively impacting the of the Cross-Border Cooperation (CBC) pro- MAs attitude is lack of a clear implemen- grams or CLLD initiatives) with projects im- tation framework for the new regional con- plemented in partnerships further exacerbat- cept, which would effectively address these ed those reservations. This could negatively identified risks. Some MAs perceive the up- impact the motivation of potential benefi- coming policy change as a top-down deci- ciaries to elaborate IP proposals and apply sion where they have no actual ownership for funds, which — in turn — could generate but will have to share — and somehow mit- a number of risks for the effective implemen- igate — the risks. Lessons learned by the tation of EU cohesion policy in Bulgaria (e.g. MAs from previous programming perspec- slow uptake of funds, failure to comply with tives show that coordination and synchro- N+2 rule, an inability to adequately address nization of actions is difficult without a territorial development challenges). leading organization; a coordination role alone is not seen as sufficient . Therefore, Potential beneficiaries felt that the obligatory a number of MAs suggested they would rather application of the partnership principle in cede the 10% of their OPs allocation to be the case of IPs generates challenges for them. managed exclusively by MRDPW to avoid Questions were raised regarding the approach the foreseen challenges. to be used for selecting partners to ensure 96 Independent reviews of the strategic approach to the Programme a viable and lasting project partnership, the Recommendation 4 scope of partnership agreements, the optimal to ensure a more coordinated effort in imple- division of responsibilities between partners menting the new regional concept it is recom- related to IP elaboration and implementation, mended to give further consideration to the the exact moment when a partnership would proposed institutional framework for the need to be established for the purposes of the programing period 2021 – 2027. Delegating application process, as well as responsibilities the responsibility for managing the funding for project co-financing, financial corrections under the new regional concept (10% alloca- and ensuring sustainability through main- tions) to one entity could significantly stream- taining the projects investments. During the line the implementation process and firmly consultations it became clear that if the new assert one entity with competences necessary regional concept is to be embraced by the to ensure a stable and standardized cross-OP prospective beneficiaries and effectively used, implementation framework and a more ‘ben- effort will be needed to stimulate the iden- eficiary-friendly’ interface. tification of potential IPs, animate the pro- cess of forming partnerships, and support Recommendation 5 the actual implementation process on the to effectively stimulate the supply side of municipal, district, and regional level. While the new regional concept, namely the pro- the biggest municipalities to some extent have cess of elaborating project proposals for IPs the capacity and resources needed to prepare it is recommended that preparatory work the IP pipeline for the next perspective, the for the 2021 – 2027 programming period smaller municipalities are unable to get pre- begin promptly. Proposals for specific ac- pared on their own and are in need of sub- tivities that could be initiated by MRDPW in- stantial assistance. clude: (1) utilize financial resources avail- able under OP RG 2014 – 2020 technical as- The preparatory activities are expected be un- sistance and national budget resources as a dertaken as early as possible by an institution source of financing the IP preparation phase which has the legitimacy, sufficient author- for local and regional stakeholders; (2) es- ity and willingness to play a leading role. tablish a project pipeline to ensure timely However, it does not appear that such an in- identification and sufficient preparation of stitution has yet been identified and the lack IPs; (3) conduct an intensive training and of such leadership could constitute a signifi- coaching program dedicated to key mu- cant bottleneck for timely implementation of nicipal, district, and regional stakehold- interventions under the new regional concept. ers, as well as to MAs and regional branch- es of MRDPW. Recommendation 3 as implementation mechanisms for the new re- Recommendation 6 gional concept raised many questions amongst MRDPW and CoM (through CCU) to strengthen stakeholders at all levels, it is advised that their alliance and take a greater lead in the MRDPW prepare in due course and make broad- process of the implementation of the new ly available a comprehensive and detailed im- regional concept for 2021 – 2027 effectively plementation framework, consisting of: acting as an anchor, coordinating and facil- itating the approach together. 1. a set of unified (for horizontal use across OPs) guidelines for beneficiaries of IPs, Recommendation 7 modification of UMIS is necessary to sub- 2. a user’s manual explaining the strategic mit and implement IPs, thus work on the and operational modalities of the new re- adapting the system should start prompt- gional concept, and ly to ensure adequate time for conceptual- ization of changes, the design process, im- 3. template(s) of partnership agreement(s) plementation, testing and retesting. MRDPW containing key obligatory clauses that reg- should consider drafting a roadmap of this ulate relations between partners and their activity and collaborate closely with CCU on roles in the project. its implementation. Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 97 Incentives for potential beneficiaries separate thematic projects as the stakehold- ers’ experience so far is primarily single sec- A number of consulted stakeholders observed tor project-based. A number of stakeholders that due to the demands related to the elabora- mentioned that a good starting point for the tion and implementation of IPs, potential ben- accurate identification of IPs could be the al- eficiaries might be reluctant to apply for such ready developed in 2015 (but never imple- funding, choosing instead to take advantage of mented) Targeted investment program to support the ‘easier’ funds available under sectoral OPs. the development of North-Western Bulgaria, the Potential beneficiaries fear that going to all Rhodopes, Strandzha-Sakar, border, mountain and the trouble identifying an IP proposal, select- semi-mountainous regions, perceived as a good ing partners and establishing a formal part- example of an inclusive, targeted and highly nership, financing necessary feasibility stud- professional approach to integrated regional ies might be all for nothing if the chances of planning sensitive to local needs. obtaining financing are slim. Recommendation 9 Recommendation 8 collecting more information on the desired one of the ways to encourage prospective ben- thematic scope of potential IPs and required eficiaries to apply for funding under the new volume of funding would be conducive to regional concept is to create a ‘motivation sys- estimating the expected demand for financ- tem’– complementing the IP implementation ing under the new regional concept. It could framework and intensive training/coaching also help to identify areas where expertise activities — to effectively incentivize potential will be most needed to assist potential ben- beneficiaries. A strong incentive would be to eficiaries in the elaboration of IP proposals increase the probability of obtaining financ- and later on to assess them. It is recommend- ing for IP proposals through placing them on ed to conduct a country-wide survey and/ indicative lists of projects early on once it or call to generate ideas for IPs. Such a sur- is verified that they meet eligibility criteria. vey and/or call could also be used as a tool of Another possibility would be to establish fi- disseminating information about the new nancial allocations for each of the NUTS 2 re- regional concept and increasing stakehold- gions (‘regional envelopes’). Such an approach er awareness and engagement. would reduce the scope of competition (from interregional to intraregional — if the compet- itive rule in project selection is to be upheld) B. Regional Development Coun- and increase chances for obtaining financing. cils: new roles and functions, composition, capacity Potential areas for IP implementation Obtaining feedback on the proposed ways of restructuring the RDCs and engaging them ac- Strategic consultations were instrumental in tively in the implementation of the new region- identifying a number of areas where stake- al concept was one of the key objectives of the holders see the rationale of applying the in- strategic consultations. The discussion centered tegrated approach, such as connectivity and around the proposed scenarios for RDCs with mobility, public services, healthcare, tourism, a view to entrusting these entities with new industrial zones, vocational education, uni- roles and functions, the composition of RDCs, versities, digitalization, prevention and re- as well as the capacity needed to perform new sponse to climate change and natural disas- roles. Given the current limited information ters, air quality, renewable energy, and water available regarding the modalities of the new and sanitation services. The stakeholders are regional concept and a lack of more specific aware that IP proposals must be in line with information related to the scope, volume and specific socio-economic situation of a giv- estimated value of IPs — which will heavily im- en region and adequately address territorial pact the workload to be processed by the RDCs challenges. Concerns were shared whether and shape expectations as to their required ex- there was sufficient capacity on the local lev- pert and administrative capacity — the opin- el to see problems in an integrated way, not as ions collected during consultations should be 98 Independent reviews of the strategic approach to the Programme treated with caution and perceived as prelim- broader support. Scenario 1 was not favored inary. Also, the recommendations presented because of a conviction that if implemented below should be treated as such. MRDPW would be controlling the RDCs and the delegation of some authority to the regional tier It is important to note that decentraliza- would not take place. Scenarios 3 and 4 were tion was a recurring topic during consulta- perceived as a possible long-term goal not tions and a substantial number of stakehold- likely to be attained during the current plan- ers voiced expectations that the new region- ning process due to its complexity and a need al concept and the restructuring and insti- for substantial capacity building at the region- tutionalization of the RDCs would gradually al level. The advantage of Scenario 2 is the in- lead to empowering local government both dependence of the RDC Office (or regional in terms of decision-making competences, development agency — depending on the se- as well as financial flexibility to more inde- lected sub-scenario) from the central gov- pendently pursue their operations. ernment, which could be perceived as a first step to building fully operational administra- tive structures on NUTS 2 level capable of com- RDC scenarios petently applying a territorial lens to develop- ment policy programming and implementation. The stakeholders were consulted on all four RDC scenarios as presented to the RAS Steer- The majority of stakeholders considered an ing Committee in June 2019, with focus on evolutionary approach to strengthening the the various merits of Scenario 1 and 2. Such regional tier seen as a gradual move from Sce- an approach provided the stakeholders with narios 1 or 2 to Scenarios 3 or 4 over time as an opportunity to share their opinions on, the most realistic and pragmatic way forward. and preferences for, from a relatively wide spectrum of arrangements aimed at empow- It is generally believed that no matter which ering the RDCs under the new regional con- RDC scenario is chosen, the actual restruc- cept. Delegation of more authority to the turing of RDCs would have to start from regional (sub-national) level seems broadly scratch. Currently, the RDCs are broadly per- accepted. Most of the stakeholders support ceived as ineffective, devoid of competenc- this development but there was no unequiv- es and capacity, and therefore incapable of ocal agreement regarding a single optimal playing any substantial role under the new ‘regional model’. While many see the value regional concept without their restructuring. added of strengthening the regional (NUTS 2) level, some stakeholders prefer more delega- Recommendation 10 tion to the municipal level as it is the only one given time constraints Scenario 2 (with a with sufficient legitimacy, some to the region- preference for sub-scenario 2.1) could be al, but not necessarily all to RDCs. considered for implementation for the years 2021 – 2027 as an arrangement promoting ef- Scenarios that gained most traction during fective involvement of the regional tier in re- the consultations were Scenarios 1 and 2, gional policy planning and implementation with a preference for the latter. At the na- under the new regional concept and a first step tional level, Scenario 2 (without a strong towards decentralization in the longer-term preference for either of the sub-scenarios) (potential implementation of Scenario 3 or 4 seems to be preferred over Scenario 1, and for the 2027+ programming perspective). Al- some stakeholders also indicated Scenari- though Scenario 1 is the most relatively easy os 3 and 4 as a preferred way forward. Those to implement, it does not provide for a real that opted for Scenario 1 presented primari- delegation of tasks and an actual empower- ly pragmatic arguments related to its relative ment of the regional level advocated for, and simplicity and swiftness to implement when expected by, the majority of consulted stake- compared with the other three. holders representing municipal/district and regional level. In order to most effectively At the regional level, Scenario 2 (with some meet the political as well as development ob- preference for sub-scenario 2.2) also found jectives and adequately identify and mitigate Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 99 risks the final choice of the scenario for im- for swift implementation of the RDC scenario plementation must be preceded by a thorough of choice. Given time constraints, a ‘fast-track’ and comprehensive analysis. approach might be needed. Recommendation 11 (general) the formulation of specific recommendations Building the capacity of RDCs on the composition, governance and capac- ity of the restructured RDC is difficult with- Building sufficient capacity seems to be of out more clarity on the broader framework in key importance, regardless of the eventually which the RDCs would operate, including the adopted scenario for the RDCs. Capacity build- modalities of IPs, their scope and expected ing is a major challenge, especially given time volume. Therefore, the recommended way constraints and the low starting point, as forward for MRDPW with the assistance from currently the RDCs virtually have no capacity. the WB team would be to: Capacity building needs are high and would 1. clearly define key processes related to the need to include also support to the MRDPW elaboration, assessment, consultation and regional branches, which are currently small selection of IPs on the regional level, as teams (max. 7 people with no current role in well as processes related to project selec- project selection, 2 of them co-responsible tion on the national level in which the for running the RDC secretariat), focused pri- RDCs will actively participate, as well as marily on administrative and logistic work. internally within the RDC (relations be- tween management and expert branches); Depending on the chosen scenario, this capac- this should highlight internal and exter- ity should be significantly strengthened to nal coordination/communication channels effectively perform the new functions and as well as decision making arrangements; to smoothly process the expected workload. 2. determine specific RDC roles and tasks to The staff with experience (interdisciplinary be performed under the identified process- experts, EU administrative experience for OP es and the corresponding responsibilities; project documents management and selec- 3. determine the resources necessary to tion process) should be hired in RDCs to build effectively perform identified roles and in-house capacity. Large scale outsourcing of tasks; and experts should preferably be avoided. If nec- 4. based on the above-mentioned findings essary additional experts could be externally — design an adequate RDC structure ca- mobilized on demand only for selected tasks. pable of effectively performing the as- signed roles and tasks and determine Pooling existing resources from a number necessary administrative capacity and of local and district level entities (such as ex- training needs. isting Intermediary Bodies, EU projects mu- nicipal units, District Information Centers Recommendation 12 and existing agencies for regional develop- the strategic choice of the RDC scenario to adopt ment) was mentioned as a possible and po- for the purposes of the new programming per- tentially most effective way forward. There spective should also take into account legal im- is administrative and expert capacity avail- plications. The adoption of each of the scenari- able on the ground, scattered between dif- os requires a different scope of legal changes to ferent sectoral policies and institutions. Dis- be introduced in the regulations to make sure trict Information Centers have been repeat- they are viable. It is therefore recommended edly mentioned as structures which have ac- to ensure that the final decision taken on the cumulated knowledge and capacity over the RDC scenario of choice will be pre-empted by a last two programming periods, have under- comprehensive legal analysis which will de- standing of the scope and modalities of all termine the specific scope of changes to be in- operational programs, are aware of the lo- troduced into the legal system. Political con- cal issues and understand the local context. sensus will have to be effectively sought by MRDPW and CCU to ensure that necessary le- Apart from identifying relevant expert re- gal changes are adopted in due time to allow sources and determining an arrangement for 100 Independent reviews of the strategic approach to the Programme supplying the RDCs with expert capacity, an regional level stakeholders, as well as to MAs intensive and comprehensive training pro- and regional branches of MRDPW. gram preparing the key stakeholders for the implementation of the new regional concept is expected to be launched. RDC composition and structure Recommendation 13 The stakeholders expressed mixed opinions the optimal way to tackle the issue of rela- about RDCs’ representative character and tively fast and effective capacity building for composition. While some claimed that the the RDCs and to determine how capable staff RDCs adequately represent the variety of stake- could be mobilized to support the func- holders, others argued that the RDCs were bi- tioning of the restructured RDCs is an area ased, as for instance the business sector was that needs further investigation. It would not sufficiently represented. It was suggest- also be useful to take into account relevant ed that business and academia representation findings and recommendations from the on- in the RDC should be strengthened to ensure going OECD pilot action on frontloading ad- a closer link between supported projects and ministrative capacity related to the strength- actual development needs, as well as to en- ening of administrative capacity at the level courage knowledge transfer between the RDC of central government, and MRDPW specifi- members. Some stakeholders argued that the cally, as well as at the level of RDCs and proj- voices of small municipalities were not ade- ect beneficiaries. A number of findings from quately acknowledged during the RDC meet- this note confirm observations formulated in ings, as their representation was not sufficient. the OECD roadmap for administrative capaci- ty building. Also, OECD recommendations are It was proposed that all municipalities should relevant in addressing needs of key stakehold- be represented in the RDC and that the RDC ers related to the preparation and implemen- members should elect an RDC head (prefera- tation phase of the new regional concept for bly a mayor) among them, as some stakehold- years 2021 – 2027. It is therefore recommend- ers shared an opinion that the district gover- ed that specific actions that are to be taken nors had no potential to manage this process in the second phase of the OECD pilot ac- as they were elected by the central govern- tion also take into account findings from ment and lacked authority. the strategic consultations. This should be conducive to designing an effective and ade- Key elements to ensure effective performance quately targeted capacity building program. of new roles by the RDCs were identified during the strategic consultations, namely: Repeated recommendation from above, given its rel- evance here. a. the necessity to institutionalize the RDCs (permanent office, adequate administra- Recommendation 4 tion and a budget, skilled staff, clear new to effectively stimulate the supply side of the functions), but also to design an arrange- new regional concept, namely the process of ment for mobilizing expert capacity on elaborating project proposals for IPs it is rec- demand; ommended for the preparatory work for the 2021 – 2027 programming period to begin b. rotational chairmanship should be either promptly. Proposals for specific activities to abolished or the period increased to at least be initialized by the MRDPW include: (1) utiliz- 12 months (with some handing over peri- ing financial resources available under OP RG od on either side) to ensure continuity of 2014 – 2020 technical assistance as a source RDC operations; of financing of the IP preparation phase for local and regional stakeholders; (2) establish- c. RDCs should be entrusted with adequate ing a project pipeline to ensure timely iden- administrative and financial powers to tification and sufficient preparation of IPs; (3) take decisions with a real impact on the conducting an intensive training and coach- development of the region, and to assert ing program dedicated to key local/district/ financial and political responsibility; Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 101 d. legal changes are needed to empower RDCs in facilitating the process of the formulation with new functions; of partnerships. There is also an expectation that the RDCs will act as a permanent forum e. the RDCs need to have clear political re- for ongoing discussion among key local and sponsibility and be publicly accountable. regional stakeholders on regional needs and It has to be determined who (which enti- objectives. Sufficient capacity would be need- ty) will hold them accountable for the ex- ed to ensure effective performance of those ecution of their new functions; and roles. The stakeholders would like to see the RDCs more as a facilitator of IPs/partnerships f. RDC composition should be further as- and not as a mere additional administrative sessed to determine the optimal one. layer that checks IP applications. Recommendation 14 one of the most significant challenges re- RDCs as knowledge hubs lated to the restructuring of RDCs will be and territorial observatories to reconcile the representative and decision making functions of the RDC ‘management There is an interest in RDCs playing the role tier’ with the project assessment function of of knowledge hubs (one stop shop assistance the RDC ‘expert tier’, in order to effectively for prospective IP beneficiaries) and territo- neutralize potential conflict of interest be- rial observatories, but the actual assertion tween those functions. The risks are relative- of these roles was perceived as a rather lon- ly high as members of the ‘management tier’ ger-term goal for the RDCs. Concerning the will most probably be applicants/beneficia- latter, the stakeholders seem to share an opin- ries of IPs. In order to neutralize — or at least ion that there was no single entity collect- mitigate — this risk the development of clear ing data specific for a given region and car- and unambiguous rules of operation of the rying out regionally focused socio-econom- two RDC tiers as well as its units ensuring ic analyses, which was detrimental to mak- a functional separation. ing well-informed decisions on development investments. Project selection It is important to note that currently it is the National Center for Territorial Devel- Most of the stakeholders raised the crucial opment (NCTD), which is entrusted with the need for a formulation of clear rules and tasks of elaborating the national spatial de- assessment criteria for the selection of proj- velopment concept, as well as regional devel- ect proposals guaranteeing the objectivity of opment schemes and conducting socio-eco- the RDC assessment and their subsequent pri- nomic analyses on the regional level. In this oritization. This could be ensured through the respect a recommended way forward would establishment of sufficient expert capacity at be to inspect the analytical potential of the the RDC level to assess all IP components and NCTD against the requirements of the new re- also through setting up of a selection mecha- gional approach and — if necessary — consid- nism ensuring transparent and impartial proj- er potential steps to be taken with a view to ect assessment/selection based on unambigu- strengthening it. ous criteria. The concerns related to a biased/ unfair assessment of project proposals due to conflict of interest should also be acknowl- C. Coordination of regional edged and addressed. policy planning and EU funds programming RDCs as a facilitator/mediator This particular topic did not raise nearly as much interest as the new regional concept and It is expected that the RDCs will play an im- the restructuring of the RDCs. The received portant role in identifying potential IPs of re- feedback is limited, and different interpre- gional importance and project partners and tations and explanations could be applied to 102 Independent reviews of the strategic approach to the Programme understand this phenomenon. The stakehold- and synchronization of activities on central ers could either have no interest in or simply level (between OPs, ministries, agencies, etc.) underestimate the significance of adequate negatively impacting the implementation of coordination mechanisms for effective im- projects on the local level (i.e. timing for an- plementation of their development interven- nouncing calls for proposals, protracted assess- tions. Other explanations could be the lack ment and contracting of projects). These prob- of involvement in those processes or a con- lems — if not adequately addressed — could viction that they cannot be improved in any have a detrimental impact on the new region- substantial way and therefore there is no use al concept and its actual implementation, as in discussing them. Regardless of the actual the IPs are to consist of components financed reasons for limited interest in this topic some from different OPs. Some municipalities raised key findings and observations were identified the issue of how to synchronise the different and are presented below. level planning for the next programming pe- riod and make them compatible, particularly The regional development plans are not per- with regards the Municipal Development Plan, ceived by the local stakeholders as a useful stra- which are currently being developed by the tegic framework for planning their investments, municipalities. Perpetuating the problem of as they are too abstract and general, lacking poor synchronization between levels of plan territorial sensitivity. Integrated plans for is the narrow thematic scope of OPs, which are urban regeneration and development that not seen as being in line with regional needs. were prepared by 39 cities for the purposes of the 2014 – 2020 programming perspective have The main observations from the strategic been seen as relatively useful for municipali- consultation are about insufficient align- ties, although the quality appears to have dif- ment between regional policy planning and fered from place to place. The reason why they EU funds programming and lack of adequate are perceived as useful is that they were pre- and meaningful involvement of all key pared bottom up and customized to local needs. stakeholders. These two processes seem be operating ‘in parallel’, failing to create syn- When planning development measures local ergies. Lack of relevance of regional develop- stakeholders rely on their own municipal de- ment plans and data for local strategies might velopment strategies and plans but struggle have a significantly negative impact on the with a deficit of relevant socio-economic implementation of the new regional concept data to plan and pursue evidence-based de- (e.g. difficulty for measuring regional impact velopment initiatives. Stakeholders observe of interventions, for formulating project se- insufficient scope of data disaggregated at the lection criteria and prioritization of project regional/local level. Municipalities/districts proposals according to their regional impact). need to purchase some of required data from the central statistics office as these are not freely available in the public domain. Munic- D. Other issues ipalities would like to obtain financing from the central government to be able to acquire This section is intended to briefly present some more relevant data. additional issues that were raised during con- sultations and were assessed by the WB team Although there seems to be no positive expe- as relevant to bring them to the attention of rience with regional policy planning so far, the MRDPW, CCU, and RAS Steering Committee. the stakeholders are firm that quality stra- tegic planning is the key to successful and efficient regional policy. The necessity for Decentralization an accurate analysis of local needs as a basis for developing regional development strate- The issue of decentralization reform was a re- gies seems to be widely recognized. curring one, as a number of consulted stake- holders point to an administrative vacu- The consulted stakeholders identified a num- um between the lowest (local) and highest ber of examples of insufficient coordination (central) levels of governance, negatively Annex 5 Report summarizing initial findings from strategic consultations (26/09/2019) 103 impacting the effectiveness of regional policy of financing projects. Changes in regulation making. The municipalities are recognized as interpretation during the current financial the main legitimate voice on the sub-central perspective and their retroactive application level, in terms of being representatives of lo- results in beneficiaries obliged to pay finan- cal interests and perspectives, elected by the cial corrections at the end of a project. Public people in a democratic process. Especially the procurement procedure failures also contrib- mayors voiced their disappointment with lack ute to the need for financial corrections. This of progress on decentralization, which seems to seems endemic and poses serious risk to ben- be an issue that resurfaces in public debate be- eficiaries, especially smaller municipalities, fore each election just to be put ‘in the freezer’ of bringing them to the verge of bankruptcy. as soon as the election is over (until next time). Lack of a consistent approach (or even a rigid or Observations were made that the new re- conservative approach) by the central govern- gional concept is the welcome first step to- ment to applying and interpreting the regula- wards decentralization but not ambitious tions on state aid was identified as a substantial enough and cannot solve some fundamental risk for the implementations of IPs, creating problems experienced by the local authorities: a deterrent to potential partnership building. unreasonably high number of municipalities, huge disparities in size and socio-economic and demographic potential between munic- Conclusions ipalities, their financial dependence on the central government and the fact that the dis- The strategic consultations were an import- trict level (NUTS 3) is not directly elected but ant opportunity to raise awareness about the rather appointed by the central government. new regional concept and possible changes to RDCs and in this regard, the consultation pro- cess appears to have well achieved this aim. ‘White spots’ The consultation process also provided the opportunity to hear from local, regional, and The problem of territories that missed out in national stakeholders their views and expecta- the last programming period because they fell tions, which will be crucial for further defin- between the OPRG and rural development pro- ing a workable implementation framework. grams (so called ‘white spots’) was identified as one of the pressing issues to be addressed by the The consultation also allowed the identifica- central level. The lack of eligibility of a group tion of certain risks or ‘blind spots’ which — if of settlements within some non-rural munic- not adequately addressed — could negative- ipalities for any EU funding was perceived as a ly impact the implementation of the new re- major obstacle to cooperation on joint devel- gional concept. A more detailed assessment of opment initiatives. Failure to address this is- the consultation process, these risks, and their sue will negatively impact the potential for im- possible mitigation measures will be presented plementing supra-municipal IPs in the coming in the full consultation report, to be delivered years. Investments in basic services seem a pri- by the WB team by the end of October 2019. ority, including water and wastewater services and local roads as an example. There was also However, given the time constraints related to call for confirmation of state funding for, and the programming process for the 2021 – 2027 fair funding for, all municipalities, but partic- financial perspective and the intention to pro- ularly those facing difficulties. vide MRDPW, CCU, and the Steering Commit- tee members with relevant assistance when it is most needed and useful, a number of initial Financial corrections and state aid rules recommendations have been formulated. Plac- ing the findings from the strategic consulta- Financial corrections were mentioned on tions and preliminary recommendations for numerous occasions throughout the consul- further consideration and discussion of the tations as a major issue for municipalities, RAS Steering Committee could be helpful in which are utilizing EU funds for the purpose obtaining feedback from key stakeholders on 104 Independent reviews of the strategic approach to the Programme the national level and advancing strategic de- 2. Confirmation of choice of RDC scenar- cision-making on the preferred way forward. io for further elaboration — this is of key These in turn will influence the direction of importance. consequent activities to be undertaken by the WB team under RAS Component 2 and 3. 3. Discussion on draft RDC schematic (pre- pared by MRDPW) based on World Bank team review and findings from consulta- Possible topics for dis- tions and decision on next steps. cussion in the RAS Steer- 4. MRDPW / CCU clarification on status of ing Committee meeting amendment to RDA, rules of implementa- (on 1 October 2019) tion, and next steps. 1. Feedback on the findings of the strategic 5. Confirmation of priorities and next steps consultation. to be taken under RAS. 105 ANNEX 6 REVIEW OF THE PROPOSED RDC STRUCTURE AND COMPOSITION PREPARED BY MRDPW (26/09/2019) Introduction in their structure, administrative capaci- ty, as well as internal rules of procedure. MRDPW prepared a draft schematic of a possi- The ongoing preparation by MRDPW of the ble model RDC structure and submitted to the guidelines for prospective IP beneficiaries will WB team for feedback in August 2019. These shed more light on the above-mentioned mo- are preliminary remarks on the draft sche- dalities, which in turn will allow for a more matic with a view to assist MRDPW in edit- in-depth review of the proposed RDC arrange- ing, correcting or fine-tuning of the proposed ments and formulation of more specific rec- arrangements, as well as drawing attention to ommendations by the WB team. some points worth considering or reassess- ing. Initial findings resulting from the anal- ysis of the legal implications of the introduc- Summary of main tion of the proposed RDC structure are also messages included in this note. Key messages of the review of the RDC struc- It is important to note that this review is pre- ture are: liminary given there remains information to be detailed on the broader framework in • Representation of different opinions and which the RDCs would operate, their func- interests seems to be pursued in the current tions, the specific roles and tasks of the RDC structure, although participation of political management, the expected nature and scope representatives should be encouraged given of Integrated Projects (IPs) and the division no voting rights of tasks between the RDC and Managing Au- thorities (MAs) amongst others. Moreover, • Design and operational rules of RDCs should the level of information provided for all ele- encourage consensus (uneven number of ments of the structure and units differs and voting rights), accountability (election rules is in some cases incomplete. It is important and voting right of the chairperson, conti- to underline that the structure of RDCs should nuity of the deputy chairperson, nomina- be determined based both on the processes, tion and selection of representatives partic- as well as the functions envisaged for the re- ularly from civil society) and effectiveness structured RDCs. of decision making (differentiated major- ity thresholds) The assessment, public consultations and facilitation of IPs elaboration and imple- • Conflicts of interests could arise between mentation will constitute the backbone of different functions of the management and crucial RDCs operations. The expected num- project assessment units and within the units, ber and size (in terms of financing, complex- and this risk should be adequately addressed ity, number of partners, etc.) of IPs in each region, as well as their selection method (in- • Mediation and Public Consultation Units dicative projects versus competitive calls for could be merged and involved in project proposals) will impact the workload to be preparation (as the creation of partnerships processed by RDCs and should be reflected is essential to prepare a project pipeline) 106 Independent reviews of the strategic approach to the Programme • The RDCs could benefit from a permanent 5. determine the resources necessary to administrative entity with offices, stable effectively perform identified roles and leadership (control and oversight), clearly tasks and transparent guidelines of selec- defined roles, an adequate legal mandate, tion processes for experts; sufficient capacity and a dedicated bud- get for operations (in line with complex- 6. based on the above-mentioned findings ity and expected size of IPs and therefore — design an adequate RDC structure capa- coordination and communication needs); ble of effectively performing the assigned OP Good Governance 2021 – 2027 could be roles and tasks and determine the neces- utilized as a potential source of financing sary administrative capacity. along with national resources • A comprehensive assessment of the exist- Legal implications ing capacity at the municipal and regional level should be undertaken (scope not cov- — introductory remarks ered by the OECD pilot action on frontloading The core legal acts which would need to be administrative capacity ) to formulate capac- amended to introduce the new structure and ity building plans; it is essential to build functions of the RDCs are: capacity of in-house and external staff also for the knowledge hub function of the RDC. • the Regional Development Act (RDA); • the RDA Implementation Rules (as proposed Therefore, the Bank team suggests that the by MRDPW in 2018), and recommended way forward to ensure that the • the ESIF Management Act. RDC structure adequately reflects their new roles and tasks as part of the broader imple- Amendments in other pieces of legislation, as mentation framework for the 2021 – 2027 pro- well as in the Internal Operational rules of the gramming perspective would be to: involved institutions will also be required, depending on the chosen RDC scenario. At the 1. clarify the rationale for selecting scenar- current stage — where a strategic choice on io 1 over scenario 2 and the longer-term the RDC scenario has not yet been made — it roadmap for a further development of is not possible to exhaustively identify the RDCs and also in terms of addressing the finite scope of required legal changes. For issue of lagging areas; that reason, many of the legal implications, as referred to in this review, are formulated 2. clearly define key processes related to the as questions or issues needed to be clarified elaboration, assessment, consultation and by MRDPW selection of IPs on the regional level, pro- cesses related to project selection on the na- tional level in which the RDCs will actively The strategic choice of participate, as well as internally within the the RDC scenario and RDC (relations between management and ex- pert branches); this should highlight internal its implications for RDC and external coordination and/or commu- structure nication channels as well as decision mak- ing arrangements (visualizations of process- The role intended by MRDPW for the RDCs un- es are included in this document for review); der the new regional approach for the years 2021 – 2027 is a pivotal one. RDCs are envis- 3. clear and unambiguous definition of rules aged to reinforce the territorial dimension of of operations of the RDCs should be de- development interventions co-financed from fined and introduced into relevant nation- the EU Cohesion Policy funds, assist prospec- al legislation;1 tive beneficiaries in establishing partnerships capable of implementing IPs, assess project 4. determine the RDC roles and tasks to be proposals against a set of criteria, including performed under the identified processes; those related to the strategic importance for Annex 6 Review of the proposed RDC structure and composition prepared by MRDPW (26/09/2019) 107 the development of the region, and to pre-se- In terms of nomination of representatives and lect them for financing, as well as to raise pub- voting, there are several questions to be raised: lic awareness on the planned interventions. • it appears that the RDC would consist of 20 The draft RDC structure proposed by MRDPW representatives with voting rights applying seems to be based on scenario 1 given the a “one representative one vote” rule. It is rec- involvement of MRDPW in the first phase of ommended to have an uneven number of the selection of projects. As this would be voting members, unless a qualified major- different than the scenario preferred by ity for passing a decision would have to be stakeholders during the consultations (the sought (e.g. 2/3 of RDC members). majority opted for Scenario 2), it would be useful to explain — for the sake of transpar- • it is also important to clarify (e.g. in the RDA ency — the rationale behind this decision Implementation Rules) what the majority and the longer-term roadmap for further rule or threshold for passing decisions development of RDCs. Moreover, it would would be, and — if possible — differentiate be useful to develop a short narrative to de- thresholds for different types of decisions fine the main aspects of the RDC functions to be taken by the RDC and to ensure that and composition under the chosen scenario. they guarantee adequate representation of It would also be useful to explain how the re- different interests at the same time (includ- structured RDCs would support a better tack- ing potential rules on obligatory personal ling of the issue of lagging regions and/or presence of RDC representatives for certain municipalities. decisions and/or on providing replacements). One of the main findings of the strategic con- • it is not clear whether the chairperson is sultations was that the process of preparing elected among the members of the council IPs would require clear leadership and pow- and by whom s/he would be elected (the er, while at the same time ensuring that the RDC members, the citizens, representatives opinions and interests of various stake- of entities pre-defined by law, etc.). In the holders are taken into account. This review case of the deputy chairperson it is clear finds that the latter may have been empha- that s/he would be elected by the RDC mem- sized over the former in the current proposed bers. To achieve continuity and predict- structure of the RDCs. ability of RDC operations, it could be con- sidered for the deputy chairperson to be respectively the previous chairperson and Governance, voting and the future one (elected one year before the composition of the RDCs start of term), which is a widespread prac- tice among collective entities. The RDC chair- Empowering the representatives of local and person selection method as well as the com- regional level with voting rights will help position of the RDC leadership should be boost a regional perspective and meet the explicitly determined by way of introduc- long-term goal of RDCs becoming an effective ing relevant legal provisions (e.g. in the RDA regional policymaking entity. Therefore, po- Implementation Rules); litical representation of municipalities and districts at the RDC management level is wel- • it would be useful to explain the rationale comed. As equal participation was highlighted behind removing the voting right from the as an important feature during the consulta- chairperson of the RDC; tions, the new institutional design and oper- ational rules of the RDCs should encourage ef- • the rules of nomination of representatives forts to reach consensus amongst RDC mem- from NGOs, local businesses and academia bers. It would be useful to get more clarifi- should be clarified as well as the selection cation on the roles of different RDC units in process of all representatives and the dura- addition to voting rights, for example on ac- tion of their terms and adequate legal pro- countability of the chairperson (i.e. in terms visions should be provided (e.g. in the RDA of reporting). Implementation Rules). 108 Independent reviews of the strategic approach to the Programme Decision-making process • 5th stage — detailed assessment and contract- ing of projects by the relevant MAs. It is the WB team’s understanding that the ‘lifecycle’ of an IP proposal/concept at the level It is important for the decision and reporting of the RDC would be as follows: chain to clearly reflect the above-mentioned assumptions, as it will be essential to ensure • 1st stage — Mediation Unit — supporting the effective work processes and reinforce the establishment of IP partnerships and the de- legitimacy of RDC decisions. velopment of project concepts (the work is completed at the time the project propos- Below is the proposed visualization of the al/concept is submitted). scheme of the decision-making processes re- lated to project assessment and selection for • 2nd stage — Consultation Unit — organizing Scenarios 1 and 2.1. It would be recommend- public discussions and consultations on the ed for MRDPW to review these schematics and submitted projects. confirm their accuracy. If necessary, it would also be useful for MRDPW to provide clarifica- • 3rd stage — Project Assessment Unit — assess- tion on which types of processes (and there- ment against a set of criteria (only project fore scenarios) would be preferred/proposed/ proposals that receive sufficient public sup- followed and the different steps. port would be assessed by this Unit). It also should be clarified what criteria will • 4th stage — discussion & decision making by be applied for the strategic assessment of the management level of RDC. regional impact, who would approve these FIGURE A6.1 Project Assessment — Scenario 1 Public First level check Assess List of projects consultation Selected regional impact projects by MrDPW regional departments ranking discussed in public list events or posted online rDCs (steering the public (Project assessment Units ) rDCs (advisory committee) and all participating Mas * / consultative) * Processing Discussions, Uphold MrDPW regional depart- Detailed Management ments (administration) evaluation, ranking list decisions and financing and transfer submitted Resolution contracting to Mas for decision Approval of changes rDCs Change relevant Mas Head of MrDPW regional department * It should be considered that the first level check and the assessment of regional impact could be implemented at one place by one unit. FIGURE A6.2 Project Assessment — Scenario 2.1 Public Assess regional consultation First level check impact List of projects Selected projects by ranking discussed in public rDC office list events or posted online rDCs (steering the public regional Steering committee) (Project assessment Units) * Committees * Processing Discussions, Uphold Management rDC office Detailed decisions and evaluation, ranking list Resolution financing and transfer submitted Approval of contracting to Mas for decision regional changes Steering Change relevant Mas Committees Head of rDC office * It should be considered that the first level check and the assessment of regional impact could be implemented at one place by one unit. Annex 6 Review of the proposed RDC structure and composition prepared by MRDPW (26/09/2019) 109 criteria and which level (management or ex- should be a permanent administrative enti- pert) would conduct the strategic assessment. ty with offices, stable leadership, clearly de- It is important as well to clarify the linkag- fined roles, an adequate legal mandate, suf- es between strategic assessment of regional ficient capacity and a dedicated budget en- impact and project eligibility checks. This is suring day-to-day operations. This is in line particularly important as stakeholders raised with the long-term goal of institutionalizing concerns throughout the strategic consul- the RDCs, but this do not seem to be clearly ad- tations about potential conflict of interest dressed in the draft RDC structure (perhaps be- between the preparation and assessment cause it is based on the selection of Scenario 1). of projects (i.e. unclear separation of func- tions between management and expert level). The scope of RDC financing and the required human resources need to be in line with Solving possible conflict of interests will the expected number and size of IPs to ef- be one of the biggest challenges to resolve. fectively sustain the functioning of the RDCs. Addressing this risk is an essential prerequi- The proposed dispersed approach to financ- site for ensuring effective involvement of RDCs ing in the short term (the draft shows two in the assessment of IPs and the recognition of sources of funding: OP Electronic Governance their decisions. These conflicts could emerge 2021 – 2027 and Technical Assistance of rele- between, for example: (i) the representative and vant OPs 2021 – 2027) could create risks for the decision making functions of the RDC manage- functioning of the RDC expert branch, nega- ment level (i.e. members of the RDC manage- tively impact timely and effective assessment ment tier being applicants/beneficiaries of IPs); of project proposals and constitute an addi- (ii) the decision making at management level tional administrative burden in terms of ob- and project evaluation at expert level (e.g. sub- taining financing from different sources. For ordination); and (iii) the different units within the expert level, one possibility would be to the expert tier (project promotion/counselling, secure the entire financing from OP Good public consultation and project evaluation). Governance 2021 – 2027 under dedicated (sub)measure(s) which would ensure a hor- The neutralization or mitigation of this risk izontal approach to financing based on one would require the development of clear and common set of rules applicable to all RDCs. unambiguous rules of operations of the RDC tiers and units with transparent functional It is unclear whether the RDC units for media- separation as well as specific rules and proce- tion, public consultation and preliminary se- dures for the assessment of IPs. These would be lection would be administrative units with- introduced into relevant national legislation. in the District Information Centers or MRDPW Regional Departments or whether they will be functions that will be implemented by Coordination, RDC the District Information Centers and MRDPW Regional Departments without allocating administrative capacity these tasks to their dedicated sub-units. This and funding requires further clarification before any com- ments can be provided. In order to effectively perform their new roles, RDCs will need to become a vital element of In light of the findings from strategic consul- the implementation framework for EU cohe- tations, the existing administrative capac- sion policy in Bulgaria. Therefore, the per- ity of the RDC Secretariat (Regional Depart- formance of their new roles should be ade- ments of MRDPW) can be assessed as limited quately coordinated and synchronized as (it is also one of the findings from the OECD they will have to act in concert with multiple pilot action on frontloading administrative partners at different levels to ensure a stream- capacity). Currently two experts in each of lined and smooth implementation process. the MRDPW Regional Departments are co-re- sponsible for the RDC secretariat but they have As mentioned throughout the strategic consul- no current or only limited experience with tations, there is some expectation that the RDCs project assessment and selection. 110 Independent reviews of the strategic approach to the Programme Clarity is also needed on how the specialized The specific roles and tasks of the RDC man- sectoral OP expertise would be provided and agement level should be clearly defined as they mobilized to support the functioning of RDCs are not referred to in the proposed draft RDC and how (and which) existing administrative structure. Moreover, clarity is needed on how capacity at municipal level would be used to the control or oversight by the RDC man- support the RDC Preliminary Selection Unit. agement level over the District Information It would be useful to conduct a comprehensive Centers (for mediation and consultation) and assessment of the existing capacity at the MRDPW Regional Departments (for project as- municipal and regional level (as this was not sessment) would be ensured as they are ad- covered by the OECD in the above-mentioned ministratively parts of different structures, not pilot action, which concentrated primarily subordinated in any way to RDCs. The struc- on capacity at the central level) and — based ture is missing a description on the task as- on the findings — formulate preliminary signment process to RDC Units, as well as in- plans on how to increase it in the future formation and communication channels to and develop in-house expertise to mini- be used to streamline and enhance the effec- mize outsourcing. tiveness of RDC operations. For the mobilization of external experts on demand it would be recommended to formu- RDC expert level late and use a list of experts accredited by the relevant MAs for the purposes of IPs as- Preliminary Selection Unit sessment (similar to the existing list managed by CCU). The MAs would be responsible for The name of the unit and scope of tasks may recruiting experts and providing them with need to be clarified. In fact, “ex ante eval- training on the IPs implementation frame- uation” of projects mentioned in the draft work and assessment criteria. A national list structure is not required by the EC on the could be complemented by a regional list to level of individual projects (only for OPs and ensure effective pooling and utilization of this may change for the Programming Peri- resources at the municipal, district and re- od 2021 – 2027). Moreover, it was understood gional level. These experts could be financed that the unit would be responsible for project from OP Good Governance 2021 – 2027. This proposal assessment (not selection or ex-an- approach would streamline the process of te evaluation), as in scenario 1 the projects expert engagement in RDCs operations, re- would be selected by the management level duce the administrative burden for RDCs of the RDCs based on the outcomes of the as- and ensure quality control of experts as sessment and a ranking list prepared by the well as horizontal rules for their training experts It would therefore be recommended and financing. to rename this unit to “(Preliminary) Proj- ect Assessment Unit”. RDC management level It is a positive development that the current structure would seem to allow for a transi- The introduced division between the RDC tion from scenario 1 to 2, as it would mainly management and expert level is welcomed. require a change in the composition of the However, the proposed setup of the manage- Project Assessment Unit. ment level gives no answer to the concerns raised during strategic consultations that po- Explicit rules of coordination of regional litical representatives from ministries tend programming with the OPs programming not to participate in RDCs activities. In fact, 2021 – 2027 should be introduced and vari- observers in RDCs are from line ministries, ous institutions should cooperate to provide Council of Ministers and other agencies which unified instructions for programming of IPs. could enhance national-regional coordination but depending on how the observer’s role is In relation to the already mentioned prob- structured or other incentives as they have lematic aspect of potential conflict of inter- no voting right. est, a challenging endeavor will be to agree Annex 6 Review of the proposed RDC structure and composition prepared by MRDPW (26/09/2019) 111 with all concerned MAs on the composition this unit an essential one for the successful of the RDC Preliminary Assessment/Selection strengthening of the bottom-up approach un- Unit. Therefore, the criteria for in-house staff der the new regional concept. Feedback from recruitment, the IPs assessment and selection stakeholders was unambiguous that there is procedures as well as the rules of hierarchical a critical need for a quality project pipe- subordination should be clarified. line and that local and regional stakehold- ers would need comprehensive assistance to prepare for the absorption of EU funds given RDC Mediation unit their limited experience with IPs. The process of project proposal preparation It is welcome that the RDCs would act as knowl- includes the interdependent activities of iden- edge hubs, in line with proposals of addi- tification of potential project ideas, facilitation tional new functions proposed for RDCs, but of the establishment of project partnerships, it is unclear how this function would fit into public consultations and the preparation of the RDC structure and how its required sub- a project application form. It could therefore stantial expert capacity would be supported. be worthwhile to consider merging the RDC Mediation and Public Consultation Units Therefore, the functions, capacity and pow- and involve them in project preparation. It ers of this unit should be clarified and prob- should be clarified who will be responsible for ably strengthened. Properly equipping the providing methodological guidance for the unit with human resources is essential: staff implementation of the mediation and consul- from DICs with their knowledge on EU funds tation functions to be executed. should be complemented by technical experts representing different fields of expertise able It is understood that the Mediation Unit would to guide discussions with potential partners, support the creation of partnerships, which support for concept proposal and the applica- constitutes a very important role in support- tion. These technical experts should be pre- ing potential project applicants — one advo- sumably both permanent staff and external cated by numerous stakeholders throughout experts (mobilized on demand to deliver the strategic consultation process. This makes selected tasks). 112 Independent reviews of the strategic approach to the Programme ANNEX 7 PROPOSAL OF POSSIBLE OPTIONS FOR STRUCTURING BULGARIA’S REGIONAL LEVEL / SCENARIOS FOR RDCS — DISCUSSION NOTE FOR SC MEETING (13/06/2019) Background RDC functions, which would be considered for inclusion in future revisions to the RDA. The Ministry of Regional Development and Public Works (MRDPW) and the World Bank RAS Steering Committee. To ensure good (the Bank) signed a Reimbursable Advisory coordination of the RAS activities, a Steering Services (RAS) agreement which is expected to Committee is being formed and is composed become effective around July 2019. The aim of of representatives of the Council of Ministers/ the RAS is to support MRDPW to: (a) enhance the Central Coordination Unit (CoM/CCU), MRD- regional development process for the next pro- PW, Managing Authorities (MA) of OPs and the gramming period 2021 – 2027 and (b) identify Bank. On an at least quarterly basis the Steer- ways to build the capacity of Regional Devel- ing Committee will convene to discuss the pri- opment Councils (RDCs) for their involvement orities for, and progress of, the RAS supported in the implementation of a new integrated ter- activities. Other stakeholders could be invited ritorial tool supported under Operational Pro- to join the discussions upon MRDPW invitation gramme (OP) for regional development as well and with the mutual agreement of the Bank. as under other OPs for the 2021 – 2027 period. The Bank will carry out activities under the Topic for Discussion. According to the expec- following components of the RAS agreement: tations expressed by MRDPW, the Bank team has prepared and will present a note on the • Strategic consultation on improving regional possible options for structuring of Bulgar- development policy; ia’s RDCs for discussion at the first Steering RAS Committee meeting to be held on 19 June • Developing a proposed mechanism to in- 2019. The Bank team would also like to dis- volve Regional Development Councils in cuss and determine the scope of issues to be implementing the operational programme debated within the framework of strategic for regional development 2021 – 2027; and consultations expected to commence as part of the RAS supported activities in July 2019. • Technical assistance and reviews. Relation to the RAS activities. Under the In mid-May, MRDPW shared a concept note stipulations of the RAS Agreement, this task with the Bank, which sets out the ministry’s relates to component 1 (strategic consultation proposal for a regional approach to be adopt- on improving regional development policy in ed during the 2021 – 2027 programming peri- Bulgaria) and specifically activity 1 (c) to pres- od, which has been shared with key national ent possible new functions and responsibilities for stakeholders. MRDPW also provided the Bank Regional Development Councils related to the require- with information on the current RDC func- ments of the EU draft Regulations on the Cohesion tions, according to the Regional Development Policy post 2020. The report outlining the stra- Act (RDA), and the ministry’s proposal for new tegic consultations and its findings is to be ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs 113 delivered four months after effectiveness of of local governance units also means that lo- RAS (Estimated: October 2019). cal planning and delivery foregoes important economies of scale and limits the ability to coor- Following the outcome of these consultations, dinate the management of the external effects the task under Component 2 is to develop a of activities in each locality. Finally, all locali- proposal for a mechanism to involve RDCs in ties rely on central government to resolve cer- the process of implementing the future OP for tain bottlenecks in the national economy, be- regional development, cross-border coopera- fore their own local activities can reap rewards. tion programmes and financial instruments for the period 2021 – 2027. A report outlining These challenges, in turn, lead to recom- this proposal with recommendations for the mending four key considerations for more options for the composition of RDCs, expert level staff transformative regional development. First, involvement, training needs, scope of delegation agree- greater decentralization of political, adminis- ments between Managing Authorities and RDCs, as trative, and fiscal duties and powers (as planned well as vertical and horizontal accountabilities and by the government), which can improve the monitoring, evaluation and reporting arrangements sensitivity of regional planning to local needs. is to be delivered seven months after effective- Second, this has to be calibrated to the capaci- ness of RAS (Estimated: January 2020). Doc- ties, and needs of each place, and be accompa- uments detailing operational modalities and nied by active programs to strengthen subna- internal rules of RDCs are to be delivered in tional authorities. Third, Bulgaria may benefit the form of a report sixteen months after ef- from stronger instruments supporting coordi- fectiveness of RAS (Estimated: Autumn 2020). nation across municipal and district boundaries, to counteract today’s fragmentation. While the EU offers instruments for the spatial coordina- Introduction tion of EU funding, Bulgaria should design insti- tutions suitable to its own circumstances, then Opportunities and challenges for enhanced consider how EU tools may or may not map onto territorial management in Bulgaria. It is im- these. Finally, decentralization must be accom- portant to set out and understand the govern- panied by better coordination between central ment’s broader goals for regionalization and and subnational authorities, so local outcomes the path that the country plans to take in the are not held back by critical national reforms. long term. Adopting a mechanism for ensur- ing an increased involvement of the regional A number of factors for more effective deliv- tier in planning and implementing regional ery of Cohesion Policy in Bulgaria are identi- policy actions could lead to the strengthen- fied by the European Commission in its recent ing of the regional dimension of development Bulgaria Country Report . These include: endeavors. It can also lead to the creation of a critical mass of experts and administrative • additional efforts to increase the administra- and technical capacity at the NUTS 2 level that tive capacity necessary for the effective ad- could pave the way for successful decentral- ministration and implementation of EU funds, ization efforts in the foreseeable future. • strengthened capacity of authorities to de- When reflecting on the strategic choices it is liver policies and strategies that could be important to consider four key bottlenecks the basis for the implementation of Europe- in Bulgaria’s territorial management today: an Structural and Cohesion Funds and im- centralization, poor local capacity, high local proved coordination and information ex- fragmentation, and reliance of subnational change between administrations; authorities on national reforms. Being a highly centralized state, regional planning is less sen- • strengthened capacity of local authorities sitive to local needs. However, the decentral- to implement integrated territorial devel- ization process is also facing challenges includ- opment strategies, ing low (and uneven) capacity at local levels to carry out decentralized political, administra- • strengthened capacity of beneficiaries, stake- tive, or fiscal functions. The high fragmentation holders, social partners and other bodies to 114 Independent reviews of the strategic approach to the Programme prepare and implement high quality projects implementation. Specific recommendations and to shape policy through public consultation for RDCs’ composition, expert staffing, oper- ational modalities and internal rules should Good Practice Principles. Upon deciding on follow a strategic decision of policy-makers a strategic approach to decentralization it is — they should not preempt it . The choice de- also important that the Government of Bul- pends primarily on the mid-term and long- garia keep in mind good practice principles term strategic approach adopted by the cen- and lessons from regional policy and plan- tral administration (CoM, MRDPW), as the ning from other EU countries, which include: future role of RDCs is heavily dependent on the way that the question of decentraliza- • regional policies and plans should encom- tion is to be tackled. Therefore, it is import- pass national or sectoral processes and all ant to determine whether entrusting RDCs sources of financing options and instru- with new roles and responsibilities is a first ments (not just EU funds); step in initiating an incremental decentral- ization effort or just a one-off attempt at in- • regionalization of sectoral expenditures is creasing the involvement of the regional tier indispensable for enhancing the effective- in implementing integrated territorial ap- ness of territorial interventions; proach to regional policy, but without plans for a full-blown decentralization reform in • decentralization of competences should be the coming years. closely followed by sufficient scope of fiscal devolution to support the local and regional MRDPW Proposal for Three New Functions tier in pursuit of autonomous, long-term and for RDCs. In mid-May MRDPW shared with proactive investment policy aimed at achiev- the Bank a concept for the RDCs’ roles during ing territorial development objectives; and the next EU financial perspective, where it is described that the RDCs would be involved in • intensive administrative capacity building pre-selecting integrated territorial projects. is of paramount importance for establish- Consequentially, MRDPW transmitted to the ing effective regional institutions. Bank team on May 30, 2019 a proposal, which consists of three new functions to be added Approach of the Bank Team. In elaborating to RDCs’ remit related to their involvement a proposal for a mechanism for the involve- in the selection of operations for integrated ment of RDCs in regional policy planning and territorial development is concerned. These implementation, as requested by MRDPW, the are described in the box below. Bank team will not work in a vacuum. Rather the team will draw upon the analysis of global First level checks of operations/project con- models and international experience relevant cepts — general eligibility check of the actions/ to Bulgaria, ideas submitted by the MRDPW, measures; RDCs would check for compliance conclusions reached in the process of strate- with the regional development scheme, gen - eral administrative check. (Need for technical gic consultations with central and regional staff & experts); level stakeholders, findings of the OECD pilot Organization of public consultations for action on frontloading administrative capacity, as the concepts passed during the first level well as other relevant sources of information. checks — RDCs would organize several public hearings/presentations in different cities in co- ordination with the project initiator/beneficiary. Development of an overall view and opinion of Options for Structuring the extent to which project concepts are sup - ported by the public. (Need for staff & experts the Regional Level in public consultations); in Bulgaria Final management decision on the project/ concept selection — discussion on the con - cepts/projects that passed the first level checks and that have a wider public support. Adoption Strategic Approach to the New Role of RDCs. of a final management decision. (Need for man - There are a number of options (scenarios) to agement level). consider as far as the introduction of the new Source: MRDPW role/s of RDCs in regional policy making and ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs 115 These proposed new functions relating to the policy in Bulgaria (planning, implementation, new territorial approach for 2021 – 2027 peri- synchronization, coordination etc.). Ideally, od are to be proposed for inclusion in future the new role of RDCs should enhance the ef- amendments to the Regional Development Act. fectiveness of regional policy planning and implementation by addressing shortcomings Preliminary Assessment of the Current Pro- of the current approach or key bottlenecks. posal. First of all, the Bank team appreciates It would, therefore, be important, as part of the amount of conceptual effort that has been the strategic consultations to have discus- put into developing the concepts; over the last sion with MRDPW and Bulgarian experts on two months, the RDC concept has been fleshed the challenges facing regional planning and out with details and was simultaneously devel- the rationale for the proposing these three oped on two dimensions — the strategic role new functions. of the RDCs (and a strategic goal of their func- tioning) and the technical details of their func- Current Composition and Status of RDCs. tioning. The Bank perceives the RDC concept The current composition of RDCs includes: as a work in progress and assumes that both these dimensions will be further elaborated • a chairperson (District Governor of one of the in an iterative, multi-stakeholder process. In districts; rotation principle every 6 months) the WB team’s view certain technical aspects • a deputy chairperson (a representative of of RDCs will stem from the envisaged (strate- a municipality in the district, the District gic) role the decision makers wish to confer Governor of which chairs the Council), to them and their function in the system of • members (representatives of different min- regional development and management of EU istries, appointed by respective Ministers; resources. For that reason, discussion on tech- the District Governors of the districts com- nical aspects of the RDCs must go along (and prised within the respective region; represen- sometime must be preceded by) discussions on tatives of the municipalities in the districts; RDCs’ role. Regarding the strategic dimension, and representatives of partner organizations this note presents four options that could be of employers and employees), considered when thinking about RDCs’ possi- • secretariat, ble future role in Bulgaria. Each of these op- • regional coordination committees, and tions includes specific technical details to be • specialized committees. further discussed. The below material is an in- put into this discussion and does not lock in or RDC Strengths and Weaknesses. In late 2018, advocate for any specific solution at this stage. staff from MRDPW, CoM/CCU, and the Bank team attended initial consultations with two RDCs. It is important to note that the discussion on From these discussions, it is understood that the new functions for the RDCs needs to be car- RDC members consider the current strengths ried out within the context of a broader debate and weaknesses of RDCs as described in the on ways of improving regional development table below. TABLE A7.1 RDC Strengths and Weaknesses Strengths Weaknesses Forum for information sharing Lack of representation or roles on RDCs — small, medium, and large municipalities. Communicate key developments No clear mandate or decision-making power. Mayors ‘feel like in municipalities guests’. District Governors feel they have ‘no function’ Possibility to solve inter-munici- No role in managing funds pal issues Meet infrequently Limited staffing and resources. Limited technical inputs Lack of inter-municipal cooperation and regional projects 116 Independent reviews of the strategic approach to the Programme Four options/scenarios for RDCs When debating the choice of a preferred ar- increased involvement in OP rangement for involving broad spectrum of (2021 – 2027) — for discussion stakeholders it is important to decide on the underlying objectives of the public consulta - tion process and bear in mind the effective- The proposed scenarios described below re- ness of the project proposal assessment. Ex- flect four possible strategic approaches to the tensive public consultations can substantially new role of RDCs under the 2021 – 2027 finan- delay the process of approving ranking lists of project proposals, becoming a bottleneck in the cial perspective and beyond. The adoption of process of implementation of EU-co-financed either one of them will have a significant im- undertakings. A balanced solution should be pact on the RDC composition, required tech- sought to ensure on the one hand a truly inclu- nical and administrative capacity, operation- sive nature of public consultations adding real (and defined upfront) value to the process and al modalities, financing etc. a streamlined assessment of project proposals on the other. This point relates to all scenarios. Option/scenario 1 (a ‘light touch’ scenario) In this scenario, the RDCs perform functions of a Regional Steering Committee, represent- The first level checks of operations/proj- ing relevant local and regional stakeholders ect proposals for all OPs (sectoral, as well as and serving as a forum for discussion on en- regional development OP) are conducted in deavors of regional importance. The approved the regions by relevant units of the MRDPW ranking list returns to the MRDPW regional regional departments (Project Assessment department and is then transferred to the rel- Units). The assessment is concluded with a evant MA for further checks needed for secur- ranking list of positively evaluated project ing financing and contracting. proposals (management decision taken by the head of the MRDPW regional department Adopting this approach would require: based on assessment conducted by panel of experts from dedicated unit of the MRDPW re- • strengthening the capacity of MRDPW re- gional department), which is then submitted gional departments by creating and staff- to respective RDCs for approval. ing units responsible for project proposal assessment; The RDCs — acting as advisory/consultative bodies — debate and assess the regional im- • introducing organizational changes to RDCs’ pact of the proposed projects and by way of functioning and securing its regular day-to- a resolution can either uphold the submitted day operations (technical staff, financing ranking list or decide on changes reflecting etc.); the outcomes of their assessment of regional impact. Passing of a resolution is preceded by • ensuring the involvement of regional ex- a public consultation process. Different ar- perts in the project proposal assessment i.e. rangements for conducting this process can be by creating a list of regional experts to be considered to ensure its effectiveness and an invited by the MRDPW regional departments inclusive nature in line with the partnership to participate in expert panels; principle. RDCs can host regular public events for the purposes of presenting project propos- • designing and enforcing effective coordi- als and discussing their regional impact (and nation mechanisms between the MRDPW by doing so raising the awareness of region- regional departments and the RDCs al development objectives), bringing togeth- er key regional and local stakeholders, social Legal status of RDC: and economic partners, as well as the general advisory/consultative body. public. Another option to consider is posting ranking lists submitted to RDCs for approv- RDC structure: al on a dedicated website enabling internet unchanged but strengthening the capacity of consultations of assessed project proposals. secretariat (back office) is needed. ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs 117 Financing of RDC operations: and assess the regional impact of the pro- Technical Assistance OP Regional Develop- posed projects and by way of a resolution ment 2021 – 2027/ Technical Assistance of sec- can either uphold the submitted ranking toral OPs 2021 – 2027. list or decide on changes reflecting the out- comes of their assessment of regional impact. Level of complexity to implement scenario: The approved ranking list returns to the RDC low (limited scope of organizational changes Office and is then transferred to the relevant to be introduced; legal framework remains MA for further checks needed for securing unchanged). financing and contracting. Passing of a res- olution is preceded by a public consulta- Level of financing: tion process . Different arrangements for minimal. conducting this process can be considered to ensure its effectiveness and an inclusive Timeline for scenario implementation: nature in line with the partnership princi- short-term. ple. Regular public events can be hosted for the purposes of presenting project propos- als and discussing their regional impact (and Option/scenario 2 by doing so raising the awareness of regional (a ‘progressive’ scenario) development objectives), bringing together key regional and local stakeholders, social RDCs are responsible for first level checks and economic partners, as well as the gen- of operations/ project proposals for all OPs eral public. Another option to consider is (sectoral, as well as regional development OP), posting ranking lists submitted to Regional assessing their regional impact and approving Steering Committees for approval on a ded- the list of positively assessed project propos- icated website enabling internet consulta- als. There are two sub-scenarios to consider: tions of assessed project proposals. 1. sub-scenario 2.1. ‘institutionalization’ Under sub-scenario 2.2. the first level checks of RDCs (change of legal status, creation of operations/project proposals for all OPs of a regular ‘RDC Office’ acting as the ex- (sectoral, as well as regional development OP) ecutive branch of RDCs); or are conducted in the relevant units of the re- gional development agency (Project Assess- 2. sub-scenario 2.2. creation of regional ment Units). The assessment is concluded with entities endowed with sufficient capaci- a ranking list of positively evaluated project ty to perform project proposal assessment proposals (management decision taken by (i.e. regional development agencies) which the Head or Board of the regional develop- could act as executive bodies for RDCs in ment agency based on assessment conduct- this respect (as one of their functions). ed by panel of experts from dedicated unit of the regional development agency), which is Under sub-scenario 2.1. the first level checks then submitted to respective Regional Steer- of operations/project proposals for all OPs ing Committee for approval. (sectoral, as well as regional development OP) are conducted in the relevant units of the RDC The Regional Steering Committees — acting Office (Project Assessment Units). The assess- as advisory/consultative bodies — debate and ment is concluded with a ranking list of pos- assess the regional impact of the proposed itively evaluated project proposals (manage- projects and by way of a resolution can ei- ment decision taken by the head of the RDC ther uphold the submitted ranking list or Office based on assessment conducted by pan- decide on changes reflecting the outcomes el of experts from dedicated unit of the RDC of their assessment of regional impact. The Office), which is then submitted to respective approved ranking list returns to the region- Regional Steering Committee for approval. al development agency and is then trans- ferred to the relevant MA for further checks The Regional Steering Committees — act- needed for securing financing and contract- ing as advisory/consultative bodies — debate ing. Passing of a resolution is preceded by a 118 Independent reviews of the strategic approach to the Programme public consultation process. Different ar- regular day-to-day operations (technical rangements for conducting this process can staff, financing etc.); be considered to ensure its effectiveness and an inclusive nature in line with the partner- • ensuring the involvement of national, as ship principle. Regular public events can be well regional level experts in the project pro- hosted for the purposes of presenting project posal assessment i.e. by creating two lists of proposals and discussing their regional im- national and regional experts to be involved pact (and by doing so raising the awareness by RDCs in expert panels; of regional development objectives), bringing together key regional and local stakeholders, • designing and enforcing effective mecha- social and economic partners, as well as the nisms for delegation of tasks and coordi- general public. Another option to consider is nation between RDCs and MAs; posting ranking lists submitted to Regional Steering Committees for approval on a ded- • designing and enforcing common standards icated website enabling internet consulta- for RDCs’ operation. tions of assessed project proposals. In this scenario, the RDCs perform functions For Sub-scenario 2.2. of a Regional Steering Committee, represent- ing relevant local and regional stakeholders • creating new entities at the regional level; in- and serving as a forum for discussion on en- tensive capacity building; creating and staff- deavors of regional importance. The approved ing agencies including units responsible for ranking list returns to the regional develop- project proposal assessment (maybe MRDPW ment agency and is then transferred to the regional departments could act as foundations relevant MA for further checks needed for se- for the newly established agencies bringing in curing financing and contracting. Adopting their staff and regional experience and con- this approach would require: tributing to building capacity at NUTS 2 level?); • RDCs acting as Regional Steering Committees For Sub-scenario 2.1. • ensuring the involvement of national, as • intensive capacity building at the level of well regional level experts in the project pro- RDCs; creating and staffing ‘RDC Office’ in- posal assessment i.e. by creating two lists of cluding units responsible for project pro- national and regional experts to be involved posal assessment (maybe MRDPW regional by the agencies in expert panels; departments could act as foundations for the newly established ‘RDC Offices’ bring- • designing and enforcing effective mecha- ing in their staff and regional experience nisms for delegation of tasks and coordina- and contributing to building capacity of the tion between agencies, RDCs and MAs; regional tier?); • designing and enforcing common standards • introducing legal and organizational chang- for agencies’ operation with respect to proj- es to RDCs’ functioning and securing its ect proposal assessment. Sub-Scenario 2.1 Sub-Scenario 2.2 Legal status of RDC legal entity advisory/consultative body Legal status of regional x legal entity (i.e. joint stock company/municipal legal development agencies entity) Financing of RDC Technical Assistance OP Regional Development Technical Assistance OP Regional Development operations 2021 – 2027 (RDC + ‘RDC Office’) 2021 – 2027 (RDCs as Regional Steering Committees) Financing of regional x Technical Assistance of sectoral OPs 2021 – 2027 development agencies and own revenues (depending on the profile of agencies ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs 119 Sub-Scenario 2.1 Sub-Scenario 2.2 RDC structure significant changes needed unchanged or minor adjustments Level of complexity to moderate / high moderate implement scenario (substantial changes to the legal framework — i.e. (legal framework changed — possible changes to RDA — with possible launch of decentralization pro - RDA, substantial organizational changes, capac - cess, substantial organizational changes, capac - ity building) ity building) Level of financing moderate/high moderate/high (depending on scope of functions of RDCs) (depending on scope of functions of agencies and their ability to generate own revenues) Timeline for scenario mid-term mid-term implementation Option/scenario 3 Sectoral OPs — RDCs performing roles as pre- (a ‘foot in the door’ scenario) sented in sub-scenario 2.1. RDCs (or regional development agencies with OP Regional Development — RDCs acting as RDCs acting as Regional Steering Committees) Intermediate Bodies involved in the process of assessing integrated territorial project proposals for all sectoral OPs, Introduction of RDCs as new Intermediate but in the case of OP Regional Development Bodies (or regional development agencies) RDCs entrusted with the role of Intermediate into the system of EU funds implementation Bodies responsible for assessing, selecting in Bulgaria requires taking steps already nec- and contracting integrated projects. essary to ensure that these new institutions are adequately equipped to: The first level checks of operations/project proposals for OP Regional Development are 1. successfully complete the designation pro- conducted in the relevant units of the RDC cedure by meeting relevant requirements Office (Project Assessment Units) or regional (designation criteria) as stipulated in EU development agencies. The assessment is con- and domestic regulations and cluded with a ranking list of positively eval- uated project proposals, which is then sub- 2. effectively perform functions delegated by mitted to the Board of the respective RDC for MA OP Regional Development. approval (management decision taken by the RDC Board based on assessment conducted by The designation is granted on the basis of des- panel of experts from dedicated unit of the ignation criteria which concern the internal RDC Office or Head or Board of the regional control environment, risk management, man- development agency). The approved ranking agement and control activities, and monitor- list returns to the RDC Office and is then trans- ing activities of the designated bodies. ferred to the relevant MA for further checks needed for securing financing and contracting. Legal status of RDC: legal entity Public consultation process takes place prior to the approval of the ranking list of positively Legal status of regional development assessed project proposals. The tasks related to agencies: the process of organizing such consultations are legal entity (i.e. joint stock company/munic- entrusted to dedicated units at RDC Office, re- ipal legal entity) sponsible for analyzing opinions submitted in the process and providing Project Assessment Financing of RDC operations: Units with relevant findings of consultations Technical Assistance OP Regional Develop- impacting final assessment of project proposals. ment 2021 – 2027 120 Independent reviews of the strategic approach to the Programme Financing of regional development respective RDC for approval (management de- agencies: cision taken by the RDC Board based on as- Technical Assistance OP Regional Develop- sessment conducted by panel of experts from ment 2021 – 2027/ Technical Assistance of sec- dedicated unit of the RDC Office or Head or toral OPs 2021 – 2027 and own revenues (de- Board of the regional development agency). pending on the profile of agencies) The approved ranking list returns to the RDC Office and is then transferred to the relevant RDC structure: MA for further checks needed for securing fi- significant changes needed depending on the nancing and contracting. scope of roles delegated by the MA OP Regional Development and designation criteria to be Public consultation process takes place prior met to the approval of the ranking list of positively assessed project proposals. The tasks related to Level of complexity to implement scenario: the process of organizing such consultations are moderate or high (depending on scope of del- entrusted to dedicated units at RDC Office, re- egated tasks and type of entity entrusted with sponsible for analyzing opinions submitted in performing these roles: RDCs or regional de- the process and providing Project Assessment velopment agencies — substantial scope of or- Units with relevant findings of consultations ganizational changes to be introduced; legal impacting final assessment of project proposals. framework needs to be changed, major capac- ity building activities, designation process) Legal status of RDC: legal entity Level of financing: moderate. Legal status of regional development agencies: Timeline for scenario implementation: legal entity (i.e. joint stock company/munic- mid-term. ipal legal entity) Financing of RDC operations: Option/scenario 4 Technical Assistance OP Regional Develop- (an ‘all in’ scenario) ment 2021 – 2027 and Technical Assistance of sectoral OPs 2021 – 2027. RDCs (or regional development agencies with RDCs acting as Regional Steering Committees) Financing of regional development involved in the process of assessment, selec- agencies: tion and contracting of integrated territorial Technical Assistance OP Regional Develop- projects and acting as Intermediate Bodies ment 2021 – 2027/ Technical Assistance of sec- with respect to all OPs (sectoral, as well as toral OPs 2021 – 2027 and own revenues (de- regional development OP). pending on the profile of agencies). Adopting this approach would require taking RDC structure: all the steps identified under scenario 3 and significant changes needed depending on the additionally concluding designation process scope of delegated roles and designation cri- for each sectoral OP where RDCs (or regional teria to be met (unless RDCs to play role of development agencies) are to perform the Regional Steering Committees with regional tasks of Intermediate Bodies. development agencies taking on the tasks of Intermediate Bodies). The first level checks of operations/project proposals for all OPs are conducted in the rel- Level of complexity to implement scenario: evant units of the RDC Office (Project Assess- high or very high (depending on scope of ment Units) or regional development agencies. delegated tasks and type of entity entrusted The assessment is concluded with a ranking with performing these roles: RDCs or region- list of positively evaluated project proposals, al development agencies — substantial scope which is then submitted to the Board of the of organizational changes to be introduced; ANNEX 7 Proposal of possible options for structuring Bulgaria’s regional level / scenarios for RDCs 121 legal framework needs to be changed, major Steering Committee presents a good oppor- capacity building activities on a broad scale, tunity) — on the most likely/preferable sce- designation process). nario could be conducive to adopting by the Bank team a more targeted and pragmatic ap- Level of financing: proach to the elaboration of the proposal for maximum. a mechanism enabling increased involvement of RDCs in regional policy making. Timeline for scenario implementation: long-term. Steering Committee Some alternate proposals Meeting: Points for for new functions for RDCs Discussion (or their executive bodies — regional develop- First Steering Committee — main items ment agencies) to consider (apart from their for discussion involvement in project assessment/selection/ contracting) might include: 1. Strategic approach to the new role of RDCs (MRDPW and CoM/CCU) — discussion on pro- 1. RDCs as knowledge hubs for local stake- posed scenarios described above. holders; provision of advisory support for municipalities and other interested stake- 2. Issues to be raised during strategic consul- holders seeking to establish effective part- tations and expected outcomes: nerships with a view to elaborating, secur- ing financing and implementing integrated a. Presentation of the new concept for territorial projects; training, coaching, men- involving the regional tier in Cohe- toring services; collection and dissemina- sion Policy planning and implemen- tion of ‘good practices’; tation 2021 – 2027 perspective (MRDPW). 2. RDCs as ‘territorial observatories’ con- b. Identification of new arrangements/ ducting regional socio-economic analyses, mechanisms or improvements needed assessing regional impact of interventions, in already functioning arrangements/ monitoring the effects of regional devel- mechanisms for regional development opment strategy, collecting research re- policy planning and delivery in Bulgar- sults and analyses carried out by other en- ia (the floor will be given to stakeholders to tities, organizing and sharing knowledge come up with their proposals and ideas and resources about the region, and making later on include them in the report outlining them available in one place, contributing findings from consultation process). to better planning and implementation of territorially targeted public interven- c. Collecting ideas for better synchroni- tion by providing information, analysis zation and coordination of regional and evaluation of public policies on the development policy in Bulgaria with progress of regional policy implementa- the process of programming and imple- tion and scenarios for the future for op- mentation of operational programmes erational and strategic planning. co-financed by the ESIF post 2020 (we need input regarding bottlenecks which neg- Note: It is important to bear in mind that all atively impact synchronization and coordi- the decision-making powers, as well as re- nation processes so: 1) these issues can be ad- sources necessary to finance the new func- dressed and reflected upon during strategic tions of RDCs are with the stakeholders at consultations 2) we can think of some new/ the central level. Therefore, seeking strate- improved arrangements drawing from inter- gic guidance from MRDPW/CoM — as early on national experience and maybe test some of into the advisory services as possible (first them during consultations). 122 Independent reviews of the strategic approach to the Programme d. Raising awareness of local and re- 4. Arrangements to ensure an inclusive na- gional actors of benefits of imple- ture of strategic consultations. These might menting territorial instruments un- include an internet survey to include local der the OPs in the next programming stakeholders, NGOs, business, academia etc. period 2021 – 2027 (MRDPW + WB could to map out development needs on the re- provide some examples of successful imple- gional level, identify local and regional ex- mentation of territorial instruments in EU periences with implementing EU projects, countries as a source of inspiration). especially those requiring formal or infor- mal partnerships and assess the potential 3. Schedule of strategic consultation meet- of implementing integrated territorial in- ings and sequencing of the process. Dis- struments under OP Regional Development cussion on the Who? What? Where? How? 2021 – 2027 as well as main challenges and of planned consultation process. bottlenecks as identified by local and re- gional stakeholders, etc.