Meeting of the European External Aid Committee 14 October 2014 EFCA Secretariat, Brussels 1. Approval of the agenda and apologies for absence The Chair welcomed all participants. Apologies for absence were noted. The secretariat will contact the Danish Committee representative prior to next meeting. The Chair welcomed the announcement that ACEI (Ireland) would nominate a representative shortly. The proposed agenda, including under item 6 a briefing on the 3 October 2014 ‘Policy Forum on Development - Workshop with Private Sector1’ was approved. 2. Approval of the minutes of the meeting held on 24 June 2014 in Brussels The minutes of the 24 June 2014 meeting were approved. 3. Reports v 24 June 2014 EFCA/FEACO meeting with Representatives of the Permanent Representations The agenda focussed on three topics: the position paper on the use of country systems and on blending, and the SAFEGE study on the application of design, build and operate methods to EC financed infrastructure projects in developing countries: - the position paper on blending proved well-timed. It is important to get the industry’s messages across and to motivate the Permanent Representation into reflecting on the topic. The position paper serves as a reference document for all member associations. The EFCA message on blending is to be conveyed to the World Bank. The position paper will be circulated again with the minutes to the Committee members in order to continue the discussion at the national level. - the Chair reported on the valuable remarks and suggestions that the Permanent Representations submitted on the draft position paper on the use of country systems. The discussion on the revised paper is noted under item 4. EC Communication ‘A stronger role of the private sector in achieving inclusive and sustainable growth in developing countries’ http://ec.europa.eu/europeaid/european-commissioncommunication-com2014263-stronger-role-private-sector-achieving-inclusive-and_en 1 v ‘The Application of Design, Build and Operate Methods to EC financed Infrastructure Projects in Developing Countries’: Final Phase 2 Report This study, commissioned to SAFEGE, is examining required legal changes (Financial Regulation) for the introduction of PPPs in EC grant-funded infrastructure projects in developing countries. The report describes in detail the FIDIC contracts. It states that “DEVCO has the choice either to decide to use an existing set of contract conditions for DB/DBO contracts, such as those provided by FIDIC, in which case a prior authorization will be required for each project, or to adapt its own contract conditions which would, as a result, no longer qualify as an exception and would no longer need prior authorization. DEVCO stated its preference for the latter, and ….”. The report explains the procedures that are permitted under the PRAG guidelines (i.e. the restricted procedure and the competitive dialogue procedure). SAFEGE proposes the two-stage procedure: tenderers submit a technical design on partially developed specifications which is individually discussed and clarified; in a second stage the responsive bidders submit technical and financial proposals that are based on the amended technical specifications. SAFEGE also proposes that the Contracting Authority engages a team of Advisers for the DB/DBO project preparation and implementation that should be kept the same. In the Chair’s view, such advisory team would comprise mostly legal and procurement experts, and only limited technical expertise. The report also states that ‘For the construction phase, the Contracting Authority should hire a Supervision Consultant (possibly a local company) who will be responsible for the day-to-day quality of the construction…’. In summary, the report suggests three possible roles for engineering consultants: assist/advise the contracting authority in the preparation and implementation of DB/DBO projects, supervise the construction and act as the designer on account of the contractor. EFCA should react and submit the industry’s views to the EC. The report is used as a reference document for the European Commission. The report and the Chair’s observations are attached to the minutes. EFCA and FEACO will jointly invite Roberto Ridolfi (DG DEVCO/C, Director) to discuss the report (and new DG DEVCO initiatives). v National meetings/lobby initiatives related to external aid/development assistance (if any) It was noted that although becoming more active, the Spanish Development Agency is not a strong institution. Funds are increasingly channeled through investment facilities and blending. Local contracting authorities are in charge of the procurement, and firms are in a vulnerable situation. GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) is being reorganised. In the firms’ experiences, taxes are becoming increasingly unclear and difficult. 2 A new public French Agency will be created as from 1 January 2015 by gathering six specialized ones; a specific link will be developed with AFD (Agence Française de Développement). Syntec-Ingénierie is establishing the dialogue with a recently appointed new high ranking official. Daniel Gras expressed interest in learning about recent developments in the national agencies’ role in the implementation of aid projects and the competition with private engineering consultancies. The Chair concluded that the Committee should consider developing the industry’s position in the private sector’s involvement in development cooperation in 2015. 4. EU external aid v 18 March 2014 letter to the Practitioners Network on new financing instruments such as blending: response The organisation, of which the address changed twice recently, would respond shortly. v PRAG 2014: EFCA/FEACO feedback to DG DEVCO The Chair invited comments on the draft letter. - Excessive financial reference criteria (to include the reference to the relevant PRAG provision) The meeting exchanged views on the general recommendation to remove financial criteria (they are not well interpreted and applied appropriately) versus the need for mixed criteria that demonstrate the firm’s financial stability (it is in the interest of our industry to have reliable partners). The letter would call for a clarification of the situation, point out our industry’s interests, and express interest in a discussion together with financial experts. - Change of the ‘per diem’ system which creates an administrative burden The item is deleted. - Criteria applied to experts: all main plus sub criteria DG DEVCO recently introduced positive changes (including clarification) to the weighting of CVs and methodology in the evaluation. The item is deleted from the letter. However, in the future, EFCA will share with DG DEVCO the industry’s experience with the evaluation grid. - Documentary proof for the selection criteria The meeting commented the inconsistency between the PRAG and the annexes, and the required submission of supporting documents to avoid that candidates are invited which prove unable to submit the supporting documents at the award stage. It was concluded that the current practice is reasonable. The item is deleted. - Disproportionate and excessive liability (and insurance) requirements: €1 million for 10 years duration (to include the reference to the relevant PRAG provision) 3 The meeting emphasised that the limitation of the candidate’s references to the last three years is very short for consulting engineering services and should be extended to at least five years. In this context, Jan Van der Putten sent Laurent Sarazin copy of annex XII of the 2014 public procurement Directive - Part II: Technical Ability, which reads under a (ii): ‘Where necessary in order to ensure an adequate level of competition, contracting authorities may indicate that evidence of relevant supplies or services delivered or performed more than three years before will be taken into account’. The topic ‘limitation of candidate’s references to the last three years’ will be incorporated in the letter. As regards the complex matter of taxes, the meeting agreed not to raise it in the letter. The revised letter will be circulated for a 10-days consultation round with the Committee. v EFCA position paper on the use of country systems The revised paper, which is still general and carrying clear messages, incorporates the Perm Reps’ suggestions. The following remarks were noted: - the views of the World Bank on the use of country systems is impacting on procedures of other IFIs. The World Bank differentiates between countries, and is focusing on the capacity of the local industry (cf. ‘local preference’) and skills of the local awarding agencies. The Chair reacted that the industry is advocating international competitive bidding with international standards. Engineering consultancy services are knowledge-based services. It will be explained that these services are high-risk and high-value and thus eligible for international competitive bidding (ICB). Also, it is important to encourage raising local procurement standards to international ones; - the phrase ‘In many developing and middle-income countries, these procurement conditions are far from being met’, needs positive rephrasing (e.g.: ‘evolve to meet these procurement conditions’); - the statement on the industry’s experience on the use of inappropriate country systems is general, vague and debatable. It was reacted that in practice, many indirect barriers exist for international firms, which make it impossible to operate in the market. The industry’s message on ICB as well as the decrease of quality due to the lack of international standards will be included; - the title will carry the message that the European consultancy industry is in favour of using international procurement standards; - the paper will not include a reference to other procurement procedures. The revised position paper will be circulated for a 10-days consultation round with the Committee. 4 v Feedback on EIB, EBRD, CEB and other European Public Financing Institutions’ procurement (if any) The programme of the EBRD-EFCA one-day hands-on seminar (Brussels, 13 November 2014) was presented. Vice-Chair Martin Güldner invites feedback on working with EBRD from all Committee members. A joint FIDIC-EFCA visit to the EBRD offices in London is planned on 17 November 2014. 5. FIDIC dialogue with IFIs v World Bank Procurement Policy and Procedures Review: status report on second stage (articulation of policy and implementation strategy) Enrico Vink reported on the schedule of the next consultation round, and the preparation of the FIDIC submission. FIDIC will consult with EFCA and EIC before the end of 2014. The Chair outlined the main themes: modernisation to adapt to future type of operations; competitive dialogue, private investment and PPPs; selection of best suppliers (cf. past performance and debarment); extended use of national competitive bidding processes (local SMEs) and domestic preference criteria; WB intervention in hands-on complaints procedure; prior review only of tenders of high risk and high value; ICB to remain preferred system and NCB to guarantee certain aspects; strategic sector-wise decision of national governments on the threshold ICB or NCB; and push for electronic tendering. Enrico Vink underlined the early involvement of engineering consultants in project programmes, education of best practice, development effectiveness (value and quality) and capacity building. He concluded that FIDIC is offering toolboxes (integrity management and sustainability) and generic training. 6. Date of the next meeting The next meeting will be held in Brussels on Tuesday, 17 March 2015 (11:30-15:30). ___ 5 Participants Ines Ferguson, Chair (TECNIBERIA) Martin Güldner, Vice – Chair (VBI) Walter Painsi (ACA – FTBI) Rasit Ünüvar (ATCEA) Daniel Gras (CINOV – SYNTEC) Hero Heering (NLingenieurs) Gianluca Vedova (OICE) Jürgen Wummel (VBI) Enrico Vink, FIDIC Managing Director Raphael Zayat (FEACO) Jan Van der Putten (EFCA) Anne Croisiau (EFCA) Apologies: Jorge Nandin de Carvalho (APPC) Patrick-Yann Dartout (CINOV – SYNTEC) Claus Jorgensen (FRI) Ian Reeckmann (FRI) Ryszard Neugebauer (SIDIR) Matti Manonen (SKOL) Anders Olin (STD-Företagen) Uwe Moshage (VBI) Etienne Matton (FEACO) Didier Wynrocx (FEACO) 6
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